1777 S. Harrison Street, Suite 1400
Denver, CO 80210
303-691-0680
FOR IMMEDIATE RELEASE
August 13, 2014
Exhibit No. 99.1 BIRNER DENTAL MANAGEMENT SERVICES, INC. ANNOUNCES RESULTS FOR 2Q 2014
DENVER, COLORADO, August 13, 2014. 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, 2014. For the quarter ended June 30, 2014, revenue increased $440,000, or 2.7%, to $16.9 million. The Company's earnings before interest, taxes, depreciation, amortization, and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") decreased $212,000, or 16.4%, to $1.1 million for the quarter ended June 30, 2014. Net income/(loss) for the quarter ended June 30, 2014 decreased $239,000, or 133.0%, to $(59,000) compared to $180,000 for the quarter ended June 30, 2013. Earnings/(loss) per share decreased to $(0.03) for the quarter ended June 30, 2014 compared to $0.10 for the quarter ended June 30, 2013.
For the six months ended June 30, 2014, revenue increased $642,000, or 1.9%, to $33.7 million. The Company's Adjusted EBITDA decreased $401,000, or 14.8%, to $2.3 million for the six months ended June 30, 2014. Net income/(loss) for the six months ended June 30, 2014 decreased $431,000, or 102.4%, to $(10,000) compared to
$421,000 for the six months ended June 30, 2013. Earnings/(loss) per share decreased to $(0.01) for the six months ended June 30, 2014 compared to $0.23 for the six months ended June 30, 2013.
Since the beginning of the fourth quarter of 2012, the Company has opened five 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; in Monument, Colorado in December 2013; and in Fort Collins, Colorado in May 2014. The Company has leased space for four additional de novo offices: in Scottsdale, Arizona, which is anticipated to open in the third quarter of 2014; and in Albuquerque, New Mexico, Westminster, Colorado and Commerce City, Colorado, which are anticipated to open in 2015. The Company is also evaluating and negotiating leases for additional sites throughout its markets.
At the end of the second quarter of 2014, the Company made certain expense reductions to more align its cost structure with the Company's revenue growth. The Company will continue to make additional expense reductions throughout the remainder of 2014. However, none of these cost reductions will affect planned de novo developments or remodels and upgrades of the Company's networks. In line with this strategy, the Company recently completed the consolidation of two of the Denver offices to achieve greater operating efficiencies.
During the first six months of 2014, the Company had capital expenditures of approximately $3.1 million, paid approximately $817,000 in dividends to its shareholders and increased total bank debt outstanding by approximately $489,000. During the six months ended June 30, 2014, the Company completed remodels and/or relocations of three 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 67 dental offices, of which 37 were acquired and 30 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 quarter ended June 30, 2014 on Wednesday, August 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 1-800-768-6569 and refer to Confirmation Code 8290231 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on August 13,
2014, the rebroadcast number is 1-888-203-1112 with the pass code of 8290231. This rebroadcast will be available through August 27, 2014.
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
REVENUE:
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Quarters Ended Six Months Ended
lune 30, lune 30,
2013 2014 2013 2014
Dental pract:ice revenue | $ 15,012,532 | $ 15,571,178 | $ 30,175,979 | $31,043,913 | |||
Capitat:ion revenue | 1,423,760 | 1,305,345 | 2,864,617 | 2,639,008 | |||
16,436,292 | 16,876,523 | 33,040,596 | 33,682,921 |
DIRECT EXPENSES:
Clinical salaries and benefits | 9,693,407 | 9,934,075 | 19,405,946 | 19,827,441 | |||
Dental supplies | 731,596 | 761,999 | 1,438,245 | 1,453,692 | |||
Laboratmy fees | 798,331 | 892,775 | 1,558,708 | 1,696,778 | |||
