2008 ANNUAL REPORT
A year of strategic investment…
a year of progress
About Patterson Companies, Inc.
Patterson is a value-added specialty distributor serving the
dental, companion-pet veterinary and rehabilitation markets.
Patterson Dental, our largest business, provides a virtually
complete range of consumable dental products, equipment and
software, turnkey digital solutions and value-added services to
dentists and dental laboratories throughout North America.
Webster Veterinary is one of the nation’s largest distributors
of consumable veterinary supplies, equipment and software,
diagnostic products, vaccines and pharmaceuticals to
companion-pet veterinary clinics.
Patterson Medical is the world’s leading distributor of
rehabilitation supplies and assistive patient products to the
physical and occupational therapy markets.
Progress in Fiscal 2008
• Sales of the CEREC® 3D dental restorative system strengthened significantly
during the second half of the year.
• Our Webster Veterinary business recorded another year of strong operating
results.
• Patterson Medical established a branch office structure as part of its plan to
strengthen its value-added platform.
• We returned $630 million to our shareholders through stock repurchases.
Financial Highlights
(In thousands, except per share amounts)
Year Ended
Net sales
Gross profit
Operating income*
Net income*
Earnings per share-diluted*
Cash and cash equivalents
Working capital
Total assets
Total debt
4/26/2008 4/28/2007 % Change 4/29/2006
$ 2,998,729 $ 2,798,398
7%
$ 2,615,123
1,031,725
968,872
359,203
335,690
224,858
208,336
6%
7%
8%
914,429
323,012
198,425
$ 1.69 $ 1.51
12%
$ 1.43
$ 308,164 $ 241,791
$ 224,392
518,974
509,021
437,727
2,076,373 1,940,320
1,911,718
655,034
180,024
300,041
Stockholders’ equity
1,004,787 1,379,214
1,242,521
* Due to the adoption of FASB Statement No. 123(R), “Share Based Payment”, effective on April 30, 2006, operating income, net income and earnings
per share - diluted were reduced by $7,723, $5,883 and $0.04, respectively, during the year ended 4/26/2008 and by $7,757, $6,253, and $0.05,
respectively, during the year ended 4/28/2007.
Fiscal 2008
Business Platform Sales
Patterson Dental
$2.2 billion
Webster Veterinary
$446 million
Patterson Medical
$371 million
Strongly Profitable
Historic Growth
5-Year Compound Annual Growth Rates:
Sales: 13%
EPS: 15%
Net Sales in Millions
EPS
Sales
$3,000
2,500
2,000
1,500
1,000
EPS
$1.80
1.50
1.20
0.90
0.60
04 05 06 07 08
1
To Our Shareholders
2008 was a year of substantial investment in Patterson’s
future as we worked to further expand the market presence
and value-added capabilities of our three businesses and
increase the returns to our shareholders.
• We strengthened Patterson Dental’s competitive position
in the northeastern U.S. with the acquisition of a highly
respected regional dental distributor.
• Patterson Medical continued establishing a branch
office structure in selected markets through acquisitions
and internal start-ups.
• We acquired an industry-leading line of practice
management software for physical therapists to further
strengthen Patterson Medical’s value-added platform.
• Webster Veterinary continued to expand its equipment
offerings, in addition to providing more product choices
for its customers.
• Webster bolstered its presence in the growing
southwestern U.S. with the acquisition of an Arizona-
based veterinary distributor.
• We repurchased approximately 18 million Patterson
shares as part of our initiative to realign Patterson’s
capital structure.
These and other initiatives are components of our drive
to strengthen Patterson’s long-term operating results. As
part of this ongoing commitment, each of our businesses
is implementing additional strategies aimed at enhancing
their future growth and profitability. We expect to realize the
initial positive impact from these new strategies in fiscal
2009, which should be a year of improved performance for
Patterson.
Financial Review
Consolidated sales increased 7% in fiscal 2008 to $3.0
billion from $2.8 billion in fiscal 2007. Net income of
$224.9 million or $1.69 per diluted share was up 8% from
$208.3 million or $1.51 in fiscal 2007.
During the second half of fiscal 2008, we repurchased
approximately 18 million shares under our 25 million-
share repurchase authorization. In the fourth quarter, we
also closed on $525 million of long-term debt financing,
part of which was used to acquire shares under an
accelerated share repurchase (ASR) program. The positive
impact of the accretion on Patterson’s earnings from our
share repurchases was largely offset by increased interest
expense and lower interest income on cash reserves in
fiscal 2008. However, the accretion from this buyback
activity is estimated at an incremental $0.06 per share in
fiscal 2009.
Investing in our three businesses remains our first priority
when it comes to capital deployment, but last year’s stock
repurchasing and debt financing transactions accomplished
several objectives:
• We returned $630 million to our shareholders.
