James Wiltz - President & Chief Executive Officer Steve Armstrong - Executive Vice President & Chief Financial Officer

Robert Willoughby - Bank of America/Merrill lynch Lisa Gill - JP Morgan John Kreger - William Blair Glen Santangelo - Credit Suisse Mike Hamilton - RBC Larry Marsh - Barclays Capital Marek Ciszewski - Harris Private Bank Jeff Johnson - Robert Baird Craig Wiese - Rivanna Capital

Ladies and gentlemen, welcome to the Patterson Company’s fourth quarter 2009 earnings conference call, on the May 21, 2009. For today’s recorded presentation, all participants will be in a listen-only mode. After the presentation there will be an opportunity to ask questions. (Operator Instructions) I will now hand the conference over to James W. Wiltz, President and CEO. Please go ahead, sir.

Good morning and thanks for participating in our fourth quarter conference call. Joining me today is Steve Armstrong, our Executive Vice President and Chief Financial Officer. We will be pleased to take 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 have included financial guidance for 2010 in our press release earlier this morning. 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. We urge you to review this material. Turning now to our fourth quarter results, consolidated sales of $779.9 million were virtually unchanged from the year early quarter. The positive impact of dental, veterinary and medical acquisitions over the past 12 months was largely offset by weaker than forecasted sales brought on by the recession and the effect of a stronger U.S. dollar in our Canadian and U.K. operations. Net income of $54 million or $0.46 per diluted share was down from $63.2 million or $0.51 per diluted share in the fourth quarter of 2008. In addition to the weaker than forecasted revenues, our earnings for this period also were affected by a shift in our sales mix, due to the October 2008 acquisition of the Columbus Serum Company by the Webster Veterinary unit. As a result veterinary products, which have a lower operating margin than revenue that’s generated by Patterson’s other businesses, accounted for a higher portion of consolidated revenues. Full year 2009 consolidated revenues totaled $3.1 billion, up 3% from $3 billion in 2008. Net income for the year came to $199.6 million or $1.69 per diluted share compared to $224.9 million or $1.69 per diluted share in 2008. Sales of Patterson dental, our largest business, declined 5% in the fourth quarter to $533.5 million. Sales of consumable dental supplies which were down 2% before the impact of foreign currency and acquisition continued to be affected by the economy related trend of patients deferring higher level and discretionary services. While the recession affected equipment sales of each of our businesses, customer caution was particularly evident in the sharp decline in sales of basic dental equipment in the fourth quarter. Partly offsetting this decline were strong sales of new technology products, with sales of CEREC dental restorative systems up 7% and sales of digital X-ray systems up 25%. We believe the explanation for the disparity between sales of basic and new technology equipment lies with the fact that the recession is causing many dental practitioners to limit their investments to equipment with rapid rates of return. New technology products like CEREC and digital X-ray systems, in comparison to such basic dental equipment as chairs and lights meet this return on investment requirement. We also believe CEREC sales are benefiting from increased interest in CAD/CAM technology, a development that has gained momentum over the past 24 months. This trend has resulted from the introduction of several new products and our more focused marketing efforts. In January of 2009, Sirona dental systems introduced a new digital image acquisition unit that provides significantly greater ease of use and imagining precision, in addition to scaleable pricing that is making CEREC available to a wider spectrum of practitioners. We believe these advance which is have placed the CEREC system at the forefront of CAD/CAM dental technology, has the potential to generate solid levels of CEREC sales. We also are encouraged by the sales posted by our operations of digital radiography systems in the fourth quarter. : Turning now to Webster Veterinary; sales of our veterinary unit increased 33% in the fourth quarter of fiscal 2009 to $158.5 million, due primarily to the October 2008 acquisition of the Columbus Serum Company. Excluding the impact of Columbus Serum, Veterinary sales were up less than 1%, reflecting the economy related slowdown in activity at veterinary clinics. Columbus Serum has greatly expanded Webster’s market position in the upper Midwest and mid-Atlantic regions and has improved Webster’s competitive position and economies of scale. The integration of this large and well established distributor is proceeding on schedule, but this significant acquisition could continue to negatively affect the operating margins of our veterinary unit through at least the first half of 2010. Patterson Medical reported a 9% sale decline in the fourth quarter, resulting from a negative six percentage point currency translation adjustment and a slowdown in its equipment business. Medical is continuing to make interments in operating system that will give them the opportunity to accelerate growth and gain economies of scale going forward. As such we remain optimistic about the future prospects of this business. Before turning to our 2010 guidance, I would like to provide an update on the expense reduction initiatives reported earlier in the year. You may recall that we announced a range of cost control initiatives, including a higher increase, except in the area of sales representatives; a wage freeze and restrictions on travel. The positive impact of these steps which began late in the third quarter, started to take full effect in the fourth quarter. We intend to continue these majors in 2010 and will take additional actions as necessary, to keep our expense structure aligned with revenues in order to maintain our operating margin at a level consistent with 2009. In addition, we expect to more fully leverage the expenses of our acquisitions going forward. Turning now to guidance contained in this morning’s release. We believe that the weakness in the general economy will continue to affect our performance for at least several more quarters. Reflecting this belief, we are forecasting earnings of $1.70 to $1.80 per diluted share for the full 2010. As you probably noticed in this morning’s release, we provided no financial guidance for the first quarter of 2010. We have long believed that too much emphasis is placed on short term quarterly results that can fluctuate significantly, particularly during uncertain and volatile periods such as we are experiencing today. This near term focus was countered to our commitment to manage Patterson from a long term perspective, with the long term benefit of our shareholders. We believe everyone including our investors, employees, will benefit from our strength that’s focused on achieving our annual and multiyear objectives. For these reasons, we will no longer provide quarterly guidance, but we will update our annual guidance during the year as required. This action should not be taken as a lack of confidence in Patterson’s future. To the contrary, we are very confident that Patterson’s future remains very secure. We have aggressive marketing programs underway in each of our operating units, with the objective of mitigating the impact of a soft economy. The long term fundamentals of the dental, veterinary and rehabilitation markets remain strong. We are continuing to generate sizable cash flow from our operations, providing us with ample resources for supporting our various growth initiatives and each of our businesses hold a strong competitive position in its served market. Given these factors we are optimistic about Patterson’s long term prospects. Thank you. Now Steve Armstrong will review some highlights from our fourth quarter results.

