Birner Dental Management Services, Inc. Announces Earnings For Fourth Quarter And Year Ended 2012

Birner Dental Management Services, Inc. Announces Earnings For Fourth Quarter
                             And Year Ended 2012

PR Newswire

DENVER, March 29, 2013

DENVER, March 29, 2013 /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 year
ended December 31, 2012. For the quarter ended December 31, 2012, revenue
increased $534,000, or 3.8%, to $14.7 million. The Company's earnings before
interest, taxes, depreciation, amortization and non-cash expense associated
with stock-based compensation ("Adjusted EBITDA") increased $121,000, or
15.2%, to $919,000 for the quarter ended December 31, 2012 compared to
$798,000 for the quarter ended December 31, 2011. Net income (loss) for the
quarter ended December 31, 2012 decreased $517,000 to $(27,000) compared to
$490,000 for the same period of 2011. Net income (loss) per share decreased
to $(0.01) for the quarter ended December 31, 2012 compared to $0.26 for the
quarter ended December 31, 2011.

The quarter ended December 31, 2011 was favorably impacted by the
remeasurement and subsequent write down of contingent liabilities by $830,000,
which the Company recognized as other income. Excluding this adjustment in
contingent liabilities, net (loss) for the quarter ended December 31, 2011
would have been $(10,000) compared to net (loss) of $(27,000) for the quarter
ended December 31, 2012, and net loss per share would have been $(0.01) for
both quarters ended December 31, 2012 and 2011.

For the year ended December 31, 2012, revenue decreased $766,000, or 1.2%, to
$62.4 million. The Company's Adjusted EBITDA increased $120,000, or 2.4%, to
$5.0 million. Net income for the year ended December 31, 2012 decreased
$808,000, or 50.0%, to $807,000 compared to $1.6 million for the year ended
December 31, 2011. Earnings per share decreased 48.4%, to $0.44 for the year
ended December 31, 2012 compared to $0.85 for the year ended December 31,
2011.

The year ended December 31, 2011 was favorably impacted by the remeasurement
and subsequent write down of contingent liabilities by $830,000, which the
Company recognized as other income. Excluding this adjustment in contingent
liabilities, net income for the year ended December 31, 2011 would have been
$1.1 million compared to net income of $807,000 for the year ended December
31, 2012, and earnings per share would have been $0.58 for the year ended
December 31, 2011 compared to $0.44 for the year ended December 31, 2012.

In January 2013, the Company changed the operating strategy of its Vantage
Dental Implant Center ("Vantage"). Vantage will no longer provide All-on-4™
services to its patients, the procedure for which the Company founded
Vantage. The Company has converted Vantage, which had a pre-tax operating
loss in 2012 of approximately $1.1 million, into a traditional Perfect Teeth
specialty office providing oral surgery and endodontic services. Fred Birner,
Chief Executive Officer of the Company, stated that "We made the decision to
put this unprofitable venture behind us and convert the facility to a
specialty care center. The traditional specialty services we will now provide
at the former Vantage center are the same services we have been successfully
providing at other Perfect Teeth offices for over a decade."

For the three months ended December 31, 2012, the revenue increase was largely
due to an increased number of dentists and hygienists affiliated with the
Perfect Teeth network. For the year ended December 31, 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.

During the fourth quarter of 2012, the Company opened two de novo offices.
One office, which is located in the Tucson, Arizona market, opened on October
31, 2012. The second de novo office is located in the Denver/Boulder,
Colorado market and opened December 21, 2012. During December 2012, the
Company consolidated the specialty dental services of one of its Denver,
Colorado offices into two other offices and subsequently closed this office.

The Company has signed a lease for a de novo office in the Loveland, Colorado
market and anticipates this office will open early in the third quarter of
2013.

