Press Release
Dialysis Corporation of America
Reports
Second Quarter 2008 Results
Linthicum, Maryland, Wednesday, August 6, 2008 - Dialysis Corporation of
America (NASDAQ-DCAI) announced its financial results for the second quarter
of 2008. Operating revenues for the second quarter were $20,836,000 compared
to $18,485,000 for the same period last year, a 13% increase, and $41,321,000
for the first half of 2008 compared to $35,376,000 for the same period last
year, a 17% increase. Net income for the quarter was $663,000 or $.07 per
share ($.07 diluted per share) compared to $753,000 or $.08 per share ($.08
diluted per share) for the same period last year, and $1,112,000 or $.12 per
share ($.12 diluted per share) for the first half of 2008 compared to
$1,136,000 or $.12 per share ($.12 diluted per share) for the same period
last year.
Stephen Everett, President and Chief Executive Officer, commented, "With the
exception of a few non-recurring expense items during the quarter, our
financial performance was on target with company expectations. Additionally,
DCA's clinical quality results continue to rank well above industry averages,
which is a critical component of both our short and long term goals. Our
company's technical and financial infrastructure continues to build with the
recent addition of a clinical reporting software system, which will be
deployed throughout the organization over the next couple of years. Finally,
I am pleased to announce that our new center in Camp Hill Pennsylvania was
certified by Medicare earlier this week and is in the process of bringing new
patients into our system. We anticipate this center to be treating
approximately 75 patients within its first full year of operation."
Financial results included: (i) a non-recurring reserve of $375,000 for
patients with terminated benefits, reimbursement rates less than anticipated,
and non-collectable receivables from a patient; (ii) pre-tax costs associated
with the opening of new centers of $62,000 for the second quarter of 2008
compared to $112,000 for the same period last year, and $238,000 for the
first half of 2008 compared to $318,000 for the same period last year; and
(iii) non-cash stock and option compensation expense of $82,000 for the
second quarter of 2008 compared to $88,000 for the same period last year and
$156,000 for the first half of 2008 compared to $201,000 for the same period
last year.
Dialysis Corporation of America will be hosting a conference call in
conjunction with its earnings release for the second quarter of 2008.
The conference call will be held on Thursday, August 7, 2008 at 10:00 a.m.
EDT. The call is accessible either by dialing 1-800-930-7709 (enter
pass-code 4743188), or by simulcast on the internet at
http://www.investorcalendar.com/IC/CEPage.asp?ID=132142. Participants may
be asked to provide the title of the conference call, which is "Dialysis
Corporation of America 2nd Quarter Earnings." A replay of the conference
call will be available on the company's website, www.dialysiscorporation.com,
for a period of thirty days following the conference call.
Dialysis Corporation of America currently owns 36 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.
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 payers, 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, 2007. 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
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ------------------
2008 2007 2008 2007
---- ---- ---- ----
Operating revenues:
Sales:
Medical services revenue $20,519,222 $18,117,808 $40,714,224 $34,714,715
Product sales 317,017 300,531 607,103 531,591
----------- ----------- ----------- -----------
Total sales revenues 20,836,239 18,418,339 41,321,327 35,246,306
Other income --- 66,849 --- 129,409
----------- ----------- ----------- -----------
20,836,239 18,485,188 41,321,327 35,375,715
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of sales revenues:
Cost of medical services 12,661,921 10,894,244 25,019,706 21,296,708
Cost of product sales 173,746 182,244 334,481 325,705
----------- ----------- ----------- -----------
Total cost of sales revenues 12,835,667 11,076,488 25,354,187 21,622,413
Selling, general and administrative
expenses:
Corporate 2,449,491 1,893,397 4,838,035 3,541,920
