Patterson Companies Reports Second Quarter Operating Results

Sales of Patterson Dental, Patterson's largest business, increased to $536,837,000 in the second quarter. The impact on sales from acquisitions (Leventhal & Sons, Inc. in April 2008 and Denesca in September 2008) was largely offset by unfavorable movements in the Canadian dollar during the second quarter.

-- Sales of consumable dental supplies and printed office products were virtually unchanged in comparison to last year's second quarter.

-- Sales of dental equipment and software rose 1% from the year-earlier period. Sales of basic dental equipment, including chairs, units and lighting, increased 7% from the second quarter of fiscal 2008.

-- Sales of other services and products, consisting primarily of technical service, parts and labor, software support services and artificial teeth, increased 2% in the second quarter.

Sales of the Webster Veterinary unit increased 14% in the second quarter of fiscal 2009 to $123,589,000. The October 2008 acquisition of Columbus Serum Company, a full-service distributor of companion-pet veterinary supplies, equipment and pharmaceuticals serving the Midwestern and mid-Atlantic markets, accounted for 10 percentage points of Webster's second quarter sales increase. Sales of Patterson Medical, Patterson's rehabilitation supply and equipment unit, were $99,035,000, virtually unchanged from the year-earlier level.

Net income of $46,903,000 in this year's second quarter includes incremental interest expense of $6.9 million ($4.3 million, net of tax) associated with the $525 million of long-term debt financing that was completed in the fourth quarter of fiscal 2008. Patterson used the proceeds of the debt issuance and cash to repurchase 19 million shares of its common stock during the second half of fiscal 2008. Net income was $53,741,000 in the second quarter of fiscal 2008.

James W. Wiltz, president and chief executive officer, commented: "Second quarter operating results of our Patterson Dental unit were below forecasted levels due, we believe, to the impact of the difficult economic environment, particularly in October, on its business. Available evidence indicates that dental patients started deferring higher level and discretionary services, which largely accounted for the soft sales of consumable supplies in the quarter. Reflecting the strengthened focus on sales of dental equipment that we initiated earlier in the year, equipment sales were relatively strong during this period. Much of this growth was generated by orders placed prior to the economic turmoil that erupted during the second quarter. We believe it is possible that the continuation of challenging economic conditions may affect the equipment purchasing decisions of dental practitioners at least over the near-term."

He continued: "Our Webster Veterinary and Patterson Medical units were affected by the difficult economic environment to a lesser degree than Patterson Dental. Webster received a strong sales contribution from its acquisition of Columbus Serum, and the integration of this large and well- established distributor is proceeding on schedule. This acquisition is an important strategic investment, since it expands Webster's geographic coverage, improves its economies of scale and allows Webster to accelerate deployment of its value-added model. Patterson Medical's second quarter performance was adversely affected by the conversion to Patterson's management information systems at the start of the quarter. Issues related to this complex systems transition have been largely resolved."

Wiltz added: "Given expectations for a continuation of weak economic conditions and the anticipated impact on Patterson's sales growth, we are reducing our cost structure by at least an annualized $20 to $25 million. These actions encompass a range of initiatives, including a hiring freeze except for sales personnel as well as wage freezes throughout the company. The initial impact of this expense savings will be realized in the third quarter, and the full impact will be apparent in the fourth quarter. While we feel it is prudent to challenge all levels of our expense structure during these uncertain times, we fully intend to continue investing wisely in our business. Moreover, our operating cash flows are forecasted to remain strong and provide us with ample resources for our growth initiatives and to take advantage of acquisition opportunities. Reflecting these factors, we are forecasting earnings of $0.43 to $0.45 per diluted share for the third quarter of fiscal 2009 ending January 24, 2009. We also have reduced our fiscal 2009 guidance to $1.73 to $1.77 per diluted share from our previously issued full-year guidance of $1.94 to $1.98 per diluted share."

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, euipment 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.

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; unexpected loss of key senior management personnel; 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.

