LOS ANGELES, California, April 23, 2008 - VCA Antech, Inc. (NASDAQ NM SYMBOL: WOOF), a leading animal healthcare company in the United States, today reported financial results for the first quarter ended March 31, 2008, as follows: revenue increased 16.1% to a first quarter record of $307.8 million; gross profit increased 9.4% to $83.0 million; operating income increased 10.5% to $60.0 million; net income increased 10.2% to $31.2 million; and diluted earnings per share increased 9.1% to $0.36.
Bob Antin, Chairman and CEO, stated, "I am pleased with our company's performance in the first quarter of 2008. Faced with a challenging economic environment and the unusually high internal revenue growth experienced in the prior year, we delivered strong operating results through our continued focus on controlling costs. We continued our very successful acquisition program, acquiring 21 animal hospitals in the first quarter with annual revenues of over $45.0 million."
"Laboratory revenue in the first quarter increased 4.3% to $76.7 million driven primarily by internal revenue growth of 4.1%. Although our laboratory gross margin declined modestly to 48.7% in 2008 compared to 48.9% in the prior year, our operating margin remained constant at 42.2%."
"Animal hospital revenue in the first quarter increased 20.8% to $226.1 million driven by acquisitions, including Healthy Pet Corp. acquired on June 1, 2007, and same-store revenue growth of 1.9%. Our same-store animal hospital gross margin decreased slightly to 19.0% compared to 19.1% in the prior year. Consolidated animal hospital gross margin decreased to 18.2% in 2008 compared to 19.0% in 2007 due to lower margins at acquired hospitals. With the improved leverage on our selling, general and administrative costs, our operating margin decreased only slightly to 15.9% compared to 16.0% in the prior year."
2008 Financial Guidance
We reaffirm our 2008 financial guidance as follows:
We will discuss our company's first quarter 2008 financial results during a conference call today, April 23, 2008, at 4:30 p.m. Eastern Time. You can access a live broadcast of the call by visiting our website at http://investor.vcaantech.com. You can also access the call via telephone by dialing (877) 591-4949. Interested parties should call at least 10 minutes prior to the start of the call to register.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may and likely will differ materially from the guidance provided in this release. Among the important factors that could cause actual results to differ are: a material adverse change in our financial condition or operations; the impact of adverse trends in the general economy on the rate of our laboratory internal revenue growth and animal hospital same-store revenue growth; the level of direct costs and our ability to maintain revenue at a level necessary to maintain expected operating margins; the level of selling, general and administrative costs; the effects of our recent acquisitions and our ability to effectively manage our growth and achieve operating synergies; a decline in demand for some of our products and services; any disruption in our information technology systems or transportation networks; the effects of competition; any impairment in the carrying value of our goodwill and other intangible assets; changes in prevailing interest rates; our ability to service our debt; and general economic conditions. These and other risk factors are discussed in our Report on Form 10-K for the year ended December 31, 2007 and the reader is directed to these statements for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements.
We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, and we supply diagnostic imaging equipment to the veterinary industry.
Tomas Fuller, Chief Financial Officer