Press Release
Dialysis Corporation of America
Reports
Fourth Quarter and Year Ended December 31, 2008 Results
Linthicum, Maryland, Thursday, March 5, 2009 - Dialysis Corporation of
America (NASDAQ-DCAI) announced its financial results for the fourth quarter
and year ended December 31, 2008.
* Year end patient census approximated 2,000 including the patients at a
Maryland dialysis center acquired December 31, 2008.
* Operating revenues for the fourth quarter of 2008 were $23.7 million
compared to $20.0 million for the same period last year, an 18%
increase.
* Operating income was $2.2 million for the fourth quarter of 2008
compared to $1.6 million for the same period last year.
* Net income for the quarter was $858,000 or $0.09 per basic and diluted
share compared to $1.0 million or $0.11 per basic and diluted share for
the same period last year.
* Operating revenues for 2008 were $86.8 million compared to $74.5 million
for 2007, a 17% increase.
* Operating income was $6.2 million for 2008 compared to $5.8 million for
2007.
* Net income for 2008 was $2.8 million or $0.30 per basic and diluted
share compared to $3.1 million or $0.32 per basic and diluted share for
2007.
Items impacting comparability between 2007 and 2008 include:
* 2007 included tax benefits of $325,000 relating to the prior year's net
operating losses that resulted in a lower effective tax rate for 2007
than for 2008.
* Minority interest expense increased in 2008 by approximately $330,000
compared with 2007, primarily due to certain large minority owned
facilities experiencing substantially better operating results in 2008.
* Pre-tax costs associated with opening new centers were $641,000 for
2008 compared to $608,000 for 2007.
* Non-cash stock compensation expense was $221,000 for 2008 compared to
$217,000 for 2007.
Stephen Everett, President and Chief Executive Officer, commented, "2008 was
both a strategic and financial success for DCA. In these extremely difficult
economic times, it is comforting to be part of both a company and industry
that are more resilient than most. Our company is in very good financial
shape and continues to grow and evolve in an ever changing regulatory and
clinical environment. It is especially heartening to witness our talented
group of caregivers continue to provide unparalleled quality clinical service
to the patients who entrust us with their lives."
Significant markers and noteworthy items for 2008 include:
* Key clinical metrics continued to show advances throughout the year,
which were the results of outstanding clinical care by our caregivers,
and a heightened focus on preparing for anticipated "pay for
performance" initiatives in conjunction with the 2011 reimbursement
bundling under Medicare.
* We experienced a slight increase in commercial contracting over prior
years, yet sustained an expected 6% increase in revenue per treatment,
year over year.
* Our continued focus and enhancement on billing and collection functions
resulted in a decrease in accounts receivable days outstanding (DSO) by
9 days in 2008.
* We completed our largest acquisition to date, which was a Maryland
dialysis center serving in excess of 145 patients. The transaction was
completed at the end of the year.
* In spite of the trying global economic conditions, we successfully
completed an enhanced revolving line of credit with KeyBank National
Association totaling $25,000,000, with favorable terms.
* The installation and use of our new Clinical Information System began
and remains on schedule for company wide deployment. This new system is
expected to assist in recording and reporting clinical results in an
increasingly regulated industry, while providing improved efficiencies
at the operating levels.
Dialysis Corporation of America will be hosting a conference call in
conjunction with its earnings release for the fourth quarter and fiscal year
ended December 31, 2008. The conference call will be held on Friday, March
6, 2009 at 10:00 a.m. EST. The call is accessible either by dialing 1-866-
238-0826 (enter attendee code: 1330728), or by simulcast on the internet at
http://www.startconference.com, using conference ID 2135668. Participants
may be asked to provide the title of the conference call, which is "Dialysis
Corporation of America Fiscal Year 2008 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 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 the those
states. The company provides patients with their choice of a full range of
quality in-center, acute or at-home hemodialysis 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, increases in
interest rates, the possible need for and availability of additional
financing, the company's satisfying the covenants and conditions of its
credit facility, certain 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.
Other Dialysis Corporation of America press releases, corporate profile,
corporate governance materials, quarterly and current reports, and other
filings with the Securities and Exchange Commission are available on Dialysis
Corporation of America's internet home page: http://www.dialysiscorporation.com.
