Patterson Companies (PDCO) 8-K Patterson Companies Reports Improved Second Quarter Operating Results

Exhibit 99

Patterson Companies Reports Improved Second Quarter Operating Results

St. Paul, MN—November 21, 2007—Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated sales of $741,992,000 for the second quarter of fiscal 2008 ended October 27, an increase of 7% from $694,273,000 in the year-earlier quarter. Net income came to $53,741,000 or $0.39 per diluted share, up 11% from $48,237,000 or $0.35 per diluted share in the second quarter of fiscal 2007.

Second quarter earnings benefited from an increase in the dental gross margin and further strengthening of the consolidated operating expense ratio, reflecting improvements in Patterson’s cost structure that have been achieved by consolidating distribution facilities and other functions at the corporate level. Revenues for this period were adversely affected by below-plan sales of dental equipment and software.

Sales of Patterson Dental, Patterson’s largest business, increased 4% to $534,505,000 in this year’s second quarter.

• Sales of consumable dental supplies and printed office products increased 7%.

• Sales of dental equipment declined 2% in the second quarter. Sales of CEREC 3D^® dental restorative systems, which were only modestly lower year-over-year, benefited from solid demand for the next-generation crown milling chamber that is sold both as an upgrade for existing installations and as an option on new system sales. Sales of basic dental equipment also were down slightly in the second quarter.

• Sales of other services and products, consisting primarily of technical service parts and labor, software support services and artificial teeth increased 13% in the second quarter.

Sales of the Webster Veterinary unit increased 14% in the second quarter of fiscal 2008 to $108,924,000. Sales of Patterson Medical, Patterson’s rehabilitation supply and equipment unit, rose 14% to $98,563,000, which included contributions from the eight branch offices that have been opened during the past year.

James W. Wiltz, president and chief executive officer, commented: “Patterson Dental recorded a mixed performance in this year’s second quarter, but on balance, we are disappointed with the overall results of this unit. Sales of consumable dental supplies were solid during this period, but sales of dental equipment and software fell short of forecasted levels. Sales growth of Patterson’s veterinary business remained strong in the quarter, and the positive outlook for this unit is reinforced by the anticipated impact of two important flea and tick medications that were introduced late in the second quarter. We also are encouraged by the initial results of Patterson Medical’s branch office strategy, which is making a solid contribution to the growth of our rehabilitation business. The recent acquisition of a developer of industry-leading practice management software for physical therapists, while not expected to have an immediate impact on Patterson Medical’s sales growth, should further strengthen the full-service, value-added business platform of our rehabilitation unit.”

Wiltz continued: “We are cautious about the near-term outlook of our equipment business, since it appears that certain economic and industry conditions may be causing some customers to temporarily delay new capital investments in their practices. Given this uncertainty, we are forecasting earnings of $0.44 to $0.46 per diluted share for the third quarter of fiscal 2008 ending January 26, 2008. We also are reducing our full-year fiscal 2008 guidance to $1.68 to $1.72 per diluted share from the previously-issued guidance of $1.73 to $1.77.”

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 and software, 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	904/415-1415

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 28, 2007 by dialing 1-303-590-3000 and providing the 11102301 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 27, 2007			October 28, 2006			October 27, 2007			October 28, 2006
Net sales	$	741,992		$	694,273		$	1,443,395		$	1,349,761
Gross profit		252,299			235,629			489,433			458,043
Operating expenses		166,686			157,608			328,613			311,485
Operating income		85,613			78,021			160,820			146,558
Other income (expense), net		755			(1,502	)		1,360			(3,343	)
Income before taxes		86,368			76,519			162,180			143,215
Income taxes		32,627			28,282			60,895			53,394
Net income	$	53,741		$	48,237		$	101,285		$	89,821
Earnings per share:
Basic	$	0.40		$	0.35		$	0.75		$	0.65
Diluted	$	0.39		$	0.35		$	0.74		$	0.65
Shares:
Basic		135,907			137,757			135,846			137,983
Diluted		136,923			138,728			136,834			138,948
Gross margin		34.0	%		33.9	%		33.9	%		33.9	%
Operating expenses as a % of net sales		22.5	%		22.7	%		22.8	%		23.1	%
Operating income as a % of net sales		11.5	%		11.2	%		11.1	%		10.8	%
Effective tax rate		37.8	%		37.0	%		37.5	%		37.3	%
Return on net sales		7.2	%		6.9	%		7.0	%		6.7	%

