Birner Dental Management Services, Inc. Announces Earnings For 1Q 2014

    Birner Dental Management Services, Inc. Announces Earnings For 1Q 2014

PR Newswire

DENVER, May 13, 2014

DENVER, May 13, 2014 /PRNewswire/ --Birner Dental Management Services, Inc.
(NASDAQ Capital Market: BDMS),operators of PERFECT TEETH®  dental practices,
announced results for the quarter ended March 31, 2014. For the quarter ended
March 31, 2014, revenue increased $202,000, or 1.2%, to $16.8 million compared
to $16.6 million for the quarter ended March 31, 2013. The Company's earnings
before interest, taxes, depreciation, amortization, and non-cash expense
associated with stock-based compensation ("Adjusted EBITDA") decreased
$189,000, or 13.3%, to $1.2 million compared to $1.4 million for the quarter
ended March 31, 2013, but increased from $633,000 for the quarter ended
December 31, 2013. Net income for the quarter ended March 31, 2014 decreased
$192,000, or 79.6%, to $49,000 compared to $241,000 for the quarter ended
March 31, 2013. Earnings per share decreased to $0.03 for the quarter ended
March 31, 2014 compared to $0.13 for the quarter ended March 31, 2013.

Since the beginning of the fourth quarter of 2012, the Company has opened four
de novo offices: in Tucson, Arizona in the fourth quarter of 2012; in Erie,
Colorado in the fourth quarter of 2012; in Loveland, Colorado in July 2013;
and in Monument, Colorado in December 2013. The Company has leased space for
three additional de novo offices: in Fort Collins, Colorado, which is
anticipated to open in May 2014; in Scottsdale, Arizona, which is anticipated
to open in the third quarter of 2014; and in Albuquerque, New Mexico, which is
anticipated to open in 2015. The Company is also evaluating and negotiating
leases for additional sites throughout its markets. Additionally, the Company
has relocated and modernized an office in Albuquerque, New Mexico, which
opened in March 2014, and has significantly upgraded and converted to digital
radiography one of its offices in Colorado Springs, Colorado, which was
completed in April 2014.

Fred Birner, Chief Executive Officer of the Company, stated that "We were
encouraged by the substantial rebound in Adjusted EBITDA in the first quarter
of 2014 from the fourth quarter of 2013 and continue to believe the Company is
moving in the right direction and making good progress with our previously
discussed initiatives and the continued progress of the four de novo offices."

During the quarter ended March 31, 2014, the Company had capital expenditures
of $1.1 million, paid approximately $408,000 in dividends to its shareholders
and increased total bank debt outstanding by approximately $963,000. The
Company's outstanding bank debt increased because of the Company's development
of de novo offices and its commitment to upgrading its existing offices
through extensive remodels and office relocations and to converting its
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 66 dental offices, of
which 37 were acquired and 29 were de novo developments. The Company
currently has 118 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 March 31, 2014 on Tuesday, May 13, 2014 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
1-800-344-6491 and refer to Confirmation Code 9115588 approximately five
minutes prior to the scheduled time. If you are unable to join the conference
call on May 13, 2014, the rebroadcast number is 1-888-203-1112 with the pass
code of 9115588. This rebroadcast will be available through May 27, 2014.

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
                                 March 31,
                                 2013                  2014
REVENUE:
 Dental practice revenue         $  15,163,445        $ 15,472,734
 Capitation revenue              1,440,857             1,333,664
                                 16,604,302            16,806,398
DIRECT EXPENSES:
 Clinical salaries and benefits  9,712,539             9,893,366
 Dental supplies                 706,649               691,692
 Laboratory fees                 760,376               804,003
 Occupancy                       1,457,577             1,458,394
 Advertising and marketing       362,827               229,925
 Depreciation and amortization   819,881               967,263
 General and administrative      1,210,900             1,429,905
                                 15,030,749            15,474,548
 Contribution from dental        1,573,553             1,331,850
 offices
CORPORATE EXPENSES:
 General and administrative     1,104,988        ^(1) 1,169,145          ^(1)
 Depreciation and amortization   46,253                54,640
OPERATING INCOME                 422,312               108,065
 Interest expense, net           26,716                27,194
INCOME BEFORE INCOME TAXES       395,596               80,871
 Income tax expense              154,282               31,540
NET INCOME                       $    241,314      $     49,331
 Net income per share of Common  $               $       0.03
 Stock - Basic                   0.13
 Net income per share of Common  $               $       0.03
 Stock - Diluted                 0.13
 Cash dividends per share of     $               $       0.22
 Common Stock                    0.22
 Weighted average number of
 shares of
 Common Stock and dilutive
 securities:
 Basic                           1,845,375             1,854,455
 Diluted                         1,857,088             1,864,708



     Corporate expenses - general and administrative includes $131,008 of
^(1) stock-based compensation expense pursuant to ASC Topic 718 for the
     quarter ended March 31, 2013 and $100,430 of stock-based compensation
     expense pursuant to ASC Topic 718 for the quarter ended March 31, 2014.







BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                  December 31,          March 31,
ASSETS                            2013                   2014
CURRENT ASSETS:
 Cash and cash equivalents        $       469,827  $       299,990
 Accounts receivable, net of
 allowance for doubtful
 accounts of approximately
 $420,000 and $420,000,           3,250,319              3,797,658
 respectively
 Notes receivable                 34,195                 34,195
 Deferred tax asset               272,523                298,019
 Income tax receivable            176,935                -
 Prepaid expenses and other       455,158                789,115
 assets
 Total current assets             4,658,957              5,218,977
PROPERTY AND EQUIPMENT, net       10,126,399             10,469,987
OTHER NONCURRENT ASSETS:
 Intangible assets, net           9,292,868              9,067,725
 Deferred charges and other       165,661                165,661
 assets
 Notes receivable                 109,501                102,804
 Total assets                     $    24,353,386    $    25,025,154
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
 Accounts payable                $     2,548,240   $     1,986,186
 Accrued expenses                 1,641,509              1,572,880
 Accrued payroll and related      2,192,495              2,734,138
 expenses
 Income taxes payable             -                      292,146
 Total current liabilities        6,382,244              6,585,350
LONG-TERM LIABILITIES:
 Deferred tax liability, net      3,030,205              2,752,344
 Long-term debt                   8,091,790              9,054,728
 Other long-term obligations      965,959                938,437
 Total liabilities                18,470,198             19,330,859
SHAREHOLDERS' EQUITY:
 Preferred Stock, no par value,
 10,000,000 shares
 authorized; none outstanding     -                      -
 Common Stock, no par value,
 20,000,000 shares authorized;
 1,852,565 and 1,860,089 shares
 issued and outstanding,          779,758                950,753
 respectively
 Retained earnings                5,103,430              4,743,542
 Total shareholders' equity       5,883,188              5,694,295
 Total liabilities and            $    24,353,386    $    25,025,154
 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, 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
                                            Ended March 31,
                                            2013        2014
RECONCILIATION OF EBITDA:
 Net income                                 $241,314    $49,331
 Add back:
  Depreciation and amortization - Offices   819,881     967,263
  Depreciation and amortization - Corporate 46,253      54,640
  Stock-based compensation expense          131,008     100,430
  Interest expense, net                     26,716      27,194
  Income tax expense                        154,282     31,540
Adjusted EBITDA                             $1,419,454  $1,230,398



SOURCE Birner Dental Management Services, Inc.

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