-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LdUfAVbXJUzlpwIAcAZ40hLgLU67R2YqBr0v4AAZlBzLUmnj7Ag+Qktd6ip5i0bI r21iuyuT6kKXM3AWj9bNZQ== 0001157523-04-006914.txt : 20040728 0001157523-04-006914.hdr.sgml : 20040728 20040727162328 ACCESSION NUMBER: 0001157523-04-006914 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040727 ITEM INFORMATION: ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VCA ANTECH INC CENTRAL INDEX KEY: 0000817366 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE SERVICES [0700] IRS NUMBER: 954097995 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16783 FILM NUMBER: 04933615 BUSINESS ADDRESS: STREET 1: 12401 WEST OLYMPIC BOULEVARD CITY: LOS ANGELES STATE: CA ZIP: 90064-1022 BUSINESS PHONE: 310-584-65 MAIL ADDRESS: STREET 1: 12401 WEST OLYMPIC BOULEVARD CITY: LOS ANGELES STATE: CA ZIP: 90064-1022 FORMER COMPANY: FORMER CONFORMED NAME: VETERINARY CENTERS OF AMERICA INC DATE OF NAME CHANGE: 19940328 8-K 1 a4688698.txt VCA ANTECH INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 27, 2004 VCA Antech, Inc. (Exact Name of Registrant as Specified in Charter) Delaware 001-16783 95-4097995 - ---------------------------- ----------- ------------------ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 12401 West Olympic Boulevard Los Angeles, California 90064-1022 (Address of Principal Executive Offices) (310) 571-6500 (Registrant's Telephone Number) 1 ITEM 5 OTHER EVENTS Reference is made to the press release of Registrant issued on July 27, 2004, declaring a two-for-one stock split in the form of a stock dividend for holders of record on August 11, 2004, to be distributed August 25, 2004. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. Reference is made to the press release of Registrant issued on July 27, 2004, regarding earnings guidance, which is incorporated herein by reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.2. ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits 99.1 Press release dated July 27, 2004, regarding stock dividend. 99.2 Press release dated July 27, 2004, regarding earnings guidance. 99.3 Press release dated July 27, 2004, regarding earnings for the second quarter of fiscal 2004. ITEM 12 RESULTS OF OPERATIONS AND FINANCIAL CONDITION Reference is made to the press release of Registrant issued on July 27, 2004, regarding earnings for the second quarter of fiscal 2004, which is incorporated herein by reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.3. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. July 27, 2004 VCA Antech, Inc. /s/ Tomas W. Fuller ------------------------------ By: Tomas W. Fuller Its: Chief Financial Officer 3 EXHIBIT INDEX Exhibits 99.1 Press release dated July 27, 2004, regarding stock dividend. 99.2 Press release dated July 27, 2004, regarding earnings guidance. 99.3 Press release dated July 27, 2004, regarding earnings for the second quarter of fiscal 2004. 4 EX-99.1 2 a4688698ex991.txt NEWS RELEASE JULY 27 STOCK DIVIDEND Exhibit 99.1 VCA Antech, Inc. Announces 2-for-1 Stock Split LOS ANGELES--(BUSINESS WIRE)--July 27, 2004--VCA Antech, Inc. (Nasdaq:WOOF), a leading animal health care company in the United States, today announced that its Board of Directors has declared a 2-for-1 split of its common stock, payable as a stock dividend, on August 25, 2004, to shareholders of record as of the close of business on August 11, 2004. The stock dividend will represent a tax-free distribution to stockholders. Bob Antin, Chairman and CEO, stated, "This stock dividend reflects our continued improvement in earnings and other financial measures, as well as the sustained double-digit growth in our two core businesses. We continually strive to create shareholder value. We are strategically increasing the number of available shares in the market thus increasing our shareholder base, which we believe will reward our shareholders in the long term." Stockholders who have stock certificates should retain them. The transfer agent for VCA Antech will mail stock certificates representing the additional shares resulting from the dividend on August 25, 2004. Upon completion of the stock dividend, the number of outstanding shares will be approximately 82 million. Statements contained in this release that are not based on historical information are 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 ability to successfully integrate National PetCare Centers, Inc. into the Company's existing operations and achieve expected operating synergies following the merger; the level of direct costs and the ability of