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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-23367
BIRNER DENTAL MANAGEMENT SERVICES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1307044
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3801 EAST FLORIDA AVENUE, SUITE 508
DENVER, COLORADO 80210
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(Address of principal executive offices) (Zip Code)
(303) 691-0680
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares Outstanding as of May 11, 1999
- -------------------------------- -------------------------------------
Common Stock, without par value 6,168,312
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
Page
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Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1999 (unaudited)
and December 31, 1998 3
Unaudited Condensed Consolidated Statements of Operations for the Quarters
Ended March 31, 1999 and 1998 4
Unaudited Condensed Statement of Shareholders' Equity 5
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1999 and 1998 6
Unaudited Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities and Use of Proceeds 19
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 20
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1999 1998
------------ -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,306,387 $ 2,169,687
Accounts receivable, net of allowance for doubtful accounts
of $396,619 and $ 296,911 at March 31, 1999 and
December 31, 1998, respectively 3,410,602 2,668,024
Current portion of notes receivable - related parties 37,607 28,746
Deferred income taxes 173,629 173,629
Income tax receivable 158,276 262,469
Prepaid expenses and other assets 741,807 345,858
----------- -----------
Total current assets 6,828,308 5,648,413
PROPERTY AND EQUIPMENT, net 6,062,769 5,613,021
OTHER NONCURRENT ASSETS:
Intangible assets, net 14,512,231 13,877,449
Deferred charges and other assets 703,815 404,476
----------- -----------
Total assets $28,107,123 $25,543,359
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 4,480,418 $ 3,042,534
Current maturities of long-term debt 185,892 276,331
Current maturities of capital lease obligations 15,906 20,996
----------- -----------
Total current liabilities 4,682,216 3,339,861
LONG TERM LIABILITIES:
Deferred income taxes 217,569 217,569
Long-term debt, net of current maturities 5,366,657 3,234,101
Capital lease obligations, net of current maturities 5,215 6,321
----------- -----------
Total liabilities 10,271,657 6,797,852
----------- -----------
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; 6,251,812 and 6,636,980, shares issued and
outstanding at March 31,1999 and December 31, 1998,
respectively 17,323,058 18,531,738
Retained earnings 512,408 213,769
----------- -----------
Total shareholders' equity 17,835,466 18,745,507
----------- -----------
Total liabilities and shareholders' equity $28,107,123 $25,543,359
=========== ===========
The accompanying notes are an integral part of these
condensed consolidated balance sheets.
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended
March 31,
-----------------------------
1999 1998
----------- -----------
NET REVENUE $ 7,022,728 $ 4,651,337
DIRECT EXPENSES:
Clinical salaries and benefits 2,597,108 1,763,771
Dental supplies 388,631 264,034
Laboratory fees 668,304 393,901
Occupancy 649,223 387,701
Advertising and marketing 81,837 77,712
Depreciation and amortization 404,256 216,743
General and administrative 635,518 410,087
----------- -----------
5,424,877 3,513,949
----------- -----------
Contribution from dental offices 1,597,851 1,137,388
Corporate expenses:
General and administrative 965,288 549,763
Depreciation and amortization 60,367 30,188
----------- -----------
Operating income 572,196 557,437
Interest expense, net (95,898) (102,385)
Conversion inducement expense - (305,100)
----------- -----------
Income before income taxes 476,298 149,952
Income tax expense (177,659) (47,984)
----------- -----------
Income before change in accounting principle 298,639 101,968
Cumulative effect of change in accounting principle - (39,162)
----------- -----------
Net income $ 298,639 $ 62,806
=========== ===========
Basic earnings per share of Common Stock:
Income before cumulative effect of change in
accounting principle $ .05 $ .02
Cumulative effect of change in accounting principle - (.01)
----------- -----------
Net income $ .05 $ .01
=========== ===========
Diluted earnings per share of Common Stock:
Income before cumulative effect of change in
accounting principle $ .05 $ .02
Cumulative effect of change in accounting principle - (.01)
----------- -----------
Net Income $ .05 $ .01
=========== ===========
Weighted average number of shares of Common stock and dilutive securities:
Basic 6,451,009 4,938,219
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Diluted 6,523,742 5,207,954
=========== ===========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
Common Stock
----------------------------- Retained Total Shareholders'
Shares Amount Earnings Equity
------------ ------------- ----------- -------------------
BALANCE, December 31, 1998 6,636,980 $ 18,531,738 $ 213,769 $ 18,745,507
Issuance of Common Stock for dental office
acquisition 12,632 35,000 - 35,000
Purchase and retirement of Common Stock (397,800) (1,243,680) - (1,243,680)
Net Income - - 298,639 298,639
--------- ------------ --------- ------------
BALANCE, March 31, 1999 6,251,812 $ 17,323,058 $ 512,408 $ 17,835,466
========= ============ ========= ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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Page 1 of 2
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
-------------------------------
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 298,639 $ 62,806
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 464,623 246,931
Provision for doubtful accounts (9,532) -
Amortization of debenture issuance costs - 13,671
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable (753,285) (133,108)
Prepaid expense, income tax receivable and other assets (529,705) 32,911
Accounts payable and accrued expenses 1,378,287 (408,635)
----------- -----------
Net cash provided by (used in) operating activities 849,027 (185,424)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Notes receivable - related parties - 3,833
Capital expenditures (385,169) (527,933)
Development of new dental offices (439,364) (110,427)
Acquisition of dental offices (680,035) (598,500)
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Net cash used in investing activities (1,504,568) (1,233,027)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering, net of underwriting discounts - 11,476,042
Payment of public offering costs - (1,116,361)
