VCA Inc. (NASDAQ:WOOF), a leading animal
healthcare company in the United States and Canada, today reported
financial results for the second quarter ended June 30, 2017, as
follows: revenue increased 13.7% to a second quarter record of
$743.1 million; gross profit increased 12.9% to $185.1 million;
operating income increased 7.8% to $125.1 million; net income
increased 5.7% to $67.7 million; and diluted earnings per common
share increased 5.1% to $0.82. Excluding transaction expenses
related to the proposed acquisition of VCA by Mars, Incorporated
(“Mars”), and acquisition-related amortization expense, our results
for this quarter are as follows: Non-GAAP operating income
increased 11.8% to $140.9 million; Non-GAAP net income increased
11.0% to $78.6 million; and Non-GAAP diluted earnings per common
share increased 10.3% to $0.96. Our results for the prior-year
quarter included transaction expenses related to the acquisition of
Companion Animal Practices, North America (“CAPNA”) and debt
retirement costs, detailed in the supplemental schedules of this
press release.
We also reported our financial results for the six months ended
June 30, 2017 as follows: revenue increased 16.8% to $1.4 billion;
gross profit increased 12.9% to $339.6 million; operating income
increased 9.3% to $220.9 million; net income increased 7.7% to
$118.8 million; and diluted earnings per common share increased
7.4% to $1.45. Excluding acquisition-related amortization expense,
transaction expenses related to the proposed acquisition of VCA by
Mars, our financial results for the six months ended June 30, 2017,
on a Non-GAAP basis, are as follows: gross profit increased 13.7%
to $359.3 million; operating income increased 13.7% to $251.5
million; net income increased 12.1% to $139.5 million; and Non-GAAP
diluted earnings per common share increased 11.1% to $1.70.
Bob Antin, Chairman and CEO, stated, “We had a good quarter
highlighted by 10.3% growth in our adjusted diluted earnings per
common share. We continue to experience organic revenue
growth and increasing gross margins in both our core Animal
Hospital and Laboratory businesses.” Bob Antin added, “On a
personal basis, it’s been a great pleasure to have achieved such
excellent growth over the past 30 years, while at the same time
working alongside many great people, including my two co-founders,
Art Antin and Neil Tauber, as well as Tom Fuller, our chief
financial officer, and Todd Tams, our chief medical officer, who
have been with VCA since the beginning. In addition to
providing consistent growth and returns to our shareholders, VCA
has established itself as a leading provider of petcare, with an
incredible group of people that have dedicated themselves to
creating a better world for pets.
“Animal Hospital revenue in the second quarter increased 16.4%,
to $628.8 million, driven by acquisitions made during the past 12
months and same-store revenue growth of 5.2%. Our same-store
gross profit margin increased 80 basis points to 18.6%, and our
total gross margin increased 40 basis points to 17.9%. Excluding
acquisition-related amortization expense, both our Non-GAAP
same-store gross profit margin and Non-GAAP Animal Hospital total
gross profit margin increased 40 basis points to 19.4%. During the
second quarter, we acquired nine independent animal hospitals which
had historical combined annual revenue of $26.7 million.
“Our Laboratory internal revenue in the second quarter increased
4.6% to $117.2 million; laboratory gross profit margin increased 10
basis points to 54.1% and operating margin increased 20 basis
points to 45.6%. Excluding acquisition-related amortization
expense, Non-GAAP Laboratory gross profit increased 10 basis points
to 54.5%; and Non-GAAP Laboratory operating margin increased 10
basis points to 45.9%.”
Non-GAAP Financial Measures
We believe investors’ understanding of our total performance is
enhanced by disclosing Non-GAAP financial measures including
Non-GAAP net income, Non-GAAP gross profit, Non-GAAP operating
income and Non-GAAP diluted earnings per common share. We define
these adjusted measures as the reported amounts, adjusted to
exclude certain significant items and amortization of intangibles
acquired in acquisitions.
Management believes these adjusted measures are useful to
management and investors in evaluating the Company's operational
performance and their use provides an additional tool for
evaluating the Company's operating results and trends. As a
result, these Non-GAAP financial measures help to provide
meaningful comparisons of our overall performance from one
reporting period to another and meaningful assessments of related
trends.
There is a material limitation associated with the use of these
Non-GAAP financial measures: our adjusted measures exclude the
impact of these significant items, and as a result, our computation
of adjusted diluted earnings per common share does not depict
diluted earnings per common share in accordance with GAAP.
