Receivables Securitization Program

9 Months Ended

Jan. 27, 2024

Transfers and Servicing [Abstract]

Receivables Securitization Program

Receivables Securitization Program

We are party to certain receivables purchase agreements (the “Receivables Purchase Agreements”) with MUFG Bank, Ltd. ("MUFG") (f.k.a. The Bank of Tokyo-Mitsubishi UFJ, Ltd.), under which MUFG acts as an agent to facilitate the sale of certain Patterson receivables (the “Receivables”) to certain unaffiliated financial institutions (the “Purchasers”). The sale of these receivables is accounted for as a sale of assets under the provisions of ASC 860, Transfers and Servicing. We utilize PDC Funding III and PDC Funding IV to facilitate the sale to fulfill requirements within the agreement. We use a daily unit of account for these Receivables.

The proceeds from the sale of these Receivables comprise a combination of cash and a deferred purchase price (“DPP”) receivable. The DPP receivable is ultimately realized by Patterson following the collection of the underlying Receivables sold to the Purchasers. The amount available under the Receivables Purchase Agreements fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $200,000 as of January 27, 2024, of which $200,000 was utilized.

We have no retained interests in the transferred Receivables, other than our right to the DPP receivable and collection and administrative service fees. We consider the fees received adequate compensation for services rendered, and accordingly have recorded no servicing asset or liability. As of January 27, 2024 and April 29, 2023, the fair value of outstanding trade receivables transferred to the Purchasers under the facility and derecognized

from the condensed consolidated balance sheets were $386,932 and $429,853, respectively. Sales of trade receivables under this facility were $2,681,935 and $2,729,673, and cash collections from customers on receivables sold were $2,725,094 and $2,723,952 during the nine months ended January 27, 2024 and January 28, 2023, respectively.

The DPP receivable is recorded at fair value within the condensed consolidated balance sheets within prepaid expenses and other current assets. The difference between the carrying amount of the Receivables and the sum of the cash and fair value of the DPP receivable received at time of transfer is recognized as a gain or loss on sale of the related Receivables inclusive of bank fees and allowance for credit losses. In operating expenses in the condensed consolidated statements of operations and other comprehensive income, we recorded losses of $3,110 and $3,254 during the three months ended January 27, 2024 and January 28, 2023, respectively, and $10,270 and $7,900 during the nine months ended January 27, 2024 and January 28, 2023, respectively, related to the Receivables.

The following rollforward summarizes the activity related to the DPP receivable:

	Nine Months Ended
	January 27, 2024		January 28, 2023
Beginning DPP receivable balance	$	227,946	$	195,764
Non-cash additions to DPP receivable	697,887		706,895
Collection of DPP receivable	(740,664)		(702,710)
Ending DPP receivable balance	$	185,169	$	199,949