Exhibit 99.8
Birner Dental Management Services, Inc.
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
August 12, 2004
BIRNER DENTAL MANAGEMENT SERVICES, INC.
ANNOUNCES 37.5% NET INCOME INCREASE
FOR THE 2Q '04 VERSUS 2Q `03
DENVER, COLORADO, August 12, 2004...Birner Dental Management Services, Inc.
(NASDAQ SmallCap Market: BDMS), operators of PERFECT TEETH dental practices,
announced results for the quarter ended June 30, 2004. The Company reported net
income increased 37.5% to $424,000, or $.33 per share of common stock on a
diluted basis for the quarter ended June 30, 2004 compared to net income of
$309,000, or $.21 per share of common stock on a diluted basis for the quarter
ended June 30, 2003. Total dental group practice revenue increased $542,000, or
4.9% to $11.7 million for the quarter ended June 30, 2004 compared to total
group practice revenue of $11.1 million for the quarter ended June 30, 2003. For
the quarter ended June 30, 2004, net revenue increased $205,000 to $8.1 million,
or 2.6% when compared to net revenue of $7.9 million for the corresponding
period in 2003. The Company's earnings before interest, taxes depreciation and
amortization (EBITDA) increased $63,000, or 5.4% to $1,237,000 for the quarter
ended June 30, 2004 compared to $1,174,000 for the quarter ended June 30, 2003.
For the six months ended June 30, 2004, net income increased 45.8% to $853,000,
or $.66 per share of common stock on a diluted basis compared to net income of
$585,000, or $.39 per share of common stock on a diluted basis for the six
months ended June 30, 2003. Total dental group practice revenue increased $1.3
million, or 6.1% to $23.4 million for the six months ended June 30, 2004
compared to $22.0 million for the six months ended June 30, 2003. For the six
months ended June 30, 2004, net revenue increased $569,000 to $16.2 million, or
3.6%, when compared to net revenue of $15.6 million for the corresponding period
in 2003. EBITDA for the six months ended June 30, 2004 increased $172,000, or
7.4% to $2.5 million compared to $2.3 million for the six months ended June 30,
2003.
Fred Birner, Chief Executive Officer, stated "We are pleased with the Company's
earnings growth in 2004 and continued strong cash flow from operations. During
the first six months of 2004, the Company has reduced its total debt by $1.6
million to $1.5 million outstanding at June 30, 2004. We will open the
previously announced de novo site in the Phoenix market by the end of August. In
addition, we have signed leases for two additional de novo sites: one in the
Denver market, which we anticipate to have open by year-end, and the other in
the Phoenix market, with an anticipated opening of third quarter 2005."
Effective August 10, 2004, James M. Ciccarelli resigned as a director of the
Company for personal reasons. Dennis N. Genty, Chief Financial Officer,
Secretary, Treasurer and a director of the Company, also resigned as a director
effective August 10, 2004 in order that the Company may remain in compliance
with applicable Nasdaq rules that require that a majority of the company's
directors must be independent according to specified criteria. After these
actions, the Company's independent directors are Brooks G. O'Neil, Paul E.
Valuck, D.D.S. and Thomas D. Wolf. The Company's other directors are Frederic
W.J. Birner, Chairman and Chief Executive Officer, and Mark A. Birner, D.D.S.,
President. Mr. Wolf will replace Mr. Ciccarelli as Chairman of the Company's
Audit Committee.
On August 10, 2004, the Board of Directors approved an additional $500,000 for
the Company to make open-market purchases of its Common Stock. Such purchases
will be made from time-to-time on an opportunistic basis, as the Company's
management deems appropriate.