Thank you, Jim. I want to begin my comments with several additional points regarding sales. Beginning in January of 2009, a major consumer products company changed the method for distributing its professional toothbrush line. This product had gone through distributors for years, but as a result of this change is now sold direct. The impact of this change reduced our dental consumable revenue growth by 1 percentage point in the fourth quarter and it will continue to negatively impact our revenue performance through this year’s second quarter. We expect this expect to diminish as we replaced the lost volume with alternative products. Implementing our new advantages customer loyalty program in January also had the effect of reducing our fourth quarter sales by 1 percentage point. This program allows customer to accumulate points that they can use against future purchases. We defer our current portion of revenues to account for the credits earned. Our previous Patterson Plus program was accounted for as a cost, not as a revenue reduction. While this change in accounting will affect our reported revenue performance throughout fiscal 2010, it has a limited impact on our operating profit. From a market perspective, we have been very pleased with the impact of the advantageous program on our dental business. As Jim noted in his remarks, foreign currency had a negative impact on sales of both our Dental and medical units, since the US dollar has strengthened dramatically against the Canadian, British and European currency since late in calendar 2008. While less than 10% of our consolidated revenues are generated by foreign operations, the impact of foreign currency adjustments on our consolidated revenues was slightly over 2% in the fourth quarter. The negative impact on our Dental unit was 2%, while the medical revenues were reduced by 6%. We believe foreign exchange rate fluctuations could continue having a similar impact due to second quarter of fiscal 2010, unless foreign exchange rates would move appreciably between now and then. Now a brief review of gross margins; while down 60 basis points on a consolidated basis, this decline was due primarily to a change in our sales mix. Our dental and medical units actually expanded their gross margins in the fourth quarter; however, our Veterinary business posted a lower gross margin for this period, due to the recently acquired Columbus Serum business, which had slightly lower margins than the historical Webster business. This factor will continue to temporarily dampen veterinary margins until Columbus Serum is fully integrated. As we have discussed in the past, our Veterinary unit has the lowest gross margin of our three units. Consequently, our Veterinary business tends to dilute our consolidated gross margin, as it becomes a relatively larger part of our overall operations. Turning to operating margin by segment; the dental margin was 12.8% for the quarter. The Veterinary and Medical segments reported margins of 5.4% and 17.5% respectively. Looking now at our cash, approximately $54 million from operations in the quarter compared to $97 million in the prior year. As we reported in the third quarter, we made a decision to invest in a financing program to support marketing efforts directed at the CEREC product line. This promotion ended with the close of our fiscal year. At the end of our fiscal year, we held approximately $95 million of finance contracts from this promotion that we cannot immediately sell to our funding sources due to certain requirements in their arrangements. As a result, our operating cash flow was reduced, while accounts receivable increased. We expect to fully liquidate these contracts by the end of fiscal 2010 and should see an incremental $95 million of operating cash flow from these contract sales in the period. Considering conditions in the financial marketplace, we believe the decision to invest in our customers through this program, represented a much better use of our cash than putting it in the bank. I would also remind you that customers were required to meet our rigid financing standards and qualify for the loans under this program. At year end, our DSO stood at 44 versus 43 in the prior year, excluding the CEREC contract I just discussed. Looking ahead to fiscal 2010, we expect our CapEx to approximate $25 million, while depreciation and amortization should be in the vicinity of $35 million. Our balance sheet is strong and conservatively managed as we move into fiscal 2010. It is our primary intention to direct our internally generated capital towards making acquisitions and supporting other prudent investments in the business over the current operating cycle. Barring our ability to find quality acquisitions, we will officially return the excess cash to the shareholders. With that I’ll turn it back to David, the conference operator, who will poll you for your questions. Thanks. David?

