Birner Dental Mgmt. Svcs. acquires develops and manages geographically dense dental practice networks in select markets including Colorado New Mexico and Arizona. The company and its dental practice management model provide a solution to the needs of dentists patients and third-party payers by allowing the company's affiliated dentists to provide high-quality efficient dental care in patient-friendly family practice settings. Birner Dental Management Services Inc. has a market cap of $20.4 million; its shares were traded at around $11 with a P/E ratio of 12.8 and P/S ratio of 0.6. The dividend yield of Birner Dental Management Services Inc. stocks is 6.2%. Birner Dental Management Services Inc. had an annual average earning growth of 18.4% over the past 5 years.
Highlight of Business Operations:Effective April, 1, 2008, the Company reclassified dentist and dental hygienist contract labor expenses from clinical salaries and benefits to net revenue and has adjusted prior periods in this filing. The reclassification had no effect on contribution from dental offices or net income. The reclassification was approximately $71,000 and $185,000 for the quarters ended March 31, 2009 and 2008, respectively.
Effective July 1, 2008, the Company reclassified dental assistant wages from clinical salaries and benefits to net revenue and has adjusted prior periods in this filing. The reclassification had no effect on contribution from dental offices or net income. The reclassification was approximately $1.2 million and $1.3 million for the quarters ended March 31, 2009 and 2008, respectfully.
Due to the Companys repurchases of Common Stock at prices higher than the original issue price, the Companys Common Stock balance would have been reduced to a negative $266,786 and a negative $171,671 as of December 31, 2008 and March 31, 2009, respectively. The Company reclassified this negative balance to Treasury Stock purchased in excess of Common Stock basis on the balance sheet. Note that on the 10-K filing, the negative Common Stock amount of $266,786 was offset against retained earnings.
The Company's dental practice acquisitions involve the purchase of tangible and intangible assets and the assumption of certain liabilities of the acquired dental offices (Offices). As part of the purchase price allocation, the Company allocates the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed, based on estimated fair market values. Costs of acquisition in excess of the net estimated fair value of tangible assets acquired and liabilities assumed are allocated to the management agreement related to the Office (Management Agreement). The Management Agreement represents the Company's right to manage the Offices during the 40-year term of the Management Agreement. The assigned value of the Management Agreement is amortized using the straight-line method over a period of 25 years. Amortization was $195,015 and $194,959 for the quarters ended March 31, 2009 and 2008, respectively.
The Company recognizes compensation expense on a straight line basis over the requisite service period of the award. Total stock-based compensation expense included in the Companys statements of income for the quarters ended March 31, 2009 and 2008 was approximately $164,000 and $173,000, respectively. Total stock-based compensation expense was recorded as a component of corporate general and administrative expense.
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