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Dialysis Corporation of America Reports First Quarter 2009 Results

LINTHICUM, Md., May 5 /PRNewswire-FirstCall/ -- Dialysis Corporation of America (Nasdaq: DCAI) announced its financial results for the first quarter of 2009.

  • Quarter end patient census approximated 2,000.
  • Operating revenues for the first quarter of 2009 were $23.5 million compared to $20.5 million for the same period last year, a 15% increase.
  • Operating income was $793,000 for the first quarter of 2009 compared to $1.3 million for the same period last year.
  • Net income attributable to the company for the quarter was $180,000 or $0.02 per basic and diluted share compared to $449,000 or $0.05 per basic and diluted share for the same period last year.

Items impacting comparability between the first quarter of 2009 and the first quarter of 2008 include:

  • The first quarter of 2009 included the following non-recurring items:
    • The expense for the first of three annual $265,000 contributions pursuant to a grant agreement with the University of Cincinnati. This expense will not be recurring during the remainder of 2009, but is expected to recur in the first quarter of each of the next two years.
    • Transitional costs and uncertainties surrounding some commercial revenue associated with our new Hyattsville center in the amount of $150,000.
    • Additional estimated bad debt expense of approximately $100,000 due to a first quarter increase in commercial patient mix.
  • Corporate SG&A costs increased by approximately $340,000, before the University of Cincinnati grant cost, over the same period last year, while flat on a sequential quarterly basis.
  • Pre-tax costs associated with opening new centers were $61,000 for the first quarter of 2009 compared to $176,000 for the same period last year.
  • Non-cash stock compensation expense was $85,000 for the first quarter of 2009 compared to $75,000 for the same period last year.

Stephen Everett, President and Chief Executive Officer, commented, "While at first glance the net income for the quarter is below our expectations, we essentially hit our internal targets after taking into account the $515,000 of one-time items impacting operating income. Without these costs, operating income would have been approximately $1,310,000. Additionally, it should be noted that our SG&A costs are $340,000 above last year's same period due to the ongoing significant investment in our infrastructure in 2008, yet as expected are essentially flat on a sequential basis. This, along with our continued development activities, including two new denovo centers recently announced, should help pave the way for the future operational and financial growth we are expecting."

Dialysis Corporation of America will be hosting a conference call in conjunction with its earnings release for the first quarter of 2009. The conference call will be held on Wednesday, May 6, 2009 at 10:00 a.m. EDT. The call is accessible either by dialing 1-866-244-4576 (enter attendee code: 1354397), or through simulcast on the internet at, using conference ID 2135668. Participants may be asked to provide the title of the conference call, which is "Dialysis Corporation of America First Quarter Earnings." A replay of the conference call will be available on the company's website,, for a period of thirty days following the conference call.

Dialysis Corporation of America owns and operates freestanding kidney hemodialysis centers located in Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, and Virginia, and provides in-hospital dialysis services on a contract basis to certain hospitals located in the those states. The company provides patients with their choice of a full range of quality in-center, acute or at-home hemodialysis services.

This release contains forward-looking statements that are subject to risks and uncertainties that could affect the business and prospects of the company and cause actual results and plans to differ materially from those anticipated. Those factors include, but are not limited to, increases in interest rates, the possible need for and availability of additional financing, the company satisfying the covenants and conditions of its credit facility, certain delays beyond the company's control with respect to future business events, the highly competitive environment in the establishment and operation of dialysis centers, the ability to develop or acquire additional dialysis facilities, whether patient bases of the company's dialysis facilities can mature to provide profitability, the extensive regulation of dialysis operations, government rate determination for Medicare reimbursement, pricing pressure from private payors, and other risks detailed in the company's filings with the SEC, particularly as described in the company's annual report on Form 10-K for the fiscal year ended December 31, 2008. The historical results contained in this press release are not necessarily indicative of future performance of the company.

