Patterson Companies Inc (PDCO) 2024 Q1 法說會逐字稿

Good morning, and welcome to the Patterson Companies Inc. First Quarter Fiscal 2024 Earnings Conference Call. (Operator Instructions) Thank you. John Wright, Vice President of Investor Relations, you may begin your conference.

早上好，歡迎參加 Patterson Companies Inc. 2024 財年第一季度收益電話會議。 （操作員說明）謝謝。投資者關係副總裁約翰·賴特 (John Wright)，您可以開始會議了。

Thank you, operator. Good morning, everyone, and thank you for participating in Patterson Companies Fiscal 2024 First Quarter Conference Call. Joining me today are Patterson President and Chief Executive Officer, Don Zurbay; and Patterson's Chief Financial Officer, Kevin Barry. After a review of our results and outlook by management, we will open the call to your questions.

謝謝你，接線員。大家早上好，感謝您參加 Patterson Companies 2024 財年第一季度電話會議。今天與我一起出席的還有 Patterson 總裁兼首席執行官 Don Zurbay；和帕特森的首席財務官凱文·巴里。管理層對我們的結果和前景進行審查後，我們將召開電話會議回答您的問題。

Before we begin, let me remind you that certain comments made during this conference call are forward-looking in nature and subject to certain risks and uncertainties. These factors, which could cause actual results to materially differ from those indicated in such forward-looking statements, are discussed in detail in our Form 10-K and our other filings with the Securities and Exchange Commission. We encourage you to review this material.

在開始之前，請允許我提醒您，本次電話會議中發表的某些評論本質上具有前瞻性，並存在一定的風險和不確定性。這些因素可能導致實際結果與此類前瞻性陳述中所示的結果存在重大差異，我們在 10-K 表格和向美國證券交易委員會提交的其他文件中詳細討論了這些因素。我們鼓勵您查看此材料。

In addition, comments about the markets we serve, including growth rates and market shares, are based upon the company's internal analysis and estimates. The content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 30, 2023. Patterson undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Also, a financial slide presentation can be found in the Investor Relations section of our website at pattersoncompanies.com.

此外，對我們所服務的市場的評論，包括增長率和市場份額，都是基於公司的內部分析和估計。本次電話會議的內容包含時間敏感信息，僅截至直播日期（2023 年 8 月 30 日）準確。帕特森不承擔修改或更新任何前瞻性陳述以反映該日期之後的事件或情況的義務這次通話的。此外，您還可以在我們網站 pattersoncompanies.com 的投資者關係部分找到財務幻燈片演示。

Please note that in this morning's conference call, we will reference our adjusted results for the first quarter of fiscal '24. The reconciliation table in our press release is provided to adjust reported GAAP measures, namely: operating income; other income expense net; income before taxes; income tax expense; net income, net income attributable to Patterson Companies, Inc. and diluted earnings per share attributable to Patterson Companies, Inc. for the impact of deal amortization, along with the related tax effect of this item.

請注意，在今天早上的電話會議中，我們將參考 24 財年第一季度的調整後業績。我們新聞稿中的調節表用於調整報告的 GAAP 指標，即： 營業收入；其他收入支出淨額；稅前收入；所得稅費用；淨利潤、歸屬於 Patterson Companies, Inc. 的淨利潤以及受交易攤銷影響的歸屬於 Patterson Companies, Inc. 的稀釋每股收益，以及該項目的相關稅收影響。

We will also discuss free cash flow as defined in our earnings release, which is a non-GAAP measure and use the term internal sales to represent net sales adjusted to exclude the impact of foreign currency and contributions from recent acquisitions. These non-GAAP measures are not intended to be a substitute for our GAAP results. This call is being recorded and will be available for replay starting at 10 a.m. Central Time for a period of 1 week.

我們還將討論收益發布中定義的自由現金流，這是一種非公認會計準則衡量標準，並使用內部銷售額一詞來表示調整後的淨銷售額，以排除外幣和最近收購的貢獻的影響。這些非公認會計準則衡量標準無意取代我們的公認會計準則結果。此通話正在錄音，並可在中部時間上午 10 點開始重播，為期 1 週。

Now I'd like to hand the call over to Don Zurbay.

現在我想把電話轉給唐·祖爾貝 (Don Zurbay)。

Thanks, John, and good morning, everyone. Patterson had a strong start to fiscal '24, building upon our momentum across the business as we continue to deliver value for our customers and shareholders. A few highlights from our first quarter.

謝謝約翰，大家早上好。 Patterson 在 24 財年取得了良好的開局，在我們繼續為客戶和股東創造價值的過程中，我們在整個業務領域取得了良好的發展勢頭。第一季度的一些亮點。

On the top line, year-over-year internal sales increased approximately 3% with growth across both the Dental and Animal Health segments. Our initiatives to drive margin improvement were successful as we achieved year-over-year adjusted operating margin expansion across the company and the Dental and Animal Health segments. We returned $55 million to shareholders in the form of cash dividends and share repurchases, and we delivered adjusted EPS growth of 25% from the same period a year ago. Given these results, we remain on track to achieve our fiscal 2024 earnings guidance.

在營收方面，隨著牙科和動物保健領域的增長，內部銷售額同比增長了約 3%。我們推動利潤率改善的舉措取得了成功，整個公司以及牙科和動物保健部門的調整後營業利潤率實現了同比增長。我們以現金股息和股票回購的形式向股東返還 5500 萬美元，調整後每股收益較上年同期增長 25%。鑑於這些結果，我們仍有望實現 2024 財年盈利指導。

As a reminder, our guidance accounts for our commitment to deliver year-over-year internal sales growth and adjusted operating margin expansion for the total company and across both our Dental and Animal Health segments. Our performance during our fiscal '24 first quarter illustrates the continued execution of our proven strategy, which, as I shared last quarter, is designed to achieve 4 core objectives: first, drive revenue growth above the current end market growth rates; second, build upon the progress we've made to enhance our margin performance; third, evolve our products, channels and services to best serve the customers in our end markets; and fourth, improve efficiency and optimization.

提醒一下，我們的指導說明了我們對整個公司以及牙科和動物保健部門實現內部銷售同比增長和調整後營業利潤率擴張的承諾。我們在24 財年第一季度的業績說明了我們行之有效的戰略的持續執行，正如我上季度分享的那樣，該戰略旨在實現4 個核心目標：第一，推動收入增長高於當前終端市場增長率；其次，在我們已經取得的進展的基礎上，提高我們的利潤表現；第三，發展我們的產品、渠道和服務，以最好地服務終端市場的客戶；第四，提高效率和優化。

Our team is aligned around various strategic initiatives to advance each of these core objectives. Today, I'd like to highlight just a couple of specific examples that we've been working on in early fiscal 2024 to demonstrate our progress. First, our focus on private label. During the first quarter, we benefited from continued growth in our private label portfolio, which includes the collection of owned brands with strong market equity. These include brands we've built like the Patterson brand in Dental in the Aspen and pivotal companion vet products as well as acquire brands like Dairy Tech in the production animal business.

我們的團隊圍繞各種戰略舉措進行協調，以推進每個核心目標。今天，我想重點介紹幾個我們在 2024 財年初一直在努力的具體示例，以展示我們的進展。首先，我們關注自有品牌。在第一季度，我們受益於自有品牌組合的持續增長，其中包括具有強大市場資產的自有品牌的集合。其中包括我們在阿斯彭牙科領域打造的 Patterson 品牌等品牌和關鍵的配套獸醫產品，以及在生產動物業務中收購的 Dairy Tech 等品牌。

We have invested in this important category by adding new SKUs and our sales team is highly engaged and motivated to drive sales growth in this margin-accretive category. We continually evaluate opportunities across our businesses, but believe there is a distinct opportunity within Animal Health to further expand the private label portfolio to meet evolving consumer preferences.

我們通過添加新的 SKU 來投資這一重要類別，我們的銷售團隊高度參與並積極推動這一利潤增長類別的銷售增長。我們不斷評估整個業務的機會，但相信動物保健領域存在獨特的機會，可以進一步擴大自有品牌產品組合，以滿足不斷變化的消費者偏好。

In fact, during fiscal '24, we expect to add more private label products to our Animal Health offering than ever before. Over the past several years, our private label sales growth has outpaced the sales growth of products manufactured by our strategic partners. The results are paying off. And in addition to generating above-market growth, our focus on private label supports our other core objectives.

事實上，在 24 財年期間，我們預計會在我們的動物保健產品中添加比以往更多的自有品牌產品。在過去的幾年中，我們的自有品牌銷售增長超過了我們的戰略合作夥伴製造的產品的銷售增長。結果正在得到回報。除了實現高於市場的增長之外，我們對自有品牌的關注也支持了我們的其他核心目標。

Another recent example relates to our efforts to improve efficiency and optimization. As we've said before, this objective includes not only a rigorous focus on cost discipline, but also targeted investments to leverage best practices and advanced operational excellence across the enterprise.

最近的另一個例子與我們提高效率和優化的努力有關。正如我們之前所說，這一目標不僅包括嚴格關注成本紀律，還包括有針對性的投資，以利用整個企業的最佳實踐和先進的卓越運營。

We have recently been implementing strategic modernization of our fulfillment facilities and capabilities. This includes investments in new technologies such as robots and cobots to automate order picking, enhancements for our teams to ensure the right skills and expertise to operate the more modern facilities and substantial expansion of our fulfillment capacity. Just this week, we are opening a brand-new fulfillment center in the U.K., we call the [Big Shed] that will double our capacity in the region. This fully automated next-generation facility is not just larger, it's more sustainable, more efficient and further advances our channel capabilities.

