Birner Dental Management Services, Inc. Announces Earnings for 3Q 2011

DENVER, Nov. 14, 2011 /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 nine months ended September 30, 2011. For the quarter ended September 30, 2011, revenue decreased $557,000, or 3.5%, to $15.5 million. The Company's earnings before interest, taxes, depreciation, amortization, non-cash expense associated with stock-based compensation and discontinued operations ("Adjusted EBITDA") decreased $528,000, or 29.8%, to $1.2 million for the quarter ended September 30, 2011.  Net income for the quarter ended September 30, 2011 decreased $111,000, or 23.0%, to $374,000 compared to $486,000 for the same period of 2010.  Earnings per share decreased 23.8%, to $0.20 for the quarter ended September 30, 2011 compared to $0.26 for the quarter ended September 31, 2010.

For the nine months ended September 30, 2011, revenue increased $741,000 or 1.5%, to $49.0 million.  The Company's Adjusted EBITDA decreased $1.3 million, or 23.8%, to $4.1 million for the nine months ended September 30, 2011.  Net income for the nine months ended September 30, 2011 decreased 9.0% to $1.1 million compared to $1.2 million for the same period of 2010.  Earnings per share decreased 9.9%, to $0.59 for the nine months ended September 30, 2011 compared to $0.65 for the nine months ended September 30, 2010.  The nine months ended September 30, 2010 was impacted by a loss from discontinued operations of $296,000, or $0.16 per share, net of tax benefit.

Fred Birner, Chief Executive Officer, stated, "Our markets in general were softer during the third quarter 2011 relative to the third quarter 2010 and relative to the first two quarters of 2011, which affected both the Perfect Teeth dental offices and the Vantage Dental Implant Center."

During the first nine months of  2011, the Company had capital expenditures of $2.3 million, purchased 17,380 shares of its Common Stock for approximately $296,000 and paid out approximately $1.1 million in dividends to its shareholders while decreasing total bank debt outstanding by approximately $629,000.  

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 109 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 September 30, 2011 on Monday, November 14, 2011 at 9:00 a.m. MST. 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 1-888-395-3237 and refer to Confirmation Code 6652746 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on November 14, the rebroadcast number is 1-888-203-1112 with the pass code of 6652746.  This rebroadcast will be available through November 28, 2011.

Non-GAAP Disclosures

This press release includes a non-GAAP financial measure with respect to Adjusted EBITDA.  Please see the last page of this release 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 the Company's prospects and performance in 2011 and other 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, performances, 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


Nine Months Ended




September 30,


September 30,




2010


2011


2010


2011












REVENUE:

$  16,049,646


$  15,492,724


$  48,243,182


$  48,984,473












DIRECT EXPENSES:










Clinical salaries and benefits

8,970,172


8,767,612


27,445,532


27,716,934



Dental supplies

730,339


658,705


1,975,194


2,157,987



Laboratory fees

660,160


679,304


2,076,093


2,188,635



Occupancy

1,320,627


1,381,849


3,908,228


4,060,977



Advertising and marketing

226,083


758,776


707,422


1,944,036



Depreciation and amortization

630,139


633,200


1,788,269


1,860,980



General and administrative

1,422,274


1,364,070


4,019,773


4,398,635




13,959,794


14,243,516


41,920,511


44,328,184













Contribution from dental offices

2,089,852


1,249,208


6,322,671


4,656,289












CORPORATE EXPENSES:










General and administrative

1,186,046

(1)

580,564

(1)

3,441,372

(2)

2,658,299

(2)


Depreciation and amortization

19,542


35,575


63,489


86,578












OPERATING INCOME

884,264


633,069


2,817,810


1,911,412



Interest expense, net

32,524


19,883


129,543


66,178












INCOME FROM CONTINUING OPERATIONS










  BEFORE INCOME TAXES

851,740


613,186


2,688,267


1,845,234



Income tax expense

366,217


239,141


1,155,924


719,641












INCOME FROM CONTINUING OPERATIONS

485,523


374,045


1,532,343


1,125,593












DISCONTINUED OPERATIONS (Note 9):










Operating (loss) attributable to assets disposed of

-


-


(250,125)


-



(Loss) recognized on dispositions

-


-


(268,598)


-



Income tax benefit

-


-


223,051


-












LOSS ON DISCONTINUED OPERATIONS

-


-


(295,672)


