VCA Inc.
Jul 25, 2002

VCA Antech, Inc. Reports Second Quarter Results That Exceed Street Consensus by $0.03



LOS ANGELES--July 25, 2002--VCA Antech, Inc.VCA Antech, Inc., a leading animal health care company in the United States, today reported financial results for its second quarter and six months ended June 30, 2002.

Revenue for the second quarter ended June 30, 2002 increased 9.5% to a record $117.2 million from revenue of $107.0 million in the same quarter last year.

Net income per diluted common share was $0.28 for the three months ended June 30, 2002 compared to a net loss per diluted common share of $(0.63) for the comparable period in 2001. The net loss for the three months ended June 30, 2001 included certain expenses and amortization of goodwill amounting to $13.2 million net of taxes, that did not occur in 2002, as provided below in the Supplemental Operating Statement Data. Excluding these expenses from 2001, the net income per diluted common share would have been $0.11 for the three months ended June 30, 2001. Goodwill amortization ceased effective January 1, 2002 pursuant to the required application of SFAS No. 142, Goodwill and Other Intangible Assets.

Operating income for the three months ended June 30, 2002 increased to $28.5 million from $8.4 million for the comparable period in 2001. As provided below in the Supplemental Operating Statement Data, operating income for the second quarter 2001 included $13.7 million of certain expenses and $2.3 million of amortization of goodwill that did not occur in 2002. Excluding these expenses from 2001, operating income would have increased $4.2 million or 17.2% for the second quarter of 2002 compared to the comparable period in 2001, as adjusted.

Earnings before interest, taxes, depreciation and amortization, minority interest and, in 2001, certain items discussed below in footnote (1) ("Adjusted EBITDA") increased 16.5% to $31.7 million for the second quarter of 2002 from $27.2 million for the second quarter of 2001.

Revenue for the six months ended June 30, 2002, increased 9.5% to a record $221.9 million from $202.7 million in 2001.

Net income per diluted common share was $0.43 for the six months ended June 30, 2002 compared to a net loss per diluted common share of $(1.09) for the comparable period in 2001. Net loss for the six months ended June 30, 2001 included certain expenses and amortization of goodwill amounting to $19.2 million net of taxes, that did not occur in 2002, as provided below in the Supplemental Operating Statement Data. Excluding these expenses from 2001, the net income per diluted common share would have been $0.01 for the six months ended June 30, 2001.

Bob Antin, Chairman and CEO, stated, "We continue to benefit from operating leverage in both of our businesses. This leverage drove outstanding growth in EBITDA and net income in our second quarter of 2002. On a 9.5% revenue increase in the second quarter, Adjusted EBITDA increased 16.5%, to $31.7 million, over the prior year comparable quarter.

"Our laboratory division continues to realize the benefits of our market leadership position and our national platform. On a 13.7% revenue increase (all of which was from internal growth) for the three months ended June 30, 2002, we achieved a 24.1% increase in laboratory Adjusted EBITDA, to $16.1 million. Laboratory Adjusted EBITDA margin for the second quarter increased to 39.6% in 2002 from 36.3% in 2001.

"Our hospital division achieved a 13.3% increase in hospital Adjusted EBITDA to $18.7 million for the second quarter of 2002 on an 8.0% increase in revenue. For the second quarter, hospital Adjusted EBITDA margin increased to 23.7% in 2002 from 22.6% in 2001. Hospital same-facility revenue growth was 3.0% for the three months ended June 30, 2002."

VCA Antech, Inc. will discuss second quarter 2002 earnings during a conference call today, July 25, 2002 at 4:30 p.m. Eastern Time. The call will be broadcast live on the Internet and can be accessed by visiting the Company's website at http://investor.vcaantech.com. The conference call can also be accessed via telephone by dialing 800/289-0468. Interested parties should call at least ten minutes prior to the conference call to register.

Statements contained in this release that are not based on historical information are forward-looking statements that involve risks and uncertainties. Actual results may vary substantially as a result of a variety of factors. Among the important factors that could cause actual results to differ are the level of direct costs and the ability of the Company to maintain gross revenue at a level necessary to maintain expected gross profit margins, the level of selling, general and administrative costs, the effects of competition, the efficient integration of the Company's acquisitions, the effects of the Company's recent acquisitions and its ability to effectively manage its growth, the ability of the Company to service its debt, the continued implementation of its management information systems, pending litigation and governmental investigations, general economic conditions, and the results of the Company's acquisition program. These and other risk factors are discussed in the Company's recent filings with the Securities and Exchange Commission on Forms 10-K and S-4 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.

VCA ANTECH, INC. owns, operates and manages the largest networks of free-standing veterinary hospitals and veterinary-exclusive clinical laboratories in the country.

