Patterson Companies' catalogs are like Wish Books for dental, veterinary, and physical rehabilitation practices. The company's Patterson Dental unit is a leading wholesaler of dental products, including X-ray film and machines, hand instruments, sterilization products, dental chairs and lights, and diagnostic equipment. Additionally, it sells office supplies, computer equipment, software, and other products and services for dental offices and laboratories. Its Patterson Veterinary unit (formerly Webster Veterinary) distributes animal health supplies, including equine products, in the US. Its Patterson Medical unit globally distributes physical therapy and other rehabilitation medical equipment.
In business since 1877, Patterson's dental unit is the second-largest dental supply wholesaler in the US and Canada after Henry Schein, and accounts for almost two-thirds of the company's sales. The segment offers its customers some 96,000 different items, including about 5,000 private-label products marketed under the Patterson name, through direct sales and marketing representatives. Consumables and printed products make up about 55% of the dental unit's sales. Patterson Dental ships its dental consumable supplies from eight centers in the US and two in Canada.
Beyond the hardware and consumable products, Patterson Dental uses its size and breadth to present itself as a full-service partner to its customers, providing proprietary software and services such as technology consulting, equipment installation, maintenance, and repair services, office design, and financing for big-ticket purchases. Patterson Dental has grown through acquisitions of smaller dental supply distributors and investment in its electronic ordering systems.
Patterson's animal health division, renamed Patterson Veterinary in 2013 to capitalize on the Patterson name, is a leading US distributor of health products for companion animals and horses, with a particularly strong presence in the eastern part of the country. It sells more than 36,000 products including vaccines and drugs, consumables, and diagnostic supplies. Patterson Veterinary is expanding its line of value-priced private label consumable items. The division distributes its products from more than 10 distribution centers. It bolstered its distribution capacity in 2011 by acquiring New York-based American Veterinary Supply Corporation.
Like Patterson's dental division, acquisitions have been part of the veterinary unit's growth strategy. And, like the dental business, it has invested in its information management products. In 2010 Patterson Veterinary acquired ePet Records, which it rebranded as ePetHealth. The service allows veterinary clients access to medical records, appointment reminders, and educational materials.
Patterson Medical, headquartered in the UK, operates worldwide. It sells equipment and supplies used by physical and occupational therapists. Its products include home health aids (bathing and dressing devices), orthopedic soft goods, walkers and canes, exam and therapy tables, and exercise equipment. Patterson Medical offers more than 30,000 items. The company manufactures some of its products, the rest are made by more than 1,500 suppliers. The business operates under the Sammons Preston and Medco Sports Medicine names in North American markets. Internationally, it operates under the Ausmedic, Homecraft, and Kinetec banners. In the US it distributes its products out of centers shared with Patterson Dental and Webster.
Like its sister businesses, Patterson Medical has a taste for acquisitions. In 2010 it bought up three overseas rehabilitation suppliers from Ireland's DCC, and in 2012 it bought Australia-based distributor Surgical Synergies Pty Ltd., which serves hospitals, surgeons, hand therapists, physiotherapists, and retailers in Australia and New Zealand.
Patterson Companies has worked to streamline its distribution infrastructure to improve its customer service and operational efficiencies. Subsidiary Patterson Logistics Services operates the US distribution centers for all three business units. Formed in 2007, the business consolidated separate dental, medical, and veterinary warehouses into shared facilities that service multiple product lines.
Patterson Companies reported $3.5 billion in sales for fiscal 2012, up almost 4% from $3.4 billion in fiscal 2011. Net income for fiscal 2012 was approximately $213 million, a decrease of about 6% from 2011. The decrease was mainly due to increased operating expenses affected by an additional sales week in 2011, which made that year a 53-week period and dropped sales growth in fiscal 2012 by about two percentage points as well as an employee stock ownership plan (ESOP) expense of about $24 million from revising the historical cost to current fair value.
Patterson Companies relies on its ability to provide a diverse platform of products and services in a total-package approach to serving its customers needs. To accomplish this, its strategy is to promote its value-added services, improve its operating efficiencies, and expand through acquisitions as well as internally, through such measures as increasing its sales force and adding branch offices.
The company's ESOP, managed by Delaware Charter Guarantee & Trust, controls about 18% of the company. – less
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