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Dialysis Corporation of America Reports Second Quarter 2008 Results
Date:8/6/2008

LINTHICUM, Md., Aug. 6 /PRNewswire-FirstCall/ -- Dialysis Corporation of America (Nasdaq: DCAI) announced its financial results for the second quarter of 2008. Operating revenues for the second quarter were $20,836,000 compared to $18,485,000 for the same period last year, a 13% increase, and $41,321,000 for the first half of 2008 compared to $35,376,000 for the same period last year, a 17% increase. Net income for the quarter was $663,000 or $.07 per share ($.07 diluted per share) compared to $753,000 or $.08 per share ($.08 diluted per share) for the same period last year, and $1,112,000 or $.12 per share ($.12 diluted per share) for the first half of 2008 compared to $1,136,000 or $.12 per share ($.12 diluted per share) for the same period last year.

Stephen Everett, President and Chief Executive Officer, commented, "With the exception of a few non-recurring expense items during the quarter, our financial performance was on target with company expectations. Additionally, DCA's clinical quality results continue to rank well above industry averages, which is a critical component of both our short and long term goals. Our company's technical and financial infrastructure continues to build with the recent addition of a clinical reporting software system, which will be deployed throughout the organization over the next couple of years. Finally, I am pleased to announce that our new center in Camp Hill Pennsylvania was certified by Medicare earlier this week and is in the process of bringing new patients into our system. We anticipate this center to be treating approximately 75 patients within its first full year of operation."

Financial results included: (i) a non-recurring reserve of $375,000 for patients with terminated benefits, reimbursement rates less than anticipated, and non-collectable receivables from a patient; (ii) pre-tax costs associated with the opening of new centers of $62,000 for the second quarter of 2008 compared to $112,000 for the same period last year, and $238,000 for the first half of 2008 compared to $318,000 for the same period last year; and (iii) non-cash stock and option compensation expense of $82,000 for the second quarter of 2008 compared to $88,000 for the same period last year and $156,000 for the first half of 2008 compared to $201,000 for the same period last year.

Dialysis Corporation of America will be hosting a conference call in conjunction with its earnings release for the second quarter of 2008. The conference call will be held on Thursday, August 7, 2008 at 10:00 a.m. EDT. The call is accessible either by dialing 1-800-930-7709 (enter pass-code 4743188), or by simulcast on the internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=132142 . Participants may be asked to provide the title of the conference call, which is "Dialysis Corporation of America 2nd Quarter Earnings." A replay of the conference call will be available on the company's website, http://www.dialysiscorporation.com, for a period of thirty days following the conference call.

Dialysis Corporation of America currently owns 36 free-standing operating kidney hemodialysis centers in Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina and Virginia providing patients with a full range of quality in-center and at-home dialysis services, as well as providing in- hospital 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, maintaining continued growth and profitability, 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 payers, 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, 2007. The historical results contained in this press release are not necessarily indicative of future performance of the company.

The company's press releases, corporate profile, corporate governance materials, quarterly and current reports, and other filings with the SEC are available on Dialysis Corporation of America's internet home page: http://www.dialysiscorporation.com .

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended Six Months Ended

June 30, June 30,

2008 2007 2008 2007

Operating revenues:

Sales:

Medical services

revenue $20,519,222 $18,117,808 $40,714,224 $34,714,715

Product sales 317,017 300,531 607,103 531,591

Total sales revenues 20,836,239 18,418,339 41,321,327 35,246,306

Other income --- 66,849 --- 129,409

20,836,239 18,485,188 41,321,327 35,375,715

Operating costs and expenses:

Cost of sales revenues:

Cost of medical

services 12,661,921 10,894,244 25,019,706 21,296,708

Cost of product sales 173,746 182,244 334,481 325,705

Total cost of sales

revenues 12,835,667 11,076,488 25,354,187 21,622,413

Selling, general and

administrative expenses:

Corporate 2,449,491 1,893,397 4,838,035 3,541,920

Facility 2,996,083 2,862,590 6,078,242 5,592,913

Total 5,445,574 4,755,987 10,916,277 9,134,833

Stock compensation expense 81,884 87,505 156,485 201,475

Depreciation and

amortization 678,831 655,226 1,341,403 1,290,962

Provision for doubtful

accounts 649,113 353,083 1,079,143 709,180

19,691,069 16,928,289 38,847,495 32,958,863

Operating income 1,145,170 1,556,899 2,473,832 2,416,852

Other income (expense), net 12,857 (27,981) (29,210) (37,208)

Income before income taxes

and minority interest 1,158,027 1,528,918 2,444,622 2,379,644

Income tax provision 305,170 520,649 684,908 866,421

Income before minority

interest 852,857 1,008,269 1,759,714 1,513,223

Minority interest in income

of consolidated

subsidiaries (190,198) (255,142) (648,143) (376,876)

Net income $662,659 $753,127 $1,111,571 $1,136,347

Earnings per share:

Basic $.07 $.08 $.12 $.12

Diluted $.07 $.08 $.12 $.12

Weighted average shares

outstanding:

Basic 9,579,766 9,573,244 9,579,931 9,572,178

Diluted 9,613,663 9,611,096 9,614,819 9,611,599

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

June 30, December 31,

2008 2007

ASSETS

Current assets:

Cash and cash equivalents $3,692,475 $2,447,820

Accounts receivable, net 20,951,827 20,159,926

Inventories, net 2,457,504 2,006,661

Deferred income tax asset 998,000 998,000

Other current assets 2,412,264 3,313,406

Total current assets 30,512,070 28,925,813

Property and equipment 30,573,834 28,766,423

Less accumulated depreciation and

amortization 13,337,405 12,264,029

17,236,429 16,502,394

Goodwill 10,549,501 8,576,893

Other assets 681,580 841,092

Total other assets 11,231,081 9,417,985

$58,979,580 $54,846,192

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses $10,203,537 $10,224,199

Income taxes payable --- 33,297

Current portion of long-term debt 67,000 56,000

Acquisition liabilities 1,323,020 ---

Total current liabilities 11,593,557 10,313,496

Deferred income taxes 574,000 574,000

Long-term debt, less current portion 7,820,156 7,009,419

Total liabilities 19,987,713 17,896,915

Minority interest in subsidiaries 5,645,317 4,942,797

Commitments and Contingencies

Stockholders' equity:

Common stock 95,797 95,736

Additional paid-in capital 15,816,220 15,587,782

Retained earnings 17,434,533 16,322,962

Total stockholders' equity 33,346,550 32,006,480

$58,979,580 $54,846,192

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

SUPPLEMENTAL OPERATING DATA

(Unaudited)

Three Months Ended June 30, Period-to-Period

2008 2007 Change%

Operating data:

Treatments:

Consolidated 68,021 60,235 12.9%

Managed -- 2,771 (100.0)%

Total treatments 68,021 63,006 8.0%

Patient revenue per treatment $301.66 $300.79 .3%

Same center growth data:

Same center treatment

growth 5% 5%

Same center revenue per

treatment change (1)% 4%

Same center patient

revenue growth 4% 9%

Six Months Ended June 30, Period-to-Period

2008 2007 Change%

Operating data:

Treatments:

Consolidated 133,342 117,082 13.9%

Managed -- 5,461 (100.0)%

Total treatments 133,342 122,543 8.8%

Patient revenue per treatment $305.34 $296.50 3.0%

Same center growth data:

Same center treatment

growth 6% 7%

Same center revenue per

treatment change 2% 1%

Same center patient

revenue growth 8% 9%

2nd Quarter 1st Quarter

2008 2008

Key clinical metrics:

Treatment adequacy

(% of pts with

Kt/V greater than 1.2) 96% 96%

Anemia management

(% of pts with Hgb

greater than 11) 82% 80%

Venous access (%

of pts with AVF) 55% 55%


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SOURCE Dialysis Corporation of America
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