我們最近一直在對我們的履行設施和能力實施戰略現代化。這包括對機器人和協作機器人等新技術的投資，以實現訂單揀選自動化，增強我們的團隊，以確保擁有正確的技能和專業知識來運營更現代化的設施，以及大幅擴展我們的履行能力。就在本週，我們將在英國開設一個全新的履行中心，我們稱之為“大棚”，這將使我們在該地區的產能增加一倍。這個完全自動化的下一代設施不僅更大，而且更可持續、更高效，並進一步提高了我們的渠道能力。

We also recently completed a technology overhaul to our fulfillment center in Southern California and are close to opening an expanded facility in Montreal, Canada. In addition, we have similar projects underway in several other locations. These strategic investments in our fulfillment centers can help alleviate capacity constraints and the modernization of our facilities is expected to enhance growth. These are only a couple of examples of some of the many initiatives we have underway. Taken together, our strategic areas of focus build upon our strong foundation and success over the past several years to further differentiate our position in the market and drive enhanced growth, profitability and value creation over the long term.

我們最近還完成了對南加州履行中心的技術檢修，並即將在加拿大蒙特利爾開設擴建設施。此外，我們在其他幾個地點也正在進行類似的項目。對我們的履行中心的這些戰略投資可以幫助緩解產能限制，並且我們設施的現代化預計將促進增長。這些只是我們正在進行的眾多舉措中的幾個例子。總而言之，我們的戰略重點領域建立在過去幾年的堅實基礎和成功之上，以進一步區分我們在市場中的地位，並推動長期增長、盈利能力和價值創造。

Now I'll provide some updates on each of our segments during the fiscal first quarter. Let's start with Dental. Dental segment internal sales increased 2% compared to the first quarter of fiscal '23, due to strong growth in consumables and value-added services, which includes our software offerings. We also achieved year-over-year adjusted operating margin expansion in the fiscal first quarter due to our Dental team's ongoing focus on our margin enhancement initiatives. Our value proposition continues to resonate with all types of Dental customers. From individual practices to group practices, we seek to create a seamless experience by offering a comprehensive suite of products and solutions to help Dental practices grow, become more efficient and provide improved patient care.

現在，我將提供第一財季每個部門的一些最新情況。讓我們從牙科開始吧。由於消耗品和增值服務（包括我們的軟件產品）的強勁增長，與 2023 財年第一季度相比，牙科部門的內部銷售額增長了 2%。由於我們的牙科團隊持續關注我們的利潤提升計劃，我們在第一財季實現了同比調整後營業利潤增長。我們的價值主張繼續引起所有類型牙科客戶的共鳴。從個人診所到團體診所，我們力求通過提供全面的產品和解決方案來創造無縫體驗，幫助牙科診所發展、提高效率並提供更好的患者護理。

In the consumables category, Dental internal sales increased approximately 5% in the fiscal first quarter compared to 1 year ago. Excluding the moderating deflationary impact of infection control products, internal sales for our non-infection control consumables increased nearly 7% year-over-year. Overall, we believe the demand we are seeing for consumables products speaks to the resiliency of the Dental market and our ability to drive growth above the current end market.

在消耗品類別中，第一財季牙科內部銷售額與一年前相比增長了約 5%。剔除感染控制產品緩和的通貨緊縮影響，我們的非感染控制耗材的內部銷售額同比增長近7%。總體而言，我們相信我們所看到的對消耗品產品的需求說明了牙科市場的彈性以及我們推動增長高於當前終端市場的能力。

Looking at Dental equipment. Internal sales in the first quarter of fiscal '24 decreased 6% compared to the year ago period. Our team delivered growth in our core equipment and CAD/CAM categories that was more than offset by a decline in digital technology, which experienced a sequential decline in sales following a strong fiscal 2023 fourth quarter. This dynamic is typical of the variability of the equipment category and further demonstrates how equipment sales can fluctuate quarter-to-quarter for a variety of factors. Over the last 8 quarters, our average quarterly equipment internal sales growth was 4%.

查看牙科設備。 2024 財年第一季度的內部銷售額與去年同期相比下降了 6%。我們的團隊在核心設備和CAD/CAM 類別中實現了增長，但數字技術的下降遠遠抵消了數字技術的下降，數字技術在2023 財年第四季度的強勁表現之後經歷了銷售額的連續下降。這種動態是設備類別變化的典型表現，並進一步表明設備銷售如何因各種因素而逐季度波動。在過去 8 個季度中，我們的平均季度設備內部銷售增長率為 4%。

Dentists continue to invest in their practices and look to Patterson when they do. We anticipate that demand for equipment and technology will drive our manufacturing partners to continue introducing new innovations and technologies. Patterson is uniquely positioned to capitalize on this demand, thanks to our expertise in selling, financing, installing, training and servicing the latest technologies and equipment.

牙醫們繼續投資於他們的診所，並在投資時向帕特森尋求幫助。我們預計對設備和技術的需求將推動我們的製造合作夥伴繼續引入新的創新和技術。憑藉我們在銷售、融資、安裝、培訓和服務最新技術和設備方面的專業知識，帕特森在利用這一需求方面擁有獨特的優勢。

And finally, Dental internal sales in our software and value-added services category increased approximately 6% over the prior year period. Value-added services represent the entire suite of offerings we provide to our customers that help make Patterson an indispensable partner to their practice, including our leading technical service offering.

最後，我們的軟件和增值服務類別的牙科內部銷售額比上年同期增長了約 6%。增值服務代表了我們向客戶提供的整套產品，幫助 Patterson 成為他們實踐中不可或缺的合作夥伴，其中包括我們領先的技術服務產品。

This category continues to grow at a rate exceeding the overall rate of the Dental segment. The strong results we have been delivering in the value-added services category, our testament to our customers, recognizing the full life cycle support and services that Patterson provides. And as an added benefit, these valuable offerings are mix favorable to our P&L.

該類別的增長速度持續超過牙科領域的整體增速。我們在增值服務類別中取得的強勁成果，是我們對客戶的證明，也是對 Patterson 提供的全生命週期支持和服務的認可。作為一個額外的好處，這些有價值的產品有利於我們的損益。

Maximizing our value-added service offerings particularly in the software category is a key part of our strategy with a meaningful opportunity for growth. Looking ahead, we believe the dental market remains stable with healthy underlying fundamentals, including an aging population, practice modernization and the direct link between the patient's oral health and overall health, which we believe will continue to serve as tailwinds and help drive performance across our Dental segment over the long term.

最大化我們的增值服務，特別是在軟件類別中，是我們戰略的關鍵部分，也是一個有意義的增長機會。展望未來，我們認為牙科市場保持穩定，具有健康的基本面，包括人口老齡化、實踐現代化以及患者口腔健康與整體健康之間的直接聯繫，我們相信這將繼續發揮推動作用，並有助於推動我們整個業務的業績。從長遠來看，牙科領域。

Now let's move on to our Animal Health segment. During the first quarter of fiscal '24, Animal Health internal sales increased 4% year-over-year, with growth in both companion animal and production animal businesses. We also achieved year-over-year adjusted operating margin expansion in the Animal Health segment, building upon our excellent track record of margin improvement over the past few years.

現在讓我們繼續我們的動物健康部分。在 2024 財年第一季度，動物保健內部銷售額同比增長 4%，伴侶動物和生產動物業務均有所增長。基於過去幾年利潤率改善的良好記錄，我們在動物保健領域也實現了逐年調整後的營業利潤率擴張。

We benefit from the depth of our offering and omnichannel presence that spans a wide range of animal species and offers comprehensive solutions for diverse customers. In companion animal, our internal sales in the first fiscal quarter increased by mid-single digits as we executed well within this healthy and growing market. As we've said before, we've been modeling mid-single-digit revenue growth for our companion business over the long term. On the production animal side, fiscal 2024 first quarter internal sales grew by low single digits. Despite ongoing headwinds within the cattle market, we have continued to deliver sales growth in this part of the Animal Health business. This is a testament to our team's performance and the diversification of our production business.

我們受益於我們產品的深度和全渠道的存在，涵蓋廣泛的動物物種，並為不同的客戶提供全面的解決方案。在伴侶動物方面，我們在第一財季的內部銷售額增長了中個位數，因為我們在這個健康且不斷增長的市場中表現良好。正如我們之前所說，從長遠來看，我們一直在為我們的配套業務預測中個位數的收入增長。在生產動物方面，2024 財年第一季度內部銷售額實現低個位數增長。儘管養牛市場持續存在阻力，我們在動物保健業務的這一部分繼續實現銷售增長。這證明了我們團隊的表現和我們生產業務的多元化。

Across the Animal Health segment, our value-added services category achieved strong growth that can be attributed to sales of our software solutions and equipment service as well as operational efficiencies. Expanding our investments in software and value-added services remains a priority for us and is core to our objective to position Patterson Animal Health as the leading provider of technology, software, data insights, services and products to the Animal Health industry.

