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, 1999
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 Blvd., Suite 1000
Santa Monica, CA 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 Registrant's press releases issued on February 18, 1999 and
March 9, 1999 which contain information meeting the requirements of this Item 5,
and which are incorporated herein by this reference. A copy of each press
release is attached to this Form 8-K as Exhibit 99.1 and Exhibit 99.2.
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SIGNATURE
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.
March 9, 1999 VETERINARY CENTERS OF AMERICA, INC.
By: /S/ THOMAS W. FULLER
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Thomas W. Fuller
Chief Financial Officer
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EXHIBIT INDEX
EXHIBITS PAGE NUMBER
- -------- -----------
99.1 Press Release dated February 18, 1999 announcing fourth 1
quarter and year end earnings.
99.2 Press Release dated March 9, 1999. 4
EXHIBIT 99.1
VETERINARY CENTERS OF AMERICA INC. REPORTS FOURTH QUARTER AND YEAR-END FINANCIAL
RESULTS
COMPANY REPORTS 40% INCREASE IN EPS ON RECORD FOURTH QUARTER EARNINGS
AND REVENUES
SANTA MONICA, Calif.--(BUSINESS WIRE)--Feb. 18, 1999--Veterinary Centers of
America Inc. (Nasdaq/NM:VCAI - NEWS; VCA) Thursday reported financial results
for the fourth quarter and the year ended Dec. 31, 1998.
Earnings per share for the fourth quarter ended Dec. 31, 1998 increased 40% to
$0.14 per diluted share from $0.10 per diluted share in the fourth quarter of
1997. Revenues in the fourth quarter of 1998 increased 22% to $69,691,000 from
$56,906,000 in the fourth quarter last year. Net income for the quarter
increased 48% to $3,038,000 compared with $2,050,000 in the fourth quarter of
1997.
For the year ended Dec. 31, 1998, earnings per share increased 40% to $0.74 per
diluted share from $0.53 per diluted share in 1997. For the year ended Dec. 31,
1998, revenues increased 19% to a record $281,039,000 from $235,913,000 in 1997.
Net income in 1998 increased 45% to $16,268,000 compared with $11,226,000 in
1997.
Bob Antin, chairman and CEO, stated: "We are excited to have ended the year with
a strong fourth quarter. This is the eighth consecutive quarter where we've
experienced record revenues and earnings. Reflecting the success of implementing
our strategy to leverage our growing revenue base, our operating income
increased 58% to $7.7 million for the quarter, on a 22% increase in revenues."
Antin further stated: "Our acquisition program continues to focus on our dual
goals of maintaining our position as the country's largest provider of
veterinary care and assuring the highest quality of care.
"As previously announced, the company recently entered into a letter of intent
to acquire AAH Management Corp. which owns or manages 15 veterinary hospitals in
New York, New Jersey and Connecticut. This acquisition will provide a strong
base for continued growth in the Northeast."
During the 1998 fourth quarter, the company adopted EITF 97-2, pertaining to the
accounting for contractual management arrangements. As a result of adopting EITF
97-2, the company no longer consolidates the operations of the hospitals owned
by professional corporations and managed by VCA, but now includes the management
fees earned from professional corporations in its consolidated financial
results.
Certain revenue and expense items for the 1996 and 1997 fiscal years and the
subsequent fiscal
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quarters will be reclassified to conform to the 1998 presentation. This change
in accounting policy has no impact on gross profit, net income or earnings per
share for any of the fiscal periods.
VCA owns and operates the largest network of free-standing veterinary hospitals
and the largest network of veterinary-exclusive clinical laboratories in the
country. VCA also owns a partnership interest in Vet's Choice, a joint venture
with Heinz Pet Products, an affiliate of H.J. Heinz Co. (NYSE:HNZ - NEWS), which
markets and distributes a complete line of specialty pet foods.
In addition, VCA owns an interest in Veterinary Pet Insurance Inc., the nation's
largest pet health insurance company.