To compensate for the limitations in the Non-GAAP financial
measures discussed above, our disclosures provide a complete
understanding of all adjustments found in Non-GAAP financial
measures, and we reconcile the Non-GAAP financial measures to the
GAAP financial measures in the attached financial schedules titled
“Supplemental Operating Data.”
Forward-Looking Statements
We have included herein statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We generally identify
forward-looking statements in this document using words like
“believe,” “intend,” “expect,” “estimate,” “may,” “plan,” “should,”
“could,” “forecast,” “looking ahead,” “possible,” “will,”
“project,” “contemplate,” “anticipate,” “predict,” “potential,”
“continue,” or similar expressions. You may find some of these
statements below and elsewhere in this document. These
forward-looking statements are not historical facts and are
inherently uncertain and outside of our control. Any or all of our
forward-looking statements in this document may turn out to be
incorrect. They can be affected by inaccurate assumptions we might
make, or by known or unknown risks and uncertainties. Many factors
mentioned in our discussion in this document will be important in
determining future results. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary
materially. Many factors could cause actual future events to differ
materially from the forward-looking statements in this document,
including but not limited to: (i) the risk that the proposed
transaction with Mars may not be completed in a timely manner or at
all, which may adversely affect the Company’s business and the
price of the common stock of the Company; (ii) the failure to
satisfy or obtain waivers of the conditions to the consummation of
the proposed transaction with Mars, including the receipt of
certain governmental and regulatory approvals; (iii) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the proposed transaction with Mars;
(iv) the effect of the announcement or pendency of the
proposed transaction on the Company’s business relationships,
operating results and business generally; (v) risks that the
proposed transaction disrupts current plans and operations of the
Company, including the risk of adverse reactions or changes to
business relationships with customers, suppliers and other business
partners of the Company; (vi) potential difficulties in the
hiring or retention of employees of the Company as a result of the
proposed transaction; (vii) risks related to diverting
management’s attention from the Company’s ongoing business
operations; (viii) potential litigation relating to the
proposed transaction with Mars; (ix) unexpected costs, charges
or expenses resulting from the proposed transaction;
(x) competitive responses to the proposed transaction; and
(xi) legislative, regulatory and economic developments. The
foregoing list of factors is not exclusive. Additional risks and
uncertainties that could affect the Company’s financial and
operating results are included under the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and elsewhere in the Company’s most
recent Annual Report on Form 10-K for the year ended December 31,
2016 filed with the Securities and Exchange Commission (the “SEC”)
on February 28, 2017, and the Company’s more recent reports filed
with the SEC. The Company can give no assurance that the conditions
to the proposed transaction will be satisfied, or that it will
close within the anticipated time period. Investors and security
holders are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on
which statements were made. Except as required by applicable law,
the Company undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise.
About VCA Inc.
We own, operate and manage the largest networks of freestanding
veterinary hospitals and veterinary-exclusive clinical laboratories
