Birner Dental Management Services, Inc. Exhibit No. 99.1
3801 East Florida Avenue, Suite 508
Denver, Colorado 80210
303-691-0680
FOR IMMEDIATE RELEASE
November 13, 2007
BIRNER DENTAL MANAGEMENT SERVICES, INC.
ANNOUNCES 7.9% ADJUSTED EBITDA INCREASE
FOR 3Q 2007
DENVER, COLORADO, November 13, 2007. Birner Dental Management Services, Inc.
(NASDAQ Capital Market: BDMS), operators of PERFECT TEETH(R) dental practices,
announced results for the quarter and nine months ended September 30, 2007.
Total dental group practice revenue increased $444,000, or 3.1%, to $14.7
million. Net revenue increased $321,000, or 3.3%, to $10.1 million. The
Company's earnings before interest, taxes, depreciation, amortization and
non-cash expense associated with stock-based compensation ("Adjusted EBITDA")
increased $145,000, or 7.9%, to $2.0 million from $1.8 million. Net income for
the quarter ended September 30, 2007 increased to $635,000 compared to $633,000
for the same period of 2006. Earnings per share increased 11.5%, to $.28 for the
quarter ended September 30, 2007 compared to $.25 for the quarter ended
September 30, 2006.
For the nine months ended September 30, 2007, total dental group practice
revenue increased $2.1 million, or 4.9%, to $45.6 million. Net revenue increased
$1.3 million, or 4.4%, to $31.3 million. The Company's Adjusted EBITDA increased
$682,000, or 12.5%, to $6.2 million from $5.5 million. Net income for the nine
months ended September 30, 2007 increased $71,000, or 3.6% to $2.0 million.
Earnings per share increased 14.6%, to $.89 for the nine months ended September
30, 2007 compared to $.77 for the nine months ended September 30, 2006.
During the first nine months of 2007, the Company purchased 133,413 shares of
its Common Stock for approximately $2.8 million, distributed $912,000 in
dividends to its shareholders, and reduced total debt outstanding by $1.2
million.
Birner Dental Management Services, Inc. acquires, develops, and manages
geographically dense dental practice networks in select markets in Colorado, New
Mexico, and Arizona. The Company currently manages 60 dental offices, of which
35 were acquired and 25 were de novo developments. At September 30, 2007, the
Company had 116 general and specialty dentists affiliated with the organization.
The Company operates its dental offices under the PERFECT TEETH name. The
Company previously announced it would conduct a conference call to review
results for the quarter and nine months ended September 30, 2007. In addition to
current financial and operating results, the teleconference may include
discussion of management's expectation of future financial and operating
results. The call will be held on Tuesday, November 13, 2007, at 9:00 a.m. MT.
To participate in this conference call, dial in to 1-866-219-5631 and refer to
"Birner Dental Management Services, Inc." approximately five minutes prior to
the scheduled time. If you are unable to join in on the conference call on
November 13, the rebroadcast number is 1-888-266-2081 with the pass code of
1159906. This rebroadcast will be available through November 27, 2007.
Non-GAAP Disclosures
- --------------------
This press release includes certain non-GAAP financial measures with respect to
total dental group practice revenue and Adjusted EBITDA. The non-GAAP financial
measures included in this press release may be different from, and therefore may
not be comparable to, similar measures used by other companies. Please see the
last page of this release for more information on the reconciliation of total
dental group practice revenue and Adjusted EBITDA to GAAP measures.
Forward-Looking Statements
- --------------------------
Certain of the matters discussed herein may contain forward-looking statements
that are subject to certain risks and uncertainties that could cause actual
results to differ materially from expectations. These include statements
regarding the Company's cash flow, growth prospects and performance in 2007.
These and other risks and uncertainties are set forth in the reports filed by
the Company with the Securities and Exchange Commission. The Company disclaims
any obligation to update these forward-looking statements.
For Further Information Contact:
Birner Dental Management Services, Inc.
