Wednesday October 29 4:08 PM EST
Company Press Release
Veterinary Centers of America Inc. Reports
Third-Quarter and Nine-Month Financial Results
SANTA MONICA, Calif.--(BUSINESS WIRE)--Oct. 29, 1997--
Company Reports 220 Percent Increase in EPS
on Record Third-Quarter Earnings and Revenues
Veterinary Centers of America Inc. (Nasdaq/NM:VCAI) Wednesday reported financial results for
the third quarter and the nine months ended Sept. 30, 1997.
Revenues for the third quarter ended Sept. 30, 1997, increased 19 percent to a record
$62,163,000 from $52,399,000 for the third quarter last year. Net income for the quarter was
$3,415,000, or 16 cents per share, compared with a loss of $11,469,000, or 66 cents per share, in
the corresponding quarter in 1996.
Compared with net income in the third quarter of 1996 of $893,000, or 5 cents per share (excluding
the $12,362,000 restructuring charge recorded in the quarter), third-quarter 1997 net income
increased more than 280 percent and earnings per share increased more than 220 percent.
For the nine months ended Sept. 30, 1997, the company's revenues increased 40 percent to
$181,379,000, vs. $129,839,000 for the corresponding period in 1996. For the nine months ended
Sept. 30, 1997, the company reported net income of $9,176,000, or 44 cents per share, compared
with a net loss of $12,013,000, or 85 cents per share, for the nine months ended Sept. 30, 1996.
Excluding the after-tax effect of the merger costs (amounting to $2,795,000) and the restructuring
charge recorded in 1996, the company posted net income for the nine months ended Sept. 30,
1996, of $3,144,000, or 18 cents per share.
Bob Antin, chairman and chief executive officer, stated: ''We are pleased to report record
third-quarter revenues and earnings. Our operating income and earnings per share, each excluding
the effect of the merger costs and restructuring charges in 1996, increased 70 percent and 220
percent, respectively.
''VCA enjoyed growth in both of its operating divisions -- VCA animal hospitals and Antech
Diagnostics. VCA animal-hospital gross profit increased 40 percent in the third quarter of 1997
compared to the third quarter of 1996, and the gross profit margin increased to 20.6 percent in the
1997 quarter, compared to 18.3 percent in the third quarter of 1996.
''The operating margin in our laboratory business, Antech Diagnostics, increased to 24.1 percent in
the third quarter of 1997, compared to 21.8 percent in the comparable period in 1996.''
Antin further stated: ''We are now focusing our efforts on accelerating our acquisition program and
forging strategic alliances. Since the end of the second quarter of 1997, we have added seven
hospitals, with annual revenues of over $9 million, to our animal-hospital network.
''Concurrently, our management team continues its efforts to capitalize on the benefits of our new
size, including expanding our marketing efforts to develop VCA name recognition. We are also
excited about our pending strategic relationship with Veterinary Pet Insurance, the nation's largest
pet-health-insurance company, which serves a market that we believe will be very important in the
future.''
Veterinary Centers of America owns and operates the largest network of free-standing veterinary
hospitals and one of the largest networks of veterinary-exclusive clinical laboratories in the country.
The company currently provides goods and services to approximately 9,000 animal hospitals
nationwide.
In addition, VCA is a general partner of Vet's Choice, a joint venture with Heinz Pet Products, an
affiliate of H.J. Heinz Co. (NYSE:HNZ - news), which markets and distributes a complete line of
specialty pet foods.
With the exception of the historical information, the matters discussed above include
forward-looking statements that involve risks and uncertainties. Actual results may vary substantially
as a result of a variety of factors. Among the important factors that could cause actual results to
differ are the level of direct costs and the ability of the company to maintain gross revenues at a level
necessary to maintain gross profit margins, the level of selling, general and administrative costs, the
effects of competition, the continued success of the company's integration process, the effects of the
company's recent acquisitions and its ability to effectively manage its growth, the continued
implementation of its management information systems, pending litigation and governmental
investigations, and the results of the company's acquisition program. These and other risk factors are
discussed in the company's recent filings with the Securities and Exchange Commission on Forms
8-K, 10-Q and 10-K, and the reader is directed to these reports for a further discussion of
important factors that could cause actual results to differ materially from those in the forward-
looking statements.
VETERINARY CENTERS OF AMERICA INC.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per-share data)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Revenues:
Animal hospital $45,784 $ 36,733 $131,652 $ 84,247
Laboratory 17,559 14,775 52,287 42,263
Pet food -- 2,151 1,064 6,121
Eliminations (1,180) (1,260) (3,624) (2,792)
62,163 52,399 181,379 129,839
Direct costs 46,490 39,718 135,793 96,423
Gross profit:
Animal hospital 9,417 6,737 26,228 14,387
Laboratory 6,256 5,033 18,790 16,626
Pet food -- 911 568 2,403
15,673 12,681 45,586 33,416
General and administrative:
Corporate 3,227 2,918 10,408 6,866
Laboratory 1,186 1,220 3,099 3,609
Pet food -- 1,165 400 3,483
4,413 5,303 13,907 13,958
Depreciation and
amortization 2,703 2,335 8,163 4,984
Restructuring charge -- 12,362 -- 12,362
Merger costs -- -- -- 2,901
Operating income (loss) 8,557 (7,319) 23,516 (789)
Interest expense, net 1,933 1,085 5,812 2,480
Income (loss) before
minority interest and
income taxes 6,624 (8,404) 17,704 (3,269)
Minority interest expense 65 1,729 356 5,038
Provision for income taxes 3,144 1,336 8,172 3,706
Net income (loss) $ 3,415 $(11,469) $ 9,176 $(12,013)
Earnings (loss) per share $ 0.16 $ (0.66) $ 0.44 $ (0.85)
Shares used for computing
earnings per share 21,305 17,250 20,953 14,890
Contact:
Veterinary Centers of America Inc., Santa Monica
Bob Antin or Tom Fuller, 310/392-9599 |
