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Patterson Companies, Inc. (PDCO) — this company's answers

The model's full reasoning — Q3 2017 call → NOWe need to determine if the dynamic described in the question occurs in the transcript. The question asks: when analysts probe a recently emerged positive element of the business — something whose meaningful contribution began only within roughly the last few quarters — does management respond with unhesitating, granular operational command, answering follow-up questions with specific, present-tense working detail, while conveying that the element's contribution to reported results is still early? Answer YES if all conditions met, else NO. We need to identify a recently emerged positive element. The transcript mentions several things: Heartland Dental relationship (new customer, implementation in January, now fully operational), core equipment strength (strongest quarter since 2009), CEREC growth, ERP implementation, Animal Health margin improvement initiatives, etc. The question specifically says "recently emerged positive element" and "meaningful contribution began only within roughly the last few quarters." Heartland Dental is a new customer relationship that started recently. The transcript says: "we are pleased with the progress we have made with our newest customer, Heartland Dental. We devoted the month of January to implementation and are now getting close to being fully operational with all of their offices." That is a recent positive element. Analysts probe it? Let's see the Q&A. There is a question from Jason Jakoby (Goldman Sachs) about Heartland: "thanks for the update on Heartland. Good to hear that that's almost fully operational. Could you just provide us any more detail there? And then just broadly speaking about the DSO segment, how focused are you on this market and is further DSO penetration embedded in your long-term growth outlook?" That is a probe. Management responds: "Yeah. Thanks, Jason. Obviously we're very excited about this new partnership with Heartland. As I said, we're off to a really good start and I think both our management team and Heartland's are very encouraged by how our teams are working so closely together. They are pleased with the transition and when the customer is happy those are good things. I would say it was – I had the honor to speak to over 1,000 of Heartland's dentists at their winter conference in December and that was an incredibly impressive event. And it was also exciting.

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