Facility 2,996,083 2,862,590 6,078,242 5,592,913
----------- ----------- ----------- -----------
Total 5,445,574 4,755,987 10,916,277 9,134,833
Stock compensation expense 81,884 87,505 156,485 201,475
Depreciation and amortization 678,831 655,226 1,341,403 1,290,962
Provision for doubtful accounts 649,113 353,083 1,079,143 709,180
----------- ----------- ----------- -----------
19,691,069 16,928,289 38,847,495 32,958,863
----------- ----------- ----------- -----------
Operating income 1,145,170 1,556,899 2,473,832 2,416,852
Other income (expense), net 12,857 (27,981) (29,210) (37,208)
----------- ----------- ----------- -----------
Income before income taxes and
minority interest 1,158,027 1,528,918 2,444,622 2,379,644
Income tax provision 305,170 520,649 684,908 866,421
----------- ----------- ----------- -----------
Income before minority interest 852,857 1,008,269 1,759,714 1,513,223
Minority interest in income
of consolidated subsidiaries (190,198) (255,142) (648,143) (376,876)
----------- ----------- ----------- -----------
Net income $ 662,659 $ 753,127 $ 1,111,571 $ 1,136,347
========== ========== =========== ===========
Earnings per share:
Basic $.07 $.08 $.12 $.12
==== ==== ==== ====
Diluted $.07 $.08 $.12 $.12
==== ==== ==== ====
Weighted average shares outstanding:
Basic 9,579,766 9,573,244 9,579,931 9,572,178
========= ========= ========= =========
Diluted 9,613,663 9,611,096 9,614,819 9,611,599
========= ========= ========= =========
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
2008 2007
-------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,692,475 $ 2,447,820
Accounts receivable, net 20,951,827 20,159,926
Inventories, net 2,457,504 2,006,661
Deferred income tax asset 998,000 998,000
Other current assets 2,412,264 3,313,406
----------- -----------
Total current assets 30,512,070 28,925,813
----------- -----------
Property and equipment 30,573,834 28,766,423
Less accumulated depreciation and amortization 13,337,405 12,264,029
----------- -----------
17,236,429 16,502,394
----------- -----------
Goodwill 10,549,501 8,576,893
Other assets 681,580 841,092
----------- -----------
Total other assets 11,231,081 9,417,985
----------- -----------
$58,979,580 $54,846,192
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $10,203,537 $10,224,199
Income taxes payable --- 33,297
Current portion of long-term debt 67,000 56,000
Acquisition liabilities 1,323,020 ---
----------- -----------
Total current liabilities 11,593,557 10,313,496
Deferred income taxes 574,000 574,000
Long-term debt, less current portion 7,820,156 7,009,419
----------- -----------
Total liabilities 19,987,713 17,896,915
----------- -----------
Minority interest in subsidiaries 5,645,317 4,942,797
Commitments and Contingencies
Stockholders' equity:
Common stock 95,797 95,736
Additional paid-in capital 15,816,220 15,587,782
Retained earnings 17,434,533 16,322,962
----------- -----------
Total stockholders' equity 33,346,550 32,006,480
----------- -----------
$58,979,580 $54,846,192
=========== ===========
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(Unaudited)
Three Months Ended June 30,
--------------------------- Period-to-Period
2008 2007 Change %
---- ---- --------
Operating data:
Treatments:
Consolidated 68,021 60,235 12.9%
Managed --- 2,771 (100.0)%
------ ------
Total treatments 68,021 63,006 8.0%
Patient revenue per treatment $301.66 $300.79 .3%
Same center growth data:
Same center treatment growth 5% 5%
Same center revenue per treatment
change (1)% 4%
Same center patient revenue growth 4% 9%
Six Months Ended June 30,
-------------------------- Period-to-Period
2008 2007 Change %
---- ---- --------
Operating data:
Treatments:
Consolidated 133,342 117,082 13.9%
Managed --- 5,461 (100.0)%
------- -------
Total treatments 133,342 122,543 8.8%
Patient revenue per treatment $305.34 $296.50 3.0%
Same center growth data:
Same center treatment growth 6% 7%
Same center revenue per treatment
change 2% 1%
Same center patient revenue growth 8% 9%
2nd Quarter 1st Quarter
2008 2008
---- ----
Key clinical metrics:
Treatment adequacy (% of pts with
Kt/V greater than 1.2) 96% 96%
Anemia management (% of pts with
Hgb greater than 11) 82% 80%
Venous access (% of pts with AVF) 55%
55%
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