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Birner Dental Management Services, Inc. Announces Earnings Per Share Up 33% for 2nd Quarter 2009

August 13, 2009 | About:

Press Release: Birner Dental Management Services, Inc. Announces Earnings Per Share Up 33% for 2nd Quarter 2009

DENVER, Aug. 13 /PRNewswire-FirstCall/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETHdental practices, announced results for the quarter and six months ended June 30, 2009. For the quarter ended June 30, 2009, total dental group practice revenue increased $300,000, or 2.0%, to $15.2 million. Net revenue increased $93,000, or 1.1%, to $8.9 million. The Company\'s earnings before interest, taxes, depreciation, amortization and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") increased $164,000, or 10.0%, to $1.8 million from $1.6 million. Net income for the quarter ended June 30, 2009 increased $69,000, or 15.4%, to $520,000 compared to $450,000 for the same period of 2008. Earnings per share increased 33.0%, to $.27 for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008. For the six months ended June 30, 2009, total dental group practice revenue increased $387,000, or 1.3%, to $30.6 million. Net revenue increased $187,000, or 1.1%, to $17.9 million. The Company\'s Adjusted EBITDA increased $378,000, or 11.0%, to $3.8 million from $3.4 million. Net income for the six months ended June 30, 2009 increased $229,000, or 23.6%, to $1.2 million compared to $968,000 for the same period of 2008. Earnings per share increased 43.4%, to $.63 for the six months ended June 30, 2009 compared to $.44 for the six months ended June 30, 2008. The increase in net revenue of $93,000 in the quarter ended June 30, 2009 consisted of an increase in same store net revenue from specialty dentistry of $126,000 along with a de novo office the Company opened in May 2008 generating an additional $63,000 in net revenue offset by a decrease in same store net revenue from general dentistry of $95,000. The increase in net revenue of $187,000 in the six months ended June 30, 2009 consisted of an increase in same store net revenue from specialty dentistry of $221,000 along with a de novo office the Company opened in May 2008 generating an additional $102,000 in net revenue offset by a decrease in same store net revenue from general dentistry of $136,000. Despite a slight increase in net revenue for the quarter and six months ended June 30, 2009 compared to the quarter and six months ended June 30, 2008, the Company believes it continues to experience a general weakness in the economy in its markets. During 2008, the Company implemented cost containment measures that favorably affected the Company\'s profitability in the quarter and six months ended June 30, 2009 compared to the same periods of 2008. Fred Birner, Chief Executive Officer stated, "We are very pleased with the operating performance achieved by the Company in the quarter, particularly in light of the weak economic environment." During the second quarter of 2009, the Company signed a new lease for a de novo office in the Albuquerque, New Mexico market. The Company expects this office to open in the second half of 2010. During the first six months of 2009, the Company had capital expenditures of $193,000, purchased 13,688 shares of its Common Stock for approximately $170,000, paid $633,000 in dividends to its shareholders and decreased total bank debt outstanding by $2.1 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 61 dental offices, of which 35 were acquired and 26 were de novo developments. At June 30, 2009, 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 six months ended June 30, 2009 on Thursday, August 13, 2009 at 9:00 a.m. MT. In addition to current financial and operating results, the teleconference may include discussion of management\'s expectation of future financial and operating results. To participate in this conference call, dial in to 1-866-244-4629 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 August 13, the rebroadcast number is 1-888-266-2081 with the pass code of 1384024. This rebroadcast will be available through August 27, 2009. Non-GAAP DisclosuresThis 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 StatementsCertain 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, performance in 2009 and other future periods and the current economic environment. 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:    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            Six Months Ended                              June 30,                   June 30,                           --------------            ----------------                         2008          2009          2008           2009                         ----          ----          ----           ----    NET REVENUE:     $8,793,229(1) $8,886,727(1) $17,740,225(2) $17,927,238(2)    DIRECT EXPENSES:      Clinical       salaries and       benefits       2,491,642     2,421,007      5,159,616      4,997,552      Dental       supplies         624,037       584,765      1,218,222      1,123,914      Laboratory       fees             739,161       684,256      1,391,874      1,322,218      Occupancy       1,203,227     1,220,142      2,388,906      2,434,068      Advertising       and marketing    119,099        98,829        226,548        183,761      Depreciation and       amortization     602,018       612,383      1,203,033      1,229,994      General and       administrative 1,266,972     1,133,811      2,436,989      2,295,770                      ---------     ---------      ---------      ---------                      7,046,156     6,755,193     14,025,188     13,587,277      Contribution       from dental       offices        1,747,073     2,131,534      3,715,037      4,339,961    CORPORATE EXPENSES:      General and       administrative   889,204(3)  1,187,732(3)   1,830,308(4)   2,162,920(4)      Depreciation       and amortization  23,186        22,161         46,654         44,551                         ------        ------         ------         ------      Operating       income           834,683       921,641      1,838,075      2,132,490      Interest       expense, net      58,369        26,937        135,997         69,353                         ------        ------        -------         ------      Income before       income taxes     776,314       894,704      1,702,078      2,063,137      Income tax       expense          326,057       375,111        734,265        866,518                        -------       -------        -------        -------      Net income       $450,257      $519,593       $967,813     $1,196,619                       ========      ========       ========     ==========      Net income per       share of Common       Stock - Basic      $0.21         $0.28          $0.46          $0.64                          =====         =====          =====          =====      Net income per       share of Common       Stock - Diluted    $0.21         $0.27          $0.44          $0.63                          =====         =====          =====          =====      Cash dividends per       share of Common       Stock              $0.17         $0.17          $0.34          $0.34                          =====         =====          =====          =====      Weighted average       number of shares       of Common Stock       and dilutive       securities:         Basic        2,107,415     1,855,778      2,109,250      1,858,036                      =========     =========      =========      =========         Diluted      2,178,816     1,890,929      2,188,583      1,887,250                      =========     =========      =========      =========    (1) Total dental group practice revenue less amounts retained by dental        offices. Dental group practice revenue was  $14,916,479 for the        quarter ended June 30, 2008, and $15,216,028 for the quarter ended        June 30, 2009.    (2) Total dental group practice revenue less amounts retained by dental        offices. Dental group practice revenue was  $30,170,730 for the six        months ended June 30, 2008, and $30,557,742 for the six months ended        June 30, 2009.    (3) Corporate expense - general and administrative includes $184,618        related to stock-based compensation expense in the quarter ended        June 30, 2008, and  $252,707 related to total stock-based compensation        expense; $170,915 related to SFAS 123(R) expense and $81,792 related        to a long term incentive program expense in the quarter ended        June 30, 2009.    (4) Corporate expense - general and administrative includes $358,030        related to stock-based compensation expense in the six months ended        June 30, 2008, and $416,884 related to total stock-based compensation        expense; $335,092 related to SFAS 123(R) expense and $81,792 related        to a long term incentive program expense in the six months ended        June 30, 2009.             BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES                      CONDENSED CONSOLIDATED BALANCE SHEETS                                               December 31,         June 30,                        ASSETS                     2008               2009                                               ------------         --------                                                    **             (Unaudited)     CURRENT ASSETS:        Cash and cash equivalents               $1,234,991         $1,201,989        Accounts receivable, net of         allowance for doubtful         accounts of $290,688 and $296,516,         respectively                            2,875,732          3,411,289        Deferred tax asset                         195,091            282,565        Prepaid expenses and other assets          418,653            565,195                                                   -------            -------         Total current assets                    4,724,467          5,461,038        PROPERTY AND EQUIPMENT, net              3,887,919          3,187,748     OTHER NONCURRENT ASSETS:        Intangible assets, net                  10,621,918         10,240,166        Deferred charges and other assets          160,289            151,956                                                   -------            -------         Total assets                          $19,394,593        $19,040,908                                               ===========        ===========             LIABILITIES AND SHAREHOLDERS\' EQUITY     CURRENT LIABILITIES:        Accounts payable                        $1,551,851         $1,732,317        Accrued expenses                         1,462,258          1,650,662        Accrued payroll and related expenses     1,714,550          2,195,580        Income taxes payable                       371,569            447,469        Current maturities of long-term debt       920,000            920,000                                                   -------            -------         Total current liabilities               6,020,228          6,946,028     LONG-TERM LIABILITIES:        Deferred tax liability, net                618,913            623,910        Long-term debt, net of current         maturities                              5,988,202          3,850,000        Other long-term obligations                259,678            193,585                                                   -------            -------         Total liabilities                      12,887,021         11,613,523     SHAREHOLDERS\' EQUITY:        Preferred Stock, no par value,         10,000,000 shares         authorized; none outstanding                    -                  -        Common Stock, no par value,         20,000,000 shares authorized;         1,863,587 and  1,861,402 shares         issued and outstanding,         respectively                                    -             78,450        Treasury Stock purchased in excess         of Common Stock basis                    (266,786)                 -        Retained earnings                        6,817,449          7,381,216        Accumulated other comprehensive loss       (43,091)           (32,281)                                                   -------            -------        Total shareholders\' equity               6,507,572          7,427,385                                                 ---------          ---------        Total liabilities and shareholders\'         equity                                $19,394,593        $19,040,908                                               ===========        ===========     ** Derived from the Company\'s audited consolidated balance sheet         at December 31, 2008.
Reconciliation of Total Dental Group Practice Revenue and Adjusted EBITDA 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 represent compensation expense to the dentists, dental hygienists and dental assistants 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 a non-GAAP measure that 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 U.S. generally accepted accounting principles ("GAAP"). The table below reconciles total dental group practice revenue to net revenue.