• By taking advantage of excellent pricing in the debt
markets, we lowered our weighted average cost of
capital by about 100 basis points.
• We positioned Patterson to increase the returns to our
shareholders.
• We maintained our financial flexibility to take
advantage of acquisition opportunities.
Patterson Dental
Sales of Patterson Dental, our largest business, increased
6% in fiscal 2008 to $2.2 billion. Sales of consumable
dental supplies were solid throughout the year, reflecting
the continued strength of the North American dental
market. We are particularly encouraged by the strong
rebound in sales of the CEREC® 3D dental restorative
system during last year’s second half. This growing sales
momentum reflected the positive impact of the new
software and crown milling chamber introduced late in
fiscal 2007. These enhancements have taken CEREC’s
performance to a new level, which is drawing considerable
attention in the marketplace. We believe the sales progress
of our CEREC line should continue in fiscal 2009.
Sales of basic dental equipment, including digital x-ray
systems and related software, fluctuated significantly
between quarters during fiscal 2008, resulting in below-
forecasted levels for the full year. As the industry’s largest
distributor of dental equipment, Patterson Dental is
implementing new sales and marketing initiatives designed
to strengthen the performance of its entire equipment
offerings, including digital technology.
In April 2008, we acquired A. Leventhal & Sons, Inc.,
a full-service regional distributor of dental supplies and
equipment with annual sales of $18 million. The addition
of Leventhal, which serves customers in Pennsylvania,
New Jersey, New York, Delaware and Maryland, has
strengthened Patterson’s existing market position in the
northeastern U.S.
2
Webster Veterinary
Fiscal 2008 marked another year of strong results for
Webster Veterinary, one of the nation’s largest distributors
of companion-pet veterinary supplies. Webster’s sales
grew 12% to $446 million, fueled in part by the strong
performance of its consumable supply business. Our
strategic decision to provide more choices for our customers
in several key product categories, including vaccines and
flea/tick and heartworm medications, is working as intended.
Webster’s fiscal 2008 performance also benefited from its
strategic emphasis on equipment and practice management
software, which represents a major component of this unit’s
drive to further strengthen its value-added platform. Webster
is now selling such equipment as digital x-ray systems,
tables, kennels and cabinetry in its markets. This initiative
is supported by Webster’s steadily expanding capabilities in
local technical support and financing. During fiscal 2009,
Webster will focus a significant portion of its attention on
refining and further expanding its relatively new equipment
business.
Associated Medical Supply, Inc., a veterinary distributor
serving companion-pet veterinarians in Arizona and
Utah, was acquired late in fiscal 2008. This transaction
was of strategic importance, since it strengthened
Webster’s competitive position in the southwestern U.S.
The acquisition of New England X-Ray, Inc., a specialty
equipment and service business in the greater Boston
market, provided a platform for expanding Webster’s
equipment business in this important region.
Patterson Medical
Patterson Medical, the world’s leading distributor of
rehabilitation supplies and equipment, reported sales
growth of 11% to $371 million. This business, which is
starting to realize its potential in the large and growing
rehabilitation market, is responding to strategies aimed
at implementing a more extensive value-added business
model. Patterson Medical has greatly expanded its
field sales force, which currently totals more than 200
representatives. In addition, it continued to establish a
full-service branch office structure. By the end of fiscal
2008, Patterson Medical had acquired or internally
started 12 branch offices around the country. Also during
fiscal 2008, Patterson Medical became the only national
distributor of the industry-leading line of Chattanooga
Medical Supply rehabilitation equipment.
In November 2007, we acquired PTOS software, a
leading line of practice management software for physical
therapists. Endorsed by the largest provider networks
in the rehabilitation market, PTOS software is enabling
Patterson Medical to garner new customers and deepen
its relationships with existing customers.
Fiscal 2008 was a year of investment and progress, and
more work remains ahead of us. We are confident about
getting this job done due to the quality and commitment
of our many outstanding employees. We thank our people
for their hard work, and we also appreciate the continued
support of our shareholders, valued customers and
business partners.
Sincerely,
James W. Wiltz
President and Chief Executive Officer
Daniel H. Peckskamp
Vice President
Operations
R. Stephen Armstrong
Executive Vice
President and Chief
Financial Officer
David P. Sproat
President
Patterson Medical
James W. Wiltz
President and Chief
Executive Officer
Scott P. Anderson
President
Patterson Dental
George L. Henriques
President
Webster Veterinary
Jerome E. Thygesen
Vice President
Human Resources
3
Business Overview
Patterson Dental is one of North America’s largest dental distributors with an
estimated 32% share of this large and growing market. This business accounted for
73% of Patterson’s consolidated total sales in fiscal 2008.
