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
26, 2012
VCA
Antech, Inc.
(Exact
Name of Registrant as Specified in Charter)
Delaware |
001-16783 |
95-4097995 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
12401 West Olympic Boulevard |
(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))
Item 2.02: Results of Operations and Financial Condition
On April 26, 2012, VCA Antech, Inc. issued a press release which included earnings for the first quarter of fiscal year 2012. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
Item 9.01: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 |
Press release dated April 26, 2012, regarding earnings for the first quarter of fiscal year 2012. |
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 26, 2012 |
VCA Antech, Inc. |
|
|
/s/ Tomas W. Fuller |
|
By: |
Tomas W. Fuller |
|
Its: |
Chief Financial Officer |
EXHIBIT INDEX
Exhibits |
||
99.1 |
Press release dated April 26, 2012, regarding earnings for the first quarter of fiscal year 2012. |
4
Exhibit 99.1
VCA Antech, Inc. Reports First Quarter 2012 Results
LOS ANGELES--(BUSINESS WIRE)--April 26, 2012--VCA Antech, Inc. (NASDAQ:WOOF), a leading animal healthcare company in the United States and Canada, today reported financial results for the first quarter ended March 31, 2012 as follows: revenue increased 15.3% to a first quarter record of $409.5 million; gross profit increased 17% to $93.4 million; net income was $35.2 million and diluted earnings per common share was $0.40.
The first quarter of 2012 included a gain of $5.7 million on our 20% interest in Associate Veterinary Clinics (“AVC”) held at the time we became the sole non-veterinarian shareholder of AVC. Excluding the gain, adjusted diluted earnings per common share was $0.34.
Bob Antin, Chairman and CEO, stated, “I am extremely pleased with our results for the quarter. This is the third consecutive quarter of improved organic revenue growth in both our Animal Hospital and Laboratory segments. In addition, we experienced margin expansion in each of these segments. Given these positive results, we remain optimistic with respect to our outlook for 2012.
“Animal Hospital revenue in the first quarter of 2012 increased 17.1% to $316.1 million driven by acquisitions made in the past twelve months and same-store revenue growth of 3.5%. Our Animal Hospital gross margin decreased slightly to 14.4%, compared to 14.7%, for the prior year quarter, and our Animal Hospital operating margin declined to 12.0%, compared to 12.4%, for the prior-year quarter. Our same-store gross profit margin increased to 14.9%, from 14.8%. During the quarter, we increased our investment in AVC which had historical annual revenue of $96.0 million. We also acquired nine independent animal hospitals which had historical combined annual revenue of $12.2 million.
“Laboratory revenue in the first quarter increased 6.5% to $84.7 million driven by both an increase in the number of requisitions and the average revenue per requisition. Our Laboratory gross profit margin increased by 1.7% to 47.9% and our operating margin increased 1.1% to 38.9%.
“Revenue from our other operations reported in our All Other segment increased $7.2 million in the first quarter to $26.3 million, which related primarily to the acquisition of Vetstreet in August 2011.”
Conference Call
We will discuss our first quarter 2012 financial results during a conference call today, April 26th, at 4:30 p.m. Eastern Time. A live broadcast of the call may be accessed by visiting our website at http://investor.vcaantech.com. The call may also be accessed by dialing (877) 293-5492. Interested parties should call at least ten minutes prior to the start of the call to register. Replay of the webcast will be available for ninety days by visiting the company’s website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Among the forward looking statements is our statement of optimism about our outlook for 2012 and other statements in this press release addressing our plans, expectations, future financial position and results of operation. These forward-looking statements are not historical facts and are inherently uncertain and out of our control. Any or all of our forward-looking statements in this press release may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Actual future results may vary materially. Among other factors that could cause our actual results to differ from this forward-looking information are: the continued effects of the economic uncertainty prevailing in regions in which we operate; our ability to execute on our growth strategy and to manage acquired operations (including Vetstreet); changes in demand for our products and services; fluctuations in our revenue adversely affecting our gross profit, operating income and margins; and the effects of the other factors discussed in our Annual Report on Form 10-K, Reports on Form 10-Q and our other filings with the SEC.