Net borrowings from line of credit 2,180,000 (350,000)
Repayment of long-term debt (144,079) (3,380,290)
Payment of debenture issuance and other financing cost - (27,927)
Purchase and retirement of Common Stock (1,243,680) -
----------- -----------
Net cash provided by financing activities 792,241 6,601,464
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 136,700 5,183,013
CASH AND CASH EQUIVALENTS, beginning of period 2,169,687 977,454
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,306,387 $ 6,160,467
=========== ===========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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Page 2 of 2
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
-------------------------------
1999 1998
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SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period for interest $ 62,800 $ 442,629
=========== ===========
Cash paid during the period for income taxes $ - $ -
=========== ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Common Stock issued for:
Conversion of debentures $ - $ 6,780,000
Acquisition of dental offices $ 35,000 $ 31,500
Liabilities assumed or incurred through acquisitions:
Accounts payable and accrued liabilities $ 59,596 $ 8,915
Accounts receivable net, acquired through acquisitions $ 40,000 $ 40,000
Other assets acquired through acquisitions $ 30,000 $ -
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1999
(1) UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures included herein are adequate to make
the information presented not misleading. A description of the Company's
accounting policies and other financial information is included in the audited
consolidated financial statements as filed with the Securities and Exchange
Commission in the Company's Form 10-K for the year ended December 31, 1998.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments necessary to present fairly the
financial position of the Company as of March 31, 1999 and the results of
operations and cash flows for the periods presented. All such adjustments are of
a normal recurring nature. The results of operations for the quarter ended March
31, 1999 are not necessarily indicative of the results that may be achieved for
a full fiscal year and cannot be used to indicate financial performance for the
entire year.
Certain prior years' amounts in the unaudited condensed consolidated financial
statements and related notes have been reclassified to conform to the
presentation used in 1999.
(2) EARNINGS PER SHARE
The Company calculates earnings per share in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 128 "Earnings Per Share".
Quarter Ended March 31,
------------------------------------------------------------------------------
1999 1998
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Per Share Per Share
Income Shares Amount Income Shares Amount
--------- --------- --------- --------- --------- ----------
Basic EPS:
Income before cumulative effect of
change in accounting principle $ 298,639 6,451,009 $.05 $ 101,968 4,938,219 $ .02
Cumulative effect of change
In accounting principle - - - (39,162) - (.01)
--------- --------- ---- --------- --------- ----
Net income $ 298,639 6,451,009 $.05 $ 62,806 4,938,219 $.01
========= ========= ==== ========= ========= ====
Diluted EPS:
Income before cumulative effect of
change in accounting principle $ 298,639 6,523,742 $.05 $ 101,968 5,207,954 $.02
Cumulative effect of change
In accounting principle - - - (39,162) - (.01)
--------- --------- ---- --------- --------- ----
Net income $ 298,639 6,523,742 $.05 $ 62,806 5,207,954 $.01
========= ========= ==== ========= ========= ====
The difference in weighted average shares outstanding between basic earnings per
share and diluted earnings per share for 1999 and 1998 relates to the effect of
72,733 and 269,735, respectively, of dilutive shares of Common Stock from stock
options and warrants which are included in total shares for the diluted
calculation.
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(3) INITIAL PUBLIC OFFERING
On February 11, 1998, the Company completed an initial offering of its Common
Stock to the public. The Company sold 1,833,816 shares with an additional
266,184 being sold by existing shareholders for a total of 2,100,000 shares
registered on the Nasdaq National Market under the trading symbol "BDMS". The
Company received net proceeds, after paying all offering costs, of approximately
$10.3 million. Approximately $2 million and $0.6 million of the net proceeds
were used to repay a bank term loan and revolving line of credit, respectively.
An additional $1.3 million was used to repay a note issued in connection with
the Gentle Dental Acquisition.
Conversion of Debentures
In connection with the offering, 1,633,142 shares of common stock were issued to
all debenture holders for the early conversion of the convertible subordinated
debentures maturing in May 2001 and December 2001. In order to induce the
conversion of these debentures, the Company paid six months of additional
interest of $305,100 along with accrued interest of $171,238. Upon conversion of
the debentures, the carrying amount of $6,780,000 was credited to shareholders'
equity, net of remaining deferred debenture issuance costs of approximately
$280,000.
Line of Credit
Under the Company's Credit Facility (as amended on December 31, 1998), during
its three-year term, the Company may borrow up to $20.0 million. Advances will
bear interest at the lender's base rate or at the applicable LIBOR rate plus
2.25%, at the Company's option, and the Company will be obligated to pay an
annual facility fee of .25% of the average unused amount of the line of credit
during the previous full calendar quarter. Borrowings are limited to an
availability formula based on the Company's adjusted EBITDA. The Credit Facility
is secured by a lien on the Company's accounts receivable and its Management
Agreements. The Credit Facility prohibits the payment of dividends and other
distributions to shareholders, restricts or prohibits the Company from incurring
indebtedness, incurring liens, disposing of assets, and requires the Company to
maintain certain financial ratios on an ongoing basis.
(4) ACQUISITIONS AND DE-NOVOS
On February 11, 1999, the Company acquired all of the assets of a Colorado sole
proprietorship (Glendale Dental Group) and obtained certain rights to manage the
practice for a total purchase price of approximately $760,000. The consideration
consisted of $665,000 payable in cash, $35,000 payable in Common Stock of the
Company and the assumption of certain obligations of approximately $60,000. On
March 27, 1999, the Company opened a de novo office in Colorado Springs,
Colorado.
