EX-99.1 2 a5945790ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

VCA Antech, Inc. Reports First Quarter 2009 Results and Affirms Its Financial Guidance for 2009

  • First quarter revenue increased 2.6% to $315.8 million
  • First quarter net income increased 2.5% to $32.0 million
  • First quarter diluted earnings per share increased 2.8% to $0.37

LOS ANGELES--(BUSINESS WIRE)--April 22, 2009--VCA Antech, Inc. (NASDAQ NM SYMBOL: WOOF), a leading animal healthcare company in the United States, today reported financial results for the first quarter ended March 31, 2009, as follows: revenue increased 2.6% to a first quarter record of $315.8 million; net income increased 2.5% to $32.0 million; and diluted earnings per share increased 2.8% to $0.37.

Bob Antin, Chairman and CEO, stated, “I am pleased with our company’s performance in the first quarter of 2009. We have continued our long history of revenue and earnings growth as a result of our continued focus on our core business strategy and by adapting to the numerous challenges presented by the current economic environment.

“Animal hospital revenue in the first quarter increased 5.4% to $238.4 million driven by acquisitions made in the past twelve months. Our animal hospital gross margin and operating margin remained essentially unchanged at 18.1% and 16.0%, respectively. Although our day-adjusted same-store revenue declined 2.7% during the quarter, our same-store gross profit margin increased to 18.8% from 18.5%.

“We made nine acquisitions during the quarter with historical combined annual revenue of $20.9 million.

“Laboratory revenue in the first quarter increased 1.0% to $77.5 million. Our laboratory internal revenue growth, adjusted for one fewer business day was 1.7%, representing an improvement as compared to the fourth quarter of 2008. Our laboratory gross profit margin declined to 46.5% compared to 48.7% in the prior year, and our operating margin declined to 39.3% compared to 42.2% in the prior year.”

2009 Financial Guidance

We affirm our 2009 financial guidance as follows:

  • Revenue from $1.36 billion to $1.39 billion;
  • Net income from $135.2 million to $141.1 million; and
  • Diluted earnings per common share from $1.56 to $1.63.

Conference Call

We will discuss our company’s first quarter 2009 financial results during a conference call today, April 22, 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 (877) 604-9675. 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. Actual results may and likely will differ materially from the guidance provided in this release. Among the important factors that could cause actual results to differ are: a material adverse change in our financial condition or operations; the impact of adverse trends in the general economy on 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 and other intangible assets; 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, 2008 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 Ended
March 31,
  2009     2008  
Revenue:
Animal hospital $ 238,358 $ 226,100
Laboratory 77,489 76,729
Medical technology 9,158 13,849
Intercompany   (9,155 )   (8,846 )
  315,850     307,832  
 
Direct costs 233,409 224,801
 
Gross profit:
Animal hospital 43,164 41,137
Laboratory 36,006 37,342
Medical technology 3,525 4,913
Intercompany   (254 )   (361 )
  82,441     83,031  
 
Selling, general and administrative expense:
Animal hospital 5,384 5,478
Laboratory 5,567 4,951
Medical technology 3,084 3,434
Corporate   9,154     9,315  
  23,189     23,178  
 
Gain on sale of assets   (248 )   (184 )
 
Operating income 59,500 60,037
 
Interest expense, net 6,118 7,615
Other (income) expense   (110 )   177  
Income before provision for
income taxes 53,492 52,245
Provision for income taxes   20,611     20,086  
Net income   32,881     32,159  
Net income attributable to the noncontrolling interest   911     957  
Net income attributable to VCA Antech, Inc. $ 31,970   $ 31,202  
 
Diluted earnings per share $ 0.37   $ 0.36  
Shares used for computing diluted
earnings per share   85,386     85,865  
VCA Antech, Inc.
Consolidated Balance Sheets
(Unaudited - In thousands)
 
March 31, December 31,
  2009     2008  
Assets
Current assets:
Cash and cash equivalents $ 109,084 $ 88,959
Trade accounts receivable, net 47,929 43,453
Inventory 26,366 26,631
Prepaid expenses and other 18,112 18,800
Deferred income taxes 16,566 15,938
Prepaid income taxes   -     5,287  
Total current assets 218,057 199,068
Property and equipment, net 273,230 263,443
Other assets:
Goodwill 940,124 922,057
Other intangible assets, net 36,600 35,645
Notes receivable, net 4,719 12,893
Deferred financing costs, net 947 1,067
Other   20,849     14,865  
Total assets $ 1,494,526   $ 1,449,038  
 