in the country. We also supply diagnostic imaging equipment to the
veterinary industry.
VCA Inc. |
Condensed, Consolidated Income
Statements |
(Unaudited) |
(In thousands, except per share
amounts) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue: |
|
|
|
|
|
|
|
|
Animal
hospital |
|
$ |
628,798 |
|
|
$ |
540,376 |
|
|
$ |
1,196,979 |
|
|
$ |
998,999 |
|
Laboratory |
|
117,201 |
|
|
112,060 |
|
|
228,349 |
|
|
218,787 |
|
All
other |
|
22,533 |
|
|
23,397 |
|
|
45,102 |
|
|
42,810 |
|
Intercompany |
|
(25,400 |
) |
|
(22,344 |
) |
|
(49,047 |
) |
|
(43,668 |
) |
|
|
743,132 |
|
|
653,489 |
|
|
1,421,383 |
|
|
1,216,928 |
|
|
|
|
|
|
|
|
|
|
Direct costs |
|
558,039 |
|
|
489,541 |
|
|
1,081,822 |
|
|
916,200 |
|
|
|
|
|
|
|
|
|
|
Gross profit: |
|
|
|
|
|
|
|
|
Animal
hospital |
|
112,559 |
|
|
94,679 |
|
|
198,869 |
|
|
168,096 |
|
Laboratory |
|
63,424 |
|
|
60,547 |
|
|
123,017 |
|
|
117,263 |
|
All
other |
|
9,356 |
|
|
8,917 |
|
|
18,042 |
|
|
15,827 |
|
Intercompany |
|
(246 |
) |
|
(195 |
) |
|
(367 |
) |
|
(458 |
) |
|
|
185,093 |
|
|
163,948 |
|
|
339,561 |
|
|
300,728 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense: |
|
|
|
|
|
|
|
|
Animal
hospital |
|
16,745 |
|
|
14,277 |
|
|
34,356 |
|
|
26,362 |
|
Laboratory |
|
9,975 |
|
|
9,702 |
|
|
19,881 |
|
|
19,998 |
|
All
other |
|
7,512 |
|
|
6,022 |
|
|
14,152 |
|
|
11,321 |
|
Corporate |
|
25,544 |
|
|
18,189 |
|
|
49,788 |
|
|
40,637 |
|
|
|
59,776 |
|
|
48,190 |
|
|
118,177 |
|
|
98,318 |
|
|
|
|
|
|
|
|
|
|
Net loss (gain) on sale
or disposal of assets |
|
230 |
|
|
(271 |
) |
|
480 |
|
|
292 |
|
Operating income |
|
125,087 |
|
|
116,029 |
|
|
220,904 |
|
|
202,118 |
|
Interest expense,
net |
|
10,169 |
|
|
7,867 |
|
|
19,196 |
|
|
14,962 |
|
Debt retirement
costs |
|
— |
|
|
1,600 |
|
|
— |
|
|
1,600 |
|
Other income |
|
(280 |
) |
|
(600 |
) |
|
(582 |
) |
|
(864 |
) |
Income before provision
for income taxes |
|
115,198 |
|
|
107,162 |
|
|
202,290 |
|
|
186,420 |
|
Provision for income
taxes |
|
44,774 |
|
|
40,736 |
|
|
79,413 |
|
|
72,272 |
|
Net income |
|
70,424 |
|
|
66,426 |
|
|
122,877 |
|
|
114,148 |
|
Net income attributable
to noncontrolling interests |
|
2,712 |
|
|
2,376 |
|
|
4,072 |
|
|
3,871 |
|
Net income attributable
to VCA Inc. |
|
$ |
67,712 |
|
|
$ |
64,050 |
|
|
$ |
118,805 |
|
|
$ |
110,277 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.82 |
|
|
$ |
0.78 |
|
|
$ |
1.45 |
|
|
$ |
1.35 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding for diluted earnings per share |
|
82,228 |
|
|
81,729 |
|
|
82,204 |
|
|
81,630 |
|
VCA Inc. |
Condensed, Consolidated Balance
Sheets |
(Unaudited) |
(In thousands) |
|
|
|
June 30, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
119,052 |
|
|
$ |
81,409 |
|
Trade
accounts receivable, net |
|
86,323 |
|
|
85,593 |
|
Inventory |
|
56,541 |
|
|
57,590 |
|
Prepaid
expenses and other |
|
42,721 |
|
|
44,752 |
|
Prepaid
income taxes |
|
— |
|
|
11,705 |
|
Total
current assets |
|
304,637 |
|
|
281,049 |
|
Property and equipment,
net |
|
656,362 |
|
|
613,224 |
|
Other assets: |
|
|
|
|
Goodwill |
|
2,264,265 |
|
|
2,164,422 |
|
Other
intangible assets, net |
|
207,158 |
|
|
212,577 |
|
Notes
receivable |
|
2,196 |
|
|
2,147 |
|
Other |
|
103,107 |
|
|
99,909 |
|
Total
assets |
|
$ |
3,537,725 |
|
|
$ |
3,373,328 |
|
Liabilities and Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Current
portion of long-term obligations |
|
$ |
49,347 |
|
|
$ |
38,320 |
|
Accounts
payable |
|
57,231 |
|
|
68,587 |
|
Accrued
payroll and related liabilities |
|
96,072 |
|
|
97,806 |
|
Income
tax payable |
|
4,732 |
|
|
— |
|
Other
accrued liabilities |
|
93,053 |
|
|
91,783 |
|
Total
current liabilities |
|
300,435 |
|
|
296,496 |
|
Long-term obligations,
net |
|
1,325,411 |
|
|
1,309,397 |
|
Deferred income taxes,
net |
|
148,368 |
|
|
142,535 |
|
Other liabilities |
