Press Release
Dialysis Corporation of America
Reports
Third Quarter 2008 Results
Linthicum, Maryland, Wednesday, November 5, 2008 - Dialysis Corporation of
America (NASDAQ-DCAI) announced its financial results for the third quarter
of 2008. Operating revenues for the third quarter were $21,860,000 compared
to $19,173,000 for the same period last year, a 14% increase, and $63,181,000
for the first nine months of 2008 compared to $54,549,000 for the same period
last year, a 16% increase. Net income for the quarter was $875,000 or $.09
per share ($.09 diluted per share) compared to $927,000 or $.10 per share
($.10 diluted per share) for the same period last year, and $1,986,000 or
$.21 per share ($.21 diluted per share) for the first nine months of 2008
compared to $2,064,000 or $.22 per share ($.21 diluted per share) for the
same period last year.
Stephen Everett, President and Chief Executive Officer, commented, "Our
company's third quarter performance was directly in line with financial
expectations and slightly ahead of plan on a clinical outcomes basis. On the
development front, we are on track with our planned expansion through the
next several years, which was further secured by the initial increase in our
credit facility to $25,000,000, as was announced earlier today. Finally, also
within the spectrum of DCA's continued growth, we have completed a company
marketing 'makeover' and reaffirmation of our corporate principals. Key to
this is the introduction of a new logo, complete revision of our website, and
all new corporate literature. We finished the process with the development of
a new 'corporate statement' which we believe says everything ... A Commitment
to Caring."
Financial results included: (i) pre-tax costs associated with the opening of
new centers of $339,000 for the third quarter of 2008 compared to $82,000 for
the same period last year, and $577,000 for the first nine months of 2008
compared to $400,000 for the same period last year; and (ii) non-cash stock
and option compensation expense of $82,000 for the third quarter of 2008
compared to $53,000 for the same period last year and $239,000 for the first
nine months of 2008 compared to $254,000 for the same period last year.
While the company does not provide routine guidance, given the aggressive
growth strategy that DCA has put in place, the intent of which is to
approximately double the size of the company over the next few years,
management believes the following key data points will help shareholders
understand what the company should look like assuming the company
successfully completes the growth plan:
Patient census 4,000 - 4,400
Revenues $175MM - $195MM
Operating Income $25MM - $27MM
Dialysis Corporation of America will be hosting a conference call in
conjunction with its earnings release for the third quarter of 2008. The
conference call will be held on Thursday, November 6, 2008 at 10:00 a.m. EST.
The call is accessible either by dialing 1-866-238-0826 (enter conference ID:
1298061), or by simulcast on the internet at http://www.startconference.com,
conference ID 2135668 Participants may be asked to provide the title of the
conference call, which is "Dialysis Corporation of America 2008 3rd Quarter
Earnings Call." 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 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, 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.
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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,
------------------------- -------------------------
2008 2007 2008 2007
---- ---- ---- ----
Operating revenues:
Sales:
Medical services revenue $21,586,004 $18,819,993 $62,300,228 $53,534,708
Product sales 273,831 272,029 880,934 803,620
----------- ----------- ----------- -----------
Total sales revenues 21,859,835 19,092,022 63,181,162 54,338,328
Other income --- 80,910 --- 210,319
----------- ----------- ----------- -----------
21,859,835 19,172,932 63,181,162 54,548,647
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of sales revenues:
Cost of medical services 12,805,376 11,167,118 37,825,082 32,463,826
Cost of product sales 158,311 162,990 492,792 488,695
----------- ----------- ----------- -----------
Total cost of sales revenues 12,963,687 11,330,108 38,317,874 32,952,521
Selling, general and
