VCA Inc.
Oct 25, 2012


LOS ANGELES, California, October 25, 2012 - VCA Antech, Inc. (NASDAQ: WOOF), a leading animal healthcare company in the United States and Canada, today reported financial results for the third quarter ended September 30, 2012 as follows: revenue increased 12.6% to a third quarter record of $433.6 million; gross profit increased 10.0% to $99.2 million; net income was $34.0 million and diluted earnings per common share was $0.38.

For the three months ended September 30, 2012 and 2011, diluted earnings per share were $0.38 and $0.35, respectively. The third quarter of 2011 included debt retirement costs of $2.8 million, or $1.7 million net of tax, related to the refinancing of our senior credit facility. Excluding this item, adjusted diluted earnings per common share for the third quarter of 2011 was $0.37.

For the nine months ended September 30, 2012 and 2011, diluted earnings per common share were $1.17 and $1.13, respectively. The results for the nine months ended September 30, 2012, included a gain of $5.7 million on our 20% interest in Associate Veterinary Clinics held at the time we became its sole non-veterinarian shareholder and a depreciation adjustment of $3.1 million, related to acquired capital leases. The results for the nine months ended September 30, 2011, included the debt retirement costs referenced above. Excluding these adjustments, adjusted diluted earnings per common share, for the nine months ended September 30, 2012 and 2011, were $1.13 and $1.15, respectively.

Bob Antin, Chairman and CEO, stated, "We are pleased with the improvement in revenue and gross profit margins in both our core Animal Hospitals and Laboratory business segments. We continued our growth strategy of acquiring individual animal hospitals in markets that complement our existing locations, with acquisitions totaling over $30.0 million during the quarter. In the third quarter of 2012 our Animal Hospital and Laboratory businesses saw sequential improvement in year-over-year organic growth rates and gross profit margins.

"Animal Hospital revenue in the third quarter of 2012 increased 13.1%, to $342.8 million, driven by acquisitions made in the past twelve months and same-store revenue growth of 1.1%. Our same-store gross profit margin decreased to 16.5%, from 17.2%, and with the lower margins of acquired Animal Hospitals, our consolidated gross margin decreased to 15.8%, compared to 17.0%, for the prior-year quarter. Our Animal Hospital operating margin decreased to 13.6%, compared to 15.1%, for the prior-year quarter. During the quarter, we acquired 10 independent animal hospitals which had historical combined annual revenue of $33.6 million.

"Laboratory internal revenue in the third quarter increased 3.5%, to $81.2 million, driven by both an increase in the number of requisitions and the average revenue per requisition. Our Laboratory gross profit margin increased from 44.7%, to 45.7%, and our operating margin increased from 35.8% to 36.8%.

"Revenue from our other operations reported in our All Other segment increased $9.2 million in the third quarter, to $28.1 million, primarily as a result of the acquisitions of Vetstreet and ThinkPets."

Conference Call

We will discuss our third-quarter 2012 financial results during a conference call today, October 25th, at 4:30 p.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 10 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 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 (including Vetstreet); 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 Antech

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