Your first question comes from Robert Willoughby - Bank of America/Merrill lynch. Robert Willoughby - Bank of America/Merrill lynch: Steve did you throw out the operating margin assumptions by business line? I may have missed it in the wrap up.

Yes Bob, I’ll repeat them for you. Dental did generate a 12.8% operating margin, the Veterinary segment 5.4% and the Medical segment was 17.5%. Robert Willoughby - Bank of America/Merrill lynch: Okay, and your comment, I think Jim you mentioned operating margin for fiscal 2010 in line with what you reported in ‘09?

Yes. We want to keep it flat Bob. Robert Willoughby - Bank of America/Merrill lynch: Okay and then just, Steve you mentioned $95 million bucks coming in, in fiscal 2010, incremental from the sale of the receivables now. When does that exactly start? Is that a third quarter phenomena for you?

It could be some of it in the late second quarter, Bob. We’ll get some of it in that promotion started in August of 2008. So, we’ll have contracts we’ll be able to sell by the second quarter. Robert Willoughby - Bank of America/Merrill lynch: And you referenced, was it eServices revenues up about 12%. Why would that be? Why is that moving up?

Well it’s moving up because of the free software Bob we are giving the away. We have more installs and more customers using e-claims and e-statements and so forth. Robert Willoughby - Bank of America/Merrill lynch: Do you have any pricing leverage on that business?

Yes. Robert Willoughby - Bank of America/Merrill lynch: Are you availing yourself of that pricing leverage?

No. Sorry Bob, we don’t share that. Robert Willoughby - Bank of America/Merrill lynch: Okay, and just any update on the acquisition front. I mean you have been active to-date; still a buyers market for things out there or how...?

It appears to be. We have a pretty full pipeline of discussions going on. Robert Willoughby - Bank of America/Merrill lynch: Okay, more dental than vet, more rehab than dental.

More rehab. Rehab will be first, dental second, and vet third right now.

Your next question comes from Lisa Gill - JP Morgan Lisa Gill - JP Morgan: I was wondering if maybe you could talk about the competitiveness of the dental business. Looking at the consumable part of the business, you came in lower than your largest competitor. Are you seeing any market share movement activity and is that the reason for the revision in your commission structure?

Lisa, you’ll have to share with me what the competitor reported, because I thought it was about the same as ours. Lisa Gill - JP Morgan: Well, I guess if you back up the 1% negative currency, it was just slightly better than what you did?

Well, I don’t know. I can’t answer the question for you Lisa. Lisa Gill - JP Morgan: Can you answer the question; are you seeing any movement from a competitive perspective?

No. Lisa Gill - JP Morgan: The revision to the commission structure, is that primarily on the dental side or on your sales people overall?

It’s on the dental side. Lisa Gill - JP Morgan: The reason for that revision, Jim; is that…?

Well, it was implemented to align the sales reps with the company’s objectives Lisa. Lisa Gill - JP Morgan: I think that you made the comment that the recognitions have ended with the fiscal year end. Because it sounds like it was fairly successful for you, any plans to do something else going forward?

No, not of the same nature, Lisa; we have started a trade-in program for the new blue CAM technology versus the old. Lisa Gill - JP Morgan: And how does that trade-in program work?

