Patterson Companies, Inc. (Nasdaq:PDCO) reported consolidated sales of $682,402,000 for the third quarter of fiscal 2006 ended January 28, an increase of 7% from $638,005,000 in the year-earlier quarter. Excluding the impact of two acquisitions earlier in fiscal 2006, internally-generated sales rose approximately 4%. The third quarter of fiscal 2006 contained one less selling day than the year-earlier period, which reduced consolidated sales growth by an estimated one to two percentage points. Net income increased 8% to $54,004,000 or $0.39 per diluted share, from $50,137,000 or $0.36 per diluted share in the third quarter of fiscal 2005.

Patterson Dental, Patterson's largest business, reported sales growth of 6% to $531,884,000 in the third quarter. The September 2005 acquisition of Accu-Bite, Inc., a Michigan-based dental distributor, accounted for approximately three percentage points of Patterson Dental's third quarter sales growth.

• Sales of consumable dental supplies and printed office products increased 12% in the third quarter. Excluding Accu-Bite, consumable sales were up 6%. Patterson Dental's sales force grew to 1,542 at January 28, which includes the addition of Accu-Bite's sales representatives.

• Sales of dental equipment and software were virtually unchanged in the third quarter. During this period, strong sales growth of digital radiography equipment and related software, including the line of CAESY patient education software, largely offset flat sales of basic equipment and modestly lower sales of CEREC 3D(R) dental restorative systems. This portion of Patterson Dental's business was confronted by a difficult year-over-year comparison, since sales of basic and new-technology equipment were very strong in the third quarter of fiscal 2005, having increased 30% from the third quarter of 2004.

• Sales of other services and products, consisting primarily of parts, technical service, software support, insurance e-claims and equipment contracts increased 13% in the third quarter.

Sales of the Webster Veterinary unit increased 14% in the third quarter of fiscal 2006 to $80,763,000. As expected, the December 2005 acquisition of Intra Corp, one of the nation's leading developers of veterinary practice management software marketed under the IntraVet brand name, had a nominal impact on Webster's third quarter sales growth. Sales of Patterson Medical, Patterson's rehabilitation supply and equipment unit, increased 3% in the third quarter to $69,755,000. Excluding the impact of currency translations, Patterson Medical's sales rose approximately 5%.

James W. Wiltz, president and chief executive officer, commented: "Patterson's improved third quarter results were paced by continued robust sales of dental consumables and another strong performance by our veterinary business. Moreover, we believe the underlying strength of our dental equipment and software business was demonstrated by its ability to virtually equal its exceptionally strong sales performance in last year's third quarter. We have implemented programs aimed at returning dental equipment sales growth to more historic norms. Equipment sales are showing signs of strengthening at this early point in the fourth quarter, but this improvement is not occurring as quickly as anticipated."

He continued: "Our Webster unit is continuing to benefit from the expansion of its geographic marketplace through acquisitions and internal start-ups, in addition to a pharmaceutical distribution agreement with Pfizer. We are particularly encouraged by the strong sales growth of veterinary equipment during the quarter, reflecting the growing positive impact of Webster's emphasis on this portion of its business. Webster's equipment initiative was reinforced by the acquisition of the IntraVet software product line, which positions our veterinary unit to optimize the benefits of digital radiography equipment and thus offer veterinarians a compelling, value-added technology solution. Finally, the third quarter performance of Patterson Medical was consistent with our forecast. This unit's new management team is evaluating current operations and implementing new sales and marketing programs that are expected to result in stronger growth during the coming fiscal year."

Wiltz added: "Patterson's performance in fiscal 2006 has fallen short of our standards, but the corrective actions that we are taking make us optimistic about our future. We believe dental equipment remains one of our strongest long-term opportunities; the momentum of our veterinary unit is continuing to grow; and the process of strengthening Patterson Medical's performance is well underway."

Patterson is forecasting earnings of $0.40 to $0.42 per diluted share for the fourth quarter of fiscal 2006 ending April 29, 2006. As a result, the Company reduced its full-year earnings guidance to $1.42 to $1.44 per diluted share from $1.44 to $1.46 per diluted share.