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 at www.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 27 by dialing 1-303-590-3000 and providing the 11122337 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 25, October 27, October 25, October 27, 2008 2007 2008 2007 Net sales $ 759,461 $ 741,992 $ 1,503,320 $ 1,443,395 Gross profit 253,575 252,299 505,305 489,433 Operating expenses 170,973 166,686 343,109 328,613 Operating income 82,602 85,613 162,196 160,820 Other expense, net (7,514 ) 755 (13,426 ) 1,360 Income before taxes 75,088 86,368 148,770 162,180 Income taxes 28,185 32,627 55,903 60,895 Net income $ 46,903 $ 53,741 $ 92,867 $ 101,285 Earnings per share: Basic $ 0.40 $ 0.40 $ 0.79 $ 0.75 Diluted $ 0.40 $ 0.39 $ 0.78 $ 0.74 Shares: Basic 117,421 135,907 117,656 135,846 Diluted 118,328 136,923 118,520 136,834 Gross margin 33.4 % 34.0 % 33.6 % 33.9 % Operating expenses as a % of net sales 22.5 % 22.5 % 22.8 % 22.8 % Operating income as a % of net sales 10.9 % 11.5 % 10.8 % 11.1 % Effective tax rate 37.5 % 37.8 % 37.6 % 37.5 %

PATTERSON COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) October 25, April 26, 2008 2008 (Unaudited) ASSETS Current assets: Cash and short-term investments $ 256,643 $ 308,164 Receivables, net 365,189 364,050 Inventory 311,637 281,238 Prepaid expenses and other current assets 38,366 31,589 Total current assets 971,835 985,041 Property and equipment, net 158,418 148,932 Goodwill and other intangible assets 924,906 881,750 Other 55,929 60,650 Total Assets $ 2,111,088 $ 2,076,373 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 188,523 $ 194,405 Other accrued liabilities 123,666 141,652 Current maturities of long-term debt 130,006 130,010 Total current liabilities 442,195 466,067 Long-term debt 525,333 525,024 Other non-current liabilities 80,862 80,495 Total liabilities 1,048,390 1,071,586 Stockholders' equity 1,062,698 1,004,787 Total Liabilities and Stockholders' Equity $ 2,111,088 $ 2,076,373

PATTERSON COMPANIES, INC. SUPPLEMENTARY FINANCIAL DATA (Dollars in thousands) (Unaudited) Three Months Ended Six Months Ended October 25, October 27, October 25, October 27, 2008 2007 2008 2007 Consolidated Net Sales Consumable and printed products $ 493,731 $ 480,646 $ 991,914 $ 945,376 Equipment and software 200,966 199,377 382,258 378,973 Other 64,764 61,969 129,148 119,046 Total $ 759,461 $ 741,992 $ 1,503,320 $ 1,443,395 Dental Supply Consumable and printed products $ 309,679 $ 310,130 $ 622,272 $ 605,537 Equipment and software 170,642 168,989 321,007 321,722 Other 56,516 55,386 113,443 106,973 Total $ 536,837 $ 534,505 $ 1,056,722 $ 1,034,232 Rehabilitation Supply Consumable and printed products $ 68,819 $ 69,796 $ 139,192 $ 136,118 Equipment and software 24,393 23,919 49,186 45,094 Other 5,823 4,848 11,357 8,613 Total $ 99,035 $ 98,563 $ 199,735 $ 189,825 Veterinary Supply Consumable and printed products $ 115,233 $ 100,720 $ 230,450 $ 203,721 Equipment and software 5,931 6,469 12,065 12,157 Other 2,425 1,735 4,348 3,460 Total $ 123,589 $ 108,924 $ 246,863 $ 219,338 Other (Expense) Income, net Interest income $ 1,870 $ 2,710 $ 3,792 $ 5,058 Interest expense (8,183 ) (2,599 ) (16,235 ) (5,096 ) Other (1,201 ) 644 (983 ) 1,398 $ (7,514 ) $ 755 $ (13,426 ) $ 1,360 Note: Certain amounts previously reported have been reclassified to conform with the current presentation.

PATTERSON COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Six Months Ended October 25, October 27, 2008 2007 Operating activities: Net income $ 92,867 $ 101,285 Depreciation & amortization 13,864 12,324 Share-based compensation 3,938 3,978 Change in assets and liabilities, net of acquired (52,839 ) (8,748 ) Net cash provided by operating activities 57,830 108,839 Investing activities: Additions to property and equipment, net of disposals (17,495 ) (9,180 ) Acquisitions (69,877 ) (11,539 ) Net cash used in investing activities (87,372 ) (20,719 ) Net cash provided by financing activities 5,650 7,111 Effect of exchange rate changes on cash (27,629 ) 8,120 Net (decrease) increase in cash and cash equivalents $ (51,521 ) $ 103,351

SOURCE: Patterson Companies, Inc.

Patterson Companies, Inc. R. Stephen Armstrong, 651-686-1600 Executive Vice President & CFO or Equity Market Partners Richard G. Cinquina, 904-415-1415