I don’t know that we’ve released any details yet Lisa. Lisa Gill - JP Morgan: I guess then just my last question would just be, on the vet business, obviously you continue to fill in the holes geographically for vet. Do you still continue to see opportunities to make additional acquisitions within the veterinary business?

Yes, we do Lisa. We think there are two or three areas that we would like to make acquisitions and it would fill out our footprint. Lisa Gill - JP Morgan: Do you think that the expectations by the sellers are becoming more realistic, given the current economic environment?

Yes, I think so.

Your next question comes from John Kreger - William Blair. John Kreger - William Blair: Just a follow-up on Lisa’s question, the promotions that you guys were running, was that only relating to CEREC or were you also offering promotions for some of your other higher tech items?

We also had a promotion running for digital X-ray, John. John Kreger - William Blair: Okay. So, the $95 million in held contracts, we can assume that that covers both of those categories Jim?

Yes. Primarily CEREC. John Kreger - William Blair: So, are you not going to offer that type of 12 month no interest, no payment program after the end of April or will there be something, but perhaps just not as long in duration?

Right now, there is nothing planned to do that same program John. John Kreger - William Blair: An unrelated question; could you quantify the impact of acquisitions on the company’s revenue growth in the quarter?

It was acquisitions for the quarter, contributed to our consolidated debt; basis John 5.7 percentage points. John Kreger - William Blair: The Columbus Serum impact on Vet was a little more than what we had expected; how is that business doing? Is it coming in above your plan?

No, I don’t think so John. I think it’s performing as we thought it would. John Kreger - William Blair: Then maybe a bit more broadly; can you just give us your updated thinking on the market environment. Across your three segments from your perspective, are we in a stabilized environment or are you still seeing signs of deterioration or maybe perhaps some signs of recovery?

Well, I think that my comment would be stabilized probably John, but we do see an area that appears to be slightly recovering in the vet market. John Kreger - William Blair: So, slight recovery in that and more stable in dental and rehab.

Yes. John Kreger - William Blair: Okay. If you look, let’s say more specifically at dental, are there any particular areas of weakness that you are seeing, perhaps where either patients or dentists are trading down?

The weakness continues to be in core dental equipment John, which the dentists comes to work everyday and walks in and looks at his dental chair that’s working properly and says “I don’t need to buy a new one right now,” and other segments are going just fine. John Kreger - William Blair: Just finally, we’ve heard and seen in the last couple of quarters Jim, about customers looking to trade down to lower price points and in some cases private-label. Can you just refresh our memory about what the Patterson strategy is around private-label and are you seeing any similar pattern in your customer base?

Well, I’ll start off by telling you, no, we don’t see any pattern in our customer base towards lower priced equipment or private-label. Our private-label philosophy has always been that we will only private-label things that are become commodities. We don’t private-label technology products.

Your next question comes from Glen Santangelo - Credit Suisse. Glen Santangelo - Credit Suisse: Jim and Steve, I just want to talk to you a little about the guidance. If I heard you correctly Jim, you said you expect the margins in fiscal ‘10 to be sort of flattish with fiscal ‘09. So kind of given what you reported for fiscal ‘09 for the full year from an EPS perspective, it seems like you are expecting flat EPS growth and flat margins. So should I assume you’re expecting revenues to be basically flat for the year as well?

That’s correct Glen. Glen Santangelo - Credit Suisse: So based on your previous comments, it kind of sounds like maybe a little bit better in the Vet business and maybe a little bit negative in dental and medical?

No, I don’t think I said negative in dental and medical. I said the same. Glen Santangelo - Credit Suisse: Okay, and I just want to talk to you about the margins, because it seems like you are anniversaring some margin headwinds. For example, you ended the finance program. You have the Dolphin acquisition, which I presume is much higher margin. You’re anniversaring, given away your EagleSoft software. So are you assuming that organically as you anniversary these things, shouldn’t the margins be up a little year-over-year or are we still seeing some modest contraction on the margin?

Glen, this is Steve. Operating margin or gross margin, where are you focused? Glen Santangelo - Credit Suisse: I guess more so gross margin.

Yes, the gross margin you are going to see more of the continuation. As Jim said, we’re sort of expecting flat revenues in the Dental and Medical businesses. Given that, we still got the Columbus Serum transaction coming in through most of the first and second quarter. Again, you are going to see that dilutive effect from that stronger Veterinary business contribution to the consolidated total. So not necessary that we’re expecting contractions in the other businesses as much as the vet margins, because their revenue growth will tend to be dilutive again. Glen Santangelo - Credit Suisse: Okay, so it is just a mix issue then. Steve, if I can just follow-up on my last question, you gave some stats on DSOs and was your point basically saying, ex this, the $95 million under the financing program, DSOs were up only slightly? Is that…?