(5) RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" that establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. As the Company holds no derivative instruments and does not
engage in hedging activities the adoption of SFAS No.
133 will have no impact to the Company.
(6) COSTS OF START-UP ACTIVITIES
The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants issued Statement of Position ("SOP") 98-5
"Reporting on the Costs of Start-Up Activities" in April 1998. This SOP provides
guidance on the reporting of start-up costs and organization costs and requires
the Company to expense these costs (as defined by the SOP) as they are incurred.
The Company adopted SOP 98-5, which is effective for fiscal years beginning
after December 15, 1998, in the first quarter of 1998. Initial application of
this SOP was reported as a cumulative effect of a change in accounting principle
in 1998, resulting in a $39,162 decrease in net income for 1998.
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(7) COMPREHENSIVE INCOME
The FASB issued SFAS No. 130 "Reporting Comprehensive Income" in June 1997 which
established standards for reporting and displaying comprehensive income and its
components in a full set of general purpose financial statements. In addition to
net income (loss), comprehensive income includes all changes in equity during a
period, except those resulting from investments by and distributions to owners.
The Company adopted SFAS 130, which is effective for fiscal years beginning
after December 15, 1997, in the first quarter of 1998. For the first quarter of
1999 and 1998 net income and comprehensive income were the same.
(8) REPORTABLE BUSINESS SEGMENTS
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" that establishes standards for reporting
information about operating segments in annual and interim financial statements.
SFAS 131 also establishes standards for related disclosures about products and
services, geographic areas and major customers. SFAS 131 is effective for fiscal
years beginning after December 15, 1997 and was adopted by the Company in 1998.
The Company operates in one business segment, which is to manage dental group
practices. The Company currently manages Offices in the states of Arizona,
Colorado and New Mexico. All aspects of the Company's business are structured on
a practice-by-practice basis. Financial analysis and operational decisions are
determined on a practice-by-practice basis, the Company does not evaluate
performance criteria based upon geographic location, type of service offered or
sources of revenue.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITON AND
RESULTS OF OPERATION
FORWARD-LOOKING STATEMENTS
The statements contained in this Form 10-Q ("Quarterly Report") of Birner Dental
Management Services, Inc. (the "Company") which are not historical in nature are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include
statements in this Item 2., "Management's Discussion and Analysis of Financial
Condition and Results of Operations," regarding intent, belief or current
expectations of the Company or its officers with respect to the development or
acquisition of additional dental practices ("Offices") and the successful
integration of such Offices into the Company's network, recruitment of
additional dentists, funding of the Company's expansion, capital expenditures,
payment or nonpayment of dividends and cash outlays for income taxes.
Such forward-looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from anticipated results. These
risks and uncertainties include regulatory constraints, changes in laws or
regulations concerning the practice of dentistry or dental practice management
companies, the availability of suitable new markets and suitable locations
within such markets, changes in the Company's operating or expansion strategy,
failure to consummate or successfully integrate proposed developments or
acquisitions of Offices, the ability of the Company to manage effectively an
increasing number of Offices, the general economy of the United States and the
specific markets in which the Company's Offices are located or are proposed to
be located, trends in the health care, dental care and managed care industries,
as well as the risk factors set forth in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations Risk Factors" section
of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (as filed with the Securities Exchange Commission on March 31, 1998),
the "Management's Discussion and Analysis of Financial Condition and Results of
Operations -Year 2000" of this Quarterly Report, and other factors as may be
identified from time to time in the Company's filings with the Securities and
Exchange Commission or in the Company's press releases.
YEAR 2000
The Year 2000 problem is the result of computer programs being written using two
digits (rather than four) to define the applicable year. Any programs that have
date-sensitive software or equipment that has time-sensitive embedded components
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations.
The Company is currently engaged in a comprehensive project to upgrade its
computer software to programs that will consistently and properly recognize the
Year 2000. The Company utilizes off-the-shelf or third party production software
and has recently purchased new hardware, software and software upgrades from
vendors who have represented that these systems are Year 2000 compliant. The
Company's expenditures and anticipated future expenditures for this remediation
are expected to be less than $100,000. In addition, the Company is in the
process of identifying non-information systems operation critical applications
that have date-sensitive software or equipment that has time-sensitive embedded
components. The Company expects to complete this assessment during the third
quarter of 1999.
The Company may also be vulnerable to other companies' Year 2000 issues. The
Company's current estimates of the impact of the Year 2000 problem on its
operations and financial results do not include costs and time that may be
incurred as a result of any vendors' or customers' failure to become Year 2000
compliant on a timely basis. The Company initiated formal communications with
all of its significant insurance payors and vendors during the third quarter of
1998 with respect to the status of their Year 2000 compliance programs and has
only begun to receive responses. There can be no assurance that these companies
will achieve Year 2000 compliance or that their conversions to become Year 2000
compliant will be compatible with the Company's systems. The inability of the
Company's significant vendors or insurance payors to become Year 2000 compliant
in a timely manner could have a material adverse effect on the Company's
financial condition or results of operations.
The Company presently anticipates that it will complete its Year 2000 assessment
by December 31, 1999. However there can be no assurance that the Company will be
successful in implementing its Year 2000 plan according to the
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anticipated schedule. In addition, the Company may be adversely affected by the
inability of other companies whose systems interact with the Company's to become
Year 2000 compliant.
Although the Company expects its internal systems will be Year 2000 compliant as
described above, the Company intends to prepare a contingency plan that will
specify what it plans to do if it or important external companies are not Year
2000 compliant in a timely manner. The Company expects to prepare its
contingency plan during fiscal 1999.