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PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	October 27, 2007		April 28, 2007
	(Unaudited)
ASSETS
Current assets:
Cash and short-term investments	$	345,142	$	241,791
Receivables, net		348,346		361,401
Inventory		280,444		250,207
Prepaid expenses and other current assets		37,640		33,091
Total current assets		1,011,572		886,490
Property and equipment, net		132,391		131,952
Goodwill and other intangible assets		772,844		762,930
Other		158,119		158,948
Total Assets	$	2,074,926	$	1,940,320
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	181,774	$	182,761
Other accrued liabilities		133,976		144,694
Current maturities of long-term debt		50,008		50,014
Total current liabilities		365,758		377,469
Long-term debt		130,069		130,010
Other non-current liabilities		67,532		53,627
Total liabilities		563,359		561,106
Stockholders’ equity		1,511,567		1,379,214
Total Liabilities and Stockholders’ Equity	$	2,074,926	$	1,940,320

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PATTERSON COMPANIES, INC.

SUPPLEMENTARY FINANCIAL DATA

(Dollars in thousands)

(Unaudited)

	Three Months Ended						Six Months Ended
	October 27, 2007			October 28, 2006			October 27, 2007			October 28, 2006
Consolidated Net Sales
Consumable and printed products	$	480,023		$	440,394		$	943,564		$	874,209
Equipment and software		200,029			198,575			380,889			368,020
Other		61,940			55,304			118,942			107,532
Total	$	741,992		$	694,273		$	1,443,395		$	1,349,761
Dental Supply
Consumable and printed products	$	310,130		$	289,892		$	605,537		$	569,309
Equipment and software		168,989			173,252			321,722			320,250
Other		55,386			49,056			106,973			95,350
Total	$	534,505		$	512,200		$	1,034,232		$	984,909
Rehabilitation Supply
Consumable and printed products	$	69,796		$	63,941		$	136,118		$	125,727
Equipment		23,919			18,575			45,094			35,721
Other		4,848			4,195			8,613			7,928
Total	$	98,563		$	86,711		$	189,825		$	169,376
Veterinary Supply
Consumable and printed products	$	100,097		$	86,561		$	201,909		$	179,173
Equipment and software		7,121			6,748			14,073			12,049
Other		1,706			2,053			3,356			4,254
Total	$	108,924		$	95,362		$	219,338		$	195,476
Other Income (Expense), net
Interest income	$	2,710		$	2,120		$	5,058		$	4,067
Interest expense		(2,599	)		(3,830	)		(5,096	)		(7,636	)
Other		644			208			1,398			226
	$	755		$	(1,502	)	$	1,360		$	(3,343	)

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PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Six Months Ended
	October 27, 2007			October 28, 2006
Operating activities:
Net income	$	101,285		$	89,821
Depreciation & amortization		12,324			12,856
Share-based compensation		3,978			4,065
Change in assets and liabilities, net of acquired		(8,748	)		(24,267	)
Net cash provided by operating activities		108,839			82,475
Investing activities:
Additions to property and equipment, net of disposals		(9,180	)		(9,726	)
Acquisitions		(11,539	)		(8,665	)
Net cash used in investing activities		(20,719	)		(18,391	)
Net cash provided by (used in) financing activities		7,111			(106,811	)
Effect of exchange rate changes on cash		8,147			(107	)
Net increase (decrease) in cash and cash equivalents	$	103,378		$	(42,834	)