VCA Inc.
VCA INC (Form: 8-K, Received: 02/09/2017 08:07:33)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

_________________

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported): February 9, 2017

 

VCA Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware 001-16783   95-4097995
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)

 

12401 West Olympic Boulevard

Los Angeles, California 90064-1022

(Address of Principal Executive Offices)

 

(310) 571-6500

(Registrant's Telephone Number)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

|_|   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02:   Results of Operations and Financial Condition

 

On February 9, 2017, VCA Inc. issued a press release which included earnings for the fourth quarter and fiscal year 2016. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

 

Item 9.01:   Financial Statements, Pro Forma Financial Information and Exhibits

 

(c)   Exhibits

 

99.1 Press release dated February 9, 2017, regarding earnings for the fourth quarter and fiscal year 2016.

 

 

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

February 9, 2017 VCA Inc.  
     
     
     
  /s/ Tomas W. Fuller   
  By:  Tomas W. Fuller  
  Its:  Chief Financial Officer

 

 

 

 

 

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EXHIBIT INDEX

 

Exhibits

 

99.1 Press release dated February 9, 2017, regarding earnings for the fourth quarter and fiscal year 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit 99.1

 

 

VCA INC. REPORTS FOURTH QUARTER 2016 RESULTS

 

Revenue increased 20.5% to a fourth quarter record of $643.1 million
Gross profit increased 14.5% to $134.8 million
Operating income increased 16.3% to $77.2 million
Diluted earnings per common share decreased 35.9% to $0.50
Non-GAAP diluted earnings per common share increased 16.0% to $0.58

 

LOS ANGELES, California, February 9, 2017 - VCA Inc. (NASDAQ: WOOF) , a leading animal healthcare company in the United States and Canada, today reported financial results for the fourth quarter ended December 31, 2016, as follows: revenue increased 20.5% to a fourth quarter record of $643.1 million; gross profit increased 14.5% to $134.8 million; operating income increased 16.3% to $77.2 million; net income decreased 36.0% to $40.7 million; diluted earnings per common share decreased 35.9% to $0.50; and Non-GAAP diluted earnings per common share increased 16.0% to $0.58.

 

Our results for the prior-year quarter included a gain of $43.3 million, $26.4 million net of tax, or $0.32 per diluted common share related to the sale of our Vetstreet business. Excluding this item and acquisition-related amortization expense, our Non-GAAP net income increased 15.7% to $47.4 million and Non-GAAP diluted earnings per share increased 16.0% to $0.58.

 

We also reported our financial results for the twelve months ended December 31, 2016 as follows: revenue increased 18.0% to $2.5 billion; gross profit increased 16.1% to $592.1 million; operating income increased 17.2% to $386.3 million; net income decreased 0.9% to $209.2 million; and diluted earnings per common share remained flat at $2.56. Our financial results for the twelve months ended December 31, 2016, on a Non-GAAP basis, are as follows: gross profit increased 17.5% to $626.8 million; operating income increased 22.8% to $428.2 million; net income increased 20.4% to $236.3 million; and Non-GAAP diluted earnings per common share increased 21.4% to $2.89.

 

Our financial results for the twelve months ended December 31, 2015 included the aforementioned gain on the sale of our Vetstreet business and a business interruption insurance gain of $4.5 million, $2.8 million net of tax, or $0.03 per diluted common share.

 

Bob Antin, Chairman and CEO, stated, “We had a strong fourth quarter, which concluded another excellent year. We experienced solid organic revenue growth of 4.9% and 5.3% in our core Animal Hospital and Laboratory business segments, respectively.

 

“Animal Hospital revenue in the fourth quarter of 2016 increased 26.2% to $539.4 million driven by acquisitions made in the past twelve months and same-store revenue growth of 4.9%. Our same-store gross profit margin increased to 15.4%, from 14.3% and our total gross margin increased to 14.4% from 14.2% in the prior-year quarter. During the quarter, we acquired 22 independent animal hospitals, which had historical combined annual revenue of $73.1 million, bringing our year-to-date total (including CAPNA) to 127 independent animal hospitals with historical combined annual revenue of $397.0 million.