在動物保健領域，我們的增值服務類別實現了強勁增長，這要歸功於我們的軟件解決方案和設備服務的銷售以及運營效率。擴大對軟件和增值服務的投資仍然是我們的首要任務，也是我們將 Patterson Animal Health 定位為動物保健行業技術、軟件、數據洞察、服務和產品領先提供商的目標的核心。

Our team stands ready to help our customers identify the right set of solutions to streamline their workflows and run their practices efficiently, all backed by our enviable service and support. Now I'll turn the call over to Kevin Barry to provide more detail on our financial results.

我們的團隊隨時準備幫助我們的客戶確定正確的解決方案，以簡化他們的工作流程並有效地運行他們的實踐，所有這些都得到我們令人羨慕的服務和支持的支持。現在我將把電話轉給凱文·巴里 (Kevin Barry)，以提供有關我們財務業績的更多詳細信息。

Thank you, Den, and good morning, everyone. In my prepared remarks this morning, I will cover the financial results for our first quarter of fiscal '24, which ended on July 29, 2023, and then conclude with our outlook for the remainder of the fiscal year. So let's begin by covering the results for our first quarter fiscal '24.

謝謝你，丹，大家早上好。在今天早上準備好的發言中，我將介紹截至 2023 年 7 月 29 日的 24 財年第一季度的財務業績，然後總結我們對本財年剩餘時間的展望。讓我們首先介紹一下 24 財年第一季度的業績。

Consolidated reported sales for Patterson Companies in our fiscal '24 first quarter were $1.6 billion, an increase of 3.5% over the first quarter of 1 year ago. Internal sales, which are adjusted for the effects of currency translation and contributions from recent acquisitions, increased 2.8% compared to the same period last year.

Patterson Companies 在 2024 財年第一季度的綜合銷售額為 16 億美元，比一年前第一季度增長了 3.5%。內部銷售額（根據貨幣換算的影響和近期收購的貢獻進行調整）與去年同期相比增長了 2.8%。

Gross margin for the first quarter of fiscal '24, was 20.2%, a decrease of 25 basis points compared to the prior year period. Our gross margin was negatively impacted by 40 basis points this quarter by the mark-to-market accounting adjustment from rising interest rates on our equipment financing portfolio. As we have mentioned in prior earnings calls, any positive or negative impact related to our equipment financing portfolio is nearly offset by our corresponding hedging instrument, which is reflected in the other income net line in our P&L. So the net result has a minimal impact on our adjusted earnings per share.

2024財年第一季度的毛利率為20.2%，比去年同期下降25個基點。由於設備融資組合利率上升而按市值計價的會計調整，本季度我們的毛利率受到了 40 個基點的負面影響。正如我們在之前的財報電話會議中提到的，與我們的設備融資組合相關的任何正面或負面影響幾乎都被我們相應的對沖工具所抵消，這反映在我們損益表中的其他收入淨額中。因此，最終結果對我們調整後每股收益的影響很小。

This dynamic also occurred in the first fiscal quarter of last year and the positive impact of the mark-to-market accounting calculation was 10 basis points. When normalizing for the mark-to-market accounting adjustment in both periods, our gross margin rate in the first quarter of fiscal '24 was 20 basis points higher than the first quarter of fiscal '23. Remember, the accounting impact of the mark-to-market adjustments impacts our total company gross margin, but not the gross margin within our business segments.

這種動態也發生在去年第一財季，按市值計算的會計計算的積極影響為 10 個基點。當對兩個時期的按市價會計調整進行正常化時，我們在 24 財年第一季度的毛利率比 23 財年第一季度高出 20 個基點。請記住，按市價調整的會計影響會影響我們公司的總毛利率，但不會影響我們業務部門內的毛利率。

Importantly, during the fiscal first quarter, both of our business units posted a year-over-year increase to their respective gross margins compared to the prior year period. Adjusted operating expenses as a percentage of net sales for the first quarter of fiscal '24 were 17.2% and favorable by 40 basis points compared to the fiscal first quarter of '23.

重要的是，在第一財季，我們的兩個業務部門各自的毛利率均較去年同期有所增長。 2024 財年第一季度調整後運營費用占淨銷售額的百分比為 17.2%，與 23 財年第一季度相比提高了 40 個基點。

In the first quarter of fiscal '24, our consolidated adjusted operating margin is 3.0%, an increase of 15 basis points compared to the first quarter of last year. Again, when normalizing for the impact of the mark-to-market accounting adjustment in both periods related to gross margin, our consolidated adjusted operating margin in the first quarter of fiscal '24 expanded by 60 basis points over the prior year period.

在2024財年第一季度，我們的綜合調整後營業利潤率為3.0%，比去年第一季度增加了15個基點。同樣，在對兩個時期與毛利率相關的按市價會計調整的影響進行標準化時，我們在 2024 財年第一季度的綜合調整後營業利潤率比上年同期擴大了 60 個基點。

I am pleased with the team's efforts to continuously improve and deliver on our commitment to drive operating margin expansion within our business segments and for the total company overall in the first quarter of fiscal '24. The initiatives we put in place to improve gross margin to work more closely with strategic vendors who reward us for our sales performance, drive improved mix, exercise expense discipline and leverage our cost structure has certainly translated into a higher level of profitability and financial performance of Patterson.

我對團隊努力不斷改進和兌現我們的承諾感到高興，即在 2024 財年第一季度推動業務部門和整個公司的營業利潤率擴張。我們為提高毛利率而採取的舉措，與戰略供應商更密切地合作，這些供應商獎勵我們的銷售業績，推動改進組合，實行費用紀律並利用我們的成本結構，這無疑轉化為更高水平的盈利能力和財務業績。帕特森。

Our adjusted tax rate for the first quarter of fiscal '24 was 23.5%, an increase of 110 basis points compared to the prior year period. Reported net income attributable to Patterson Companies, Inc. for the first quarter of fiscal '24 was $31.2 million or $0.32 per diluted share. This compares to reported net income in the first quarter of last year of $24.6 million or $0.25 per diluted share.

我們 24 財年第一季度的調整後稅率為 23.5%，比去年同期增加了 110 個基點。 2024 財年第一季度 Patterson Companies, Inc. 公佈的淨利潤為 3120 萬美元，或攤薄後每股收益 0.32 美元。相比之下，去年第一季度報告的淨利潤為 2460 萬美元，即稀釋後每股收益 0.25 美元。

Adjusted net income attributable to Patterson Companies, Inc. in the first quarter of fiscal '24 was $38.6 million or $0.40 per diluted share. This compares to $31.7 million or $0.32 per diluted share in the first quarter of fiscal '23. This 25% increase in adjusted earnings per diluted share for the fiscal first quarter was primarily due to the sales execution and operating margin expansion in both of our business segments.

2024 財年第一季度調整後歸屬於 Patterson Companies, Inc. 的淨利潤為 3860 萬美元，或攤薄後每股收益 0.40 美元。相比之下，2023 財年第一季度的每股攤薄收益為 3170 萬美元或 0.32 美元。第一財季調整後每股攤薄收益增長 25%，主要歸功於我們兩個業務部門的銷售執行和營業利潤率的擴大。

Now let's turn to our business segments starting with our Dental business. In the first quarter of fiscal '24, internal sales for our Dental business increased 2.1% compared to the first quarter of fiscal '23. Internal sales of dental consumables in the fiscal first quarter increased 4.6% compared to 1 year ago and were impacted by continued price deflation of certain infection control products.

現在讓我們從牙科業務開始討論我們的業務部門。在 24 財年第一季度，我們牙科業務的內部銷售額比 23 財年第一季度增長了 2.1%。第一財季牙科耗材的內部銷售較一年前增長了 4.6%，並受到某些感染控制產品價格持續下跌的影響。

Internal sales of non-infection control products increased 6.9% in the first quarter of fiscal '24 compared to the year ago period. This negative impact from infection control product deflation has continued to moderate over the past year, and we expect the year-over-year deflationary effect to continue moderating and fully normalized by the end of fiscal year '24.

與去年同期相比，2024 財年第一季度非感染控制產品的內部銷售額增長了 6.9%。感染控制產品通貨緊縮的負面影響在過去一年中持續減弱，我們預計同比通貨緊縮效應將繼續減弱，並在 24 財年末完全正常化。

In the first quarter of fiscal '24, internal sales of Dental equipment decreased 5.7% compared to 1 year ago. As Don mentioned, sales in the equipment category can vary from quarter to quarter, and these dynamics apply to each of the specific product categories as well. This quarter, core equipment and CAD/CAM sales posted positive year-over-year sales growth, but were more than offset by a decline in the digital X-ray category compared to the prior year period.

2024 財年第一季度，牙科設備的內部銷售額比一年前下降了 5.7%。正如唐提到的，設備類別的銷售額每個季度都會有所不同，這些動態也適用於每個特定的產品類別。本季度，核心設備和 CAD/CAM 銷售額同比出現正增長，但被數字 X 射線類別同比下降所抵消。

Internal sales of value-added services in the first quarter of fiscal '24 increased 5.8% over the prior year period, led by the increased year-over-year contribution from our technical service team and continued growth of our software business. Value-added services, including our software offerings represent the entire suite of offerings we provide to our customers to help make us an indispensable partner to their practice, and these valuable offerings are also a mix favorable to our P&L.

