Birner Dental Management Services, Inc. Announces Earnings For 1Q 2014

DENVER, May 13, 2014 /PRNewswire/ -- Birner Dental Management Services, Inc. (NASDAQ Capital Market: BDMS),operators of PERFECT TEETH® dental practices, announced results for the quarter ended March 31, 2014.  For the quarter ended March 31, 2014, revenue increased $202,000, or 1.2%, to $16.8 million compared to $16.6 million for the quarter ended March 31, 2013.  The Company's earnings before interest, taxes, depreciation, amortization, and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") decreased $189,000, or 13.3%, to $1.2 million compared to $1.4 million for the quarter ended March 31, 2013, but increased from $633,000 for the quarter ended December 31, 2013.  Net income for the quarter ended March 31, 2014 decreased $192,000, or 79.6%, to $49,000 compared to $241,000 for the quarter ended March 31, 2013.  Earnings per share decreased to $0.03 for the quarter ended March 31, 2014 compared to $0.13 for the quarter ended March 31, 2013.

Since the beginning of the fourth quarter of 2012, the Company has opened four de novo offices: in Tucson, Arizona in the fourth quarter of 2012; in Erie, Colorado in the fourth quarter of 2012; in Loveland, Colorado in July 2013; and in Monument, Colorado in December 2013.  The Company has leased space for three additional de novo offices: in Fort Collins, Colorado, which is anticipated to open in May 2014; in Scottsdale, Arizona, which is anticipated to open in the third quarter of 2014; and in Albuquerque, New Mexico, which is anticipated to open in 2015.  The Company is also evaluating and negotiating leases for additional sites throughout its markets.  Additionally, the Company has relocated and modernized an office in Albuquerque, New Mexico, which opened in March 2014, and has significantly upgraded and converted to digital radiography one of its offices in Colorado Springs, Colorado, which was completed in April 2014. 

Fred Birner, Chief Executive Officer of the Company, stated that "We were encouraged by the substantial rebound in Adjusted EBITDA in the first quarter of 2014 from the fourth quarter of 2013 and continue to believe the Company is moving in the right direction and making good progress with our previously discussed initiatives and the continued progress of the four de novo offices."

During the quarter ended March 31, 2014, the Company had capital expenditures of $1.1 million, paid approximately $408,000 in dividends to its shareholders and increased total bank debt outstanding by approximately $963,000.  The Company's outstanding bank debt increased because of the Company's development of de novo offices and its commitment to upgrading its existing offices through extensive remodels and office relocations and to converting its offices to digital radiography. 

Birner Dental Management Services, Inc. acquires, develops, and manages geographically dense dental practice networks in select markets in Colorado, New Mexico, and Arizona.  The Company currently manages 66 dental offices, of which 37 were acquired and 29 were de novo developments.  The Company currently has 118 dentists.  The Company operates its dental offices under the PERFECT TEETH® name.

The Company previously announced it would conduct a conference call to review results for the quarter ended March 31, 2014 on Tuesday, May 13, 2014 at 9:00 a.m. MT. In addition to current operating results, the teleconference may include discussion of management's expectations of future financial and operating results. To participate in this conference call, dial in to 1-800-344-6491 and refer to Confirmation Code 9115588 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on May 13, 2014, the rebroadcast number is 1-888-203-1112 with the pass code of 9115588.  This rebroadcast will be available through May 27, 2014.

Non-GAAP Disclosures

This press release includes a non-GAAP financial measure with respect to Adjusted EBITDA.  Please see below for more information regarding Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income.

Forward-Looking Statements

Certain of the matters discussed herein may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. These include statements regarding potential de novo offices and the Company's prospects and performance in future periods.  These statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.  These and other risks and uncertainties are set forth in the reports filed by the Company with the Securities and Exchange Commission. The Company disclaims any obligation to update these forward-looking statements.