 

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“Our Laboratory internal revenue in the fourth quarter of 2016 increased 5.3% to $98.4 million driven by an increase in average revenue per requisition of 4.3% . Laboratory gross profit margin decreased slightly to 48.5% from 48.8% and Non-GAAP Laboratory operating margin increased to 39.1% from 38.4%.”

 

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.”

 

As previously announced on January 9, 2017, we entered into an Agreement and Plan of Merger with Mars, Incorporated (“Mars”) under which Mars will acquire all of the outstanding shares of VCA for $93 per share, or a total value of approximately $9.1 billion, including $1.4 billion in outstanding debt. The Boards of Directors of both companies have approved the transaction, which is subject to certain customary closing conditions including, among other things, VCA shareholder approval and customary regulatory approvals. We expect the transaction to close in Q3 2017.

 

 

Conference Call and Webcast

 

In light of the previously announced agreement with Mars, the previously scheduled earnings conference call and webcast with analysts and investors scheduled for February 9, 2017 has been cancelled. VCA does not intend to provide guidance for fiscal 2017.

 

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Forward-Looking Statements

 

This document contains forward-looking statements within the meaning of the securities laws with respect to the proposed transaction between VCA Inc. (the “Company”), Mars and certain subsidiaries of Mars. 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 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, including the adoption of the merger agreement by the stockholders of the Company and 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 merger agreement; (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 merger agreement or the proposed transaction; (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, 2015 filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2016, 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.

 

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Additional Information and Where to Find It

 

This document is being made in respect of the proposed transaction between the Company, Mars and certain subsidiaries of Mars. In connection with the proposed transaction, the Company filed a preliminary proxy statement on Schedule 14A with the SEC on February 3, 2017. Following the filing of the definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed transaction. The Company also plans to file with the SEC other documents regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO CAREFULLY READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) IN THEIR ENTIRETY AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED TRANSACTION. When completed, a definitive proxy statement and form of proxy will be mailed to the stockholders of the Company. The definitive proxy statement, the preliminary proxy statement and other relevant materials in connection with the proposed transaction (when they become available), and any other documents filed by the Company with the SEC, may be obtained free of charge at the SEC’s website (http://www.sec.gov) or through the investor relations section of the Company’s website (http://investor.vca.com).

 

Participants in Solicitation

 

This document does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities. The Company and its directors, executive officers and certain employees may be deemed to be participants in the solicitations of proxies from the Company’s stockholders with respect to the meeting of stockholders that will be held to consider the proposed transaction. Information about the persons who may, under the SEC rules, be considered to be participants in the solicitation of stockholders of the Company in connection with the proposed transaction, is set forth in the proxy statement for the Company’s 2016 Annual Meeting of Stockholders filed with the SEC on March 4, 2016. Stockholders may obtain additional information regarding the direct and indirect interests of any such persons who may, under the SEC rules, be considered to be participants in the solicitation of stockholders of the Company in connection with the proposed transaction, including the interests of the Company’s directors and executive officers in the proposed transaction, which may be different than those of the stockholders of the Company generally, by reading the proxy statement and other relevant documents regarding the proposed transaction when they become available, which the Company will file with the SEC. Copies of these documents (when they become available) may be obtained free of charge as described in the preceding paragraph.

 

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.

 

  Contact: Tomas Fuller
    Chief Financial Officer
    (310) 571-6505
     
  Source: VCA Inc.

 

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VCA Inc.

Condensed, Consolidated Income Statements

(Unaudited)

(In thousands, except per share amounts)

 

    Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2016   2015   2016   2015
Revenue:                
Animal hospital   $ 539,403     $ 427,544     $ 2,091,780     $ 1,697,870  
Laboratory     98,374       93,397       422,301       393,900  
All other     27,954       33,254       93,751       126,988  
Intercompany     (22,650 )     (20,475 )     (90,969 )     (85,083 )
      643,081       533,720       2,516,863       2,133,675  
                                 
Direct costs     508,322       416,024       1,924,799       1,623,604  
                                 
Gross profit:                                
Animal hospital     77,756       60,525       339,988       264,335  
Laboratory     47,689       45,609       219,158       201,702  
All other     10,126       12,128       34,874       46,702  
Intercompany     (812 )     (566 )     (1,956 )     (2,668 )
      134,759       117,696       592,064       510,071  
                                 
