Press Release
Dialysis Corporation of America
Reports
Third Quarter 2007 Results
Linthicum, Maryland, Wednesday, November 7, 2007 - Dialysis Corporation of
America (NASDAQ-DCAI) announced its financial results for the third quarter
of 2007.
* Operating revenues for the third quarter were $19,173,000 compared to
$16,586,000 for the same period last year, a 16% increase.
* Net income for the third quarter was $927,000 or $.10 per share ($.10
diluted per share) compared to $814,000 or $.09 per share ($.08 diluted
per share) for the same period last year, a 14% increase.
* Operating revenues for the first nine months of 2007 were $54,549,000
compared to $44,261,000 for the same period last year, a 23% increase.
* Net income for the first nine months of 2007 was $2,064,000 or $.22 per
share ($.21 diluted per share) compared to $1,929,000 or $.20 per share
($.20 diluted per share) for the same period last year, a 7% increase.
Stephen Everett, President and Chief Executive Officer, commented, "The
quarter proved to be in line with our expectations and slightly ahead on a
revenue per treatment basis, in spite of a small decrease in EPO usage on a
per treatment basis. Simultaneously, our balance sheet is in great shape with
both improved DSO and reduced borrowings. Our year over year planned increase
in administrative costs was largely offset with decreases in new center
start-up costs, and non-cash stock and option expenses. We are very pleased
with our current position as we prepare to enter 2008. "
Financial results for the period included: (i) pre-tax costs associated with
the opening of new centers of $82,000 for the third quarter of 2007 compared
to $324,000 for the same period last year, and $400,000 for the first nine
months of 2007 compared to $1,171,000 for the same period last year; and (ii)
non-cash stock and option compensation expense of $53,000 for the third
quarter of 2007 compared to $122,000 for the same period last year and
$254,000 for the first nine months of 2007 compared to $293,000 for the same
period last year.
Dialysis Corporation of America owns and operates freestanding kidney
hemodialysis centers located in Georgia, Maryland, New Jersey, Ohio,
Pennsylvania, South Carolina and Virginia, and provides in-hospital dialysis
services on a contract basis to certain hospitals located in those states.
The company provides patients with their choice of a full range of quality
in-center, acute or at home hemodialysis services. The company has three new
centers under development in Indiana, Ohio and South Carolina, and is engaged
in negotiations for development of additional centers, as well as reviewing
other potential growth opportunities.
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, 2006. 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.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2007 2006 2007 2006
---- ---- ---- ----
Operating revenues:
Sales
Medical services revenue $18,819,993 $16,280,763 $53,534,708 $43,219,316
Product sales 272,029 223,651 803,620 677,281
----------- ----------- ----------- -----------
Total sales revenues 19,092,022 16,504,414 54,338,328 43,896,597
Other income 80,910 82,010 210,319 364,877
----------- ----------- ----------- -----------
19,172,932 16,586,424 54,548,647 44,261,474
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of sales
Cost of medical services 11,167,118 9,895,768 32,463,826 26,385,709
Cost of product sales 162,990 144,635 488,695 420,246
----------- ----------- ----------- -----------
Total cost of sales revenues 11,330,108 10,040,403 32,952,521 26,805,955
Selling, general and
administrative expenses
Corporate 2,130,059 1,676,894 5,671,979 4,696,022
Facility 2,715,047 2,329,274 8,307,960 6,517,481
----------- ----------- ----------- -----------
Total 4,845,106 4,006,168 13,979,939 11,213,503
Stock compensation expense 52,509 122,070 253,984 292,972
Depreciation and amortization 672,873 618,169 1,963,835 1,704,177
Provision for doubtful accounts 450,254 345,436 1,159,434 738,349
----------- ----------- ----------- -----------
17,350,850 15,132,246 50,309,713 40,754,956
----------- ----------- ----------- -----------
Operating income 1,822,082 1,454,178 4,238,934 3,506,518