|
47,472 |
|
|
44,560 |
|
Total
liabilities |
|
1,821,686 |
|
|
1,792,988 |
|
Redeemable
noncontrolling interests |
|
10,558 |
|
|
11,615 |
|
VCA Inc. stockholders’
equity: |
|
|
|
|
Common
stock |
|
81 |
|
|
81 |
|
Additional paid-in capital |
|
40,985 |
|
|
32,157 |
|
Retained
earnings |
|
1,603,196 |
|
|
1,484,391 |
|
Accumulated other comprehensive loss |
|
(37,075 |
) |
|
(45,406 |
) |
Total VCA
Inc. stockholders’ equity |
|
1,607,187 |
|
|
1,471,223 |
|
Noncontrolling
interests |
|
98,294 |
|
|
97,502 |
|
Total
equity |
|
1,705,481 |
|
|
1,568,725 |
|
Total
liabilities and equity |
|
$ |
3,537,725 |
|
|
$ |
3,373,328 |
|
VCA Inc. |
Condensed, Consolidated Statements of Cash
Flows |
(Unaudited) |
(In thousands) |
|
|
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
Net
income |
|
$ |
122,877 |
|
|
$ |
114,148 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
60,920 |
|
|
46,978 |
|
Amortization of debt issue costs |
|
767 |
|
|
865 |
|
Provision
for uncollectible accounts |
|
4,319 |
|
|
2,891 |
|
Debt
retirement costs |
|
— |
|
|
1,600 |
|
Net loss
on sale or disposal of assets |
|
480 |
|
|
292 |
|
Share-based compensation |
|
7,993 |
|
|
9,104 |
|
Excess
tax benefits from share-based compensation |
|
— |
|
|
(1,421 |
) |
Other |
|
(1,332 |
) |
|
6,665 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Trade
accounts receivable |
|
(5,318 |
) |
|
(7,065 |
) |
Inventory, prepaid expense and other assets |
|
1,287 |
|
|
(15,607 |
) |
Accounts
payable and other accrued liabilities |
|
8,777 |
|
|
5,889 |
|
Accrued
payroll and related liabilities |
|
(1,936 |
) |
|
2,817 |
|
Income
taxes |
|
16,449 |
|
|
23,557 |
|
Net cash
provided by operating activities |
|
215,283 |
|
|
190,713 |
|
Cash flows from
investing activities: |
|
|
|
|
Business
acquisitions, net of cash acquired |
|
(123,852 |
) |
|
(540,878 |
) |
Property
and equipment additions |
|
(54,638 |
) |
|
(58,814 |
) |
Proceeds
from sale of assets |
|
1,747 |
|
|
282 |
|
Other |
|
(7,900 |
) |
|
(4,924 |
) |
Net cash
used in investing activities |
|
(184,643 |
) |
|
(604,334 |
) |
Cash flows from
financing activities: |
|
|
|
|
Repayment
of long-term obligations |
|
(58,259 |
) |
|
(1,256,250 |
) |
Proceeds
from issuance of long-term obligations |
|
— |
|
|
1,255,000 |
|
Proceeds
from revolving credit facility |
|
70,000 |
|
|
435,000 |
|
Payment
of financing costs |
|
— |
|
|
(3,829 |
) |
Distributions to noncontrolling interest partners |
|
(2,333 |
) |
|
(2,554 |
) |
Proceeds
from formation of noncontrolling interests |
|
335 |
|
|
— |
|
Purchase
of noncontrolling interests |
|
(1,401 |
) |
|
(3,730 |
) |
Proceeds
from issuance of common stock under stock incentive plans |
|
90 |
|
|
1,122 |
|
Excess
tax benefits from share-based compensation |
|
— |
|
|
1,421 |
|
Stock
repurchases |
|
(129 |
) |
|
(843 |
) |
Other |
|
(1,479 |
) |
|
(1,233 |
) |
Net cash
provided by financing activities |
|
6,824 |
|
|
424,104 |
|
Effect of currency
exchange rate changes on cash and cash equivalents |
|
179 |
|
|
313 |
|
Increase in cash and
cash equivalents |
|
37,643 |
|
|
10,796 |
|
Cash and cash
equivalents at beginning of period |
|
81,409 |
|
|
98,888 |
|
Cash and cash
equivalents at end of period |
|
$ |
119,052 |
|
|
$ |
109,684 |
|
VCA Inc. |
Supplemental Operating Data |
(Unaudited - In thousands, except per share
amounts) |
|
Table
#1 |
|
|
|
|
|
|
|
|
Reconciliation
of net income attributable to |
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
VCA Inc., to Non-GAAP net income attributable |
|
|
to VCA Inc. (1) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Net income attributable
to VCA Inc. |
|
$ |
67,712 |
|
|
$ |
64,050 |
|
|
$ |
118,805 |
|
|
$ |
110,277 |
|
Adjustments to other long-term liabilities, net of tax (2) |
|
— |
|
|
— |
|
|
— |
|
|
2,040 |
|
Discrete
tax items (3) |
|
— |
|
|
— |
|
|
— |
|
|
1,045 |
