Patterson Companies (PDCO) 8-K Patterson Companies Reports Second Quarter Sales and Earnings

Exhibit 99

Patterson Companies Reports Second Quarter Sales and Earnings

St. Paul, MN—November 23, 2005—Patterson Companies, Inc. (Nasdaq NMS: PDCO) today reported consolidated sales of $641,697,000 for the second quarter of fiscal 2006 ended October 29, an increase of 11% from $578,237,000 in the year-earlier quarter. Excluding the impact of two acquisitions made during the past year, internally generated sales rose approximately 7%. Net income increased 5% to $44,720,000 or $0.32 per diluted share, from $42,504,000 or $0.31 per diluted share in the second quarter of fiscal 2005.

Patterson Dental, Patterson’s largest business, reported sales growth of 9% to $480,080,000 in the second quarter. The September 2005 acquisition of Accu-Bite, Inc., a Michigan-based dental distributor, accounted for approximately three percentage points of Patterson Dental’s second quarter sales growth.

• Sales of consumable dental supplies and printed office products increased 12% in the second quarter. Excluding Accu-Bite, consumable sales were up 7%. Patterson Dental’s sales force grew to 1,535 at October 29, reflecting the addition of Accu-Bite’s sales representatives.

• Sales of dental equipment and software rose 5% in the second quarter. During this period, the growth of Patterson Dental’s equipment business was driven by sales of CEREC® 3D dental restorative systems and digital radiography equipment.

• Sales of other services and products, consisting primarily of parts, technical service, software support, and insurance e-claims increased 11% in the second quarter.

Sales of the Webster Veterinary unit increased 29% in the second quarter of fiscal 2006 to $82,817,000. Excluding the October 2004 acquisition of Milburn Distributions, Webster’s second quarter sales rose 14%. Sales of Patterson Medical, Patterson’s rehabilitation supply and equipment unit, increased 5% in the second quarter to $78,800,000.

James W. Wiltz, president and chief executive officer, commented: “Patterson’s second quarter earnings shortfall was attributable primarily to weaker than forecasted sales growth of basic dental equipment, including chairs, lights and cabinets. A below-plan performance in revenues and gross margins at the Patterson Medical unit also affected our results for this period. Consistent with prior statements, the operations of Accu-Bite had a neutral impact on Patterson’s consolidated profitability. On the positive side, our second quarter results benefited from improved growth of consumable dental supplies year over year, ongoing demand for CEREC and digital radiography systems, and the performance of our Webster Veterinary unit. Webster is benefiting from the expansion of its geographic marketplace through acquisitions and internal expansion, in addition to a new pharmaceutical distribution agreement with Pfizer.”

Wiltz added: “We believe dentists will continue to modernize their practices with new equipment that strengthens productivity and provides offices with a state-of-the-art appearance. To fully optimize this opportunity, we are taking actions to strengthen our focus on basic dental equipment. However, these measures are not expected to have a significant near-term impact on the growth rate of basic dental equipment sales. As a result, we are forecasting earnings of $0.38 to $0.40 per diluted share for the third quarter of fiscal 2006 ending January 28, 2006. For the same reason, we previously issued revised full-year earnings guidance of $1.44 to $1.46 per diluted share, down from the guidance of $1.54 to $1.58 per diluted share that was issued at the beginning of fiscal 2006. Despite our near-term challenges, we believe that Patterson’s business foundation remains strong and that our dental, veterinary and rehabilitation units can further strengthen their positions of industry leadership. As a result, we remain confident about Patterson’s long-term prospects.”

About Patterson Companies, Inc.

Patterson Companies, Inc. is a value-added distributor serving the dental, companion-pet veterinarian and rehabilitation supply markets.

Dental Market

As Patterson’s largest business, Patterson Dental 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.

Veterinary Market

Webster Veterinary is the nation’s second largest distributor of consumable veterinary supplies, equipment, diagnostic products, vaccines and pharmaceuticals to companion-pet veterinary clinics.

Rehabilitation Market

Patterson Medical is the world’s leading distributor of rehabilitation supplies and non-wheelchair assistive patient products to the physical and occupational therapy markets. The unit’s global customer base includes hospitals, long-term care facilities, clinics and dealers.

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This release 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 that 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: 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; unforeseen operating risks; risks associated with the dependence on manufacturers of the Company’s products; and the ability of the Company to successfully integrate the recent acquisitions into its existing business. 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.

For additional information contact:

R. Stephen Armstrong	Richard G. Cinquina
Executive Vice President & CFO	Equity Market Partners
651/686-1600	904/261-2210 or 800/522-1744

Second Quarter Conference Call and Replay

Patterson’s second quarter earnings conference call will start at 10:00 a.m. Eastern today. Investors can listen to a live webcast of the conference call atwww.pattersoncompanies.com. Listeners should go to this website at least 15 minutes prior to the call to download and install any necessary audio software. The conference call will be archived on Patterson’s web site. A replay of the second quarter conference call can be heard through November 30, 2005 by dialing by dialing 1-303-590-3000 and providing the 11044919 confirmation code.

