A big miss on third-quarter earnings and a continuing slide in revenue resulted in Patterson Cos. shares losing more than one-fifth of their value on Thursday.
The Mendota Heights-based distributor of dental and animal health supplies and equipment reported net income of $109 million, or $1.18 per share, for the quarter ended Jan. 27, up from $24.5 million, or 26 cents a share, in the same quarter a year ago.
However, when accounting for a $77.3 million provisional net benefit from the recent federal tax reform and other one-time events, adjusted earnings were 43 cents a share. Wall Street was expecting 52 cents.
Company shares closed the day at $24.10, down 24 percent.
"Our third-quarter results did not meet our expectations," Mark Walchirk, the company's new president and CEO, said in a statement.
"Since joining Patterson 90 days ago, I have begun a thorough review of our business and the factors impacting performance," he said. "We are moving quickly to implement an initial set of actions to improve our results, focused on enhancing the customer experience and driving better execution across the business."
Sales were down 1.6 percent for the quarter to $1.38 billion, and down 2 percent over the first nine months of the fiscal year.
Quarterly sales were off sharpest in the company's dental segment, down 7.7 percent to $577.9 million. Consumable dental supplies were off 7.4 percent and dental equipment down 10.6 percent.
Sales in the larger animal health segment rose 4.2 percent in the quarter to $794.9 million.
The company also lowered its guidance for the remainder of the fiscal year and now says adjusted earnings per share will be in the $1.65 to $1.70 per share range, down from $2 to $2.10 per share.
Walchirk also announced that Chief Financial Officer Ann Gugino has resigned. The company's current corporate controller, Dennis Goedken, has been appointed interim CFO.
"We are grateful to Ann for her many contributions to Patterson over the past 18 years with the company, and I thank her for her support during my transition," Walchirk said.
The release noted Gugino's departure is not related to the company's financial condition or strategic direction.
Gugino will remain a special adviser through July.