James Wiltz - President and CEO Steve Armstrong - EVP and CFO

Glen Santangelo Derek Leckow - Barrington Research Larry Marsh - Lehman Brothers Robert Willoughby - Banc of America Securities Jeff Johnson - Robert W. Baird John Kreger - William Blair Andrea Bici - Schroders Investment Management

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Patterson Companies, Inc.’s First Quarter 2009 Earnings Conference Call. At this time, all participants’ lines are muted. Following the formal presentation, instructions will be given for the question-and-answer session. (Operator Instructions). As a reminder this conference is being recorded, Thursday, August 21st, 2008. I would now like to turn the conference over to James Wiltz, President and CEO. Please go ahead, sir.

Thank you, Nicole. Good morning and thanks for participating in our first quarter conference call. Joining me today is Steve Armstrong, our Executive Vice President and Chief Financial Officer. We will be pleased to your questions at the conclusion of our remarks. Since Regulation FD prohibits us from providing investors with any earnings guidance, unless we release that information simultaneously, we’ve included financial guidance for the second quarter of 2009 in our press release earlier today. Our guidance is subject to a number of risks and uncertainties that could cause Patterson’s actual results to vary from our forecast. These risks and uncertainties are discussed in detail in our annual report on Form 10-K, and our other SEC filings and we urge you to review this material. Turning now to our first quarter results. Consolidated sales rose 6% to $743.9 million. Earnings per share increased 11% to $0.39 from $0.35 in last year’s first quarter. As many of you know, we completed $525 million of new long-term debt financing in last year’s fourth quarter, which enabled us to lower cost of capital about 100 basis points. The proceeds of this debt issuance are the portions of our cash reserve were used to repurchase 19 million shares of our common stock in 2008. We are expecting accretion of additional $0.06 to $0.07 per share in 2009 as a result of these transactions. An additional interest expense associated with this debt negatively affected our net income in the first quarter and it will continue to affect the comparability of net income over the balance of 2009. But by completing these transactions in 2008, we believe we have better positioned Patterson to increase its returns to our shareholders, while maintaining our financial flexibility to take advantage of acquisition or other investment opportunities. Steve will provide more detail on the financial impact of these transactions during his prepared remarks. Now, I will briefly review the performance of our three businesses. Patterson Dental results were generally consistent with our internal forecast for this period. Sales of consumable supplies increased 6%, reflecting the continued strength of the North American dental market. Total sales of equipment and software were down modestly in the first quarter, but sales of basic equipment were up 4% in this period. As anticipated, first quarter sales of software and digital x-ray systems were adversely affected by the roll-out of our previously announced sales and marketing initiatives which have fundamentally changed many of the ways we do business. Given the nature of these changes and the short-term distractions they created for our sales force, we believe this roll-out also had an impact on the CEREC sales. Our recently implemented initiative consists of the following elements. The commission structure of Patterson Dental’s sales force has been revamped to better align compensation with the growth objectives and strategies of the organization. Among other things our new compensation structure is designed to sharpen our focus on the digital market. Responsibility for selling digital solutions and patient education products has been refocused on our territory field representatives and equipment specialists. We have started offering our EagleSoft practice management software free of charge to any dentist with the goal of winning new customers for our digital x-ray solution and growing revenues generated by software support and e-business services and increasing sales of other equipment and consumable supplies. In addition our customer loyalty program, now called Patterson Advantage, has been thoroughly redesigned to give customers a strong incentive to partner with us for meeting all of their dental office needs. And finally, the selection and training of field sales representatives has been significantly strengthened. By further strengthening our position as the leader and innovator in the North American dental market. These initiatives are expected to generate improving results at Patterson Dental in the future. Turning now to Webster, sales of Veterinary supply unit increased 10% in the first quarter to $123.3 million. This solid growth was driven by the continued robust performance of Webster’s consumable supply business. Later this quarter Webster will be stocking a whole compliment of the inventory in our expanded Dinuba, California distribution center, which is already utilized by our Dental and rehabilitation units. As a result Dinuba will become Patterson’s second distribution center serving all three businesses while four other facilities are currently dual use. Patterson Medical, our rehabilitation supply and equipment unit posted first quarter sales growth of 10% to $100.7 million. Excluding the impact of acquisitions over the past year related to this units branch office strategy and foreign currency translations, first quarter sales of Patterson Medical rose a solid 6%. Sales of rehabilitation equipment were particularly strong in the first quarter, due partly to the addition of the industry-leading equipment lines manufactured by Chattanooga group. Patterson Medical’s performance also benefited from strong sales posted by it’s sports medicine business. Our rehabilitation unit also is benefiting from on-going efforts to further expand and strengthen it's value added platform. 12 branches are currently operating and each one is cut over to Patterson and management systems. We expect to acquire or internally start additional branch offices in 2009, although at a slower rate than in 2008. In addition, Patterson Medical sales force has grown to more than 200 and we will be increasing this number during the coming year. Patterson Medical has made a significant process in strengthening it's operations and market position and we believe this business is increasingly well positioned to realize it's full potential in the global rehabilitation market. Turning now to our guidance contained in this mornings release. We are forecasting earnings of $0.45 to $0.47 per diluted share for the second quarter ending October 25, 2008. We are also reiterating our previously issued guidance for the full year of $1.94 to $1.98 per diluted share, reaffirming our belief that 2009 should be a year of improved performance. Thank you. Now Steve Armstrong will review some highlights from our first quarter results. Steve.

