Press Release
Dialysis Corporation of America
Reports
Third Quarter 2006 Results
Linthicum, Maryland, Thursday, November 9, 2006 - Dialysis Corporation of
America (NASDAQ-DCAI) announced its financial results for the third quarter
of 2006. Operating revenues for the third quarter were $16,586,000 compared
to $11,481,000 for the same period last year, a 44% increase. Net income for
the quarter was $814,000 or $.09 per share ($.08 diluted per share) compared
to $537,000 or $.06 per share ($.06 diluted per share) for the same period
last year, representing a 52% increase in net income. Operating revenues for
the first nine months of 2006 were $44,261,000 compared to $33,235,000 for
the same period last year, a 33% increase. Net income for the first nine
months of 2006 was $1,929,000 or $.20 per share ($.20 diluted per share)
compared to $1,306,000 or $.15 per share ($.15 diluted per share) for the
same period last year, representing a 48% increase in net income.
Stephen Everett, President and Chief Executive Officer, commented, "We are
pleased with our results for the third quarter of 2006, which have again
demonstrated our commitment to building Dialysis Corporation of America,
including opening two new centers during the quarter, while increasing
shareholder value. We are currently developing three additional centers and
have a solid pipeline of new opportunities that are being explored."
Financial results for the period included operating revenues of approximately
$698,000 for our Toledo, Ohio subsidiary, which has been consolidated for
financial recording purposes since August 1, pre-tax costs associated with
the opening of new centers of $324,000 for the third quarter of 2006 and
$1,171,000 for the first nine months of 2006. Non-cash stock compensation
expense of $122,000 was included in our results of operations for the third
quarter with such costs totaling $293,000 for the first nine months of 2006.
Additionally, we incurred costs of $163,000 during the third quarter and
$177,000 for the first nine months of 2006 for review and implementation
costs related to Sarbanes-Oxley Section 404 compliance, which was offset by
$215,000 of non-recurring revenues associated with litigation settlements."
Dialysis Corporation of America currently owns or manages 32 free-standing
operating kidney hemodialysis centers in Georgia, Maryland, New Jersey, Ohio,
Pennsylvania, South Carolina and Virginia providing patients with a full
range of quality in-center and at-home dialysis services, as well as
providing in-hospital services. The company has three new centers under
development in Georgia and South Carolina.
This release contains forward-looking statements that are subject to risks
and uncertainties that could affect the business and prospects of the company
and cause actual results and plans to differ materially from those
anticipated. Those factors include, but are not limited to, maintaining
continued growth and profitability, delays beyond the company's control with
respect to future business events, the highly competitive environment in the
establishment and operation of dialysis centers, the ability to develop or
acquire additional dialysis facilities, whether patient bases of the
company's dialysis facilities can mature to provide profitability, the
extensive regulation of dialysis operations, government rate determination
for Medicare reimbursement, pricing pressure from private payors, and other
risks detailed in the company's filings with the SEC, particularly as
described in the company's annual report on Form 10-K for the fiscal year
ended December 31, 2005. The historical results contained in this press
release are not necessarily indicative of future performance of the company.
The company's press releases, corporate profile, corporate governance
materials, quarterly and current reports, and other filings with the SEC are
available on Dialysis Corporation of America's internet home page:
http://www.dialysiscorporation.com.
CONTACT: For additional information, you may contact Stephen Everett,
President and CEO of Dialysis Corporation of America, 1302 Concourse Drive,
Suite 204, Linthicum, MD 21090; Telephone No. (410) 694-0500.
- more -
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2006 2005 2006 2005
---- ---- ---- ----
Operating revenues:
Sales
Medical services revenue $16,280,763 $11,372,722 $43,219,316 $32,878,347
Product sales 223,651 --- 677,281 ---
----------- ----------- ----------- -----------
Total sales revenues 16,504,414 11,372,722 43,896,597 32,878,347
Other income 82,010 108,321 364,877 356,618
----------- ----------- ----------- -----------
16,586,424 11,481,043 44,261,474 33,234,965
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of sales
Cost of medical services 9,895,768 7,178,936 26,385,709 20,446,406
Cost of product sales 144,635 --- 420,246 ---
----------- ----------- ----------- -----------
Total cost of sales revenues 10,040,403 7,178,936 26,805,955 20,446,406
Selling, general and administrative
expenses
Corporate 1,676,894 889,797 4,696,022 3,302,732
Facility 2,329,274 1,793,585 6,517,481 5,257,418
----------- ----------- ----------- -----------
Total 4,006,168 2,683,382 11,213,503 8,560,150
Stock compensation expense 122,070 --- 292,972 ---
Depreciation and amortization 618,169 422,858 1,704,177 1,244,101
Provision for doubtful accounts 345,436 222,130 738,349 674,773
----------- ----------- ----------- -----------
15,132,246 10,507,306 40,754,956 30,925,430
----------- ----------- ----------- -----------
Operating income 1,454,178 973,737 3,506,518 2,309,535
Other income (expense)
Interest income on officer/director note --- 1,578 --- 4,291
Interest expense on note and advances
payable to parent --- (67,780) --- (157,591)
Other income, net 255,166 50,857 388,440 127,250
----------- ----------- ----------- -----------
255,166 (15,345) 388,440 (26,050)
----------- ----------- ----------- -----------
Income before income taxes, minority and
other equity interests and equity in
affiliate earnings 1,709,344 958,392 3,894,958 2,283,485
Income tax provision 504,933 352,202 1,364,318 971,110
----------- ----------- ----------- -----------
Income before minority and other equity
interests and equity in affiliate earnings 1,204,411 606,190 2,530,640 1,312,375
Minority and other equity interests in
income of consolidated subsidiaries (414,482) (128,230) (818,996) (280,631)
Equity in affiliate earnings 24,459 59,024 216,927 273,822
----------- ----------- ----------- -----------
Net income $ 814,388 $ 536,984 $ 1,928,571 $ 1,305,566
=========== =========== =========== ===========
Earnings per share:
Basic $.09 $.06 $.20 $.15
==== ==== ==== ====
Diluted $.08 $.06 $.20 $.15
==== ==== ==== ====
Weighted average shares outstanding:
Basic 9,549,079 8,715,136 9,460,570 8,957,843
=========== =========== =========== ===========
Diluted 9,599,004 9,171,192 9,565,308 9,499,951
=========== =========== =========== ===========
- more -
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
Nine Months Ended September, 30,
-------------------------------
2006 2005 Y/Y Change %
---- ---- ------------
Operating data:
Treatments:
Consolidated 148,607 120,088 23.7%
Managed 11,669 11,538 1.1%
------- ------- -----
Total treatments 160,000 131,626 21.8%
Patient revenue per treatment $290.83 $273.79 6.2%
Non-acquired growth data:
Non-acquired treatment growth 9% 3%
Non-acquired revenue per treatment change 9%
(6)%
Non-acquired patient revenue growth 18% (3)%
Key clinical metrics:
Treatment adequacy (% of pts with
Kt/V greater than 1.2) 95.69% 94.64%
Anemia management (% of pts with
Hgb greater than 11) 80.43% 80.31%
Venous access (% of pts with AVF)
47.01%
42.89%
- end -