the Company to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of competition; the effects of the Company's recent acquisitions and its ability to effectively manage its growth; the ability of the Company to service its debt; the continued implementation of the Company's management information systems; pending litigation and governmental investigations; general economic conditions; 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 Form 10-K and Form 10-Q and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. VCA Antech owns, operates and manages the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country. CONTACT: VCA Antech, Inc. Tom Fuller (CFO), 310-571-6505 EX-99.2 3 a4688698ex992.txt NEWS RELEASE JULY 27 EARNINGS GUIDANCE Exhibit 99.2 VCA Antech, Inc. Increases Financial Guidance for Fiscal Year 2004 and Provides Financial Guidance for the Third Quarter of 2004 LOS ANGELES--(BUSINESS WIRE)--July 27, 2004--VCA Antech, Inc. (Nasdaq:WOOF), a leading animal health care company in the United States, provides the following revised guidance for all investors in adherence with Regulation Fair Disclosure as issued by the United States Securities and Exchange Commission, SEC, and encourages all current and potential investors to review the disclosure regarding forward-looking statements in this press release as well as in all financial documents filed with the SEC. All guidance amounts are before any potential special items. In response to its strong performance for the second quarter of 2004, VCA Antech is increasing its financial guidance for the year ending December 31, 2004 as follows: -- projected revenue to a range of $648.0 million to $654.0 million; -- projected operating income to a range of $131.9 million to $132.7 million; -- projected net income to a range of $61.0 million to $61.5 million; and -- projected diluted earnings per common share to a range of $1.46 to $1.47, or $0.73 to $0.74 reflecting the 2-for-1 stock split announced today, which is payable on August 25, 2004. Financial guidance for the three months ending September 30, 2004 is as follows: projected revenue to a range of $173.0 million to $176.0 million and diluted earnings per common share to a range of $0.40 to $0.41, or $0.20 reflecting the 2-for-1 stock split. The foregoing includes an aggregate charge of approximately $1.3 million, which consists of the following: (1) integration costs related to the merger of National PetCare Centers, Inc. ("NPC") in the amount of $570,000 actually incurred during the second quarter of 2004 and an estimated $1.0 million expected to be incurred during the remainder of 2004; (2) debt retirement costs related to the refinance of the Company's senior credit facility in the amount of $810,000 incurred during the second quarter of 2004; and (3) a benefit of $1.1 million for the settlement of an insurance claim during the first quarter of 2004. Statements contained in this release that are not based on historical information are 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 ability to successfully integrate NPC into the Company's existing operations and achieve expected operating synergies following the merger; the level of direct costs and the ability of the Company to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of competition; the effects of the Company's recent acquisitions and its ability to effectively manage its growth; the ability of the Company to service its debt; the continued implementation of the Company's management information systems; pending litigation and governmental investigations; general economic conditions; 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 Form 10-K and Form 10-Q and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. VCA Antech owns, operates and manages the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country. CONTACT: VCA Antech, Inc. Tom Fuller (CFO), 310-571-6505 EX-99.3 4 a4688698ex993.txt NEWS RELEASE JULY 27 EARNINGS 2ND QUARTER Exhibit 99.3 VCA Antech, Inc. Reports Second Quarter Results Business Editors LOS ANGELES--(BUSINESS WIRE)--July 27, 2004--VCA Antech, Inc. (Nasdaq:WOOF): -- Second quarter reported diluted earnings per common share was $0.44. -- Second quarter adjusted diluted earnings per common share was $0.45, beating earnings consensus estimate by $0.02 per diluted common share. -- Second quarter reported revenue increased 19.0% to a record $169.9 million. VCA Antech, Inc. (Nasdaq:WOOF), a leading animal health care company in the United States, today reported financial results for the second