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term obligations $ 8,117 $ 7,771
Accounts payable 23,704 26,087
Accrued payroll and related liabilities 39,795 42,840
Income taxes payable 9,370 -
Other accrued liabilities   43,699     46,424  
Total current liabilities 124,685 123,122
Long-term obligations, less current portion 542,670 544,860
Deferred income taxes 54,255 47,331
Other liabilities 10,174 9,890
VCA Antech, Inc. stockholders' equity:
Common stock 85 85
Additional paid-in capital 310,782 308,674
Retained earnings 440,552 408,582
Accumulated other comprehensive loss   (4,986 )   (6,352 )
Total VCA Antech, Inc. stockholders' equity   746,433     710,989  
Noncontrolling interest   16,309     12,846  
Total equity   762,742     723,835  
Total liabilities and equity $ 1,494,526   $ 1,449,038  
VCA Antech, Inc.
Consolidated Statements of Cash Flows
(Unaudited - In thousands)
 
Three Months Ended
March 31,
  2009     2008  
Cash flows from operating activities:
Net income $ 32,881 $ 32,159
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 9,152 7,263
Amortization of debt costs 120 116
Provision for uncollectible accounts 1,559 820
Gain on sale of assets (248 ) (184 )
Share-based compensation 1,976 1,309
Deferred income taxes 5,304 2,329
Excess tax benefit from exercise of stock options - (133 )
Other (148 ) 86
Changes in operating assets and liabilities:
Accounts receivable (5,455 ) (6,463 )
Inventory, prepaid expenses and other assets (2,790 ) (2,351 )
Accounts payable and other accrued liabilities (2,362 ) 2,767
Accrued payroll and related liabilities (3,204 ) (5,629 )
Income taxes   14,413     16,946  
Net cash provided by operating activities   51,198     49,035  
Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,467 ) (47,826 )
Real estate acquired in connection with business acquisitions (963 ) (3,612 )
Property and equipment additions (12,886 ) (9,463 )
Proceeds from sale of assets 74 1,747
Other   (373 )   (12,124 )
Net cash used in investing activities   (28,615 )   (71,278 )
Cash flows from financing activities:
Repayment of long-term obligations (1,946 ) (1,966 )
Distributions to noncontrolling interest partners (888 ) (760 )
Proceeds from issuance of common stock under stock option plans 557 214
Excess tax benefit from exercise of stock options - 133
Net share settlements   (180 )   -  
Net cash used in financing activities   (2,457 )   (2,379 )
Effect of currency exchange rate changes on cash and cash equivalents   (1 )   -  
Increase (decrease) in cash and cash equivalents 20,125 (24,622 )
Cash and cash equivalents at beginning of period   88,959     110,866  
Cash and cash equivalents at end of period $ 109,084   $ 86,244  
VCA Antech, Inc.
Supplemental Operating Data
(Unaudited - In thousands)
As of
Table #1 March 31,   December 31,
Selected consolidated balance sheet data   2009     2008  
 
Debt:
Revolving credit facility $ - $ -
Senior term notes 520,934 522,282
Other debt and capital leases   29,853     30,349  
Total debt $ 550,787   $ 552,631  
 
Three Months Ended
Table #2 March 31,
Selected expense data   2009     2008  
 
Rent expense $ 11,410   $ 10,041  
 
 
Depreciation and amortization included
in direct costs:
Animal hospital $ 6,219 $ 4,783
Laboratory 2,168 1,632
Medical technology 152 307
Intercompany   (187 )   (123 )
$ 8,352 $ 6,599
Depreciation and amortization included
in selling, general and administrative
expense   800     664  
Total depreciation and amortization $ 9,152   $ 7,263  
 
 
Share-based compensation included in direct costs:
Laboratory $ 155 $ 173
 
Share-based compensation included in selling,
general and administrative expense:
Animal hospital 371 333
Laboratory 301 202
Medical technology 75 33
Corporate   1,074     568  
  1,821     1,136  
Total share-based compensation $ 1,976   $ 1,309  

CONTACT:
VCA Antech, Inc.
Tomas Fuller, Chief Financial Officer
(310) 571-6505