Thank you, Jim. On a consolidated basis our key operating statistics in the first quarter weren’t change from the prior year and generally in lined with our expectations. With the strategy changes announced in the Dental segment during the quarter, which we believe are very important to improving the success of this segment. There were two immediate impacts that adversely affected our operating results. First, since we are no longer charging for EagleSoft, practice management software, our revenues from this product are down 100%. The impact of this decision reasonably reduced consolidated operating margins by over 30 basis points on a comparable basis. And secondly, operating expenses for the Dental segment reflect the incremental expense from the initial rollout of this strategy changes. As we move through this fiscal year, we expect that the extent of the impact of these changes will progressively decline over the next three quarters. Our Veterinary segment saw improvement in both their gross margins and operating leverage result, brining 50 basis points of operating margin expansion in the quarter. Our Medical segment improved their gross margins but the expense structure continues to be impacted by the branch expansion initiatives from last year and the conversion cost of this unit transitions to the Patterson system. By segment our first quarter operating margins were 11.5% for Dental, 13.9% for Medical and 4.8% for Veterinary. As Jim mentioned the debt that we issued in the latter part of fiscal 2008 and an incremental interest expense and nearly $6.7 million or $4.2 million net of tax. Since most of the new debt was issued at fixed rate, we would expect the same incremental impact going forward. We will have this same incremental impact going forward, however, total interest expense will decline by $1.3 million per quarter following the pay down in November of the remaining $130 million of debt we issued in 2003 is part of the Patterson Medical acquisition. A quick review of our balance sheet shows that our accounts receivable was reduced by about $50 million in comparison to the fiscal year and we historically produced higher levels of sales in our third and fourth fiscal quarters in comparison to the first quarter of the new fiscal year which result in an accounts receivable pay down in most year's. In comparison to the end of fiscal 2008, inventory increased by approximately $38 million at the end of this year's first quarter. This increase resulted from normal seasonal increases in our warehouse inventories to improve service levels along with higher levels of CEREC and other equipment inventory. As CEREC growth was due primarily to increasingly unit levels of the XL milling chamber for the [trade-in] program that is running this summer. Our DSO stands at 43 days unchanged from the prior year, while inventory return are 6.7 compared to 7.3 a year ago. The inventory return should improve as we move through the year. We generated cash flow from operations of approximately $33 million in the first quarter compared to $53 million in the year earlier period. The decrease is primarily due to a large sale of finance contracts in the first quarter of last year. Capital expenditures in the quarter reflect the expansion cost of the Dinuba Distribution Center which will be completed in the second quarter and the expansion and renovation of the general office here in Minnesota. With that, I am going to turn it back to Nicole, and she will poll you for your questions. Thank you.

Thank you. (Operator Instructions) Our first question comes from the line of Glen Santangelo, please go ahead.

