On Thursday, Patterson Companies (NASDAQ:PDCO) released Q1 2007 earnings for the period ended July 29.

  • Despite strong sales, net profit declined year over year on slimmer margins across the board.
  • On the other hand, free cash flow increased nicely, and now outpaces earnings -- something a Fool always likes to see.
  • The company, a dental and veterinary supply distributor, is paying down debt while keeping tight reins on share dilution, another couple of shareholder-friendly things to do.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2007

Q1 2006

Change

Sales

$653

$655

$596

10%

Net Profit

--

$42

$43

(3%)

EPS

$0.32

$0.30

$0.31

(3.2%)

Diluted Shares

139

139

0%



Get back to basics with a look at the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

33.93%

34.78%

(0.85)

Operating Margin

10.46%

11.67%

(1.21)

Net Margin

6.35%

7.20%

(0.85)



*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$265

$155

70.9%

Accounts Rec.

$328

$306

7.2%

Inventory

$262

$226

16%



Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$154

$148

4.4%

Long-Term Debt

$205

$297

(30.9%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

$53

$29

80.1%

Capital Expenditures

$7

$16

(59.1%)

Free Cash Flow

$46

$13

256%



Find out why Fools always follow the money.

Related companies:

  • Henry Schein (NASDAQ:HSIC)
  • MWI Veterinary Supply (NASDAQ:MWIV)
  • IDEXX Laboratories (NASDAQ:IDXX)
  • Dentsply International (NASDAQ:XRAY)
  • PSS World Medical (NASDAQ:PSSI)
  • Owens & Minor (NYSE:OMI)

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had positions in none of the companies discussed today. Fool rules are here .