With operations in the U.S. and Canada, our dental
business has attained a position of industry leadership by
deploying a full-service, value-added strategy focused on
meeting a virtually complete range of dental office needs.
Our long-term success also is grounded in our recognition
that we are engaged in a relationship business with our
customers. Patterson Dental’s more than 1,500 field
representatives, comprising the largest sales force in the
industry, work closely with sole practitioners and small
dental offices to provide unsurpassed customer service.
Patterson Dental’s operations are also highly decentralized
with 87 branches. This decentralization places decision-
making close to the customer, in addition to resulting in
greater local accountability.
Competitive Strengths
Patterson Dental’s full-service, value-added strategy
enables this business to provide dental offices with
a virtually complete range of consumable supplies,
equipment and software, and value-added services in a
cost-effective and highly efficient manner.
• Consumables. We provide the industry’s broadest range
of consumable products and front office supplies.
These supplies, which generate a large base of
recurring revenues, are marketed not only by our sales
force, but also through a highly efficient electronic
order/entry system at the disposal of our customers.
• Equipment and software. Patterson Dental is the
industry’s largest distributor
of basic and new technology
equipment. We have
attained this position
through our long-
technical support and market experience. As the table
below indicates, Patterson Dental holds the largest
market share of the industry’s leading equipment lines
in virtually every major equipment category, from dental
chairs and lights to CAD/CAM systems and digital
radiography. Our equipment and software business is
supported by the unique capabilities of the Patterson
Technology Center, which is responsible for providing
dentists with a total digital solution through software
development, support and integration and office
networking.
• Value-added services. Patterson Dental’s full-service
business model extends to a broad range of services
required by its customers. These value-added services
include: equipment financing; technical service (local
equipment repair, installation and customer support,
networking and customer training); dental office
design; electronic patient education services; electronic
order-entry; and eBusiness solutions such as electronic
claims and customer statements.
Dental Market Growth
We estimate the North American dental market at more
than $6 billion and growing at a 5%-6% annual rate.
According to the Centers for Medicare and Medicaid
Services, total U.S. dental expenditures are expected to
The Clear Industry
Leader in Dental
Equipment
Sold by
Patterson
Dental
Sold by
Nearest
Competitor
Manufacturer’s Category Rank
#1 #2 #3
#1 #2 #3
established
reputation for
unmatched
credibility
with dental
practitioners
and by offering
leading equipment
manufacturers
unparalleled local
Chairs
Cabinetry
Units
Digital X-ray: Intraoral
Digital X-ray: Extraoral
Handpieces
CAD/CAM
Patterson Dental is the only
national distributor of A-dec
chairs, the most widely used by
the dental profession.
Patterson Dental sells more dental equipment and represents
more of the industry-leading equipment manufacturers in the
primary equipment categories than any other dental distributor.
4
Patterson Dental
1 1 1 1 1 1 1 continue growing at approximately 7% each year through
2015. It also is estimated that the growth of dental
expenditures during this period will rise roughly twice as fast
as the forecasted growth of the U.S. economy as measured
by gross domestic product.
Fueling the growth of the dental market are a series of
powerful factors:
Favorable Demographics
Similar to overall health care, rising demand for dental
services will be generated by an expanding adult population,
whose numbers are growing three times the rate of the
general population. Older patients are retaining their natural
teeth longer, which will require more dental services over an
extended period of time.
Cosmetic and Specialty Procedures
Patient demand for specialty and cosmetic dental
procedures has increased in recent years, and this growth
is expected to continue
over the foreseeable future.
Procedures like tooth
whitening, orthodontic
treatment for adults and
veneers— aimed at improving
the patient’s appearance—
have become increasingly
popular.
Technology
Converting to new dental
procedures based on digital
and CAD/CAM technologies
also is fueling the growth of
the dental market. Digital
x-rays and the CEREC® 3D
crown restoration system are
increasing the efficiencies
of dental offices, while improving dental outcomes and the
overall patient experience. The efficiency-enhancing aspects
of these new technologies are particularly critical in view of
the declining number of dentists per capita. The looming
shortage of dental practitioners will place an increasing
premium on technologies that enable dentists to treat more
patients within the same number of weekly office hours.
Insurance
Dental insurance has increased the percentage of the
general population that can routinely access dental care,
resulting in additional demand for dental services.
Key Business Strategies
To further strengthen our ability to capitalize on the
attractive opportunities that we see in the North American
dental market, Patterson Dental recently implemented a
series of related growth strategies.
• The commission structure of Patterson Dental’s sales
force has been revamped to better align compensation
with the growth objectives and strategies of the
organization.