Occupancy | 1,453,961 | 1,459,529 | 2,911,538 | 2,917,923 | |||
Advert:ising and market:ing | 215,408 | 239,324 | 578,237 | 469,249 | |||
Depreciat:ion and amort:izat:ion | 838,363 | 1,026,816 | 1,658,244 | 1,994,079 | |||
Generai and administrat:ive | 1,056,742 | 1,395,000 | 2,267,645 | 2,824,904 | |||
14,787,808 | 15,709,518 | 29,818,563 | 31,184,066 |
Contribution from dental offices 1,648,484 1,167,005 3,222,033 2,498,855
CORPORATE EXPENSES:
Generai and administrat:ive 1,297,830 0) 1,179,881 0) 2,402,819 0) 2,349,025 0)
Depreciat:ion and amort:izat:ion 49,497 56,655 95,750 111,294
OPERAT1NG 1NCOME/(LOSS) 301,157 (69,531) 723,464 38,536
Interest expense, net 6,798 27,584 33,513 54,778
1NCOME/(LOSS) BEFORE 1NCOME TAXES 294,359 (97,115) 689,951 (16,242) Income tax expense/(benefit) 114,799 (37,874) 269,081 (6,334)
NET 1NCOME/(LOSS) $ 179,560 $ (59,241) $ 420,870 $ (9,908) Net income/(loss) per share ofCornmon Stock- Basic $ 0.10 $ (0.03) $ 0.23 $ (0.01) Net income/(loss) per share ofCornmon Stock- Diluted $ 0.10 $ (0.03) $ 0.23 $ (0.01) Cash dividends per share ofCornmon Stock $ 0.22 $ 0.22 $ 0.44 $ 0.44
Weighted average mnnber of shares of
Cornmon Stock and dilut:ive securit:ies:
Basic 1,851,598 1,860,089 1,849,118 1,857,288
Diluted 1,863,855 1,860,089 1,861,020 1,857,288
C1 l Corporate expense- generai and administrative includes $106,573 ofstock-based compensation expense pursuant to ASC Topic 718 for the quarter ended June 30,2013 and $69,606 ofstock-based compensatian expense pursuant to ASC Topic 718 for the quarter ended June 30, 2014.
C2l C01-porate expense- generai and administrative includes $237,581 of stock-based compensatian expense pursuant to ASC Topic 718 for the six months ended Jooe 30,
2013 and $170,035 of stock-based compensatian expense pursuant to ASC Topic 718 for the six months ended Jooe 30, 2014.
BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents Accmmts receivable, net of allowance for doubtfiù accmmts of approximately $420,000 and $420,000, respectively | $ 469,827 3,250,319 | $ | 3,658,127 | |
Notes receivable | 34,195 | 34,195 | ||
Deferred tax asset | 272,523 | 304,239 | ||
Income tax receivable | 176,935 | |||
Prepaid expenses and other assets | 455,158 | 741,504 | ||
Total current assets | 4,658,957 | 4,738,065 | ||
PROPERTY AND EQUIPMENT, net | 10,126,399 | 11,600,958 | ||
OTHER NONCURRENT ASSETS: Intangible assets, net | 9,292,868 | 8,842,582 | ||
Deferred charges and other assets | 165,661 | 165,661 | ||
Notes receivable | 109,501 | 96,278 | ||
Total assets | $ 24,353,386 | $ 25,443,544 |
UABIUTIES AND SHAREHOLDERS' EQUITY
CURRENT UABIUTIES:
Accmmts payable $ 2,548,240 $ 3,317,117
Accrued expenses 1,641,509 1,617,416
Accrued payroll and related expenses 2,192,495 2,649,003
Income taxes payable 501,981
Total current liabilities 6,382,244 8,085,517
LONG-TERM UABIUTIES:
Deferred tax liability, net 3,030,205 2,505,709
Long-term debt 8,091,790 8,580,578
Other long-term obligations 965,959 971,154 Totalliabilities 18,470,198 20,142,958
SHAREHOLDERS' EQUITY:
Preferred Stock, no parvalue, 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, respectively | 779,758 | 1,025,504 | |
Retained earnings | 5,103,430 | 4,275,082 | |
Total shareholders' equity | 5,883,188 | 5,300,586 | |
Totalliabilities and shareholders' equity | $ 24,353,386 | $ 25,443,544 |
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/(loss) 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/(benefit) to net income/(loss) as in the table below.
Quarter
Ended June 30,
Six Months
Ended June 30,
RECONCILIATION OF ADJUSTED EBITDA:
2013 2014 2013 2014
Net income/(loss) $179,560
Add back:
$ (59,241)
$420,870
$ (9,908)
Depreciation and amortization - Offices 838,363 1,026,816 1,658,244 1,994,079
Depreciation and amortization - Corporate 49,497 56,655 95,750 111,294
Stock-based compensation expense 106,573 69,606 237,581 170,035
Interest expense, net 6,798 27,584 33,513 54,778
Income tax expense/(benefit) 114,799 (37,874) 269,081 (6,334) Adjusted EBITDA
distributed by |