Selling, general and administrative expense:                                
Animal hospital     17,049       11,960       58,952       44,311  
Laboratory     10,253       10,181       39,979       38,075  
All other     7,533       9,481       24,918       33,569  
Corporate     22,228       18,630       80,875       68,040  
      57,063       50,252       204,724       183,995  
Business interruption insurance gain, net                       (4,523 )
Net loss on sale of assets     478       1,063       1,006       829  
Operating income     77,218       66,381       386,334       329,770  
Interest expense, net     8,191       5,680       32,453       21,076  
Debt retirement costs                 1,600        
Other expense (income)     83       271       (902 )     359  
Gain on sale of business, net           (43,306 )           (43,306 )
Income before provision for income taxes     68,944       103,736       353,183       351,641  
Provision for income taxes     26,468       39,582       135,780       135,543  
Net income     42,476       64,154       217,403       216,098  
Net income attributable to noncontrolling interests     1,788       559       8,207       5,049  
Net income attributable to VCA Inc.   $ 40,688     $ 63,595     $ 209,196     $ 211,049  
                                 
Diluted earnings per share   $ 0.50     $ 0.78     $ 2.56     $ 2.56  
                                 
Weighted-average shares outstanding for diluted earnings per share     81,811       81,461       81,725       82,414  

 

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VCA Inc.

Condensed, Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

    December 31,   December 31,
    2016   2015
Assets                
Current assets:                
Cash and cash equivalents   $ 81,409     $ 98,888  
Trade accounts receivable, net     85,593       76,634  
Inventory     57,590       51,523  
Prepaid expenses and other     44,752       30,521  
Prepaid income taxes     11,705       24,598  
Total current assets     281,049       282,164  
Property and equipment, net     613,224       507,753  
Other assets:                
Goodwill     2,164,422       1,517,650  
Other intangible assets, net     212,577       97,377  
Notes receivable, net     2,147       2,194  
Other     99,909       93,994  
Total assets   $ 3,373,328     $ 2,501,132  
Liabilities and Equity                
Current liabilities:                
Current portion of long-term obligations   $ 38,320     $ 33,623  
Accounts payable     68,587       52,337  
Accrued payroll and related liabilities     97,806       75,519  
Other accrued liabilities     91,783       70,828  
 Total current liabilities     296,496       232,307  
Long-term obligations, less current portion     1,309,397       832,718  
Deferred income taxes     142,535       131,478  
Other liabilities     44,560       36,084  
Total liabilities     1,792,988       1,232,587  
Redeemable noncontrolling interests     11,615       11,511  
VCA Inc. stockholders’ equity:                
Common stock     81       81  
Additional paid-in capital     32,157       19,708  
Retained earnings     1,484,391       1,275,207  
Accumulated other comprehensive loss     (45,406 )     (50,034 )
Total VCA Inc. stockholders’ equity     1,471,223       1,244,962  
Noncontrolling interests     97,502       12,072  
Total equity     1,568,725       1,257,034  
Total liabilities and equity   $ 3,373,328     $ 2,501,132  

 

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VCA Inc.

