-----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, UMnpdHlCWYr/hTOijK9Ae4xIvMnwJsM9n0OvhZHUjWvbfq1C0tVkrlXvxkwnDPH5 ax7I0rFRqNtOMa+HgmbfUw== 0001157523-07-010173.txt : 20071024 0001157523-07-010173.hdr.sgml : 20071024 20071024160015 ACCESSION NUMBER: 0001157523-07-010173 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20071024 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071024 DATE AS OF CHANGE: 20071024 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: 071188196 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 a5526267.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): October 24, 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 October 24, 2007, regarding earnings for the third 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 October 24, 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 October 24, 2007, regarding earnings for the third quarter of fiscal 2007. 99.2 Press release dated October 24, 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. October 24, 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 October 24, 2007, regarding earnings for the third quarter of fiscal 2007. 99.2 Press release dated October 24, 2007, regarding earnings guidance. 4 EX-99.1 2 a5526267ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 VCA Antech, Inc. Reports Third Quarter 2007 Results -- Third quarter revenue increased 21.8% to $306.5 million -- Third quarter gross profit increased 22.5% to $86.3 million -- Third quarter diluted earnings per common share increased 18.8% to $0.38 LOS ANGELES--(BUSINESS WIRE)--Oct. 24, 2007--VCA Antech, Inc. (NASDAQ:WOOF), a leading animal healthcare company in the United States, today reported financial results for the quarter ended September 30, 2007, as follows: revenue increased 21.8% to a third quarter record of $306.5 million; gross profit increased 22.5% to $86.3 million; operating income increased 23.6% to $63.7 million; net income increased 19.5% to $32.2 million; and diluted earnings per common share increased 18.8% to $0.38. We also reported our financial results for the nine months ended September 30, 2007, as follows: revenue increased 17.7% to $872.0 million; gross profit increased 20.7% to $252.1 million; operating income increased 22.1% to $185.4 million; net income was $96.4 million; and diluted earnings per common share was $1.13. The nine months ended September 30, 2006, included a tax benefit in the amount of $6.8 million, or $0.08 per diluted common share, and excluding this benefit from 2006, adjusted net income increased 21.4% to $96.4 million and adjusted diluted earnings per common share increased 20.2% to $1.13. Bob Antin, Chairman and CEO, stated, "The third quarter was highlighted by the outstanding operating performance of our laboratory and animal hospital businesses. On a 21.8% increase in consolidated revenue, our gross profit and operating income increased 22.5% and 23.6%, respectively, and diluted earnings per common share increased 18.8%. "Our laboratory revenue increased 12.4% to $74.3 million driven primarily by internal revenue growth of 11.6%. Our laboratory gross profit increased 18.7% and operating income increased 19.9%. Laboratory gross margin increased to 48.0% compared to 45.4% and operating margin increased to 41.4% compared to 38.8% in the comparable prior year quarter. "Our animal hospital revenue increased 25.0% to $229.4 million driven by acquisitions, including Healthy Pet Corp. acquired on June 1, 2007, and same-store revenue growth, adjusted for one less business day, of 5.7%. Our animal hospital gross profit increased 27.0% and operating income increased 29.6%. Animal hospital gross margin increased to 20.7% compared to 20.4% and operating margin increased to 18.2% compared to 17.6% in the comparable prior year quarter. Our animal hospital same-store gross margin increased to 21.0% compared to 20.5% in the comparable prior year quarter." 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 nine months ended September 30, 2006, the only item excluded in computing adjusted net income and adjusted diluted earnings per common share was a $6.8 million tax benefit recorded during the first quarter of 2006. For the quarter and nine months ended September 30, 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 nine months ended September 30, 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 third quarter 2007 financial results during a conference call today, October 24, 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 (888) 455-2311. 