24 財年第一季度增值服務內部銷售額同比增長 5.8%，主要得益於我們的技術服務團隊同比貢獻增加以及軟件業務的持續增長。增值服務，包括我們的軟件產品，代表了我們向客戶提供的整套產品，幫助我們成為他們實踐中不可或缺的合作夥伴，這些有價值的產品也有利於我們的損益。

The adjusted operating margin in Dental was 7.4% in the first quarter of fiscal '24, which represents a 35 basis point improvement over the prior year period. This operating margin performance reflects the efforts of our dental team to improve margins through effective pricing and mix management and continued expense discipline to deliver operating margin expansion for the first quarter of fiscal '24.

2024 財年第一季度，牙科業務調整後營業利潤率為 7.4%，比上年同期提高了 35 個基點。這一營業利潤率表現反映了我們的牙科團隊通過有效的定價和組合管理以及持續的費用紀律來提高利潤率的努力，以實現 24 財年第一季度營業利潤率的擴張。

Now let's move on to our Animal Health segment. In the first quarter of fiscal '24, internal sales for our Animal Health business increased 4.0% compared to the first quarter of fiscal '23. Internal sales for our companion animal business in the first quarter of fiscal '24, increased 5.1% over the prior year period, which included strong sales performance from our NVS business in the U.K.

現在讓我們繼續我們的動物健康部分。在 24 財年第一季度，我們動物保健業務的內部銷售額比 23 財年第一季度增長了 4.0%。我們的伴侶動物業務在 2024 財年第一季度的內部銷售額比去年同期增長了 5.1%，其中包括我們在英國的 NVS 業務的強勁銷售業績。

Internal sales for our production animal business quarter increased 2.5% in the quarter compared to the prior year period. Our production animal team continues to execute well in the market and internal sales in the first quarter of fiscal '24 delivered particularly strong growth in the swine category compared to the prior year period.

我們生產動物業務季度的內部銷售額與去年同期相比增長了 2.5%。我們的生產動物團隊繼續在市場上表現良好，24 財年第一季度的內部銷售在生豬類別中與去年同期相比實現了特別強勁的增長。

The adjusted operating margin in our Animal Health segment was 4.0% in the fiscal '24 first quarter, an increase of nearly 80 basis points from the prior year period. Our Animal Health team continues to drive business with strategic manufacturer partners who value our ability to deliver increased sales, while also exercising expense discipline as they delivered operating margin expansion for the first quarter of fiscal '24.

2024 財年第一季度，我們動物保健部門調整後的營業利潤率為 4.0%，比去年同期增長了近 80 個基點。我們的動物保健團隊繼續推動與戰略製造商合作夥伴的業務發展，他們重視我們增加銷售額的能力，同時也嚴格執行費用紀律，因為他們在 24 財年第一季度實現了營業利潤率擴張。

Now let me cover cash flow and balance sheet items. During the first 3 months of fiscal '24, our free cash flow improved by $35.7 million compared to the same period 1 year ago. This was primarily due to a decreased level of working capital in the first 3 months of fiscal '24 compared to the year ago period.

現在讓我介紹一下現金流量和資產負債表項目。在 2024 財年的前 3 個月，我們的自由現金流與一年前同期相比增加了 3570 萬美元。這主要是由於 24 財年前 3 個月的營運資本水平與去年同期相比有所下降。

Turning now to capital allocation. Our capital spending in the first quarter of was $17.1 million and $2.5 million higher than the first quarter of fiscal '23. This increased spending reflects the investments we are making in our distribution capabilities as well as our software and value-added services. We continue to execute on our strategy to return cash to our shareholders. In the first quarter of fiscal '24, we declared a quarterly cash dividend of $0.26 per diluted share, which was then paid at the beginning of the second quarter of fiscal '24. We also repurchased 29.5 million of shares during the first quarter of fiscal '24, thereby returning a total of $54.9 million to shareholders through dividends and share repurchases.

現在轉向資本配置。我們第一季度的資本支出為 1710 萬美元，比 23 財年第一季度高出 250 萬美元。支出的增加反映了我們對分銷能力以及軟件和增值服務的投資。我們繼續執行向股東返還現金的戰略。在 24 財年第一季度，我們宣布季度現金股息為稀釋後每股 0.26 美元，然後在 24 財年第二季度初支付。我們還在 24 財年第一季度回購了 2,950 萬股股票，從而通過股息和股票回購向股東總共返還 5,490 萬美元。

Let me conclude with our outlook for the remainder of fiscal '24. Today, we are reaffirming our fiscal '24 GAAP earnings guidance range of $2.14 to $2.24 per diluted share and our adjusted earnings guidance range of $2.45 to $2.55 per diluted share. And now I'm going to turn the call back over to Don for some additional comments.

最後讓我對 24 財年剩餘時間的展望進行總結。今天，我們重申 24 財年 GAAP 每股攤薄收益指引範圍為 2.14 美元至 2.24 美元，調整後每股收益指引範圍為 2.45 美元至 2.55 美元。現在我要把電話轉回給唐，徵求一些補充意見。

Thanks, Kevin. Before we open it up for Q&A, I want to thank the entire Patterson team for a great start to fiscal 2024 as we made progress to build upon our momentum across the business. We're continuing to deliver on our proven strategy and combined with the resilient end markets in which we operate, I'm confident that we are well positioned to drive enhanced growth, profitability and value creation over the long term. That concludes our prepared remarks. Kevin and I will be glad to take questions. Operator, please open the line.

謝謝，凱文。在我們開始問答之前，我要感謝整個 Patterson 團隊，他們在 2024 財年取得了良好的開端，我們在整個業務的發展勢頭上取得了進展。我們將繼續實施我們行之有效的戰略，並結合我們經營所在的富有彈性的終端市場，我相信我們有能力推動長期增長、盈利能力和價值創造。我們準備好的發言到此結束。凱文和我很樂意回答問題。接線員，請開通線路。

(Operator Instructions) And your first question comes from the line of Jason Bednar from Piper Sandler.

（操作員說明）您的第一個問題來自 Piper Sandler 的 Jason Bednar。

Don and Ken, I want to start, the Dental consumable performance was really strong. It really seems to defy expectations that I think many have out there on the Dental market at the moment. I heard the private label commentary, but could you unpack a bit more where the strength is coming from, that's supporting that 7% underlying growth in consumables? Any procedure categories to call out where you're seeing notable strength or anything of note on DSOs, pricing, share gains, anything like that?

唐和肯，我想開始，牙科耗材的性能非常強勁。這似乎確實違背了我認為目前牙科市場上許多人的預期。我聽到了自有品牌的評論，但您能否更多地解釋一下支撐 7% 的消費品基礎增長的力量的來源？有哪些程序類別可以指出您在 DSO、定價、股票收益等方面看到的顯著優勢或任何值得注意的地方？

Yes. Thanks, Jason. We're trying to be helpful here. We're not going to probably break down pieces. But quite honestly, we saw strength across the board. I think patient traffic is steady. We feel really good about that. All customer types performed and the sales force really, I think, is just hitting on all cylinders right now. We think the momentum -- we think the key to this quarter and last quarter and just kind of where we're at right now is just the continued momentum in the business. So not to able to break that down for you, but honestly, it was across the board.

是的。謝謝，傑森。我們試圖在這裡提供幫助。我們可能不會分解碎片。但老實說，我們看到了全面的實力。我認為患者流量是穩定的。我們對此感覺非常好。我認為，所有客戶類型都表現出色，而且銷售人員現在確實正在全力以赴。我們認為勢頭——我們認為本季度和上季度的關鍵以及我們現在所處的位置就是業務的持續動力。所以無法為您詳細說明這一點，但老實說，這是全面的。

Okay. That's helpful. I'm sure there's some -- probably are questions there as well but maybe just for a follow-up. I did want to ask, I mean, Don, you highlighted those corporate investments. I don't think we've heard those kind of specifics in the past, that it sounds like you have a lot of wheels in motion across your facilities, your distribution network. Are you able to quantify, at all, the investments you've made with some of that automation work? And what the ROI or payback you're expecting from some of those investments?

好的。這很有幫助。我確信還有一些——可能也有問題，但也許只是為了後續行動。我確實想問，我的意思是，唐，你強調了這些企業投資。我認為我們過去沒有聽說過這些細節，聽起來你的設施、分銷網絡中有很多輪子在運轉。您是否能夠量化您在某些自動化工作中所做的投資？您對其中一些投資的預期投資回報率或回報是多少？

Yes. Well, if you look at our CapEx spending this quarter is above last first quarter. And I think what you're going to see is as we go through the year, that will continue to be the case. All of these projects go through a rigorous process that we have internally to make sure that the ROI gets above our cost to capital. And that it all is a financial payoff as well as all the other benefits we're getting from it. So we're pretty excited about each of these investments. Obviously, we're not going to see the benefits of these quite yet, but I wanted to highlight some examples of the types of things that we have that are going to keep the margin improvement moving in the right direction. And when we make the commitment to continuously improving the margin. I think this is an example of how that works. So pretty excited about all of them. I think more to come, and what I really like is the team's continues to think about the next thing and the next opportunity.

是的。好吧，如果你看看我們本季度的資本支出高於去年第一季度。我想你會看到，今年的情況將繼續如此。所有這些項目都經過我們內部嚴格的流程，以確保投資回報率高於我們的資本成本。這一切都是經濟回報以及我們從中獲得的所有其他好處。因此，我們對每一項投資都感到非常興奮。顯然，我們還不會看到這些的好處，但我想強調一些我們擁有的東西類型的例子，這些東西將使利潤率的改善朝著正確的方向發展。當我們承諾不斷提高利潤率時。我認為這是一個如何運作的例子。對他們所有人都很興奮。我認為未來還會有更多，我真正喜歡的是團隊繼續思考下一步的事情和下一個機會。

Your next question comes from the line of Nathan Rich from Goldman Sachs.