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 Income
(Unaudited - In Thousands)
<TABLE>
<CAPTION>
Three Months Year
Ended Ended
Dec. 31, Dec. 31,
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1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Animal Hospital $ 48,149 $41,268 $196,988 $170,548
Laboratory 22,934 16,710 89,896 68,997
Pet Food -- -- -- 1,064
Eliminations (1,392) (1,072) (5,845) (4,696)
69,691 56,906 281,039 235,913
Direct Costs 53,272 45,208 209,380 178,630
Gross Profit:
Animal Hospital 9,105 6,162 41,969 32,389
Laboratory 7,314 5,536 29,690 24,326
Pet Food -- -- -- 568
16,419 11,698 71,659 57,283
General & Administrative:
Corporate 3,675 2,685 14,218 13,092
Laboratory 1,497 1,085 5,475 4,184
Pet Food -- -- -- 400
5,172 3,770 19,693 17,676
Depreciation & Amortization 3,540 3,037 13,132 11,199
Operating Income 7,707 4,891 38,834 28,408
Interest Expense, Net 2,325 1,598 8,832 7,411
Income Before Minority
Interest and Income Taxes 5,382 3,293 30,002 20,997
Minority Interest Expense 160 68 780 424
Provision for Income Taxes 2,184 1,175 12,954 9,347
Net Income $ 3,038 $ 2,050 $ 16,268 $ 11,226
Basic Earnings Per Share $ 0.15 $ 0.10 $ 0.80 $ 0.57
Diluted Earnings Per Share $ 0.14 $ 0.10 $ 0.74 $ 0.53
Shares Used for
Computing Basic EPS 20,515 20,073 20,350 19,626
Shares Used for
Computing Diluted EPS 22,177 21,243 21,940 21,013
</TABLE>
CONTACT:
Veterinary Centers of America Inc., Santa Monica
Bob Antin/Tom Fuller, 310/392-9599
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EXHIBIT 99.2
VETERINARY CENTERS OF AMERICA INC. AND AAH MANAGEMENT CORP. SIGN MERGER
AGREEMENT
COMPANY TO ACQUIRE AAH MANAGEMENT CORP., THE MANAGER OF 15 VETERINARY PRACTICES
LOCATED IN THE GREATER NEW YORK METROPOLITAN AREA
SANTA MONICA, Calif.--(BUSINESS WIRE)--March 9, 1999-- Veterinary Centers of
America Inc. ("VCA") (Nasdaq NMS:VCAI) and AAH Management Corp. ("AAH") Tuesday
announced that they have signed a merger agreement in which VCA will acquire
100% of the outstanding securities of AAH Management Corp.
AAH manages 15 veterinary practices in the New York and New Jersey markets.
Under the terms of the agreement, VCA will buy the stock of AAH for a total
consideration of approximately $12.6 million, consisting of $4.3 million in cash
and notes and 517,568 shares of VCA common stock valued at approximately $8.3
million.
In addition, VCA will assume AAH debt totaling approximately $15 million.
Included in AAH's assets is approximately $4 million of real estate that houses
certain of the company's hospital operations. The merger, which will be
accounted for as a purchase, is expected to close on April 1, 1999.
Bob Antin, Chairman and chief executive officer, said: "We view the combination
of our two companies as an excellent opportunity to accelerate our growth in the
New York Metropolitan area, one of the largest pet care markets in the country.
Additionally, our management team in the Northeast will be significantly
strengthened by the combination of our two management teams."
Veterinary Centers of America owns and operates and manages the largest network
of freestanding veterinary hospitals and the largest network of
veterinary-exclusive clinical laboratories in the country. In addition, VCA has
an investment in Veterinary Pet Insurance Inc., the nation's largest pet health
insurance company.
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With the exception of 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 success or
failure of VCA in completing the definitive transaction documents, the
satisfaction of all closing conditions, the ability of VCA to successfully
integrate the operations of AAH with VCA's existing operations, the ability of
VCA to continue to manage its growth, the effects of governmental regulation and
the other factors discussed in VCA's Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission.
CONTACT:
Veterinary Centers of America Inc.
Bob Antin or Tom Fuller, 310/392-9599
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