One day.

Yes, just one day Glen. If you take out that $95 million, we look at it as a more of a short term cash investment. Glen Santangelo - Credit Suisse: Right, and could you just give us some details about this $95 million bucks? I mean, is this all related just to the financing program in the last couple of quarters? It doesn’t sound like that should all come in at once or should it? Does it come in over some extended period of time? I mean, how should we think about modeling the balance sheet going forward as a result of that?

We generated all the contracts in fiscal 2009, so they should all liquidate in fiscal 2010. As Bob will be asked a little earlier, they will start to liquidate here at the end of the second quarter; a good chunk of them will come out in the third quarter and then there will be some in the fourth quarter as well. Glen Santangelo - Credit Suisse: So it’s not extended financing, it was just basically a loan and everyone’s got to pay it back all at once?

No Glen, it was a no interest, no payment promotion and then the customer would pay under normal terms, but we are not allowed to sell that contract to our funding source until the first payment comes in from the customers.

(Operator Instructions) Your next question comes from Mike Hamilton - RBC. Mike Hamilton - RBC: I was wondering, in the past you’ve run some catalog sales as I recall in the fourth quarter, was that something done this year?

I think you’re referring Mike to the year-end equipment promotion that we typically do; that runs on a calendar year typically, so it would be most impactful in our third quarter Mike, not in the fourth quarter. Mike Hamilton - RBC: Could you comment a little bit on what you’re seeing out of your DC leverage and kind of your thinking here as we go into ‘10 and ‘11?

Well, we’re continuing to consolidate. I think we talked on the last call about the new California being up and running now and while it was up and running that we doubled the size there, and we now have the vet medical and dental operating out of that one. We’re currently working on Jacksonville, Florida doing the same thing, doubling our capacity there and again it will also house vet, medical and dental and then we’ll probably start one new one this year, which we have not decided on yet, Mike. Mike Hamilton - RBC: Finally, in the environment we’re in, are you seeing anything in customers in terms of their needs and requirements, where they are looking to you for areas of capability that they have not in the past? In other words, any areas where you can leverage the scale that Patterson brings to the party?

I really, I don’t think so Mike. I don’t think we see any real change in what the customers are expecting from us. One other comment I might make Mike, is technology continues to be very important to them and even more so in this economy, but we think we’re well positioned to be the best provider for them.

Your next question comes from Larry Marsh - Barclays Capital Larry Marsh - Barclays Capital: I missed some of that comment, so I apologize if you have to repeat any of this. First off I guess on the cost side, I know in the past you talked about some ability to save on the cost side over the near term, but a hesitancy to be too aggressive in cutting your cost structure over the medium term. Is that a fair assessment with the quarter and if so, can you sort of talk about areas such as systems and infrastructure where you may need to step up any spending this year?

Larry, this is Steve. I think you’re correct in your presumption that we’re going to be very cautious about tearing apart infrastructure. Obviously, it was a very variably costs structure, there’s not a lot of places to go and you can’t close plants. We will continue to keep the thumbscrews on the expenses very tight through 2010. As Jim commented, it will take as strong a measure as we have to, to try to maintain a flat operating margin. We’re going to see revenues up slightly as we look at it today, but if those revenues continue to weaken, we’ll take stronger cost control measures as necessary. Larry Marsh - Barclays Capital: If we sort of desegregate that to system spending, should we assume that that’s going to go up this year and have you quantified what sort of size we’re talking about?

We’ve never given out that kind of information Larry. I think in qualitative terms I would tell you that we’re going to continue to invest in our infrastructure, primarily on the customer facing side of the business. So, that would be at the Passive Technology Center and some of our internal sales infrastructure, but again because of where we are, we have to be very prudent with the amount of capital we’re going to commit to those types projects. So we’re going to be very judicious, very pointed in how we direct those dollars over 2010, until we see this revenue situation brighten up a little bit. Larry Marsh - Barclays Capital: The second question is, I know in the call from February, I think Jim, you guys were cautious about the economy, fairly sober in your assessment of how you’re thinking about the top line, fast forward a couple of months, obviously your numbers are in the ballpark I think with competitors in terms of direction, but from a qualitative standpoint, you still view that it’s reasonably consistent with what you would have taught a couple of months ago. Is your conviction still as high, that you would hope to see some pick-up in the business during the second half of your fiscal 2010 or is it nobody can really predict in this kind of market?