您的下一個問題來自高盛 (Goldman Sachs) 的內森·里奇 (Nathan Rich)。

I wanted to start with question on margins. Don, you reiterated expectations for operating margin expansion for the total company as well as both segments. I guess, any change in your expectations for the overall level of margin expansion? I guess particularly with respect to the dynamics you're seeing in the corporate segment. And then any comments or thoughts on just cadence of margin improvement over the balance of the year.

我想從邊緣問題開始。唐，您重申了對整個公司以及兩個部門營業利潤率擴張的預期。我想，您對整體利潤率擴張水平的預期有什麼變化嗎？我想尤其是在企業部門看到的動態方面。然後是對今年剩餘時間利潤率改善節奏的任何評論或想法。

I'll maybe let Kevin get into a little of that. I think overall, we're still committed to the margin improvement story, both at the corporate level and in each of the business units. And if anything changed, it's minor. I think our expectations are the same as they were as we entered the year.

我也許會讓凱文參與其中。我認為總體而言，我們仍然致力於提高利潤率，無論是在公司層面還是在每個業務部門。如果有什麼改變，那也是微不足道的。我認為我們的期望與進入今年時相同。

Yes. We got off to a good start here in Q1 with both of our business units, expanding both their gross margins and their operating margin. And so we're seeing that momentum at the business unit level. You alluded to the corporate segment. Just as a reminder, this is a dynamic that we have related to our equipment financing portfolio where as the forward interest rate curve changes, we have to mark that portfolio to market, which does create some noise in our corporate segment and our overall margins, which is offset with the hedge we have in our other income line below operating profit.

是的。我們的兩個業務部門在第一季度都取得了良好的開端，毛利率和營業利潤率均有所提高。因此，我們在業務部門層面看到了這種勢頭。您提到了企業部門。提醒一下，這是一個與我們的設備融資投資組合相關的動態，隨著遠期利率曲線的變化，我們必須將該投資組合標記為市場，這確實會給我們的企業部門和整體利潤率帶來一些噪音，這被我們在營業利潤以下的其他收入項目中的對沖所抵消。

This quarter, it was a bit of a headwind as the forward rate curve increased in that portfolio. And so -- and that's why we try to give you guys kind of the adjusted numbers, so you can see kind of what that noise taken out of it, how we're performing underneath it. So we're not going to guess where interest rates are going to go from here, but we'll continue to kind of have that dynamic as interest change. But again, I think as you can strip that out and see the underlying momentum there.

本季度，隨著該投資組合的遠期利率曲線增加，這有點不利。所以——這就是為什麼我們試圖給你們一些調整後的數字，這樣你們就可以看到從中剔除的噪音，以及我們在噪音之下的表現。因此，我們不會猜測利率將走向何方，但隨著利率的變化，我們將繼續保持這種動態。但同樣，我認為你可以將其剝離並看到那裡的潛在動力。

And then the other thing on phasing, I'd say is that I think we expect a similar cadence where we typically see some leverage as we go through the year. Q1 is typically our lowest op margin level for the year. But as we have higher sales quarters, we typically see leverage on the op margin line through the rest of the year.

關於分階段的另一件事，我認為我們預計會出現類似的節奏，在這一年中我們通常會看到一些槓桿作用。第一季度通常是我們今年最低的運營利潤率水平。但由於我們的銷售季度較高，我們通常會看到今年剩餘時間運營利潤率的槓桿作用。

I think I just maybe want to reiterate. When you take out the dynamics of the accounting that Kevin mentioned, which you need to do and look at our margin, I mean, our gross margin was up 20 basis points in the quarter, like Kevin mentioned and operating margin up 60%, which I think was notable. And I want to make sure people understand that dynamic, it's kind of confusing.

我想我只是想重申一下。當你拿出凱文提到的會計動態（你需要這樣做）並看看我們的利潤率時，我的意思是，我們的毛利率在本季度上升了20 個基點，就像凱文提到的那樣，營業利潤率上升了60%，這我認為值得注意。我想確保人們理解這種動態，這有點令人困惑。

Great. That's helpful. And then I wanted to ask on the U.S. companion animal business. I know you said overall companion was up 5.1%. But I think, Kevin, you kind of called out is maybe the main driver of that. Could you comment on how the U.S. companion animal business did? And any change to your outlook for that business, just given kind of the overall kind of traffic and level of demand that you're seeing in the market?

偉大的。這很有幫助。然後我想問一下美國的伴侶動物業務。我知道您說過伴侶整體上漲了 5.1%。但我認為，凱文，你的呼籲可能是這一切的主要推動力。您能否評價一下美國伴侶動物行業的表現？考慮到您在市場上看到的總體流量和需求水平，您對該業務的前景有什麼變化嗎？

Sure. I can jump in, and Don can add. We saw growth in both segments. We saw particularly the strong growth in our NVS business, which is -- I want to call them out, they're performing really well in that market. And this is in advance of some of the investments Don mentioned, what you think are even going to accelerate that business further. But the U.S. companion business also did grow in the quarter. Now as you'd expect, we're not seeing the same level of growth as we have over the past couple of years as that market has kind of moderated a bit from the heights of the pandemic boom. But -- and in the overall market, we still see spending up even as visits have come down a bit. So that team is executing really well and they are growing in the market so.

當然。我可以插話，唐可以補充。我們在這兩個領域都看到了增長。我們特別看到 NVS 業務的強勁增長，我想指出的是，他們在該市場的表現非常出色。這是唐提到的一些投資之前的事情，你認為這些投資甚至會進一步加速該業務。但美國的同伴業務在本季度也確實有所增長。現在，正如您所期望的那樣，我們沒有看到與過去幾年相同的增長水平，因為該市場已從大流行病繁榮的高峰期有所放緩。但是，在整個市場中，儘管訪問量有所下降，但我們仍然看到支出有所增加。因此，該團隊執行得非常好，並且他們在市場上不斷成長。

Yes. I think the 5% is off a fairly tough comp, as Kevin mentioned, with some of the dynamics in the market that were in place last year.

是的。我認為 5% 的折扣相當艱難，正如 Kevin 提到的，考慮到去年市場上的一些動態。

Your next question comes from the line of Jeff Johnson from Baird.

您的下一個問題來自貝爾德 (Baird) 的傑夫·約翰遜 (Jeff Johnson)。

Don, I wanted to start on your equipment number, the down 5.7%. Obviously, we've seen many times in the past from you and other companies push hard as kind of the fiscal end of year to make some numbers and then the next quarter has a bit of an overhang here. How much of that was an impact this quarter? I mean obviously, you talked about digital x-ray being down. But I'm hoping you can help us maybe disaggregate kind of end market -- tenor of end markets versus just some timing of when you close your fiscal year and then made a big push last year, and had a bit of an overhang to deal with in this first quarter.

唐，我想從你的裝備數量開始，下降了 5.7%。顯然，我們過去多次看到你們和其他公司在財政年底大力推動取得一些數字，然後下個季度就會出現一些懸而未決的情況。其中對本季度的影響有多大？我的意思是，顯然，您談到了數字 X 射線的故障。但我希望你能幫助我們分解終端市場的類型——終端市場的基期與你結束財政年度然後去年大力推動並有一些懸而未決的時間的情況在第一季度。

Yes, no, no doubt, Jeff. And I think you've seen that in the past. And there's a lot of reasons for it. Obviously, there can be a fourth quarter push. We do budget and forecast for that. And I think, as you mentioned, the digital category sometimes is the one that you may see more variability on that kind of dynamic. So this gets back to -- for me, just back to the whole notion of looking at it in the 3-month increments, particularly as you're bringing up in the fourth quarter, first quarter kind of realm. I think the -- I think if you just looked across the 6-month period, which might be a better way to think about all that. Our equipment sales were up 8%, Q4 and Q1 over last year. And then I think the -- I would just highlight that we keep watching this category as you all do, I think, in terms of the economy and things. But all we're seeing is just the our customers' desire to continue investing in their practice, and that's just not slowing down. It's good patient traffic and it's kind of translating to the practices wanting to continue to invest.

是的，不，毫無疑問，傑夫。我想你過去已經看到過這一點。其原因有很多。顯然，第四季度可能會有推動。我們為此做預算和預測。我認為，正如您所提到的，有時您可能會在數字類別中看到這種動態的更多變化。因此，這又回到了——對我來說，回到了以 3 個月的增量來看待它的整個概念，特別是當你在第四季度、第一季度的領域中提出這一點時。我認為，如果你只看一下 6 個月的時間段，這可能是思考這一切的更好方法。我們的設備銷售額比去年第四季度和第一季度增長了 8%。然後我想——我想強調的是，我們一直在關注這個類別，就像你們所有人一樣，我認為，在經濟和事物方面。但我們所看到的只是我們的客戶希望繼續投資於他們的實踐，而且這種願望並沒有放緩。這是良好的患者流量，並且可以轉化為想要繼續投資的實踐。

That's helpful. And then just on the EPS guidance, you're obviously up 25% year-over-year this quarter. I think your guidance for the year is low single digit to mid-single digit growth year-over-year for the full year. So that would kind of imply kind of flattish EPS over the next 3 quarters on a year-over-year basis. Just remind us, one, why would that be the right level of EPS growth after a strong start here on the EPS line of the year? And two, how much conservatism versus other factors we might have to be taken into account there?