About VCA Antech
We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country and we provide the largest online communication, professional education and marketing solution to the veterinary community. We also 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, | ||||||||||||
2012 | 2011 | |||||||||||
Revenue: | ||||||||||||
Animal hospital | $ | 316,125 | $ | 269,941 | ||||||||
Laboratory | 84,730 | 79,549 | ||||||||||
All other | 26,325 | 19,096 | ||||||||||
Intercompany | (17,715 | ) | (13,463 | ) | ||||||||
409,465 | 355,123 | |||||||||||
Direct costs | 316,086 | 275,345 | ||||||||||
Gross profit: | ||||||||||||
Animal hospital | 45,556 | 39,553 | ||||||||||
Laboratory | 40,551 | 36,730 | ||||||||||
All other | 8,667 | 4,458 | ||||||||||
Intercompany | (1,395 | ) | (963 | ) | ||||||||
93,379 | 79,778 | |||||||||||
Selling, general and administrative expense: | ||||||||||||
Animal hospital | 7,057 | 6,083 | ||||||||||
Laboratory | 7,598 | 6,636 | ||||||||||
All other | 9,283 | 3,556 | ||||||||||
Corporate | 15,113 | 9,908 | ||||||||||
39,051 | 26,183 | |||||||||||
Loss on sale and disposal of assets | 523 | 89 | ||||||||||
Operating income | 53,805 | 53,506 | ||||||||||
Interest expense, net | 4,087 | 4,548 | ||||||||||
Business combination adjustment gain | (5,719 | ) | - | |||||||||
Other (income) expense | (207 | ) | 58 | |||||||||
Income before provision for | ||||||||||||
income taxes | 55,644 | 48,900 | ||||||||||
Provision for income taxes | 19,323 | 18,933 | ||||||||||
Net income | 36,321 | 29,967 | ||||||||||
Net income attributable to noncontrolling interests | 1,076 | 1,128 | ||||||||||
Net income attributable to VCA Antech, Inc. | $ | 35,245 | $ | 28,839 | ||||||||
Diluted earnings per share | $ | 0.40 | $ | 0.33 | ||||||||
Shares used for computing diluted | ||||||||||||
earnings per share | 88,055 | 87,245 | ||||||||||
VCA Antech, Inc. |
||||||||||
Consolidated Balance Sheets | ||||||||||
(Unaudited) | ||||||||||
(In thousands) | ||||||||||
March 31, | December 31, | |||||||||
2012 | 2011 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 72,716 | $ | 63,651 | ||||||
Trade accounts receivable, net | 63,849 | 58,279 | ||||||||
Inventory | 52,697 | 48,661 | ||||||||
Prepaid expenses and other | 24,091 | 21,883 | ||||||||
Deferred income taxes | 26,854 | 26,310 | ||||||||
Prepaid income taxes | 6,087 | 18,373 | ||||||||
Total current assets | 246,294 | 237,157 | ||||||||
Property and equipment, net | 377,082 | 370,646 | ||||||||
Other assets: | ||||||||||
Goodwill | 1,338,569 | 1,237,607 | ||||||||
Other intangible assets, net | 112,285 | 92,403 | ||||||||
Deferred financing costs, net | 5,188 | 5,435 | ||||||||
Other | 50,173 | 52,120 | ||||||||
Total assets | $ | 2,129,591 | $ | 1,995,368 | ||||||
Liabilities and Equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt | $ | 34,920 | $ | 32,571 | ||||||
Accounts payable | 40,136 | 37,797 | ||||||||
Accrued payroll and related liabilities | 55,829 | 42,658 | ||||||||
Other accrued liabilities | 54,402 | 43,968 | ||||||||
Total current liabilities | 185,287 | 156,994 | ||||||||
Long-term debt, less current portion | 621,898 | 586,282 | ||||||||
Deferred income taxes | 109,361 | 101,229 | ||||||||
Other liabilities | 34,800 | 25,947 | ||||||||
Redeemable noncontrolling interest | 6,950 | 6,964 | ||||||||
VCA Antech, Inc. stockholders' equity: | ||||||||||
Common stock | 87 | 87 | ||||||||
