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When announcing 2Q18 results, $PDCO cut down its previously announced FY18 outlook. Patterson now expects GAAP EPS to be $1.67-1.77 compared with the previous outlook of $1.90-2.05. Non-GAAP EPS expectation was also trimmed to $2.00-2.10 band from the earlier range of $2.25-2.40.
$PDCO said that its 2Q18 profit was impacted by the strategic actions taken by the company, market conditions and the impact of hurricanes. Net income dropped 12% to $40MM or $0.43 per share, while sales slipped 2.3% to $1.4Bil. Adjusted earnings slide 9% to $0.51 per share.
$PDCO reaffirmed its FY18 guidance and expects the GAAP earnings to be in the range of $1.90 to $2.05 per diluted share. The non-GAAP earnings would be in the range of $2.25 to $2.40 per diluted share. In 1Q18, it repurchased approx. 0.8MM shares of its outstanding common stock, with a value of $37.5MM.
The dental wing of $PDCO, which comprises 40% of the total sales, suffered as its net sales nosedived by 6.5% to $518.8MM in 1Q18. The company expects that a broadened portfolio in the dental segment would help overcome the lean patch. The Animal Health division fared better with a net sales of $776.1MM, 1.8% higher than same period last year.
Lower sales and higher rates of depreciation and amortization pulled back the net income of $PDCO, a medical supplies firm, to $30.8MM or $0.33 per diluted share in 1Q18 compared to $38.9MM, or $0.40 per diluted share last year. The net sales dipped by 2.1% to $1.30Bil from $1.33Bil a year ago.
$PDCO has named Kevin Pohlman as Interim President of Patterson Animal Health, effective July 1. He will succeed John Adent, current CEO of Patterson Animal Health, who is leaving to pursue other opportunities. Mr. Pohlman will report directly to Interim President and CEO, Jim Wiltz.
$PDCO said it has been added to the Fortune 500 list of America's largest companies, based on revenues, for the first time since its inception 140 years ago. In fiscal 2017, Patterson Companies recorded net sales of $5.6Bil, a 3.8% growth from 2016.
CEO of $PDCO and Chairman of its Board, Scott Anderson, will step down from those roles, effective immediately. James Wiltz, a director of the company, will assume the role of interim CEO. John Buck, currently the Lead Director, will assume the role of non-executive Chairman. A search is on to find a permanent CEO.
For FY17, $PDCO generated cash flow from operations of $166MM, down from $195MM in FY16. Over the next five years, the company continues to expect to generate more than $1.3Bil of free cash flow. CapEx for FY17 totaled $47MM and expects FY18 CapEx to be in the range of about $50MM.
$PDCO expects FY18 EPS of $1.90-2.05 and non-GAAP EPS of $2.25-2.40. The non-GAAP earnings forecast excludes after-tax impact of deal amortization expense, integration and business restructuring expenses, and transaction-related costs. The forecast assumes North American and international market conditions similar to FY17.
$PDCO reported a decline in 4Q17 earnings due to lower sales. Net income fell to $61.69MM or $0.65 per share from $65.62MM or $0.68 per share last year. Net sales declined to $1.445Bil from $1.454MM. Non-GAAP EPS decreased to $0.69 from $0.77.
$PDCO said Alex Blanco, EVP and Chief Supply Chain Officer at Ecolab, was elected to its BoD, increasing the board's size to nine members. Blanco will serve on the board's audit committee and will also be on the governance and nominating committee.
$PDCO increased its quarterly dividend to $0.26 per share, up 8% from the prior quarter. The dividend, which improves the annual cash dividend to $1.04 per share, will be payable on or about April 28, 2017, to shareholders of record at business close on April 14, 2017.