|
Transaction costs related to the CAPNA acquisition, net of tax
(4) |
|
— |
|
|
141 |
|
|
— |
|
|
728 |
|
Debt
retirement costs, net of tax (5) |
|
— |
|
|
974 |
|
|
— |
|
|
974 |
|
Transaction costs related to the Mars transaction (6) |
|
4,468 |
|
|
— |
|
|
7,851 |
|
|
— |
|
Acquisitions related amortization, net of tax (1) |
|
6,411 |
|
|
5,628 |
|
|
12,876 |
|
|
9,419 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to VCA Inc. |
|
$ |
78,591 |
|
|
$ |
70,793 |
|
|
$ |
139,532 |
|
|
$ |
124,483 |
|
|
|
|
|
|
|
|
|
|
Table
#2 |
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
Reconciliation
of diluted earnings per share to |
|
|
Non-GAAP diluted earnings per share (1) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.82 |
|
|
$ |
0.78 |
|
|
$ |
1.45 |
|
|
$ |
1.35 |
|
Adjustments to other long-term liabilities, net of tax (2) |
|
— |
|
|
— |
|
|
— |
|
|
0.02 |
|
Discrete
tax items (3) |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Transaction costs related to the CAPNA acquisition, net of tax
(4) |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Debt
retirement costs, net of tax (5) |
|
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
Transaction costs related to the Mars transaction (6) |
|
0.05 |
|
|
— |
|
|
0.10 |
|
|
— |
|
Acquisitions related amortization, net of tax (1) |
|
0.08 |
|
|
0.07 |
|
|
0.16 |
|
|
0.12 |
|
Non-GAAP diluted
earnings per share (7) |
|
$ |
0.96 |
|
|
$ |
0.87 |
|
|
$ |
1.70 |
|
|
$ |
1.53 |
|
|
|
|
|
|
|
|
|
|
Shares used for
computing diluted earnings per share |
|
82,228 |
|
|
81,729 |
|
|
82,204 |
|
|
81,630 |
|
|
|
|
|
|
|
|
|
|
Table
#3 |
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
Reconciliation
of consolidated gross profit to |
|
|
Non-GAAP consolidated gross profit (1) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Consolidated gross
profit |
|
$ |
185,093 |
|
|
$ |
163,948 |
|
|
$ |
339,561 |
|
|
$ |
300,728 |
|
Acquisitions related amortization (1) |
|
9,606 |
|
|
9,187 |
|
|
19,757 |
|
|
15,415 |
|
Non-GAAP consolidated
gross profit |
|
$ |
194,699 |
|
|
$ |
173,135 |
|
|
$ |
359,318 |
|
|
$ |
316,143 |
|
Non-GAAP consolidated
gross profit margin |
|
26.2 |
% |
|
26.5 |
% |
|
25.3 |
% |
|
26.0 |
% |
|
|
|
|
|
|
|
|
|
VCA Inc. |
Supplemental Operating Data
(cont) |
(Unaudited - In thousands, except per share
amounts) |
|
Table
#4 |
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
Reconciliation
of consolidated operating income to |
|
|
Non-GAAP consolidated operating income (1) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
Consolidated operating
income |
|
$ |
125,087 |
|
|
$ |
116,029 |
|
|
$ |
220,904 |
|
|
$ |
202,118 |
|
Adjustments to other long-term liabilities (2) |
|
— |
|
|
— |
|
|
— |
|
|
1,954 |
|
Transaction costs related to the CAPNA acquisition (4) |
|
— |
|
|
231 |
|
|
— |
|
|
1,197 |
|
Transaction costs related to the Mars transaction (6) |
|
4,468 |
|
|
— |
|
|
7,851 |
|
|
— |
|
Acquisitions related amortization (1) |
|
11,338 |
|
|
9,799 |
|
|
22,763 |
|
|
16,027 |
|
Non-GAAP consolidated
operating income |
|
$ |
140,893 |
|
|
$ |
126,059 |
|
|
$ |
251,518 |
|
|
$ |
221,296 |
|
Non-GAAP consolidated
operating margin |
|
19.0 |
% |
|
19.3 |
% |
|
17.7 |
% |
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
_______________________________________________
(1) Management believes that investors'
understanding of our performance is enhanced by disclosing adjusted
measures as the reported amounts, adjusted to exclude certain
significant items and acquisition-related amortization. Non-GAAP
net income, Non-GAAP diluted earnings per common share, Non-GAAP
consolidated gross profit and Non-GAAP consolidated operating
income measures are not, and should not be viewed as substitutes
for U.S. generally accepted accounting principles (GAAP) net
income, its components and diluted earnings per share.
