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Birner Dental Management Services, Inc. Announces 10.0% Adjusted EBITDA Increase for 2007 Versus 2006
Date:3/18/2008

DENVER, March 18 /PRNewswire-FirstCall/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETH(R) dental practices, announced results for the year ended December 31, 2007. Total dental group practice revenue increased $2.2 million, or 3.9%, to $59.4 million. Net revenue increased $1.4 million, or 3.6%, to $40.8 million. The Company's earnings before interest, taxes, depreciation, amortization and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") increased $712,000, or 10.0%, to $7.8 million from $7.1 million for the year ended December 31, 2006.

Net income for the year ended December 31, 2007 increased $114,000, or 4.9% to $2.4 million. Earnings per share increased 14.7% to $1.08 for the year ended December 31, 2007 compared to $.94 for the year ended December 31, 2006.

For the quarter ended December 31, 2007, total dental group practice revenue increased $116,000, or .8%, to $13.8 million. Net revenue increased $96,000, or 1.0%, to $9.5 million. The Company's Adjusted EBITDA increased $30,000, or 1.8%, to $1.7 million for the quarter ended December 31, 2007 compared to $1.6 million for the quarter ended December 31, 2006.

Net income for the quarter ended December 31, 2007 increased $43,000, or 11.8% to $408,000. Earnings per share increased 22.3% to $.19 for the quarter ended December 31, 2007 compared to $.15 for the quarter ended December 31, 2006.

During 2007, the Company purchased 196,791 shares of its Common Stock for approximately $4.1 million and paid out just over $1.2 million in dividends to its shareholders while reducing debt outstanding by $1.7 million. In January 2008, the Company signed a lease for a de novo office in Longmont, Colorado, which the Company expects to open in the second quarter of 2008.

As previously reported, the Company's Board of Directors approved an increase in its quarterly dividend for 2008 to $.17 per share from $.15 per share in 2007. This increased dividend is first payable on April 11, 2008 to shareholders of record on March 28, 2008.

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 60 dental offices, of which 35 were acquired and 25 were de novo developments. The Company operates its dental offices under the PERFECT TEETH(R) name.

The Company previously announced it would conduct a conference call to review results for the year and quarter ended December 31, 2007. In addition to current operating results, the teleconference may include discussion of management's expectations of future financial and operating results. The call will be held on Tuesday, March 18, 2008, at 9:00 a.m. MT. To participate in this conference call, dial in to 1-866-837-9780 and refer to "Birner Dental Management Services, Inc." approximately five minutes prior to the scheduled time. If you are unable to join in on the conference call on March 18, the rebroadcast number is 1-888-266-2081 with the pass code of 1214453. This rebroadcast will be available through April 1, 2008.

Non-GAAP Disclosures

This press release includes certain non-GAAP financial measures with respect to total dental group practice revenue and Adjusted EBITDA. The non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similar measures used by other companies. Please see the last page of this release for more information on the reconciliation of total dental group practice revenue and Adjusted EBITDA to GAAP measures.

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 growth prospects and performance in 2008 and other future periods. 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

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Quarters Ended Years Ended

December 31, December 31,

2006 2007 2006 2007

NET REVENUE: (1) $9,399,312 $9,495,772 9,386,996 $40,790,255

DIRECT EXPENSES:

Clinical salaries

and benefits 3,390,590 3,477,782 14,201,712 14,761,863

Dental supplies 528,412 552,253 2,279,107 2,316,044

Laboratory fees 630,795 616,728 2,591,499 2,615,017

Occupancy 1,058,281 1,151,492 4,268,641 4,599,981

Advertising and

marketing 159,280 119,389 797,042 678,488

Depreciation and

amortization 611,160 711,447 2,192,411 2,541,995

General and

administrative 1,147,499 1,171,630 4,603,745 4,593,316

7,526,017 7,800,721 30,934,157 32,106,704

Contribution from

dental offices 1,873,295 1,695,051 8,452,839 8,683,551

CORPORATE EXPENSES:

General and

administrative 1,004,245(2) 924,326(2) 4,174,889(3) 4,119,052(3)

Depreciation and

amortization 32,319 25,383 131,356 110,270

Operating income 836,731 745,342 4,146,594 4,454,229

Interest expense,

net 107,873 78,989 226,835 365,140

Income from

continuing

operations

before income

taxes 728,858 666,353 3,919,759 4,089,089

Income tax expense 364,179 258,806 1,596,785 1,651,792

Net income $364,679 $407,547 $2,322,974 $2,437,297

Net income per

share of

Common Stock -

Basic $0.16 $0.20 $1.02 $1.16

Net income per

share of

Common Stock -

Diluted $0.15 $0.19 $0.94 $1.08

Cash dividends

per share of

Common Stock $0.13 $0.15 $0.52 $0.60

Weighted average

number of shares

of Common Stock

and dilutive

securities:

Basic 2,221,594 2,046,283 2,279,859 2,092,448

Diluted 2,402,407 2,194,530 2,469,540 2,258,108

(1) Total dental group practice revenue less amounts retained by group

practices. Total dental group practice revenue was $13,828,553 for the

quarter ended December 31, 2007 compared to $13,712,111 for the

quarter ended December 31, 2006 and was $59,390,457 for the year ended

December 31, 2007 compared to $57,141,226 for the year ended December

31, 2006.

