pdco-20241026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________

FORM 10-Q

____________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED October 26, 2024.


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-20572

__________________________________________________________

PATTERSON COMPANIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

____________________________________________________________


Minnesota		41-0886515
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
1031 Mendota Heights Road
St. Paul	Minnesota	55120
(Address of Principal Executive Offices)		(Zip Code)

(651) 686-1600

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $.01	PDCO	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 19, 2024, there were 88,316,000 shares of Common Stock of the registrant issued and outstanding.

Table of Contents

PATTERSON COMPANIES, INC.

INDEX


			Page
PART I - FINANCIAL INFORMATION

Item 1- Financial Statements			3

Condensed Consolidated Balance Sheets			3

Condensed Consolidated Statements of Operations and Other Comprehensive Income			4

Condensed Consolidated Statements of Changes in Stockholders' Equity			5

Condensed Consolidated Statements of Cash Flows			7

Notes to Condensed Consolidated Financial Statements			8

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			20

Item 3 - Quantitative and Qualitative Disclosures about Market Risk			26

Item 4 - Controls and Procedures			27

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings			28

Item 1A - Risk Factors			28

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			28

Item 5 - Other Information			28

Item 6 - Exhibits			30

Signatures			31

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)


	October 26, 2024		April 27, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	157,935	$	114,462
Receivables, net of allowance for doubtful accounts of $3,847 and $2,731	532,038		547,287
Inventory, net	823,689		782,898
Prepaid expenses and other current assets	328,355		334,116
Total current assets	1,842,017		1,778,763
Property and equipment, net	225,354		229,081
Operating lease right-of-use assets, net	124,881		122,295
Long-term receivables, net	118,702		129,876
Goodwill	160,084		156,328
Identifiable intangibles, net	181,158		193,261
Investments	85,962		166,320
Other non-current assets, net	107,444		120,808
Total assets	$	2,845,602	$	2,896,732
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	731,259	$	745,375
Accrued payroll expense	53,010		78,211
Other accrued liabilities	167,302		167,399
Operating lease liabilities	33,865		32,815
Current maturities of long-term debt	125,000		122,750
Borrowings on revolving credit	234,000		186,000
Total current liabilities	1,344,436		1,332,550
Long-term debt	325,396		328,911
Non-current operating lease liabilities	94,294		92,464
Other non-current liabilities	118,027		141,075
Total liabilities	1,882,153		1,895,000
Stockholders’ equity:
Common stock, $0.01 par value: 600,000 shares authorized; 88,317 and 89,701 shares issued and outstanding	883		897
Additional paid-in capital	271,956		258,679
Accumulated other comprehensive loss	(85,369)		(89,915)
Retained earnings	775,540		831,483

Total Patterson Companies, Inc. stockholders' equity	963,010		1,001,144
Noncontrolling interests	439		588
Total stockholders’ equity	963,449		1,001,732
Total liabilities and stockholders’ equity	$	2,845,602	$	2,896,732

See accompanying notes

Table of Contents

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND OTHER COMPREHENSIVE INCOME

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 26, 2024		October 28, 2023		October 26, 2024		October 28, 2023
Net sales	$	1,674,375	$	1,652,772	$	3,216,117	$	3,229,517
Cost of sales	1,346,283		1,313,746		2,575,416		2,571,436
Gross profit	328,092		339,026		640,701		658,081
Operating expenses	290,456		282,123		573,696		562,956
Operating income	37,636		56,903		67,005		95,125
Other income (expense):

Other income, net	9,705		7,096		11,419		18,997
Interest expense	(11,798)		(10,642)		(25,021)		(20,154)
Income before taxes	35,543		53,357		53,403		93,968
Income tax expense	8,847		13,502		13,068		22,983


Net income	26,696		39,855		40,335		70,985
Net loss attributable to noncontrolling interests	(73)		(103)		(149)		(207)
Net income attributable to Patterson Companies, Inc.	$	26,769	$	39,958	$	40,484	$	71,192
Earnings per share attributable to Patterson Companies, Inc.:


Basic	$	0.30	$	0.42	$	0.46	$	0.75



Diluted	$	0.30	$	0.42	$	0.46	$	0.74
Weighted average shares:
Basic	88,158		94,710		88,142		95,127
Diluted	88,663		95,156		88,724		95,722