Thanks guys. It’s Glen Santangelo. Just a couple of quick questions here on the equipment side. I am kind of curious about the interoper ability between EagleSoft and the digital x-ray, is it -- do you think its pretty much a foregone conclusion that if you can convince a Dental Office to take the EagleSoft product that will ultimately lead to the digital x-ray sale, is that basically the conclusion you are drawn?

Yes, Glen, that is exactly the right way to put at, if you look at anybody’s software and anybody’s digital they both work better together when they were dealt to be together.

So, I guess, in all processes there is a little bit of lag time that once you kind of get more installs of EagleSoft that will ultimately translate into some digital x-ray sales?

Digital x-ray sales as well as increased e-business for their service contracts and for the e-claims and the e-statements and so forth, yes.

And there was no mention of seminars in the press release and nothing in the comments, could you kind of give us maybe an update there now that E-4D has been out for a couple of quarters, so you are starting to see maybe some of that log jam that we saw in the market the past couple of years ease a little bit or –

Well, I do not think we saw it in the quarter, but I think we are starting to see signs of because there is a lot more activity going on with seminars and doctors signing up for seminars. So, it would appear that the confusion has started to go out with the marketplace, but our CEREC sales were down slightly in that first quarter of this year.

And then, Steve, maybe just one question on the guidance, as I look at the full year, of a $1.94 to a $1.98, I am guessing imbedded in that assumption is some sort of reacceleration to your equipment sale, can you give me a rough idea, the magnitude of equipment sales you need to ultimately achieve that guidance, is it 5% for the full year, is it something less, or something little more than that?

Well, Glen, we have never given that kind of specific information out publicly before. We are still looking at total sales growth for the organization up in the higher single digits for the year that was kind of a original forecast and that’s as far I am willing to take that comment.

Okay. So we should just think about total sales for the company in the 5-10ish percent range, is that fair?

Correct.

Okay. Thanks for the comments, guys.

Thanks, Glen.

Thank you. And our next question comes from the line of Derek Leckow with Barrington Research. Please go ahead. Derek Leckow - Barrington Research: Thank you. Good morning. My question is also on the equipment side. Just wondering about the change in the compensation structure you have talked about in the press release here. Can you tell me how that has changed specifically, Steve or Jim?

(inaudible). Let him say --

Okay. Derek, it is really, first of all, I think, everybody needs to keep in mind that whatever really changed to drive was to increase the number of customers who have signed up for our Patterson Advantage Program and so without giving you the full details which I am obviously not going to do, there was some component in there, where the sales rep has to meet certain goals with the equipment, with software, with digital and they must be what customers had signed up in their Advantage Program for them to maximize. If they do what we have requested that they do Derek their commissions will actually increase. If they do not infuse to go on in the direction they have been heading they will actually lose some commission. Derek Leckow - Barrington Research: So software wasn’t in the commission structure a year ago and I guess software has been taken out now, is that right?

That’s correct, but you -- we have taken out a whole group of sales people and shifted the income they were getting off of digital back to the equipment sales people and the territory sales people. Derek Leckow - Barrington Research: So, help me out with the outlook for the equipment sector, if I look at and try to remove the software piece, again, we are trying to figure out what the growth rate should be, but what is the right growth to assume for equipment?

Well, I think Steve just told you -- broken answer. Derek Leckow - Barrington Research: Okay. So, what about, what if we take out the CEREC, was there an upward bias to the digital equipment sale if they removed CEREC from that group, or –

Not in the first quarter, no because we have all the unsettling of removing the sales force responsible for selling that product. Derek Leckow - Barrington Research: Okay. And has the headcount changed at all in the equipment center?

Not in the equipment sector -- well, yes it had, we have increased in the equipment sales, Steve has probably got that number, hold on.

Basically, Derek what we get was we took the former PTR group through our Patterson Technology rep and many of those folks were dispersed into the territory rep group and the equipment group, some became CEREC specialists, some became technical advisors to provide, if you will, backroom support in the technologies. So, the numbers have moved around quite a bit in that group. But, the total sales count today is about 1,550 versus almost 1,600 at the beginning of the year. As we said many of those folks had moved into advisory rolls within the organization, so they come out of the sale of it. Derek Leckow - Barrington Research: Okay.

