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 | |
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(UNAUDITED) |
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|
| Quarters Ended |
| Years Ended |
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| December 31, |
| December 31, |
| |
|
| 2009 |
| 2010 |
| 2009 |
| 2010 |
| |
REVENUE: | $ 14,209,250 |
| $ 15,749,451 |
| $ 59,172,973 |
| $ 63,992,633 |
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DIRECT EXPENSES: |
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| 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 |
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| Contribution from dental offices | 1,892,050 |
| 1,256,939 |
| 8,435,538 |
| 7,579,610 |
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CORPORATE EXPENSES: |
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|
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| 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 |
| |
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OPERATING INCOME | 792,372 |
| 315,969 |
| 4,057,404 |
| 3,133,782 |
| |
| Interest expense (income), net | 56,184 |
| 25,627 |
| 175,938 |
| 155,170 |
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INCOME FROM CONTINUING OPERATIONS |
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| 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 |
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DISCONTINUED OPERATIONS (Note 13): |
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| 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 |
| |
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|
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LOSS ON DISCONTINUED OPERATIONS | (94,298) |
| - |
| (356,386) |
| (304,490) |
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NET INCOME | $ 362,897 |
| $ 206,544 |
| $ 1,925,066 |
| $ 1,443,219 |
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Net income per share of Common Stock - Basic |
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|
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|
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| 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 |
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Net income per share of Common Stock - Diluted |
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| 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 |
| |
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Cash dividends per share of Common Stock | $ 0.17 |
| $ 0.20 |
| $ 0.68 |
| $ 0.80 |
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Weighted average number of shares of |
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| Common Stock and dilutive securities: |
|
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|
|
|
|
|
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| Basic | 1,865,204 |
| 1,849,842 |
| 1,863,596 |
| 1,857,084 |
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|
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| Diluted | 1,893,125 |
| 1,909,600 |
| 1,895,441 |
| 1,915,148 |
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(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. | |
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES | |
CONSOLIDATED BALANCE SHEETS | |
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| December 31, | |
ASSETS | 2009 |
| 2010 | |
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CURRENT ASSETS: |
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| Cash and cash equivalents | $ 779,622 |
| $ 406,208 | |
| Accounts receivable, net of allowance for doubtful |
|
|
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| 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 | |
|
|
|
|
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| Total current assets | 4,532,174 |
| 5,077,208 | |
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| PROPERTY AND EQUIPMENT, net | 3,532,011 |
| 5,123,934 | |
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OTHER NONCURRENT ASSETS: |
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| |
| Intangible assets, net | 12,842,285 |
| 11,941,931 | |
| Deferred charges and other assets | 153,734 |
| 155,674 | |
| Notes receivable | 191,557 |
| 167,420 | |
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|
|
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| Total assets | $ 21,251,761 |
| $ 22,466,167 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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|
| |
| 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 | |
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|
|
|
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| Total current liabilities | 6,633,991 |
| 7,277,482 | |
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LONG-TERM LIABILITIES: |
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|
| |
| 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 | |
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| Total liabilities | 13,634,446 |
| 14,544,474 | |
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COMMITMENTS AND CONTINGENCIES | |
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SHAREHOLDERS' EQUITY: |
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| 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 | |
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|
|
|
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| Total liabilities and shareholders' equity | $ 21,251,761 |
| $ 22,466,167 | |
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| | | | |
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.
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|
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| Quarters Ended |
| Years Ended | |
|
|
|
| December 31, |
| December 31, | |
|
|
|
| 2009 |
| 2010 |
| 2009 |
| 2010 | |
RECONCILIATION OF EBITDA: |
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|
|
|
|
|
| |
| Net income | $362,897 |
| $206,544 |
| $1,925,066 |
| $1,443,219 | |
| Add back: |
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|
|
|
|
|
| |
|
| Discontinued operations |
|
|
|
|
|
|
| |
|
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| (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 | |
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Adjusted EBITDA | $1,596,404 |
| $1,103,608 |
| $7,273,193 |
| $6,481,006 | |
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