Other (expense) income, net (46,770) 255,166 (83,978) 388,440
----------- ----------- ----------- -----------
Income before income taxes, minority and
other equity interests and equity in
affiliate earnings 1,775,312 1,709,344 4,154,956 3,894,958
Income tax provision 580,885 504,933 1,447,306 1,364,318
Income before minority and other equity
interests and equity in affiliate
earnings 1,194,427 1,204,411 2,707,650 2,530,640
Minority and other equity interests in
income of consolidated subsidiaries (267,010) (414,482) (643,886) (818,996)
Equity in affiliate earnings --- 24,459 --- 216,927
----------- ----------- ----------- -----------
Net income $ 927,417 $ 814,388 $ 2,063,764 $ 1,928,571
=========== =========== =========== ===========
Earnings per share:
Basic $.10 $.09 $.22 $.20
==== ==== ==== ====
Diluted $.10 $.08 $.21 $.20
==== ==== ==== ====
Weighted average shares outstanding:
Basic 9,573,596 9,549,079 9,572,656 9,460,570
========= ========= ========= =========
Diluted 9,604,278 9,599,004 9,609,136 9,565,308
========= ========= ========= =========
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2007 2006(A)
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 4,256,819 $ 3,491,569
Accounts receivable, less allowance of $2,380,000 at
September 30, 2007; $2,512,000 at December 31, 2006 18,839,388 15,695,302
Inventories, less allowance for obsolescence of
$78,000 at September 30, 2007 and December 31, 2006 2,109,336 1,985,415
Deferred income tax asset 1,105,000 1,105,000
Prepaid expenses and other current assets 2,982,418 3,178,788
Prepaid and refundable income taxes 174,174 174,174
----------- -----------
Total current assets 29,467,135 25,630,248
----------- -----------
Property and equipment:
Land 1,333,191 1,338,191
Buildings and improvements 5,705,642 6,128,626
Machinery and equipment 13,086,893 12,056,713
Leasehold improvements 9,116,985 7,921,149
----------- -----------
29,242,711 27,444,679
Less accumulated depreciation and amortization 12,812,781 11,091,432
----------- -----------
16,429,930 16,353,247
----------- -----------
Deferred income taxes --- 359,295
Goodwill 8,386,599 6,681,160
Other assets 1,039,787 831,776
----------- -----------
Total other assets 9,426,386 7,872,231
----------- -----------
$55,323,451 $49,855,726
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,979,214 $ 1,998,125
Accrued expenses 6,126,458 5,744,348
Income taxes payable 140,557 660,092
Current portion of long-term debt 56,000 130,000
----------- -----------
Total current liabilities 9,302,229 8,532,565
Deferred income taxes 542,138 ---
Long-term debt, less current portion 9,623,126 8,618,325
----------- -----------
Total liabilities 19,467,493 17,150,890
----------- -----------
Minority interest in subsidiaries 4,892,600 3,643,347
Commitments and Contingencies
Stockholders' equity:
Common stock, $.01 par value, authorized 20,000,000 shares:
9,573,596 shares issued and outstanding at September 30, 2007;
9,564,346 shares issued and outstanding at December 31, 2006 95,735 95,643
Additional paid-in capital 15,567,219 15,729,206
Retained earnings 15,300,404 13,236,640
----------- -----------
Total stockholders' equity 30,963,358 29,061,489
----------- -----------
$55,323,451 $49,855,726
=========== ===========
(A) Reference is made to the company's Annual Report on Form 10-K for the year
ended December 31, 2006 filed with the Securities and Exchange Commission
in March, 2007.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
Nine Months Ended September, 30,
-------------------------------
2007 2006 Y/Y Change %
---- ---- ------------
Operating data:
Treatments:
Consolidated 178,372 148,607 20.0%
Managed 8,290 11,669 -29.0%
Total treatments 186,662 160,276 16.5%
Patient revenue per treatment $300.13 $290.83 3.2%
Non-acquired growth data:
Non-acquired treatment growth 6% 9%
Non-acquired revenue per treatment change 1% 7%
Non-acquired patient revenue growth 7% 16%
Key clinical metrics:
Treatment adequacy (% of pts with Kt/V
greater than 1.2) 95.00% 95.69%
Anemia management (% of pts with Hgb
greater than 11) 82.02% 80.43%
Venous access (% of pts with AVF) 49.83% 47.01%
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