Patterson Companies, Inc. operates as a value-added distributor serving the North American dental supply; United States companion-pet (dogs, cats and other common household pets) and equine veterinary supply; and the worldwide rehabilitation and non-wheelchair assistive products supply market.
Subsidiaries
The Company's subsidiaries include: Direct Dental Supply Co., Patterson Dental Canada Inc., Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc., PDC Funding Company, LLC, Patterson Technology Center, Inc., Patterson Office Supplies, Inc., Webster Management LP, Patterson Medical Holdings, Inc., Patterson Medical Supply, Inc., Sammons Preston Canada, Inc., AO Liquidation, Inc., Tumble Forms, Inc., Midland Manufacturing Company, Inc., Medco Supply Company, Inc., Intra Corp., Patterson Logistics Services, Inc., Accu-Bite, Inc., Accu-Bite Dental Products Limited Liability Company, Williamston Industrial Center, LLC, Strategic Dental Marketing, Inc., AbilityOne Homecraft Limited, AbilityOne Limited, AbilityOne Kinetec S. A. and AOC Vertriebs GmbH.
Segments
The Company has three segments: Dental Supply, Veterinary Supply, and Rehabilitation Supply.
Dental Supply Segment
As Patterson’s principal business, Patterson Dental is a distributor of dental products in North America. The business has operations in the United States and Canada. Patterson Dental, a full-service, value-added supplier to dentists, dental laboratories, institutions, and other healthcare professionals, provides: consumable products (including x-ray film, restorative materials, hand instruments and sterilization products); basic and advanced technology dental equipment; practice management and clinical software; patient education systems; and office forms and stationery. Patterson Dental offers its customers a selection of dental products including approximately 90,000 stock keeping units (SKUs) of which approximately 4,500 are private-label products sold under the Patterson name. Patterson Dental also offers customers a range of related services including dental equipment installation, maintenance and repair, dental office design and equipment financing. Patterson Dental markets its dental products and services through approximately 1,540 direct sales representatives, 398 of whom are equipment specialists.
Products and Services
Consumable and Printed Products
Dental Supplies: Patterson offers a product line of consumable dental supplies, such as x-ray film and solutions; impression materials; restorative materials (composites and alloys); hand instruments; sterilization products; anesthetics; infection control products such as protective clothing, gloves and facemasks; paper, cotton and other disposable products; toothbrushes and a line of dental accessories, including instruments, burs, and diamonds. Patterson markets its own private label line of dental supplies including anesthetics, instruments, preventive and restorative products, and cotton and paper products.
Printed Office Products: Patterson Dental provides various printed office products, office filing supplies, and practice management systems to office-based healthcare providers, including dental, veterinary and medical offices. Products include custom printed products, insurance and billing forms, stationery, envelopes and business cards, labels, file folders, appointment books and other stock office supply products. Products are sold through two channels: The Company’s dental and veterinary supply sales force; and Direct mail catalogs distributed to approximately 100,000 customers several times a year. A staff of telemarketing personnel located in Champaign, Illinois supports both channels.
Equipment and Software
Dental Equipment: Patterson Dental is a supplier of dental equipment in the United States and Canada. It offers a range of dental equipment products including x-ray machines, high-and low-speed handpieces, dental chairs, dental handpiece control units, diagnostic equipment, sterilizers, dental lights and compressors. The Company also distributes newer technology equipment that provides customers with the tools to improve productivity and patient satisfaction. Such products include the CEREC family of products, a chair-side restoration system; digital x-rays; and inter-oral cameras.
Software: Patterson develops and markets its own line of practice management and clinical software for dental professionals. Products include software for scheduling, billing, charting and capture/storage/retrieval of digital images. The Company also sells software products developed by third parties including Sidexis by Sirona and Dimax2 by Planmeca.
Hardware: Patterson Dental offers custom hardware and networking solutions required for integrating the dental office. This product offering is offered to the Company’s dental customers.
Patient Education Services: With the acquisition of CAESY Education Systems, Inc., Patterson Dental expanded its offering of value-added services to include patient education services.
Other
Software Services: The Company offers various services to complement its software products, such as service agreements, electronic claims processing and billing statement processing.