During 2012, the Company had capital expenditures of $4.2 million, repurchased
37,787 shares of its Common Stock for approximately $622,000 and paid out
approximately $1.6 million in dividends to its shareholders. During 2012,
total bank debt outstanding increased by approximately $2.2 million. The
Company's outstanding bank debt 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 year ended December 31, 2012, the Company opened two
de novo offices, 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 37 were acquired and 28 were de novo developments. The Company
currently has 119 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, 2012 on Friday, March 29,
2013 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 1-888-523-1228 and refer to Confirmation Code 3150441 approximately five
minutes prior to the scheduled time. If you are unable to join the conference
call on March 29, the rebroadcast number is 1-888-203-1112 with the pass code
of 3150441. This rebroadcast will be available through April 12, 2013.

Non-GAAP Disclosures

This press release includes non-GAAP financial measures with respect to
Adjusted EBITDA and Adjusted net income (loss). Please see below for more
information regarding Adjusted EBITDA and Adjusted net income (loss) and
reconciliations of Adjusted EBITDA and Adjusted net income (loss) to net
income (loss).

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 prospects and performance in future periods, including
continuing operating losses at the former Vantage center. 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                   Years Ended
                 December 31,                     December 31,
                 2011            2012             2011             2012
REVENUE:         $           $             $            $    
                 14,136,136      14,669,651      63,120,607      62,354,189
DIRECT EXPENSES:
 Clinical
 salaries and    7,930,224       8,490,442        35,647,158       35,402,831
 benefits
 Dental supplies 584,411         614,839          2,742,398        2,693,604
 Laboratory fees 674,796         830,419          2,863,431        3,133,481
 Occupancy       1,330,005       1,412,540        5,390,982        5,549,650
 Advertising and 722,895         287,597          2,666,930        2,018,264
 marketing
 Depreciation
 and             644,978         777,907          2,505,957        2,838,582
 amortization
 General and     1,307,106       1,240,779        5,705,741        4,934,926
 administrative
                 13,194,415      13,654,523       57,522,597       56,571,338
 Contribution
 from dental     941,721         1,015,128        5,598,010        5,782,851
 offices
CORPORATE
EXPENSES:
 General and     885,776    ^(1) 1,002,608   ^(1) 3,544,074   ^(2) 4,207,681  ^(2)
 administrative
 Depreciation
 and             35,639          43,226           122,217          161,693
 amortization
OPERATING INCOME 20,306          (30,706)         1,931,719        1,413,477
(LOSS)
OTHER INCOME
(EXPENSE)
 Change in fair
 value of        830,000         -                830,000          -
 contingent
 liabilities
 Interest        (14,742)        (27,352)         (80,920)         (104,147)
 (expense), net
INCOME BEFORE    835,564         (58,058)         2,680,799        1,309,330
INCOME TAXES
 Income tax
 expense         345,831         (31,215)         1,065,472        502,066
 (income)
NET INCOME       $           $           $           $    
(LOSS)                         (26,843)         1,615,327       
                 489,733                                           807,264
Net income       $                            $           $    
(loss) per share             $                            
of Common Stock  0.27             (0.01)      0.87            0.44
- Basic
Net income       $                            $           $    
(loss) per share             $                            
of Common Stock  0.26             (0.01)      0.85            0.44
- Diluted
Cash dividends   $           $           $           $    
per share of                    0.22                        
Common Stock     0.22                            0.86            0.88
Weighted average
number of shares
of Common Stock
and dilutive
securities:
 Basic           1,845,366       1,842,402        1,853,307        1,839,149
 Diluted         1,892,775       1,851,315        1,909,760        1,848,714

     Corporate expense - general and administrative includes $96,661 of
     stock-based compensation expense pursuant to ASC Topic 718 for the
^(1) quarter ended December 31, 2011 and $128,351 of stock-based compensation
     expense pursuant to ASC Topic 718 for the quarter ended December 31,
     2012.
     Corporate expense - general and administrative includes $335,076 of
^(2) stock-based compensation expense pursuant to ASC Topic 718 for the year
     ended December 31, 2011 and $600,936 of stock-based compensation expense
     pursuant to ASC Topic 718 for the year ended December 31, 2012.





BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                   December 31,
ASSETS                             2011                   2012
CURRENT ASSETS:
 Cash and cash equivalents         $       923,878  $     1,112,511
 Accounts receivable, net of
 allowance for doubtful
 accounts of approximately
 $302,000 and $304,000,            2,855,726              2,614,152
 respectively
 Notes Receivable                  44,023                 165,718
 Deferred tax asset                197,327                205,693
 Income tax receivable             -                      442,630
 Prepaid expenses and other assets 595,093                482,297
 Total current assets              4,616,047              5,023,001
 PROPERTY AND EQUIPMENT, net       5,789,521              7,894,333
OTHER NONCURRENT ASSETS:
 Intangible assets, net            11,095,926             10,193,488
 Deferred charges and other assets 165,267                158,316
 Notes receivable                  155,419                -
 Total assets                      $    21,822,180    $    23,269,138
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
 Accounts payable                 $     2,111,155   $     1,919,457
 Accrued expenses                  1,973,593              1,640,076
 Accrued payroll and related       1,731,273              1,718,417
 expenses
 Income taxes payable              115,038                -
 Current maturities of long-term   -                      400,000
 debt
 Total current liabilities         5,931,059              5,677,950
LONG-TERM LIABILITIES:
 Deferred tax liability, net       2,309,279              2,997,808
 Long-term debt, net of current    4,251,068              6,074,042
 maturities
 Other long-term obligations       1,504,684              1,547,369
 Total liabilities                 13,996,090             16,297,169
COMMITMENTS AND CONTINGENCIES
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
 outstanding, respectively         368,186                329,236
 Retained earnings                 7,457,904              6,642,733
 Total shareholders' equity        7,826,090              6,971,969
 Total liabilities and             $    21,822,180    $    23,269,138
 shareholders' 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. 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 and subtracting change in fair value of contingent
liabilities as in the table below.

                                  Quarters Ended        Years Ended
                                  December 31,          December 31,
                                  2011       2012       2011        2012
RECONCILIATION OF ADJUSTED
EBITDA:
 Net income                       $489,733   ($26,843)  $1,615,327  $807,264
 Add back:
    Depreciation and amortization 644,978    777,907    2,505,957   2,838,582
    - Offices
    Depreciation and amortization 35,639     43,226     122,217     161,693
    - Corporate
    Stock-based compensation      96,661     128,351    335,076     600,936
    expense
    Interest expense, net         14,742     27,352     80,920      104,147
    Income tax expense            345,831    (31,215)   1,065,472   502,066
 Less:
    Change in fair value of       (830,000)  -          (830,000)   -
    contingent liabilities
Adjusted EBITDA                   $797,584   $918,778   $4,894,969  $5,014,688

Reconciliation of Adjusted net income (loss)

The following non-GAAP financial measures used by the Company provide
information useful to investors in understanding the Company's operating
performance and trends, and facilitate comparisons with the performance of the
Company's prior periods. A reconciliation of Adjusted net income (loss) to
net income (loss) can be made by subtracting change in fair value of
contingent liabilities as in the table below.

                                Quarters Ended          Years Ended
                                December 31,            December 31,
                                2011        2012        2011         2012
Adjusted net income (loss):
Net income (loss)               $ 489,733   $ (26,843)  $ 1,615,327  $ 807,264
Less Change in fair value of
contingent liabilities, net of  (500,120)   -           (500,120)    -
tax
Adjusted net income (loss)      $ (10,387)  $ (26,843)  $ 1,115,207  $ 807,264
Adjusted diluted income
(loss) per share:
Diluted income (loss) per       $ 0.26      $ (0.01)    $ 0.85       $ 0.44
share
Less Change in fair value of
contingent liabilities, net of  (0.27)      -           (0.27)       -
tax
Adjusted diluted income (loss)  $ (0.01)    $ (0.01)    $ 0.58       $ 0.44
per share





SOURCE Birner Dental Management Services, Inc.

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