Yes, about a 120 of those people, Derek, and probably about 40. We probably had about a 40 headcount reduction of those 120. Derek Leckow - Barrington Research: Okay. Let me shift over to medical business. It looks you had a good quarter here. Is this the right growth rate now, or are we still seeing an acceleration in that segment of the business?

I think we’re still looking at acceleration slightly in that segment. Derek Leckow - Barrington Research: Okay. Let me stop there. Thanks a lot guys.

Thank you, Derek.

Thank you, Derek.

Thank you. Our next question comes from the line of Larry Marsh with Lehman Brothers. Please go ahead. Larry Marsh - Lehman Brothers: Thanks and good morning. Look forward to seeing you guys here in the couple of weeks at your analyst meeting. Just conceptually of one more question on this EagleSoft decision, which is your step back and say the EagleSoft platform relative to others in the market is I guess so much smaller. Your digital platform has been like bigger. I guess your message and the message in the market these days you really have to tie the two together. So, is the idea Jim that by giving away EagleSoft you hope that you would substantially increase your install base in that business in the next year. And I guess that means that you will be replacing a lot of competitors, what happens if the competitors say you are going to give it away as well?

Well, it’s good question, Larry. I am not sure I know the answer to the last part of that. But yes, that’s our assumption that we will increase installs. We are the fastest growing currently, even we are recharging for it. Larry Marsh - Lehman Brothers: Okay.

We are currently number two with about a 21% market share according to CRA which just came out this week, and the fasting growing by far. So, we just want to accelerate that because it does dramatically help the customer as it relates to digital x-ray, but there is also some additional benefit as I mentioned earlier in the e-business that they do with us. Larry Marsh - Lehman Brothers: Right.

Which is an ongoing businesses, the razor blades, and the software business. Larry Marsh - Lehman Brothers: So, it’s in your mind, let’s say two to three years out given your overall market penetration in the 30s is your goal to get EagleSoft market share up in that 35% plus range?

Actually, I think our goals is to get higher than that unless some other people come out and decide to start give it [little way] free, Larry. Larry Marsh - Lehman Brothers: Okay.

We think we can get into the 40s. Larry Marsh - Lehman Brothers: Over the next, what, couple years.

Yes. Larry Marsh - Lehman Brothers: Okay. Second question on CEREC, I know you had said that that was also impacted by some of the changes in the structure, may be elaborate on that, because I know last year mid-year you had the upgrade. So, I think we were assuming that the comps was still be pretty easy here in the first this quarter or next quarter. I think Jeff asked that last quarter as well, so which changed really to see such, if it was down slightly year-over-year that would mean it would be, in my numbers, down a lot sequentially. What – how much disruption was there just in the sale force or are there other things going on?

No, it was primarily disruption in the sales force, Larry. Any time you announce the commission change, your sales force assumes that you have taken money away from them. So, it gets very unsettled, take a while for our measures to properly introduce the new programs. We also did away with the specialty sales force of which the CEREC is so one group of CEREC specialists. And I think they immediately made the assumption that all were going to be gone to. Larry Marsh - Lehman Brothers: I see.

Which was never our plan. And so, I think that’s what we’re talking about by the disruption in the sales in the first quarter. And I think I can safely say to you, Larry, that everything we see right now says that that bow involves through the snake. Larry Marsh - Lehman Brothers: Okay. So, would you – are you coming on, was there any impact in your, for a cycle of that business related to the competitor introduction here in the last months or based on the feedback that you’ve gotten that that really hasn’t changed any of your selling dynamic.

No, I think actually the things that are if I look at today, last quarter, the first quarter we were still involved with some confusion in the marketplace because [Shine] was introducing. And now that they have equity in the market and selling it, I think the customer confusion has gone and we don’t appear to have the same difficulty that we did getting to doctors to come attend our seminars and so forth. They would now want to compare the machines so. Larry Marsh - Lehman Brothers: Got it. Two other quick questions. The inventory, Steve, last quarter you talked about some increase with the CEREC, XL and some of that business this quarter, and there is always a sequential expansion in Q1, but it’s little bit more than I was thinking. So, is that to tie into your comment, that’s all incremental XL milling chamber inventory.