Equipment Installation, Repair and Maintenance: The major equipment sold by Patterson includes installation and Patterson’s 90-day labor warranty. Patterson also provides repair and maintenance services for dental equipment, whether or not purchased from Patterson, including handpiece repair service. In addition to service technicians who provide installation and repair services on basic dental equipment, the Company has also invested in personnel who specialize in installing and troubleshooting issues with technology solutions such as practice management software, digital imaging products, hardware and networking.
Dental Office Design: Patterson provides dental office layout and design services through the use of a computer-aided design (CAD) program. Equipment specialists can create original or revised dental office designs required to produce conventional drawings.
Equipment Financing: Patterson Dental provides various options to fulfill its customers’ financing needs. For qualified purchasers of equipment, the Company would arrange financing for the customer through Patterson or a third party. For non-equipment related needs, customers are referred to a third party organization.
Patterson has also maintained one or more finance referral agreements with an outside finance company to provide a selection of finance opportunities to its customers. This might include financing for practice transactions, working capital, leasing, real estate and long-term capital. This service is provided by HPSC, Inc. To meet the needs of its customers, Patterson also initiates installment sale contracts that can be sold to either a commercial paper conduit managed by JPMorgan Chase Bank, N.A., or to a group of banks led by U.S. Bank National Association.
Sales and Marketing
During year ended April 29, 2006, Patterson Dental sold products or services to approximately 120,000 customers in the U.S. and Canada. Patterson Dental’s customers include dentists, laboratories, institutions and other healthcare professionals. Patterson Dental has approximately 90 local offices throughout the U.S. and Canada. The branches are grouped into seven regions in the U.S. and one in Canada. Dental customers receive a product catalog containing approximately 30,000 inventoried items. The catalog includes pictures of products, descriptions and specifications of products.
Distribution and Suppliers
Patterson ships dental consumable supplies from 10 distribution centers located in the U.S. and Canada. Patterson Dental’s approximately 90 dental sales offices are generally configured with display areas where the dental equipment can be demonstrated.
Patterson Dental obtains products from approximately 1,100 vendors in the dental segment. Patterson has distribution agreements with various dental equipment manufacturers, including Sirona Dental Systems GmbH for the CEREC, and Schick Technologies, Inc. for digital x-rays. In June 2006, Sirona and Schick merged to create Sirona Dental Systems, Inc. The Company is the national dealer for A-dec equipment, including chairs, units and cabinetry. A-dec is the manufacturer of dental equipment in the U.S.
Competition
The Company identifies competition form a full-service firm, Sullivan-Schein Dental, a unit of Henry Schein, Inc. The Company also faces competition in Canada in the dental supply market. The principal competitor is a national, full-service dental distributor, Henry Schein Ash Arcona, a unit of Henry Schein, Inc.
Veterinary Supply Segment
Webster Veterinary (Webster) is the distributor of veterinary supplies to companion-pet (dogs, cats and other common household pets) veterinary clinics in the eastern United States. In addition, through its acquisition of Milburn Distributions, Inc., Webster is also a equine distributor in the United States. Webster provides products used for the diagnosis, treatment and/or prevention of diseases in companion pets and equine animals.
Webster is a value-added, full-service distributor of a range of consumable supplies, equipment, diagnostic supplies, biologicals (vaccines) and pharmaceuticals. Webster does not distribute pet foods. Webster’s product offering, totaling approximately 11,000 items, is sold by approximately 165 field sales representatives. In addition to its core business of distributing veterinary products, Webster has an agency commission business with pharmaceutical manufacturers. In the agency relationship, Webster processes the order to the manufacturer but handles none of the product nor does Webster bill and collect from the customer.
Products and Services
Consumable and Printed Products
Webster offers its customers a selection of veterinary supply products, including consumable supplies, pharmaceuticals, diagnostics, and biologicals. Consumable supplies distributed by Webster include lab supplies, various types and sizes of paper goods, needles and syringes, gauze and wound dressings, sutures, latex gloves, orthopedic and casting products. Webster’s pharmaceutical products include anesthetics, antibiotics, injectibles, ointments and nutraceuticals. The diagnostics product category includes on-site testing products for heartworm, FIV, FELV and Parvo-virus. Biological products are comprised of vaccines and injectibles. Majority of the office supply products sold to the dental supply market are also offered to the veterinary supply market.
