Birner Dental Management Services, Inc. Announces Results For 1Q 2017

DENVER, May 11, 2017

Despite challenging comparisons of the quarter ended March 31, 2017 to the same quarter in 2016, the Company believes there are meaningful signs of progress.  As previously reported, the Company believes much of the decline in revenue and Adjusted EBITDA has been driven by a decrease in the number of dentists in the network.  The dentist count was 112 at March 31, 2016 and had declined to 98 at December 31, 2016. As a result of management's actions, the Company believes this trend is beginning to reverse as evidenced by the Company's increasing its dentist count to 102 at March 31, 2017.  Furthermore, dentist productivity, as measured by daily revenue per practicing dentist, increased 8.3% in the first quarter of 2017 as compared to the first quarter of 2016.  In addition, patient flow continues to be strong with new patient visits up 8.2% in the quarter ended March 31, 2017 versus the same quarter in 2016.  As dentist count increases, management believes operating results will improve through increased revenue and Adjusted EBITDA. 

During the quarter ended March 31, 2017, the Company had capital expenditures of $156,000 and decreased total bank debt outstanding by approximately $655,000.  The Company was in compliance with its first quarter 2017 bank credit facility covenants, including the EBITDA covenant as a result of $104,000 of expenses related to the strategic assessment that commenced in the second quarter of 2016 and was discontinued in the first quarter of 2017, which the bank permitted the Company to add back to EBITDA.     

The Company also announced that it has reached an agreement in principle, pending receipt of signatures, with a group of shareholders regarding a mutual settlement agreement to end a potential proxy contest related to the Company's upcoming annual meeting of shareholders. Under the terms of the pending settlement agreement, the Company will nominate John M. Climaco and Gregory G. Fulton for election to its board of directors at the 2017 annual meeting, along with incumbent director Brooks G. O'Neil. "The board and management team believe this settlement serves the best interests of the Company, its shareholders and employees," said Fred Birner, the Company's Chairman and CEO. "We welcome these new nominees to our board. We look forward to putting this matter behind us and to getting back to the business of growing the Company and building shareholder value." As part of the pending settlement agreement, the shareholder group has agreed to withdraw its proposals for the annual meeting and to vote in favor of the above slate of director nominees at the 2017 annual meeting. In addition, the shareholder group agrees to a standstill that generally extends until the later of the 2018 annual meeting of shareholders and the date neither Mr. Climaco nor Mr. Fulton serves on the board, except that the shareholder group may propose nominees for director for the 2018 annual meeting in accordance with the Company's bylaws.

Birner Dental Management Services, Inc. acquires, develops, and manages geographically dense dental practice networks in select markets in Colorado, New Mexico, and Arizona.  As of March 31, 2017, the Company managed 68 dental offices, of which 35 were acquired and 33 were de novo developments. The Company operates its dental offices under the PERFECT TEETH® name.

The Company previously announced it would conduct a conference call to review results for the quarter ended March 31, 2017 on Thursday, May 11, 2017 at 9:00 a.m. MT. In addition to current operating results, the teleconference may include discussion of management's expectations of future financial and operating results. To participate in this conference call, dial in to 1-888-471-3820 and refer to Confirmation Code 5570786 approximately five minutes prior to the scheduled time. If you are unable to join the conference call on May 11, 2017, the rebroadcast number is 1-888-203-1112 with the pass code of 5570786.  This rebroadcast will be available through May 25, 2017.

Non-GAAP Disclosures