Dennis Genty
Chief Financial Officer
(303) 691-0680
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Quarters Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
2006 2007 2006 2007
-------------- ------------- -------------- -------------
NET REVENUE: (1) $ 9,756,186 $10,077,204 $29,988,004 $31,294,484
DIRECT EXPENSES:
Clinical salaries and benefits 3,540,887 3,708,692 10,811,123 11,284,077
Dental supplies 597,488 608,885 1,750,695 1,763,791
Laboratory fees 635,446 628,877 1,960,704 1,998,289
Occupancy 1,059,477 1,174,333 3,210,359 3,448,489
Advertising and marketing 176,830 143,023 637,763 559,100
Depreciation and amortization 572,788 609,470 1,581,250 1,830,548
General and administrative 1,126,326 1,126,024 3,456,569 3,421,685
-------------- ------------- -------------- -------------
7,709,242 7,999,304 23,408,463 24,305,979
-------------- ------------- -------------- -------------
Contribution from dental offices 2,046,944 2,077,900 6,579,541 6,988,505
CORPORATE EXPENSES:
General and administrative 948,371 (2) 894,079 (2) 3,170,644 (3) 3,194,729 (3)
Depreciation and amortization 32,396 26,785 99,038 84,887
-------------- ------------- -------------- -------------
Operating income 1,066,177 1,157,036 3,309,859 3,708,889
Interest expense (income), net 38,875 90,823 118,962 286,151
-------------- ------------- -------------- -------------
Income before income taxes 1,027,302 1,066,204 3,190,897 3,422,738
Income tax expense 394,498 431,164 1,232,604 1,392,985
-------------- ------------- -------------- -------------
Net income $ 632,804 $ 635,040 $ 1,958,293 $ 2,029,753
============== ============= ============== =============
Net income per share of Common Stock - Basic $ 0.27 $ 0.31 $ 0.84 $ 0.96
============== ============= ============== =============
Net income per share of Common Stock - Diluted $ 0.25 $ 0.28 $ 0.77 $ 0.89
============== ============= ============== =============
Cash dividends per share of Common Stock $ 0.13 $ 0.15 $ 0.39 $ 0.45
============== ============= ============== =============
Weighted average number of shares of
Common Stock and dilutive
securities:
Basic 2,311,901 2,074,314 2,337,049 2,108,006
============== ============= ============== =============
Diluted 2,493,941 2,243,889 2,528,388 2,287,075
============== ============= ============== =============
(1) Total dental group practice revenue less amounts retained by dental
offices. Dental group practice revenue was $14,282,765 for the quarter
ended September 30, 2006 compared to $14,726,411 for the quarter ended
September 30, 2007. Dental group practice revenue was $43,429,434 for the
nine months ended September 30, 2006 compared to $45,561,904 for the nine
months ended September 30 ,2007.
(2) Corporate expense - general and administrative includes $81,030 of equity
compensation for a stock award and $78,620 related to stock-based
compensation expense in the quarter ended September 30, 2006, and $81,030
of equity compensation expense for a stock award and $102,100 related to
stock-based compensation expense in the quarter ended September 30, 2007.