這很有幫助。然後，僅根據 EPS 指引，本季度的業績同比顯然增長了 25%。我認為您對今年的指導是全年同比低個位數到中個位數的增長。因此，這在某種程度上意味著未來三個季度的每股收益將與去年同期持平。請提醒我們，第一，在今年每股收益線強勁開局之後，為什麼這是正確的每股收益增長水平？第二，與其他因素相比，我們可能需要考慮多少保守主義？

Yes. Yes. I think this really actually -- I think this mostly relates just to a bit of phasing on the year. I think that we had a tough comp or we had an easy comp in Q1 and obviously, a tough comp in Q4 and there's some other dynamics within the year. But I think it relates more to that than anything. And so when we kind of look back and say even with all that phasing, we're comfortable with the guidance we've given for the year and that growth even though it comes in a little bit different form each quarter.

是的。是的。我認為這實際上是——我認為這主要與今年的一些階段性有關。我認為我們在第一季度有一個艱難的比賽，或者我們有一個簡單的比賽，顯然，在第四季度有一個艱難的比賽，並且今年還有一些其他動態。但我認為這比任何事情都更重要。因此，當我們回顧過去並說，即使經歷了所有這些階段性的變化，我們對今年給出的指導和增長感到滿意，儘管每個季度的形式略有不同。

Yes, I think the other thing I'd add, Jeff, is there are some -- while we do expect the business to continue to grow over the course of the year, there are some internal investments we're making that will ramp up a bit here into the rest of the year that we think are great investments for the long term of the company. But we're going to have a little bit of spending that will come through in the back half of the year, too.

是的，我想我要補充的另一件事是，傑夫，雖然我們確實預計業務將在今年繼續增長，但我們正在進行一些內部投資，這些投資將會增加我們認為，今年剩下的時間裡，這對公司的長期發展來說是一筆巨大的投資。但我們也將在今年下半年完成一些支出。

And your next question comes from the line of Kevin Caliendo from UBS.

您的下一個問題來自瑞銀集團的 Kevin Caliendo。

I guess one question I had to ask is around what you saw in July. That's the month we don't get to see from anybody else. I'm just wondering if trend through the quarter was consistent or not. I understand on the equipment side, what happened with ordering and timing. I'm just wondering as you exited the quarter, did you think the demand for equipment to change, at all, from the beginning of the quarter or from second quarter. We're just trying to get a read on what's going to happen over the rest of the calendar year into next year.

我想我必須問的一個問題是關於你在七月看到的情況。那是我們看不到其他人的月份。我只是想知道整個季度的趨勢是否一致。我了解設備方面的訂購和時間安排。我只是想知道，當您退出本季度時，您是否認為設備的需求從本季度初或第二季度開始發生變化。我們只是想了解從今年剩餘時間到明年將會發生什麼。

Yes. No, Kevin, I appreciate the question and a good one. I -- for us, I think the quarter really played out kind of in normal fashion. I don't -- I wouldn't highlight and we probably wouldn't say too much about intra-quarter phasing. But I guess I would say that I don't think that there was nothing notable from my perspective on how the quarter played into the first 2 months versus the last one.

是的。不，凱文，我很欣賞這個問題，而且是一個很好的問題。我——對我們來說，我認為這個季度確實以正常方式進行。我不會——我不會強調，我們可能不會對季度內分階段說太多。但我想我會說，從我的角度來看，該季度前兩個月與上個月的表現並沒有什麼值得注意的地方。

Okay. That's helpful. And also just thinking about with equipment, where are you in terms of relatively speaking, in terms of backlog, whether it's core or digital? Has that normalized? Or do you feel like the backlog in either of those are elevated or lower or normal? Any color around that would be super helpful.

好的。這很有幫助。想想設備方面，相對而言，在積壓方面，無論是核心還是數字？這已經正常化了嗎？或者您覺得其中任何一個的積壓是增加還是減少還是正常？周圍的任何顏色都會非常有幫助。

I think -- this is Kevin. I think what we'd say the core equipment demand continues to be strong. Those supply chains have normalized, I think we'd say, compared to what we were talking about a couple of past year or 2. So the lead times aren't as long as they used to be. So that sales cycle has shortened for us, which is good. And then for the digital categories, those sales cycles are pretty quick. We can turn around those orders and installs fairly, fairly rapidly. The consults, obviously, not as complicated as a new office build out. So we don't really think about those in terms of backlog just because the cycle is pretty quick. But I'd say, like Don said, we're seeing healthy demand in the market. Our sales teams are executing really well to help their customers find the right investment for their practice and feel good about the rest of the year.

我想——這是凱文。我認為我們所說的核心設備需求仍然強勁。我想我們會說，與我們過去一兩年談論的情況相比，這些供應鏈已經正常化。因此，交貨時間不像以前那麼長。因此，銷售週期對我們來說縮短了，這是好事。對於數字類別，這些銷售週期非常快。我們可以相當、相當快地扭轉這些訂單並進行安裝。顯然，諮詢並不像新建辦公室那麼複雜。因此，我們並沒有真正考慮積壓方面的問題，只是因為周期非常快。但我想說，就像唐所說，我們看到了市場的健康需求。我們的銷售團隊執行得非常好，幫助他們的客戶找到適合他們實踐的正確投資，並對今年剩下的時間感覺良好。

Do you think that interest rates or the economic situation has held up ordering in any way, shape or form, on some of the higher cost equipment in the category? I'm just -- we've heard anecdotally this from -- in the channel and from some of your peers and manufacturers. Just wondering how real you see that as being any kind of impact on the market.

您認為利率或經濟形勢是否以任何方式阻礙了該類別中一些成本較高設備的訂購？我只是——我們從渠道以及一些同行和製造商那裡聽說過這一點。只是想知道您認為這對市場的影響有多真實。

Yes. I think marginally, not in a significant way, though. And again, we're pleased with the momentum in the business, but the momentum in the market, too, in terms of -- again, in terms of practices willing to invest in their business and it continues. So it's a little more challenging, I think, but still makes sense, I think, when they run the math.

是的。我認為只是輕微的，但不是很重要。再說一遍，我們對業務的勢頭感到滿意，但市場的勢頭也很高興，再次，就願意投資其業務的做法而言，而且這種勢頭仍在繼續。因此，我認為這更具挑戰性，但當他們進行數學計算時，我認為仍然有意義。

And your next question comes from the line of John Block from Stifel.

您的下一個問題來自 Stifel 的 John Block。

Great. I guess I'll go back to the underlying Dental consumables, which were seemingly, I guess, the revenue highlight for the quarter. You've got inflation impact starting to diminish. I guess what I'm trying to go with this is, what was the approximate price contribution in fiscal '23 for Dental consumables? And how do you see that playing out in fiscal '24? I'm just trying to focus on that pricing contribution because I think we all want to arrive at how underlying volumes are trending. And if the price contribution for consumables is sort of closer to normalized levels as we currently sit here today.

偉大的。我想我會回到基本的牙科耗材，我想這似乎是本季度的收入亮點。通貨膨脹的影響開始減弱。我想我想要解決的是，23 財年牙科耗材的大致價格貢獻是多少？您如何看待 24 財年的情況？我只是想關注定價貢獻，因為我認為我們都想了解基本交易量的趨勢。如果消耗品的價格貢獻有點接近我們今天坐在這裡的正常水平。

Yes, Jon, this is Kevin. Yes, I think we would say that the pricing certainly is kind of more at historical norms, the kind of low single-digit pricing. As we've looked at our internal data, here, we certainly -- part of our Q1 performance was price contribution, but it was also a positive volume contribution. So we saw units grow this quarter as well. So it wasn't just the one or the other. I think we expect that for some of those infection control products that we've been tracking, that year-over-year deflationary impact is going to continue to be a drag for the next couple of quarters. The prices have stabilized but we're still going to be comparing back to a higher kind of ASP basket for those products from last year. So I think as we -- so we'll be dealing with that dynamic for the next couple of quarters. But I think for -- if you kind of look at the category as a whole, we'd say, we're seeing volume contribution as well as kind of more normalized historical price contribution for dental consumables.

是的，喬恩，這是凱文。是的，我想我們會說定價肯定更符合歷史標準，是一種低個位數的定價。當我們查看我們的內部數據時，我們第一季度業績的一部分當然是價格貢獻，但它也是積極的銷量貢獻。因此，我們看到本季度單位數量也有所增長。所以這不僅僅是其中之一。我認為我們預計，對於我們一直在跟踪的一些感染控制產品來說，同比通貨緊縮的影響將在接下來的幾個季度繼續成為拖累。價格已經穩定，但我們仍將與去年這些產品的較高平均售價籃子進行比較。所以我認為，我們將在接下來的幾個季度處理這種動態。但我認為，如果你從整體上看這個類別，我們會說，我們會看到牙科耗材的銷量貢獻以及更加標準化的歷史價格貢獻。

Okay. Got it. And then just maybe a small handful as part of the second question. For Dental equipment, should we still expect mid-single-digit growth for the year? Obviously, fiscal 1Q was down. You got a really tough comp in 4Q. So do we still think you can land at mid-single digits for the year? And Kevin, still tax rate of 25% for the year, is that correct? You were shy of that for the quarter. And did your messaging change a little bit on the deflationary for the infection control? I thought before that was supposed to ease in the back part of the year. And maybe in your prepared remarks, you sort of said that continues to the end of the fiscal year, maybe some clarification there.

