Exhibit No. 99.1
Birner Dental Management Services, Inc.
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
March 21, 2006
BIRNER DENTAL MANAGEMENT SERVICES, INC.
ANNOUNCES NET INCOME AND REVENUE UP 57% AND 13%, RESPECTIVELY,
IN 2005 VERSUS 2004
DENVER, COLORADO, March 21, 2006. Birner Dental Management Services, Inc.
(NASDAQ Capital Market: BDMS), operators of PERFECT TEETH(R) dental practices,
announced results for the year and quarter ended December 31, 2005. The
Company's net income increased 56.9% to $2.2 million, or $.82 per share of
common stock, compared to net income of $1.4 million, or $.53 per share of
common stock, for the year ended December 31, 2004. Net income for the year
ended December 31 included an expense of $748,000 ($475,000 after tax, or $.18
per share) related to a restricted stock grant in the 2005 period and an
after-tax loss on discontinued operations and disposition of assets of $188,000,
or $.07 per share of common stock, in 2004.
Total dental group practice revenue increased $6.1 million, or 13.1%, to $52.5
million for the year ended December 31, 2005 compared to $46.5 million for the
year ended December 31, 2004. For the year ended December 31, 2005, net revenue
increased $4.5 million, or 14.1% to $36.7 million, compared to net revenue of
$32.2 million in 2004. Earnings before interest, taxes, depreciation,
amortization and discontinued operations ("Adjusted EBITDA") for the year ended
December 31, 2005 increased $748,000, or 16.1%, to $5.4 million from $4.7
million for the year ended December 31, 2004.
Net income for the fourth quarter of 2005 increased 20.6% to $417,000, or $.16
per share of common stock, compared to net income of $346,000, or $.13 per share
of common stock, for the quarter ended December 31, 2004. After adding back the
after-tax equity compensation expense, net income for the fourth quarter of 2005
would have been $467,000, or a 35.1% increase over net income for the fourth
quarter of 2004. Total dental group practice revenue increased $1.3 million, or
11.9%, to $12.5 million for the quarter ended December 31, 2005 compared to
$11.2 million for the quarter ended December 31, 2004. For the quarter ended
December 31, 2005, net revenue increased $923,000, or 11.9%, to $8.7 million,
compared to net revenue of $7.8 million for the corresponding period in 2004.
The Company's Adjusted EBITDA increased $220,000, or 21.1%, to $1.3 million for
the quarter ended December 31, 2005 compared to $1.0 million for the quarter
ended December 31, 2004.
The Company has opened three de novo offices; one in the Phoenix, Arizona market
in October 2005, one in the Denver, Colorado market in January 2005 and one in
the Phoenix, Arizona market in March 2006. For the remainder of 2006, the
Company anticipates opening three more de novo offices; one each in the Denver,
Phoenix and Albuquerque markets, and will continue to evaluate other potential
sites. The three additional de novo offices are projected to open in the second
and third quarters of 2006. The Company completed a major remodel and expansion
of one of its Denver market offices in November 2005 and intends to complete a
second office expansion of a Denver market office in the second quarter of 2006.
In February 2006, the Company opened a new office in its Colorado Springs,
Colorado market that was a relocation of an existing office into a much larger
facility.
During 2005, the Company purchased 312,000 shares of its Common Stock for
approximately $4.3 million and paid out just over $800,000 in dividends to its
shareholders. The Company's borrowing's under its line of credit increased by
$2.0 million during the year to $2.9 million at December 31, 2005.
In August 2005, and as previously announced, the Company's stock was split
2-for-1. All shares outstanding and per share results reported herein have been
adjusted to reflect the stock split. As previously reported, the Company's Board
of Directors approved an increase in its quarterly dividend for 2006 to $.13 per
share from $.10 per share in 2005. This increased dividend is first payable on
April 15, 2006 to shareholders of record on March 31, 2006.
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 58 dental offices, of which
35 were acquired and 23 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, 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, March 21, 2006, at 9:00 a.m. MT. To participate in this conference
call, dial in to 1-888-280-4443 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 21st, the rebroadcast number is
1-888-203-1112 with the pass code of 4334405. This rebroadcast will be available
through April 4, 2006.