GENERAL
The following discussion relates to factors which have affected the results of
operations and financial condition of the Company for the quarters ended March
31, 1999 and 1998. This information should be read in conjunction with the
Company's Condensed Consolidated Financial Statements and related Notes thereto
included elsewhere in this Quarterly Report.
OVERVIEW
The Company was formed in May 1995, and as of March 31, 1999 managed 51 Offices
in Colorado, New Mexico and Arizona staffed by 65 full-time equivalent general
dentists and four and one half full-time equivalent specialists. The Company has
acquired 42 Offices (three of which were consolidated into existing Offices) and
opened 12 de novo Offices. Of the 42 acquired Offices, only three (the first
three practices, which were acquired from the Company's President, Mark Birner,
DDS) were acquired from affiliates of the Company. The Company derives all of
its revenue from its Management Agreements with professional corporations
("P.C.s") which employ or contract with the dentists and dental hygienists that
practice at that Office. In addition, the Company assumes a number of
responsibilities when it acquires a new practice or develops a de novo Office,
which are set forth in a Management Agreement, as described below. The Company
expects to expand in existing and new markets by acquiring solo and group dental
practices, by developing de novo Offices and by enhancing the operating
performance of its existing Offices. Generally, the Company seeks to acquire
dental practices for which the Company believes application of its dental
practice management model will improve operating performance.
The Company was formed with the intention of becoming the leading dental
practice management company in Colorado. The Company's growth and success in the
Colorado market led to its expansion into the New Mexico and Arizona markets as
well as to its evaluation of expansion into additional markets. The following
table sets forth the increase in the number of Offices owned and managed by the
Company during each of the periods indicated, including the number of de novo
Offices and acquired Offices in each such period.
1995(1) 1996(2) 1997 1998 1999(3)
------------- ------------- ------------ ------------ -----------
Offices at beginning of period 0 4 18 34 49
De novo Offices 0 5 1 5 1
Acquired Offices 4 9 15 10 1
============= ============= ============ ============ ===========
Offices at end of period 4 18 34 49 51
============= ============= ============ ============ ===========
(1) From October 1, 1995 through December 31, 1995. The Company was formed on
May 17, 1995, and had no substantial operations until October 1, 1995.
(2) For 1996, does not include three practices that were acquired and
consolidated with existing Offices.
(3) From January 1, 1999 through March 31, 1999.
The combined purchase amounts for the four Offices acquired in 1995, the 12
practices acquired in 1996, the 15 practices acquired in 1997, the 10 practices
acquired in 1998, and the practice acquired in the first three months of 1999
were $412,000, $4.3 million, $5.4 million, $6.0 million, and $760,000
respectively. The average investment by the Company in each of its twelve de
novo Offices has been approximately $180,000, which includes the cost of
equipment, leasehold improvements and working capital associated with the
Offices. The nine de novo Offices opened between January 1996 and June 1998
began generating positive contribution from dental offices, on average, within
four months of opening. The Company's three remaining de novo Offices, which
have been open an average of two months, have not generated positive
contribution from dental offices as of the date of this Quarterly Report.
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At March 31, 1999, the Company's total assets of $28.1 million included $14.5
million of identifiable intangible assets related to Management Agreements. At
that date, the Company had total shareholders' equity of $17.8 million and a
tangible net worth of $3.3 million. The Company reviews the recorded amount of
intangible assets and other fixed assets for impairment for each Office whenever
events or changes in circumstances indicate the carrying amount of the assets
may not be recoverable. If this review indicates that the carrying amount of the
assets may not be recoverable as determined based on the undiscounted cash flows
of each Office, whether acquired or developed, the carrying value of the asset
is reduced to fair value. Among the factors that the Company will continually
evaluate are unfavorable changes in each Office, relative market share and local
market competitive environment, current period and forecasted operating results,
cash flow levels of Offices and the impact on the net revenue earned by the
Company, and the legal and regulatory factors governing the practice of
dentistry.
COMPONENTS OF REVENUE AND EXPENSES
Total dental group practice revenue ("Revenue") represents the revenue of the
Offices reported at estimated realizable amounts, received from third-party
payors and patients for dental services rendered at the Offices. Net revenue
represents Revenue less amounts retained by the Offices. The amounts retained by
the Offices represent amounts paid as salary, benefits and other payments to
employed dentists and hygienists. The Company's net revenue is dependent on the
Revenue of the Offices. Direct expenses consist of the expenses incurred by the
Company in connection with managing the Offices, including salaries and benefits
(for personnel other than dentists and hygienists), dental supplies, dental
laboratory fees, occupancy costs, advertising and marketing, depreciation and
amortization and general and administrative (including office supplies,
equipment leases, management information systems and other expenses related to
dental practice operations). The Company also incurs personnel and
administrative expenses in connection with maintaining a corporate function that
provides management, administrative, marketing, development and professional
services to the Offices.
Under the Management Agreements, the Company manages the business and marketing
aspects of the Offices, including (i) providing capital, (ii) designing and
implementing marketing programs, (iii) negotiating for the purchase of supplies,
(iv) providing a patient scheduling system, (v) staffing, (vi) recruiting, (vii)
training of non-dental personnel, (viii) billing and collecting patient fees,
(ix) arranging for certain legal and accounting services, and (x) negotiating
with managed care organizations. The P.C. is responsible for, among other things
(i) employing and supervising all dentists and dental hygienists, (ii) complying
with all laws, rules and regulations relating to dentists and dental hygienists,
and (iii) maintaining proper patient records. The Company has made, and intends
to make in the future, loans to P.C.s in Colorado, New Mexico and Arizona to
fund their acquisition of dental assets from third parties in order to comply
with the laws of such states. Bonuses payable to dentists based on the operating
performance of the P.C.s take into account principal and interest payments made
on the loans, resulting in the dentists sharing with the Company the economic
benefits or detriments associated with assets acquired by the P.C.s using such
loans. Because the Company consolidates the financial statements of the P.C.s
with its financial statements, these loans are eliminated in consolidation.
