2014

Birner Dental Management Services, Inc. Announces Earnings for Year Ended and Fourth Quarter 2011

DENVER, March 30, 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 year and quarter ended December 31, 2011.  For the year ended December 31, 2011, revenue decreased $872,000, or 1.4%, to $63.1 million. The Company's earnings before interest, taxes, depreciation, amortization, non-cash expense associated with stock-based compensation and discontinued operations ("Adjusted EBITDA") decreased $1.6 million, or 24.5%, to $4.9 million.  Net income for the year ended December 31, 2011 increased $172,000, or 11.9%, to $1.6 million compared to $1.4 million for the same period of 2010.  Earnings per share increased 12.2%, to $0.85 for the year ended December 31, 2011 compared to $0.75 for the year ended December 31, 2010.  

The year ended December 31, 2011 was impacted by the remeasurement and subsequent write down of contingent liabilities by $830,000, which was recognized as other income.  The year ended December 31, 2010 was impacted by a loss from discontinued operations of $304,000, or $0.16 per share, net of tax benefit.

For the quarter ended December 31, 2011, revenue decreased $1.6 million, or 10.2%, to $14.1 million.  The Company's Adjusted EBITDA decreased $306,000, or 27.7%, to $798,000 for the quarter ended December 31, 2011 compared to $1.1 million for the quarter ended December 31, 2010.  Net income for the quarter ended December 31, 2011 increased $283,000, or 137.1%, to $490,000 compared to $207,000 for the same period of 2010.  Earnings per share increased 139.2%, to $0.26 for the quarter ended December 31, 2011 compared to $0.11 for the quarter ended December 31, 2010.  The quarter ended December 31, 2011 was impacted by the remeasurement and subsequent write down of contingent liabilities by $830,000, which was recognized as other income.    

During 2011, the Company had capital expenditures of $2.4 million, repurchased 28,426 shares of its Common Stock for approximately $479,000 and paid out approximately $1.6 million in dividends to its shareholders while decreasing total bank debt outstanding by approximately $186,000.  On March 26, 2012, the Company's Board of Directors approved up to $1,000,000 of stock repurchases.  Common Stock repurchases may be made from time to time as the Company's management deems appropriate.  

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 year and quarter ended December 31, 2011 on Friday, March 30, 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 1-888-466-4587 and refer to Confirmation Code 2104558 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on March 30, the rebroadcast number is 1-888-203-1112 with the pass code of 2104558.  This rebroadcast will be available through April 13, 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 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


Years Ended




December 31,


December 31,




2010


2011


2010


2011












REVENUE:

$ 15,749,451


$ 14,136,136


$ 63,992,633


$ 63,120,607












DIRECT EXPENSES:










Clinical salaries and benefits

8,815,502


7,930,224


36,261,034


35,647,158



Dental supplies

803,338


584,411


2,778,532


2,742,398



Laboratory fees

741,106


674,796


2,817,198


2,863,431



Occupancy

1,327,481


1,330,005


5,235,709


5,390,982



Advertising and marketing

633,581


722,895


1,341,002


2,666,930



Depreciation and amortization

644,158


644,978


2,432,427


2,505,957



General and administrative

1,527,346


1,307,106


5,547,121


5,705,741




14,492,512


13,194,415


56,413,023


57,522,597













Contribution from dental offices

1,256,939


941,721


7,579,610


5,598,010












CORPORATE EXPENSES:










General and administrative

925,399

(1)

885,776

(1)

4,366,767

(2)

3,544,074

(2)


Depreciation and amortization

15,571


35,639


79,061


122,217












OPERATING INCOME

315,969


20,306


3,133,782


1,931,719












OTHER INCOME (EXPENSE)










Change in fair value of contingent liabilities

-


830,000


-


830,000



Interest (expense), net

(25,627)


(14,742)


(155,170)


(80,920)












INCOME FROM CONTINUING OPERATIONS










  BEFORE INCOME TAXES

290,342


835,564


2,978,612


2,680,799



Income tax expense

83,798


345,831


1,230,903


1,065,472












INCOME FROM CONTINUING OPERATIONS

206,544


489,733


1,747,709


1,615,327












DISCONTINUED OPERATIONS (Note 13):










Operating (loss) attributable to assets disposed of

-


-


(250,125)


-



(Loss) recognized on dispositions

-


-


(268,598)


-



Income tax benefit

-


-


214,233


-












LOSS ON DISCONTINUED OPERATIONS

-


-


(304,490)


