Exhibit No. 99.8
Birner Dental Management Services, Inc.
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
March 24, 2005
BIRNER DENTAL MANAGEMENT SERVICES, INC.
ANNOUNCES INCOME FROM CONTINUING OPERATIONS
INCREASED 24.9% IN 2004 VERSUS 2003
DENVER, COLORADO, March 24, 2005. Birner Dental Management Services, Inc.
(NASDAQ SmallCap Market: BDMS), operators of PERFECT TEETH(R) dental practices,
announced results for the year and quarter ended December 31, 2004. The Company
reported net income increased 16.6% to $1.4 million, or $1.05 per share of
common stock compared to net income of $1.2 million, or $.83 per share of common
stock for the year ended December 31, 2003. The reported net income for 2004
included a loss on discontinued operations of $(188,000) or $(.14) per share of
common stock compared to a loss on discontinued operations of $(71,000) or
$(.05) per share of common stock for 2003. The loss on discontinued operations
was a result, as previously reported, of the Company closing an office in the
Phoenix market it had acquired in 1998 because the office was older and no
longer fit the Company's operating model. Income from continuing operations
increased 24.9% to $1.6 million, or $1.19 per share of common stock for the year
ended December 31, 2004 compared to $1.3 million, or $.88 per share of common
stock for the year ended December 31, 2003.
Total dental group practice revenue increased $3.2 million, or 7.4%, to $46.5
million for the twelve months ended December 31, 2004 compared to $43.3 million
for the year ended December 31, 2003. For the year ended December 31, 2004, net
revenue increased $1.6 million to $32.2 million, or 5.3%, compared to net
revenue of $30.5 million for the corresponding period in 2003. Earnings before
interest, taxes, depreciation, amortization and discontinued operations
("Adjusted EBITDA") for the year ended December 31, 2004 was $4,654,000 compared
to $4,655,000 for the year ended December 31, 2003.
Net income for the fourth quarter of 2004 increased 15.3% to $346,000, or $.26
per share of common stock compared to net income of $300,000, or $.23 per share
of common stock for the quarter ended December 31, 2003. Total dental group
practice revenue increased $903,000, or 8.8%, to $11.2 million for the quarter
ended December 31, 2004 compared to total group practice revenue of $10.3
million for the quarter ended December 31, 2003. For the quarter ended December
31, 2004, net revenue increased $584,000 to $7.8 million, or 8.1%, compared to
net revenue of $7.2 million for the corresponding period in 2003. The Company's
Adjusted EBITDA decreased $99,000, or 8.7%, to $1,040,000 for the quarter ended
December 31, 2004 compared to $1,139,000 for the quarter ended December 31,
2003.
Fred Birner, Chief Executive Officer, stated "Overall we are very pleased with
the financial performance of the Company in 2004. One year ago, we stated that
the big challenge for 2004 was revenue growth and I believe the Company achieved
this goal. However, and more important, we took actions during 2004 that we
believe will assure continued growth in 2005 and beyond. These actions included:
(1) closing an underperforming office that no longer fit the Company's operating
model; (2) opening two new de novo offices during the year and a third one in
January 2005; (3) significantly increasing the marketing and advertising
campaign for the Company's offices in Denver and Colorado Springs; (4)
aggressive recruitment of dentists, particularly for the Company's specialty
services; and (5) signing leases for three new dental offices that the Company
expects to open during the second half of 2005 and early 2006. While most of
these actions increased the Company's direct expenses during 2004, as we move
forward in 2005, we expect to realize the benefits of these actions through
increased Adjusted EBITDA."
During 2004, the Company reduced its total debt outstanding by $1.8 million from
$3.1 million at December 31, 2003 to $1.2 million at December 31, 2004. As
previously reported, the Company's Board of Directors approved an increase in
its quarterly dividend for 2005 to $.20 per share from $.075 per share in 2004.
This increased dividend is first payable in 2005 on April 15, 2005, to
shareholders of record March 31, 2005.
Birner Dental Management Services, Inc. acquires, develops, and manages
geographically dense dental practice networks in select markets in Colorado, New
Mexico, and Arizona. Currently, the Company manages 56 dental offices, of which
36 were acquired and 20 were de novo developments. The Company operates its
dental offices under the PERFECT TEETH(R) name.
The Company previously announced it would conduct a conference call to review
year to date and quarter ended December 31, 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, March 24, 2005, at 9:00 a.m. MT. To participate in this conference
call, dial in to 1-800-406-5345 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 24th, the rebroadcast number is
1-888-203-1112 with the pass code of 4274820. This rebroadcast will be available
through April 7, 2005.