quarter ended June 30, 2004 as follows: revenue increased 19.0% to a second quarter record of $169.9 million; reported net income increased to $18.2 million; and reported diluted earnings per common share increased to $0.44. Reported net income and reported diluted earnings per common share for the quarter ended June 30, 2004 included an after-tax charge of $478,000 for debt retirement costs related to the refinance of the Company's senior credit facility. Excluding this item, adjusted net income increased 21.5% to $18.6 million, and adjusted diluted earnings per common share increased 21.6% to $0.45, exceeding the Bloomberg.com earnings consensus estimate by $0.02. The Company also reported the financial results for the six months ended June 30, 2004 as follows: revenue increased 17.1% to $314.3 million; reported net income increased to $32.9 million; and reported diluted earnings per common share increased to $0.79. Reported net income and reported diluted earnings per common share for the six months ended June 30, 2004 included (i) an after-tax charge of $478,000 for debt retirement costs and (ii) an after-tax benefit of $1.1 million for the settlement of an insurance claim relating to a prior legal settlement. Reported net income and reported diluted earnings per common share for the six months ended June 30, 2003 included an after-tax charge of $4.4 million for debt retirement costs. Excluding these items, adjusted net income increased 29.5% to $32.3 million, and adjusted diluted earnings per share increased 25.8% to $0.78, compared to the same period in 2003. In a separate press release issued today, the Company announced a 2-for-1 stock split to be effected in the form of a 100% stock dividend to shareholders of record on August 11, 2004 payable on August 25, 2004. The effect of the stock split will be an increase in outstanding shares of the Company's common stock from approximately 41 million to 82 million based on shares outstanding on June 30, 2004. Diluted shares outstanding and earnings per share information presented in this release are on a pre-split basis. Bob Antin, Chairman and CEO, stated, "We had another excellent and productive quarter marked by continued growth in our core operations, a refinancing of our senior credit facility resulting in a 25 basis point reduction in the interest rate, and the completion of the National PetCare Centers, Inc. ("NPC") merger on June 1, 2004. For the quarter, adjusted diluted earnings per common share increased by 21.6% from $0.37 to $0.45. "Our laboratory segment for the second quarter of 2004 increased laboratory revenue by 11.3%, generating an increase in laboratory gross profit of 13.7% to $24.0 million and an increase in laboratory gross profit margins to 46.1% from 45.1% in 2003. Laboratory internal revenue growth was 8.2% for the second quarter of 2004. "The integration of NPC's animal hospitals is proceeding well. We are pleased that the June operating results for NPC's animal hospitals were in-line with our expectations. The Company's consolidated animal hospital revenue increased 22.8%. However, as expected, NPC's gross profit margins, which are lower than our existing margins, resulted in a reduction in our consolidated animal hospital segment gross profit margins, which decreased from 21.9% in 2003 to 21.4% in 2004. Same-store animal hospital gross profit margins declined from 22.2% to 22.0%. Same-store animal hospital revenue growth was 4.4% for the second quarter of 2004. "As anticipated, we incurred $570,000 of NPC integration costs during the quarter, which is included in corporate selling, general and administrative expense. The integration process will continue through the third quarter. Because the NPC animal hospitals have historically had lower gross profit margins than our existing animal hospitals, we anticipate lower margins in our animal hospital segment for the next several quarters. We remain excited about the opportunities to achieve shared synergies as we continue to integrate the two companies." Non-GAAP Financial Measures We believe investors' understanding of our total performance is enhanced by disclosing adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per common share. We define adjusted net income, adjusted operating income, adjusted operating margin and adjusted diluted earnings per common share as the reported items, adjusted to exclude certain significant items. For the periods presented in this press release, the only significant item that was excluded from adjusted operating income and adjusted