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for earnings per share)

(Unaudited)

	Three Months Ended						Six Months Ended
	October 29, 2005			October 30 2004			October 29, 2005			October 30 2004
Net sales	$	641,697		$	578,237		$	1,237,544		$	1,156,180
Gross profit		219,214			204,627			426,458			408,596
Operating expenses		146,388			134,568			284,118			270,935
Operating income		72,826			70,059			142,340			137,661
Other expense, net		(1,387	)		(2,164	)		(2,399	)		(4,560	)
Income before taxes		71,439			67,895			139,941			133,101
Income taxes		26,719			25,391			52,339			49,782
Net income	$	44,720		$	42,504		$	87,602		$	83,319
Earnings per share:
Basic	$	0.33		$	0.31		$	0.64		$	0.61
Diluted	$	0.32		$	0.31		$	0.63		$	0.60
Shares:
Basic		137,554			136,737			137,427			136,630
Diluted		139,249			138,795			139,183			138,702
Gross margin		34.2	%		35.4	%		34.5	%		35.3	%
Operating expenses as a % of net sales		22.8	%		23.3	%		23.0	%		23.4	%
Operating income as a % of net sales		11.4	%		12.1	%		11.5	%		11.9	%
Effective tax rate		37.4	%		37.4	%		37.4	%		37.4	%
Return on net sales		7.0	%		7.4	%		7.1	%		7.2	%

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PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	October 29, 2005		April 30, 2005
	(Unaudited)
ASSETS
Current assets:
Cash and short-term investments	$	152,060	$	245,931
Receivables, net		341,258		317,168
Inventory		237,011		206,405
Prepaid expenses and other current assets		30,088		30,533
Total current assets		760,417		800,037
Property and equipment, net		119,820		97,178
Goodwill and other intangible assets		760,541		746,079
Other		142,334		42,007
Total Assets	$	1,783,112	$	1,685,301
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	173,096	$	160,954
Other accrued liabilities		134,329		141,307
Current maturities of long-term debt		21,527		20,027
Total current liabilities		328,952		322,288
Long-term debt		290,016		301,530
Other non-current liabilities		51,668		46,411
Total liabilities		670,636		670,229
Stockholders’ equity		1,112,476		1,015,072
Total Liabilities and Stockholders’ Equity	$	1,783,112	$	1,685,301

NOTE:Certain amounts previously reported have been reclassified to conform with the current presentation.

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PATTERSON COMPANIES, INC.

SUPPLEMENTARY FINANCIAL DATA

(Dollars in thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	October 29, 2005			October 30, 2004			October 29, 2005			October 30, 2004
Consolidated Net Sales
Consumable and printed products	$	418,010		$	367,140		$	818,350		$	757,003
Equipment and software		176,724			167,675			326,787			312,659
Other		46,963			43,422			92,407			86,518
Total	$	641,697		$	578,237		$	1,237,544		$	1,156,180
Dental Supply
Consumable and printed products	$	271,798		$	243,472		$	523,528		$	496,599
Equipment and software		166,200			157,498			305,712			291,583
Other		42,082			37,948			82,896			76,353
Total	$	480,080		$	438,918		$	912,136		$	864,535
Rehabilitation Supply
Consumable and printed products	$	67,930		$	64,335		$	135,587		$	129,864
Equipment		7,214			7,443			14,744			15,700
Other		3,656			3,427			7,019			6,886
Total	$	78,800		$	75,205		$	157,350		$	152,450
Veterinary Supply
Consumable and printed products	$	78,282		$	59,333		$	159,235		$	130,540
Equipment		3,310			2,734			6,331			5,376
Other		1,225			2,047			2,492			3,279
Total	$	82,817		$	64,114		$	168,058		$	139,195
Other (Expense) Income, net
Interest income	$	1,479		$	1,180		$	3,575		$	2,501
Interest expense		(3,109	)		(3,791	)		(6,186	)		(7,549	)
Other		243			447			212			488
	$	(1,387	)	$	(2,164	)	$	(2,399	)	$	(4,560	)

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PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Six Months Ended
	October 29, 2005			October 30, 2004
Operating activities:
Net income	$	87,602		$	83,319
Depreciation & amortization		10,928			13,234
Stock-based compensation		390			—
Change in assets and liabilities, net of acquired		(31,016	)		28,858
Net cash provided by operating activities		67,904			125,411
Investing activities:
Additions to property and equipment, net		(27,166	)		(13,386	)
Acquisitions		(32,728	)		(72,762	)
Distribution agreement		(100,000	)		—
Sale (purchase) of investments, net		9,369			(12,373	)
Net cash used in investing activities		(150,525	)		(98,521	)
Net cash used in financing activities		(1,881	)		(48,244	)
Net decrease in cash and cash equivalents	$	(84,502	)	$	(21,354	)