• Patterson Dental is offering its EagleSoft® practice
management software free of charge to any dentist with
the goal of converting non-Patterson customers to our
digital x-ray solution. We believe this strategy, which could
Patterson Dental is the industry leader at introducing important new
dental technologies, including wireless digital radiography (pictured
above) and the CEREC® 3D dental restorative system (below), which
is based on CAD/CAM technology.
also lead prospective customers to purchase consumable
supplies and other dental equipment from us, will enable
Patterson Dental to more fully capitalize on the digital
radiography opportunity, which is the fastest growing
product niche in dentistry.
• Our customer loyalty program, now called Patterson
AdvantageSM, has been redesigned to incent customers to
partner with Patterson Dental to meet all of their needs.
• The selection process and training of field sales
representatives have been materially strengthened with
the goal of attracting and retaining the best people.
5
Business Overview
Webster Veterinary is one of the nation’s largest distributors of companion-pet
veterinary supplies, equipment and pharmaceuticals with an estimated 15% national
market share. Accounting for 15% of Patterson’s consolidated sales in fiscal 2008,
Webster is the leading companion-pet veterinary distributor in the eastern half of the
U.S. and is establishing a steadily growing presence west of the Mississippi.
Expanding Value-Added Platform
Over the past few years, Webster has focused on
strengthening its full-service, value-added business
platform, with the goal of functioning as a single-source
solution for companion-pet veterinarians. Webster’s
progress on this front is evident in its solid growth during
this period of time. As a result, we believe that Webster,
which remains the industry’s top financial performer,
represents the vehicle for establishing a leading national
position in the companion-pet veterinarian market.
Growing Sales Force
By the end of fiscal 2008, Webster’s sales force had
grown to more than 180 field sales representatives
operating from 12 branch offices. In addition to growth
in numbers, Webster’s sales force has also become
increasingly specialized to include equine, equipment
and technology specialists. Webster’s sales force also
is augmented by a large group of knowledgable and
experienced inside customer service representatives, who
consistently rank as the best in the industry.
Extensive Product Choice
In the area of consumable supplies, Webster offers the
widest range of products in the industry. Moreover, the
strategic decision to provide more pharmaceutical choices
for our customers in several key product categories,
including vaccines, flea/tick, and heartworm is working as
planned. As a result of this initiative, Webster currently
supports offerings from Fort Dodge Animal Health,
Intervet/Schering-Plough, Eli Lilly, Novartis, Bayer, Virbac
and other leading pharmaceutical manufacturers. Webster
also offers its customers a full range of front office
business forms and supplies.
Expanding Equipment Business
As part of its plan to strengthen its full-service platform,
Webster is strongly focusing on sales of veterinary
equipment. Webster is now selling an expanding range
of equipment, including digital x-ray systems, tables,
kennels, and cabinetry, in most of its markets. Webster
is supporting this initiative through its steadily expanding
capabilities in local technical service. In addition, several
Webster branches include equipment showrooms.
Webster is also developing a more open architecture for its
IntraVet® practice management software, which will enable
veterinary professionals to integrate digital x-ray images, as
well as lab results from other equipment, into a digitized
patient record. By leveraging the full capabilities of the
Patterson Technology Center, Webster will be the only
veterinary distributor capable of offering a single-source
digital solution. Other practice-enhancing functionalities
are being evaluated for integration into IntraVet software.
Growing Range of Value-Added Services
Webster is expanding its offerings of value-added services
in order to meet a more complete set of customer needs.
These services currently include veterinary clinic and
hospital design, equipment financing, electronic order/
entry and customer education programs.
Total U.S Pet Industry Expenditures
Source: American Pet Products Manufacturers Association
$50 Bil
$40 Bil
$34.4
$36.3
$38.5
$43.4
(est)
$41.2
$30 Bil
$20 Bil
$10 Bil
0
2004 2005 2006 2007 2008
Many households consider their pets a part of the family and are
spending more on pet care, products and services.
6 Webster Veterinary
Efficient Distribution
A significant portion of Webster’s distribution has been
consolidated into combined, full-service veterinary, dental
and rehabilitation facilities in the Northeast, Middle
Atlantic and Northwest regions under the management of
Patterson Logistics Services. Veterinary products will be
integrated into an expanded multi-use distribution center
in California later this fiscal year, which will support
Webster’s growing position in this key market. Webster’s
remaining stand-alone distribution centers have been
functionally separated from its branch offices under
Patterson Logistics.
Attractive Market Characteristics
The U.S. companion-pet market
is estimated at approximately $3
billion, encompassing approximately
24,000 veterinary practices. As
the fastest growing segment of
the overall veterinary market,
the companion-pet market is
being fueled by highly attractive
demographics and consumer
spending trends.
• Industry sources estimate that
63% or 71 million households
own one or more companion pets,
including dogs, cats and horses.
This ownership level is up from
56% of all U.S. households in
1988.
