Exhibit No. 99.11
Birner Dental Management Services, Inc.
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
August 9, 2005
BIRNER DENTAL MANAGEMENT SERVICES, INC.
ANNOUNCES 49.3% NET INCOME INCREASE
FOR THE 2Q '05 VERSUS 2Q `04
DENVER, COLORADO, August 9, 2005. Birner Dental Management Services, Inc.
(NASDAQ SmallCap Market: BDMS), operators of PERFECT TEETH(R) dental practices,
announced results for the quarter ended June 30, 2005. The Company reported net
income increased 49.3% to $633,000, or $.25 per share of common stock compared
to net income of $424,000, or $.16 per share of common stock for the quarter
ended June 30, 2004. Total dental group practice revenue increased $1.6 million,
or 13.7%, to $13.3 million for the quarter ended June 30, 2005 compared to total
group practice revenue of $11.7 million for the quarter ended June 30, 2004. For
the quarter ended June 30, 2005, net revenue increased $1.2 million to $9.4
million, or 14.9%, compared to net revenue of $8.2 million for the corresponding
period in 2004. The Company's earnings before interest, taxes, depreciation,
amortization and discontinued operations ("Adjusted EBITDA") increased $215,000,
or 17.0%, to $1,484,000 for the quarter ended June 30, 2005 compared to
$1,269,000 for the quarter ended June 30, 2004.
For the six months ended June 30, 2005, net income increased 56.2% to $1.3
million, or $.52 per share of common stock compared to net income of $853,000,
or $.33 per share of common stock for the six months ended June 30, 2004. Total
dental group practice revenue increased $3.1 million, or 13.4%, to $26.7 million
for the six months ended June 30, 2005 compared to $23.6 million for the six
months ended June 30, 2004. For the six months ended June 30, 2005, net revenue
increased $2.4 million to $18.8 million, or 14.5%, compared to net revenue of
$16.4 million for the corresponding period in 2004. Adjusted EBITDA for the six
months ended June 30, 2005 increased $524,000, or 20.3%, to $3.1 million
compared to $2.6 million for the six months ended June 30, 2004.
On July 13, 2005, the Company announced that its Board of Directors had declared
a 2-for-1 stock split of its common stock. The 2-for-1 stock split, which was
effected as a stock dividend, was distributed on August 8, 2005 to shareholders
of record at the close of business on August 1, 2005. The stock split increased
the number of shares outstanding from 1,210,295 on August 8, 2005 to 2,420,590.
All share and earnings per share calculations for all periods in this press
release have been restated to reflect the effect of the stock split.
On July 1, 2005, the independent directors of the Company's Board of Directors
approved an award of 60,000 shares of restricted stock to the Company's Chairman
and Chief Executive Officer. This grant was in accordance with the terms of the
2005 Equity Incentive Plan. The shares granted vest one-third on each of January
1, 2006, January 1, 2007 and January 1, 2008. In connection with this grant, the
Company has agreed to reimburse the Chief Executive Officer for his tax
liability incurred in connection with the award. Such reimbursement will total
approximately $580,000. As a result of the award of shares and the reimbursement
of the tax liability, the Company expects to recognize equity compensation
expense, before taxes, of approximately $661,000 in the quarter ended September
30, 2005 and approximately $81,000 of compensation expense, before taxes, in
each subsequent quarter through the quarter ending December 31, 2007.
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 June 30, 2005 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, August 9, 2005, at 9:00 a.m. MT. To participate in this conference
call, dial in to 1-800-231-9012 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 9, the rebroadcast number is
1-888-203-1112 with the pass code of 4263331. This rebroadcast will be available
through August 23, 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 and compensation expense. 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 Six Months Ended
June 30, June 30,
--------------------------- -----------------------------
2004 2005 2004 2005
NET REVENUE (a) $ 8,177,042 $ 9,393,284 $16,387,238 $18,761,015
DIRECT EXPENSES:
Clinical salaries and benefits 3,006,341 3,490,196 6,035,947 6,976,346
Dental supplies 495,415 599,015 957,839 1,132,353
Laboratory fees 638,934 655,810 1,267,572 1,284,306
Occupancy 867,920 952,684 1,743,068 1,912,900
Advertising and marketing 189,589 312,155 335,677 571,597
Depreciation and amortization 453,575 416,620 921,316 840,992
General and administrative 965,704 992,319 1,905,245 1,972,432
----------- ----------- ----------- -----------
6,617,478 7,418,799 13,166,664 14,690,926
----------- ----------- ----------- -----------
Contribution from dental offices 1,559,564 1,974,485 3,220,574 4,070,089
CORPORATE EXPENSES:
General and administrative 743,867 906,629 1,561,956 1,807,117
Depreciation and amortization 54,325 32,618 110,922 69,292