The last statement was correct Larry. We haven’t seen any change from our February call through this call. The market has remained pretty much the same as we saw it then.

I think Larry, we’ve talked about this, I think fairly publicly. There’s an opportunity with regard to the equipment business, there’s some optimism towards the second half of our fiscal year obviously, but as Jim has stated and I’ll state again, we’re being very cautious over the first half of 2010. Larry Marsh - Barclays Capital: So, I guess around CEREC, obviously with the introduction of some of the modules of AC, with different price point, the trade-in program starting here in May, I know it gets a lot of visibility with you in the marketplace. Just directionally in the last couple of quarters, obviously we’ve seen good growth, some of that’s just a new product, but still not helping sort of lift the overall tide either on margins or revenues and I know in years past that kind of helped drive the overall business, at least in my mind a little bit more. So, I guess my question is, you think about CEREC as a broad part of category, would you define its margin profile now as being still above kind of your average, at your average or below your average, because of some of the support you’re providing in the marketplace?

It’s still above your average, Larry. Larry Marsh - Barclays Capital: Okay, even with some of the financing as you’ve sort of talked about.

Yes. Larry Marsh - Barclays Capital: Okay, right, and that’s fully loading in I guess the cost of the payment in such and you would still Jim anticipate that that would stay nicely above your overall average?

Yes Larry, I don’t see a thing that would take it down.

Larry, we had a very solid gross margin increase in the Dental business in the fourth quarter. I’m not going to get into specifics on it, but obviously with the mix change, equipment coming down, consumables being a bit higher percentage of the mix, as well as CEREC, Dolphin and some of the other technologies, we saw a very nice rise in the margins in the fourth quarter. As Jim said, it’s a positive contribution to the business. Larry Marsh - Barclays Capital: Right. So your gross margins, you’re saying year-over-year was up nicely?

Yes. Larry Marsh - Barclays Capital: I know you’ll break that out in your K or whatever, so you’re saying really then dental is really more of a cost? If your gross margins were up, I guess that didn’t offset the fact that overall revenues were down and you still had cost that were going up.

Correct. The core equipment was really holding everything down, Larry. Larry Marsh - Barclays Capital: Okay and then finally on the rehab, I know you got hurt with the foreign exchange, so I understand that makes the optics on the top line look worse, but just directionally, can you talk a little bit about how you’re thinking about the infrastructure, cost structure and your ability to grow that business internally in this kind of economic environment and whether you’d want to revisit any of those structural opportunities?

Well, as we look at the Medical business, we’re really looking at slightly down on the internal growth for 2010 Larry, but we just announced an acquisition in the U.K., Mobilis, and frankly that’s where a lot of our acquisition activity is. So, we are really attempting to offset what’s going on internally with acquisition work over the next 12 months Larry in the Medical business. Larry Marsh - Barclays Capital: Is that just overseas more than domestic Jim or…?

It is both. It’s domestic and overseas. Larry Marsh - Barclays Capital: The key is, if you can get the incremental volume through acquisitions that can help offset the fact you are not getting any growth at all there, can you still get some leverage then on operating margins over the next say two to three years there, even though the margins are still pretty healthy?

Yes, I think there’s no question over next two, three years we’ll get some leverage on that, because we’ve made some heavy investments in the last 18 months in Medical. Larry Marsh - Barclays Capital: Okay. Final question I promise, I know you’re saying no more quarterly guidance, but as I think it’s sort of fairly obvious, certainly the first quarter compared, would be a lot more difficult than the second half compared. As we sort of think about the year, that’s almost actually emetic, but I mean is that a fair way to think of it?

Yes, I think so Larry. We are looking at it the same way.

Your next question comes from Marek Ciszewski - Harris Private Bank. Marek Ciszewski - Harris Private Bank: So just a real quick question here; first is, I’m curious, how much of what you sell do you manufacture?

In Dental and Veterinary business, the only thing we manufacture is software. We don’t manufacture any other products in Dental or Veterinary business and in Medical, we either manufacture or have manufactured for us about 25% of the revenues of that Medical. Marek Ciszewski - Harris Private Bank: Okay. So when you aggregate it overall for the entire company, in terms of revenues?

Yes, about 4%. Marek Ciszewski - Harris Private Bank: About 4%?