No. It’s a combination spread across the consumables that I will call non-CEREC inventory with our equipment categories as well as CEREC. So, it’s a combination of all three. Larry Marsh - Lehman Brothers: Got it. And your CapEx, that was up a lot more than I thought. Are you still saying 25 million as your target, why was it up so much this quarter?

Well, we got the Dinuba facility it's just about done Larry, so most of the expenditures came in the fourth and the first quarter for that. That closed to a $20 million project in and of itself, and then the [GO] renovation cranked up in the fourth quarter and in the first quarter as well. And those projects as they wrap up in the first half of this year then our capital spend should diminish in the later half of the year, unless, and I say unless because we are thinking about potentially re-renovating another warehouse starting later in the year. Larry Marsh - Lehman Brothers: Okay. So to hold off on using 25 million is the target you think it would be a bit higher now?

I think it's still in the 25 to 30 range. Larry Marsh - Lehman Brothers: Okay.

We can turn that on and off a little bit depending on what we decide to start that next project. Larry Marsh - Lehman Brothers: Okay. Then finally on (inaudible), you the news here is good. Profits up nicely year-over-year you talked about throughout the typical question over the next couple of years you still, could you still be in a position to meaningfully expand that through acquisition and if not, why not?

No, I think we feel like we can still expand that considerably Larry. Larry Marsh - Lehman Brothers: Okay. Alright, let me stop there. Well, thanks a lot.

:

Thank you.

Thank you. Our next question comes from the line of Robert Willoughby with Banc of America Securities. Please go ahead. Robert Willoughby - Banc of America Securities: Hi, Jim what actually has been the competitive response to the free software program, have you seen anything in the market as yet or still too early?

No, no we have seen some response. Nobody is really responded with that, but the other national competitors that are already nameless has rebate program that they put in place it was advertise in the latest general product report magazine. So, we have seen response from them. So far we have seen no response from (inaudible) practice works [Codec] product. Robert Willoughby - Banc of America Securities: And you cited fastest growth rate out there, there is a pick up then with free software that has had immediate impact for you?

No, the growth rate that I am citing was actually free software. So, we expect that even accelerate more. Robert Willoughby - Banc of America Securities: Okay. And just and you think anecdotal as you look into the current quarter obviously you giving guidance out there, but can you speak to any uptick on equipment as yet encouraging at this point or still too early for the initiative to have traction?

I think from the initiatives that we've talked about we feel very comfortable with what we see early on. But it's too early to tell you what the tax incentives that were laid out, there are going to do, you typically until we get into November timeframe. We really don’t know the impact those are going to have on our equipment business. That does seems to not wake up to that fact until the last couple of the months of the year. Robert Willoughby - Banc of America Securities: Okay. And Steve your comment on the interest expense, did you say down sequentially going forward about $1 million bucks? Did you retire to 130 that was current debts post to quarter?

After November, $3 million comes out after November. Robert Willoughby - Banc of America Securities: After November?

Right. Robert Willoughby - Banc of America Securities: Okay.

And the second half will be down to just the interest on the new debt. Robert Willoughby - Banc of America Securities: Okay. And just I guess capital structure initiatives you have done encouraging but they be even more encouraging. If they kind of continued the cash -- your cash is up I mean what's the resistance suggest they kind of token share repurchases just a modest level of buying every month versus every decade having a big recap of some sort. I mean is there any ongoing thought there in terms of how the book-to-capital work.

Well, we certainly had discussions about that Bob, and we still have an authorization of 7 million shares out there. So, we still got some room to work we choose to, I think, it depends on the price point and we will keep looking it down. I don’t -- it’s not a taboo thing here. We have always got some acquisitions in the pipeline. We are going to make sure we got enough money to do that with. Robert Willoughby - Banc of America Securities: Okay. And just lastly, have you -- financing terms changed at all that you are offering to Dennis at this point or still the same.

We did just introduce a program particularly on CEREC. And we will plan to have a financing promotion at the end of the year as we do traditionally. Robert Willoughby - Banc of America Securities: Okay. That’s it. Thank you.

