Birner Dental Management Services, Inc. Announces Earnings For Year Ended And Fourth Quarter 2010

Mar 24, 2011, 08:30 ET from Birner Dental Management Services, Inc.

DENVER, March 24, 2011 /PRNewswire/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETH dental practices and Vantage Dental Implant Center, announced results for the year and quarter ended December 31, 2010. For the year ended December 31, 2010, revenue increased $4.8 million, or 8.1%, to $64.0 million. The Company's earnings before, interest, taxes, depreciation, amortization, non-cash expense associated with stock-based compensation and discontinued operations ("Adjusted EBITDA") decreased $792,000, or 10.9%, to $6.5 million. Net income for the year ended December 31, 2010 decreased $482,000, or 25.0%, to $1.4 million compared to $1.9 million for the same period of 2009. Earnings per share decreased 25.8%, to $0.75 for the year ended December 31, 2010 compared to $1.02 for the year ended December 31, 2009.

For the quarter ended December 31, 2010, revenue increased $1.5 million, or 10.8%, to $15.7 million. The Company's Adjusted EBITDA decreased $493,000, or 30.9%, to $1.1 million for the quarter ended December 31, 2010 compared to $1.6 million for the quarter ended December 31, 2009. Net income for the quarter ended December 31, 2010 decreased $156,000, or 43.1%, to $207,000. Earnings per share decreased 43.6%, to $.11 for the quarter ended December 31, 2010 compared to $.19 for the quarter ended December 31, 2009.

The increase in revenue of $4.8 million for the year ended December 31, 2010 was attributable to $4.3 million in additional revenue related to three offices acquired in the third and fourth quarters of 2009 and two de novo offices opened in the first and fourth quarters of 2010.  Same store revenue (based on 57 offices open during each full year) increased $481,000.  The increase in revenue of $1.5 million for the quarter ended December 31, 2010 was attributable to $832,000 in additional revenue related to two offices acquired in the fourth quarter of 2009 and two de novo offices opened in the first and fourth quarters of 2010.  Same store revenue (based on 58 offices open during each full quarter) increased $708,000, or 5.1%, primarily due to increased revenue related to a clinical quality improvement program initiated by the Company during 2010.

For the year ended December 31, 2010, advertising expenses increased $890,000 compared to the year ended December 31, 2009.  For the fourth quarter ended December 31, 2010, advertising expenses increased $497,000 compared to the fourth quarter ended December 31, 2009.

While the Company's Perfect Teeth dental offices generated strong financial results in the fourth quarter of 2010, the performance of Vantage Dental Implant Center negatively affected the Company's Adjusted EBITDA and earnings.  The Company anticipates this to continue into 2011.  

During 2010, the Company had capital expenditures of $3.4 million, purchased 39,805 shares of its Common Stock for approximately $676,000 and paid approximately $1.4 million in dividends to its shareholders. During 2010, bank debt decreased approximately $845,000, which reduced total debt outstanding to $4.4 million at December 31, 2010.  The Company continues to have strong operating cash flows and has maintained a conservative financial position.

The Company's board of directors has approved an increase in the Company's quarterly dividend to $.22 per share from $.20 per share.  This increase will be effective with the dividend payable in July 2011.

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 119 dentists.  The Company operates its dental offices under the PERFECT TEETH™ name. Birner Dental also operates one Vantage Dental Implant Center in Colorado.

The Company previously announced it would conduct a conference call to review results for the year and quarter ended December 31, 2010 on Thursday, March 24, 2011 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 1-888-312-9865 and refer to Confirmation Code 9726975 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on March 24, the rebroadcast number is 1-888-203-1112 with the pass code of 9726975. This rebroadcast will be available through April 7, 2011.

Non-GAAP Disclosures

This press release includes a non-GAAP financial measure with respect to Adjusted EBITDA.  The non-GAAP financial measure included in this press release may be different from, and therefore may not be comparable to, similar measures used by other companies.  Please see the last page of this release for more information on the reconciliation of Adjusted EBITDA to GAAP measures.

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 growth prospects and performance in 2010 and other future periods, implied future results as a result of the Company's training program to improve productivity of its dentists and hygienists and results at the Vantage Dental Implant Center opened in October 2010.  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


CONSOLIDATED STATEMENTS OF INCOME


(UNAUDITED)




Quarters Ended


Years Ended




December 31,


December 31,




2009


2010


2009


2010


REVENUE:

$    14,209,250


$    15,749,451


$    59,172,973


$    63,992,633












DIRECT EXPENSES:










Clinical salaries and benefits

8,014,142


8,815,502


33,886,996


36,261,034



Dental supplies

519,996


803,338


2,198,631


2,778,532



Laboratory fees

638,420


741,106


2,597,300


2,817,198



Occupancy

1,222,536


1,327,481


4,736,598


5,235,709



Advertising and marketing

136,959


633,581


450,797


1,341,002



Depreciation and amortization

542,905


644,158


2,226,571


2,432,427



General and administrative

1,242,242


1,527,346


4,640,542


5,547,121




12,317,200


14,492,512


50,737,435


56,413,023













Contribution from dental offices

1,892,050


1,256,939


8,435,538


7,579,610












CORPORATE EXPENSES:










General and administrative

1,078,590

(1)

