Birner Dental Management Services, Inc. Announces Earnings For 3Q 2012

    Birner Dental Management Services, Inc. Announces Earnings For 3Q 2012

PR Newswire

DENVER, Nov. 13, 2012

DENVER, Nov. 13, 2012 /PRNewswire/ -- Birner Dental Management Services, Inc.
(NASDAQ Capital Market: BDMS), operators of PERFECT TEETH®  dental practices
and Vantage Dental Implant Center, announced results for the quarter and nine
months ended September 30, 2012. For the quarter ended September 30, 2012,
revenue increased $217,000, or 1.4%, to $15.7 million. The Company's earnings
before interest, taxes, depreciation, amortization, and non-cash expense
associated with stock-based compensation ("Adjusted EBITDA") increased
$307,000, or 24.7%, to $1.6 million for the quarter ended September 30, 2012.
Net income for the quarter ended September 30, 2012 increased $9,000, or 2.4%,
to $383,000 compared to $374,000 for the quarter ended September 30, 2011.
Earnings per share increased to $0.21 for the quarter ended September 30, 2012
compared to $0.20 for the quarter ended September 30, 2011.

For the nine months ended September 30, 2012, revenue decreased $1.3 million,
or 2.7%, to $47.7 million. The Company's Adjusted EBITDA remained constant at
$4.1 million for the nine months ended September 30, 2012 and 2011. Net
income for the nine months ended September 30, 2012 decreased $291,000, or
25.9%, to $834,000 compared to $1.1 million for the nine months ended
September 30, 2011. Earnings per share decreased to $0.45 for the nine months
ended September 30, 2012 compared to $0.59 for the nine months ended September
30, 2011.

For the three months ended September 30, 2012, the revenue increase was
largely due to patients accepting more expensive treatment plans. For the
nine months ended September 30, 2012, revenue was negatively impacted in the
first and second quarters by the general economic weakness in the Company's
markets, which resulted in patients accepting less expensive treatment plans
relative to the same period of 2011.

The Company has leased space for two de novo offices. One office, which is
located in the Tucson, Arizona market, opened on October 31, 2012. The
Company anticipates the other office, which is located in the Denver/Boulder,
Colorado market, will open in December 2012. The Company anticipates
approximately $500,000 in capital expenditures at each de novo office. The
Company also has signed letters of intent for two additional de novo office
locations. The Company does not anticipate opening either of these offices
until after the first quarter of 2013.

During the first nine months of 2012, the Company had capital expenditures of
approximately $3.1 million, paid out approximately $1.2 million in dividends
to its shareholders, and purchased 37,787 shares of its Common Stock for
approximately $622,000. During the first nine months of 2012, total bank debt
outstanding increased by approximately $984,000. The Company's outstanding
bank debt has increased because of the Company's commitment to upgrading its
existing offices through extensive remodels and/or office relocations and its
continued commitment to converting its offices to digital radiography. During
the nine months ended September 30, 2012, the Company completed remodels
and/or relocations on four of its offices and converted four additional
offices to digital radiography.

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 116 dentists. The Company operates its dental offices under the
PERFECT TEETH® name. The Company also operates one Vantage Dental Implant
Center in Denver, Colorado.

The Company previously announced it would conduct a conference call to review
results for the quarter ended September 30, 2012 on Tuesday, November 13, 2012
at 9:00 a.m. MST. 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 1-888-428-9473 and refer to Confirmation Code 8569254 approximately five
minutes prior to the scheduled time. If you are unable to join the conference
call on November 13, the rebroadcast number is 1-888-203-1112 with the pass
code of 8569254. This rebroadcast will be available through November 27,
2012.

Non-GAAP Disclosures

This press release includes a non-GAAP financial measure with respect to
Adjusted EBITDA. Please see below for more information regarding Adjusted
EBITDA and a reconciliation of Adjusted EBITDA to net income.

