Economy dampens Patterson Dental sales

The economic downturn continues to affect dental supply companies. The latest to experience lower-than-expected sales and revenues is Patterson.

Sales of Patterson Dental, Patterson's largest business, increased to $537 million in the second quarter of fiscal year 2009 (end-October 25), up from $535 million in the second quarter of 2008, according to the company.

The company believes the flat sales are due primarily to patients deferring some treatments, which has impacted its consumables business.

Sales of consumable dental supplies and printed office products were $309 million for the quarter, down from $310 million for the same quarter a year ago. Sales of dental equipment and software rose 1% from the year-earlier period to $171 million, up from $169 million last year.

"Second-quarter operating results of our Patterson Dental unit were below forecasted levels due, we believe, to the impact of the difficult economic environment, particularly in October, on its business," said James W. Wiltz, president and CEO, in a press release. "Available evidence indicates that dental patients started deferring higher level and discretionary services, which largely accounted for the soft sales of consumable supplies in the quarter."

While dental equipment sales were stronger during the quarter, most of this growth was generated by orders placed prior to the second quarter, he added. In addition, "We believe it is possible that the continuation of challenging economic conditions may affect the equipment purchasing decisions of dental practitioners at least over the near-term," he said.

As a result of the lower-than-expected showing in the quarter, Patterson has placed a freeze on hiring (except for sales) and wages.

Patterson is certainly not alone; earlier this month, competitor Henry Schein said it would cut 300 jobs and close several smaller facilities in an effort to reduce costs.