-----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, QoNv5LLp5ctJQ+tECYmyOwR+3xqodoFooARtCC13OOoHvLrAol1SBKLu1g3BM6bv KNrE55t+VgJRP+U/to2T2A== 0001157523-07-004043.txt : 20070425 0001157523-07-004043.hdr.sgml : 20070425 20070425160035 ACCESSION NUMBER: 0001157523-07-004043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070425 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070425 DATE AS OF CHANGE: 20070425 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: 07787722 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 a5385692.txt VCA ANTECH, INC. 8-K UNITED STATES 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): April 25, 2007 -------------- 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 Item 2.02: Results of Operations and Financial Condition Reference is made to the press release of Registrant issued on April 25, 2007, regarding earnings for the first quarter of fiscal 2007, which is incorporated herein by reference. A copy of the press release is attached to this Form 8-K as Exhibit 99.1. Item 8.01: Other Events Reference is made to the press release of Registrant issued on April 25, 2007, 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 9.01: Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 99.1 Press release dated April 25, 2007, regarding earnings for the first quarter of fiscal 2007. 99.2 Press release dated April 25, 2007, regarding earnings guidance. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. April 25, 2007 VCA Antech, Inc. /s/ Tomas W. Fuller ------------------- By: Tomas W. Fuller Its: Chief Financial Officer 3 EXHIBIT INDEX Exhibits 99.1 Press release dated April 25, 2007, regarding earnings for the first quarter of fiscal 2007. 99.2 Press release dated April 25, 2007, regarding earnings guidance. 4 EX-99.1 2 a5385692-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 VCA Antech, Inc. Reports First Quarter Results -- Revenue Increased 13.2% to $265.1 Million -- Gross Profit Increased 19.5% to $75.9 Million -- Reported Diluted Earnings Per Common Share Was $0.33 -- Adjusted Diluted Earnings Per Common Share Increased 22.2% to $0.33 LOS ANGELES--(BUSINESS WIRE)--April 25, 2007--VCA Antech, Inc. (NASDAQ:WOOF), a leading animal healthcare company in the United States, today reported financial results for the quarter ended March 31, 2007, as follows: revenue increased 13.2% to a first quarter record of $265.1 million; gross profit increased 19.5% to $75.9 million; operating income increased 21.4% to $54.3 million; net income was $28.3 million; and diluted earnings per common share was $0.33. The first quarter of 2006 included a tax benefit of $6.8 million, or $0.08 per diluted common share, due to a favorable outcome of an income tax audit that resulted in a change to our estimated tax liabilities. Excluding this item from 2006, adjusted net income increased 23.9% to $28.3 million and adjusted diluted earnings per common share increased 22.2% to $0.33. Bob Antin, Chairman and CEO, stated, "We experienced a very strong quarter. Our consolidated revenue increased 13.2% to $265.1 million. Our consolidated gross profit increased 19.5% and our consolidated operating income increased 21.4%. Our consolidated gross margin increased to 28.6% compared to 27.1% in the comparable prior year quarter. In addition, our consolidated operating margin increased to 20.5% compared to 19.1% in the comparable prior year quarter. "Our laboratory revenue increased 19.6% to $73.6 million. Our laboratory gross profit increased 26.1% and our laboratory gross margin increased to 48.9% compared to 46.4% in the comparable prior year quarter. Our laboratory operating income increased 27.0% and our laboratory operating margin increased to 42.2% compared to 39.7% in the comparable prior year quarter. Laboratory internal revenue growth was 17.4% for the first quarter of 2007. "Our animal hospital revenue increased 9.8% to $187.2 million. Our animal hospital same-store revenue growth was 5.5% for the first quarter of 2007 and our animal hospital same-store gross margin increased to 19.2% compared to 19.1% in the comparable prior year quarter. Due to our recent animal hospital acquisitions, our consolidated animal hospital gross margin declined to 19.0% compared to 19.1% in the comparable prior year quarter. In addition, our consolidated animal hospital operating margin declined to 16.0% compared to 16.4% in the comparable prior year quarter. "Our medical technology revenue increased 39.8% to $11.2 million and our medical technology gross profit increased 72.3% to $4.3 million, while our medical technology gross margin increased to 38.6% compared to 31.3% in the comparable prior year quarter. Our medical technology operating income was $1.4 million compared to an operating loss of $149,000 reported in the first quarter of 2006." Non-GAAP Financial Measures We believe investors' understanding of our total performance is enhanced by disclosing adjusted net income and adjusted diluted earnings per common share. We define adjusted net income and adjusted diluted earnings per common share as the reported items, adjusted to exclude certain significant items. Adjusted diluted earnings per common share is adjusted net income divided by diluted common shares outstanding. Management uses adjusted net income and adjusted diluted earnings per common share because they exclude the effect of significant items 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. For the quarter ended March 31, 2006, the only item excluded in computing adjusted net income and adjusted diluted earnings per common share was a $6.8 million tax