Birner Dental Management Services, Inc. Announces Results For 2Q 2015

Aug 14, 2015, 08:30 ET from Birner Dental Management Services, Inc.

DENVER, Aug. 14, 2015 /PRNewswire/ --  Birner Dental Management Services, Inc. (NASDAQ Capital Market: BDMS), business services provider of PERFECT TEETH® dental practices, announced results for the quarter and six months ended June 30, 2015.  For the quarter ended June 30, 2015, revenue decreased $522,000, or 3.1%, to $16.4 million.  The Company's earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense ("Adjusted EBITDA") increased $32,000, or  2.9%, to $1.1 million for the quarter ended June 30, 2015.  Net loss for the quarter ended June 30, 2015 decreased $2,000, or 3.0%, to $(57,000) compared to $(59,000) for the quarter ended June 30, 2014.  Net loss per share remained constant at $(0.03) for the quarters ended June 30, 2015 and 2014.

For the six months ended June 30, 2015, revenue decreased $741,000, or 2.2%, to $32.9 million.  The Company's Adjusted EBITDA remained constant at approximately $2.3 million for the six months ended June 30, 2015.  Net loss for the six months ended June 30, 2015 increased $93,000 to $(103,000) compared to $(10,000) for the six months ended June 30, 2014.  Net loss per share increased to $(0.06) for the six months ended June 30, 2015 compared to $(0.01) for the six months ended June 30, 2014.

Since the beginning of the fourth quarter of 2012, the Company has opened six de novo offices: in Tucson, Arizona and in Erie, Colorado in the fourth quarter of 2012; in Loveland, Colorado in July 2013; in Monument, Colorado in December 2013; in Fort Collins, Colorado in May 2014; and in Scottsdale, Arizona in October 2014.  The Company has leased space for two additional de novo offices: in Albuquerque, New Mexico, which is expected to open in September 2015, and Commerce City, Colorado, which is anticipated to open in the fourth quarter of 2015. 

During the three months ended June 30, 2015, the Company reduced bank debt by $865,000, made capital expenditures of $470,000 and paid $409,000 in dividends to its shareholders.  For the six months ended June 30, 2015, the Company paid approximately $818,000 in dividends to its shareholders, had capital expenditures of approximately $657,000 and decreased total bank debt outstanding by approximately $478,000

Fred Birner, Chief Executive Officer of the Company, stated "In the second quarter of 2015, we began seeing the financial benefits of our lower cost structure and the cash generating ability of the business with the substantial decrease in our outstanding debt.  If we start seeing upward movement on the revenue side, we believe the effect on Adjusted EBITDA should be robust."

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 67 dental offices, of which 36 were acquired and 31 were de novo developments.  The Company currently has 105 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, 2015 on Friday, August 14, 2015 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 1-888-428-9490 and refer to Confirmation Code 3870785 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on August 14, 2015, the rebroadcast number is 1-888-203-1112 with the pass code of 3870785.  This rebroadcast will be available through August 27, 2015.

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 loss.

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, capital investments, revenue, Adjusted EBITDA 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 OPERATIONS


(UNAUDITED)




Quarters Ended


Six Months Ended




June 30,


June 30,




2014


2015


2014


2015


REVENUE:










Dental practice revenue

$  15,571,178


$  15,170,913


$  31,043,913


$  30,559,888



Capitation revenue

1,305,345


1,183,716


2,639,008


2,382,266




16,876,523


16,354,629


33,682,921


32,942,154












DIRECT EXPENSES:










Clinical salaries and benefits

9,934,075


9,718,810


19,827,441


19,663,626



Dental supplies

761,999


753,716


1,453,692


1,499,200



Laboratory fees

892,775


854,796


1,696,778


1,665,173



Occupancy

1,459,529


1,437,852


2,917,923


2,912,525



Advertising and marketing

239,324


220,017


469,249


380,905



Depreciation and amortization

1,026,816


1,084,479


1,994,079


2,194,350



General and administrative

1,395,000


1,318,264


2,824,904


2,576,029




15,709,518


15,387,934


31,184,066


30,891,808













Contribution from dental offices

1,167,005


966,695


2,498,855


2,050,346












CORPORATE EXPENSES:










General and administrative 

1,179,881

(1)

982,334

(1)

2,349,025

(2)

2,057,340

(2)


Depreciation and amortization

56,655


56,573


111,294


111,908












OPERATING INCOME/(LOSS)

(69,531)


(72,212)


38,536


(118,902)



Interest expense, net

27,584


22,040


54,778


50,557












LOSS BEFORE INCOME TAXES

(97,115)


(94,252)


(16,242)


(169,459)



Income tax benefit

(37,874)


(36,759)


(6,334)


(66,089)












NET LOSS

$       (59,241)


$       (57,493)


$         (9,908)


$     (103,370)













Net loss per share of Common Stock - Basic

$           (0.03)


$           (0.03)


$           (0.01)


$           (0.06)













Net loss per share of Common Stock - Diluted

$           (0.03)


$           (0.03)


$           (0.01)


$           (0.06)













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

1,860,089


1,859,689


1,857,288


1,859,689













Diluted

1,860,089


1,859,689


1,857,288


1,859,689




(1)

Corporate expense - general and administrative includes $69,606 and $46,491 of stock-based compensation expense pursuant to ASC Topic 718 for the quarters ended June 30, 2014 and 2015, respectively.

(2)

Corporate expense - general and administrative includes $170,035 and $127,264 of stock-based compensation expense pursuant to ASC Topic 718 for the six months ended June 30, 2014 and 2015, respectively. 

 

BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



December 31, 


June 30,

ASSETS

2014


2015

CURRENT ASSETS:





Cash and cash equivalents

$        310,229


$        428,460


Accounts receivable, net of allowance for doubtful





accounts of approximately $420,000 and $390,000, respectively

3,185,136


3,464,695


Notes receivable

34,195


34,195


Deferred tax asset

614,944


479,507


Prepaid expenses and other assets

520,187


636,447







Total current assets

4,664,691


5,043,304






PROPERTY AND EQUIPMENT, net

11,258,025


10,031,613






OTHER NONCURRENT ASSETS:





Intangible assets, net

8,410,535


7,987,930


Deferred charges and other assets

160,853


158,403


Notes receivable

82,929


69,174







Total assets

$   24,577,033


$   23,290,424






LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:





Accounts payable 

$     2,912,162


$     3,007,602


Accrued expenses

1,557,811


1,484,502


Accrued payroll and related expenses

2,511,953


2,774,311


Income taxes payable

6,638


266,281







Total current liabilities

6,988,564


7,532,696






LONG-TERM LIABILITIES:





Deferred tax liability, net

2,951,321


2,415,002


Long-term debt

9,833,453


9,355,474


Other long-term obligations

1,046,633


1,024,559







Total liabilities

20,819,971


20,327,731






SHAREHOLDERS' EQUITY:





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





authorized; none outstanding

-


-


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





1,859,689 shares issued and outstanding

1,214,056


1,341,320


Retained earnings

2,543,006


1,621,373







Total shareholders' equity

3,757,062


2,962,693







Total liabilities and shareholders' equity

$   24,577,033


$   23,290,424

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 loss 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 benefit to net loss as in the table below.

 





Quarters


Six Months





Ended June 30,


Ended June 30,





2014


2015


2014


2015

RECONCILIATION OF ADJUSTED EBITDA:









Net loss

($59,241)


($57,493)


($9,908)


($103,370)


Add back:










Depreciation and amortization - Offices

1,026,816


1,084,479


1,994,079


2,194,350



Depreciation and amortization - Corporate

56,655


56,573


111,294


111,908



Stock-based compensation expense

69,606


46,491


170,035


127,264



Interest expense, net

27,584


22,040


54,778


50,557



Income tax benefit

(37,874)


(36,759)


(6,334)


(66,089)












Adjusted EBITDA

$1,083,546


$1,115,331


$2,313,944


$2,314,620

 

SOURCE Birner Dental Management Services, Inc.



RELATED LINKS

http://www.bdms-perfectteeth.com