Birner Dental Management Services, Inc. Announces Earnings for Year Ended and Fourth Quarter 2009
DENVER, March 31 /PRNewswire-FirstCall/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETH® dental practices, announced results for the year and quarter ended December 31, 2009. For the year ended December 31, 2009, revenue increased $557,000, or 0.9%, to $59.6 million. The Company's earnings before interest, taxes, depreciation, amortization and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") increased $101,000, or 1.5%, to $6.9 million. Net income for the year ended December 31, 2009 increased $135,000, or 7.5%, to $1.9 million compared to $1.8 million for the same period of 2008. Earnings per share increased 18.6%, to $1.02 for the year ended December 31, 2009 compared to $.86 for the year ended December 31, 2008.
For the quarter ended December 31, 2009, revenue increased $456,000 or 3.3%, to $14.3 million. The Company's Adjusted EBITDA decreased $32,000, or 2.1%, to $1,492,000 for the quarter ended December 31, 2009 compared to $1,524,000 for the quarter ended December 31, 2008. Net income for the quarter ended December 31, 2009 increased $40,000, or 12.3%, to $363,000. Earnings per share increased 11.8%, to $.19 for the quarter ended December 31, 2009 compared to $.17 for the quarter ended December 31, 2008.
The increase in revenue of $557,000 for the year ended December 31, 2009 consisted of a decrease in same office revenue of $316,000 offset by revenue related to new offices of $873,000. The increase in revenue of $456,000 for the quarter ended December 31, 2009 consisted of a decrease in same office revenue of $142,000 offset by revenue related to new offices of $598,000. We believe same office sales in 2009 were affected by continued weakness in the economy.
The Company opened one de novo office in the Albuquerque, New Mexico market in February 2010.
During 2009, the Company had capital expenditures of $1.1 million, acquired three dental offices for $1.4 million, purchased 61,702 shares of its Common Stock for approximately $930,000 and paid out approximately $1.3 million in dividends to its shareholders. During 2009, bank debt decreased approximately $1.6 million, which reduced total debt outstanding to $5.3 million at December 31, 2009.
As previously reported, the Company's Board of Directors approved an increase in its quarterly dividend to $.20 per share from $.17 per share. The dividend is payable on April 9, 2010 to shareholders of record on March 26, 2010.
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 65 dental offices, of which 38 were acquired and 27 were de novo developments. The Company currently has 123 dentists. 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 year and quarter ended December 31, 2009 on Wednesday, March 31, 2010 at 9:00 a.m. MT. In addition to current operating results, the teleconference may include discussion of management's expectations of future financial and operating results. To participate in this conference call, dial in to 1-866-288-0540 and refer to Confirmation Code 1040701 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on March 31, the rebroadcast number is 1-888-203-1112 with the pass code of 1040701. This rebroadcast will be available through April 14, 2010.
Non-GAAP Disclosures
This press release includes a non-GAAP financial measure with respect to Adjusted EBITDA. The non-GAAP financial measure 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 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 growth prospects and performance in 2010 and other future periods. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. 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: |
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Birner Dental Management Services, Inc. |
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Dennis Genty |
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Chief Financial Officer |
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(303) 691-0680 |
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(UNAUDITED) |
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Quarters Ended |
Years Ended |
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December 31, |
December 31, |
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2008 (1) |
2009 |
2008 (1) |
2009 |
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REVENUE: |
$13,869,407 |
$ 14,325,124 |
$ 59,016,250 |
$ 59,573,559 |
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DIRECT EXPENSES: |
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Clinical salaries and benefits |
8,088,317 |
8,151,539 |
34,242,025 |
34,351,138 |
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Dental supplies |
525,267 |
526,872 |
2,370,866 |
2,230,807 |
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Laboratory fees |
636,926 |
641,528 |
2,722,607 |
2,615,246 |
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Occupancy |
1,196,155 |
1,273,116 |
4,798,133 |
4,943,088 |
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Advertising and marketing |
101,721 |
140,230 |
433,496 |
462,861 |
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Depreciation and amortization |
619,723 |
592,251 |
2,445,956 |
2,423,788 |
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General and administrative |
1,102,430 |
1,261,865 |
4,731,822 |
4,718,548 |
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12,270,539 |
12,587,401 |
51,744,905 |
51,745,476 |
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Contribution from dental offices |
1,598,868 |
1,737,723 |
7,271,345 |
7,828,083 |
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CORPORATE EXPENSES: |
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General and administrative |
882,026 |
(2) |
1,078,599 |
(2) |
3,687,341 |
(3) |
4,291,325 |
(3) |
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Depreciation and amortization |
24,193 |
21,089 |
96,366 |
86,809 |
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OPERATING INCOME |
692,649 |
638,035 |
3,487,638 |
3,449,949 |
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Interest expense, net |
82,450 |
56,069 |
282,267 |
174,582 |
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INCOME BEFORE INCOME TAXES |
610,199 |
581,966 |
3,205,371 |
3,275,367 |
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Income tax expense |
287,692 |
219,069 |
1,414,962 |
1,350,301 |
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NET INCOME |
$ 322,507 |
$ 362,897 |
$ 1,790,409 |
$ 1,925,066 |
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Net income per share of Common Stock - Basic |
$ 0.17 |
$ 0.19 |
$ 0.88 |
$ 1.03 |
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Net income per share of Common Stock - Diluted |
$ 0.17 |
$ 0.19 |
$ 0.86 |
$ 1.02 |
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Cash dividends per share of Common Stock |
$ 0.17 |
$ 0.17 |
$ 0.68 |
$ 0.68 |
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Weighted average number of shares of |
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Common Stock and dilutive securities: |
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Basic |
1,889,690 |
1,865,204 |
2,024,794 |
1,863,596 |
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Diluted |