administrative expenses:
Corporate 2,764,026 2,130,059 7,602,061 5,671,979
Facility 3,311,688 2,715,047 9,389,930 8,307,960
----------- ----------- ----------- -----------
Total 6,075,714 4,845,106 16,991,991 13,979,939
Stock compensation expense 82,393 52,509 238,878 253,984
Depreciation and amortization 708,626 672,873 2,050,029 1,963,835
Provision for doubtful accounts 499,897 450,254 1,579,040 1,159,434
----------- ----------- ----------- -----------
20,330,317 17,350,850 59,177,812 50,309,713
----------- ----------- ----------- -----------
Operating income 1,529,518 1,822,082 4,003,350 4,238,934
Other income (expense), net 488 (46,770) (28,722) (83,978)
----------- ----------- ----------- -----------
Income before income taxes and
minority interest 1,530,006 1,775,312 3,974,628 4,154,956
Income tax provision 510,899 580,885 1,195,807 1,447,306
----------- ----------- ----------- -----------
Income before minority interest 1,019,107 1,194,427 2,778,821 2,707,650
Minority interest in income of
consolidated subsidiaries (144,162) (267,010) (792,305) (643,886)
----------- ----------- ----------- -----------
Net income $ 874,945 $ 927,417 $ 1,986,516 $ 2,063,764
=========== =========== =========== ===========
Earnings per share:
Basic $.09 $.10 $.21 $.22
==== ==== ==== ====
Diluted $.09 $.10 $.21 $.21
==== ==== ==== ====
Weighted average shares outstanding:
Basic 9,579,743 9,573,596 9,579,868 9,572,656
========= ========= ========= =========
Diluted 9,614,084 9,604,278 9,614,162 9,609,136
========= ========= ========= =========
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 4,706,122 $ 2,447,820
Accounts receivable, net 20,889,179 20,159,926
Inventories, net 2,466,817 2,006,661
Deferred income tax asset 998,000 998,000
Other current assets 2,323,285 3,313,406
----------- -----------
Total current assets 31,383,403 28,925,813
----------- -----------
Property and equipment 32,065,622 28,766,423
Less accumulated depreciation and amortization 13,955,039 12,264,029
----------- -----------
18,110,583 16,502,394
----------- -----------
Goodwill 10,619,026 8,576,893
Other assets 560,238 841,092
----------- -----------
Total other assets 11,179,264 9,417,985
----------- -----------
$60,673,250 $54,846,192
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $11,653,254 $10,224,199
Income taxes payable --- 33,297
Current portion of long-term debt 74,000 56,000
Acquisition liabilities 1,349,226 ---
----------- -----------
Total current liabilities 13,076,480 10,313,496
Deferred income taxes 574,000 574,000
Long-term debt, less current portion 7,293,699 7,009,419
----------- -----------
Total liabilities 20,944,179 17,896,915
----------- -----------
Minority interest in subsidiaries 5,425,183 4,942,797
Commitments and Contingencies
Stockholders' equity:
Common stock 95,797 95,736
Additional paid-in capital 15,898,613 15,587,782
Retained earnings 18,309,478 16,322,962
----------- -----------
Total stockholders' equity 34,303,888 32,006,480
----------- -----------
$60,673,250 $54,846,192
=========== ===========
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(Unaudited)
<CAPTION
Three Months Ended September 30, Period-to-Period
------------------------------- Change %
2008 2007 ----------------
---- ----
Operating data:
Treatments:
Consolidated 68,925 61,290 12.5%
Managed --- 2,829 (100.0)%
------- -------
Total treatments 68,925 64,119 7.5%
Patient revenue per treatment $313.18 $307.06 2.0%
Same center growth data:
Same center treatment growth 6% 3%
Same center revenue per treatment change 5% 2%
Same center patient revenue growth 11% 5%
Nine Months Ended September 30, Period-to-Period
------------------------------- Change %
2008 2007 ----------------
---- ----
Operating data:
Treatments:
Consolidated 202,176 178,372 13.3%
Managed --- 8,290 (100.0)%
------- -------
Total treatments 202,176 186,662 8.3%
Patient revenue per treatment $308.15 $300.13 2.7%
Same center growth data:
Same center treatment growth 6% 6%
Same center revenue per treatment change 3% 1%
Same center patient revenue growth 9% 7%
3rd Quarter 2nd Quarter
2008 2008
---- ----
Key clinical metrics:
Treatment adequacy (% of pts with
Kt/V greater than 1.2) 97% 96%
Anemia management (% of pts with
Hgb greater than 11) 82% 82%
Venous access (% of pts with AVF) 58% 55%
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