Thanks Bob.

Thank you. Our next question comes from the line of Jeff Johnson with Robert W. Baird. Please go ahead. Jeff Johnson - Robert W. Baird: Thank you. Good morning guys.

Good morning Jeff.

Hi Jeff. Jeff Johnson - Robert W. Baird: Couple of things here is just on I am talking about the additional share repurchases. What are the cash flow from operations or free cash flow expectations for the year?

In round numbers, probably $250 million to $300 million. Jeff Johnson - Robert W. Baird: Okay. So, are you talking operations I would assume that a free cash number?

Free cash number, yes. Jeff Johnson - Robert W. Baird: Okay. So, there would be a room, even if you exhaust these 7 million shares, there we can even put part of that towards an additional repurchases.

Well, Jim mentioned it, and I will be more blunt. We have got $130 million of debt we have to pay off here in a couple of months. We always have acquisitions in the pipeline. And we would use the 7 million as it makes sense to use it. We have got excess cash building. We will certainly consider going into the market and repurchasing shares. But that’s not a key strategy for us right now. We want to build the business, and we have got niche for the cash other than just repurchasing shares. Jeff Johnson - Robert W. Baird: All right, Steve. Well if I center tone there, to me, maybe a quarter or two ago was shifting towards, maybe we don’t go to the fourth leg, maybe we repurchase shares, the acquisition pipeline that we are talking within the three core areas, would be back, I think, it may be a fourth leg?

Right now, we are looking at the three core areas, Joe. Jeff Johnson - Robert W. Baird: All right, thanks Steve. And then, Steve eleven-fold impact on the quarter, was that a point, point and a half to dental consumables and can you quantify at all maybe the impact that Chattanooga would have on the medical organic growth?

I can give you the first -- I won’t give you the second. The first was less than a percent. Jeff Johnson - Robert W. Baird: Okay. Close to a percent?

Pretty close. Jeff Johnson - Robert W. Baird: All right. Fair enough. And then on the Chattanooga, if I do not get a growth rate there, at least conceptually, when we started to think about this maybe a year ago or so, last year at the analyst meeting, I think, when we started to think about a potential Chattanooga deal there, we were thinking it would maybe add up sizable medical up in the organic range up or single digit, is it better to think about kind of keeping you in a healthy kind of 6-7% kind of more in line with the market type growth on a go-forward basis over the next few quarters?

Again, we have never given you specific guidance and I do not want to get in that trap right now as far as individual equipment lines or individual categories within business units. Our goal is to grow these businesses faster than their underlying market and that is the guidance we are going to continue to give you. How we break that down and how we get that, to be honest, with you guys caring a hell a lot more about it than we do, we do not care where it comes from we are just looking to try to get that composite growth. Now we have -- obviously we have targets in categories throughout the system for the year, but I am not going to give you a specific equipment target growth rate.

Let me just make one statement to you, Jeff, this will really help you. We are very happy with our relationship at this point with Chattanooga. Jeff Johnson - Robert W. Baird: No, we have been taking this as a big deal if it eventually happens, so, no, it is good to see it happen, I agree Jim. Last question then just sales rep count, Steve any, or Jim any numbers you can give us there, as we just kind of look for stability in the dental sales force here?

As we mentioned, we are basically sort of flat year-over-year, when you consider the reclassifications we have made in assignments and a deal, but the actual numbers are we are 1550 in dental reps versus 1599 lest year at the beginning of the year. Jeff Johnson - Robert W. Baird: Sorry, I missed that, I didn’t catch it before if you gave that. Thanks, guys. That’s all I have.

Okay.

Thank you. (Operator Instructions) Our next question comes from the line of John Kreger with William Blair. Please go ahead. John Kreger - William Blair: Hi, thanks. Can you give us your latest thinking on the impact the economy is having on each of the three segments?