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 2005 and other
future periods. 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 Twelve Months Ended
December 31, December 31,
--------------------------- -----------------------------
2003 2004 2003 2004
----------- ----------- ----------- -----------
NET REVENUE (a) $ 7,183,120 $ 7,767,432 $30,539,417 $32,170,405
DIRECT EXPENSES:
Clinical salaries and benefits 2,693,608 2,954,438 11,537,539 11,985,523
Dental supplies 404,760 485,289 1,767,574 1,987,951
Laboratory fees 542,630 549,409 2,366,843 2,398,743
Occupancy 861,982 919,196 3,447,471 3,584,515
Advertising and marketing 85,194 112,655 357,254 678,193
Depreciation and amortization 491,625 430,993 2,147,635 1,787,892
General and administrative 804,306 947,286 3,407,851 3,826,401
----------- ----------- ----------- -----------
5,884,105 6,399,266 25,032,167 26,249,218
----------- ----------- ----------- -----------
Contribution from dental offices 1,299,015 1,368,166 5,507,250 5,921,187
CORPORATE EXPENSES:
General and administrative 651,547 759,657 2,999,675 3,054,747
Depreciation and amortization 65,228 51,887 291,975 216,926
----------- ----------- ----------- -----------
Operating income 582,240 556,622 2,215,600 2,649,514
Interest expense, net 30,149 1,719 154,656 59,062
----------- ----------- ----------- -----------
Income from continuing operations
before income taxes 552,091 554,903 2,060,944 2,590,452
Income tax expense (233,243) (209,016) (806,563) (1,023,254)
----------- ----------- ----------- -----------
Income from continuing operations 318,848 345,887 1,254,381 1,567,198
DISCONTINUED OPERATIONS
Operating (loss) attributable to assets disposed of (32,468) - (116,082) (120,169)
(Loss) recognized on dispositions - - - (192,500)
Income tax benefit 13,658 - 45,388 125,068
----------- ----------- ----------- -----------
Loss on discontinued operations (18,810) - (70,694) (187,601)
----------- ----------- ----------- ----------
Net income $ 300,038 $ 345,887 $ 1,183,687 $1,379,597
=========== ========== =========== ==========
Net income per share of Common Stock - Basic:
Continuing operations $ .27 $ .29 $ .96 $ 1.30
Discontinued operations (.02) - (.05) (.16)
----------- ---------- ----------- ----------
Net income per share of Common Stock - Basic $ .25 $ .29 $ .91 $ 1.14
=========== ========== =========== ==========
Net income per share of Common Stock - Diluted:
Continuing operations $ .24 $ .26 $ .88 $ 1.19
Discontinued operations (.01) - (.05) (.14)
----------- ---------- ----------- ----------
Net income per share of Common Stock - Diluted $ .23 $ .26 $ .83 $ 1.05
=========== ========== =========== ==========
Weighted average number of shares of Common Stock
and dilutive securities:
Basic 1,202,230 1,208,442 1,302,113 1,207,922
========= ========= ========= =========
Diluted 1,313,327 1,321,303 1,427,936 1,315,527
========= ========= ========= =========
a) Total dental group practice revenue less amounts retained by group
practices. Dental practice revenue was $11,205,066 for the three months
ended December 31, 2004 compared to $10,302,326 for the three months ended
December 31, 2003 and was $46,460,595 for the twelve months ended December
31, 2004 compared to $43,273,221 for the twelve months ended December 31,
2003.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
ASSETS 2003 2004
------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 1,110,786 $ 756,181
Accounts receivable, net of allowance for doubtful accounts
of $215,838 and $232,543, respectively 2,673,041 2,976,186
Deferred tax asset 121,475 135,826
Income tax receivable - 80,318
Prepaid expenses and other assets 736,424 800,671
------------- ------------
Total current assets 4,641,726 4,749,182
PROPERTY AND EQUIPMENT, net 2,680,169 3,164,124
OTHER NONCURRENT ASSETS:
Intangible assets, net 14,732,349 13,787,093
Deferred charges and other assets 155,461 159,440
------------- ------------
Total assets $ 22,209,705 $ 21,859,839
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,990,467 $ 4,637,927
Income taxes payable 190,883 -
Current maturities of long-term debt 351,847 167,217
------------- ------------
Total current liabilities 4,533,197 4,805,144
LONG-TERM LIABILITIES:
Deferred tax liability, net 349,801 670,893
Long-term debt, net of current maturities 2,735,576 1,078,711
Other long-term obligations 179,884 176,741
------------- ------------
Total liabilities 7,798,458 6,731,489
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 1,208,510 shares issued and
outstanding, respectively 12,428,363 12,125,811
Retained earnings 1,982,884 3,002,539
------------- ------------
Total shareholders' equity 14,411,247 15,128,350
------------- ------------
Total liabilities and shareholders' equity $ 22,209,705 $ 21,859,839
============= ============
Although Adjusted 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 Adjusted
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 Adjusted EBITDA can be made by
adding Discontinued operations (before income tax expense), Depreciation and
amortization - Offices, Depreciation and amortization - Corporate, Interest
expense, net and Income tax expense to Net income as in the table below.
Quarters Ended December 31, Twelve Months Ended December 31,
------------------------------ --------------------------------
2003 2004 2003 2004
------------ ----------- ----------- ------------
RECONCILIATION OF Adjusted EBITDA:
Net income $ 300,038 $ 345,887 $ 1,183,687 $ 1,379,597
Discontinued operations -
(before income tax expense) 32,468 - 116,082 312,669
Depreciation and amortization - Offices 491,625 430,993 2,147,635 1,787,892
Depreciation and amortization - Corporate 65,228 51,887 291,975 216,926
Interest expense, net 30,149 1,719 154,656 59,062
Income tax expense 219,585 209,016 761,175 898,186
----------- ---------- ----------- ------------
Adjusted EBITDA $ 1,139,093 $ 1,039,502 $ 4,655,210 $ 4,654,332
============ =========== =========== ===========
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 December 31, Twelve Months Ended December 31,
------------------------------ --------------------------------
2003 2004 2003 2004
------------ ----------- ------------ -------------
Total dental group practice revenue $ 10,302,326 $ 11,205,066 $ 43,273,221 $ 46,460,595
Amounts retained by group practices (3,119,206) (3,437,634) (12,733,804) (14,290,190)
------------- ------------- ------------ -------------
Net revenue $ 7,183,120 $ 7,767,432 $ 30,539,417 $ 32,170,405
============ ============ ============ =============