Our worst performer was Patterson Companies (NASDAQ:PDCO), a distributor of dental and animal health products. The stock cut 106 basis points from the Fund’s return, as it plummeted 38.5% from $36.13 to $22.23. Shares plunged after the company reported disappointing sales and lowered guidance. The company experienced a sharp decline in demand for its dental consumables and equipment due to the loss of exclusivity with its largest manufacturing partner, Dentsply Sirona. On top of this issue, Patterson experienced disruption from its internal sales force changes and increased competition from online players such as Amazon. We’re disappointed with the company’s performance but hopeful that newly appointed CEO, Mark Walchirk, will move with a sense of urgency to improve performance and drive sustainable earnings growth.
From Jerome Dodson (Trades, Portfolio)'s first-quarter 2018 Parnassus Fund shareholder letter.
