Birner Dental Management Services, Inc. Announces Earnings For 2Q 2013

    Birner Dental Management Services, Inc. Announces Earnings For 2Q 2013

PR Newswire

DENVER, Aug. 13, 2013

DENVER, Aug. 13, 2013 /PRNewswire/ -- Birner Dental Management Services, Inc.
(NASDAQ Capital Market: BDMS), operators of PERFECT TEETH® dental practices,
announced results for the quarter and six months ended June 30, 2013. For the
quarter ended June 30, 2013, revenue increased $661,000, or 4.2%, to $16.4
million. The Company's earnings before interest, taxes, depreciation,
amortization, and non-cash expense associated with stock-based compensation
("Adjusted EBITDA") increased $197,000, or 17.9%, to $1.3 million for the
quarter ended June 30, 2013. Net income for the quarter ended June 30, 2013
increased $37,000, or 26.3%, to $180,000 compared to $142,000 for the quarter
ended June 30, 2012. Earnings per share increased to $0.10 for the quarter
ended June 30, 2013 compared to $0.08 for the quarter ended June 30, 2012.

For the six months ended June 30, 2013, revenue increased $1.1 million, or
3.3%, to $33.0 million. The Company's Adjusted EBITDA increased 170,000, or
6.7%, to $2.7 million for the six months ended June 30, 2013. Net income for
the six months ended June 30, 2013 decreased $30,000, or 6.7%, to $421,000
compared to $451,000 for the six months ended June 30, 2012. Earnings per
share decreased to $0.23 for the six months ended June 30, 2013 compared to
$0.24 for the six months ended June 30, 2012.

Since the beginning of the fourth quarter of 2012, the Company has opened
three de novo offices: in Tucson in the fourth quarter of 2012; in Erie,
Colorado in the fourth quarter of 2012; and in Loveland, Colorado on July 29,
2013. The Company has leased space for two additional de novo offices: in
Monument, Colorado anticipated to open in the fourth quarter of 2013; and in
Fort Collins, Colorado anticipated to open in the third quarter of 2014. The
Company is also evaluating and negotiating leases on additional sites
throughout its markets. Additionally, the Company has signed new leases for
the relocation and modernization of two of its offices: in Denver anticipated
to open in the third quarter of 2013; and in Albuquerque anticipated to open
in the fourth quarter of 2013.

During the six months ended June 30, 2013, the Company completed a remodel of
one of its offices and converted two additional offices to digital
radiography.

During the first six months of 2013, the Company had capital expenditures of
approximately $1.5 million, paid out approximately $812,000in dividends to
its shareholders and decreased total bank debt outstanding by approximately
$185,000.

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 66 dental offices, of
which 37 were acquired and 29 were de novo developments. The Company
currently has 124 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 quarter ended June 30, 2013 on Tuesday, August 13, 2013 at
9:00 a.m. MDT. 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
1-888-337-8198 and refer to Confirmation Code3829976 approximately five
minutes prior to the scheduled time. If you are unable to join the conference
call on August 13, the rebroadcast number is 1-888-203-1112 with the pass code
of 3829976. This rebroadcast will be available through August 27, 2013.

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                  Six Months Ended
                 June 30,                        June 30,
                 2012            2013            2012            2013
REVENUE:         $               $               $               $
                 15,775,428      16,436,292      31,975,115      33,040,596
DIRECT EXPENSES:
 Clinical
 salaries and    8,951,275       9,693,407       18,089,124      19,405,946
 benefits
 Dental supplies 712,490         731,596         1,389,482       1,438,245
 Laboratory fees 798,072         798,331         1,551,528       1,558,708
 Occupancy       1,370,243       1,453,961       2,735,560       2,911,538
 Advertising and 702,101         215,408         1,377,664       578,237
 marketing
 Depreciation
 and             685,394         838,363         1,334,956       1,658,244
 amortization
 General and     1,235,366       1,056,742       2,444,835       2,267,645
 administrative
                 14,454,941      14,787,808      28,923,149      29,818,563
 Contribution
 from dental     1,320,487       1,648,484       3,051,966       3,222,033
 offices
CORPORATE
EXPENSES:
 General and     1,019,259  ^(1) 1,297,830  ^(1) 2,186,754  ^(2) 2,402,819  ^(2)
 administrative
 Depreciation
 and             41,870          49,497          77,159          95,750
 amortization
OPERATING INCOME 259,358         301,157         788,053         723,464
 Interest        26,299          6,798           48,778          33,513
 expense, net
INCOME BEFORE    233,059         294,359         739,275         689,951
INCOME TAXES
 Income tax      90,893          114,799         288,317         269,081
 expense
NET INCOME       $             $             $             $  
                 142,166        179,560        450,958        420,870
 Net income per  $           $           $           $    
 share of Common  0.08          0.10          0.24          0.23
 Stock - Basic
 Net income per  $           $           $           $    
 share of Common  0.08          0.10          0.24          0.23
 Stock - Diluted
 Cash dividends  $           $           $           $    
 per share of     0.22          0.22          0.44          0.44
 Common Stock
 Weighted
 average number
 of shares of
 Common Stock
 and dilutive
 securities:
  Basic        1,843,738       1,851,598       1,843,302       1,849,118
  Diluted      1,852,103       1,863,855       1,853,433       1,861,020