-












NET INCOME

$       485,523


$       374,045


$      1,236,671


$      1,125,593












Net income per share of Common Stock - Basic










Continuing Operations

$               0.26


$               0.20


$               0.82


$                0.61



Discontinued Operations

-


-


(0.15)


-


Net income per share of Common Stock - Basic

$               0.26


$               0.20


$               0.67


$                0.61












Net income per share of Common Stock - Diluted










Continuing Operations

$               0.26


$               0.20


$                0.81


$               0.59



Discontinued Operations

-


-


(0.16)


-


Net income per share of Common Stock - Diluted

$               0.26


$               0.20


$               0.65


$               0.59












Cash dividends per share of Common Stock

$               0.20


$               0.22


$               0.60


$               0.64












Weighted average number of shares of









Common Stock and dilutive securities:










Basic

1,851,828


1,859,362


1,859,470


1,855,984













Diluted

1,893,082


1,914,075


1,899,203


1,917,594












(1)

Corporate expense - general and administrative includes $153,020 of stock-based compensation expense pursuant to ASC Topic 718 and $84,348 related to a long-term incentive program for the quarter ended September 30, 2010 and $104,759 of stock-based compensation expense pursuant to ASC Topic 718 and ($162,828) related to a long-term incentive program for the quarter ended September 30, 2011.

(2)

Corporate expense - general and administrative includes $454,781 of stock-based compensation expense pursuant to ASC Topic 718 and $253,044 related to a long-term incentive program for the nine months ended September 30, 2010 and $238,415 of stock-based compensation expense pursuant to ASC Topic 718 and $0 related to a long-term incentive program for the nine months ended September 30, 2011.



BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS








December 31,


September 30,

ASSETS

2010


2011



**


(Unaudited)

CURRENT ASSETS:





Cash and cash equivalents

$       406,208


$        565,026


Accounts receivable, net of allowance for doubtful





accounts of $315,333 and $320,964, respectively

3,429,373


3,238,318


Deferred tax asset

207,530


207,530


Income tax receivable

435,800


-


Prepaid expenses and other assets

598,297


673,382







Total current assets

5,077,208


4,684,256






PROPERTY AND EQUIPMENT, net

5,123,934


6,099,171






OTHER NONCURRENT ASSETS:





Intangible assets, net

11,941,931


11,314,166


Deferred charges and other assets

155,674


141,523


Notes receivable

167,420


155,406







Total assets

$  22,466,167


$   22,394,522






LIABILITIES AND SHAREHOLDERS’ EQUITY









CURRENT LIABILITIES:





Accounts payable

$    2,163,082


$     2,163,348


Accrued expenses

2,410,689


1,981,921


Accrued payroll and related expenses

1,945,020


2,150,057


Income taxes payable

18,484


872,069


Current maturities of long-term debt

690,000


230,000


Liabilities related to discontinued operations

50,207


-







Total current liabilities

7,277,482


7,397,395






LONG-TERM LIABILITIES:





Deferred tax liability, net

1,265,436


1,265,436


Long-term debt, net of current maturities

3,747,017


3,578,040


Other long-term obligations

2,254,539


2,344,526







Total liabilities

14,544,474


14,585,397






SHAREHOLDERS' EQUITY:





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





authorized; none outstanding

-


-


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





1,850,716 and 1,847,405 shares issued and outstanding, respectively

493,638


436,435


Retained earnings

7,433,205


7,372,690


Accumulated other comprehensive loss

(5,150)


-







Total shareholders' equity

7,921,693


7,809,125







Total liabilities and shareholders' equity

$  22,466,167


$   22,394,522






**  Derived from the Company’s audited consolidated balance sheet at December 31, 2010.



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 discontinued operations before income tax expense, 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


Nine Months





Ended September 30,


Ended September 30,





2010


2011


2010


2011

RECONCILIATION OF ADJUSTED EBITDA:









Net income

$485,523


$374,045


$1,236,671


$1,125,593


Add back:










Discontinued operations











(before income tax expense)

-


-


518,723


-



Depreciation and amortization - Offices

630,139


633,200


1,788,269


1,860,980



Depreciation and amortization - Corporate

19,542


35,575


63,489


86,578



Stock-based compensation expense

237,368


(58,069)


707,825


238,414



Interest expense, net

32,524


19,883


129,543


66,178



Income tax expense

366,217


239,141


932,873


719,641












Adjusted EBITDA

$1,771,313


$1,243,775


$5,377,393


$4,097,384














SOURCE Birner Dental Management Services, Inc.



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

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