Vca 8-K VCA Antech, Inc. Reports Second Quarter 2008 Results and Reaffirms its Financial Guidance for 2008

Exhibit 99.1

VCA Antech, Inc. Reports Second Quarter 2008 Results and Reaffirms its Financial Guidance for 2008

• Second quarter revenue increased 11.4% to $334.4 million
• Second quarter gross profit increased 7.9% to $97.0 million
• Second quarter net income increased 12.5% to $40.3 million
• Second quarter diluted earnings per share increased 11.9% to $0.47

LOS ANGELES--(BUSINESS WIRE)--VCA Antech, Inc. (NASDAQ: WOOF), a leading animal healthcare company in the United States, today reported financial results for the second quarter ended June 30, 2008, as follows: revenue increased 11.4% to a second quarter record of $334.4 million; gross profit increased 7.9% to $97.0 million; operating income increased 9.8% to $74.0 million; net income increased 12.5% to $40.3 million; and diluted earnings per share increased 11.9% to $0.47.

We also reported our financial results for the six months ended June 30, 2008, as follows: revenue increased 13.6% to a six-month record of $642.3 million; gross profit increased 8.6% to $180.0 million; operating income increased 10.1% to $134.1 million; net income was $71.5 million; and diluted earnings per share increased 10.7% to $0.83.

Bob Antin, Chairman and CEO, stated, “I am pleased with our company’s performance in the second quarter of 2008. In spite of the challenging economy and the difficulties being felt by the consumer, our team met those challenges and we continued our long record of revenue and earnings growth.

“Current economic conditions prevailing in the nation’s economy have had an adverse impact on our internal revenue growth rates. However, we have been able to counteract the effects of the general economy and continue to grow our bottom line results without compromising our high standard of animal healthcare by increasing our rate of acquisitions to drive revenue growth, and by implementing cost controls.

“In the second quarter, we acquired 15 animal hospitals with combined annual revenue of over $30 million. Year-to-date, we have acquired 36 animal hospitals with combined annual revenue of over $75 million. Historically we have targeted acquisition activity at approximately $50 million to $60 million of acquired revenue per year (excluding the acquisitions of any animal hospital chains).

“Laboratory revenue in the second quarter increased 3.3% to $81.8 million, driven primarily by internal revenue growth of 2.5%. Laboratory margins in the second quarter were essentially flat: our gross margin declined to 49.9% compared to 50.5% and our operating margin declined to 43.6% compared to 44.0%.

“Animal hospital revenue in the second quarter increased 14.9% to $251.0 million driven by acquisitions. While same-store revenue declined 0.2% during the quarter, our animal hospital margins in the second quarter remained essentially flat: same-store gross margin was 21.6% compared to 21.5%; gross margin was 21.0% compared to 21.2% and operating margin was 18.7% compared to 18.6%.”

We reaffirm our 2008 financial guidance as follows:

• Revenue from $1.30 billion to $1.33 billion;
• Diluted earnings per common share from $1.55 to $1.60.

Conference Call

We will discuss our company’s second quarter 2008 financial results during a conference call today, July 24, 2008 at 4:30 p.m. Eastern Time. You can access a live broadcast of the call by visiting our website at http://investor.vcaantech.com. You can also access the call via telephone by dialing (877) 440-5785. Interested parties should call at least 10 minutes prior to the start of the call to register.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may and likely will differ materially from the guidance provided in this release. Among the important factors that could cause actual results to differ are a material adverse change in our financial condition or operations; the impact of adverse trends in the general economy on the rate of our laboratory internal revenue growth and animal hospital same-store revenue growth; the level of direct costs and our ability to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of our recent acquisitions and our ability to effectively manage our growth and achieve operating synergies; a decline in demand for some of our products and services; any disruption in our information technology systems or transportation networks; the effects of competition; any impairment in the carrying value of our goodwill and other intangible assets; changes in prevailing interest rates; our ability to service our debt; and general economic conditions. These and other risk factors are discussed in our Report on Form 10-K for the year ended December 31, 2007, and our Report on Form 10-Q for the quarter ended March 31, 2008, and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements.

We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, and we supply diagnostic imaging equipment to the veterinary industry.

VCA Antech, Inc.
Consolidated Income Statements
(Unaudited - In thousands, except per share amounts)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenue:
Laboratory	$	81,840		$	79,210		$	158,569		$	152,807
Animal hospital		251,001			218,466			477,101			405,637
Medical technology		11,838			10,635			25,687			21,807
Intercompany		(10,245	)		(8,006	)		(19,091	)		(14,801	)
		334,434			300,305			642,266			565,450
Direct costs		237,468			210,427			462,269			399,652
Gross profit:
Laboratory		40,874			39,966			78,216			75,968
Animal hospital		52,620			46,301			93,757			81,881
Medical technology		4,222			3,785			9,135			8,096
Intercompany		(750	)		(174	)		(1,111	)		(147	)
		96,966			89,878			179,997			165,798
Selling, general and administrative expense:
Laboratory		5,185			5,046			10,136			10,013
Animal hospital		5,694			5,321			11,172			10,881
Medical technology		2,948			2,693			6,382			5,628
Corporate		8,982			8,983			18,297			16,994
		22,809			22,043			45,987			43,516
Write-down and loss (gain) on sale of assets		127			420			(57	)		542
Operating income		74,030			67,415			134,067			121,740
Interest expense, net		7,045			6,671			14,660			12,444
Other (income) expense		(213	)		172			(36	)		227
Minority interest		988			1,028			1,945			1,874
Income before provision for income taxes		66,210			59,544			117,498			107,195
Provision for income taxes		25,893			23,697			45,979			43,035
Net income	$	40,317		$	35,847		$	71,519		$	64,160
Diluted earnings per share	$	0.47		$	0.42		$	0.83		$	0.75
Shares used for computing diluted earnings per share		85,725			85,605			85,805			85,481