Condensed, Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

    Twelve Months Ended
    December 31,
    2016   2015
Cash flows from operating activities:                
Net income   $ 217,403     $ 216,098  
Adjustments to reconcile net income to net cash provided by operating activities:                
Gain on sale of business           (43,306 )
Depreciation and amortization     102,942       81,688  
Amortization of debt issue costs     1,652       1,741  
Provision for uncollectible accounts     8,306       8,401  
Debt retirement costs     1,600        
Net loss on sale or disposal of assets     1,006       829  
Share-based compensation     18,762       16,264  
Deferred income taxes     18,339       56,722  
Excess tax benefit from share-based compensation     (10,711 )     (11,089 )
Other     7,229       2,159  
Changes in operating assets and liabilities:                
Trade accounts receivable     (13,555 )     (28,720 )
Inventory, prepaid expense and other assets     (22,784 )     (9,716 )
Accounts payable and other accrued liabilities     16,124       10,812  
Accrued payroll and related liabilities     19,993       11,323  
Income taxes     23,525       4,339  
Net cash provided by operating activities     389,831       317,545  
Cash flows from investing activities:                
Business acquisitions, net of cash acquired     (697,673 )     (151,586 )
Investment in Vetstreet Inc.           (9,552 )
Property and equipment additions     (122,946 )     (95,234 )
Proceeds from sale of assets     1,729       6,762  
Proceeds from sale of business           48,000  
Other     (9,351 )     (2,042 )
Net cash used in investing activities     (828,241 )     (203,652 )
Cash flows from financing activities:                
Repayment of long-term obligations     (1,274,924 )     (35,017 )
Proceeds from issuance of long-term obligations     1,255,000        
Proceeds from revolving credit facility     555,000       97,000  
Repayment of revolving credit facility     (95,000 )      
Payment of financing costs     (3,817 )      
Distributions to noncontrolling interest partners     (6,134 )     (4,962 )
Purchase of noncontrolling interests     (4,552 )     (2,500 )
Proceeds from issuance of common stock under stock incentive plans     3,965       2,683  
Excess tax benefit from share-based compensation     10,711       11,089  
Stock repurchases     (17,219 )     (165,607 )
Other     (1,714 )     2,041  
Net cash provided by (used in) financing activities     421,316       (95,273 )
Effect of currency exchange rate changes on cash and cash equivalents     (385 )     (1,115 )
(Decrease) increase in cash and cash equivalents     (17,479 )     17,505  
Cash and cash equivalents at beginning of year     98,888       81,383  
Cash and cash equivalents at end of year   $ 81,409     $ 98,888  

 

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VCA Inc.

Supplemental Operating Data

(Unaudited - In thousands, except per share amounts)

 

Table #1                
Reconciliation of net income attributable to   Three Months Ended   Twelve Months Ended
VCA Inc. to Non-GAAP net income   December 31,   December 31,
attributable to VCA Inc. (1)   2016   2015   2016   2015
                 
Net income attributable to VCA Inc.   $ 40,688     $ 63,595     $ 209,196     $ 211,049  
Adjustments to Other Long-term liabilities, net of tax (2)                 2,040        
Discrete tax items (3)                 1,045        
Transaction costs related to the Mars Plan of Merger, net of tax (4)     464             464        
Transaction costs related to the CAPNA acquisition, net of tax (5)     26             843        
Debt retirement costs, net of tax (6)                 974        
Business interruption proceeds, net of tax (7)                       (2,752 )
Gain on sale of business, net of tax (8)           (26,356 )           (26,356 )
Acquisitions related amortization, net of tax (1)     6,254       3,774       21,703       14,239  
                                 
Non-GAAP net income attributable to VCA Inc.   $ 47,432     $ 41,013     $ 236,265     $ 196,180  

 

Table #2   Three Months Ended   Twelve Months Ended
Reconciliation of diluted earnings per share to   December 31,   December 31,
Non-GAAP diluted earnings per share (1)   2016   2015   2016   2015
                 
Diluted earnings per share   $ 0.50     $ 0.78     $ 2.56     $ 2.56  
Adjustments to Other Long-term liabilities, net of tax (2)                 0.02        
Discrete tax items (3)                 0.01        
Transaction costs related to the Mars Plan of Merger, net of tax (4)     0.01             0.01        
Transaction costs related to the CAPNA acquisition, net of tax (5)                 0.01        
Debt retirement costs, net of tax (6)                 0.01        
Business interruption proceeds, net of tax (7)                       (0.03 )
Gain on sale of business, net of tax (8)           (0.32 )           (0.32 )
Acquisitions related amortization, net of tax (1)     0.08       0.05       0.27       0.17  
                                 
Non-GAAP diluted earnings per share (9)   $ 0.58     $ 0.50     $ 2.89     $ 2.38  
Shares used for computing diluted earnings per share     81,811       81,461       81,725       82,414  

 

 

 

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VCA Inc.

