Birner Dental Management Services, Inc. Announces Results For 3Q 2015

(NASDAQ Capital Market: BDMS), business services provider of PERFECT TEETH® dental practices, announced results for the quarter and nine months ended September 30, 2015.  For the quarter ended September 30, 2015, revenue decreased $248,000, or 1.5%, to $15.9 million.  The Company's earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense ("Adjusted EBITDA") decreased $194,000, or 19.2%, to $818,000 for the quarter ended September 30, 2015.  Net loss for the quarter ended September 30, 2015 decreased$176,000, or 43.7%, to $(227,000) compared to $(403,000) for the quarter ended September 30, 2014.  Net loss per share decreased to$(0.12) for the quarter ended September 30, 2015 compared to $(0.22) for the quarter ended September 30, 2014. 

For the nine months ended September 30, 2015, revenue decreased $989,000, or 2.0%, to $48.8 million.  The Company's Adjusted EBITDA decreased $194,000, or 5.8%, to $3.1 million for the nine months ended September 30, 2015.  Net loss for the nine months ended September 30, 2015 decreased $83,000 to $(330,000) compared to $(413,000) for the nine months ended September 30, 2014.  Net loss per share decreased to $(0.18) for the nine months ended September 30, 2015 compared to $(0.22) for the nine months endedSeptember 30, 2014.

Revenue in the third quarter, particularly during the month of September, was especially soft this year, and was a primary driver of the decline in Adjusted EBITDA in the quarter along with $118,000 of negative EBITDA from the Company's two most recently opened de novo offices.  In response to the quarter's results, the Company has taken the following actions:

• In all of its markets, the Company has begun the process of becoming credentialed to accept Medicare or Medicaid, and in some cases both, in selected offices.  This is a potential revenue source that the Company has not previously accessed. 
• In late October, the Company eliminated 26 support employees in its dental offices and restructured or suspended certain bonus programs, which the Company expects will result in expense savings in excess of $100,000 per month.
• For the balance of 2015 and at least the first two quarters of 2016, the Company is suspending television advertising.  The Company expects this to result in $40,000 to $60,000 in monthly expense savings as compared to the third quarter of 2015, when television ads were running during those months.  The Company regularly adjusts its advertising and marketing expenditures in response to market conditions and performance in individual markets and does not expect the reduction in advertising to have an adverse effect on revenue in those markets.
• The Company has leased space for an additional de novo office in Commerce City, Colorado, which is anticipated to open by January 2016.  The Company does not intend to open any additional de novo offices in 2016.  Instead, it will focus on gaining profitability in its most recently opened offices, filling excess capacity in existing facilities, and paying down bank debt.

Since the beginning of the fourth quarter of 2012, the Company has opened seven de novo offices: in Tucson, Arizona and in Erie, Colorado in the fourth quarter of 2012; in Loveland, Colorado in July 2013; in Monument, Colorado in December 2013; in Fort Collins, Colorado in May 2014; in Scottsdale, Arizona in October 2014; and in Albuquerque, New Mexico in September 2015.  The Company has leased space for an additional de novo office in Commerce City, Colorado, which is anticipated to open by January 2016. 

During the nine months ended September 30, 2015, the Company paid approximately $1.2 million in dividends to its shareholders, had capital expenditures of approximately $1.6 million and increased total bank debt outstanding by approximately $564,000. 

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 68 dental offices, of which 36 were acquired and 32 were de novo developments.  The Company currently has 110 dentists.  The Company operates its dental offices under the PERFECT TEETH® name.

The Company previously announced it would conduct a conference call to review results for the quarter ended September 30, 2015 onThursday, November 12, 2015 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 1-888-438-5525 and refer to Confirmation Code 511243 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on November 12, 2015, the rebroadcast number is 1-888-203-1112 with the pass code of 511243.  This rebroadcast will be available through November 25, 2015.

Source: http://www.prnewswire.com/news-releases/birner-dental-management-services-inc-announces-results-for-3q-2015-300177067.html

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