Comprehensive income:
Net income	$	26,696	$	39,855	$	40,335	$	70,985
Foreign currency translation gain	844		(17,589)		4,025		(10,221)
Cash flow hedges, net of tax	260		260		521		521
Comprehensive income	$	27,800	$	22,526	$	44,881	$	61,285

See accompanying notes

Table of Contents

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Non-controlling Interests		Total
	Shares	Amount
Balance at April 29, 2023	96,350	$	964	$	233,706	$	(89,262)	$	972,127	$	1,000	$	1,118,535
Foreign currency translation	—	—		—		7,368		—		—		7,368
Cash flow hedges	—	—		—		261		—		—		261
Net income (loss)	—	—		—		—		31,234		(104)		31,130
Dividends declared ($0.26 per common share)	—	—		—		—		(25,134)		—		(25,134)
Common stock issued	565	5		1,569		—		—		—		1,574
Repurchases of common stock	(1,109)	(11)		—		—		(29,497)		—		(29,508)
Stock-based compensation	—	—		7,015		—		—		—		7,015




Balance at July 29, 2023	95,806	958		242,290		(81,633)		948,730		896		1,111,241
Foreign currency translation	—	—		—		(17,589)		—		—		(17,589)
Cash flow hedges	—	—		—		260		—		—		260
Net income (loss)	—	—		—		—		39,958		(103)		39,855
Dividends declared ($0.26 per common share)	—	—		—		—		(24,897)		—		(24,897)
Common stock issued	180	2		3,226		—		—		—		3,228
Repurchases of common stock	(1,897)	(19)		(661)		—		(60,964)		—		(61,644)
Stock-based compensation	—	—		4,635		—		—		—		4,635

Balance at October 28, 2023	94,089	941		249,490		(98,962)		902,827		793		1,055,089
Foreign currency translation	—	—		—		12,538		—		—		12,538
Cash flow hedges	—	—		—		261		—		—		261
Net income (loss)	—	—		—		—		47,703		(110)		47,593
Dividends declared ($0.26 per common share)	—	—		—		—		(23,591)		—		(23,591)
Common stock issued	103	1		1,844		—		—		—		1,845
Repurchases of common stock	(4,101)	(41)		(1,219)		—		(124,055)		—		(125,315)
Stock-based compensation	—	—		3,745		—		—		—		3,745

Balance at January 27, 2024	90,091	901		253,860		(86,163)		802,884		683		972,165
Foreign currency translation	—	—		—		(4,012)		—		—		(4,012)
Cash flow hedges	—	—		—		260		—		—		260
Net income (loss)	—	—		—		—		67,036		(95)		66,941
Dividends declared ($0.26 per common share)	—	—		—		—		(23,521)		—		(23,521)
Common stock issued	107	1		2,462		—		—		—		2,463
Repurchases of common stock	(497)	(5)		(119)		—		(14,916)		—		(15,040)
Stock-based compensation	—	—		2,476		—		—		—		2,476

Balance at April 27, 2024	89,701	$	897	$	258,679	$	(89,915)	$	831,483	$	588	$	1,001,732

See accompanying notes

Table of Contents

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Non-controlling Interests		Total
	Shares	Amount
Balance at April 27, 2024	89,701	$	897	$	258,679	$	(89,915)	$	831,483	$	588	$	1,001,732
Foreign currency translation	—	—		—		3,181		—		—		3,181
Cash flow hedges	—	—		—		261		—		—		261
Net income (loss)	—	—		—		—		13,715		(76)		13,639
Dividends declared ($0.26 per common share)	—	—		—		—		(23,221)		—		(23,221)
Common stock issued	385	4		(752)		—		—		—		(748)
Repurchases of common stock	(1,940)	(20)		(403)		—		(49,980)		—		(50,403)
Stock-based compensation	—	—		8,060		—		—		—		8,060


Balance at July 27, 2024	88,146	881		265,584		(86,473)		771,997		512		952,501
Foreign currency translation	—	—		—		844		—		—		844
Cash flow hedges	—	—		—		260		—		—		260
Net income (loss)	—	—		—		—		26,769		(73)		26,696
Dividends declared ($0.26 per common share)	—	—		—		—		(23,226)		—		(23,226)
Common stock issued	171	2		1,968		—		—		—		1,970
Repurchases of common stock	—	—		32		—		—		—		32
Stock-based compensation	—	—		4,372		—		—		—		4,372


Balance at October 26, 2024	88,317	$	883

SEC Form 10-Q filed by Patterson Companies Inc.