Birner Dental Management Services, Inc. Announces Earnings For 2Q 2012

DENVER, Aug. 14, 2012 /PRNewswire/ -- Birner Dental Management Services, Inc. (NASDAQ Capital Market: BDMS),operators of PERFECT TEETH® dental practices and Vantage Dental Implant Center, announced results for the quarter and six months ended June 30, 2012. For the quarter ended June 30, 2012, revenue decreased $641,000, or 3.9%, to $15.8 million. The Company's earnings before interest, taxes, depreciation, amortization, and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") decreased $335,000, or 23.4%, to $1.1 million for the quarter ended June 30, 2012.  Net income for the quarter ended June 30, 2012 decreased $223,000, or 61.1%, to $142,000 compared to $365,000 for the quarter ended June 30, 2011.  Earnings per share decreased 59.6%, to $0.08 for the quarter ended June 30, 2012 compared to $0.19 for the quarter ended June 30, 2011.

For the six months ended June 30, 2012, revenue decreased $1.5 million, or 4.5%, to $32.0 million.  The Company's Adjusted EBITDA decreased $308,000, or 10.8%, to $2.5 million for the six months ended June 30, 2012.  Net income for the six months ended June 30, 2012 decreased $301,000, or 40.0%, to $451,000 compared to $752,000 for the six months ended June 30, 2011.  Earnings per share decreased 37.8%, to $0.24 for the six months ended June 30, 2012 compared to $0.39 for the six months ended June 30, 2011.

For the quarter and six months ended June 30, 2012, revenue was negatively impacted by a decrease in the number of patient visits in the offices relative to the quarter and six months ended June 30, 2011.  Additionally, for the quarter and six months ended June 30, 2012, patients accepted less expensive treatment relative to the prior periods.  The Company believes this is due to a general weakness in the economy in its markets.

The Company has entered into leases for two de novo offices, which the Company anticipates will open in the fourth quarter of 2012.  One office is located in the Tucson, Arizona market and the other office is located in the Denver/Boulder, Colorado market.  The Company anticipates approximately $500,000 in capital expenditures at each de novo office.  The Company also has signed letters of intent for two additional de novo office locations. The Company does not anticipate opening either of these offices until after the first quarter of 2013.

During the first six months of  2012, the Company had capital expenditures of approximately $1.9 million, paid out approximately $812,000 in dividends to its shareholders, and purchased 37,787 shares of its Common Stock for approximately $622,000. During the first six months of 2012, total bank debt outstanding increased by approximately $925,000

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 64 dental offices, of which 38 were acquired and 26 were de novo developments.  The Company currently has 107 dentists.  The Company operates its dental offices under the PERFECT TEETH® name. The Company also operates one Vantage Dental Implant Center in Denver, Colorado.

The Company previously announced it would conduct a conference call to review results for the quarter ended June 30, 2012 on Tuesday, August 14, 2012 at 9:00 a.m. MDT. 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 1-888-239-5167 and refer to Confirmation Code 7674290 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on August 14, the rebroadcast number is 1-888-203-1112 with the pass code of 7674290.  This rebroadcast will be available through August 28, 2012.

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


Six Months Ended




June 30,


June 30,




2011


2012


2011


2012












REVENUE:

$   16,416,545


$   15,775,428


$    33,491,748


$   31,975,115












DIRECT EXPENSES:










Clinical salaries and benefits

9,237,249


8,951,275


18,949,321


18,089,124



Dental supplies

697,738


712,490


1,499,282


1,389,482



Laboratory fees

793,852


798,072


1,509,330


1,551,528



Occupancy

1,328,738


1,370,243


2,679,129


2,735,560



Advertising and marketing

607,916


702,101


1,185,260


1,377,664



Depreciation and amortization

609,586


685,394


1,227,779


1,334,956



General and administrative

1,430,725


1,235,366


3,034,563


2,444,835




14,705,804


14,454,941


30,084,664


28,923,149













Contribution from dental offices

1,710,741


1,320,487


3,407,084


3,051,966












CORPORATE EXPENSES:










