Patterson Cos.’ interim CEO said the distributor of dental and animal health products continued to struggle in the first quarter of fiscal 2018 and that a period of change will continue at the company.
“Our performance in the 2018 first quarter reflects a period of significant transition,” James Wiltz, interim president and chief executive, said in a news release.
The Mendota Heights company is working on a sales force realignment in its dental segment that it began last year. The realignment did have some impact on the segment’s 6.5 percent decrease in sales for the quarter. In addition, the company is in the midst of rolling out new enterprise resource planning software for the entire organization and has begun the search process for a new CEO.
“We are nearing the major milestone of the full rollout of our enterprise resource system to our U.S. dental and companion animal health operations,” Wiltz said in the release. “This will allow us to shift our focus to begin realizing the benefits of the new platform as well as enhancing the system experience for our customers, suppliers and field locations.”
The company had sales of $1.3 million, a 2.1 percent decrease from the first quarter last year. Net income of $30.8 million, or 33 cents per share, was down from $38.9 million, or 40 cents a share.
Company revenue just missed the consensus sales estimates of analysts polled by Thomson Reuters. Adjusted earnings per share of 44 cents — which excluded certain transaction-related costs, deal amortization and integration and business expenses — was also down from last year but met expectations.
“We expect the first half of fiscal 2018 to be challenging, and we remain committed to strengthening our sales execution and expanding our technology product platform in our dental business, improving margins in animal health and driving greater efficiencies across the entire enterprise,” Wiltz said.
On June 1, the company announced that CEO Scott Anderson would step down, shortly after it was announced that fiscal 2017 sales were flat and profit was down for the second year in a row.
On a conference call with analysts, Wiltz said it was too early to give many details on the CEO search other than the board’s search committee and an executive search firm have identified candidates and begun interviews.
Patterson reiterated its fiscal 2018 earnings guidance, saying it expects earnings in the range of $1.90 to $2.05 per diluted share. The company said non-GAAP adjusted earnings are still expected to be in the range of $2.25 to $2.40 per diluted share.
Shares of Patterson on Thursday rose 1.6 percent to $36.84. On a total return basis, shares are down 8.6 percent year to date, and down 17.6 percent from a year ago.