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 ability to successfully integrate the acquisition of Healthy Pet Corp. and achieve expected operating synergies; 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 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 our report on Form 10-Q for the quarter ended June 30, 2007, 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 (Unaudited - In Thousands, Except Per Share Amounts) Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2007 2006 2007 2006 --------- --------- --------- --------- Revenue: Laboratory $ 74,266 $ 66,054 $227,073 $195,064 Animal hospital 229,409 183,592 635,046 540,117 Medical technology 11,091 8,956 32,898 25,348 Intercompany (8,229) (6,970) (23,030) (19,567) --------- --------- --------- --------- 306,537 251,632 871,987 740,962 --------- --------- --------- --------- Direct costs 220,235 181,167 619,887 532,014 Gross profit: Laboratory 35,638 30,013 111,606 91,087 Animal hospital 47,584 37,460 129,465 109,708 Medical technology 3,261 3,426 11,357 9,072 Intercompany (181) (434) (328) (919) --------- --------- --------- --------- 86,302 70,465 252,100 208,948 --------- --------- --------- --------- Selling, general and administrative: Laboratory 4,859 4,350 14,872 12,793 Animal hospital 5,411 5,161 16,292 15,107 Medical technology 2,761 2,534 8,389 7,734 Corporate 9,264 6,901 26,258 21,681 --------- --------- --------- --------- 22,295 18,946 65,811 57,315 --------- --------- --------- --------- Loss (gain) on sale of assets 333 3 875 (200) --------- --------- --------- --------- Operating income 63,674 51,516 185,414 151,833 Interest expense, net 8,930 6,084 21,374 18,323 Other (income) expense (1) 73 226 (24) Minority interest expense 1,187 846 3,061 2,520 --------- --------- --------- --------- Income before provision for income taxes 53,558 44,513 160,753 131,014 Provision for income taxes 21,329 17,536 64,364 44,825 --------- --------- --------- --------- Net income $ 32,229 $ 26,977 $ 96,389 $ 86,189 ========= ========= ========= ========= Diluted earnings per common share $ 0.38 $ 0.32 $ 1.13 $ 1.02 ========= ========= ========= ========= Shares used for computing diluted earnings per common share 85,752 85,187 85,572 84,864 ========= ========= ========= ========= VCA Antech, Inc. Consolidated Balance Sheets (Unaudited - In thousands) September 30, December 31, 2007 2006 ------------- ------------ Assets Current assets: Cash and cash equivalents $ 87,155 $ 45,104 Trade accounts receivable, net 46,503 44,491 Inventory 21,332 21,420 Prepaid expenses and other 13,616 13,492 Deferred income taxes 17,866 14,935 Prepaid income taxes - 13,523 ------------- ------------ Total current assets 186,472 152,965 Property and equipment, net 206,347 166,033 Other assets: Goodwill 847,942 625,748 Other intangible assets, net 16,586 16,293 Deferred financing costs, net 1,623 979 Other 14,175 9,939 ------------- ------------ Total assets $ 1,273,145 $ 971,957 ============= ============ Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term obligations $ 7,997 $ 6,648 Accounts payable 23,905 23,328 Accrued payroll and related liabilities 32,932 33,864 Other accrued liabilities 43,961 30,961 ------------- ------------ Total current liabilities 108,795 94,801 Long-term obligations, less current portion 554,205 384,067 Deferred income taxes 45,647 39,804 Other liabilities 12,118 13,294 Minority interest 10,634 9,686 Stockholders' equity: Common stock 84 84 Additional paid-in capital 292,223 275,013 Retained earnings 250,975 154,586 Accumulated other comprehensive (loss) income (1,536) 622 ------------- ------------ Total stockholders' equity 541,746 430,305 ------------- ------------ Total liabilities and stockholders' equity $ 1,273,145 $ 971,957 ============= ============ VCA Antech, Inc. Consolidated Statements of Cash Flows (Unaudited - In thousands) Nine Months Ended September 30, --------------------- 2007 2006 ---------- --------- Cash flows from operating activities: Net income $ 96,389 $ 86,189 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,764 16,347 Amortization of debt costs 253 299 Provision for uncollectible accounts 3,561 4,174 Loss (gain) on sale of assets 875 (200) Share-based compensation 3,429 2,326 Minority interest in income of subsidiaries 3,061 2,520 Distributions to minority interest partners (2,262) (2,439) Deferred income taxes 4,627 7,222 Excess tax benefit from exercise of stock options (6,576) (5,774) Other (115) (750) Changes in operating assets and liabilities: Accounts receivable (4,823) (8,500) Inventory, prepaid expenses and other assets 1,140 (6,816) Accounts payable and other accrued liabilities (1,195) (2,499) Accrued payroll and related liabilities (3,958) (1,928) Income taxes 20,983 567 ---------- --------- Net cash provided by operating activities 135,153 90,738 ---------- --------- Cash flows from investing