VCA Antech Reports Fourth Quarter Earnings
Animal healthcare company VCA Antech Inc. of Los Angeles, Calif. has reported that financial results for the fourth quarter ended Dec. 31, 2009 show revenue increased 4 percent to $315.2 million, net income decreased 1.3 percent to $25.4 million and diluted earnings per common share was $0.29.
Results for the year ended Dec. 31, 2009 include the following: revenue increased 2.9 percent to a record $1.31 billion; gross profit increased slightly to $343.0 million; net income decreased 1.2 percent to $131.4 million; and diluted earnings per common share was at $1.53. Twelve-month results include a charge, net of the recovery in the fourth quarter, of $2 million or $0.02 per diluted share related to abandonment of an internally developed software project. Excluding this item, adjusted net income increased slightly to $133.5 million and adjusted diluted earnings per common share remained flat at $1.55. Bob Antin, chairman and CEO, said the company faced challenges in 2009. “As with most companies, the economy negatively impacted our revenue growth rates throughout the year. While the economy continues to put pressure on us, we have seen a relative improvement in the fourth quarter in comparison to the previous three quarters,” he said. Animal hospital revenue in the fourth quarter increased 3.6 percent to $237.2 million driven by acquisitions made in the past 12 months. Lower margins at acquired hospitals, combined with a decline in same-store margins from a decrease in revenue, caused the organization’s animal hospital gross margin to decrease to 15.3 percent from 17.5 percent, he said.
The same-store revenue declined by 2.2 percent, and same-store gross profit margin declined to 15.5 percent from 17.8 percent, the company said. In addition, nine animal hospitals were acquired during the quarter with historical combined annual revenue of $23.9 million.
Laboratory revenue in the fourth quarter increased 2 percent to $70.7 million driven predominantly by internal revenue growth of 1.4 percent. The company said it improved laboratory gross profit by 80 basis points to 43.1 percent and the operating margin was up slightly to 34.5 percent.
“We continued our integration of Sound Technologies with Eklin Medical Systems during the quarter,” Antin said. Sound-Eklin revenue increased 28.4 percent during the quarter mainly from the addition of the Eklin business.
Gross profit margin declined slightly to 34.4 percent because of a change in product mix and the operating margin declined from 13.4 percent to 6.7 percent because of the incremental general and administrative costs taken on with the Eklin merger at the beginning of the third quarter of this year, Antin said.