Patterson Companies Inc. F4Q09 (Qtr End 25/04/09) Earnings Call Transcript

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2009-05-21 12:01:56.0

Tags: Seeking Alpha, Patterson Companies Inc.

Question-and-Answer Session

Operator

Your first question comes from Robert Willoughby - Bank of America/Merrill lynch.

Robert Willoughby - Bank of America/Merrill lynch

Steve did you throw out the operating margin assumptions by business line? I may have missed it in the wrap up.

Steve Armstrong

Yes Bob, I’ll repeat them for you. Dental did generate a 12.8% operating margin, the Veterinary segment 5.4% and the Medical segment was 17.5%.

Robert Willoughby - Bank of America/Merrill lynch

Okay, and your comment, I think Jim you mentioned operating margin for fiscal 2010 in line with what you reported in ?09?

James Wiltz

Yes. We want to keep it flat Bob.

Robert Willoughby - Bank of America/Merrill lynch

Okay and then just, Steve you mentioned $95 million bucks coming in, in fiscal 2010, incremental from the sale of the receivables now. When does that exactly start? Is that a third quarter phenomena for you?

Steve Armstrong

It could be some of it in the late second quarter, Bob. We’ll get some of it in that promotion started in August of 2008. So, we’ll have contracts we’ll be able to sell by the second quarter.

Robert Willoughby - Bank of America/Merrill lynch

And you referenced, was it eServices revenues up about 12%. Why would that be? Why is that moving up?

Steve Armstrong

Well it’s moving up because of the free software Bob we are giving the away. We have more installs and more customers using e-claims and e-statements and so forth.

Robert Willoughby - Bank of America/Merrill lynch

Do you have any pricing leverage on that business?

Steve Armstrong

Yes.

Robert Willoughby - Bank of America/Merrill lynch

Are you availing yourself of that pricing leverage?

Steve Armstrong

No. Sorry Bob, we don’t share that.

Robert Willoughby - Bank of America/Merrill lynch

Okay, and just any update on the acquisition front. I mean you have been active to-date; still a buyers market for things out there or how...?

Steve Armstrong

It appears to be. We have a pretty full pipeline of discussions going on.

Robert Willoughby - Bank of America/Merrill lynch

Okay, more dental than vet, more rehab than dental.

Steve Armstrong

More rehab. Rehab will be first, dental second, and vet third right now.

Operator

Your next question comes from Lisa Gill - JP Morgan

Lisa Gill - JP Morgan

I was wondering if maybe you could talk about the competitiveness of the dental business. Looking at the consumable part of the business, you came in lower than your largest competitor. Are you seeing any market share movement activity and is that the reason for the revision in your commission structure?

 

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