Supplemental Operating Data (continued)

(Unaudited - In thousands, except per share amounts)

 

Table #3   Three Months Ended   Twelve Months Ended
Reconciliation of consolidated gross profit to   December 31,   December 31,
Non-GAAP consolidated gross profit (1)   2016   2015   2016   2015
                 
Consolidated gross profit   $ 134,759     $ 117,696     $ 592,064     $ 510,071  
Acquisitions related amortization (1)     9,918       6,140       34,702       23,153  
                                 
Non-GAAP consolidated gross profit   $ 144,677     $ 123,836     $ 626,766     $ 533,224  
Non-GAAP consolidated gross profit margin     22.5 %     23.2 %     24.9 %     25.0 %

 

Table #4   Three Months Ended   Twelve Months Ended
Reconciliation of consolidated operating income to   December 31,   December 31,
Non-GAAP consolidated operating income (1)   2016   2015   2016   2015
                 
Consolidated operating income   $ 77,218     $ 66,381     $ 386,334     $ 329,770  
Adjustments to Other Long-term liabilities (2)                 1,954        
Transaction costs related to the Mars Plan of Merger (4)     762             762        
Transaction costs related to the CAPNA acquisition (5)     43             1,386        
Business interruption proceeds (7)                       (4,523 )
Acquisitions related amortization (1)     11,073       6,201       37,782       23,396  
                                 
Non-GAAP consolidated operating income   $ 89,096     $ 72,582     $ 428,218     $ 348,643  
Non-GAAP consolidated operating margin     13.9 %     13.6 %     17.0 %     16.3 %

_________________________________________________

 

(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 end of the fourth quarter, we have recorded transaction costs of $762,000, or $464,000 net of tax, related to the Plan of Merger between VCA and Mars.
   
(5) As of the end of the fourth quarter, we have recorded transaction costs of $1.4 million, or $843,000 net of tax, related to our acquisition of CAPNA.
   
(6) We incurred debt retirement costs of $1.6 million, or $974,000 net of tax, in connection with our new credit facility entered into on June 29, 2016.
   
(7) In the third quarter of 2015, we received insurance proceeds related to the fire that damaged the headquarters of our Medical Technology business resulting in a net gain of $4.5 million.
   
(8) In the fourth quarter of 2015, we recognized a gain of $43.3 million related to the sale of our wholly-owned subsidiary, Vetstreet, Inc.
   
(9) Amounts may not foot due to rounding.

 

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VCA Inc.

Supplemental Operating Data (continued)

(Unaudited - In thousands, except per share amounts)

 

    As of
    December 31,   December 31,
Table #5   2016   2015
Selected consolidated balance sheet data        
Long-term Obligations:                
Senior term notes   $ 869,000     $ 585,000  
Revolving credit     400,000       232,000  
Other debt and capital leases     85,415       55,474  
Total long-term obligations   $ 1,354,415     $ 872,474  

 

    Three Months Ended   Twelve Months Ended
Table #6   December 31,   December 31,
Selected expense data   2016   2015   2016   2015
                 
Rent expense   $ 23,831     $ 19,933     $ 91,988     $ 76,694  
                                 
Depreciation and amortization included in direct costs:                                
Animal hospital   $ 23,751     $ 17,042     $ 84,432     $ 65,850  
Laboratory     2,941       2,754       11,280       10,606  
All other     691       926       2,911       3,797  
Intercompany     (658 )     (554 )     (2,463 )     (2,156 )
    $ 26,725     $ 20,168     $ 96,160     $ 78,097  
Depreciation and amortization included in selling, general and administrative expense     2,145       886       6,782       3,591  
Total depreciation and amortization   $ 28,870     $ 21,054     $ 102,942     $ 81,688  
                                 
Share-based compensation included in direct costs:                                
Laboratory   $ 324     $ 217     $ 883     $ 685  
                                 
Share-based compensation included in selling, general and administrative expense:                                
Animal hospital     1,203       715       3,542       2,696  
Laboratory     485       405       1,755       1,511  
All other     256       493       716       1,119  
Corporate     2,825       2,348       11,866       10,253  
      4,769       3,961       17,879       15,579  
Total share-based compensation   $ 5,093     $ 4,178     $ 18,762     $ 16,264  

 

 

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