----------- ----------- ----------- -----------
Operating income 761,372 1,035,238 1,547,696 2,193,680
Interest expense (income), net 17,517 (20,235) 43,619 (27,867)
Income from continuing operations
before income taxes 743,855 1,055,473 1,504,077 2,221,547
Income tax expense (297,542) (422,205) (601,631) (888,636)
----------- ----------- ----------- -----------
Income from continuing operations 446,313 633,268 902,446 1,332,911
DISCONTINUED OPERATIONS
Operating (loss) attributable to assets disposed of (36,840) - (82,035) -
(Loss) recognized on dispositions - - - -
Income tax benefit 14,736 - 32,814 -
----------- ----------- ----------- -----------
Loss on discontinued operations (22,104) - (49,221) -
----------- ----------- ----------- -----------
Net income $ 424,209 $ 633,268 $ 853,225 $ 1,332,911
=========== =========== =========== ===========
Net income per share of Common Stock - Basic:
Continuing operations $ .19 $ .27 $ .38 $ .57
Discontinued operations (.01) - (.02) -
------------ ----------- ----------- -----------
Net income per share of Common Stock - Basic $ .18 $ .27 $ .36 $ .57
=========== =========== =========== ===========
Net income per share of Common Stock - Diluted:
Continuing operations $ .17 $ .25 $ .35 $ .52
Discontinued operations (.01) - (.02) -
------------ ----------- ----------- -----------
Net income per share of Common Stock - Diluted $ .16 $ .25 $ .33 $ .52
=========== =========== =========== ===========
Weighted average number of shares of Common Stock
and dilutive securities:
Basic 2,379,582 2,306,202 2,378,442 2,342,994
=========== =========== =========== ===========
Diluted 2,596,602 2,555,696 2,594,126 2,587,816
=========== =========== =========== ===========
a) Total dental group practice revenue less amounts retained by group
practices. Dental group practice revenue was $13,344,516 for the three
months ended June 30, 2005 compared to $11,740,173 for the three months
ended June 30, 2004 and was $26,694,923 for the six months ended June 31,
2005 compared to $23,550,013 for the six months ended June 30, 2004.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
ASSETS 2004 2005
----------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 756,181 $ 1,006,352
Accounts receivable, net of allowance for doubtful accounts
of $230,495 and $251,661, respectively 2,976,186 3,838,860
Deferred tax asset 135,826 135,826
Income tax receivable 80,318 -
Prepaid expenses and other assets 800,671 538,086
----------- ------------
Total current assets 4,749,182 5,519,124
PROPERTY AND EQUIPMENT, net 3,164,124 3,113,429
OTHER NONCURRENT ASSETS:
Intangible assets, net 13,787,093 13,411,873
Deferred charges and other assets 159,440 157,965
----------- ------------
Total assets $21,859,839 $22,202,391
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 4,637,927 $ 5,240,098
Income taxes payable - 426,018
Current maturities of long-term debt 167,217 165,221
----------- ------------
Total current liabilities 4,805,144 5,831,337
LONG-TERM LIABILITIES:
Deferred tax liability, net 670,893 670,893
Long-term debt, net of current maturities 1,078,711 1,223,672
Other long-term obligations 176,741 171,276
----------- ------------
Total liabilities 6,731,489 7,897,178
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value, 10,000,000 shares
authorized; none outstanding - -
Common Stock, no par value, 20,000,000 shares
authorized; 2,417,020 and 2,355,990 shares issued and
outstanding, respectively 12,125,811 10,442,330
Retained earnings 3,002,539 3,862,883
----------- ------------
Total shareholders' equity 15,128,350 14,305,213
----------- ------------
Total liabilities and shareholders' equity $21,859,839 $22,202,391
=========== ===========
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/(income), net and Income tax expense to Net income as in the table
below.
Quarters Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2004 2005 2004 2005
Reconciliation of Adjusted EBITDA:
Net income $ 424,209 $ 633,268 $ 853,225 $ 1,332,911
Discontinued operations -
(before income tax expense) 36,840 - 82,035 -
Depreciation and amortization - Offices 453,575 416,620 921,316 840,992
Depreciation and amortization - Corporate 54,325 32,618 110,922 69,292
Interest expense/(income), net 17,517 (20,235) 43,619 (27,867)
Income tax expense 282,806 422,205 568,817 888,636
----------- ---------- ----------- ------------
Adjusted EBITDA $ 1,269,272 $1,484,476 $ 2,579,934 $3,103,964
=========== ========== =========== ==========
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 Six Months Ended
June 30, June 30,
----------------------------- -------------------------------
2004 2005 2004 2005
Total dental group practice revenue $ 11,740,173 $ 13,344,516 $ 23,550,013 $ 26,694,923
Amounts retained by group practices (3,563,131) (3,951,232) (7,162,775) (7,933,908)
------------ ------------ ------------ ------------
Net revenue $ 8,177,042 $ 9,393,284 $ 16,387,238 $ 18,761,015
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