Yes. Marek Ciszewski - Harris Private Bank: Okay, great and then also, so your comment was earlier that you really haven’t seen any change between what you saw last quarter and this quarter in terms of broad macroeconomic activity. So I’m curious, for the benefit of us all, for trying to engage your progress going forward, if you could maybe give some pointers as to what are some of the macroeconomic data that you pay the greatest attention to and what sort of improvement in these would you or do you look forward to, that would give you comfort that the worst of the downturn maybe over?

The thing that we’ve paid most attention to is what the customers are telling us first and foremost, and we have a sales force that’s in contact with our customers every two weeks, so we feel like we have pretty good data back from our customers. There are obviously over other metrics we use. We buy data from different sources, we and the businesses kind of measure where we are and where the market is, but what we are really saying to you is, from all of the things that we look at, we can’t see any change in the very near future, meaning the next couple of quarters? Marek Ciszewski - Harris Private Bank: Is there is there any data points from a publicly disclosed something that you and the rest of the people like me could see to gage, to give us some confidence that once we’ve seen improvement in this, then I should expect that things will get relatively better for you guys.

I think two of the indicators that are probably having as much impact on Dental spends and Veterinary and Medical as well. Historically you’ve always got to look at unemployment. Where’s unemployment? How good do people feel about the confidence to spend some money at the special services providers’ office; so that’s one. The other I think is the market starts to recover. You’re going to see, I think some confidence back in, I’ll call it the Baby Boomer Generation, with a lot of wealth. They were one of the bigger drivers of dentistry over the last 20 to 25 years. As they get that wealth back, some of the deferred work that Jim referred to earlier, is going to come back into the Dental office. So I think those two indictors will tell you how particularly the Dental market is going to move and I think Veterinary will move in a similar fashion as well as Medical. It’s a confidence issue just like the general economy.

Your next question comes from Jeff Johnson - Robert Baird. Jeff Johnson - Robert Baird: Well, thanks for squeezing me in here late. A couple of things to clarify, and hopefully if I could, from an EPS standpoint, and Jim if I heard the comments correctly throughout the call and I’ve been on and off the call, I apologize, but it sounds like revenue is expected to be relatively flat this year, margin is flat, and I thought at one point with Glen’s question, you said that EPS is about flat, so how do I think about the low end of the guidance which is essentially flat to the upper end? I mean is there a chance to get the low or above the low end of the guidance? What am I missing there?

I didn’t say earnings per share would be flat Jeff, if I said that our operating margin would be flat. Jeff Johnson - Robert Baird: So, I thought when you were talking with Glen, that you kind of confirmed the EPS flat too. So what would be the drivers?

Jeff, I didn’t intend to.

Just at the low end of the range Jeff, I should point out. Jeff Johnson - Robert Baird: Fair enough. So if revenues that were relatively flattish and margins flat, is there something below the line to the upper half of that guidance or is it revenue acceleration in the back half that would potentially do it?

Well it’s a combination of things. It’s revenue in the back half and its expense control through the whole year. Jeff Johnson - Robert Baird: Then I guess just on the financing contracts, I don’t want to beat this one to death here, but they have been positive on CEREC sales and some of the other high-tech sales, granted they cause balance sheet pressures if you will just from holding those contracts, why stop them if they were working and your competitors are using them seem to be having success with them. Does this put you at a competitive disadvantage of not having all of these financing contracts or will it be the financing no interest, no payments financials at this point?

Well, we think we have the best product by far Jeff, so no, I don’t think we’re at a competitive disadvantage. It’s a matter of cash and cash usage and how we want to apply the cash that we have. If we see the need and we’ve got plenty of cash to do it, we certainly could reinstate the program, but just to continue to run a program for ever and ever never kind of defeats the purpose of the promotion. Jeff Johnson - Robert Baird: No, I guess that was my question; is the reason here because you don’t want to train dentists to get to use this kind of program or is it because you are getting investors pushing back on the balance sheet risk. I mean, what drove the decision to end what has obviously been a successful program?

Well, I don’t think we’re getting lack about promotion from investors, but it’s just the course of running the business Jeff. I don’t think it made prudent sense for us to stop the promotion. We ran it from August through the end of our year, through April. Jeff Johnson - Robert Baird: Then last question on operating margin and medical. I was in the back of a cab, so I don’t have my model in front of me, but was 17% of that the operating margin you said Steve in that segment? If memory serves, that’s up very nicely from the last few quarters trend anyway; am I correct in that?