Under the typical Management Agreement used by the Company, the P.C. pays the
Company a management fee equal to the Adjusted Gross Center Revenue of the P.C.
less compensation paid to the dentists and dental hygienists employed by the
P.C. Adjusted Gross Center Revenue is comprised of all fees and charges booked
each month by or on behalf of the P.C. as a result of dental services provided
to patients at the Office, less any adjustments for uncollectible accounts,
professional courtesies and other activities that do not generate a collectible
fee. The Company's costs include all direct and indirect costs, overhead and
expenses relating to the Company's provision of management services at each
Office under the Management Agreement, including (i) salaries, benefits and
other direct costs of employees who work at the Office, (ii) direct costs of all
Company employees or consultants who provide services to or in connection with
the Office, (iii) utilities, janitorial, laboratory, supplies, advertising and
other expenses incurred by the Company in carrying out its obligations under the
Management Agreement, (iv) depreciation expense associated with the P.C.'s
assets and the assets of the Company used at the Office, and the amortization of
intangible asset value as a result of any acquisition or merger of another
dental practice relating to the Office, (v) interest expense on indebtedness
incurred by the Company to finance any of its obligations under the Management
Agreement, (vi) general and malpractice insurance expenses, lease expenses and
dentist recruitment expenses, (vii) personal property and other taxes assessed
against the Company's or the P.C.'s assets used in connection with the operation
of the Office, (viii) out-of-pocket expenses of the Company's personnel related
to mergers or acquisitions involving the P.C., (ix) corporate overhead charges
or any other expenses of the Company including the P.C.'s pro rata share of the
expenses of the accounting and computer services provided by the
13
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Company, and (x) a collection reserve in the amount of 5.0% of Adjusted Gross
Center Revenue. As a result, substantially all costs associated with the
provision of dental services at the Offices are borne by the Company, other than
the compensation and benefits of the dentists and hygienists who are employed by
the P.C.s. This enables the Company to manage the profitability of the Offices.
Each Management Agreement is for a term of 40 years. Further, each Management
Agreement generally may be terminated by the P.C. only for cause, which includes
a material default by or bankruptcy of the Company. Upon expiration or
termination of a Management Agreement by either party, the P.C. must satisfy all
obligations it has to the Company.
The Company's Revenue is derived principally from fee-for-service revenue and
revenue from capitated managed dental care plans. Fee-for-service revenue
consists of P.C. revenue received from indemnity dental plans, preferred
provider plans and direct payments by patients not covered by any third-party
payment arrangement. Managed dental care revenue consists of P.C. revenue
received from capitated managed dental care plans, including capitation payments
and patient co-payments. Capitated managed dental care contracts are between
dental benefits organizations and the P.C.s. Under the Management Agreements,
the Company negotiates and administers these contracts on behalf of the P.C.s.
Under a capitated managed dental care contract, the dental group practice
provides dental services to the members of the dental benefits organization and
receives a fixed monthly capitation payment for each plan member covered for a
specific schedule of services regardless of the quantity or cost of services to
the participating dental group practice obligated to provide them. This
arrangement shifts the risk of utilization of these services to the dental group
practice providing the dental services. Because the Company assumes
responsibility under the Management Agreements for all aspects of the operation
of the dental practices (other than the practice of dentistry) and thus bears
all costs of the P.C.s associated with the provision of dental services at the
Offices (other than compensation and benefits of dentists and hygienists), the
risk of over-utilization of dental services at the Offices under capitated
managed dental care plans is effectively shifted to the Company. In addition,
dental group practices participating in a capitated managed dental care plan
often receive supplemental payments for more complicated or elective procedures.
In contrast, under traditional indemnity insurance arrangements, the insurance
company pays whatever reasonable charges are billed by the dental group practice
for the dental services provided.
The Company seeks to increase its fee-for-service business by increasing the
patient volume of existing Offices through effective marketing and advertising
programs, opening new Offices and acquiring solo and group practices. The
Company seeks to supplement this fee-for-service business with revenue from
contracts with capitated managed dental care plans. Although the Company's
fee-for-service business generally is more profitable than its capitated managed
dental care business, capitated managed dental care business serves to increase
facility utilization and dentist productivity.
The relative percentage of the Company's revenue derived from fee-for-service
business and capitated managed dental care contracts varies from market to
market depending on the availability of capitated managed dental care contracts
in any particular market and the Company's ability to negotiate favorable
contractual terms. In addition, the profitability of managed dental care revenue
varies from market to market depending on the level of capitation payments and
co-payments in proportion to the level of benefits required to be provided.
Variations in the relative penetration and popularity of capitated managed
dental care from market to market across the country, however, make it difficult
to determine whether the Company's experience in new markets will be consistent
with its experience in the Company's existing markets. The Company expects that
the level of profitability of its operations in new markets entered through
acquisition will vary depending in part on these factors and may not replicate
or be comparable to the Company's current results.
RESULTS OF OPERATIONS
As a result of the ongoing expansion of its business through acquisitions and
the development of de novo Offices, and the Company's limited period of
affiliation with these Offices, the Company believes that the period-to-period
comparisons set forth below may not be representative of future operating
results.