Other Dialysis Corporation of America press releases, corporate profile, corporate governance materials, quarterly and current reports, and other filings with the Securities and Exchange Commission are available on Dialysis Corporation of America's internet home page:

             (dollars in thousands, except share and per share amounts)

                                             Three Months Ended March 31
                                                   2009         2008
                                                   ----         ----
    Operating revenues:
       Medical services revenue                 $23,168      $20,195
       Product sales                                289          290
                                                    ---          ---
          Total sales revenues                   23,457       20,485
                                                 ------       ------

    Operating costs and expenses:
       Cost of sales revenues:
       Cost of medical services                  14,431       12,358
       Cost of product sales                        160          161
                                                    ---          ---
          Total cost of sales revenues           14,591       12,519
       Selling, general and administrative
          Corporate                               2,990        2,388
          Facility                                3,601        3,082
                                                  -----        -----
              Total                               6,591        5,470
       Stock compensation expense                    85           75
       Depreciation and amortization                726          662
       Provision for doubtful accounts              671          430
                                                    ---          ---
                                                 22,664       19,156
                                                 ------       ------

    Operating income                                793        1,329

    Other expense, net                              (14)         (42)
                                                   ----         ----

    Income before income taxes                      779        1,287

    Income tax provision                            242          380
                                                    ---          ---

    Net income                                      537          907

    Less:  net income attributable to
      noncontrolling interests                      357          458
                                                    ---          ---

          Net income attributable to the
           company                                 $180         $449
                                                   ====         ====

    Earnings per share:
        Basic                                      $.02         $.05
                                                   ====         ====
        Diluted                                    $.02         $.05
                                                   ====         ====

    Weighted average shares outstanding:
              Basic                           9,590,778    9,580,096
                                              =========    =========
              Diluted                         9,612,637    9,614,591
                                              =========    =========

                                CONSOLIDATED BALANCE SHEETS
                                 (dollars in thousands)

                                                   March 31,    December 31,
                                                     2009           2008
                                                     ----           ----
     Current assets:
       Cash and cash equivalents                    $3,380          $6,543
       Accounts receivable, net                     20,849          21,494
       Inventories, net                              2,699           2,919
       Deferred income tax asset                     1,185           1,185
       Other current assets                          2,757           2,978
                                                     -----           -----
                  Total current assets              30,870          35,119
                                                    ------          ------

     Property and equipment                         33,561          32,987
     Less:  accumulated depreciation and
       amortization                                 15,105          14,452
                                                    ------          ------
                                                    18,456          18,535
                                                    ------          ------

     Goodwill                                       16,492          16,492
     Other assets                                      908             933
                                                       ---             ---
                Total other assets                  17,400          17,425
                                                    ------          ------
                                                   $66,726         $71,079
                                                   =======         =======

     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable and accrued expenses       $13,384         $14,717
       Income taxes payable                             36              61
       Current portion of long-term debt                70              74
                                                        --              --
                Total current liabilities           13,490          14,852

     Deferred income taxes                           1,275           1,275
     Long-term debt, less current portion           11,260          14,276
                                                    ------          ------
                Total liabilities                   26,025          30,403
                                                    ------          ------

    Commitments and Contingencies

       Common stock                                     96              96
       Additional paid-in capital                   16,086          16,001
       Retained earnings                            19,347          19,167
                                                    ------          ------
               Total company stockholders' equity   35,529          35,264
       Noncontrolling interests                      5,172           5,412
                                                     -----           -----
                 Total equity                       40,701          40,676
                                                    ------          ------
                                                   $66,726         $71,079
                                                   =======         =======

                                   SUPPLEMENTAL OPERATING DATA

                           Three Months Ended March 31,
                           ----------------------------     Quarter-to-Quarter
                                 2009             2008             Change %
                                 ----             ----            --------
    Operating data:
    Treatments                 71,490           65,321                9.4%

    Patient revenue per
     treatment                $324.08          $309.17                4.8%
    Same center growth
       Same center treatment
        growth                      3%               5%
       Same center revenue
        per treatment change        7%               9%
       Same center patient
        revenue growth             10%              15%

                                       1st              4th
                                     Quarter          Quarter
                                       2009             2008
    Key clinical metrics:
         Treatment adequacy (%
          of pts with Kt/V greater
          than 1.2)                     97%              97%
         Anemia management (% of pts
          with Hgb greater than 11)     81%              82%

         Venous access (% of pts with
          AVF)                          57%              56%

SOURCE Dialysis Corporation of America
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