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Dialysis Corporation of America Reports Third Quarter 2008 Results
Date:11/5/2008

LINTHICUM, Md., Nov. 5 /PRNewswire-FirstCall/ -- Dialysis Corporation of America (Nasdaq: DCAI) announced its financial results for the third quarter of 2008. Operating revenues for the third quarter were $21,860,000 compared to $19,173,000 for the same period last year, a 14% increase, and $63,181,000 for the first nine months of 2008 compared to $54,549,000 for the same period last year, a 16% increase. Net income for the quarter was $875,000 or $.09 per share ($.09 diluted per share) compared to $927,000 or $.10 per share ($.10 diluted per share) for the same period last year, and $1,986,000 or $.21 per share ($.21 diluted per share) for the first nine months of 2008 compared to $2,064,000 or $.22 per share ($.21 diluted per share) for the same period last year.

Stephen Everett, President and Chief Executive Officer, commented, "Our company's third quarter performance was directly in line with financial expectations and slightly ahead of plan on a clinical outcomes basis. On the development front, we are on track with our planned expansion through the next several years, which was further secured by the initial increase in our credit facility to $25,000,000, as was announced earlier today. Finally, also within the spectrum of DCA's continued growth, we have completed a company marketing 'makeover' and reaffirmation of our corporate principals. Key to this is the introduction of a new logo, complete revision of our website, and all new corporate literature. We finished the process with the development of a new 'corporate statement' which we believe says everything...A Commitment to Caring."

Financial results included: (i) pre-tax costs associated with the opening of new centers of $339,000 for the third quarter of 2008 compared to $82,000 for the same period last year, and $577,000 for the first nine months of 2008 compared to $400,000 for the same period last year; and (ii) non-cash stock and option compensation expense of $82,000 for the third quarter of 2008 compared to $53,000 for the same period last year and $239,000 for the first nine months of 2008 compared to $254,000 for the same period last year.

While the company does not provide routine guidance, given the aggressive growth strategy that DCA has put in place, the intent of which is to approximately double the size of the company over the next few years, management believes the following key data points will help shareholders understand what the company should look like assuming the company successfully completes the growth plan:

Patient census 4,000 - 4,400

Revenues $175MM - $195MM

Operating Income $25MM - $27MM

Dialysis Corporation of America will be hosting a conference call in conjunction with its earnings release for the third quarter of 2008. The conference call will be held on Thursday, November 6, 2008 at 10:00 a.m. EST. The call is accessible either by dialing 1-866-238-0826 (enter conference ID: 1298061), or by simulcast on the internet at http://www.startconference.com , conference ID 2135668 Participants may be asked to provide the title of the conference call, which is "Dialysis Corporation of America 2008 3rd Quarter Earnings Call." 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 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, 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 .

CONTACT: For additional information, you may contact Stephen Everett, President and CEO of Dialysis Corporation of America, 1302 Concourse Drive, Suite 204, Linthicum, MD 21090; Telephone No. (410) 694-0500.

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended Nine Months Ended

September 30, September 30,

2008 2007 2008 2007

Operating revenues:

Sales:

Medical services revenue $21,586,004 $18,819,993 $62,300,228 $53,534,708

Product sales 273,831 272,029 880,934 803,620

Total sales revenues 21,859,835 19,092,022 63,181,162 54,338,328

Other income --- 80,910 --- 210,319

21,859,835 19,172,932 63,181,162 54,548,647

Operating costs and

expenses:

Cost of sales revenues:

Cost of medical

services 12,805,376 11,167,118 37,825,082 32,463,826

Cost of product

sales 158,311 162,990 492,792 488,695

Total cost of sales

revenues 12,963,687 11,330,108 38,317,874 32,952,521

Selling, general and

administrative expenses:

Corporate 2,764,026 2,130,059 7,602,061 5,671,979

Facility 3,311,688 2,715,047 9,389,930 8,307,960

Total 6,075,714 4,845,106 16,991,991 13,979,939

Stock compensation expense 82,393 52,509 238,878 253,984

Depreciation and

amortization 708,626 672,873 2,050,029 1,963,835

Provision for doubtful

accounts 499,897 450,254 1,579,040 1,159,434

20,330,317 17,350,850 59,177,812 50,309,713

Operating income 1,529,518 1,822,082 4,003,350 4,238,934

Other income (expense), net 488 (46,770) (28,722) (83,978)

Income before income taxes

and minority interest 1,530,006 1,775,312 3,974,628 4,154,956

Income tax provision 510,899 580,885 1,195,807 1,447,306

Income before minority

interest 1,019,107 1,194,427 2,778,821 2,707,650

Minority interest in income

of consolidated

subsidiaries (144,162) (267,010) (792,305) (643,886)

Net income $874,945 $927,417 $1,986,516 $2,063,764

Earnings per share:

Basic $.09 $.10 $.21 $.22

Diluted $.09 $.10 $.21 $.21

Weighted average shares

outstanding:

Basic 9,579,743 9,573,596 9,579,868 9,572,656

Diluted 9,614,084 9,604,278 9,614,162 9,609,136

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

September 30, December 31,

2008 2007

ASSETS

Current assets:

Cash and cash equivalents $4,706,122 $2,447,820

Accounts receivable, net 20,889,179 20,159,926

Inventories, net 2,466,817 2,006,661

Deferred income tax asset 998,000 998,000

Other current assets 2,323,285 3,313,406

Total current assets 31,383,403 28,925,813

Property and equipment 32,065,622 28,766,423

Less accumulated depreciation and

amortization 13,955,039 12,264,029

18,110,583 16,502,394

Goodwill 10,619,026 8,576,893

Other assets 560,238 841,092

Total other assets 11,179,264 9,417,985

$60,673,250 $54,846,192

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses $11,653,254 $10,224,199

Income taxes payable --- 33,297

Current portion of long-term debt 74,000 56,000

Acquisition liabilities 1,349,226 ---

Total current liabilities 13,076,480 10,313,496

Deferred income taxes 574,000 574,000

Long-term debt, less current portion 7,293,699 7,009,419

Total liabilities 20,944,179 17,896,915

Minority interest in subsidiaries 5,425,183 4,942,797

Commitments and Contingencies

Stockholders' equity:

Common stock 95,797 95,736

Additional paid-in capital 15,898,613 15,587,782

Retained earnings 18,309,478 16,322,962

Total stockholders' equity 34,303,888 32,006,480

$60,673,250 $54,846,192

DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

SUPPLEMENTAL OPERATING DATA

(Unaudited)

Three Months Ended

September 30, Period-to-Period

2008 2007 Change %

Operating data:

Treatments:

Consolidated 68,925 61,290 12.5%

Managed -- 2,829 (100.0)%

Total treatments 68,925 64,119 7.5%

Patient revenue per treatment $313.18 $307.06 2.0%

Same center growth data:

Same center treatment growth 6% 3%

Same center revenue per

treatment change 5% 2%

Same center patient revenue

growth 11% 5%

Nine Months Ended

September 30, Period-to-Period

2008 2007 Change %

Operating data:

Treatments:

Consolidated 202,176 178,372 13.3%

Managed -- 8,290 (100.0)%

Total treatments 202,176 186,662 8.3%

Patient revenue per treatment $308.15 $300.13 2.7%

Same center growth data:

Same center treatment growth 6% 6%

Same center revenue per

treatment change 3% 1%

Same center patient revenue

growth 9% 7%

3rd 2nd

Quarter Quarter

2008 2008

Key clinical metrics:

Treatment adequacy (% of pts with 97% 96%

Kt/V greater than 1.2)

Anemia management (% of pts with 82% 82%

Hgb greater than 11)

Venous access (% of pts with AVF) 58% 55%


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SOURCE Dialysis Corporation of America
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