Patterson Companies, Inc. (NASDAQ:PDCO) Q1 2024 Earnings Call Transcript

Jeff Johnson: Thank you. Good morning, guys. Don, I wanted to start on your equipment number that down 5.7%. You know, obviously, we’ve seen many times in the past from you and other companies push hard. It’s kind of the fiscal end of year to make some numbers and then the next quarter has a bit of an overhang here. How much of that did — was an impact this quarter? I mean, obviously, you talked about digital x-ray being down, but I’m hoping you can help us maybe disaggregate, kind of, end market tenure of end markets versus just some timing of when you closed your fiscal year and then made a big push last year and had a bit of an overhang to deal with, in this first quarter? Thanks.

Don Zurbay: Yes. No doubt, Jeff, and I think you’ve seen that in the past. And there’s a lot of reasons for it. Obviously, you know, there can be a fourth quarter push, we do budget and forecast for that. And I think, as you mentioned, you know, the digital category sometimes is the one that may see more variability on that kind of dynamic. So, you know, this gets back to, for me, just back to the whole notion of looking at it in the three month increments, particularly [Indiscernible] as you’re bringing up in the fourth quarter, first quarter kind of realm. I think the — if you just looked across the six month period, which might be a better way to think about all that, you know, our equipment sales were up 8% Q4 and Q1 over last year.

And then I think the — so I would just highlight that we — you know, we keep watching this category, as you all do, I think, in terms of the economy and things. But, all we’re seeing is just the — our customers, desire to continue investing in their practice and that’s just not slowing down. It’s a good patient traffic, and it’s kind of translating to the practices wanting to continue to invest.

Jeff Johnson: That’s helpful. Thank you. And then just on the EPS guidance, you’re obviously up 25% year-over-year this quarter. I think your guidance for the year is low-single-digit to mid-single-digit growth year-over-year to full-year. So that would kind of imply kind of flattish EPS over the next three quarters on a year-over-year basis. Just remind us, one, why would that be the right level of EPS growth after a strong start here on the EPS line of the year? And two, how much conservatism versus other factors we might have to be taken into account there.

Don Zurbay: Yes. Yes. I think this really actually — I think this mostly relates just to a bit of phasing on the year. I think that we had a tough comp — or we had an easy comp in Q1 and obviously, a tough comp in Q4, and there’s some other dynamics within the year, but I think it relates more to that than anything. And so when we kind of look back and say, even with all that phasing, we’re comfortable with the guidance we’ve given for the year and that growth even though it comes a little bit different for each quarter.

Kevin Barry: Yes, I think the other thing I’d add, Jeff, is there are some — while we do expect the business to continue to grow over the course of the year, there are some internal investments we’re making that will ramp up a bit here into the rest of the year that we think are great investments for the long-term of the company. But we’re going to have a little bit of spending that will come through in the back half of the year, too.

Operator: And your next question comes from the line of Kevin Caliendo from UBS. Your line is open.