(2) In the first quarter of 2016, we
recorded a non-cash charge to adjust certain long-term liabilities
for $3.4 million, or $2.0 million net of tax. $2.0 million of this
amount relates to compensation and $1.4 million relates to interest
accretion.
(3) In the first quarter of 2016, we
recorded a tax adjustment to our income tax liabilities for $1.0
million.
(4) As of the second quarter of 2016, we
have recorded transaction costs of $1.2 million or $728,000 net of
tax related to our acquisition of CAPNA.
(5) In June of 2016, we incurred debt
retirement costs of $1.6 million, or $974,000 net of tax, in
connection with our new credit facility.
(6) As of the second quarter of 2017, we
have recorded transaction costs of $7.9 million related to the
proposed transaction with Mars.
(7) Amounts may not foot due to
rounding.
VCA Inc. |
Supplemental Operating Data
(cont) |
(Unaudited - In thousands, except per share
amounts) |
|
|
|
|
|
As of |
Table
#5 |
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
Selected
consolidated balance sheet data |
|
|
|
|
|
|
|
|
Long-term
obligations: |
|
|
|
|
|
|
|
|
Senior
term notes |
|
|
|
|
|
$ |
858,000 |
|
|
$ |
869,000 |
|
Revolving
credit |
|
|
|
|
|
440,000 |
|
|
400,000 |
|
Other
debt and capital leases |
|
|
|
|
|
82,689 |
|
|
85,415 |
|
Total long-term
obligations |
|
|
|
|
|
$ |
1,380,689 |
|
|
$ |
1,354,415 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
Table
#6 |
|
|
Selected
expense data |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Rent expense |
|
$ |
25,609 |
|
|
$ |
23,449 |
|
|
$ |
50,777 |
|
|
$ |
44,313 |
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization included |
|
|
|
|
|
|
|
|
in direct
costs: |
|
|
|
|
|
|
|
|
Animal
hospital |
|
$ |
25,196 |
|
|
$ |
21,190 |
|
|
$ |
50,575 |
|
|
$ |
38,714 |
|
Laboratory |
|
3,139 |
|
|
2,803 |
|
|
6,011 |
|
|
5,551 |
|
All
other |
|
124 |
|
|
767 |
|
|
698 |
|
|
1,519 |
|
Intercompany |
|
(704 |
) |
|
(597 |
) |
|
(1,390 |
) |
|
(1,183 |
) |
|
|
$ |
27,755 |
|
|
$ |
24,163 |
|
|
$ |
55,894 |
|
|
$ |
44,601 |
|
Depreciation and
amortization included in selling, |
|
|
|
|
|
|
|
|
general
and administrative expense |
|
2,764 |
|
|
1,526 |
|
|
5,026 |
|
|
2,377 |
|
Total depreciation and
amortization |
|
$ |
30,519 |
|
|
$ |
25,689 |
|
|
$ |
60,920 |
|
|
$ |
46,978 |
|
|
|
|
|
|
|
|
|
|
Share-based
compensation included in direct costs: |
|
|
|
|
|
|
|
|
Laboratory |
|
$ |
192 |
|
|
$ |
181 |
|
|
$ |
381 |
|
|
$ |
358 |
|
|
|
|
|
|
|
|
|
|
Share-based
compensation included in |
|
|
|
|
|
|
|
|
selling,
general and administrative expense: |
|
|
|
|
|
|
|
|
Animal
hospital |
|
864 |
|
|
724 |
|
|
1,696 |
|
|
1,508 |
|
Laboratory |
|
362 |
|
|
407 |
|
|
703 |
|
|
836 |
|
All
other |
|
159 |
|
|
147 |
|
|
313 |
|
|
300 |
|
Corporate |
|
2,454 |
|
|
2,739 |
|
|
4,900 |
|
|
6,102 |
|
|
|
3,839 |
|
|
4,017 |
|
|
7,612 |
|
|
8,746 |
|
Total share-based
compensation |
|
$ |
4,031 |
|
|
$ |
4,198 |
|
|
$ |
7,993 |
|
|
$ |
9,104 |
|
Contact: Tomas Fuller
Chief Financial Officer
(310) 571-6505
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