Additional paid-in capital | 378,609 | 361,715 | ||||||||
Accumulated earnings | 780,903 | 745,658 | ||||||||
Accumulated other comprehensive income | 1,482 | 418 | ||||||||
Total VCA Antech, Inc. stockholders' equity | 1,161,081 | 1,107,878 | ||||||||
Noncontrolling interest | 10,214 | 10,074 | ||||||||
Total equity | 1,171,295 | 1,117,952 | ||||||||
Total liabilities and equity | $ | 2,129,591 | $ | 1,995,368 | ||||||
VCA Antech, Inc. | ||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||
(Unaudited) | ||||||||||||
(In thousands) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2012 | 2011 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 36,321 | $ | 29,967 | ||||||||
Adjustments to reconcile net income to net cash provided by | ||||||||||||
operating activities: | ||||||||||||
Depreciation and amortization | 16,562 | 13,380 | ||||||||||
Amortization of debt costs | 322 | 388 | ||||||||||
Provision for uncollectible accounts | 1,146 | 1,297 | ||||||||||
Business combination adjustment gain | (5,719 | ) | - | |||||||||
Loss on sale and disposal of assets | 523 | 89 | ||||||||||
Share-based compensation | 4,183 | 1,068 | ||||||||||
Deferred income taxes | 4,212 | 8,035 | ||||||||||
Excess tax benefit from exercise of stock options | (187 | ) | (185 | ) | ||||||||
Other | (391 | ) | 171 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (4,606 | ) | (6,933 | ) | ||||||||
Inventory, prepaid expenses and other assets | (2,939 | ) | 1,417 | |||||||||
Income taxes | 12,698 | 9,922 | ||||||||||
Accounts payable and other accrued liabilities | 814 | (8,120 | ) | |||||||||
Accrued payroll and related liabilities | 10,725 | 10,734 | ||||||||||
Net cash provided by operating activities | 73,664 | 61,230 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Business acquisitions, net of cash acquired | (65,472 | ) | (5,467 | ) | ||||||||
Real estate acquired in connection with business acquisitions | - | (1,200 | ) | |||||||||
Property and equipment additions | (16,072 | ) | (12,034 | ) | ||||||||
Proceeds from sale of assets | 36 | 22 | ||||||||||
Other | 193 | (131 | ) | |||||||||
Net cash used in investing activities | (81,315 | ) | (18,810 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||
Repayment of long-term obligations | (34,626 | ) | (7,301 | ) | ||||||||
Proceeds from the issuance of long-term obligations | 50,000 | - | ||||||||||
Borrowings on revolving credit facility | 50,000 | - | ||||||||||
Repayments on revolving credit facility | (50,000 | ) | - | |||||||||
Payment of financing costs | (101 | ) | - | |||||||||
Distributions to noncontrolling interest partners | (719 | ) | (652 | ) | ||||||||
Proceeds from issuance of common stock under stock option plans | 2,621 | 1,175 | ||||||||||
Repurchase of common stock | (579 | ) | (2,337 | ) | ||||||||
Excess tax benefit from exercise of stock options | 187 | 185 | ||||||||||
Other | (151 | ) | (345 | ) | ||||||||
Net cash provided by (used in) financing activities | 16,632 | (9,275 | ) | |||||||||
Effect of currency exchange rate changes on cash and cash equivalents | 84 | 128 | ||||||||||
Decrease in cash and cash equivalents | 9,065 | 33,273 | ||||||||||
Cash and cash equivalents at beginning of period | 63,651 | 97,126 | ||||||||||
Cash and cash equivalents at end of period | $ | 72,716 | $ | 130,399 | ||||||||
VCA Antech, Inc. | |||||||||||
Supplemental Operating Data | |||||||||||
(Unaudited - In thousands, except per share amounts) | |||||||||||
