SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): July 30, 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
Reference is made to the press release of Registrant, issued on July 30,
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.
August 6, 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
99.1 Press Release dated July 30, 1997.
</TEXT/
VETERINARY CENTERS OF AMERICA, INC. REPORTS
SECOND QUARTER AND SIX MONTH FINANCIAL RESULTS
Company Reports 133% Increase in EPS on Record Earnings and Revenues
SANTA MONICA, CA July 30, 1997 -- VETERINARY CENTERS OF AMERICA, INC.
(NASDAQ NM SYMBOL: VCAI) today reported financial results for the second
quarter and the six months ended June 30, 1997.
Revenues for the second quarter ended June 30,1997 increased 50% to a
record $63,191,000 from $42,208,000 for the second quarter last year. Net
income for the quarter was $4,350,000, or $0.21 per share compared to a loss of
$1,304,000, or $0.09 per share, in the corresponding quarter in 1996.
Excluding the merger costs recorded in the second quarter of 1996 (amounting to
$2,901,000, or $2,795,000, after tax) the Company reported net income of
$1,491,000, or $0.09 per share, in the second quarter of 1996.
For the six months ended June 30, 1997, the Company's revenues increased
54% to $119,214,000 versus $77,440,000 for the corresponding period in 1996.
For the six months ended June 30, 1997, the Company reported net income of
$5,760,000, or $0.28 per share, compared to a net loss of $544,000, or $0.04
per share for the six months ended June 30, 1996. Excluding the after-tax
effect of the merger costs recorded in 1996, the Company posted net income
for the six months ended June 30, 1996 of $2,251,000, or $0.14 per share.
Bob Antin, Chairman and CEO, stated, "We are pleased to report significant
growth in our revenues and record second quarter earnings. Our consolidated
revenues increased 50%, and our operating income and earnings per share, each
excluding the effect of the merger costs in 1996, increased 68% and 133%,
respectively. VCA enjoyed growth in both of its operating divisions-- VCA
animal hospitals and Antech Diagnostics. VCA animal hospital gross profit
increased 133% in the second quarter of 1997 compared to the second quarter of
1996. Gross profit margin increased to 22.7% in the 1997 quarter compared to
17.6% in the second quarter of 1996. The 1997 margin was benefited by
consulting fees received from Heinz Pet Products under a consulting agreement
entered into during the first quarter of 1997. The operating margin in the
second quarter of 1997 in our laboratory business, Antech Diagnostics, was
28.0% compared to 32.1% in the comparable period in 1996. The operating margin
in 1997 was impacted by increased costs associated with the expansion of our
laboratory management team and our laboratory services. Additional
amortization expense, attributable to our buyout of our minority partners'
interest in Vet Research Laboratories, LLC in January 1997, also impacted the
laboratory margin.
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Bob Antin further stated, "The integration plan that we commenced in the
later part of last year is substantially complete. We are excited that our
expanded management team is now focusing its efforts on capitalizing on the
benefits of our new size and our leadership position in the industry."
VETERINARY CENTERS OF AMERICA, INC. owns and operates the largest network
of free-standing veterinary hospitals and one of the largest networks of
veterinary-exclusive clinical laboratories in the country. The Company
currently provides goods and services to approximately 9,000 animal hospitals
nationwide. In addition, VCA is a general 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.
Actual results may vary substantially as a result of a variety of factors.
Among the important factors that could cause actual results to differ are the
level of direct costs and the ability of the company to maintain gross revenues
at a level necessary to maintain gross profit margins, the level of selling,
general and administrative costs, the effects of competition, the continued
success of the company's integration process, the effects of the company's
recent acquisitions and its ability to effectively manage its growth, the
continued implementation of its management information systems, pending
litigation and governmental investigations, and the results of the company's
acquisition program. 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 which could cause actual results to differ
materially from those in the forward-looking statements.
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VETERINARY CENTERS OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1997 1996 1997 1996
------- ------- ------- ------
<S> <C> <C> <C> <C>
Revenues:
Animal Hospital $45,929 $25,455 $85,868 $47,514
Laboratory 18,480 15,432 34,726 27,488
Pet Food -- 2,120 1,064 3,970
Eliminations (1,218) (799) (2,444) (1,532)
------- ------- ------- -------
63,191 42,208 119,214 77,440
------- ------- ------- -------
Direct Costs 45,779 30,489 89,299 57,199
Gross Profit:
Animal Hospital 10,437 4,488 16,811 7,650
Laboratory 6,975 6,429 12,536 11,099
Pet Food -- 802 568 1,492
------- ------- ------- -------
17,412 11,719 29,915 20,241
------- ------- ------- -------
General & Administrative:
Corporate 3,692 2,139 7,181 3,948
Laboratory 955 980 1,915 1,895
Pet Food -- 1,198 400 2,318
------- ------- ------- -------
4,647 4,317 9,496 8,161
------- ------- ------- -------
Depreciation & Amortization 2,731 1,414 5,459 2,649
Merger Costs -- 2,901 -- 2,901
------- ------- ------- -------
Operating Income 10,034 3,087 14,960 6,530
Interest Expense, Net 2,082 882 3,880 1,395
------- ------- ------- -------
Income Before Minority Interest
and Income Taxes 7,952 2,205 11,080 5,135
Minority Interest Expense 120 1,938 291 3,309
Provision for Income Taxes 3,482 1,571 5,029 2,370
------- ------- ------- -------
Net Income (Loss) $4,350 $(1,304) $5,760 $(544)
======= ======= ======= =======
Earnings (Loss) Per Share $0.21 $(0.09) $0.28 $(0.04)
======= ======= ======= =======
Shares Used for Computing EPS 20,737 14,163 20,631 13,697
======= ======= ======= =======
</TABLE>