CONTACT: For additional information, you may contact Dialysis Corporation of
America, 1302 Concourse Drive, Suite 204, Linthicum, MD 21090; Telephone
Number (410) 694-0500; Attention: Investor Relations.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
2008 2007 2006
---- ---- ----
(Unaudited)
Operating revenues:
Sales:
Medical services revenue $85,675,687 $73,170,573 $61,138,963
Product sales 1,161,206 1,077,988 891,242
----------- ----------- -----------
Total sales revenues 86,836,893 74,248,561 62,030,205
Other income --- 286,174 430,033
----------- ----------- -----------
86,836,893 74,534,735 62,460,238
----------- ----------- -----------
Cost and expenses:
Cost of sales revenues:
Cost of medical services 51,452,299 44,248,309 36,968,682
Cost of product sales 659,766 598,086 549,590
----------- ----------- -----------
Total cost of sales revenues 52,112,065 44,846,395 37,518,272
Selling, general and administrative expenses
Corporate 10,586,797 7,917,038 6,460,309
Facility 12,851,367 11,423,072 8,988,078
----------- ----------- -----------
Total 23,438,164 19,340,110 15,448,387
Stock compensation expense 221,166 217,474 275,438
Depreciation and amortization 2,783,826 2,619,049 2,319,070
Provision for doubtful accounts 2,088,248 1,665,120 1,198,995
----------- ----------- -----------
80,643,469 68,688,148 56,760,162
----------- ----------- -----------
Operating income 6,193,424 5,846,587 5,700,076
Other (expense) income, net (48,605) (39,637) 100,968
----------- ----------- -----------
Income before income taxes, minority and other
equity interests and equity in affiliate earnings 6,144,819 5,806,950 5,801,044
Income tax provision 1,862,479 1,614,892 2,085,874
----------- ----------- -----------
Income before minority and other equity interests
and equity in affiliate earnings 4,282,340 4,192,058 3,715,170
Minority and other equity interests in income
of consolidated subsidiaries (1,438,225) (1,105,736) (919,739)
Equity in affiliate earnings --- --- 253,765
----------- ----------- -----------
Net income $ 2,844,115 $ 3,086,322 $ 3,049,196
=========== =========== ===========
Earning per share:
Basic $.30 $.32 $.32
Diluted $.30 $.32 $.32
==== ==== ====
Weighted average shares outstanding:
Basic 9,579,837 9,572,893 9,484,926
========= ========= =========
Diluted 9,613,866 9,607,672 9,575,733
========= ========= =========
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2008 2007
----------- ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 6,543,000 $ 2,447,820
Accounts receivable, net 21,493,780 20,159,926
Inventories, net 2,918,578 2,006,661
Deferred income tax asset 1,185,000 998,000
Other current assets 2,978,049 3,313,406
----------- -----------
Total current assets 35,118,407 28,925,813
----------- -----------
Property and equipment 32,987,475 28,766,423
Less accumulated depreciation and amortization 14,452,018 12,264,029
----------- -----------
18,535,457 16,502,394
----------- -----------
Goodwill 16,492,401 8,576,893
Other assets 932,930 841,092
----------- -----------
Total other assets 17,425,331 9,417,985
----------- -----------
$71,079,195 $54,846,192
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $14,717,692 $10,224,199
Income taxes payable 60,470 33,297
Current portion of long-term debt 74,000 56,000
----------- -----------
Total current liabilities 14,852,162 10,313,496
Deferred income taxes 1,275,000 574,000
Long-term debt, less current portion 14,275,798 7,009,419
----------- -----------
Total liabilities 30,402,960 17,896,915
----------- -----------
Minority interest in subsidiaries 5,412,208 4,942,797
Commitments and Contingencies
Stockholders' equity:
Common stock 95,797 95,736
Additional paid-in capital 16,001,153 15,587,782
Retained earnings 19,167,077 16,322,962
----------- -----------
Total stockholders' equity 35,264,027 32,006,480
----------- -----------
$71,079,195 $54,846,192
=========== ===========
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
Year Ended December 31, Year-to-year
----------------------- Change %
2008 2007 ------------
Operating data:
Treatments:
Consolidated 272,452 241,189 13.0%
Managed --- 11,137 (100.0)%
------- -------
Total treatments 272,452 252,326 8.0%
Patient revenue per treatment $314.46 $303.37 3.7 %
Same center growth data:
Same center treatment growth 5% 6%
Same center revenue per treatment change 4% 1%
Same center patient revenue growth 9% 7%
Quarter-to-
Quarter Ended December 31, Quarter
------------------------ Change %
2008 2007 ------------
Operating data:
Treatments:
Consolidated 70,276 62,817 11.9%
Managed --- 2,847 (100.0)%
------- -------
Total treatments 70,276 65,664 7.0%
Patient revenue per treatment $332.62 $312.59 6.4%
Same center growth data:
Same center treatment growth 4% (4)%
Same center revenue per treatment change 6% 10%
Same center patient revenue growth 10% 5%
Key clinical metrics:
Treatment adequacy (% of pts with Kt/V greater
than 1.2) 97.32% 95.38%
Anemia management (% of pts with Hgb greater
than 11) 82.06% 78.74%
Venous access (% of pts with AVF) 56.06% 52.98%
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