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| Company Contact: |
Investor Contacts: |
| Pet DRx Corporation |
Lippert/Heilshorn & Associates,
Inc. |
| Steven T. Johnson, President & COO |
Bruce Voss (bvoss@lhai.com) |
| (Steven.Johnson@petdrx.com) |
Don Markley (dmarkley@lhai.com) |
| (615) 369-1914 – www.petdrx.com |
(310) 691-7100 – http://www.lhai.com |
Download Full Press Release
PET DRx REPORTS 2008 SECOND QUARTER RESULTS
• Second Quarter Revenue Increased to $17.9 Million
• Acquisition of Valley Animal Medical Center
• NASDAQ Listing
Conference Call Today at 5:00 p.m. Eastern Time
BRENTWOOD, Tenn. (August 14, 2008) – Pet DRx, Corporation (Nasdaq:
VETS), a provider of veterinary primary care and specialized
services to companion animals, today announced financial results
for the 2008 second quarter.
Revenue in the second quarter of 2008 was $17.9 million, up 1.1%
compared with revenue of $17.7 million in the second quarter of
2007, primarily due to a price increase implemented in the first
quarter of 2008.
Hospital contribution margin improved to 7.1% from 4.5% in the
prior year second quarter. The improvement was primarily due to
reduced costs of medical products and supplies as the Company
began centralizing the purchasing of those products. Hospital
contribution in the second quarter of 2008 included one-time
charges of approximately $0.1 million associated with the
consolidation of operations as the Company looks to further
leverage efficiencies in its “hub and spoke” strategy. Excluding
these one-time charges, the hospital contribution margin would
have been 7.8%.
The net loss in the second quarter of 2008 was $5.2 million, or
($0.22) per share, compared with a net loss in the second
quarter of 2007 of $3.3 million, or ($0.77) per share (adjusted
for merger share conversion ratio). The net loss in the second
quarter of 2008 includes interest expense of $2.7 million
compared with $1.1 million in the prior year quarter. The
increase in interest expense is primarily attributable to
one-time charges recorded for the discount and other charges
associated with the payoff of debt during the period. The loss
from operations in the second quarter of 2008 was $2.7 million,
compared with $2.2 million in the same quarter a year ago.
“We are pleased to have grown same store revenue in this
challenging economic environment.” said Steven Johnson,
President and Chief Operating Officer. “We acquired an
additional facility in July which further strengthens our
presence in the Coachella Valley in California. We continue to
focus on optimizing the productivity and efficiency of our
current facilities in California, and remain confident that our
strategy of building ‘hub-and-spoke’ networks in high volume
markets will provide customers with the best possible service.
We also delivered on our goal of moving the trading of Pet DRx
from the OTC Bulletin Board to the Nasdaq, which has increased
our visibility in the financial community.”
Year-to-Date Results
For the six months ended June 30, 2008, Pet DRx reported revenue
of $35.8 million, up 26% compared with revenue of $28.4 million
for the first six months of 2007. The revenue increase was
primarily due to the acquisition of six veterinary hospitals
late in the first quarter of 2007. The net loss for the first
six months of 2008 was $8.3 million, or ($0.36) per share,
compared with a net loss of $5.8 million, or ($1.45) per share
(adjusted for merger share conversion ratio), in the first six
months of 2007.
2008 Financial Guidance
Pet DRx is temporarily suspending its financial guidance. The
company expects to resume guidance following the completion of
management’s review of operations and the projected acquisition
pipeline.
Management Changes
Pet DRx also announced that Executive Vice President and Chief
Financial Officer Gregory Eisenhauer has decided to leave the
Company and return to Atlanta for family reasons. He will remain
with the Company through November 30, 2008. “We thank Gregg for
his contributions in transitioning us from a private company to
a public company and we wish him well,” said Johnson
Conference Call
Pet DRx management will host a conference call on Thursday,
August 14, 2008 beginning at 5:00 p.m. Eastern time to discuss
second quarter results and to answer questions. Individuals
interested in participating in the call should dial (800)
232-9476 from the U.S. or (706) 679-2538 from outside the U.S.
The live call also will be available in the Investors section of
the Company’s Web site at www.petdrx.com.
A telephone replay will be available for 48 hours beginning
approximately one hour after the conclusion of the call by
dialing (800) 642-1687 from the U.S. or (706) 645-9291 from
outside the U.S., and entering reservation code 58134999. The
webcast will be available in the Investors section of the
Company’s Web site for 14 days following the completion of the
call.
About Pet DRx
Pet DRx Corporation provides veterinary primary care and
specialized services to companion animals through a network of
fully-owned veterinary hospitals. The Company currently owns and
operates 25 leading veterinary hospitals in the state of
California, which it has organized into unique, regional “hub
and spoke” networks. Pet DRx provides a full range of general
medical treatments for companion animals, including (i)
preventive care, such as examinations, vaccinations,
spaying/neutering and dental care and (ii) a broad range of
specialized diagnostic and medical services, such as internal
medicine, surgery, cardiology, ophthalmology, dermatology,
oncology, neurology, x-ray, ultrasound and other services.
SAFE HARBOR STATEMENT
Certain statements and information included in this press
release, including statements as to the expected operations of
the Company, its prospects for growth, and future product and
service offerings constitute “forward-looking statements” within
the meaning of the Federal Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including, but not limited to, the ability of the
Company to successfully acquire, integrate and operate
veterinary hospitals and clinics, requirements or changes
affecting the businesses in which the Company is engaged,
veterinary services trends, including factors affecting supply
and demand, the effect of competition, decline in demand for the
Company’s products or services, dependence on acquisitions for
growth, labor and personnel relations, changing interpretations
of generally accepted accounting principles, the Company’s
ability to service its substantial indebtedness, the level of
direct costs and the Company’s ability to maintain revenue at a
level necessary to maintain expected operating margins, the
level of selling, general and administrative costs, any
impairment in the carrying value of the Company’s goodwill and
other intangible assets, changes in prevailing interest rates,
and general economic conditions. These and other risks and
uncertainties are described in greater detail in the Company’s
filings with the Securities and Exchange Commission, including
its reports on Form 10-K and 10-Q, as well as its current report
on Form 8-K/A (Amendment No. 1) filed on April 4, 2008, and the
foregoing information should be read in conjunction with these
filings. These forward-looking statements speak only as of the
date hereof and the Company disclaims any intention or
obligation to update or revise any forward-looking statements,
either as a result of new information, future events or
otherwise.
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