2014

Birner Dental Management Services, Inc. Announces Earnings For 2Q 2013

DENVER, Aug. 13, 2013 /PRNewswire/ -- Birner Dental Management Services, Inc. (NASDAQ Capital Market: BDMS), operators of PERFECT TEETH® dental practices, announced results for the quarter and six months ended June 30, 2013.  For the quarter ended June 30, 2013, revenue increased $661,000, or 4.2%, to $16.4 million.  The Company's earnings before interest, taxes, depreciation, amortization, and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") increased $197,000, or 17.9%, to $1.3 million for the quarter ended June 30, 2013.  Net income for the quarter ended June 30, 2013 increased $37,000, or 26.3%, to $180,000 compared to $142,000 for the quarter ended June 30, 2012.  Earnings per share increased to $0.10 for the quarter ended June 30, 2013 compared to $0.08 for the quarter ended June 30, 2012.

For the six months ended June 30, 2013, revenue increased $1.1 million, or 3.3%, to $33.0 million.  The Company's Adjusted EBITDA increased 170,000, or 6.7%, to $2.7 million for the six months ended June 30, 2013.  Net income for the six months ended June 30, 2013 decreased $30,000, or 6.7%, to $421,000 compared to $451,000 for the six months ended June 30, 2012.  Earnings per share decreased to $0.23 for the six months ended June 30, 2013 compared to $0.24 for the six months ended June 30, 2012.

Since the beginning of the fourth quarter of 2012, the Company has opened three de novo offices: in Tucson in the fourth quarter of 2012; in Erie, Colorado in the fourth quarter of 2012; and in Loveland, Colorado on July 29, 2013.  The Company has leased space for two additional de novo offices: in Monument, Colorado anticipated to open in the fourth quarter of 2013; and in Fort Collins, Colorado anticipated to open in the third quarter of 2014.  The Company is also evaluating and negotiating leases on additional sites throughout its markets.  Additionally, the Company has signed new leases for the relocation and modernization of two of its offices: in Denver anticipated to open in the third quarter of 2013; and in Albuquerque anticipated to open in the fourth quarter of 2013.

During the six months ended June 30, 2013, the Company completed a remodel of one of its offices and converted two additional offices to digital radiography.

During the first six months of  2013, the Company had capital expenditures of approximately $1.5 million, paid out approximately $812,000 in dividends to its shareholders and decreased total bank debt outstanding by approximately $185,000

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 66 dental offices, of which 37 were acquired and 29 were de novo developments.  The Company currently has 124 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 June 30, 2013 on Tuesday, August 13, 2013 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 1-888-337-8198 and refer to Confirmation Code 3829976 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on August 13, the rebroadcast number is 1-888-203-1112 with the pass code of 3829976.  This rebroadcast will be available through August 27, 2013.

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,




2012


2013


2012


2013












REVENUE:

$ 15,775,428


$ 16,436,292


$ 31,975,115


$ 33,040,596












DIRECT EXPENSES:










Clinical salaries and benefits

8,951,275


9,693,407


18,089,124


19,405,946



Dental supplies

712,490


731,596


1,389,482


1,438,245



Laboratory fees

798,072


798,331


1,551,528


1,558,708



Occupancy

1,370,243


1,453,961


2,735,560


2,911,538



Advertising and marketing

702,101


215,408


1,377,664


578,237



Depreciation and amortization

685,394


838,363


1,334,956


1,658,244



General and administrative

1,235,366


1,056,742


2,444,835


2,267,645




14,454,941


14,787,808


28,923,149


29,818,563













Contribution from dental offices

1,320,487


1,648,484


3,051,966


3,222,033












CORPORATE EXPENSES:










General and administrative 

1,019,259

(1)

1,297,830

(1)

2,186,754

(2)

2,402,819

(2)


Depreciation and amortization

41,870


49,497


77,159


95,750












OPERATING INCOME

259,358


301,157


788,053


723,464



Interest expense, net

26,299


6,798


48,778


33,513












INCOME BEFORE INCOME TAXES

233,059


294,359


739,275


689,951



Income tax expense

90,893


114,799


288,317


269,081












NET INCOME

$      142,166


$      179,560


$      450,958


$      420,870













Net income per share of Common Stock - Basic

$            0.08


$            0.10


$            0.24


$            0.23













Net income per share of Common Stock - Diluted

$            0.08


$            0.10


$            0.24


$            0.23













Cash dividends per share of Common Stock

$            0.22


$            0.22


$            0.44


$            0.44













Weighted average number of shares of










Common Stock and dilutive securities: 










   Basic

1,843,738


1,851,598


1,843,302


1,849,118













   Diluted

1,852,103


1,863,855


1,853,433


1,861,020



(1)

Corporate expense - general and administrative includes $112,198 of stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended June 30, 2012 and  $106,573 of stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended June 30, 2013. 



(2)

Corporate expense - general and administrative includes $344,963 of stock-based compensation expense pursuant to ASC Topic 718 for the six months ended June 30, 2012 and  $237,581 of stock-based compensation expense pursuant to ASC Topic 718 for the six months ended June 30, 2013. 

 

BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



December 31, 


June 30,

ASSETS

2012


2013

CURRENT ASSETS:





Cash and cash equivalents

$     1,112,511


$        640,978


Accounts receivable, net of allowance for doubtful





accounts of approximately $304,000 and $319,000, respectively

2,614,152


3,887,377


Notes receivable

165,718


154,834


Deferred tax asset

205,693


322,060


Income tax receivable

442,630


-


Prepaid expenses and other assets

482,297


729,041







Total current assets

5,023,001


5,734,290






PROPERTY AND EQUIPMENT, net

7,894,333


8,119,132






OTHER NONCURRENT ASSETS:





Intangible assets, net

10,193,488


9,743,203


Deferred charges and other assets

158,316


161,912







Total assets

$   23,269,138


$   23,758,537






LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:





Accounts payable 

$     1,919,457


$     1,887,884


Accrued expenses

1,640,076


1,683,486


Accrued payroll and related expenses

1,718,417


2,481,401


Income taxes payable

-


159,704


Current maturities of long-term debt

400,000


1,000,000







Total current liabilities

5,677,950


7,212,475






LONG-TERM LIABILITIES:





Deferred tax liability, net

2,997,808


2,877,674


Long-term debt, net of current maturities

6,074,042


5,289,342


Other long-term obligations

1,547,369


1,551,037







Total liabilities

16,297,169


16,930,528






SHAREHOLDERS' EQUITY:





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





authorized; none outstanding

-


-


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





1,842,402 and 1,851,598 shares issued and outstanding, respectively

329,236


577,965


Retained earnings

6,642,733


6,250,044







Total shareholders' equity

6,971,969


6,828,009







Total liabilities and shareholders' equity

$   23,269,138


$   23,758,537







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


Six Months



Ended June 30,


Ended June 30,




2012


2013


2012


2013

RECONCILIATION OF ADJUSTED EBITDA:









Net income

$142,166


$179,560


$450,958


$420,870


Add back:










Depreciation and amortization - Offices

685,394


838,363


1,334,956


1,658,244



Depreciation and amortization - Corporate

41,870


49,497


77,159


95,750



Stock-based compensation expense

112,198


106,573


344,963


237,581



Interest expense, net

26,299


6,798


48,778


33,513



Income tax expense

90,893


114,799


288,317


269,081









Adjusted EBITDA

$1,098,820


$1,295,590


$2,545,131


$2,715,039

 

SOURCE Birner Dental Management Services, Inc.



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