-












NET INCOME

$      206,544


$      489,733


$   1,443,219


$   1,615,327












Net income per share of Common Stock - Basic










Continuing Operations

$            0.11


$            0.27


$            0.94


$            0.87



Discontinued Operations

-


-


(0.16)


-


Net income per share of Common Stock - Basic

$            0.11


$            0.27


$            0.78


$            0.87












Net income per share of Common Stock - Diluted










Continuing Operations

$            0.11


$            0.26


$            0.91


$            0.85



Discontinued Operations

-


-


(0.16)


-


Net income per share of Common Stock - Diluted

$            0.11


$            0.26


$            0.75


$            0.85












Cash dividends per share of Common Stock

$            0.20


$            0.22


$            0.80


$            0.86












Weighted average number of shares of









Common Stock and dilutive securities:










Basic

1,849,842


1,845,366


1,857,084


1,853,307













Diluted

1,909,600


1,892,775


1,915,148


1,909,760












(1)

Corporate expense - general and administrative includes $131,034 of stock-based compensation expense pursuant to ASC Topic 718 and ($3,124) related to a long-term incentive program for the quarter ended December 31, 2010 and $96,661 of stock-based compensation expense pursuant to ASC Topic 718 and $0 related to a long-term incentive program for the quarter ended December 31, 2011.

(2)

Corporate expense - general and administrative includes $585,816 of stock-based compensation expense pursuant to ASC Topic 718 and $249,920 related to a long-term incentive program for the year ended December 31, 2010 and $335,076 of stock-based compensation expense pursuant to ASC Topic 718 and $0 related to a long-term incentive program for the year ended December 31, 2011.



BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS








December 31,


December 31,

ASSETS

2010


2011






CURRENT ASSETS:





Cash and cash equivalents

$             406,208


$             923,878


Accounts receivable, net of allowance for doubtful





accounts of $315,333 and $301,945, respectively

3,429,373


2,855,726


Deferred tax asset

207,530


197,327


Income tax receivable

435,800


-


Prepaid expenses and other assets

598,297


639,116







Total current assets

5,077,208


4,616,047






PROPERTY AND EQUIPMENT, net

5,123,934


5,789,521






OTHER NONCURRENT ASSETS:





Intangible assets, net

11,941,931


11,095,926


Deferred charges and other assets

155,674


165,267


Notes receivable

167,420


155,419







Total assets

$        22,466,167


$        21,822,180






LIABILITIES AND SHAREHOLDERS’ EQUITY









CURRENT LIABILITIES:





Accounts payable

$          2,163,082


$          2,111,155


Accrued expenses

2,410,689


1,973,593


Accrued payroll and related expenses

1,945,020


1,731,273


Income taxes payable

18,484


115,038


Current maturities of long-term debt

690,000


-


Liabilities related to discontinued operations

50,207


-







Total current liabilities

7,277,482


5,931,059






LONG-TERM LIABILITIES:





Deferred tax liability, net

1,265,436


2,309,279


Long-term debt, net of current maturities

3,747,017


4,251,068


Other long-term obligations

2,254,539


1,504,684







Total liabilities

14,544,474


13,996,090






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 1,837,519 shares issued and outstanding, respectively

493,638


368,186


Retained earnings

7,433,205


7,457,904


Accumulated other comprehensive loss

(5,150)


-







Total shareholders' equity

7,921,693


7,826,090







Total liabilities and shareholders' equity

$        22,466,167


$        21,822,180






**  Derived from the Company’s audited consolidated balance sheet at December 31, 2011.



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 and subtracting change in fair value of contingent liabilities as in the table below.





Quarters Ended


Years Ended





December 31,


December 31,





2010


2011


2010


2011

RECONCILIATION OF ADJUSTED EBITDA:









Net income

$206,544


$489,733


$1,443,219


$1,615,327


Add back:










Discontinued operations











(before income tax expense)

-


-


518,723


-



Depreciation and amortization - Offices

644,158


644,978


2,432,427


2,505,957



Depreciation and amortization - Corporate

15,571


35,639


79,061


122,217



Stock-based compensation expense

127,910


96,661


835,736


335,076



Interest expense, net

25,627


14,742


155,170


80,920



Income tax expense

83,798


345,831


1,016,670


1,065,472


Less:











Change in fair value of contingent liabilities

-


(830,000)


-


(830,000)












Adjusted EBITDA

$1,103,608


$797,584


$6,481,006


$4,894,969



SOURCE Birner Dental Management Services, Inc.



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

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