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 2006 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)
Quarter Ended Year Ended
December 31, December 31,
----------------------------------- ------------------------------------
2004 2005 2004 2005
---------------- --------------- --------------- -----------------
NET REVENUE: (a) $7,767,432 $8,690,653 $32,170,405 $36,716,117
DIRECT EXPENSES:
Clinical salaries and benefits 2,954,438 3,280,373 11,985,523 13,578,650
Dental supplies 485,289 517,113 1,987,951 2,215,685
Laboratory fees 549,409 573,224 2,398,743 2,446,344
Occupancy 919,196 998,711 3,584,515 3,864,640
Advertising and marketing 112,655 156,932 678,193 951,916
Depreciation and amortization 430,993 441,340 1,787,892 1,703,330
General and administrative 947,286 1,136,159 3,826,401 4,183,471
---------------- --------------- --------------- -----------------
6,399,266 7,103,852 26,249,218 28,944,036
---------------- --------------- --------------- -----------------
Contribution from dental offices 1,368,166 1,586,801 5,921,187 7,772,081
CORPORATE EXPENSES:
General and administrative (includes $81,030
of equity compensation in the
quarter ended December 31, 2005 and
$747,904 of equity compensation and
related taxes in the
year ended December 31, 2005) 759,657 850,149 3,054,747 4,235,510
Depreciation and amortization 51,887 36,625 216,926 139,512
---------------- --------------- --------------- -----------------
Operating income 556,622 700,027 2,649,514 3,397,059
Interest expense (income), net 1,719 29,016 59,062 (12,204)
---------------- --------------- --------------- -----------------
Income from continuing operations
before income taxes 554,903 671,011 2,590,452 3,409,263
Income tax expense 209,016 254,009 1,023,254 1,244,960
---------------- --------------- --------------- -----------------
Income from continuing operations 345,887 417,002 1,567,198 2,164,303
DISCONTINUED OPERATIONS (Note 4):
Operating (loss) attributable to assets
disposed of - - (120,169) -
(Loss) recognized on dispositions - - (192,500) -
Income tax benefit - - 125,068 -
---------------- --------------- --------------- -----------------
(Loss) on discontinued operations - - (187,601) -
---------------- --------------- --------------- -----------------
Net income $345,887 $417,002 $1,379,597 $2,164,303
================ =============== =============== =================
Net income (loss) per share of
Common Stock - Basic:
Continuing operations $0.14 $0.18 $0.65 $0.91
Discontinued operations - - (0.08) -
---------------- --------------- --------------- -----------------
Net income per share of Common Stock - Basic $0.14 $0.18 $0.57 $0.91
================ =============== =============== =================
Net income (loss) per share of
Common Stock - Diluted:
Continuing operations $0.13 $0.16 $0.60 $0.82
Discontinued operations - - (0.07) -
---------------- --------------- --------------- -----------------
Net income per share of Common Stock - Diluted $0.13 $0.16 $0.53 $0.82
================ =============== =============== =================
Weighted average number of shares of
Common Stock and dilutive securities:
Basic 2,416,884 2,378,500 2,415,844 2,367,923
================ =============== =============== =================
Diluted 2,642,606 2,640,984 2,631,054 2,624,286
================ =============== =============== =================
a) Total dental group practice revenue less amounts retained by group
practices. Dental practice revenue was $12,539,249 for the quarter ended
December 31, 2005 compared to $11,205,066 for the quarter ended December 31,
2004 and was $52,526,276 for the year ended December 31, 2005 compared to
$46,460,595 for the year ended December 31, 2004.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
---------------------------------
ASSETS 2004 2005
-------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents $756,181 $921,742
Accounts receivable, net of allowance for doubtful
accounts of $232,543 and $261,031, respectively 2,976,186 3,215,369
Deferred tax asset 135,826 160,411
Income tax receivable 80,318 -
Prepaid expenses and other assets 800,671 605,599
-------------- ---------------
Total current assets 4,749,182 4,903,121
PROPERTY AND EQUIPMENT, net 3,164,124 3,939,452
OTHER NONCURRENT ASSETS:
Intangible assets, net 13,787,093 13,036,652
Deferred charges and other assets 159,440 154,245
-------------- ---------------
Total assets $21,859,839 $22,033,470
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $4,637,927 $4,678,479
Income taxes payable - 175,259
Current maturities of long-term debt 167,217 145,150
-------------- ---------------
Total current liabilities 4,805,144 4,998,888
LONG-TERM LIABILITIES:
Deferred tax liability, net 670,893 750,346
Long-term debt, net of current maturities 1,078,711 2,887,166
Other long-term obligations 176,741 195,723
-------------- ---------------
Total liabilities 6,731,489 8,832,123
COMMITMENTS AND CONTINGENCIES (Note 10)
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 2,343,675 shares issued and
outstanding, respectively 12,125,811 9,628,457
Deferred equity compensation (648,240)
Retained earnings 3,002,539 4,221,130
-------------- ---------------
Total shareholders' equity 15,128,350 13,201,347
Total liabilities and shareholders' equity $21,859,839 $22,033,470
============== ===============
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 benefit), depreciation and
amortization - offices, depreciation and amortization - corporate, amortization
of equity compensation, interest expense/(income), net and income tax expense to
net income as in the table below.
Quarters Ended 12 Months Ended
December 31, December 31,
-------------------------------- -------------------------------
2004 2005 2004 2005
------------- --------------- -------------- -------------
RECONCILIATION OF ADJUSTED EBITDA:
Net income $345,887 $417,002 $1,379,597 $2,164,303
Add Back:
Discontinued operations -
(before income tax expense) - - 312,669 -
Depreciation and amortization - Offices 430,993 441,340 1,787,892 1,703,330
Depreciation and amortization - Corporate 51,887 36,625 216,926 139,512
Amortization of equity compensation - 81,030 - 162,060
Interest expense (income), net 1,719 29,016 59,062 (12,204)
Income tax expense 209,016 254,009 898,186 1,244,960
------------- --------------- -------------- -------------
ADJUSTED EBITDA $1,039,502 $1,259,022 $4,654,332 $5,401,961
============= =============== ============== =============
Total dental group practice revenue is the revenue generated at the Company's
offices from professional services provided to its patients. Amounts retained by
dental offices 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 12 Months Ended
December 31, December 31,
-------------------------------- --------------------------------
2004 2005 2004 2005
------------- -------------- -------------- -------------
Total dental group practice revenue $11,205,066 $12,539,249 $46,460,595 $52,526,276
Less - amounts retained by dental offices 3,437,634 3,848,596 14,290,190 15,810,159
------------- -------------- -------------- -------------
Net revenue $7,767,432 $8,690,653 $32,170,405 $36,716,117
============= ============== ============== =============