好的。知道了。然後可能只是第二個問題的一小部分。對於牙科設備，我們是否仍應預期今年將實現中個位數增長？顯然，第一財季出現了下滑。第四季度的比賽非常艱難。那麼我們仍然認為今年的業績可以達到中個位數嗎？而凱文，當年的稅率仍然是 25%，對嗎？這個季度你對此感到害羞。您在感染控制的通貨緊縮方面的信息是否有所改變？我之前認為這種情況應該會在今年下半年有所緩解。也許在您準備好的講話中，您說過這種情況會持續到本財年結束，也許需要對此進行一些澄清。

Yes, I'll take a couple of those. So yes, on the deflation, I think what I'd say is we really saw the prices kind of stabilize at a new level in our Q4 of fiscal '23. So it's probably -- Q2 will have a headwind. Q3 will have a smaller headwind, yes. Q4, it should be pretty marginal sort of how we see the pricing dynamics playing out for, Jon. And then on the tax rate, yes, we'd still say about 25%. We're seeing a step-up this year in our tax rate due to some changes in the U.K. tax law as well as some historical deductions that have expired for us. So I think that's still the right number for your estimate.

是的，我會拿幾個。所以，是的，關於通貨緊縮，我想我想說的是，我們確實看到價格在 23 財年第四季度穩定在新的水平。所以第二季度可能會遇到阻力。是的，第三季度的阻力會更小。第四季度，喬恩，我們對定價動態的看法應該是相當邊緣的。然後關於稅率，是的，我們仍然會說大約 25%。由於英國稅法的一些變化以及我們的一些歷史扣除額已經過期，我們今年的稅率有所提高。所以我認為這仍然是您估計的正確數字。

And equipment -- yes. And I think -- yes, you're right. We do have some tough comps coming up in equipment. The team is still pushing hard on that. I think mid-single digit long term. And again, given some -- not looking at quarter-to-quarter, but over a reasonable time frame is what we'd expect. And I just keep reiterating what we're saying is I think the market is looking for these investments. And so we're still pushing to get to that mid-single digit long-term growth rate for equipment.

還有設備——是的。我認為——是的，你是對的。我們確實在設備方面面臨一些艱難的挑戰。該團隊仍在努力推動這一目標。我認為長期來看中個位數。再說一遍，考慮到我們所期望的不是季度與季度，而是在合理的時間範圍內。我只是不斷重申我們所說的是我認為市場正在尋找這些投資。因此，我們仍在努力實現設備的中個位數長期增長率。

I think the -- Jon, I think the metric we've kind of brought out every quarter is what does it look like if you look over the last 8 quarters. I think the equipment growth is 4% in that time, and it kind of has been. So you can kind of think about it like that. I think the ups and downs year-over-year, up here, we deal with. But over an 8-quarter period, that's still -- we still think that's a pretty good number.

我認為——喬恩，我認為我們每個季度都會推出的衡量標準是，如果你回顧過去 8 個季度，情況會是什麼樣子。我認為當時設備增長了 4%，而且確實如此。所以你可以這樣想。我認為我們在這裡應對逐年的起伏。但在 8 個季度的時間裡，我們仍然認為這是一個相當不錯的數字。

And your next question comes from the line of Elizabeth Anderson from Evercore ISI.

您的下一個問題來自 Evercore ISI 的 Elizabeth Anderson。

Just a quick question. How are you guys thinking about -- obviously, you haven't (inaudible) interest expense in the quarter. How are you sort of expecting that to trend for the rest of the year?

只是一個簡單的問題。你們怎麼想的——顯然，你們本季度沒有（聽不清）利息支出。您預計今年剩餘時間的趨勢如何？

Yes. Yes, so interest expense, we'd expect it to be maybe a little above what we carried here in Q1 for the rest of the next 3 quarters as we've kind of re-forecast where we expect rates to go. And so really, if you look at it versus the last year, there will still be a bit of a headwind here in Q2 and Q3, a little bit less so in Q4.

是的。是的，所以利息支出，我們預計在接下來的三個季度的剩餘時間裡，利息支出可能會略高於第一季度的水平，因為我們已經重新預測了利率的預期走向。事實上，如果你與去年相比，你會發現第二季度和第三季度仍然會遇到一些阻力，第四季度的阻力會小一些。

Okay. That's helpful. And maybe on the longer-term side, what are the things that maybe come out in the last of years? Is that -- you seem to have a sort of different M&A strategy for the Animal Health business versus the Dental business? It seems like sort of more tuck-ins or a more regular cadence of tuck-ins on the Animal Health side. Can you talk to us a little bit more about sort of maybe why that is? Why you're seeing is this is availability of assets? Is it just something unique about that business versus some of the Dental, which is, obviously, just had more core benefit?

好的。這很有幫助。也許從長遠來看，過去幾年可能會出現哪些事情？您對動物保健業務與牙科業務似乎有不同的併購策略嗎？在動物健康方面，這似乎是更多的進餐或更規律的進餐節奏。您能和我們多談談這可能是為什麼嗎？為什麼您會看到這是資產的可用性？與某些牙科業務相比，這是否只是該業務的獨特之處，顯然，牙科業務只是擁有更多的核心利益？

Yes. Okay. I think there -- first of all, I would start off by saying in terms of our M&A strategy, we're agnostic to some extent between Animal Health and Dental. We're looking for the right opportunities that hit our metrics and that check the box on what we're thinking about in terms of M&A. So I mean I would put this particular dynamic and kind of where we've been over the last few years, it's just the timing of opportunities that come up and when we're ready to do something, and how they check the box. I don't know that there's anything particularly unique about Animal Health that would put us into a position where there's some good tuck-in acquisitions versus Dental, but we're doing a lot of work. There's a lot of work going into all kinds of potential acquisitions. I know we've been saying this, but we're careful. We want to make sure we make the right investments. And so far, this is what we have. But again, I don't think there's anything unique about Animal Health and Dental. They are different businesses, but we're looking for the right opportunities.

是的。好的。我認為，首先，我首先要說的是，就我們的併購戰略而言，我們在動物健康和牙科之間在某種程度上是不可知的。我們正在尋找符合我們指標的合適機會，並勾選我們在併購方面的想法。所以我的意思是，我會把這種特殊的動態和過去幾年我們所處的情況放在一起，這只是機會出現的時機，當我們準備好做某事時，以及他們如何勾選框。我不知道動物保健有什麼特別獨特的地方，可以讓我們與牙科相比進行一些很好的收購，但我們正在做很多工作。各種潛在收購都有大量工作要做。我知道我們一直這麼說，但我們很小心。我們希望確保做出正確的投資。到目前為止，這就是我們所擁有的。但同樣，我不認為動物健康和牙科有什麼獨特之處。他們是不同的企業，但我們正在尋找合適的機會。

Got it. Just one for me. Just how do you think about the private label opportunity? I know you sort of talked about that particular -- is there something you can sort of like quantify there? And I know you said you're adding more products than before, but how do we think about that as like a driver of margins in that business?

知道了。只給我一個。您如何看待自有品牌機會？我知道你談到了這個特定的問題——有什麼東西你可以量化嗎？我知道您說過您將比以前添加更多產品，但我們如何將其視為該業務利潤的驅動因素？

Well, I think what you're going to see is private label becoming a more prominent part of our program. I mean, it's slow, we're not accelerating at any -- at a significantly rapid pace. So I mean we move carefully, but definitely, there's a strategic objective to make that a bigger part of our business and our sales in both the Animal Health and Dental businesses.

嗯，我認為您將看到自有品牌成為我們計劃中更加突出的一部分。我的意思是，速度很慢，我們根本沒有加速——以非常快的速度。所以我的意思是，我們採取謹慎行動，但肯定有一個戰略目標，使之成為我們業務以及動物保健和牙科業務銷售的更大組成部分。

Your next question comes from the line of A.J. Rice from Credit Suisse.

你的下一個問題來自 A.J.瑞士信貸的大米。

Obviously, you had really solid strong growth in consumables on the dental side and then your equipment sales down for all the reasons we talked about and need to normalize that. I wonder though, in the quarter, does that dynamic -- is it enough on the product mix shift you saw that have an impact on the margin? Is that part of why the margins showed the improvement that they did in Dental?

顯然，牙科方面的消耗品確實有強勁的增長，但由於我們談到的所有原因，您的設備銷量下降了，需要使其正常化。但我想知道，在本季度，這種動態是否足以影響您所看到的產品組合轉變，從而對利潤率產生影響？這是牙科行業利潤率有所改善的部分原因嗎？

A.J., yes, it is. I mean we see typically within our Dental business, our consumables margins and our value-added services margins, gross margins, are higher than our equipment gross margins. Now they're somewhat interrelated, I'd say, because when we look at equipment, we also think about all the services that we provide with regard to the equipment that actually shows up on our value-added services. So in a quarter where we have slightly lower equipment sales that quarter, we might see a little bit of a mix benefit. But we know in our model, it accrues to mix benefits going forward when we sell a lot of equipment because we get the value-add services, we get the technical service revenue from that relationship.