For Further Information Contact:
Birner Dental Management Services, Inc.
Dennis Genty  
Chief Financial Officer
(303) 691-0680

 

BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)



Quarters Ended




March 31,




2013


2014


REVENUE:






Dental practice revenue

$   15,163,445


$  15,472,734



Capitation revenue

1,440,857


1,333,664




16,604,302


16,806,398








DIRECT EXPENSES:






Clinical salaries and benefits

9,712,539


9,893,366



Dental supplies

706,649


691,692



Laboratory fees

760,376


804,003



Occupancy

1,457,577


1,458,394



Advertising and marketing

362,827


229,925



Depreciation and amortization

819,881


967,263



General and administrative

1,210,900


1,429,905




15,030,749


15,474,548









Contribution from dental offices

1,573,553


1,331,850








CORPORATE EXPENSES:






General and administrative 

1,104,988

(1)

1,169,145

(1)


Depreciation and amortization

46,253


54,640








OPERATING INCOME

422,312


108,065



Interest expense, net

26,716


27,194








INCOME BEFORE INCOME TAXES

395,596


80,871



Income tax expense

154,282


31,540








NET INCOME

$        241,314


$         49,331









Net income per share of Common Stock - Basic

$              0.13


$             0.03









Net income per share of Common Stock - Diluted

$              0.13


$             0.03









Cash dividends per share of Common Stock

$              0.22


$             0.22









Weighted average number of shares of






Common Stock and dilutive securities: 






Basic

1,845,375


1,854,455









Diluted

1,857,088


1,864,708


 

(1)

Corporate expenses - general and administrative includes $131,008 of stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended March 31, 2013 and $100,430 of stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended March 31, 2014.

 

 

 

 BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



December 31, 


March 31,

ASSETS

2013


2014

CURRENT ASSETS:





Cash and cash equivalents

$             469,827


$             299,990


Accounts receivable, net of allowance for doubtful





accounts of approximately $420,000 and $420,000, respectively

3,250,319


3,797,658


Notes receivable

34,195


34,195


Deferred tax asset

272,523


298,019


Income tax receivable

176,935


-


Prepaid expenses and other assets

455,158


789,115







Total current assets

4,658,957


5,218,977






PROPERTY AND EQUIPMENT, net

10,126,399


10,469,987






OTHER NONCURRENT ASSETS:





Intangible assets, net

9,292,868


9,067,725


Deferred charges and other assets

165,661


165,661


Notes receivable

109,501


102,804







Total assets

$        24,353,386


$        25,025,154






LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:





Accounts payable 

$          2,548,240


$          1,986,186


Accrued expenses

1,641,509


1,572,880


Accrued payroll and related expenses

2,192,495


2,734,138


Income taxes payable

-


292,146







Total current liabilities

6,382,244


6,585,350






LONG-TERM LIABILITIES:





Deferred tax liability, net

3,030,205


2,752,344


Long-term debt

8,091,790


9,054,728


Other long-term obligations

965,959


938,437







Total liabilities

18,470,198


19,330,859






SHAREHOLDERS' EQUITY:





Preferred Stock, no par value, 10,000,000 shares





authorized; none outstanding

-


-


Common Stock, no par value, 20,000,000 shares authorized;





1,852,565 and 1,860,089 shares issued and outstanding, respectively

779,758


950,753


Retained earnings

5,103,430


4,743,542







Total shareholders' equity

5,883,188


5,694,295







Total liabilities and shareholders' equity

$        24,353,386


$        25,025,154

Reconciliation of Adjusted EBITDA

Adjusted EBITDA is not a U.S. generally accepted accounting principle ("GAAP") measure of performance or liquidity. However, the Company believes that it may be useful to an investor in evaluating the Company's ability to meet future debt service, capital expenditures and working capital requirements, and the Company uses Adjusted EBITDA for this purpose.  Investors should not consider Adjusted EBITDA in isolation or as a substitute for operating income, cash flows from operating activities or any other measure for determining the Company's operating performance or liquidity that is calculated in accordance with GAAP. In addition, because Adjusted EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of Adjusted EBITDA to net income can be made by adding depreciation and amortization expense - Offices, depreciation and amortization expense – Corporate, stock-based compensation expense, interest expense, net and income tax expense to net income as in the table below.





Quarters





Ended March 31,





2013


2014

RECONCILIATION OF EBITDA:





Net income

$241,314


$49,331


Add back:






Depreciation and amortization - Offices

819,881


967,263



Depreciation and amortization - Corporate

46,253


54,640



Stock-based compensation expense

131,008


100,430



Interest expense, net

26,716


27,194



Income tax expense

154,282


31,540








Adjusted EBITDA

$1,419,454


$1,230,398

     

SOURCE Birner Dental Management Services, Inc.



RELATED LINKS
http://www.bdms-perfectteeth.com

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