It was 17.5% in the quarter, correct Jeff. Jeff Johnson - Robert Baird: Is that up sequentially quite a bit?

Yes, up about 280 basis points. Jeff Johnson - Robert Baird: Sorry, I don’t know have that, by memory I thought it worked up. So, what are the drivers there? Is that partly foreign currency or what are the drivers there?

Actually their revenues are down, which we would have thought would have hurt their leverage for the quarter, but the medical management team did a terrific job managing their expense structure in the quarter Jeff, to minimize the impact on the revenues. As you will recall, we’ve made substantial investments in brand structure and systems and so forth down there, over the last 24 to 30 months and Dave and his folks took advantage of the opportunities to use those systems and so forth to get the costs out of the system and I think that’s the primary contributor. Now their gross margins were up slightly as well, but it was mostly managing the cost structure. I think we’re a miss if I didn’t tell you that I wouldn’t push that margin number again to 2010, because as Jim mentioned, we have the Mobilis transaction coming online in 2010 and that’s going to put a little pressure on Dave’s margins. For most of 2010, until we can get that business integrated, but no, I would just attribute to Dave and his management team doing a great job and managing expenses for the quarter. Jeff Johnson - Robert Baird: I guess just the only follow-up to that is, so as you talk about what we should expect on that op margin line in that segment, down closer to the 14% for the year or somewhere in between the 14%, 17% range. Not to get too specific, but just as we think about it?

Not to get too specific, we’re already specific. Jeff Johnson - Robert Baird: Give me the exact number, if you would?

I would tell you that I’ll let you push it through your model a little bit and we’ll talk about it later if you want, but look at their business and look at what an acquisition is going to do to have an impact on those metrics. As we said, it’s about a $25 million to $30 million acquisition. The cost structure is going to have to come in. It’s not as good as Dave’s got it throughout the rest of his business and we’ll try to give you some further focus after you think about it a little bit.

Your next question comes from Craig Wiese - Rivanna Capital Craig Wiese - Rivanna Capital: I know that the 10-Q is not out yet, I was just wondering if you could tell me what your allowance for doubtful accounts was at the end of the year.

You’re right, the Q doesn’t go on file for about a week or so yet. I think the allowance for doubtful accounts is consolidated, either $9.3 million or $9.8 million Craig. Craig Wiese - Rivanna Capital: So, that puts it at actually a slightly lower level as a percentage of receivables than a year ago. I guess I find that a little surprising given the economic environment, as well as this financing program that you guys have been running with CEREC. What gives you confidence that actually bringing that down a bit year-over-year is appropriate?

Good question and I think it’s just an optical thing for you Craig. We don’t really consider those contracts as being subject to bad debt and some of them are. Obviously you could potentially in the future, but they’re good, strong, high value customers. If you take out the $95 million of contracts we talked about, I think you’ll actually see their allowance for doubtful accounts is up slightly year-over-year as a percentage of receivable. Craig Wiese - Rivanna Capital: So, this way you’re not reserving at all against the no interest, no payment for 12 months loans.

Without getting into excruciating detail, we do reserve for those contracts, but it’s through a different metric than through that standard trade allowance that you would see on the balance sheet. Craig Wiese - Rivanna Capital: So that goes somewhere else on the balance sleet?

When we sell the contract, there’s a provision that goes into place to allow for some bad debt. We have to do that under the accounting standards, but because they’re a long term assets, it ends up down in the long term receivable line. Craig Wiese - Rivanna Capital: That’s where it is right now?

Correct. Craig Wiese - Rivanna Capital: Okay, and so when you sell it, is there going to be a gain on sale?

When we sell those contracts? Craig Wiese - Rivanna Capital: Yes.

Probably modest because of the interest impact on those contracts, because it is a street rate, but it has been discounted because of the 12 month no interest. The effective rate is slightly lower. So, I don’t anticipate there will be a huge gain coming out of that Craig. Craig Wiese - Rivanna Capital: So, there’s probably at least some modest gain reflected in the guidance.

As long as interest rates don’t get carried away here over the next nine to 12 months, it’ll be a modest gain out of it.

(Operator Instructions) and there appears to be no further questions sir.

I think we can wrap up now. I want to thank everybody for joining us on our fourth quarter conference call and we look forward to you joining us for our first quarter of 2010. Thank you very much.

Thank you. This concludes the Patterson Companies fourth quarter earnings conference call. Thank you for participating. You may now disconnect.