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Birner Dental Management Services, Inc. Announces Earnings for Year End and Fourth Quarter 2008
Date:3/26/2009

DENVER, March 26 /PRNewswire-FirstCall/ -- Birner Dental Management Services, Inc. (Nasdaq: BDMS), operators of PERFECT TEETH dental practices, announced results for the year ended December 31, 2008. Total dental group practice revenue decreased $371,000, or .6%, to $59.0 million. Net revenue decreased $760,000, or 2.2%, to $34.5 million.

The Company's earnings before interest, taxes, depreciation, amortization and non-cash expense associated with stock-based compensation ("Adjusted EBITDA") decreased $1.1 million, or 13.7%, to $6.8 million from $7.8 million for the year ended December 31, 2007.

Net income for the year ended December 31, 2008 decreased $645,000, or 26.5% to $1.8 million. Earnings per share decreased 20.4% to $.86 for the year ended December 31, 2008 compared to $1.08 for the year ended December 31, 2007.

For the quarter ended December 31, 2008, total dental group practice revenue increased $41,000 or .3%, to $13.9 million. Net revenue decreased $150,000, or 1.8%, to $8.0 million. The Company's Adjusted EBITDA decreased $152,000, or 9.1%, to $1.5 million for the quarter ended December 31, 2008 compared to $1.7 million for the quarter ended December 31, 2007.

Net income for the quarter ended December 31, 2008 decreased $85,000, or 20.9% to $323,000. Earnings per share decreased 9.5% to $.17 for the quarter ended December 31, 2008 compared to $.19 for the quarter ended December 31, 2007.

The decrease in net revenue of $760,000 for the year ended December 31, 2008 consisted of a decrease in net revenue from general dentistry of $1.3 million partly offset by an increase in net revenue from specialty dentistry of $536,000. The decrease in net revenue of $150,000 for the quarter ended December 31, 2008 consisted of a decrease in net revenue from general dentistry of $288,000 partly offset by an increase in net revenue from specialty dentistry of $138,000. The Company attributes the decline in net revenue for the year ended December 31, 2008 to a general weakness in the economy in the Company's markets as reflected by a reduced number of new patient visits, patient procedures and in particular fewer crown and bridge procedures.

During 2008, the Company had capital expenditures of $1.1 million, purchased 292,538 shares of its Common Stock for approximately $4.4 million and paid out approximately $1.4 million in dividends to its shareholders. During the year bank debt increased approximately $1.2 million which brought total debt outstanding to $6.9 million at December 31, 2008.

The Company's Board of Directors approved a quarterly dividend for 2009 of $.17 per share. This dividend is first payable on April 10, 2009 to shareholders of record on March 27, 2009.

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 61 dental offices, of which 35 were acquired and 26 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, 2008 on Thursday, March 26, 2009 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 1-866-244-4519 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 26, the rebroadcast number is 1-888-266-2081 with the pass code of 1342517. This rebroadcast will be available through April 9, 2009.

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 2009 and other future periods. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances, 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
                            CONSOLIDATED STATEMENTS OF INCOME
                                      (UNAUDITED)


                               Quarters Ended             Years Ended
                                December 31,              December 31,
                               2007       2008         2007         2008

     NET REVENUE:(1)       $8,168,452  $8,018,742  $35,282,984  $34,522,861

     DIRECT EXPENSES:
        Clinical
         salaries and
         benefits           2,150,467   2,237,651    9,258,232    9,748,636
        Dental
         supplies             552,253     525,267    2,316,044    2,370,866
        Laboratory
         fees                 616,728     636,926    2,615,017    2,722,607
        Occupancy           1,151,492   1,196,155    4,599,981    4,798,133
        Advertising
         and marketing        119,389     101,721      678,488      433,496
        Depreciation
         and amortization     711,447     619,723    2,541,995    2,445,956
        General and
         administrative     1,171,630   1,102,430    4,593,316    4,731,822
                            6,473,406   6,419,873   26,603,073   27,251,516

        Contribution
         from dental
         offices            1,695,046   1,598,869    8,679,911    7,271,345

     CORPORATE EXPENSES:
        General and
         administrative       924,323(2)  882,028(2) 4,119,052(3) 3,687,341(3)
        Depreciation
         and amortization      25,383      24,192      110,270       96,366

        Operating income      745,340     692,649    4,450,589    3,487,638
        Interest
         expense, net          78,989      82,450      365,140      282,267

        Income from
         continuing
         operations
         before income
         taxes                666,351     610,199    4,085,449    3,205,371
        Income tax
         expense              258,807     287,692    1,650,342    1,414,962