I got you. The last time I handled that, John, I am not sure, I want to. I think anytime that we have a bad economy as we have currently in my opinion that it effects all businesses somewhat, John, but as I look at our three businesses and the growth rates that we are able to achieve, I have to tell you that I do not think our customers in any of the three segments are experiencing much of a slowdown. I think if you talk to a large group of dentist you would find out that maybe their book, their appointment lead time has come down a little bit, but they are still very busy and they are still generating income at an increasing rate. So, I have to say that, that I think all three of our customers are very healthy, but I do think that there is some negative impact that comes out of a slower economy particularly as it relates to capital equipment [Audio Gap] tax advantage will spear enough people on to (inaudible) and once that are on the negative side the equation will hold up. So I think it will be somewhere near zero impact. John Kreger - William Blair: Okay, thanks.

So I think we should look for a normal year-end and equipment purchases. John Kreger - William Blair: Okay. And then just one final question, if we’re doing the math right with your guidance I think it implies, if we have stable revenue growth around 30, 35 basis points of operating margin improvement, if you agree with that math, can give us a sense is there a particular segment that you think that will come from or will be it spread across your entire portfolio?

:

It should come across the portfolio. We are targeting each of the groups to contribute 50 basis points to our operating margin expansion. Now, we have said earlier and I would reiterate that a bit of a wildcard is the impact on dental as we have made these changes that Jim talked about earlier, and what the outcome could be for the year there. John Kreger - William Blair: Great. Thanks a very much.

Welcome.

Thank you. Our next question is the follow-up question from the line of Larry Marsh with Lehman Brothers. Go ahead. Larry Marsh - Lehman Brothers: Yes. Just two maybe here as putting things a little bit. Just I was wondering 11, 12 but 1.5% impact on consumables, and I know when you bought it, you said it was running about $18 million in [reps], is there some overlap or am I thinking of that little too aggressively.

Well, I remember they were selling equipment too, so. Larry Marsh - Lehman Brothers: Got it. Okay. So, that’s a difference. Thank you.

Yes. Larry Marsh - Lehman Brothers: And then secondly the share repurchase, I know last quarter it was $18 million and then today you are saying $19 million, what’s the difference and where do that show up?

Good question, Larry. The $18 million was what we had in the bank at the end of fiscal year, April of 2008. If you remember we entered into an ASR. Larry Marsh - Lehman Brothers: Yes.

That matured in late June and we actually picked up another million shares of the ASR. Larry Marsh - Lehman Brothers: Okay.

When it matured. Larry Marsh - Lehman Brothers: So, the million which show up Q1?

Yes. Larry Marsh - Lehman Brothers: It’s on account. And then finally, is there some re-class on the balance sheet between goodwill and other, what is that?

That’s the Sirona contract, Larry. Larry Marsh - Lehman Brothers: Okay. So, when that kicks in that, the value of that kicks in, gets reallocated up to goodwill, once its sort of inside.

No. I think what you are seeing maybe is just the amortization that’s already been coming out of there Larry. Larry Marsh - Lehman Brothers: Okay. I guess, all of that, because it looks like it’s about a 100 and some million difference. I see, so it’s a 100 million that just gets been moved from one bucket to another. Okay.

Right, you got it. Larry Marsh - Lehman Brothers: Because it’s already paid. Okay.

Okay. Larry Marsh - Lehman Brothers: Pretty good. That’s it. Thanks.

You bet.

Thank you. Our next question comes from the line of Andrea Bici with Schroders Investment Management. Please go ahead. Andrea Bici - Schroders Investment Management: Good morning. Could you provide me with what cash flow from operations and CapEx was in the quarter, and give us a little color on the outlook for that going forward?

Cash flow from operations, if you go to the detail of the press release, you’ll find that in there, it’s $32.5 million, and CapEx was a little over about $11.5 million. As we said earlier we would expect the cash flow from operations to probably approach $250 million for the year and CapEx to be between $25 million and $30 million for the year. Andrea Bici - Schroders Investment Management: Thank you.

Thank you. And there are no further questions. I would like to turn the call back over to management for any closing remark.

Okay. Thank you to call, and I would like to thank everybody this morning for joining us on our first quarter conference call, and we’ll look forward to being back to you with our second quarter. Thank you very much.

Thank you, ladies and gentlemen. That does conclude the Patterson Companies first quarter 2009 earnings conference call. We thank you for your participation. You may now disconnect.