1,915,538 |
1,893,125 |
2,085,889 |
1,895,441 |
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(1) |
The Company restated its audited consolidated statements of income for the years ended December 31, 2007 and 2008 and its unaudited consolidated statements of income for each of the quarters of the years ended December 31, 2008 and 2009. The restatements affect the Company’s previously reported revenue and expenses for clinical salaries and benefits paid to dentists, dental hygienists and dental assistants. The Company’s reported revenue increased by the amounts paid to dentists, dental hygienists and dental assistants. Clinical salaries and benefits increased by the same dollar amounts as the increase in revenue. The restatements have no impact on the Company’s contribution from dental offices, operating income, net income, earnings per share, consolidated balance sheets, consolidated statements of shareholders equity and comprehensive income or consolidated statements of cash flows, or the calculation of Adjusted EBITDA. For additional information, please see the Company’s Form 8-K filed with the Securities and Exchange Commission on March 12, 2010 and the Company’s Form 10-K for the year ended December 31, 2009. |
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(2) |
Corporate expenses - general and administrative includes $187,271 related to stock-based compensation expense pursuant to ASC Topic 718 for the quarter ended December 31, 2008; and $158,248 related to stock-based compensation expense pursuant to ASC Topic 718 and $81,792 related to a long-term incentive program for the quarter ended December 31, 2009. |
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(3) |
Corporate expenses - general and administrative includes $731,607 related to stock-based compensation expense pursuant to ASC Topic 718 for the year ended December 31, 2008; and $657,033 related to stock-based compensation expense pursuant to ASC Topic 718 and $245,376 related to a long-term incentive program for the year ended December 31, 2009. |
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BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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December 31, |
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ASSETS |
2008 |
2009 |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ 1,234,991 |
$ 779,622 |
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Accounts receivable, net of allowance for doubtful |
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accounts of $290,688 and $371,762, respectively |
2,875,732 |
3,124,160 |
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Deferred tax asset |
195,091 |
195,170 |
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Prepaid expenses and other assets |
418,653 |
433,222 |
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Total current assets |
4,724,467 |
4,532,174 |
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PROPERTY AND EQUIPMENT, net |
3,887,919 |
3,532,011 |
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OTHER NONCURRENT ASSETS: |
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Intangible assets, net |
10,621,918 |
12,842,285 |
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Deferred charges and other assets |
160,289 |
153,734 |
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Notes receivable |
- |
191,557 |
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Total assets |
$ 19,394,593 |
$ 21,251,761 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
$ 1,551,851 |
$ 1,934,468 |
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Accrued expenses |
1,462,258 |
1,716,395 |
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Accrued payroll and related expenses |
1,714,550 |
1,795,968 |
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Income taxes payable |
371,569 |
267,160 |
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Current maturities of long-term debt |
920,000 |
920,000 |
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Total current liabilities |
6,020,228 |
6,633,991 |
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LONG-TERM LIABILITIES: |
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Deferred tax liability, net |
618,913 |
526,036 |
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Long-term debt, net of current maturities |
5,988,202 |
4,362,024 |
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Other long-term obligations |
259,678 |
2,112,395 |
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Total liabilities |
12,887,021 |
13,634,446 |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS' EQUITY: |
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Preferred Stock, no par value, 10,000,000 shares authorized; none outstanding |
- |
- |
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Common Stock, no par value, 20,000,000 shares authorized; 1,863,587 and 1,858,135 shares issued and outstanding, respectively |
- |
164,255 |
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Treasury Stock purchased in excess of Common Stock basis |
(266,786) |
- |
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Retained earnings |
6,817,449 |
7,475,212 |
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Accumulated other comprehensive loss |
(43,091) |
(22,152) |
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Total shareholders' equity |
6,507,572 |
7,617,315 |
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Total liabilities and shareholders' equity |
$ 19,394,593 |
$ 21,251,761 |
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Reconciliation of Adjusted EBITDA
Adjusted EBITDA is not a U.S. generally accepted accounting principle ("GAAP") measure of performance or liquidity. However, 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. Investors should not consider Adjusted EBITDA 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 Ended |
Years Ended |
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December 31, |
December 31, |
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2008 |
2009 |
2008 |
2009 |
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RECONCILIATION OF ADJUSTED EBITDA: |
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Net income |
$322,507 |
$362,897 |
$1,790,409 |
$ 1,925,066 |
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Add back: |
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Depreciation and amortization - Offices |
619,723 |
592,251 |
2,445,956 |
2,423,788 |
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Depreciation and amortization - Corporate |
24,192 |
21,089 |
96,366 |
86,809 |
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Stock-based compensation expense |
187,271 |
240,040 |
731,607 |
902,409 |
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Interest expense, net |
82,450 |
56,069 |
282,267 |
174,582 |
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Income tax expense |
287,692 |
219,069 |
1,414,962 |
1,350,301 |
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Adjusted EBITDA |
$1,523,835 |
$1,491,415 |
$6,761,567 |
$6,862,955 |
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SOURCE Birner Dental Management Services, Inc.
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