Equipment
Webster sells equipment for hospital, laboratory and general surgical use within the veterinary practice. New equipment offerings in the year ended April 29, 2006, included iM3 Dental stations, ScanX Digital Radiography System, Schick Dental Digital Radiography System, EVA-VET Digital Dental X-ray System, Sedecal Veterinary X-Ray Systems, Min Xray High Frequency Radiology Systems, Image Vet 70ACP Dental X-ray unit, Provecta-V Mobile Dental X-Ray unit, Sunnex Surgical Lights, European Design and Midmark Medical Cabinets.
Other
Other products and services include commissions on agency sales and freight recovery on shipments to customers.
Distribution
As of April 29, 2006, the decentralized distribution network in the veterinary supply segment consisted of 12 distribution centers.
Rehabilitation Supply Segment
Patterson Medical is the distributor of rehabilitation medical supplies and non-wheelchair assistive products. Patterson Medical offers a range of distributed and self-manufactured rehabilitation products to health care professionals globally. Patterson Medical operates as Sammons Preston Rolyan in North America and Homecraft in International markets.
Patterson Medical serves as the gateway through which approximately 23,000 rehabilitation products originating from approximately 2,000 suppliers and manufacturers are sold to a diverse customer base with an emphasis on physical therapists (PTs) and occupational therapists (OTs). Principal channels of distribution are acute care hospitals, long-term care facilities, rehabilitation clinics, dealers and schools. Patterson Medical offers a range of differentiated products to users and their health care providers, while focusing on niches, worldwide.
Patterson Medical’s international operations are based in the United Kingdom (U.K.) and made up of two divisions: Homecraft in the U.K. and Kinetec in France. In the U.K., Homecraft operations include sales and marketing, customer service, distribution, purchasing and administration. In France, Kinetec is a self-contained manufacturing unit with limited sales and marketing, distribution, administration and purchasing.
Homecraft is a supplier of aids to daily living (ADL) and rehabilitation products in the U.K., and a player in the international markets. Having developed and designed various proprietary products, Homecraft is the prime source for various ADL brands, including products sold under the Sammons Preston Rolyan brand. The Homecraft catalog offers a line of ADL, therapy, rehabilitation and pediatric products containing approximately 10,000 items. Their catalog is circulated to PTs, OTs, loan equipment stores and private clinics, trade outlets and the general public. Homecraft’s central sales and marketing focus on hospitals, local government and trade customers throughout the U.K.
Kinetec consists of two operations, the manufacturing and distribution of Continuous Passive Motions machines (CPMs) for sale on a worldwide basis and the sale and distribution of Sammons Preston Rolyan and Homecraft products in France. Products are marketed to customers through product brochures, mailings, tele-marketing and a 6 person sales force that covers the French rehabilitation market.
Products and Services
Consumable and Printed Products
Patterson Medical offers a selection of supply products that can be categorized as follows: Aids to Daily Living—dressing devices, toileting, dining, bathing aids and grooming devices; Orthopedic Soft Goods / Splints—braces, splints and orthonics for protecting, supporting and positioning; Clinical—products that assist in the examination and treatment of patients, such as exercise bands, putty, weights balls and mats; Mobility—walkers, canes and wheelchair accessories such as gloves, trays and carrying bags; Pediatric Seating and Positioning—rolls, wedges, specialty seating and standers and mobility assistance products for special needs children. This category also includes sensory motor stimulation products such as toys, crafts and devices to assist with balance; and Modalities—products for heating and cooling therapies, electrical stimulation, laser, ultrasound, paraffin, iontophoresis and therapeutic creams and lotions.
Equipment
Rehabilitation equipment consists of exercise, examination, treatment and therapy equipment and furniture. These products include parallel bars, treatment tables, mat platforms, treadmills, stationary bicycles and CPMs.
Sales and Marketing
Its PT and OT customers generally know Patterson Medical as Sammons Preston Rolyan in the U.S. and Canada, and Homecraft in the remainder of the world. The Patterson Medical sales professionals, majority of whom are therapists, are located throughout the U.S. and Canada. Patterson Medical directly sells to U.S. hospitals, nursing homes and rehab clinics. Patterson Medical also distributes to national distributors and local dealers.
Distribution
Patterson Medical’s primary distribution center is located in Bolingbrook, IL, with certain product also fulfilled from multi-segment facilities within the Patterson distribution network.
History
Patterson Companies, Inc. was founded in 1877.