The Company has experienced significant year-to-year growth in Revenue. For the
three months ended March 31, 1999, Revenue increased to $9.3 million from $6.2
million for the three months ended March 31, 1998, an increase of 49.2%. The
Company acquired one practice and opened one de novo Office during the period
from January 1, 1999 to March 31, 1999 which, in the aggregate, accounted for
$208,000 of the $3.1 million increase. The remainder of the increase in Revenue
of $2.9 million was attributable to the 49 Offices that existed at the beginning
of 1999. Revenue at the 34
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Offices in existence during both full periods increased to $6.6 million in 1999
from $6.1 million in 1998, an increase of $480,000, or 7.9%.
The following table sets forth the percentages of net revenue represented by
certain items reflected in the Company's condensed consolidated statements of
operations. The information contained in the table represents the historical
results of the Company. The information that follows should be read in
conjunction with the Company's Condensed Consolidated Financial Statements and
related Notes thereto contained elsewhere in this Quarterly Report.
QUARTER ENDED MARCH 31,
--------------------------
1999 1998
-------- -------
Net revenue 100.0% 100.0%
Direct expenses:
Clinical salaries and benefits 37.0% 37.9%
Dental supplies 5.5% 5.7%
Laboratory fees 9.5% 8.5%
Occupancy 9.2% 8.3%
Advertising and marketing 1.2% 1.7%
Depreciation and amortization 5.8% 4.7%
General and administrative 9.0% 8.8%
------ -----
77.2% 75.6%
------ -----
Contribution from dental offices 22.8% 24.4%
Corporate expenses:
General and administrative 13.7% 11.8%
Depreciation and amortization 0.9% 0.6%
------ ------
Operating income 8.2% 12.0%
Interest expense, net (1.4)% (2.2)%
Conversion inducement expense - (6.6)%
------ ------
Income before income taxes 6.8% 3.2%
Income tax expense (2.5)% (1.0)%
------ ------
Income before change in accounting principle 4.3% 2.2%
Cumulative effect of change in accounting
principle - (0.8)%
------ ------
Net income 4.3% 1.4%
====== ======
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998:
Net revenue. Net revenue increased to $7.0 million for the three months March
31, 1999 from $4.6 million for the three months ended March 31, 1998, an
increase of approximately $2.4 million, or 51.0%. The Company acquired one
practice and opened one de novo Office during the period from January 1, 1999 to
March 31, 1999, which contributed $142,000 of the increase. Net revenue at the
34 Offices which the Company managed and which were in existence for both full
first quarters of 1999 and 1998 increased 11.8% or $542,000 to $5.1 million in
the first quarter of 1999 from $4.6 million in the first quarter of 1998. The
remainder of the increase in net revenue of $1.7 million was attributable to 10
practice acquisitions and 5 de novo Office openings which occurred between
January 1, 1998 and December 31, 1998.
Clinical salaries and benefits. Clinical salaries and benefits increased to $2.6
million for the three months ended March 31, 1999 from $1.8 million for the
three months ended March 31, 1998, an increase of $833,000 or 47.2%. This
increase was due primarily to the increased number of Offices and the
corresponding addition of non-dental personnel. As a percentage of net revenue,
clinical salaries and benefits decreased to 37.0% for the three months ended
March 31, 1999 from 37.9% for the three months ended March 31, 1998.
Dental supplies. Dental supplies increased to $389,000 for the three months
ended March 31, 1999 from $264,000 for the three months ended March 31, 1998, an
increase of $125,000 or 47.2%. This increase was primarily due to the
incremental expenditures required to operate 51 dental practices at March 31,
1999 compared to 35 dental practices at March 31, 1998. As a percentage of net
revenue, dental supplies decreased to 5.5% during the three months ended March
31, 1999 from 5.7% during the three months ended March 31, 1998.
Laboratory fees. Laboratory fees increased to $668,000 during the three months
ended March 31, 1999 from $394,000 during the three months ended March 31, 1998,
an increase of $274,000 or 69.7%. This increase was primarily due to the
incremental expenditures required to operate 51 dental practices at March 31,
1999 compared to 35 dental
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practices at March 31, 1998. As a percentage of net revenue, laboratory fees
increased to 9.5% during the three months ended March 31, 1999 from 8.5% during
the three months March 31, 1998. The increase in laboratory fees as a percentage
of net revenue is attributable to cost increases in certain laboratory
agreements and to recently acquired dental practices which have not fully
converted to laboratories with which the Company has pricing agreements.
Occupancy. Occupancy increased to $649,000 during the three months ended March
31, 1999 from $388,000 during the three months ended March 31, 1998, an increase
of $262,000 or 67.5%. This increase was primarily due to the incremental
expenditures required to operate 51 dental practices at March 31, 1999 compared
to 35 dental practices at March 31, 1998. As a percentage of net revenue,
occupancy expense increased to 9.2% during the three months ended March 31, 1999
from 8.3% during the three months ended March 31, 1998. The increase in
occupancy as a percentage of net revenue is attributable to rent expense at the
Company's recently opened de novo Offices and rent increases at the Company's
recently expanded Offices.
Advertising and marketing. Advertising and marketing increased to $82,000 for
the three months ended March 31, 1999 from $78,000 for the three months ended
March 31, 1998, an increase of $4,000 or 5.3%. As a percentage of net revenue,
advertising and marketing decreased to 1.2% during the three months ended March
31, 1999 from 1.7% during the three months ended March 31, 1998.