activities: Business acquisitions, net of cash acquired (214,758) (37,612) Real estate acquired in connection with business acquisitions (7,962) (2,872) Property and equipment additions (38,033) (23,800) Proceeds from sale of assets 1,774 533 Other (188) 268 ---------- --------- Net cash used in investing activities (259,167) (63,483) ---------- --------- Cash flows from financing activities: Repayment of long-term obligations (6,282) (64,106) Proceeds from the issuance of long-term obligations 160,000 - Payment of financing costs (897) - Proceeds from issuance of common stock under stock option plans 6,668 5,410 Excess tax benefit from exercise of stock options 6,576 5,774 ---------- --------- Net cash provided by (used in) financing activities 166,065 (52,922) ---------- --------- Increase (decrease) in cash and cash equivalents 42,051 (25,667) Cash and cash equivalents at beginning of period 45,104 58,488 ---------- --------- Cash and cash equivalents at end of period $ 87,155 $ 32,821 ========== ========= VCA Antech, Inc. Supplemental Operating Data (Unaudited - In Thousands, Except Per Share Amounts) Three Months Nine Months Table #1 Ended September 30, Ended September 30, ------------------- ------------------- Reconciliation of net income to adjusted net income 2007 2006 2007 2006 ---------- -------- --------- --------- Net income $ 32,229 $26,977 $ 96,389 $ 86,189 Certain significant item: Tax benefit - - - (6,806) ---------- -------- --------- --------- Adjusted net income $ 32,229 $26,977 $ 96,389 $ 79,383 ========== ======== ========= ========= Table #2 Reconciliation of diluted earnings per common share to adjusted diluted earnings per common share Diluted earnings per common share $ 0.38 $ 0.32 $ 1.13 $ 1.02 Certain significant items as detailed in Table #1 - - - (0.08) ---------- -------- --------- --------- Adjusted diluted earnings per common share $ 0.38 $ 0.32 $ 1.13 $ 0.94 ========== ======== ========= ========= Shares used for computing adjusted diluted earnings per common share 85,752 85,187 85,572 84,864 ========== ======== ========= ========= Table #3 Depreciation and amortization Depreciation and amortization included in direct costs: Laboratory $ 1,727 $ 1,206 $ 4,643 $ 3,328 Animal hospital 4,371 3,531 12,528 10,580 Medical technology 305 284 897 891 Intercompany (100) (41) (281) (109) ---------- -------- --------- --------- 6,303 4,980 17,787 14,690 Depreciation and amortization included in selling, general and administrative expense 721 516 1,977 1,657 ---------- -------- --------- --------- Total depreciation and amortization $ 7,024 $ 5,496 $ 19,764 $ 16,347 ========== ======== ========= ========= VCA Antech, Inc. Supplemental Operating Data - Continued (Unaudited - In Thousands) Table #4 September 30, December 31, Selected consolidated balance sheet data 2007 2006 ------------- ------------ Debt: Revolving credit facility $ - $ - Senior term notes 529,023 372,668 Other debt and capital leases 33,179 18,047 ------------- ------------ Total debt $ 562,202 $ 390,715 ============= ============ For the Three Months For the Nine Months Table #5 Ended September 30, Ended September 30, -------------------- -------------------------- Selected expense data 2007 2006 2007 2006 ---------- --------- ------------- ------------ Rent expense $ 9,574 $ 8,095 $ 27,109 $ 23,699 Share-based compensation included in direct costs: Laboratory $ 161 $ 172 $ 502 $ 492 Share-based compensation included in selling, general and administrative expense: Laboratory 180 128 552 382 Animal hospital 289 376 896 807 Medical technology 27 - 81 - Corporate 472 205 1,398 645 ---------- --------- ------------- ------------ 968 709 2,927 1,834 ---------- --------- ------------- ------------ Total share- based compensation $ 1,129 $ 881 $ 3,429 $ 2,326 ========== ========= ============= ============ CONTACT: VCA Antech, Inc. Tomas W. Fuller, Chief Financial Officer, (310) 571-6505 EX-99.2 3 a5526267ex99_2.txt EXHIBIT 99.2 Exhibit 99.2 VCA Antech, Inc. Updates Financial Guidance For Fiscal Year 2007 LOS ANGELES--(BUSINESS WIRE)--Oct. 24, 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 from $1.15 billion to $1.16 billion; and -- Diluted earnings per common share from $1.39 to $1.40. 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 ability to successfully integrate the acquisition of Healthy Pet Corp. and achieve expected operating synergies; 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 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 our Report on Form 10-Q for the quarter ended June 30, 2007, 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 W. Fuller, Chief Financial Officer, (310) 571-6505 -----END PRIVACY-ENHANCED MESSAGE-----