operating margin was a litigation settlement reimbursement recognized during the first quarter of 2004 as a result of the Company settling a claim with its insurance company. The only significant items excluded from adjusted net income were the litigation settlement reimbursement recognized during the first quarter of 2004, debt retirement costs incurred during the second quarter of 2004 and debt retirement costs incurred during the first quarter of 2003. Adjusted diluted earnings per common share is adjusted net income divided by diluted common shares outstanding. Management uses adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per common share because they exclude the effects of the litigation settlement reimbursement and debt retirement costs that we believe are not representative of our core operations for the periods presented. As a result, these non-GAAP financial measures help to provide meaningful comparisons of our overall performance from one reporting period to another and meaningful assessments of our future performance and related trends. There are material limitations associated with the use of these non-GAAP financial measures: adjusted operating income and adjusted operating margin exclude the impact of significant items (in this case, the litigation settlement reimbursement); adjusted net income excludes the impact of significant items (in this case, the litigation settlement reimbursement and debt retirement costs) on current performance; and adjusted diluted earnings per common share does not depict the amount accrued directly to each stockholder's benefit. To compensate for the limitations in the non-GAAP financial measures discussed above, we ensure that our disclosures provide a complete understanding of all adjustments found in non-GAAP financial measures, and we reconcile the non-GAAP financial measures to the GAAP financial measures in the attached financial schedules titled "Supplemental Operating Data." Conference Call VCA Antech will discuss its second quarter 2004 financial results during a conference call today, July 27, 2004 at 4:30 p.m. Eastern Time. The call will be broadcast live on the Internet and can be accessed by visiting the Company's website at http://investor.vcaantech.com. The conference call can also be accessed via telephone by dialing 800-263-8506. Interested parties should call at least ten minutes prior to the start of the conference call to register. Statements contained in this release that are not based on historical information are 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 ability to successfully integrate NPC into the Company's existing operations and achieve expected operating synergies following the merger; the level of direct costs and the ability of the Company to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of competition; the effects of the Company's recent acquisitions and its ability to effectively manage its growth; the ability of the Company to service its debt; the continued implementation of the Company's management information systems; pending litigation and governmental investigations; general economic conditions; 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 Form 10-K and Form 10-Q and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. VCA Antech owns, operates and manages the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country. VCA Antech, Inc. Consolidated Statements of Operations For the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited - In Thousands, Except Per Share Amounts) Three Months Six Months Ended June 30, Ended June 30, ---------------- ---------------- 2004 2003 (1) 2004 2003 (1) ------- ------- ------- ------- Revenue: Laboratory $51,951 $46,691 $101,133 $88,389 Animal hospital 121,384 98,822 219,340 185,129 Intercompany (3,388) (2,752) (6,176) (5,178) ------- ------- ------- ------- 169,947 142,761 314,297 268,340 ------- ------- ------- ------- Direct costs: Laboratory 27,983 25,615 55,698 49,825 Animal hospital 95,348 77,142 175,211 147,919 Intercompany (3,388) (2,752) (6,176) (5,178) ------- ------- ------- ------- 119,943 100,005 224,733 192,566 ------- ------- ------- ------- Gross profit: Laboratory 23,968 21,076 45,435 38,564 Animal hospital 26,036 21,680 44,129 37,210 ------- ------- ------- ------- 50,004 42,756 89,564 75,774 ------- ------- ------- ------- Selling, general and administrative: Laboratory 3,190 2,797 6,363 5,504 Animal hospital 3,056 2,519 5,804 5,022 Corporate 5,519 4,168 8,299 8,667 ------- ------- ------- ------- 11,765 9,484 20,466 19,193 ------- ------- ------- ------- Loss (gain) on sale of assets 4 78 66 (160) ------- ------- ------- ------- Operating income 38,235 33,194 69,032 56,741 Interest expense, net 6,098 6,418 12,083 13,410 Other (income) expense (287) 131 (176) 258 Minority interest expense 755 462 1,171 823 Debt retirement costs 810 - 810 7,417 ------- ------- ------- ------- Income before provision for income taxes 30,859 26,183 55,144 34,833 Provision for income taxes 12,692 10,833 22,233 14,300 ------- ------- ------- ------- Net income $18,167 $15,350 $32,911 $20,533 ======= ======= ======= ======= Diluted earnings per common share $0.44 $0.37 $0.79 $0.51 ======= ======= ======= ======= Shares used for computing diluted earnings per common share 41,691 41,136 41,609 40,288 ======= ======= ======= ======= VCA Antech, Inc. Supplemental Operating Data For the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited - In Thousands, Except Per Share Amounts) Table #1 Reconciliation of net income Three Months Six Months to adjusted net income Ended June 30, Ended June 30, ------------------ ------------------ 2004 2003 2004 2003 -------- -------- -------- -------- Net income $18,167 $15,350 $32,911 $20,533 Certain significant items: Debt retirement costs 810 - 810 7,417 Litigation settlement reimbursement - - (1,124) - Related income tax benefit (332) - (332) (3,041) -------- -------- -------- -------- 478 - (646) 4,376 -------- -------- -------- -------- Adjusted net income $18,645 $15,350 $32,265 $24,909 ======== ======== ======== ======== Table #2 Reconciliation of diluted earnings per common share to adjusted diluted earnings per common share Diluted earnings per common share $0.44 $0.37 $0.79 $0.51 Certain significant items as detailed in Table #1, net of income tax benefit 0.01 - (0.01) 0.11 -------- -------- -------- -------- Adjusted diluted earnings per common share $0.45 $0.37 $0.78 $0.62 ======== ======== ======== ======== Shares used for computing adjusted diluted earnings per common share 41,691 41,136 41,609 40,288 ======== ======== ======== ======== Table #3 Reconciliation of operating income to adjusted operating income and operating margin to adjusted operating margin Revenue $169,947 $142,761 $314,297 $268,340 ======== ======== ======== ======== Operating income $38,235 $33,194 $69,032 $56,741 Operating margin 22.5% 23.3% 22.0% 21.1% Certain significant items: Litigation settlement reimbursement - - (1,124) - -------- -------- -------- -------- Adjusted operating income $38,235 $33,194 $67,908 $56,741 ======== ======== ======== ======== Adjusted operating margin 22.5% 23.3% 21.6% 21.1% VCA Antech, Inc. Supplemental Operating Data - Continued For the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited - In Thousands) Table #4 Depreciation and amortization Three Months Six Months Ended June 30, Ended June 30, ----------------- ---------------- 2004 2003 (1) 2004 2003 (1) ------- ------- ------- ------- Depreciation and amortization included in direct costs: Laboratory $897 $799 $1,718 $1,553 Animal hospital 2,536 2,304 4,937 4,781 ------- ------- ------- ------- 3,433 3,103 6,655 6,334 Other 386 394 780 740 ------- ------- ------- ------- Depreciation and amortization $3,819 $3,497 $7,435 $7,074 ======= ======= ======= ======= As of June 30, 2004 and December 31, 2003 (Unaudited - In Thousands) Table #5 Selected consolidated June 30, Dec. 31, balance sheet data 2004 2003 -------- -------- Cash $32,836 $17,237 Accounts receivable, net $26,753 $22,335 Stockholders' equity $199,150 $161,923 Total assets $697,408 $554,803 Debt: Revolving credit facility $- $- Senior term E notes 224,438 - Senior term D notes - 145,703 9.875% senior subordinated notes 170,000 170,000 Other 4,129 1,770 Unamortized discounts - (4) -------- -------- Total debt $398,567 $317,469 ======== ======== VCA Antech, Inc. Supplemental Operating Data - Continued For the Six Months Ended June 30, 2004 and 2003 (Unaudited - In Thousands) For the Six Months Table #6 Ended June 30, Selected cash flow and expense data ------------------ 2004 2003 -------- -------- Net cash provided by operating activities $42,315 $38,520 Rent expense $9,397 $8,043 Capital expenditures $9,027 $6,168 (1) During 2004, the Company began including depreciation and amortization in direct costs and selling, general and administrative expense. Prior periods presented in this press release have been reclassified to conform to the 2004 financial statement presentation. CONTACT: VCA Antech, Inc. Tom Fuller (CFO), 310-571-6505 -----END PRIVACY-ENHANCED MESSAGE-----