Exhibit 99.2
VCA Antech, Inc. Updates Guidance for Fiscal Year 2006
LOS ANGELES--(BUSINESS WIRE)--July 26, 2006--VCA Antech, Inc.
(NASDAQ:WOOF), a leading animal healthcare company in the United
States, provides the following revised financial guidance for all
investors in adherence with Regulation Fair Disclosure as issued by
the United States Securities and Exchange Commission, the SEC. We
encourage all current and potential investors to review the disclosure
regarding forward-looking statements in this press release as well as
in all financial documents filed with the SEC.
In response to our company's strong performance for the second
quarter of 2006, we are updating our financial guidance for the year
ending December 31, 2006 as follows:
-- Revenue of $968 million to $980 million;
-- Laboratory internal revenue growth to a range of 7% to 9%;
-- Animal hospital same-store revenue growth to a range of 3% to
5%;
-- Animal hospital acquired revenue of $30 million to $35
million;
-- Medical technology revenue of $34 million to $39 million;
-- Operating income of $183 million to $185 million;
-- Net income of $100 million to $102 million;
-- Adjusted net income of $93 million to $95 million, which
excludes a tax benefit of $6.8 million recognized in the first
quarter of 2006 related to a favorable income tax audit;
-- Diluted earnings per common share of $1.18 to $1.20; and
-- Adjusted diluted earnings per common share of $1.10 to $1.12,
which excludes a tax benefit of $0.08 per diluted common share
as described above.
Non-GAAP Financial Measures
We believe investors' understanding of our total performance is
enhanced by disclosing adjusted net income and adjusted diluted
earnings per common share. We define adjusted net income and adjusted
diluted earnings per common share as the reported items, adjusted to
exclude certain significant items. Adjusted diluted earnings per
common share is adjusted net income divided by diluted common shares
outstanding.
Management uses adjusted net income and adjusted diluted earnings
per common share because they exclude the effect of significant items
that we believe are not representative of our core operations for the
periods presented. As a result, these non-GAAP financial measures help
to provide meaningful comparisons of our overall performance from one
reporting period to another and meaningful assessments of our future
performance and related trends. For the guidance provided above, the
only item excluded in computing adjusted net income and adjusted
diluted earnings per common share was a $6.8 million tax benefit
recorded in the first quarter of 2006.
There is a material limitation associated with the use of these
non-GAAP financial measures: our computation of adjusted net income
excludes the impact of certain items and as a result, our computation
of adjusted diluted earnings per common share does not depict diluted
earnings per common share in accordance with GAAP.
To compensate for the limitations in the non-GAAP financial
measures discussed above, our disclosures provide a complete
understanding of all adjustments found in non-GAAP financial measures,
and we reconcile the non-GAAP financial measures to the GAAP financial
measures in the following table (in millions, except earnings per
common share):
Year Ending
December 31, 2006
--------------------
Net income $ 100 $ 102
Tax benefit (7) (7)
------ ------
Adjusted net income $ 93 $ 95
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Diluted earnings per common share $ 1.18 $ 1.20
Tax benefit (0.08) (0.08)
------ ------
Adjusted diluted earnings per common share $ 1.10 $ 1.12
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Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including our financial guidance for fiscal year 2006. Among the
important factors that could cause actual results to differ are: a
material adverse change in our financial condition or operations; the
rate of our laboratory internal revenue growth and animal hospital
same-store revenue growth; the level of direct costs and our ability
to maintain revenue at a level necessary to maintain expected
operating margins; the level of selling, general and administrative
costs; the effects of our recent acquisitions, including Pet's Choice,
Inc., and our ability to effectively manage our growth and achieve
operating synergies; a continued decline in demand for some of our
products and services; any disruption in our information technology
systems or transportation networks; the effects of competition; any
impairment in the carrying value of our goodwill; changes in
prevailing interest rates; our ability to service our debt; and
general economic conditions. These and other risk factors are
discussed in our Report on Form 10-K for the year ended December 31,
2005 and our Report on Form 10-Q for the quarter ended March 31, 2006,
and the reader is directed to these statements for a further
discussion of important factors that could cause actual results to
differ materially from those in the forward-looking statements.
We own, operate and manage the largest networks of freestanding
veterinary hospitals and veterinary-exclusive clinical laboratories in
the country, and we supply ultrasound and digital radiography
equipment to the veterinary industry.
CONTACT: VCA Antech, Inc.
Tomas Fuller, 310-571-6505