DENVER, Nov. 12 /PRNewswire-FirstCall/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETH dental practices, announced results for the quarter and nine months ended September 30, 2009. For the quarter ended September 30, 2009, total dental group practice revenue decreased $285,000 or 1.9% to $14.7 million. Net revenue decreased $268,000, or 3.1%, to $8.5 million. The Company's earnings before interest, taxes, depreciation, amortization and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") decreased $244,000, or 13.6%, to $1.5 million from $1.8 million. Net income for the quarter ended September 30, 2009 decreased $135,000, or 26.9%, to $366,000. Earnings per share decreased 21.9%, to $.19 for the quarter ended September 30, 2009 compared to $.24 for the quarter ended September 30, 2008.
For the nine months ended September 30, 2009, total dental group practice revenue increased $102,000, or 0.2%, to $45.2 million. Net revenue decreased $81,000, or 0.3%, to $26.4 million. The Company's Adjusted EBITDA increased $134,000, or 2.6%, to $5.4 million. Net income for the nine months ended September 30, 2009 increased $94,000, or 6.4%, to $1.6 million compared to $1.5 million for the same period of 2008. Earnings per share increased 20.2%, to $.82 for the nine months ended September 30, 2009 compared to $.69 for the nine months ended September 30, 2008.
The decrease in net revenue of $268,000 in the quarter ended September 30, 2009 consisted of a decrease in same store net revenue from general dentistry of $326,000 offset by an increase in same store net revenue from specialty dentistry of $58,000. The decrease in net revenue of $81,000 in the nine months ended September 30, 2009 consisted of a decrease in same store net revenue from general dentistry of $482,000 offset by an increase in same store net revenue from specialty dentistry of $267,000 along with a de novo office the Company opened in May 2008 generating an additional $134,000 in net revenue. The Company attributes the decrease in net revenue for the quarter and nine months ended September 30, 2009 compared to the quarter and nine months ended September 30, 2008, to a general weakness in the economy in its markets.
During the second quarter of 2009, the Company signed a new lease for a de novo office in the Albuquerque, New Mexico market. The Company expects this office to open in the first quarter of 2010.
As previously reported, the Company has entered the Tucson, Arizona market with the acquisition of assets of two dental practices that had 2008 patient revenue totaling $3.7 million. One dental practice acquisition closed in late September, 2009 while the other closed in late October, 2009. Total purchase price for these two dental practice acquisitions was $1.1 million.
During the first nine months of 2009, the Company had capital expenditures of $909,000, purchased 47,096 shares of its Common Stock for approximately $706,000, paid $950,000 in dividends to its shareholders and decreased total bank debt outstanding by $2.8 million.
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 63 dental offices, of which 37 were acquired and 26 were de novo developments. Currently, the Company has 121 general and specialty dentists affiliated with the organization. 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 and nine months ended September 30, 2009 on Thursday, November 12, 2009 at 9:00 a.m. MT. In addition to current financial and operating results, the teleconference may include discussion of management's expectation of future financial and operating results. To participate in this conference call, dial in to 1-866-253-6509 and refer to "Birner Dental Management Services, Inc." approximately five minutes prior to the scheduled time. If you are unable to join in on the conference call on November 12, the rebroadcast number is 1-888-266-2081 with the pass code of 1409015. This rebroadcast will be available through November 26, 2009.
Non-GAAP Disclosures
This press release includes certain non-GAAP financial measures with respect to total dental group practice revenue and Adjusted EBITDA. The non-GAAP financial measures 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 total dental group practice revenue and 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 cash flow, growth prospects, prospects for the Tucson, Arizona market and the acquired practices, performance in 2009 and other future periods and the current economic environment. These statements involve known and unknown risks, uncertainties and other factors which may cause our 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,
------------- -------------
2008 2009 2008 2009
---- ---- ---- ----
NET
REVENUE: $8,763,895(1) $8,496,084(1) $26,504,119(2) $26,423,323(2)
DIRECT
EXPENSES:
Clinical
salaries and
benefits 2,351,310 2,376,929 7,510,984 7,374,481
Dental
supplies 627,377 580,022 1,845,599 1,703,935
Laboratory
fees 693,809 651,501 2,085,682 1,973,718
Occupancy 1,213,074 1,235,905 3,601,979 3,669,972
Advertising
and marketing 105,227 138,870 331,775 322,631
Depreciation
and
amortization 623,199 601,545 1,826,232 1,831,537
General and
administrative 1,192,403 1,160,913 3,629,391 3,456,683
--------- --------- --------- ---------
6,806,399 6,745,685 20,831,642 20,332,957
--------- --------- ---------- ----------
Contribution
from dental
offices 1,957,496 1,750,399 5,672,477 6,090,366
CORPORATE
EXPENSES:
General and
administrative 975,006(3) 1,049,806(3) 2,805,315(4) 3,212,726(4)
Depreciation
and
amortization 25,519 21,170 72,173 65,720
------ ------ ------ ------
Operating
income 956,971 679,423 2,794,989 2,811,920
Interest
expense, net 63,819 49,160 199,817 118,513
------ ------ ------- -------
Income before
income taxes 893,152 630,263 2,595,172 2,693,407
Income tax
expense 393,005 264,713 1,127,270 1,131,231
------- ------- --------- ---------
Net income $500,147 $365,550 $1,467,902 $1,562,176
======== ======== ========== ==========
Net income
per share
of Common
Stock -
Basic $0.25 $0.20 $0.71 $0.84
===== ===== ===== =====
Net income
per share
of Common
Stock -
Diluted $0.24 $0.19 $0.69 $0.82
===== ===== ===== =====
Cash dividends
per share
of Common Stock $0.17 $0.17 $0.51 $0.51
===== ===== ===== =====
Weighted average
number of
shares of
Common Stock
and dilutive
securities:
Basic 1,992,821 1,872,924 2,070,157 1,863,054
========= ========= ========= =========
Diluted 2,045,245 1,914,748 2,141,674 1,896,252
========= ========= ========= =========
(1) Total dental group practice revenue less amounts retained by dental
offices. Dental group practice revenue was $14,976,112 for the
quarter ended September 30, 2008, and $14,690,693 for the quarter
ended September 30, 2009.