Depreciation and amortization. Depreciation and amortization, which consists of
depreciation and amortization expense incurred at the Offices, increased to
$404,000 for the three months ended March 31, 1999 from $217,000 for the three
months ended March 31, 1998, an increase of $188,000 or 86.5%. This increase is
related to the increase in the Company's depreciable and amortizable asset base.
The increase in the asset base is directly related to the Company's expansion
from 35 dental practices at the end of the 1998 period to 51 dental practices at
the end of the 1999 period. As a percentage of net revenue, depreciation and
amortization increased to 5.8% for the three months ended March 31, 1999 from
4.7% for the three months ended March 31, 1998. The increase in depreciation and
amortization as a percentage of net revenue is related to the higher depreciable
asset base associated with the Company's de novo Offices and recent Office
expansions.
General and administrative. General and administrative, which is attributable to
the Offices, increased to $636,000 during the three months ended March 31, 1999
from $410,000 during the three months ended March 31, 1998, an increase of
approximately $225,000 or 55.0%. This increase was primarily due to the
incremental expenditures required to operate 51 dental practices at March 31,
1999 compared to 35 dental practices at March 31, 1998. As a percentage of net
revenue, general and administrative expenses increased to 9.0% during the three
months ended March 31, 1999 from 8.8% during the three months ended March 31,
1998.
Contribution from dental offices. As a result of the above, contribution from
dental offices increased to $1.6 million for the three months ended March 31,
1999 from $1.1 million for the three months ended March 31, 1998, an increase of
$460,000 or 40.5%. As a percentage of net revenue, contribution from dental
offices decreased to 22.8% during the three months ended March 31, 1999 from
24.4% during the three months ended March 31, 1999. This decrease as a
percentage of net revenue is a result of the factors discussed above.
Corporate expenses - general and administrative. Corporate expenses - general
and administrative increased to $965,000 during the three months ended March 31,
1999 from $550,000 during the three months ended March 31, 1998, an increase of
$416,000 or 75.6%. This increase was due to expansion of the Company's
infrastructure to manage growth, primarily through the addition of personnel. As
a percentage of net revenue, corporate expense - general and administrative
increased to 13.7% during the three months ended March 31, 1999 from 11.8%
during the three months ended March 31, 1998.
Corporate expenses - depreciation and amortization. Corporate expenses -
depreciation and amortization increased to $60,000 for the three months ended
March 31, 1999 from $30,000 for the three months ended March 31, 1998, an
increase of $30,000 or 100.0%. This increase was a result of the Company's
expansion of its corporate infrastructure, primarily investments in computer
equipment to manage future growth. As a percentage of net revenue, corporate
expenses - depreciation and amortization increased to 0.9% during the three
months ended March 31, 1999 from 0.6% during the three months ended March 31,
1998.
Operating income. As a result of the above, operating income increased to
$572,000 during the three months ended March 31, 1999 from $557,000 during the
three months ended March 31, 1998, an increase of $15,000 or 2.6%. As a
percentage of net
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revenue, operating income decreased to 8.2% during the three months ended March
31, 1999 from 12.0% during the three months ended March 31, 1998. The decrease
as a percentage of net revenue is a result of the factors discussed above.
Interest expense, net. The Company had net interest expense of $96,000 for the
three months ended March 31, 1999 compared to $102,000 for the three months
ended March 31, 1998. This decrease is attributable to a decrease in the
average debt outstanding during the 1999 period.
Conversion inducement expenses. During the three months ended March 31, 1998,
the Company incurred a one-time charge of $305,000 related to inducing the
convertible debenture holders to convert to Common Stock at the closing of the
Company's initial public offering in February 1998.
Net income (loss). As a result of the above, net income increased to $299,000
for the three months ended March 31, 1999 from net income of $63,000 for the
three months ended March 31, 1998, an increase of $236,000. Net income for the
three months ended March 31, 1999 was net of income taxes of $178,000. Net
income for the three months ended March 31, 1998 was net of $305,100 related to
a one-time charge to induce the conversion of the debentures, income taxes of
$48,000, and the cumulative effect of a change in an accounting principle
related to SOP 98-5 of $39,000. As a percentage of net revenue, net income
increased to 4.3% for the three months ended March 31, 1999 from 1.4% for the
three months ended March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its growth through a combination
of private sales of convertible subordinated debentures and Common Stock, cash
provided by operating activities, a bank line of credit (the "Credit Facility"),
seller notes, and the initial public offering of Common Stock.
Net cash provided by (used in) operating activities was approximately $849,000
and ($185,000) for the three months ended March 31, 1999 and 1998, respectively.
Net cash provided by operating activities during the 1999 period, after adding
back non-cash items, consisted primarily of an increase in accounts payable and
accrued expenses of approximately $1.4 million partially offset by an increase
in accounts receivable of approximately $753,000 and an increase in prepaid
expenses and other assets of approximately $530,000. Net cash used in operating
activities during the 1998 period, after adding back non-cash items, consisted
primarily of an increase in accounts receivable of approximately $133,000, a
decrease in prepaid expenses and other assets of approximately $33,000 and a
decrease in accounts payable and accrued expenses of approximately $409,000.
During the three months ended March 31, 1999, net income contributed
approximately $299,000 to net cash provided by operating activities for the
period compared to approximately $63,000 for the same three months in 1998.