     Corporate expense - general and administrative includes $112,198 of
^(1) stock-based compensation expense pursuant to ASC Topic 718 for the
     quarter ended June 30, 2012 and $106,573 of stock-based compensation
     expense pursuant to ASC Topic 718 for the quarter ended June 30, 2013.
     Corporate expense - general and administrative includes $344,963 of
     stock-based compensation expense pursuant to ASC Topic 718 for the six
^(2) months ended June 30, 2012 and $237,581 of stock-based compensation
     expense pursuant to ASC Topic 718 for the six months ended June 30,
     2013.



BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                             December 31,    June 30,
ASSETS                                       2012             2013
CURRENT ASSETS:
 Cash and cash equivalents                   $   1,112,511  $    640,978
 Accounts receivable, net of allowance for
 doubtful
 accounts of approximately $304,000 and      2,614,152        3,887,377
 $319,000, respectively
 Notes receivable                            165,718          154,834
 Deferred tax asset                          205,693          322,060
 Income tax receivable                       442,630          -
 Prepaid expenses and other assets           482,297          729,041
 Total current assets                        5,023,001        5,734,290
PROPERTY AND EQUIPMENT, net                  7,894,333        8,119,132
OTHER NONCURRENT ASSETS:
 Intangible assets, net                      10,193,488       9,743,203
 Deferred charges and other assets           158,316          161,912
 Total assets                                $  23,269,138   $  23,758,537
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Accounts payable                           $   1,919,457  $   1,887,884
 Accrued expenses                            1,640,076        1,683,486
 Accrued payroll and related expenses        1,718,417        2,481,401
 Income taxes payable                        -                159,704
 Current maturities of long-term debt        400,000          1,000,000
 Total current liabilities                   5,677,950        7,212,475
LONG-TERM LIABILITIES:
 Deferred tax liability, net                 2,997,808        2,877,674
 Long-term debt, net of current maturities   6,074,042        5,289,342
 Other long-term obligations                 1,547,369        1,551,037
 Total liabilities                           16,297,169       16,930,528
SHAREHOLDERS' EQUITY:
 Preferred Stock, no par value, 10,000,000
 shares
 authorized; none outstanding                -                -
 Common Stock, no par value, 20,000,000
 shares authorized;
 1,842,402 and 1,851,598 shares issued and   329,236          577,965
 outstanding, respectively
 Retained earnings                           6,642,733        6,250,044
 Total shareholders' equity                  6,971,969        6,828,009
 Total liabilities and shareholders' equity  $  23,269,138   $  23,758,537

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                Six Months
                                Ended June 30,          Ended June 30,
                                2012        2013        2012        2013
RECONCILIATION OF ADJUSTED
EBITDA:
 Net income                     $142,166    $179,560    $450,958    $420,870
 Add back:
  Depreciation and amortization 685,394     838,363     1,334,956   1,658,244
  - Offices
  Depreciation and amortization 41,870      49,497      77,159      95,750
  - Corporate
  Stock-based compensation      112,198     106,573     344,963     237,581
  expense
  Interest expense, net         26,299      6,798       48,778      33,513
  Income tax expense            90,893      114,799     288,317     269,081
Adjusted EBITDA                 $1,098,820  $1,295,590  $2,545,131  $2,715,039



SOURCE Birner Dental Management Services, Inc.
 
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