Quarters Ended            Six Months Ended                                 June 30,                    June 30,                              --------------            ----------------                            2008           2009        2008          2009                            ----           ----        ----          ----    Total dental group     practice revenue    $14,916,479   $15,216,028  $30,170,730   $30,557,742     Less - amounts      retained by      dental Offices      (6,123,250)   (6,329,301) (12,430,505)  (12,630,504)                          ----------    ----------  -----------   -----------    Net revenue           $8,793,229    $8,886,727  $17,740,225   $17,927,238                          ==========    ==========  ===========   ===========
Adjusted EBITDA is not a 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 related to SFAS 123(R), interest expense, net and income tax expense to net income as in the table below.

Quarters                 Six Months                                    Ended June 30,            Ended June 30,                                    --------------            --------------                                  2008           2009       2008        2009                                  ----           ----       ----        ----    RECONCILIATION OF     ADJUSTED EBITDA:      Net income                $450,257       $519,593   $967,813  $1,196,619      Add back:        Depreciation and         amortization -         Offices                 602,018        612,383  1,203,033   1,229,994        Depreciation and         amortization -         Corporate                23,186         22,161     46,654      44,551        Stock-based         compensation expense    184,618        252,707    358,030     416,884        Interest expense, net     58,369         26,937    135,997      69,353        Income tax expense       326,057        375,111    734,265     866,518                                 -------        -------    -------     -------    Adjusted EBITDA           $1,644,505     $1,808,892 $3,445,792  $3,823,919                              ==========     ========== ==========  ==========
Adjusted EBITDA is not a 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 related to SFAS 123(R), interest expense, net and income tax expense to net income as in the table below.

Source: PRNewsWire

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