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): February 18, 1997
VETERINARY CENTERS OF AMERICA, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10787 95-4097995
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3420 Ocean Park Boulevard, Suite 1000
Santa Monica, California 90405
(Address of Principal Executive Offices)
(310) 392-9599
(Registrant's Telephone Number)
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ITEM 5. OTHER EVENTS
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Reference is made to the press release of Registrant, issued on February
18, 1997, which contains information meeting the requirements of this Item 5,
and which is incorporated herein by this reference. A copy of this press
release is attached to this Form 8-K as Exhibit 99.1.
<PAGE>
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.
February 21, 1997 VETERINARY CENTERS OF AMERICA, INC.
By: /s/Tomas Fuller
--------------------------------
Tomas W. Fuller
Chief Financial Officer,
Vice President and
Assistant Secretary
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EXHIBIT INDEX
Exhibits Page Number
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99.1 Press Release dated February 18, 1997.
VETERINARY CENTERS OF AMERICA, INC.
REPORTS FOURTH QUARTER AND
YEAR END FINANCIAL RESULTS
SANTA MONICA, CA, February 18, 1997 -- VETERINARY CENTERS OF AMERICA, INC.
("VCA") (NASDAQ NM Symbol: VCAI), Tuesday announced that revenues for the
fourth quarter and the fiscal year ended December 31, 1996 hit record levels.
The Company reported revenues of $52.3 million for the fourth quarter and
$182.2 million for the full year. This represents an increase for the quarter
and year of 71.1% and 69.1%, respectively, over revenues of $30.6 million and
$107.7 million in the comparable periods in the prior year.
The increases in revenues for the quarter and the year were attributable
primarily to the Company's aggressive acquisition program.
VCA's current and historical operating results include the results of
Pets' Rx, Inc., which was acquired through a pooling-of-interests merger on
June 19, 1996. In addition, on July 19, 1996, the Company acquired The Pet
Practice, Inc. The Company acquired over 100 animal hospitals primarily
through these acquisitions.
In addition, the Company completed the acquisition of six veterinary
diagnostic laboratories in 1996.
In the third quarter of 1996, the Company began to implement its plan to
integrate the operations of the acquired hospitals. This plan included the
write-off of certain redundant assets, the closure or sale of unprofitable
hospitals and the termination of certain personnel.
As a result, the Company recorded charges of $2.9 million in the fourth
quarter and $15.2 million for the year. The charges, net of tax, represents
$0.10 and $0.89 per share, respectively.
The Company reported a net loss for the fourth quarter of $2.6 million or
$0.14 per share, compared to a net loss of $1.8 million or $0.16 per share in
1995.
Excluding the after-tax effect of restructuring and asset write-down
charges in 1996 and 1995, the Company posted a loss for the fourth quarter of
1996 of $806,000 or $0.04 per share, compared with income of $371,000 or $0.03
per share for the fourth quarter of 1995.
The Company reported a net loss for 1996 of $14.6 million or $0.92 per
share, compared to a net loss of $1.2 million or $0.13 per share in 1995.
Excluding the after-tax effect of restructuring and asset write-down charges in
1996 and 1995, the Company recorded income of $2.3 million or $0.15 per share
in 1996, compared with income of $1.6 million or $0.17 per share in 1995.
Bob Antin, President and Chief Executive Officer, stated: "1996 was a year
of tremendous growth. The hospital division more than doubled in size, adding
more than 100 locations to solidify our position as the largest provider of
veterinary medicine in the United States. We now have over 150 hospitals in 23
states."
"We also developed the largest veterinary exclusive diagnostic laboratory
network in the country. Our laboratory network, now operating under the name
Antech Diagnostics, has the ability to provide same-day or next-day results to
approximately 90% of the country."
"Vet's Choice, our joint venture with H.J. Heinz, reached a milestone
with profitable months in December 1996 and January 1997."
"The growth was accompanied by significant integration problems which
became apparent during the fourth quarter. The Company has developed a plan
which includes selling, closing or merging hospitals which do not fit our
operating model, continuing our acquisition program, strengthening our
management team, and completing the systems integration process."
"We also altered the Vet's Choice partnership, allowing Heinz Pet Products
to provide the day-to-day management of Vet's Choice which allows our
management team to focus on our hospital and laboratory businesses."
"We believe that Heinz Pet Products will be able to combine our products'
marketing and distribution efforts with those of Nature's Recipe and other
Heinz Pet Products pet-food companies, leveraging marketing, distribution and
logistics and, most importantly, the value of our 50.5% ownership. Heinz Pet
Products has an option to purchase our interest in three years based on a
multiple of revenues."
"Additionally, VCA and Heinz Pet Products have entered into a separate
agreement in which VCA will continue to provide support services to Heinz Pet
Products and assist them in their efforts to penetrate the worldwide hospital
market. Heinz Pet Products of the United States and Canada will pay VCA $15.3
million for these services, which will be recognized over a three-year period."
Antin concluded, "While the improvements are ongoing, we expect to
substantially complete our efforts by the end of April 1997."
VETERINARY CENTERS OF AMERICA, INC. owns and operates a nationwide
network of veterinary hospitals and veterinary clinical laboratories. The
Company currently provides goods and services to approximately 9,000 animal
hospitals nationwide.
In addition, VCA is a partner of Vet's Choice, a joint venture with Heinz
Pet Products, an affiliate of H.J. Heinz Company (NYSE Symbol: HNZ), which
markets and distributes a complete line of specialty pet foods.
With the exception of the historical information, the matters discussed
above include forward-looking statements that involve risks and uncertainties.
Among the important factors that could cause actual results to differ from
those indicated in the forward-looking statements are that the success of the
Company's acquisition program is dependent upon identifying potential
acquisition candidates, successfully negotiating favorable terms in the related
acquisition agreements and successfully integrating and profitably operating
the businesses once acquired. The failure of any of these steps would cause
actual results to differ materially from the forward-looking statements
discussed above. These and other risk factors are discussed in the Company's
recent filings with the Securities and Exchange Commission on Forms 8-K, 10-Q
and 10-K and the reader is directed to these reports for a further discussion
of important factors that could cause actual results to differ materially from
those in the forward-looking statements.