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 potential de novo offices and the Company's prospects and
performance in future periods. These statements involve known and unknown
risks, uncertainties and other factors which may cause the Company's actual
results, performance or achievements to be materially different from any
future results, performance 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                    Nine Months Ended
                 September 30,                     September 30,
                 2011             2012             2011             2012
REVENUE:         $                $                $                $
                 15,492,724      15,709,423      48,984,473      47,684,538
DIRECT EXPENSES:
 Clinical
 salaries and    8,767,612        8,823,264        27,716,934       26,912,387
 benefits
 Dental supplies 658,705          689,283          2,157,987        2,078,765
 Laboratory fees 679,304          751,534          2,188,635        2,303,063
 Occupancy       1,381,849        1,401,550        4,060,977        4,137,110
 Advertising and 758,776          353,004          1,944,036        1,730,667
 marketing
 Depreciation
 and             633,200          725,719          1,860,980        2,060,675
 amortization
 General and     1,364,070        1,249,314        4,398,635        3,694,149
 administrative
                 14,243,516       13,993,668       44,328,184       42,916,816
 Contribution
 from dental     1,249,208        1,715,755        4,656,289        4,767,722
 offices
CORPORATE
EXPENSES:
 General and     580,564     ^(1) 1,018,319   ^(1) 2,658,299   ^(2) 3,205,073   ^(2)
 administrative
 Depreciation
 and             35,575           41,308           86,578           118,467
 amortization
OPERATING INCOME 633,069          656,128          1,911,412        1,444,182
 Interest        19,883           28,018           66,178           76,796
 expense, net
INCOME BEFORE    613,186          628,110          1,845,234        1,367,386
INCOME TAXES
 Income tax      239,141          244,963          719,641          533,281
 expense
NET INCOME       $             $             $               $   
                 374,045          383,147          1,125,593       834,105
 Net income per  $           $           $           $     
 share of Common  0.20            0.21            0.61            0.45
 Stock - Basic
 Net income per  $           $           $           $     
 share of Common  0.20            0.21            0.59            0.45
 Stock - Diluted
 Cash dividends  $           $           $           $     
 per share of     0.22            0.22            0.64            0.66
 Common Stock
 Weighted
 average number
 of shares of
 Common Stock
 and dilutive
 securities:
 Basic           1,859,362        1,841,817        1,855,984        1,839,788
 Diluted         1,914,075        1,851,445        1,917,594        1,849,842

     Corporate expense - general and administrative includes $104,759 of
     stock-based compensation expense pursuant to ASC Topic 718 and ($162,828)
^(1) related to a long-term incentive program for the quarter ended September
     30, 2011 and $127,621 of stock-based compensation expense pursuant to
     ASC Topic 718 for the quarter ended September 30, 2012.
     Corporate expense - general and administrative includes $238,415 of
     stock-based compensation expense pursuant to ASC Topic 718 for the nine
^(2) months ended September 30, 2011 and $472,585 of stock-based compensation
     expense pursuant to ASC Topic 718 for the nine months ended September 30,
     2012.







BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                           December 31,     September 30,
ASSETS                                     2011              2012
CURRENT ASSETS:
 Cash and cash equivalents                 $    923,878  $     502,407
 Accounts receivable, net of allowance for
 doubtful
 accounts of $302,000 and $314,000,        2,855,726         3,046,507
 respectively
 Deferred tax asset                        197,327           197,327
 Prepaid expenses and other assets         639,116           669,146
 Total current assets                      4,616,047         4,415,387
PROPERTY AND EQUIPMENT, net                5,789,521         7,343,237
OTHER NONCURRENT ASSETS:
 Intangible assets, net                    11,095,926        10,418,631
 Deferred charges and other assets         165,267           159,441
 Notes receivable                          155,419           132,318
 Total assets                              $  21,822,180    $  22,469,014
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable                         $   2,111,155   $   2,011,963
 Accrued expenses                          1,973,593         1,742,338
 Accrued payroll and related expenses      1,731,273         2,129,467
 Income taxes payable                      115,038           250,582
 Current maturities of long-term debt      -                 400,000
 Total current liabilities                 5,931,059         6,534,350
LONG-TERM LIABILITIES:
 Deferred tax liability, net               2,309,279         2,309,279
 Long-term debt, net of current maturities 4,251,068         4,835,158
 Other long-term obligations               1,504,684         1,496,253
 Total liabilities                         13,996,090        15,175,040
SHAREHOLDERS' EQUITY:
 Preferred Stock, no par value, 10,000,000
 shares
 authorized; none outstanding              -                 -
 Common Stock, no par value, 20,000,000
 shares authorized;
 1,837,519 and 1,842,402 shares issued and 368,186           219,074
 outstanding, respectively
 Retained earnings                         7,457,904         7,074,900
 Total shareholders' equity                7,826,090         7,293,974
 Total liabilities and shareholders'       $  21,822,180    $  22,469,014
 equity



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, and the
Company uses Adjusted EBITDA for this purpose. 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                Nine Months
                                Ended September 30,     Ended September 30,
                                2011        2012        2011        2012
RECONCILIATION OF ADJUSTED
EBITDA:
 Net income                     $374,045    $383,147    $1,125,593  $834,105
 Add back:
  Depreciation and amortization 633,200     725,719     1,860,980   2,060,675
  - Offices
  Depreciation and amortization 35,575      41,308      86,578      118,467
  - Corporate
  Stock-based compensation      -58,069     127,621     238,414     472,585
  expense
  Interest expense, net         19,883      28,018      66,178      76,796
  Income tax expense            239,141     244,963     719,641     533,281
Adjusted EBITDA                 $1,243,775  $1,550,776  $4,097,384  $4,095,909



SOURCE Birner Dental Management Services, Inc.

Website: http://www.bdms-perfectteeth.com
 
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