• Households have significantly
increased spending on veterinary
care as a percentage of their real
disposable income. Many households consider their
pets a part of the family and are willing to pay for
advanced and intensive veterinary care. Reflecting
this concern for their pets, household expenditures
on veterinary care have increased from $28.5 billion
in 2001 to $38.5 billion in 2006, representing a 6%
compound annual growth rate.
Fiscal 2009 Goals
During the coming fiscal year, Webster will be
communicating more actively its position as a single-
source solution for the companion-pet veterinary market.
At the same time, Webster will be expanding and refining
its relatively new equipment business. This effort will
include further development of its technical service
capabilities. Webster also will remain alert to attractively
priced acquisition opportunities that would result in
expansion into new geographic markets or product
offerings.
7
As part of its plan to strengthen its full-service,
value-added platform, Webster is focusing on sales
of veterinary equipment. Webster is now selling an
expanding range of equipment, including digital
x-ray systems, tables, kennels, and cabinetry, in
most of its markets.
Business Overview
Patterson Medical is the world’s leading distributor
of supplies, equipment and assistive living product
focused on rehabilitation and sports medicine
specialists. With an estimated 6% share of this global
market, which reflects the highly fragmented nature
of this market, Patterson Medical accounted for 12%
of Patterson’s consolidated sales in fiscal 2008.
Patterson Medical is the only one-stop shop in the
rehabilitation market, providing its customers with the
convenience of a single source of supply for virtually
all of their product needs. The business is significantly
larger than its nearest competitor, and no other distributor
can match the scope of Patterson Medical’s offerings.
It manufactures approximately 25% of the products it
distributes and owns many of the leading brands in the
global rehabilitation market, including Sammons Preston
in the Americas, Medco in the U.S. sports medicine
market and Homecraft Rolyan in Europe and Asia. During
fiscal 2008, Patterson Medical also began distributing
Chattanooga Medical Supply’s
industry-leading line of rehabilitation
equipment on a national basis.
With operations in North America
and the U.K., Patterson Medical
serves a wide range of customers
on a global basis. Outside the U.S.,
Patterson Medical’s products are sold
to customers in 70 countries through
a network of 200 dealers. Physical
and occupational therapists working
in hospitals and clinics constitute
Patterson Medical’s largest base
of customers. This unit also sells
rehabilitation supplies and equipment to athletic directors
and sports trainers, long-term care facilities, schools, local
equipment dealers and end-user consumers. A wide range
of sales channels is used to reach this diverse customer
base, including the industry’s largest direct mail catalog
operation; a growing sales force; contracts, some exclusive,
with virtually every major national healthcare purchasing
group; telemarketing; country-specific distributors; and the
internet.
Patterson Medical does not engage in third-party
billing. Instead, it sells to and collects directly from its
customers, who provide third-party services. In addition,
Patterson Medical’s products generally are not subject to
reimbursement pressures from Medicare and Medicaid.
Patterson Medical owns many of the leading
brands on the global rehabilitation market,
including Sammons Preston in the Americas,
Medco in the U.S. sports medicine market and
Homecraft Rolyan in Europe and Asia.
Expanding Value-Added Platform
Over the past few years, Patterson Medical has been
implementing plans and strategies aimed at strengthening
and expanding its value-added business platform.
Increasing the size and quality of its field sales force and
establishing a branch office structure rank among the most
important of these strategies.
Growing Field Sales Force
Back in 2005, Patterson Medical’s U.S. field sales force
totaled 85 representatives, which was already the largest
in the rehabilitation industry. At the end of fiscal 2008,
this sales force had more than doubled to over 200
representatives worldwide. The rationale for this strategy
is based on the fact that rehabilitation, like dentistry and
veterinary medicine, is a relationship business. Physical
8
Patterson Medical
U.S. Population Growth (millions) 65+ Age Group
Source: U.S. Census Bureau
Population will double between 2000 and 2030
s
n
o
i
l
l
i
m
90
60
30
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
The aging baby boomer generation will generate growing demand for rehabilitation supplies and equipment.
strategy, the local sales staff is able to build strong
customer relationships, while locally-based decision-making
results in greater accountability. Branch office equipment
showrooms and availability of local technical service have
provided Patterson Medical with an added measure of
credibility among manufacturers of premium equipment
lines.
Market Growth Drivers
The growth of the estimated $6 billion rehabilitation market
is being fueled by a combination of factors. Perhaps most
importantly is the aging baby boomer population. The U.S.
Census Bureau estimates that the population over the age
of 65 will double in size between 2000 and 2030, growing
from 35 million to 72 million. Aging population trends
in the U.K., Patterson Medical’s largest overseas market,
mirror those in the U.S. It is estimated that the U.K.’s over-
65 population will nearly double to almost 16.5 million
over the next 30 years. Moreover, the over-85 population
is projected to nearly triple over this same period. Growing
demand for rehabilitation services also is being generated
by today’s more active lifestyles, resulting in growing
numbers of sports and recreation-related injuries. In
addition, there is a trend toward less invasive treatment
and intervention, which frequently involves a rehabilitation
protocol for the recovery process.