(2) Total dental group practice revenue less amounts retained by dental
offices. Dental group practice revenue was $45,146,842 for the nine
months ended September 30, 2008, and $45,248,436 for the nine months
ended September 30, 2009.
(3) Corporate expense - general and administrative includes $186,306
related to stock-based compensation expense in the quarter ended
September 30, 2008, and $245,485 related to total stock-based
compensation expense in the quarter ended September 30, 2009, of
which $163,693 related to ASC Topic 718 expense (stock option
expense) and $81,792 related to a long term incentive program.
(4) Corporate expense - general and administrative includes $544,337
related to stock-based compensation expense in the nine months ended
September 30, 2008, and $662,370 related to total stock-based
compensation expense in the nine months ended September 30, 2009, of
which $498,786 related to ASC Topic 718 expense (stock option
expense) and $163,584 related to a long term incentive program.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, September 30,
ASSETS 2008 2009
---- ----
** (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $1,234,991 $884,845
Accounts receivable, net of allowance
for doubtful accounts of $290,688 and
$303,316, respectively 2,875,732 3,085,304
Deferred tax asset 195,091 305,183
Prepaid expenses and other assets 418,653 445,265
------- -------
Total current assets 4,724,467 4,720,597
PROPERTY AND EQUIPMENT, net 3,887,919 3,161,433
OTHER NONCURRENT ASSETS:
Intangible assets, net 10,621,918 10,360,067
Deferred charges and other assets 160,289 152,885
------- -------
Total assets $19,394,593 $18,394,982
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,551,851 $1,881,568
Accrued expenses 1,462,258 1,672,479
Accrued payroll and related expenses 1,714,550 2,045,286
Income taxes payable 371,569 290,009
Current maturities of long-term debt 920,000 920,000
------- -------
Total current liabilities 6,020,228 6,809,342
LONG-TERM LIABILITIES:
Deferred tax liability, net 618,913 614,114
Long-term debt, net of current maturities 5,988,202 3,217,683
Other long-term obligations 259,678 251,743
------- -------
Total liabilities 12,887,021 10,892,882
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value, 10,000,000
shares authorized; none outstanding - -
Common Stock, no par value, 20,000,000
shares authorized; 1,863,587 and
1,865,824 shares issued and outstanding,
respectively - 101,924
Treasury Stock purchased in excess of
Common Stock basis (266,786) -
Retained earnings 6,817,449 7,428,424
Accumulated other comprehensive loss (43,091) (28,248)
------- -------
Total shareholders' equity 6,507,572 7,502,100
--------- ---------
Total liabilities and shareholders'
equity $19,394,593 $18,394,982
=========== ===========
** Derived from the Company's audited consolidated balance sheet at
December 31, 2008.
Reconciliation of Total Dental Group Practice Revenue and Adjusted EBITDA
Total dental group practice revenue is the revenue generated at the Company's offices from professional services provided to its patients. Amounts retained by dental offices represent compensation expense to the dentists, dental hygienists and dental assistants and is subtracted from total dental group practice revenue to arrive at net revenue. The Company reports net revenue in its financial statements to comply with ASC Topic 810. Total dental group practice revenue is a non-GAAP measure that is disclosed because it is a critical component for management's evaluation of office performance. However, investors should not consider this measure 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 U.S. generally accepted accounting principles ("GAAP"). The table below reconciles total dental group practice revenue to net revenue.
Quarters Ended Nine Months Ended
September 30, September 30,
----------------- ------------------
2008 2009 2008 2009
---- ---- ---- ----
Total dental group
practice revenue $14,976,112 $14,690,693 $45,146,842 $45,248,436
Less - amounts
retained by dental
Offices (6,212,217) (6,194,609) (18,642,723) (18,825,113)
---------- ---------- ----------- -----------
Net revenue $8,763,895 $8,496,084 $26,504,119 $26,423,323
========== ========== =========== ===========
Adjusted EBITDA is not a 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 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,
----------------- ----------------
2008 2009 2008 2009
---- ---- ---- ----
RECONCILIATION OF ADJUSTED
EBITDA:
Net income $500,147 $365,550 $1,467,902 $1,562,176
Add back:
Depreciation and
amortization - Offices 623,199 601,545 1,826,232 1,831,537
Depreciation and
amortization -
Corporate 25,519 21,170 72,173 65,720
Stock-based compensation
expense 186,306 245,485 544,337 662,370
Interest expense, net 63,819 49,160 199,817 118,513
Income tax expense 393,005 264,713 1,127,270 1,131,231
------- ------- --------- ---------
Adjusted EBITDA $1,791,995 $1,547,623 $5,237,731 $5,371,547
========== ========== ========== ==========
SOURCE Birner Dental Management Services, Inc.