General and administrative 

1,058,674

(1)

1,019,259

(1)

2,077,735

(2)

2,186,754

(2)


Depreciation and amortization

31,420


41,870


51,003


77,159












OPERATING INCOME

620,647


259,358


1,278,346


788,053



Interest expense, net

21,589


26,299


46,295


48,778












INCOME BEFORE INCOME TAXES

599,058


233,059


1,232,051


739,275



Income tax expense

233,633


90,893


480,500


288,317












NET INCOME

$        365,425


$        142,166


$         751,551


$        450,958













Net income per share of Common Stock - Basic

$              0.20


$              0.08


$               0.41


$              0.24













Net income per share of Common Stock - Diluted

$              0.19


$              0.08


$               0.39


$              0.24













Cash dividends per share of Common Stock

$              0.22


$              0.22


$               0.42


$              0.44













Weighted average number of shares of










Common Stock and dilutive securities: 










Basic

1,856,506


1,843,738


1,854,266


1,843,302













Diluted

1,921,563


1,852,103


1,920,081


1,853,433












(1)

Corporate expense - general and administrative includes $90,636 of stock-based compensation expense pursuant to ASC Topic 718 and $81,414 related to a long-term incentive program for the quarter ended June 30, 2011 and  $112,198 of stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended June 30, 2012. 



(2)

Corporate expense - general and administrative includes $133,655 of stock-based compensation expense pursuant to ASC Topic 718 and $162,828 related to a long-term incentive program for the six months ended June 30, 2011 and  $344,963 of stock-based compensation expense pursuant to ASC Topic 718 for the six months ended June 30, 2012. 











 

 

BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



December 31, 


June 30,

ASSETS

2011


2012

CURRENT ASSETS:





Cash and cash equivalents

$             923,878


$             687,739


Accounts receivable, net of allowance for doubtful





accounts of $302,000 and $308,000, respectively

2,855,726


3,015,247


Deferred tax asset

197,327


197,327


Prepaid expenses and other assets

639,116


787,427







Total current assets

4,616,047


4,687,740






PROPERTY AND EQUIPMENT, net

5,789,521


6,682,577






OTHER NONCURRENT ASSETS:





Intangible assets, net

11,095,926


10,643,774


Deferred charges and other assets

165,267


162,459


Notes receivable

155,419


137,560







Total assets

$        21,822,180


$        22,314,110






LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:





Accounts payable 

$          2,111,155


$          2,010,326


Accrued expenses

1,973,593


1,558,232


Accrued payroll and related expenses

1,731,273


2,215,805


Income taxes payable

115,038


363,355


Current maturities of long-term debt

-


400,000







Total current liabilities

5,931,059


6,547,718






LONG-TERM LIABILITIES:





Deferred tax liability, net

2,309,279


2,309,279


Long-term debt, net of current maturities

4,251,068


4,776,500


Other long-term obligations

1,504,684


1,492,078







Total liabilities

13,996,090


15,125,575






SHAREHOLDERS' EQUITY:





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





authorized; none outstanding

-


-


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





1,837,519 and 1,841,790 shares issued and outstanding, respectively

368,186


91,452


Retained earnings

7,457,904


7,097,083







Total shareholders' equity

7,826,090


7,188,535







Total liabilities and shareholders' equity

$        21,822,180


$        22,314,110






 

 

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. 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


Six Months





Ended June 30,


Ended June 30,





2011


2012


2011


2012

RECONCILIATION OF ADJUSTED EBITDA:









Net income

$365,425


$142,166


$751,551


$450,958


Add back:










Depreciation and amortization - Offices

609,586


685,394


1,227,779


1,334,956



Depreciation and amortization - Corporate

31,420


41,870


51,003


77,159



Stock-based compensation expense

172,050


112,198


296,483


344,963



Interest expense, net

21,589


26,299


46,295


48,778



Income tax expense

233,633


90,893


480,500


288,317












Adjusted EBITDA

$1,433,703


$1,098,820


$2,853,611


$2,545,131












 

SOURCE Birner Dental Management Services, Inc.



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

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