VCA Inc.
Jul 29, 2015


LOS ANGELES, California, July 29, 2015 - 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, 2015, as follows: revenue increased 12.1% to a second quarter record of $548.8 million; gross profit increased 17.0% to $140.8 million; operating income increased 21.6% to $97.2 million; net income increased 19.1% to $54.3 million and diluted earnings per common share increased 27.5% to $0.65. Non-GAAP diluted earnings per common share, which excludes acquisition-related amortization, increased 27.3% to $0.70.

We also reported our financial results for the six months ended June 30, 2015, as follows: revenue increased 11.6% to $1.0 billion, gross profit increased 14.8% to $254.7 million, operating income increased 17.8% to $166.3 million, net income increased 16.3% to $92.6 million, and diluted earnings per common share increased 24.7% to $1.11. Our financial results for the six months ended June 30, 2015, on a Non-GAAP basis, are as follows: gross profit increased 14.6% to $266.0 million, operating income increased 17.3% to $178.0 million, net income increased 15.8% to $99.5 million, and Non-GAAP diluted earnings per common share increased 25.0% to $1.20.

Bob Antin, Chairman and CEO, stated, "We had a great quarter. Our Animal Hospital business segment same-store revenue growth rate continues to accelerate, driven once again by an increase in both the number of orders and the average revenue per order. Our Laboratory business segment experienced 7.3% internal revenue growth resulting in a 220 basis point increase in gross profit margin. Accordingly, we remain very optimistic with respect to our results for the full year ended December 2015.

"Animal Hospital revenue in the current quarter increased 12.6%, to $435.4 million, driven by acquisitions made during the past 12 months and same-store revenue growth of 6.0%. Our same-store gross profit margin increased to 17.3%, from 16.6% and our total gross margin increased to 16.9%, from 16.4% in the prior-year quarter. During the quarter, we acquired 12 independent animal hospitals which had historical combined annual revenue of $30.5 million.

"Laboratory internal revenue in the second quarter increased 7.3%, to $103.0 million. Our Laboratory gross profit margin increased to 53.4%, from 51.2% and our operating margin increased to 44.4%, from 42.5% in the prior-year quarter.

"During the quarter we repurchased 840,000 shares of our common stock for $43.9 million. Since the Board authorized our repurchase programs in April 2013, through the second quarter 2015, we have acquired 9.1 million shares for $365.7 million, including commissions. At the end of the second quarter, we have $159.5 million left in our authorization."

2015 Guidance

We are revising our guidance as follows:

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."

Conference Call

We will discuss our second quarter 2015 financial results during a conference call today, July 29th, at 9:00 a.m. Eastern Time. A live broadcast of the call may be accessed by visiting our website at The call may also be accessed by dialing (877) 293-5492. Interested parties should call at least ten minutes prior to the start of the call to register. Replay of the webcast will be available for ninety days by visiting the company's website.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Among the forward-looking statements in this press release are statements addressing our 2015 guidance and plans, expectations, future financial position and results of operation. These forward-looking statements are not historical facts and are inherently uncertain and out of our control. Any or all of our forward-looking statements in this press release may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Actual future results may vary materially. Among other factors that could cause our actual results to differ from this forward-looking information are: the continued effects of the economic uncertainty prevailing in regions in which we operate; our ability to execute on our growth strategy and to manage acquired operations; changes in demand for our products and services; fluctuations in our revenue adversely affecting our gross profit, operating income and margins; and the effects of the other factors discussed in our Annual Report on Form 10-K, Reports on Form 10-Q and our other filings with the SEC.

About VCA Inc.

We own, operate and manage the largest networks of freestanding veterinary hospitals and veterinary-exclusive clinical laboratories in the country, additionally we are the largest provider of online communication, professional education and marketing solutions to the veterinary community. We also supply diagnostic imaging equipment to the veterinary industry.

Tomas Fuller
Chief Financial Officer
(310) 571-6505