Table #1 | |||||||||||
Reconciliation of net income attributable to | Three Months Ended | ||||||||||
VCA Antech, Inc., to adjusted net income | March 31, | ||||||||||
attributable to VCA Antech, Inc. (1) | 2012 | 2011 | |||||||||
Net income attributable to VCA Antech, Inc. | $ | 35,245 | $ | 28,839 | |||||||
Business combination adjustment gain (2) | (5,719 | ) | - | ||||||||
Adjusted net income attributable to VCA Antech, Inc. | $ | 29,526 | $ | 28,839 | |||||||
Table #2 | Three Months Ended | ||||||||||
Reconciliation of diluted earnings per share to | March 31, | ||||||||||
adjusted diluted earnings per share (1) | 2012 | 2011 | |||||||||
Diluted earnings per share | $ | 0.40 | $ | 0.33 | |||||||
Impact of business combination adjustment gain (2) | (0.06 | ) | - | ||||||||
Adjusted diluted earnings per share | $ | 0.34 | $ | 0.33 | |||||||
Shares used for computing adjusted | |||||||||||
diluted earnings per share |
88,055 | 87,245 | |||||||||
(1) Management uses adjusted net income and adjusted diluted earnings per share, and its components among other factors, to measure the performance of the overall Company. Further, we believe that investors’ understanding of our performance is enhanced by disclosing these measures. Adjusted net income and its components and adjusted diluted EPS measures are not, and should not be viewed as substitutes for, U.S. generally accepted accounting principles (GAAP) net income and its components and diluted earnings per share. |
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(2) As a result of the acquisition of a controlling interest in AVC, we recorded a gain for the increase in value of our previously held interest in AVC, which we acquired in 2008. |
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VCA Antech, Inc. |
|||||||||||||
Supplemental Operating Data | |||||||||||||
(Unaudited - In thousands) | |||||||||||||
As of | |||||||||||||
Table #3 | March 31, | December 31, | |||||||||||
Selected consolidated balance sheet data | 2012 | 2011 | |||||||||||
Debt: | |||||||||||||
Senior term notes | $ | 616,094 | $ | 573,984 | |||||||||
Other debt and capital leases | 40,724 | 44,869 | |||||||||||
Total debt | $ | 656,818 | $ | 618,853 | |||||||||
Three Months Ended | |||||||||||||
Table #4 | March 31, | ||||||||||||
Selected expense data | 2012 | 2011 | |||||||||||
Rent expense | $ | 16,045 | $ | 13,271 | |||||||||
Depreciation and amortization included | |||||||||||||
in direct costs: | |||||||||||||
Animal hospital | $ | 11,226 | $ | 9,799 | |||||||||
Laboratory | 2,468 | 2,369 | |||||||||||
All other | 1,502 | 410 | |||||||||||
Intercompany | (362 | ) | (301 | ) | |||||||||
14,834 | 12,277 | ||||||||||||
Depreciation and amortization included in selling, general and | |||||||||||||
administrative expense | 1,728 | 1,103 | |||||||||||
Total depreciation and amortization | $ | 16,562 | $ | 13,380 | |||||||||
Share-based compensation included in direct costs: | |||||||||||||
Laboratory |
$ | 123 | $ | 78 | |||||||||
Share-based compensation included in | |||||||||||||
selling, general and administrative expense: | |||||||||||||
Animal hospital | 341 | 218 | |||||||||||
Laboratory | 385 | 240 | |||||||||||
All other | 152 | 55 | |||||||||||
Corporate | 3,182 | 477 | |||||||||||
4,060 | 990 | ||||||||||||
Total share-based compensation | $ | 4,183 | $ | 1,068 |
CONTACT:
VCA Antech, Inc.
Tomas Fuller
Chief Financial Officer
310-571-6505