Fiscal 2009 Goals
During the coming year, Patterson Medical will focus
on strengthening the operations of its branch structure,
including the implementation of Patterson’s management
systems at each branch. Additional branches will be
opened but probably at a slower rate than in fiscal 2008.
In addition, Patterson Medical will continue expanding its
field sales force. Patterson Medical also will continue to
evaluate acquisition opportunities, reflecting its market-
leading position as a consolidator of a highly fragmented
industry. Of particular interest would be local/regional
dealers and specialty distributors, including those serving
the sports medicine market. Finally, Patterson Medical will
work to continue strengthening its international operations
and extending its brands throughout the world.
9
Physical and occupational therapists working in hospitals
and clinics constitute Patterson Medical’s largest base of
customers.
and occupational therapists and athletic trainers want
relationships with sales representatives based on product
knowledge, industry expertise and quality service. Patterson
Medical’s growing sales force has been augmented by
electronic order/entry and the launch of a customer loyalty
program.
Branch Office Structure
Patterson Medical has been establishing a branch office
structure through acquisitions and internal start-ups over
the past two years. At the end of fiscal 2008, the unit
was operating 12 branches, serving such major markets
as New York, Atlanta, Chicago, Dallas, Houston and San
Francisco. Each branch deploys a full-service, value-added
model, based upon a commissioned sales staff, equipment
showrooms, and a service department for equipment
installation, repair and warranty service. Through this
$ 1,415,515 $ 1,156,455 $ 1,045,883 $ 883,268
921,335
494,180
347,000
147,180
5,043
747,301
409,154
294,039
115,115
7,081
678,766 571,698
367,117 311,570
269,658 234,098
97,459
5,540
77,472
2,239
$ 331,413 $ 310,046 $ 238,502 $ 187,952
718,376
549,180
451,976 373,250
976
990
1,719
2,097
514,360
408,515
330,470 265,199
Selected Consolidated Financial and Operating Data
(In thousands, except per share amounts)
Year ended
4/26/08
4/28/07
4/29/06
4/30/05
4/24/04
4/26/03
4/27/02
4/28/01
4/29/00
4/24/99
Statement of Operations Data:
Net sales
Cost of sales
Gross margin
Operating expenses (2)
Operating income
Other income (expense) – net
$ 2,998,729 $ 2,798,398 $ 2,615,123 $ 2,421,457 $ 1,969,349 $ 1,656,956
1,700,694 1,558,946 1,267,005 1,082,370
1,967,004
574,586
1,031,725
395,638
672,522
178,948
359,203
7,454
(1,775)
1,829,526
968,872
633,182
335,690
(6,082)
702,344
459,844
242,500
(2,980)
914,429
591,417
323,012
(6,039 )
862,511
560,375
302,136
(8,689 )
Income taxes
132,570
121,272
118,548
109,749
90,055
70,082
56,933
45,721
38,527
29,815
Income before cumulative effect of
accounting change
$ 224,858 $ 208,336 $ 198,425 $ 183,698 $ 149,465 $ 116,320
$ 95,290 $ 76,475 $ 64,472 $ 49,896
Diluted earnings per share (1) (2)
$ 1.69 $ 1.51 $ 1.43 $ 1.32 $ 1.08 $ 0.85
$ 0.70 $ 0.56 $ 0.48 $ 0.37
Weighted average shares and potentially
dilutive shares outstanding (1)
132,910
137,769
139,234
138,873
137,768
136,894
136,402
135,526
135,088 133,986
Dividends per common share
—
—
—
—
—
—
—
—
—
—
Balance Sheet Data:
Working capital
Total assets
Total debt
Stockholders’ equity
Operating Data:
(as of fiscal year-end)
Number of sales representatives
Number of employees
Number of service technicians
$ 518,974 $ 509,021 $ 437,727 $ 470,439 $ 507,145 $ 422,093
823,978
2,076,373
274
655,034
633,686
1,004,787
1,911,718 1,685,301 1,588,957
499,587
801,758
321,557
300,041
1,379,214 1,242,521 1,015,072
1,940,320
180,024
1,998
6,857
1,217
1,923
6,577
1,143
1,864
6,438
1,124
1,683
5,948
1,037
1,582
5,741
991
1,353
4,772
976
1,308
4,637
911
1,087
3,853
807
1,046
3,789
793
986
3,623
721
(1) Amounts are adjusted for two-for-one stock splits on September 14, 2004 and June 13, 2000.