benefit. For the quarter ended March 31, 2007, there were no adjustments. There is a material limitation associated with the use of these non-GAAP financial measures: our computation of adjusted net income for the quarter ended March 31, 2006, excludes the impact of the $6.8 million tax benefit and as a result, our computation of adjusted diluted earnings per common share does not depict diluted earnings per common share in accordance with GAAP. To compensate for the limitations in the non-GAAP financial measures discussed above, 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 We will discuss our company's first quarter 2007 financial results during a conference call today, April 25, 2007 at 4:30 p.m. Eastern Time. You can access a live broadcast of the call by visiting our website at http://investor.vcaantech.com. You can also access the call via telephone by dialing (800) 475-3716. Interested parties should call at least 10 minutes prior to the start of the call to register. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Among the important factors that could cause actual results to differ are: a material adverse change in our financial condition or operations; the rate of our laboratory internal revenue growth and animal hospital same-store revenue growth; the level of direct costs and our ability to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of our recent acquisitions and our ability to effectively manage our growth and achieve operating synergies; a continued decline in demand for some of our products and services; any disruption in our information technology systems or transportation networks; the effects of competition; any impairment in the carrying value of our goodwill; changes in prevailing interest rates; our ability to service our debt; and general economic conditions. These and other risk factors are discussed in our report on Form 10-K for the year ended December 31, 2006, 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. We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, and we supply diagnostic imaging equipment to the veterinary industry. VCA ANTECH, INC. CONSOLIDATED INCOME STATEMENTS For the Three Months Ended March 31, 2007 and 2006 (In thousands, except per share amounts) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Revenue: Laboratory $ 73,597 $ 61,537 Animal hospital 187,171 170,523 Medical technology 11,172 7,992 Intercompany (6,795) (5,872) --------- --------- 265,145 234,180 --------- --------- Direct costs 189,225 170,659 Gross profit: Laboratory 36,002 28,550 Animal hospital 35,580 32,597 Medical technology 4,311 2,502 Intercompany 27 (128) --------- --------- 75,920 63,521 --------- --------- Selling, general and administrative: Laboratory 4,967 4,094 Animal hospital 5,560 4,823 Medical technology 2,935 2,651 Corporate 8,011 7,317 --------- --------- 21,473 18,885 --------- --------- Write-down and loss (gain) on sale of assets 122 (118) --------- --------- Operating income 54,325 44,754 Interest expense, net 5,773 6,312 Other (income) expense 55 (66) Minority interest 846 774 --------- --------- Income before provision for income taxes 47,651 37,734 Provision for income taxes 19,338 8,075 --------- --------- Net income $ 28,313 $ 29,659 ========= ========= Diluted earnings per common share $ 0.33 $ 0.35 ========= ========= Shares used for computing diluted earnings per common share 85,649 84,583 ========= ========= VCA ANTECH, INC. CONSOLIDATED BALANCE SHEETS As of March 31, 2007 and December 31, 2006 (In thousands) March 31, December 31, 2007 2006 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 38,245 $ 45,104 Trade accounts receivable, net 49,228 44,491 Inventory 21,491 21,420 Prepaid expenses and other 13,381 13,492 Deferred income taxes 16,526 14,935 Prepaid income taxes - 13,523 ------------ ------------ Total current assets 138,871 152,965 Property and equipment, net 180,692 166,033 Other assets: Goodwill 652,339 625,748 Other intangible assets, net 16,604 16,293 Deferred financing costs, net 918 979 Other 12,299 9,939 ------------ ------------ Total assets $ 1,001,723 $ 971,957 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term obligations $ 5,645 $ 6,648 Accounts payable 21,457 23,328 Accrued payroll and related liabilities 31,594 33,864 Income taxes payable 3,145 - Other accrued liabilities 31,713 30,961 ------------ ------------ Total current liabilities 93,554 94,801 Long-term obligations, less current portion 382,768 384,067 Deferred income taxes 42,233 39,804 Other liabilities 12,251 13,294 Minority interest 9,615 9,686 Stockholders' equity: Common stock 84 84 Additional paid-in capital 278,038 275,013 Retained earnings 182,899 154,586 Accumulated other comprehensive income 281 622 ------------ ------------ Total stockholders' equity 461,302 430,305 ------------ ------------ Total liabilities and stockholders' equity $ 1,001,723 $ 971,957 ============ ============ VCA ANTECH, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2007 and 2006 (In thousands) Three Months Ended March 31, ------------------- 2007 2006 --------- --------- Cash flows from operating activities: Net income $ 28,313 $ 29,659 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,931 5,422 Amortization of debt costs 61 132 Provision for uncollectible accounts 1,425 1,562 Write-down and loss (gain) on sale of assets 122 (118) Share-based compensation 1,217 776 Excess tax benefit from exercise of stock options (922) (1,277) Minority interest in income of subsidiaries 846 774 Distributions to minority interest partners (645) (798) Deferred income taxes 1,159 2,917 Other (142) (235) Changes in operating assets and liabilities: Accounts receivable (6,040) (2,132) Inventory, prepaid expenses and other assets (398) (222) Accounts payable and other accrued liabilities (2,279) (6,578) Accrued payroll and related liabilities (2,270) (3,430) Income taxes 17,637 11,300 --------- --------- Net cash provided by operating activities 44,015 37,752 --------- --------- Cash flows from investing activities: Business acquisitions, net of cash acquired (32,203) (15,863) Real estate acquired in connection with business acquisitions (7,929) (1,779) Property and equipment additions (11,875) (7,860) Proceeds from sale of assets 1,564 286 Other 110 76 --------- --------- Net cash used in investing activities (50,333) (25,140) --------- --------- Cash flows from financing activities: Repayment of long-term obligations (2,302) (41,416) Proceeds from issuance of common stock under stock option plans 839 1,219 Excess tax benefit from exercise of stock options 922 1,277 --------- --------- Net cash used in financing activities (541) (38,920) --------- --------- Decrease in cash and cash equivalents (6,859) (26,308) Cash and cash equivalents at beginning of period 45,104 58,488 --------- --------- Cash and cash equivalents at end of period $ 38,245 $ 32,180 ========= ========= VCA ANTECH, INC. SUPPLEMENTAL OPERATING DATA For the Three Months Ended March 31, 2007 and 2006 (In thousands, except per share amounts) Three Months Ended Table #1 March 31, ------------------ Reconciliation of net income to adjusted net income 2007 2006 --------- -------- Net income $ 28,313 $29,659 Certain significant item: Tax benefit - (6,806) --------- -------- Adjusted net income $ 28,313 $22,853 ========= ======== Table #2 Reconciliation of diluted earnings per common share to adjusted diluted earnings per common share Diluted earnings per common share $ 0.33 $ 0.35 Certain significant item as detailed in Table #1 - (0.08) --------- -------- Adjusted diluted earnings per common share $ 0.33 $ 0.27 ========= ======== Shares used for computing adjusted diluted earnings per common share 85,649 84,583 ========= ======== Table #3 Depreciation and amortization Depreciation and amortization included in direct costs: Laboratory $ 1,338 $ 1,057 Animal hospital 3,815 3,506 Medical technology 293 318 Intercompany (89) (31) --------- -------- 5,357 4,850 Depreciation and amortization included in selling, general and administrative expense: 574 572 --------- -------- Total depreciation and amortization $ 5,931 $ 5,422 ========= ======== VCA ANTECH, INC. SUPPLEMENTAL OPERATING DATA - Continued As of March 31, 2007 and December 31, 2006 (In thousands) Table #4 March 31, December 31, Selected consolidated balance sheet data 2007 2006 ------------ ------------ Debt: Revolving credit facility $ - $ - Senior term notes 371,720 372,668 Other debt and capital leases 16,693 18,047 ------------ ------------ Total debt $ 388,413 $ 390,715 ============ ============ For the Three Months Ended March 31, 2007 and 2006 (In thousands) Three Months Ended Table #5 March 31, ------------------------- Selected expense data 2007 2006 ------------ ------------ Rent expense $ 8,425 $ 7,690 Share-based compensation included in direct costs: Laboratory $ 183 $ 160 Share-based compensation included in selling, general and administrative expense: Laboratory 197 128 Animal hospital 324 215 Medical technology 28 - Corporate 485 273 ------------ ------------ 1,034 616 ------------ ------------ Total share-based compensation $ 1,217 $ 776 ============ ============ CONTACT: VCA Antech, Inc. Tomas Fuller, Chief Financial Officer, 310-571-6505 EX-99.2 3 a5385692-ex992.txt EXHIBIT 99.2 EXHIBIT 99.2 VCA Antech, Inc. Updates Financial Guidance for Fiscal Year 2007 LOS ANGELES--(BUSINESS WIRE)--April 25, 2007--VCA Antech, Inc. (NASDAQ:WOOF), a leading animal healthcare company in the United States, provides the following revised financial guidance for all investors in adherence with Regulation Fair Disclosure as issued by the United States Securities and Exchange Commission, the SEC. We encourage 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. We are providing the following revised financial guidance for the year ending December 31, 2007: -- Revenue of $1.08 billion to $1.09 billion; and -- Diluted earnings per common share of $1.31 to $1.35. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our financial guidance for fiscal year 2007. Among the important factors that could cause actual results to differ are: a material adverse change in our financial condition or operations; the rate of our laboratory internal revenue growth and animal hospital same-store revenue growth; the level of direct costs and our ability to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of our recent acquisitions and our ability to effectively manage our growth and achieve operating synergies; a continued decline in demand for some of our products and services; any disruption in our information technology systems or transportation networks; the effects of competition; any impairment in the carrying value of our goodwill; changes in prevailing interest rates; our ability to service our debt; and general economic conditions. These and other risk factors are discussed in our Report on Form 10-K for the year ended December 31, 2006, 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. We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, and we supply diagnostic imaging equipment to the veterinary industry. CONTACT: VCA Antech, Inc. Tomas Fuller, Chief Financial Officer, 310-571-6505 -----END PRIVACY-ENHANCED MESSAGE-----