        Net income           $407,544    $322,507   $2,435,107   $1,790,409

        Net income
         per share of
         Common Stock
         - Basic                $0.20       $0.17        $1.16        $0.88

        Net income
         per share of
         Common Stock
         - Diluted              $0.19       $0.17        $1.08        $0.86

        Cash
         dividends
         per share of
         Common Stock           $0.15       $0.17        $0.60        $0.68

        Weighted
         average
         number of
         shares of
         Common Stock
         and dilutive
         securities:
           Basic            2,046,283   1,889,690    2,092,448    2,024,794

           Diluted          2,194,530   1,918,538    2,258,108    2,085,889


    (1) Total dental group practice revenue less amounts retained by group
         practices. Total dental group practice revenue was $13,869,408 for
         the quarter ended December 31, 2008 compared to $13,828,553 for the
         quarter ended December 31, 2007 and was $59,016,250 for the year
         ended December 31, 2008 compared to $59,386,817 for the year ended
         December 31, 2007.

     (2) Corporate expenses - general and administrative includes $187,271 of
         stock-based compensation expense pursuant to SFAS 123 (R) for the
         quarter ended December 31, 2008, and $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.

     (3) Corporate expenses - general and administrative includes $731,607 of
         stock-based compensation expense pursuant to SFAS 123 (R) for the
         year ended December 31, 2008, and $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.



                BIRNER DENTAL MANAGEMENT SERVICES, INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS

                                                        December 31,
                   ASSETS                          2007               2008

     CURRENT ASSETS:
        Cash and cash equivalents               $964,150          $1,234,991
        Accounts receivable, net of
         allowance for doubtful
         accounts of $291,827 and
         $290,688, respectively                3,008,550           2,875,732
        Deferred tax asset                       178,591             195,091
        Income taxes receivable                   26,817                   -
        Prepaid expenses and other
         assets                                  620,365             418,653

          Total current assets                 4,798,473           4,724,467

        PROPERTY AND EQUIPMENT, net            4,533,531           3,887,919

     OTHER NONCURRENT ASSETS:
        Intangible assets, net                11,393,590          10,621,918
        Deposits                                 171,687             160,289

          Total assets                       $20,897,281         $19,394,593

      LIABILITIES AND SHAREHOLDERS' EQUITY

     CURRENT LIABILITIES:
        Accounts payable                      $1,945,420          $1,551,851
        Accrued expenses                       1,581,661           1,462,258
        Accrued payroll and related
         expenses                              1,456,477           1,714,550
        Income taxes payable                           -             371,569
        Current maturities of long-term
         debt                                    920,000             920,000

          Total current liabilities            5,903,558           6,020,228

     LONG-TERM LIABILITIES:
        Deferred tax liability, net              538,093             618,913
        Long-term debt, net of current
         maturities                            4,784,511           5,988,202
        Other long-term obligations              291,266             259,678

          Total liabilities                   11,517,428          12,887,021

       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;
         2,123,440 and 1,863,587
         shares issued and outstanding,
         respectively                          3,028,515                   -
        Retained earnings                      6,385,494           6,550,663
        Accumulated other comprehensive
         loss                                    (34,156)            (43,091)

        Total shareholders' equity             9,379,853           6,507,572

        Total liabilities and
         shareholders' equity                $20,897,281         $19,394,593

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,
                                  2007         2008        2007        2008

     RECONCILIATION OF
      ADJUSTED EBITDA:
        Net income              $407,544    $322,507   $2,435,107   $1,790,409
        Add back:
          Depreciation and
           amortization -
           Offices               711,447     619,723    2,541,995    2,445,956
          Depreciation and
           amortization -
           Corporate              25,383      24,192      110,270       96,366
          Stock-based
           compensation
           expense               193,618     187,271      729,394      731,607
          Interest expense,
           net                    78,989      82,450      365,140      282,267
          Income tax expense     258,807     287,692    1,650,342    1,414,962

     Adjusted EBITDA          $1,675,788  $1,523,835   $7,832,248   $6,761,567


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,
                               2007           2008        2007         2008

    Total dental group
     practice revenue      $13,828,553   $13,869,408  $59,386,817  $59,016,250
    Less - amounts
     retained by
     Offices                 5,660,101     5,850,666   24,103,833   24,493,389

    Net revenue             $8,168,452    $8,018,742  $35,282,984  $34,522,861


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SOURCE Birner Dental Management Services, Inc.
Copyright©2009 PR Newswire.
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