Net cash used in investing activities was approximately $1.5 million and $1.2
million for the three months ended March 31, 1999 and 1998, respectively. During
the three month period ended March 31, 1999, approximately $680,000 was utilized
for acquisitions and approximately $825,000 was invested in the purchase of
additional property and equipment, including approximately $440,000 for the de
novo Offices. For the three months ended March 31, 1998, approximately $600,000
was utilized for acquisitions and approximately $640,000 was invested in the
purchase of additional property and equipment including approximately $110,000
for the de novo offices.
Net cash provided by financing activities was approximately $790,000 and $6.6
million for the three months ended March 31, 1999 and 1998, respectively. During
the three months ended March 31, 1999, net cash provided by financing activities
was comprised of net borrowings under the Company's line of credit of
approximately $2.2 million which was partially offset by the purchase and
retirement of Common Stock of approximately $1.2 million and approximately
$145,000 for the repayment of long-term debt. During the three months ended
March 31, 1998, net cash provided by financing activities was comprised of $11.5
million of proceeds from the initial public offering of the Company's Common
Stock. This was partially offset by $3.7 million used for the repayment of a
bank line of credit and a note issued in connection with the September 1997
acquisition of nine dental practices operated under the name Gentle Dental, $1.1
million for costs associated with the public offering, and $28,000 used for the
payment of debenture issuance and other financing costs.
Under the Company's Credit Facility, during its three-year term, the Company may
borrow up to $20.0 million. Advances will bear interest at the lender's base
rate or at the applicable LIBOR rate plus 2.25%, at the Company's option, and
the Company will be obligated to pay an annual facility fee of .25% of the
average unused amount of the line
17
18
of credit during the previous full calendar quarter. Borrowings are limited to
an availability formula based on the Company's adjusted EBITDA. At March 31,
1999, the Company had $8.4 million available and $5.0 million outstanding under
the Credit Facility. The Credit Facility is secured by a lien on the Company's
accounts receivable and its Management Agreements. The Credit Facility prohibits
the payment of dividends and other distributions to shareholders, restricts or
prohibits the Company from incurring indebtedness, incurring liens, disposing of
assets, and requires the Company to maintain certain financial ratios on an
ongoing basis.
At March 31, 1999, the Company had outstanding indebtedness of approximately
$526,000 represented by notes issued in connection with various practice
acquisitions, all of which bear interest at rates varying from 7.0% to 14.0% and
capital lease obligations. The Company's material commitments for capital
expenditures total approximately $1.4 million for the expansion of certain
Offices and planned de novo Office developments. The Company anticipates that
these capital expenditures will be funded by cash on hand, cash generated by
operations, or borrowings under the Company's Credit Facility. The Company's
accumulated earnings as of March 31, 1999 were approximately $512,000, and the
Company had working capital on that date of approximately $2.1 million.
On February 11, 1998, the Company completed a public offering of 2,100,000
shares of Common Stock at an initial public offering price of $7.00 per share,
resulting in net proceeds to the Company of approximately $10.4 million. At
September 30, 1998, the Company had fully expended the proceeds from the initial
public offering which included the repayment of $3.7 million of outstanding
indebtedness.
On October 8, 1998, the Company's Board of Directors unanimously approved the
purchase of up to 300,000 shares of the Company's Common Stock on the open
market on such terms, as the Board of Directors deems acceptable. On February 9,
1999, the Company's Board of Directors increased the approved number of shares
to be purchased on the open market to 600,000 shares. During 1998 the Company,
in 11 separate transactions, purchased approximately 60,000 shares of its Common
Stock for total consideration of approximately $242,000 at prices ranging from
$3.63 to $4.81 per share. During the first quarter of 1999, the Company, in 33
separate transactions, purchased approximately 398,000 shares of Common Stock
for total consideration of $1.2 million at prices ranging from $2.81 to $3.75
per share.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact the financial position,
results of operations or cash flows of the Company due to adverse changes in
financial and commodity market prices and rates. The Company is exposed to
market risk in the area of changes in United States interest rates. Historically
and as of March 31, 1999, the Company has not used derivative instruments or
engaged in hedging activities.
Interest Rate Risk. The interest payable on the Company's line-of-credit is
variable based upon the prime rate or LIBOR (at the Company's option), and,
therefore, affected by changes in market interest rates. At March 31, 1999,
approximately $5.0 million was outstanding with an interest rate of 8.25% (prime
plus 0.5%). The line-of-credit matures on February 11, 2001. The Company may
repay the balance in full at any time without penalty. As a result, the Company
does not believe that reasonably possible near-term changes in interest rates
will result in a material effect on future earnings, fair values or cash flows
of the Company.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time the Company is subject to litigation incidental to its
business. The Company is not presently a party to any material litigation. Such
claims, if successful, could result in damage awards exceeding, perhaps
substantially, applicable insurance coverage.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) During the three month period ended March 31, 1999, the Company issued an
aggregate of 12,632 shares of Common Stock at a price of $2.77 per share as
part of the purchase price for one acquisition. This issuance of Common
Stock was exempt from registration pursuant to section 4(2) of the
Securities Act of 1933 and Regulation D adopted thereunder because it did
not involve any public offering.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit
Number Description of Document
- -------- -----------------------
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BIRNER DENTAL MANAGEMENT SERVICES, INC.
a Colorado corporation
Date: May 13, 1999 By: /s/ Frederic W.J. Birner
----------------------------------------------
Name: Frederic W.J. Birner
Title: Chairman of the Board, Chief Executive Officer
and Director (Principal Executive Officer)
Date: May 13, 1999 By: /s/ Dennis N. Genty
----------------------------------------------
Name: Dennis N. Genty
Title: Chief Financial Officer, Secretary, Treasurer
and Director (Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description of Document
- -------- -----------------------
27.1 Financial Data Schedule.
21