LOS ANGELES, California, July 28, 2011 - VCA Antech, Inc. (NASDAQ NM SYMBOL: WOOF), a leading animal healthcare company in the United States, today reported financial results for the second quarter ended June 30, 2011 as follows: revenue increased 6.3% to a second quarter record of $376.1 million, gross profit increased 3.6% to $96.8 million; adjusted operating income increased 4.7% to $70.1 million; adjusted net income increased 3.5% to $39.6 million and adjusted diluted earnings per common share increased 2.3% to $0.45.
For the three and six months ended June 30, 2011 and 2010 diluted earnings per share were $0.45 and $0.34 and $0.78 and $0.70, respectively. The second quarter of 2010 included a non-cash charge of $14.5 million, or $8.9 million after tax for future estimated executive compensation. Excluding this charge, adjusted diluted earnings per share for the three and six months ended June 30, 2010 were $0.44 and $0.81, respectively.
Bob Antin, Chairman and CEO, stated, "We had a very active quarter with the acquisition of BrightHeart Veterinary Centers which operates nine animal hospitals with annual revenues of approximately $53.0 million, eight of which focus on the delivery of specialty and emergency medicine and a general practice in Charlotte, North Carolina. We have enjoyed a long relationship with the management of BrightHeart and believe they will be an excellent addition to our strategic focus of providing the highest level of service in the communities we serve.
"As previously announced, VCA Antech entered into an agreement to purchase MediMedia Animal Health, LLC, which operates under the name VetStreet. VetStreet is the nation's largest provider of online communications, professional education and marketing solutions to the veterinary community. VetStreet is a rapidly growing company that has relationships with approximately 5,000 animal hospitals which facilitates the veterinarians' ability to communicate to more than 20 million pet owners. We believe that VetStreet will enhance VCA Antech's ability to serve the community of veterinary professionals and provide them a more effective channel to educate and communicate with their clients.
"Animal Hospital revenue in the second quarter increased 8.9% to $291.3 million driven by acquisitions made in the past twelve months. While same-store revenues declined 1.9%, our gross margins of 18.2% remained relatively flat compared to the prior year quarter. As a result we are pleased in our ability to successfully manage expenses. Our Animal Hospital operating margin likewise remained relatively flat at 16.1% compared to the prior year quarter. During the quarter, we acquired four animal hospitals which had historical combined annual revenue of $7.0 million.
"Laboratory revenue in the second quarter increased 1.7% due to organic growth to $84.4 million. Our Laboratory gross profit margin and operating margin were 48.2% and 40.1%, respectively, a decline of 70 bps and 90 bps, compared to the same period last year.
"Medical Technology revenue in the second quarter increased 11.0% to $16.2 million and gross profit increased 10.2% to $4.8 million. Gross profit margin was 29.6%, essentially flat compared to the prior year quarter. The operating margin increased to 7.4% from 6.4% as SG&A expenses decreased to 22.1% from 23.3%."
We will discuss our company's second quarter 2011 financial results during a conference call today, July 28th, 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 by dialing (877) 293-5492. 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 this forward-looking information. Our Animal Hospital and Laboratory revenues have been materially adversely impacted by the current economic recession. We are unable to forecast accurately the timing or degree of any economic recovery. Further, trends in the general economy may not be reflected in our business at the same time or in the same degree as in the general economy. The timing and degree of any economic recovery, and its impact on our business, are among the important factors that could cause actual results to differ from this forward-looking information. Among other factors that could cause our actual results to differ from this forward-looking information are: an increase in the level of direct costs or a failure to increase revenue at a level necessary to maintain our expected operating margins, a material adverse change in our financial condition or operations; the level of selling, general and administrative costs; the effects of our recent and future acquisitions (including the planned consummation of our VetStreet acquisition) and our ability to effectively manage our growth and achieve operating synergies; a decline in demand for any 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 risks are discussed in our Report on Form 10-K for the year ended December 31, 2010 and our other filings with the Securities and Exchange Commission 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.
Chief Financial Officer