925,399

(1)

4,291,325

(2)

4,366,767

(2)


Depreciation and amortization

21,088


15,571


86,809


79,061












OPERATING INCOME

792,372


315,969


4,057,404


3,133,782



Interest expense (income), net

56,184


25,627


175,938


155,170












INCOME FROM CONTINUING OPERATIONS










  BEFORE INCOME TAXES

736,188


290,342


3,881,466


2,978,612



Income tax expense

278,993


83,798


1,600,014


1,230,903


INCOME FROM CONTINUING OPERATIONS

457,195


206,544


2,281,452


1,747,709












DISCONTINUED OPERATIONS (Note 13):










Operating (loss) attributable to assets disposed of

(154,221)


-


(606,099)


(518,723)



(Loss) recognized on dispositions

-


-


-


-



Income tax benefit

59,923


-


249,713


214,233












LOSS ON DISCONTINUED OPERATIONS

(94,298)


-


(356,386)


(304,490)












NET INCOME

$         362,897


$         206,544


$      1,925,066


$      1,443,219












Net income per share of Common Stock - Basic










Continuing Operations

$               0.24


$               0.11


$               1.22


$               0.94



Discontinued Operations

(0.05)


-


(0.19)


(0.16)


Net income per share of Common Stock - Basic

$               0.19


$               0.11


$               1.03


$               0.78












Net income per share of Common Stock - Diluted










Continuing Operations

$               0.24


$               0.11


$               1.20


$               0.91



Discontinued Operations

(0.05)


-


(0.18)


(0.16)


Net income per share of Common Stock - Diluted

$               0.19


$               0.11


$               1.02


$               0.75












Cash dividends per share of Common Stock

$               0.17


$               0.20


$               0.68


$               0.80












Weighted average number of shares of










Common Stock and dilutive securities:










Basic

1,865,204


1,849,842


1,863,596


1,857,084













Diluted

1,893,125


1,909,600


1,895,441


1,915,148












(1)

Corporate expenses - general and administrative includes $158,248 of stock-based compensation expense pursuant to ASC Topic 718 and $81,792 related to a long-term incentive program for the quarter ended December 31, 2009; and $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.

(2)

Corporate expenses - general and administrative includes $657,033 of stock-based compensation expense pursuant to ASC Topic 718 and $245,376 related to a long-term incentive program for the year ended December 31, 2009; and $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.



BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS








December 31,

ASSETS

2009


2010






CURRENT ASSETS:





Cash and cash equivalents

$             779,622


$             406,208


Accounts receivable, net of allowance for doubtful





accounts of $371,762 and $315,333, respectively

3,124,160


3,429,373


Deferred tax asset

195,170


207,530


Income tax receivable

-


435,800


Prepaid expenses and other assets

433,222


598,297







Total current assets

4,532,174


5,077,208







PROPERTY AND EQUIPMENT, net

3,532,011


5,123,934






OTHER NONCURRENT ASSETS:





Intangible assets, net

12,842,285


11,941,931


Deferred charges and other assets

153,734


155,674


Notes receivable

191,557


167,420







Total assets

$        21,251,761


$        22,466,167






LIABILITIES AND SHAREHOLDERS’ EQUITY









CURRENT LIABILITIES:





Accounts payable

$          1,934,468


$          2,163,082


Accrued expenses

1,716,395


2,410,689


Accrued payroll and related expenses

1,795,968


1,945,020


Income taxes payable

267,160


18,484


Current maturities of long-term debt

920,000


690,000


Liabilities related to discontinued operations

-


50,207







Total current liabilities

6,633,991


7,277,482






LONG-TERM LIABILITIES:





Deferred tax liability, net

526,036


1,265,436


Long-term debt, net of current maturities

4,362,024


3,747,017


Other long-term obligations

2,112,395


2,254,539







Total liabilities

13,634,446


14,544,474






COMMITMENTS AND CONTINGENCIES






SHAREHOLDERS' EQUITY:





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





authorized; none outstanding

-


-


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





authorized; 1,858,135 and 1,850,716 shares issued and





outstanding, respectively

164,255


493,638


Treasury stock purchased in excess of Common Stock basis

-


-


Retained earnings

7,475,212


7,433,205


Accumulated other comprehensive loss

(22,152)


(5,150)







Total shareholders' equity

7,617,315


7,921,693







Total liabilities and shareholders' equity

$        21,251,761


$        22,466,167








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 Ended


Years Ended





December 31,


December 31,





2009


2010


2009


2010

RECONCILIATION OF EBITDA:









Net income

$362,897


$206,544


$1,925,066


$1,443,219


Add back:










Discontinued operations











(before income tax expense)

154,221


-


606,099


518,723



Depreciation and amortization - Offices

542,905


644,158


2,226,571


2,432,427



Depreciation and amortization - corporate

21,088


15,571


86,809


79,061



Stock-based compensation expense

240,039


127,910


902,409


835,736



Interest expense, net

56,184


25,627


175,938


155,170



Income tax expense

219,070


83,798


1,350,301


1,016,670












Adjusted EBITDA

$1,596,404


$1,103,608


$7,273,193


$6,481,006














SOURCE Birner Dental Management Services, Inc.



RELATED LINKS

http://www.bdms-perfectteeth.com