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 June 30, 2004 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 June 30, 2004 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 Thursday,
August 12, 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 August 12th, the rebroadcast number is
1-800-839-0860 with the pass code of 1414. This rebroadcast will be available
through August 26, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarters Ended June 30, Six Months Ended June 30,
--------------------------------- --------------------------------
2003 2004 2003 2004
----------- ----------- ----------- -----------
NET REVENUE (a) $ 7,880,470 $ 8,085,785 $15,609,228 $16,178,144
DIRECT EXPENSES:
Clinical salaries and benefits 3,002,902 3,027,701 6,013,741 6,079,706
Dental supplies 478,576 496,777 923,173 960,912
Laboratory fees 669,624 640,350 1,269,126 1,270,546
Occupancy 870,260 879,985 1,733,968 1,767,543
Advertising and marketing 95,719 190,816 193,658 337,766
Depreciation and amortization 565,459 458,127 1,147,486 930,471
General and administrative 777,848 869,436 1,529,088 1,692,570
---------- ---------- ----------- ----------
6,460,388 6,563,192 12,810,240 13,039,514
--------- --------- --------- ----------
Contribution from dental offices 1,420,082 1,522,593 2,798,988 3,138,630
CORPORATE EXPENSES:
General and administrative 811,860 743,867 1,611,698 1,561,956
Depreciation and amortization 74,767 54,325 154,749 110,922
---------- ---------- ---------- ----------
Operating income 533,455 724,401 1,032,541 1,465,752
Interest expense, net 35,845 17,386 88,648 43,710
Income before income taxes 497,610 707,015 943,893 1,422,042
Income tax expense 189,093 282,806 358,679 568,817
--------- ---------- ---------- ---------
Net income $ 308,517 $ 424,209 $ 585,214 $ 853,225
=========== =========== =========== =========
Net income per share of Common Stock:
Basic $ .23 $ .36 $ .43 $ .72
============ =========== =========== =========
Diluted $ .21 $ .33 $ .39 $ .66
============ =========== =========== =========
Weighted average number of shares of
Common Stock and dilutive securities:
Basic 1,341,461 1,189,791 1,374,195 1,189,221
========= ========= ========= =========
Diluted 1,476,919 1,298,301 1,505,183 1,297,063
========= ========= ========= =========
a) Total dental group practice revenue less amounts retained by group
practices. Dental practice revenue was $11,663,435 for the three months
ended June 30, 2004 compared with $11,121,493 for the three months ended
June 30, 2003 and was $23,379,072 for the six months ended June 30, 2004
compared to $22,034,074 for the six months ended June 30, 2003.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
2003 2004
------------- -----------
** (Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,110,786 $ 916,005
Accounts receivable, net of allowance for doubtful accounts
of $215,838 and $230,495, respectively 2,673,041 2,897,163
Deferred tax asset 121,475 121,475
Prepaid expenses and other assets 736,424 531,818
----------- -----------
Total current assets 4,641,726 4,466,461
PROPERTY AND EQUIPMENT, net 2,680,169 2,367,461
OTHER NONCURRENT ASSETS:
Intangible assets, net 14,732,349 14,352,190
Deferred charges and other assets 155,461 157,358
----------- -----------
Total assets $22,209,705 $21,343,470
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,990,467 $ 4,452,539
Income taxes payable 190,883 198,100
Current maturities of long-term debt 351,847 364,302
----------- -----------
Total current liabilities 4,533,197 5,014,941
LONG-TERM LIABILITIES:
Deferred tax liability, net 349,801 349,801
Long-term debt, net of current maturities 2,735,576 1,150,506
Other long-term obligations 179,884 176,636
----------- -----------
Total liabilities 7,798,458 6,691,884
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; 1,203,511 and 1,196,593 shares issued and
outstanding, respectively 12,428,363 11,994,098
Retained earnings 1,982,884 2,657,488
----------- -----------
Total shareholders' equity 14,411,247 14,651,586
----------- -----------
Total liabilities and shareholders' equity $22,209,705 $21,343,470
=========== ===========
** Derived from the Company's audited consolidated balance sheet at
December 31, 2003
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 June 30, Six Months Ended June 30,
---------------------------------- -------------------------------
2003 2004 2003 2004
------------ ------------ ------------- -----------
RECONCILIATION OF EBITDA:
Net income $ 308,517 $ 424,209 $ 585,214 $ 853,225
Depreciation and amortization - Offices 565,459 458,127 1,147,486 930,471
Depreciation and amortization - Corporate 74,767 54,325 154,749 110,922
Interest expense, net 35,845 17,386 88,648 43,710
Income tax expense 189,093 282,806 358,679 568,817
----------- ------------ ------------ -----------
EBITDA $ 1,173,681 $ 1,236,853 $ 2,334,776 $ 2,507,145
=========== =========== =========== ===========
Total dental group practice revenue is the revenue generated at the Company's
offices from professional services provided to its patients. Amounts retained by
group practices represents compensation expense to the dentists and hygienists
and is subtracted from total dental group practice revenue to arrive at net
revenue. The Company reports net revenue in its financial statements to comply
with Emerging Issues Task Force Issue No. 97-2, Application of SFAS No. 94
(Consolidation of All Majority Owned Subsidiaries) and APB Opinion No. 16
(Business Combinations) to Physician Practice Management Entities and Certain
Other Entities With Contractual Management Arrangements. Total dental group
practice revenue is disclosed because it is a critical component for
management's evaluation of office performance. However, investors should not
consider this measure in isolation or as a substitute for operating income, cash
flows from operating activities or any other measure for determining the
Company's operating performance or liquidity that is calculated in accordance
with generally accepted accounting principles.
Quarters Ended June 30, Six Months Ended June 30,
----------------------------- ---------------------------------
2003 2004 2003 2004
----------- ----------- ------------ ------------
Total dental group practice revenue $11,121,493 $11,663,435 $ 22,034,074 $ 23,379,072
Amounts retained by group practices (3,241,023) (3,577,650) (6,424,846) (7,200,928)
----------- ----------- ------------ ------------
Net revenue $ 7,880,470 $ 8,085,785 $ 15,609,228 $ 16,178,144
=========== =========== ============ ============