Exhibit 99.5
Birner Dental Management Services, Inc.
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
March 9, 2004
BIRNER DENTAL MANAGEMENT SERVICES, INC.
2003 YEAR-END RESULTS OF $.83 PER SHARE
VERSUS $.58 PER SHARE IN 2002 AND DECLARES
$.075 QUARTERLY DIVIDEND
DENVER, COLORADO, March 9, 2003...Birner Dental Management Services, Inc.
(NASDAQ SmallCap Market: BDMS), operators of PERFECT TEETH dental practices
announced results for the year and quarter ended December 31, 2003. The Company
reported net income of $1,184,000, or $.83 per share for the year ended December
31, 2003 compared to net income of approximately $934,000, or $.58 per share for
the year ended December 31, 2002. Net revenue was approximately $30.3 million
for the years ended December 31, 2003 and 2002. During the same period, total
dental group practice revenue increased approximately $441,000 to $43.1 million,
or 1.0%., when compared to total dental group practice revenue from the
corresponding period in 2002. The Company's earnings before interest, taxes,
depreciation and amortization (EBITDA) for the years ended December 31, 2003 and
2002 was $4.6 million.
Net income for the fourth quarter of 2003 was approximately $300,000, or $.23
per share compared to net income of approximately $190,000, or $.12 per share
for the fourth quarter in 2002. For the quarter ended December 31, 2003, net
revenue decreased approximately $147,000 to $7.1 million, or 2.0%, when compared
to net revenue of $7.3 million from the corresponding period in 2002. Total
dental group practice revenue was $10.3 million for the quarters ended December
31, 2003 and 2002. For the fourth quarter ended December 31, 2003, earnings
before interest, taxes depreciation and amortization (EBITDA) increased
approximately $65,000 to $1,112,000 or 6.2% when compared to EBITDA of
$1,046,000 for the corresponding period in 2002.
The Company ended the year with total debt of approximately $3.1 million, down
from $3.26 million in 2002. This reduction in overall debt was accomplished
despite the fact the Company utilized approximately $3.9 million to purchase
296,000 shares of its Common Stock during the year. The Company's liquidity is
strong with approximately $1.1 million in cash and cash equivalents at year-end,
strong cash flow from operations and a $4.0 million line of credit, of which
$2.0 million was available at year-end. Fred Birner, Chief Executive Officer
stated, "Our big challenge for 2004 is revenue growth, as we previously
announced we experienced some softness in patient visits during the year 2003
and have taken some steps to help revenue growth. Some of the initiatives we
have taken to achieve increased revenue during 2004 are: implemented an
aggressive marketing campaign in the Colorado Springs market; signed a lease for
a de novo site in Phoenix and we are in the process of negotiating other leases
for de novo sites; evaluating potential acquisitions; expanding the specialty
services side of the business; and aggressive dentist recruitment."
In addition, the Company today announced that its board of directors has
declared a quarterly cash dividend of 7.5 cents per share of common stock. The
dividend is payable April 14, 2004, to shareholders of record March 31, 2004.
"We are pleased to begin offering a quarterly dividend to our shareholders",
said Fred Birner. "With the change in United States tax laws, the Company has
determined that a dividend should be implemented as a way of providing an
additional tax effective return to shareholders. This program will be used to
return a portion of current earnings to shareholders. The balance of the
Company's earnings will be retained and reinvested in growth."
Birner Dental Management Services, Inc. acquires, develops, and manages
geographically dense dental practice networks in select markets in Colorado, New
Mexico, and Arizona. As of December 31, 2003 the Company managed 54 dental
offices, of which 37 were acquired and 17 were de novo developments. The Company
operates its dental offices under the PERFECT TEETH name.
The Company previously announced it would conduct a conference call to review
year and quarter ended December 31, 2003 results. In addition to current
operating results, the teleconference may include discussion of management's
expectation of future financial and operating results. The call will be held on
Tuesday, March 9, 2004, at 9:00 a.m. MT. To participate in this conference call,
dial in to 1-800-937-6563 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 March 9th, the rebroadcast number is
1-800-839-0860 with the pass code of 1318. This rebroadcast will be available
through March 23, 2004.
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 and other risks are set
forth in the reports filed by the Company with the Securities and Exchange
Commission.
For Further Information Contact:
Birner Dental Management Services, Inc.