A.J.，是的，確實如此。我的意思是，我們通常看到，在牙科業務中，我們的耗材利潤率和增值服務利潤率（毛利率）高於我們的設備毛利率。我想說，現在它們在某種程度上是相互關聯的，因為當我們查看設備時，我們還會考慮我們提供的與設備相關的所有服務，這些服務實際上出現在我們的增值服務中。因此，在設備銷售額略低的季度中，我們可能會看到一些混合效益。但我們知道，在我們的模型中，當我們出售大量設備時，它會帶來未來的混合效益，因為我們獲得了增值服務，我們從這種關係中獲得了技術服務收入。

Okay. The company continues to put in its press release, the non to uncertain macro backdrop and some inflationary pressures we've talked on the call already about inflation impact or deflation impact in our infection control. And you've said you don't think you're seeing any impact on the equipment sales. Are you just making those statements to sort of keep a cautionary tone on things? Or is there any place that hasn't come up where those 2 dynamics, uncertain macroeconomic and inflationaries or pressures, are having an impact now that you would want to call out?

好的。該公司繼續在其新聞稿中發布不確定的宏觀背景和一些通脹壓力，我們已經在電話會議上談到了我們感染控制中的通脹影響或通貨緊縮影響。您曾說過，您認為設備銷售不會受到任何影響。您發表這些言論只是為了對事情保持謹慎的態度嗎？或者還有哪些地方還沒有出現，這兩種動態，即不確定的宏觀經濟和通脹或壓力，現在正在產生您想要指出的影響？

No. I think we are we're putting that out there as just sort of a caution that kind of these forces are out there, and we have a lot of ways that we're looking at. Whether those are impacting our business and looking forward, do we think they're going to, and we're not seeing that. I think, again, I go back to -- I've been out in the field, I've been with our top salespeople recently. And I'd just tell you that the momentum in the business right now, the optimism momentum are extremely high and and they're just not seeing it. So we'll continue to monitor it. And I think we want to put that out there just so -- I mean, not that people don't, but so people keep that in mind, but it's not showing up.

不。我認為我們把它放在那裡只是一種警告，這些力量就在那裡，我們有很多方法正在研究。這些是否會影響我們的業務並展望未來，我們認為它們會影響我們的業務嗎？我們還沒有看到這一點。我想，我再次回到——我一直在外地工作，最近我一直在和我們的頂級銷售人員在一起。我只想告訴你，現在的業務勢頭、樂觀勢頭非常高，但他們只是沒有看到。所以我們會持續關注。我認為我們想把它放在那裡——我的意思是，不是人們不這樣做，而是讓人們牢記這一點，但它並沒有出現。

It sounds like -- to an earlier question, when you think about the outlaying out the rest of the year, it doesn't sound like you're taking -- you're making any adjustments, that things get tougher in any particular area because of these factors later in the year. I just want to confirm that the variation that would be there is more because of the year-to-year comps, et cetera, not so much because you're making an assumption about the macro environment changing. Is that right?

聽起來——對於之前的問題，當你考慮今年剩餘時間的支出時，聽起來你並沒有做出任何調整，任何特定領域的事情都會變得更加困難由於這些因素，今年晚些時候。我只是想確認，由於逐年比較等原因，存在的變化更多，而不是因為您對宏觀環境變化做出假設。是對的嗎？

That's right. Absolutely.

這是正確的。絕對地。

And your next question comes from the line of Allen Lutz from Bank of America.

您的下一個問題來自美國銀行的艾倫·魯茨 (Allen Lutz)。

I wanted to follow up on Jeff's question from earlier. So over the past 6 months, equipment sales have been about 8%, and that's higher than what it's been over the past 8 quarters. And so as we think about what we've seen so far on interest rates, you've said there's been a marginal impact. As you think about the guide for the remaining 3 quarters of the year, is there any expected incremental impact from higher interest rates? And then kind of more thematically in longer term, is there any way to think about how dentists react if interest rates stay higher for maybe a few quarters?

我想跟進傑夫之前提出的問題。因此，過去 6 個月，設備銷售額約為 8%，高於過去 8 個季度的水平。因此，當我們思考迄今為止在利率方面所看到的情況時，您說過影響很小。當您考慮今年剩餘 3 個季度的指南時，利率上升是否會產生任何預期的增量影響？從長遠來看，有沒有什麼辦法可以考慮如果利率在幾個季度內保持較高水平，牙醫會如何反應？

Well, I would say, first, the concept of any kind of marginal impact on the equivalent business, given interest rates is something that we spent a lot of time modeling is all really built into our guidance. So I think it would -- unless there's a fairly dramatic change there that we built some of that into our guidance and that's there. What was the second part of the question?

好吧，我想說，首先，考慮到我們花了很多時間建模的利率，對同等業務的任何邊際影響的概念都真正納入了我們的指導中。所以我認為會的——除非發生相當大的變化，我們將其中的一些內容納入我們的指導中，那就是這樣。問題的第二部分是什麼？

Just how dentists would -- historically, how they react if interest rates stay higher for longer. We haven't really seen an environment where rates have been elevated for more than a few quarters. So just curious about your perspective there.

從歷史上看，如果利率長期保持較高水平，牙醫會如何反應。我們還沒有真正看到利率上漲超過幾個季度的環境。所以只是好奇你的觀點。

Well, again, what we keep seeing, and it's not just in the numbers, it's really just as we interact with our customers that there's a lot of interest and continued investment in the practice. We'll monitor that. I mean, I think if we start to see something happen there that changes that dynamic, then we'll build that into the expectations. But again, for right now, that's just -- again, there's a lot of interest in investment.

好吧，再說一次，我們不斷看到的，不僅僅是數字，而是當我們與客戶互動時，人們對這種做法表現出很大的興趣並持續投資。我們會對此進行監控。我的意思是，我認為如果我們開始看到那裡發生的事情改變了這種動態，那麼我們會將其納入預期。但現在，再次強調，人們對投資很感興趣。

And your final question today comes from the line of John Stansel from JP Morgan.

今天你們的最後一個問題來自摩根大通的約翰·斯坦塞爾。

I wanted to look into production a little bit more. I think you -- appreciate you called out the headwind around cattle. So how does that sequential decline in herd count kind of translate to traffic? And then when you're having conversations with customers, how are you thinking about this? Is this something you see as kind of persistent through the year or more of a kind of a near term?

我想多了解一下生產情況。我想你——很感激你喚起了牛群的逆風。那麼，牛群數量的連續下降如何轉化為交通量呢？然後當你與客戶交談時，你是如何考慮這個問題的？您認為這是全年持續存在的情況還是短期內出現的情況？

Yes, so certainly, our customers are seeing those lower herd counts on the cattle business, and I'd say our production team is doing a fantastic job managing through that. I think the thing for our business is that we do have a diverse kind of portfolio of customers and species that we serve. We've got a large cattle business, but we also serve the swine markets, the dairy markets. And so as we look at our business, even if one of those markets is relatively down, we see strength like we did in this quarter in the swine market. The dairy markets have come back. So we'll be able to kind of manage through with our portfolio. And so if there's a bit of a headwind here in [one] for a couple of quarters as those herd counts normalize, we're confident we've got the plan to manage through it.

是的，當然，我們的客戶看到養牛業的牛群數量減少，我想說我們的生產團隊在管理這方面做得非常出色。我認為對我們的業務來說，我們所服務的客戶和物種確實多種多樣。我們擁有龐大的養牛業務，但我們也為生豬市場和乳製品市場提供服務。因此，當我們審視我們的業務時，即使其中一個市場相對下滑，我們也看到了像本季度生豬市場一樣的強勁勢頭。乳製品市場已經恢復。因此，我們將能夠管理我們的投資組合。因此，如果隨著牛群數量正常化而在幾個季度內出現一些逆風，我們相信我們已經制定了應對計劃。

Great. And then just quickly on working capital. I think you called out that it improved in the quarter. Is there anything specifically that you're doing to drive this working capital improvement?

偉大的。然後很快就投入營運資金。我認為您指出本季度情況有所改善。您正在採取哪些具體措施來推動營運資金的改善？

Yes -- no, the team did a good job this quarter. I think we're at a place with our working capital, I'd say that we're always looking for the right opportunities to make sure we've got the right inventory levels. We're balancing our service levels with good -- not getting too long on certain inventory categories. So I'd say there's opportunities that we look at more kind of opportunistically on the margins. But I'd just say, this quarter, our receivables team is doing a really good job. And I think as we go through the year, we'll continue to find some price some opportunities to take inventory down a bit, balancing that need to service the demand we've seen.

是的——不，團隊本季度做得很好。我認為我們的營運資金充足，我想說我們一直在尋找合適的機會以確保我們擁有合適的庫存水平。我們正在平衡我們的服務水平和良好的服務水平——不要在某些庫存類別上花太長時間。所以我想說，我們會以機會主義的方式看待一些機會。但我只想說，本季度我們的應收賬款團隊做得非常好。我認為，隨著這一年的發展，我們將繼續尋找一些機會來減少庫存，平衡滿足我們所看到的需求的需求。

And we have reached the end of our question-and-answer session. I will now turn the call back over to CEO, Don Zurbay, for some final closing remarks.

我們的問答環節已經結束。現在，我將把電話轉回給首席執行官 Don Zurbay，讓其發表最後的結束語。

Just want to thank everybody for their time today and their interest in Patterson Companies, and we'll talk to you in a quarter. Thank you.

我只想感謝大家今天抽出寶貴的時間以及對帕特森公司的興趣，我們將在一個季度後與您交談。謝謝。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。