(2) Reflects the adoption of FASB Statement No. 142 “Goodwill and Other Intangible Assets” in fiscal year 2003. Had this standard been
adopted at the beginning of fiscal 1999, income in fiscal years 1999 through 2002 would have been positively impacted by no more than
$0.02 per diluted share. In addition, FASB Statement No. 123(R) “Share-Based Compensation” was adopted at the beginning of fiscal
year 2007 and reduced diluted earnings per share by $0.04 and $0.05 in fiscal years 2008 and 2007, respectively. All prior years in this
summary do not reflect expense under Statement 123(R).
(3) See the Notes to the Consolidated Financial Statements included in Item 8. of the Annual Report on Form 10-K.
Market Information
The Company’s common stock trades on the NASDAQ Global Select
Market® under the symbol PDCO.
The following table sets forth the range of high and low sale prices
for the Company’s common stock for each full quarterly period within
the two most recent fiscal years. Such quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may
not necessarily represent actual transactions.
10
Fiscal 2008
Fiscal 2007
High
Low
High
Low
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$38.27 $33.81
$40.08 $35.03
$39.93 $28.32
$37.78 $30.89
$36.13 $31.51
$34.25 $29.61
$38.29 $31.80
$39.76 $31.71
Year ended
4/26/08
4/28/07
4/29/06
4/30/05
4/24/04
4/26/03
4/27/02
4/28/01
4/29/00
4/24/99
$ 1,415,515 $ 1,156,455 $ 1,045,883 $ 883,268
678,766 571,698
367,117 311,570
269,658 234,098
77,472
2,239
921,335
494,180
347,000
147,180
5,043
747,301
409,154
294,039
115,115
7,081
97,459
5,540
Income taxes
132,570
121,272
118,548
109,749
90,055
70,082
56,933
45,721
38,527
29,815
accounting change
$ 224,858 $ 208,336 $ 198,425 $ 183,698 $ 149,465 $ 116,320
$ 95,290 $ 76,475 $ 64,472 $ 49,896
Diluted earnings per share (1) (2)
$ 1.69 $ 1.51 $ 1.43 $ 1.32 $ 1.08 $ 0.85
$ 0.70 $ 0.56 $ 0.48 $ 0.37
Weighted average shares and potentially
dilutive shares outstanding (1)
132,910
137,769
139,234
138,873
137,768
136,894
136,402
135,526
135,088 133,986
Dividends per common share
—
—
—
—
—
—
—
—
—
—
Statement of Operations Data:
Net sales
Cost of sales
Gross margin
Operating expenses (2)
Operating income
Other income (expense) – net
Income before cumulative effect of
Balance Sheet Data:
Working capital
Total assets
Total debt
Stockholders’ equity
Operating Data:
(as of fiscal year-end)
$ 2,998,729 $ 2,798,398 $ 2,615,123 $ 2,421,457 $ 1,969,349 $ 1,656,956
1,967,004
1,031,725
672,522
359,203
(1,775)
1,829,526
1,700,694 1,558,946 1,267,005 1,082,370
968,872
633,182
335,690
(6,082)
914,429
591,417
323,012
(6,039 )
862,511
560,375
302,136
(8,689 )
702,344
459,844
242,500
(2,980)
574,586
395,638
178,948
7,454
$ 518,974 $ 509,021 $ 437,727 $ 470,439 $ 507,145 $ 422,093
2,076,373
1,940,320
1,911,718 1,685,301 1,588,957
823,978
655,034
180,024
300,041
321,557
1,004,787
1,379,214 1,242,521 1,015,072
499,587
801,758
274
633,686
$ 331,413 $ 310,046 $ 238,502 $ 187,952
451,976 373,250
2,097
330,470 265,199
718,376
976
514,360
549,180
990
408,515
1,719
Unaudited Quarterly Results
(In thousands, except per share amounts)
Quarterly results are determined in accordance with the accounting
policies used for annual data and include certain items based upon
estimates for the entire year. All fiscal quarters include results for
13 weeks. The following table summarizes results for fiscal 2008
and 2007.