VCA Antech, Inc.
Consolidated Balance Sheets
(Unaudited - In thousands)
	June 30,			December 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	75,924		$	110,866
Trade accounts receivable, net		48,834			42,650
Inventory		25,527			25,517
Prepaid expenses and other		19,251			15,307
Deferred income taxes		14,907			14,402
Prepaid income taxes		-			8,160
Total current assets		184,443			216,902
Property and equipment, net		241,634			214,020
Other assets:
Goodwill		885,447			821,967
Other intangible assets, net		34,156			22,373
Deferred financing costs, net		1,304			1,537
Other		26,774			9,912
Total assets	$	1,373,758		$	1,286,711
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term obligations	$	7,810		$	7,886
Accounts payable		26,288			28,092
Accrued payroll and related liabilities		39,451			38,341
Income taxes payable		2,464			-
Other accrued liabilities		49,298			42,074
Total current liabilities		125,311			116,393
Long-term obligations, less current portion		548,686			552,294
Deferred income taxes		33,321			28,197
Other liabilities		9,208			11,236
Minority interest		12,403			10,207
Stockholders' equity:
Common stock		84			84
Additional paid-in capital		300,606			296,037
Accumulated earnings		347,117			275,598
Accumulated other comprehensive loss		(2,978	)		(3,335	)
Total stockholders' equity		644,829			568,384
Total liabilities and stockholders' equity	$	1,373,758		$	1,286,711

VCA Antech, Inc.
Consolidated Statements of Cash Flows
(Unaudited - In thousands)
	Six Months Ended
	June 30,
	2008			2007
Cash flows from operating activities:
Net income	$	71,519		$	64,160
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,325			12,740
Amortization of debt costs		233			137
Provision for uncollectible accounts		2,008			2,110
Write-down and (gain) loss on sale of assets		(57	)		542
Share-based compensation		3,322			2,300
Minority interest in income of subsidiaries		1,945			1,874
Distributions to minority interest partners		(1,456	)		(1,364	)
Deferred income taxes		5,431			3,025
Excess tax benefit from exercise of stock options		(355	)		(2,680	)
Other		(150	)		(173	)
Changes in operating assets and liabilities:
Accounts receivable		(8,004	)		(5,244	)
Inventory, prepaid expenses and other assets		(4,519	)		45
Accounts payable and other accrued liabilities		2,307			(173	)
Accrued payroll and related liabilities		1,465			1,105
Income taxes		10,979			15,789
Net cash provided by operating activities		99,993			94,193
Cash flows from investing activities:
Business acquisitions, net of cash acquired		(80,367	)		(203,322	)
Real estate acquired in connection with business acquisitions		(13,098	)		(7,962	)
Property and equipment additions		(25,543	)		(27,236	)
Proceeds from sale of assets		1,753			1,564
Other		(14,987	)		(256	)
Net cash used in investing activities		(132,242	)		(237,212	)
Cash flows from financing activities:
Repayment of long-term obligations		(3,925	)		(4,224	)
Proceeds from issuance of long-term obligations		-			160,000
Payment of financing costs		-			(794	)
Proceeds from issuance of common stock under stock option plans		892			2,360
Excess tax benefit from exercise of stock options		355			2,680
Net cash (used in) provided by financing activities		(2,678	)		160,022
Effect of currency exchange rate changes on cash and cash equivalents		(15	)		-
(Decrease) increase in cash and cash equivalents		(34,942	)		17,003
Cash and cash equivalents at beginning of period		110,866			45,104
Cash and cash equivalents at end of period	$	75,924		$	62,107

VCA Antech, Inc.
Supplemental Operating Data
(Unaudited - In thousands)
							As of
Table #1							June 30,			December 31,
Selected consolidated balance sheet data							2008			2007
Debt:
Revolving credit facility							$	-		$	-
Senior term notes								524,979			527,675
Other debt and capital leases								31,517			32,505
Total debt							$	556,496		$	560,180
	Three Months Ended						Six Months Ended
Table #2	June 30,						June 30,
Selected expense data	2008			2007			2008			2007
Rent expense	$	10,271		$	9,106		$	20,479		$	17,531
Depreciation and amortization included in direct costs:
Laboratory	$	1,793		$	1,578		$	3,425		$	2,916
Animal hospital		5,439			4,342			10,222			8,157
Medical technology		313			299			620			592
Intercompany		(139	)		(92	)		(262	)		(181	)
		7,406			6,127			14,005			11,484
Depreciation and amortization included in selling, general and administrative expense		656			682			1,320			1,256
Total depreciation and amortization	$	8,062		$	6,809		$	15,325		$	12,740
Share-based compensation included in direct costs:
Laboratory	$	219		$	158		$	392		$	341
Share-based compensation included in selling, general and administrative expense:
Laboratory		303			175			505			372
Animal hospital		456			283			789			607
Medical technology		54			26			87			54
Corporate		981			441			1,549			926
		1,794			925			2,930			1,959
Total share-based compensation	$	2,013		$	1,083		$	3,322		$	2,300

CONTACT:
VCA Antech, Inc.
Tomas Fuller, Chief Financial Officer, 310-571-6505