(3) Corporate expense - general and administrative includes $243,090 of equity
compensation for a stock award and $244,651 related to stock-based
compensation expense in the nine months ended September 30, 2006, and
$243,090 of equity compensation expense for a stock award and $292,686
related to stock-based compensation expense in the nine months ended
September 30, 2007.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, September 30,
ASSETS 2006 2007
------------ -------------
** (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 888,186 $ 740,176
Accounts receivable, net of allowance for doubtful
accounts of $288,513 and $301,450 respectively 3,103,922 3,462,540
Deferred tax asset 185,671 223,198
Prepaid expenses and other assets 597,283 505,741
----------- -----------
Total current assets 4,775,062 4,931,655
PROPERTY AND EQUIPMENT, net 5,592,672 4,785,649
OTHER NONCURRENT ASSETS:
Intangible assets, net 12,272,358 11,692,222
Deferred charges and other assets 181,860 173,477
----------- -----------
Total assets $22,821,952 $21,583,003
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,648,498 $ 1,695,347
Accrued expenses 1,398,267 1,283,658
Accrued payroll and related expenses 1,596,770 1,952,714
Income taxes payable 114,016 586,726
Current maturities of long-term debt 953,561 1,150,000
----------- -----------
Total current liabilities 5,711,112 6,668,445
LONG-TERM LIABILITIES:
Deferred tax liability, net 734,234 725,942
Long-term debt, net of current maturities 6,502,411 5,147,823
Other long-term obligations 326,550 318,738
----------- -----------
Total liabilities 13,274,307 12,860,948
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value, 10,000,000 shares
authorized; none outstanding -- --
Common Stock, no par value, 20,000,000 shares
authorized; 2,132,461 and 2,023,598 shares issued and
outstanding, respectively 4,191,349 2,275,340
Retained earnings 5,356,296 6,446,715
----------- -----------
Total shareholders' equity 9,547,645 8,722,055
----------- -----------
Total liabilities and shareholders' equity $22,821,952 $21,583,003
=========== ===========
** Derived from the Company's audited consolidated balance sheet at December 31,
2006.
Although Adjusted EBITDA is not a U.S. generally accepted accounting principle
("GAAP") measure of performance or liquidity, the Company believes that it may
be useful to an investor in evaluating the Company's ability to meet future debt
service, capital expenditures and working capital requirements. However,
investors should not consider these measures in isolation or as a substitute for
operating income, cash flows from operating activities or any other measure for
determining the Company's operating performance or liquidity that is calculated
in accordance with GAAP. In addition, because Adjusted EBITDA is not calculated
in accordance with GAAP, it may not necessarily be comparable to similarly
titled measures employed by other companies. A reconciliation of Adjusted EBITDA
to net income can be made by adding depreciation and amortization expense -
offices, depreciation and amortization expense - corporate, stock-based
compensation expense, interest expense, net and income tax expense to net income
as in the table below.
Quarters Nine Months
Ended September 30, Ended September 30,
----------------------- -----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
RECONCILIATION OF ADJUSTED EBITDA:
Net income $ 632,804 $ 635,040 $1,958,293 $2,029,753
Depreciation and amortization - Offices 572,788 609,470 1,581,250 1,830,548
Depreciation and amortization - Corporate 32,396 26,785 99,038 84,887
Stock-based compensation expense 159,650 183,130 487,741 535,776
Interest expense, net 38,875 90,832 118,962 286,151
Income tax expense 394,498 431,164 1,232,604 1,392,985
---------- ---------- ---------- ----------
Adjusted EBITDA $1,831,011 $1,976,421 $5,477,888 $6,160,100
========== ========== ========== ==========
Total dental group practice revenue is the revenue generated at the Company's
offices from professional services provided to its patients. Amounts retained by
dental offices represents compensation expense to the dentists and hygienists
and is subtracted from total dental group practice revenue to arrive at net
revenue. The Company reports net revenue in its financial statements to comply
with Emerging Issues Task Force Issue No. 97-2, Application of SFAS No. 94
(Consolidation of All Majority Owned Subsidiaries) and APB Opinion No. 16
(Business Combinations) to Physician Practice Management Entities and Certain
Other Entities With Contractual Management Arrangements. Total dental group
practice revenue is disclosed because it is a critical component for
management's evaluation of office performance. However, investors should not
consider this measure in isolation or as a substitute for operating income, cash
flows from operating activities or any other measure for determining the
Company's operating performance or liquidity that is calculated in accordance
with GAAP.
Quarters Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2006 2007 2006 2007
------------ ------------ ------------ ------------
Total dental group practice revenue $ 14,282,765 $ 14,726,411 $ 43,429,434 $ 45,561,904
Less - amounts retained by dental Offices (4,526,579) (4,649,207) (13,441,430) (14,267,420)
------------ ------------ ------------ ------------
Net revenue $ 9,756,186 $ 10,077,204 $ 29,988,004 $ 31,294,484
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