(2) Corporate expenses -- general and administrative includes $81,030 of

equity compensation for a stock award and $112,588 of stock-based

compensation expense pursuant to SFAS 123 ( R ) for the quarter ended

December 31, 2007, and $81,030 of equity compensation for a stock

award and $84,403 of stock-based compensation expense pursuant to SFAS

123 ( R ) for the quarter ended December 31, 2006.

(3) Corporate expenses -- general and administrative includes $324,120 of

equity compensation for a stock award and $405,274 of stock-based

compensation expense pursuant to SFAS 123 ( R ) for the year ended

December 31, 2007, and $324,120 of equity compensation for a stock

award and $329,054 of stock-based compensation expense pursuant to

SFAS 123 ( R ) for the year ended December 31, 2006.

BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

ASSETS 2006 2007

CURRENT ASSETS:

Cash and cash equivalents $888,186 $964,150

Accounts receivable, net of allowance

for doubtful accounts of $288,513 and

$291,827, respectively 3,103,922 3,008,550

Deferred tax asset 185,671 178,591

Income taxes receivable - 26,817

Prepaid expenses and other assets 597,283 620,365

Total current assets 4,775,062 4,798,473

PROPERTY AND EQUIPMENT, net 5,592,672 4,533,531

OTHER NONCURRENT ASSETS:

Intangible assets, net 12,272,358 11,393,590

Deposits 181,860 171,687

Total assets $22,821,952 $20,897,281

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $1,648,498 $1,945,420

Accrued expenses 1,398,267 1,334,785

Accrued payroll and related expenses 1,596,770 1,456,477

Income taxes payable 114,016 -

Current maturities of long-term debt 953,561 920,000

Total current liabilities 5,711,112 5,656,682

LONG-TERM LIABILITIES:

Deferred tax liability, net 734,234 633,667

Long-term debt, net of current

maturities 6,502,411 4,784,511

Other long-term obligations 326,550 291,266

Total liabilities 13,274,307 11,366,126

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS

SHAREHOLDERS' EQUITY:

Preferred Stock, no par value,

10,000,000 shares

authorized; none outstanding - -

Common Stock, no par value,

20,000,000 shares

authorized; 2,132,461 and

2,123,440 shares issued and

outstanding, respectively 4,191,349 3,028,515

Retained earnings 5,356,296 6,536,796

Accumulated other comprehensive loss - (34,156)

Total shareholders' equity 9,547,645 9,531,155

Total liabilities and

shareholders' equity $22,821,952 $20,897,281

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, amortization of equity compensation, stock-based compensation expense related to SFAS 123( R ), interest expense, net and income tax expense to net income as in the table below.

Quarters Ended Years Ended

December 31, December 31,

2006 2007 2006 2007

RECONCILIATION OF ADJUSTED

EBITDA:

Net income $364,679 $407,547 $2,322,974 $2,437,297

Add back:

Depreciation and

amortization - Offices 611,160 711,447 2,192,411 2,541,995

Depreciation and

amortization - Corporate 32,319 25,383 131,356 110,270

Stock-based compensation

expense 165,433 193,618 653,174 729,394

Interest expense, net 107,873 78,989 226,835 365,140

Income tax expense 364,179 258,806 1,596,785 1,651,792

Adjusted EBITDA $1,645,643 $1,675,790 $7,123,535 $7,835,888

Total dental group practice revenue is the revenue generated at the Company's offices from professional services provided to its patients. Amounts retained by dental offices represents compensation expense to the dentists and hygienists and is subtracted from total dental group practice revenue to arrive at net revenue. The Company reports net revenue in its financial statements to comply with Emerging Issues Task Force Issue No. 97-2, Application of SFAS No. 94 (Consolidation of All Majority Owned Subsidiaries) and APB Opinion No. 16 (Business Combinations) to Physician Practice Management Entities and Certain Other Entities With Contractual Management Arrangements. Total dental group practice revenue is a non-GAAP measure that is disclosed because it is a critical component for management's evaluation of office performance. However, investors should not consider this measure 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.

Quarters Ended Years Ended

December 31, December 31,

2006 2007 2006 2007

Total dental group

practice revenue $13,712,111 $13,828,553 $57,141,226 $59,390,457

Less - amounts

retained by Offices 4,312,799 4,332,781 17,754,230 18,600,202

Net revenue $9,399,312 $9,495,772 $39,386,996 $40,790,255


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SOURCE Birner Dental Management Services, Inc.
Copyright©2008 PR Newswire.
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