Fiscal 2008
Quarter
Fourth
Third
Second
First
Net sales
Gross profit
Operating income
$778,388
273,154
101,269
$776,946
269,138
97,114
$741,992
252,299
85,613
$701,403
237,134
75,207
Net income
63,209
60,364
53,741
47,544
Earnings per share
basic
diluted
$ 0.52
$ 0.51
$ 0.45
$ 0.45
$ 0.40
$ 0.39
$ 0.35
$ 0.35
Fiscal 2007
Quarter
Fourth
Third
Second
First
Net sales
Gross profit
Operating income
$739,143
260,563
96,446
$709,494
250,266
92,686
$694,273
235,629
78,021
$655,488
222,414
68,537
Net income
59,924
58,591
48,237
41,584
Earnings per share
basic
diluted
$ 0.44
$ 0.44
$ 0.43
$ 0.43
$ 0.35
$ 0.35
$ 0.30
$ 0.30
Number of sales representatives
Number of employees
Number of service technicians
1,998
6,857
1,217
1,923
6,577
1,143
1,864
6,438
1,124
1,683
5,948
1,037
1,582
5,741
991
1,353
4,772
976
1,308
4,637
911
1,087
3,853
807
1,046
3,789
793
986
3,623
721
11
Corporate Headquarters
Directors
1031 Mendota Heights Road
St. Paul, MN 55120-1419
651/686-1600
www.pattersoncompanies.com
John D. Buck (3), (4)
Chief Executive Officer
Whitefish Ventures, LLC
Minneapolis, MN
Independent Auditors
Ernst & Young LLP
Minneapolis, MN
Legal Counsel
Briggs and Morgan, P.A.
Minneapolis, MN
Stock Transfer Agent and Registrar
Wells Fargo Bank, N.A.
South St. Paul, MN
Investor Relations Counsel
Equity Market Partners
Amelia Island, FL
Annual Meeting
The annual meeting of shareholders
will be held at 4:30 p.m. on
September 8, 2008 at the Minnesota
Branch of Patterson Dental, 2930
Waters Road, Suite 100, Eagan,
Minnesota.
Form 10-K
A copy of our annual report on Form
10-K is available to shareholders
without charge in the investor
relations section of the Patterson
website
(www.pattersoncompanies.com) or
by writing to: R. Stephen Armstrong,
Executive Vice President and Chief
Financial Officer
Ronald E. Ezerski (2), (4)
Private Investor
Peter L. Frechette (1)
Chairman
Patterson Companies, Inc.
Andre B. Lacy (2), (4)
Chairman
LDI Ltd., LLC
Indianapolis, IN
Charles Reich (2), (4)
Executive Vice President (retired)
3M Company
St. Paul, MN
Ellen A. Rudnick (3), (4)
Executive Director
Michael P. Polsky Center for
Entrepreneurship
University of Chicago Graduate
School of Business
Chicago, IL
Harold C. Slavkin (3), (4)
Dean
School of Dentistry
University of Southern California
Los Angeles, CA
James W. Wiltz (1)
President and Chief Executive Officer
Patterson Companies, Inc.
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee
(4) Member of Governance Committee
Executive Officers
Peter L. Frechette
Chairman
James W. Wiltz
President and Chief Executive Officer
R. Stephen Armstrong (1)
Executive Vice President, Chief
Financial Officer and Treasurer
Corporate Officers and
Officers of Operating Units
Lynn E. Askew
Vice President
Management Information Systems
Daniel H. Peckskamp
Vice President
Operations
Matthew L. Levitt
Secretary and General Counsel
Scott P. Anderson
President
Patterson Dental
George L. Henriques
President
Webster Veterinary
David P. Sproat
President
Patterson Medical
Jerome E. Thygesen
Vice President
Human Resources
12
This report contains forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are information of a non-historical
nature and are subject to risks and uncertainties which
are beyond the Company’s ability to control. The Company
cautions shareholders and prospective investors that the
following factors, among others, may cause actual results to
differ materially from those indicated by the forward-looking
statements: the ability to integrate recent acquisitions into
Patterson’s operations in a timely manner; competition within
the dental, veterinary, and rehabilitative and assistive living
supply industries; changes in the economics of dentistry,
including reduced growth in expenditures by private dental
insurance plans, the effects of economic conditions and the
effects of healthcare reform, which may affect future per capita
expenditures for dental services and the ability and willingness
of dentists to invest in high-technology products; the effects
of healthcare related legislation and regulation which may
affect expenditures or reimbursements for rehabilitative
and assistive products; changes in the economics of the
veterinary supply market, including reduced growth in per
capita expenditures for veterinary services and reduced growth
in the number of households owning pets; the ability of the
Company to maintain satisfactory relationships with its sales
force; unexpected loss of key senior management personnel;
unforeseen operating risks; and risks associated with the
dependence on manufacturers of the Company’s products.
Forward-looking statements are qualified in their entirety by
the cautionary language set forth in the Company’s filings with
the Securities and Exchange Commission.
1031 Mendota Heights Road
St. Paul, MN 55120-1419
651/686-1600
www.pattersoncompanies.com
Patterson Dental
1031 Mendota Heights Road
St. Paul, MN 55120-1419
651/ 686-1600
Webster Veterinary
86 Leominster Road
Sterling, MA 01564
978/422-8211
Patterson Medical
1000 Remington Boulevard, Suite 210
Bolingbrook, IL 60440-5117
630/378-6300