Dennis Genty
Chief Financial Officer
(303) 691-0680
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarters Ended December 31, Twelve Months Ended December 31,
2002 2003 2002 2003
----------- ----------- ----------- ------------
NET REVENUE (a) $ 7,294,951 $ 7,148,224 $30,254,749 $ 30,295,403
DIRECT EXPENSES:
Clinical salaries and benefits 2,764,481 2,711,998 11,598,162 11,641,256
Dental supplies 433,807 405,925 1,788,471 1,779,025
Laboratory fees 565,398 543,488 2,366,710 2,385,808
Occupancy 862,452 873,866 3,416,877 3,496,411
Advertising and marketing 96,466 86,066 352,947 361,824
Depreciation and amortization 595,356 496,693 2,389,556 2,172,323
General and administrative 826,424 763,712 3,192,266 3,068,946
----------- ----------- ----------- ------------
6,144,384 5,881,748 25,104,989 24,905,593
----------- ----------- ----------- ------------
Contribution from dental offices 1,150,567 1,266,476 5,149,760 5,389,810
CORPORATE EXPENSES:
General and administrative 699,489 651,547 2,977,096 2,999,675
Depreciation and amortization 79,264 65,228 326,879 291,975
----------- ----------- ----------- ------------
Operating income 371,814 549,701 1,845,785 2,098,160
Interest expense, net 70,034 30,078 344,738 153,298
Income before income taxes 301,780 519,623 1,501,047 1,944,862
Income tax expense 111,639 219,585 567,361 761,175
----------- ------------ ----------- ------------
Net income $ 190,141 $ 300,038 $ 933,686 $ 1,183,687
=========== =========== =========== ============
Net income per share of Common Stock:
Basic $ .13 $ .25 $ .63 $ .91
=========== =========== =========== ============
Diluted $ .12 $ .23 $ .58 $ .83
=========== =========== =========== ============
Weighted average number of shares of
Common Stock and dilutive securities:
Basic 1,440,876 1,202,230 1,480,490 1,302,113
=========== =========== =========== ============
Diluted 1,567,662 1,313,327 1,614,315 1,427,936
=========== =========== =========== ============
a) Total dental group practice revenue less amounts retained by group
practices. Dental practice revenue was $10,281,900 for the three months
ended December 31, 2003 compared with $10,307,932 for the three months
ended December 31, 2002 and was $43,120,605 for the twelve months ended
December 31, 2003 compared to $42,679,654 for the twelve months ended
December 31, 2002.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2002 2003
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 1,072,757 $ 1,110,786
Accounts receivable, net of allowance for doubtful accounts
of $212,803 and $215,838, respectively 2,708,231 2,673,041
Deferred tax asset 120,622 121,475
Prepaid expenses and other assets 738,119 736,424
----------- -----------
Total current assets 4,639,729 4,641,726
PROPERTY AND EQUIPMENT, net 3,926,422 2,680,169
OTHER NONCURRENT ASSETS:
Intangible assets, net 15,496,271 14,732,349
Deferred charges and other assets 167,098 155,461
----------- -----------
Total assets $24,229,520 $22,209,705
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,981,247 $ 3,990,467
Income taxes payable 30,219 190,883
Current maturities of long-term debt 2,169,713 351,847
----------- -----------
Total current liabilities 6,181,179 4,533,197
LONG-TERM LIABILITIES:
Deferred tax liability, net 24,258 349,801
Long-term debt, net of current maturities 1,087,422 2,735,576
Other long-term obligations 177,635 179,884
----------- -----------
Total liabilities 7,470,494 7,798,458
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; 1,434,817 and 1,203,511 shares issued and
outstanding, respectively 15,959,829 12,428,363
Retained earnings 799,197 1,982,884
----------- -----------
Total shareholders' equity 16,759,026 14,411,247
----------- -----------
Total liabilities and shareholders' equity $24,229,520 $22,209,705
=========== ===========
Although EBITDA is not a generally accepted accounting principles measure of
performance or liquidity, the Company believes that it may be useful to an
investor in evaluating its 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
generally accepted accounting principles. In addition, because EBITDA is not
calculated in accordance with generally accepted accounting principles, it may
not necessarily be comparable to similarly titled measures employed by other
companies. A reconciliation of EBITDA can be made by adding Depreciation and
Amortization Expense, Depreciation and Amortization Expense - Corporate,
Interest Expense, Net and Income Tax Expense to Net Income as in the table
below.
Quarters Ended Twelve Months Ended
December 31, December 31,
----------------------------- ---------------------------------
2002 2003 2002 2003
------------ ------------ ------------- ------------
RECONCILIATION OF EBITDA:
Net income $ 190,141 $ 300,038 $ 933,686 $ 1,183,687
Depreciation and
amortization 595,356 496,693 2,389,556 2,172,323
Depreciation and
amortization - Corporate 79,264 65,228 326,879 291,975
Interest expense, net 70,034 30,078 344,738 153,298
Income tax expense 111,639 219,585 567,361 761,175
------------ ----------- ------------- ------------
EBITDA $ 1,046,434 $ 1,111,622 $ 4,562,220 $ 4,562,458