                           VCA Antech, Inc.
                 Consolidated Statements of Operations
           Three and Six Months Ended June 30, 2002 and 2001
         (Unaudited -- In Thousands, Except Per Share Amounts)

                                Three Months           Six Months
                               Ended June 30,        Ended June 30,
                              2002       2001       2002       2001

Revenue:
 Laboratory                $ 40,604   $ 35,707   $ 78,261   $ 68,384
 Animal Hospital             78,621     72,780    147,265    137,134
 Other                          500        500      1,000      1,000
 Intercompany                (2,500)    (1,938)    (4,606)    (3,789)
                            117,225    107,049    221,920    202,729

Direct costs                 77,004     73,311    149,592    142,773

Gross profit,
 excluding depreciation
 and amortization:
 Laboratory                  18,470     14,541     34,565     26,899
 Animal Hospital             21,251     18,697     36,763     32,057
 Other                          500        500      1,000      1,000
                             40,221     33,738     72,328     59,956

General and administrative:
 Laboratory                   2,396      3,303      5,069      6,580
 Animal Hospital              2,585      3,250      5,264      6,605
 Corporate                    3,558      3,663      6,828      7,589
                              8,539     10,216     17,161     20,774

Depreciation                  2,703      2,424      5,281      4,692
Amortization                    436      4,011      1,021      7,997
Loss on sale of assets           --      8,694         --      8,837
Operating income             28,543      8,393     48,865     17,656

Interest expense, net        10,344     10,917     20,333     22,070
Other (income) expense          (61)       229       (154)       229
Minority interest expense       528        425        930        700
Net income (loss) before
 income taxes                17,732     (3,178)    27,756     (5,343)
Provision for income taxes    7,237      2,642     11,626      3,466
Net income (loss)            10,495     (5,820)    16,130     (8,809)

Increase in carrying
 amount of redeemable
 preferred stock                 --      5,193         --     10,221

Net income (loss)
 available to common
 Stockholders             $  10,495  $ (11,013) $  16,130  $ (19,030)

Net income (loss) per
 diluted common
 Share                    $    0.28  $   (0.63) $    0.43  $   (1.09)
Diluted shares               37,087     17,524     37,084     17,524



                           VCA Antech, Inc.
                 Supplemental Operating Statement Data
           Three and Six Months Ended June 30, 2002 and 2001
         (Unaudited -- In Thousands, Except Per Share Amounts)

                            Three Months Ended     Six Months Ended
                                  June 30,              June 30,
                              2002       2001       2002       2001

Adjusted net income (loss)
available to common stockholders:
 Net income (loss)
  reported                  $ 10,495   $(11,013)  $ 16,130   $(19,030)
  Add expenses:
   Management fees                --        620         --      1,240
   Loss on sale of assets         --      8,694         --      8,837
   Non-cash compensation          --      3,044         --      6,088
   Amortization of executive
    covenants not to compete      --      1,302         --      2,625
   Amortization of goodwill       --      2,292         --      4,555
     Total expenses               --     15,952         --     23,345
   Tax effect                     --      2,715         --      4,123
     Total expenses, net
       of tax                 10,495     13,237     16,130     19,222
     Adjusted net income    $ 10,495   $  2,224   $ 16,130   $    192

Adjusted net income
 per diluted common share   $   0.28   $   0.11   $   0.43   $   0.01
Diluted shares                37,087     19,397     37,084     19,372
Adjusted EBITDA (1)         $ 31,682   $ 27,186   $ 55,167   $ 46,510

Ratio of earnings to
 fixed charges (2)            2.5x        n/a       2.2x        n/a

(1) EBITDA is operating income (loss) before depreciation and
    amortization. There were no adjustments made to EBITDA to arrive
    at Adjusted EBITDA for 2002. Adjusted EBITDA for 2001 represents
    EBITDA adjusted to exclude management fees, loss on sale of assets
    and non-cash compensation. The management agreement for the
    management fees discussed above was terminated in the fourth
    quarter of 2001 in connection with the Company's initial public
    offering of common stock. EBITDA and Adjusted EBITDA are not
    measures of financial performance under generally accepted
    accounting principles, GAAP. Although EBITDA and Adjusted EBITDA
    should not be considered in isolation or as substitutes for net
    income, cash flows from operating activities and other income or
    cash flow statement data prepared in accordance with GAAP, or as a
    measure of profitability or liquidity, we understand that EBITDA
    and Adjusted EBITDA are widely used by financial analysts as a
    measure of financial performance. We believe Adjusted EBITDA is a
    useful measure of our operating performance as it reflects
    earnings before the impact of depreciation and amortization,
    interest, taxes and minority interest (and, in 2001, other
    non-operating or non-recurring items) that may vary from period to
    period as a result of non-operating activities. Adjusted EBITDA is
    also an important component of our financial ratios included in
    our debt covenants, which provides us with a measure of our
    ability to service our debt and meet capital expenditure
    requirements out of our earnings. Our calculation of EBITDA and
    Adjusted EBITDA may not be comparable to similarly titled measures
    reported by other companies.

(2) Calculated by dividing income before income taxes and fixed
    charges by fixed charges. "Fixed charges" means the sum of (a)
    interest expensed or capitalized, (b) amortized discounts and
    deferred financing costs related to indebtedness and (c) an
    estimate of the interest within rental expense. This calculation
    is not applicable for 2001 as we had pre-tax losses for the three
    and six months ended June 30, 2001.


                           VCA Antech, Inc.
               Selected Consolidated Balance Sheet Data
               As of June 30, 2002 and December 31, 2001
                      (Unaudited -- In Thousands)

                                   June 30,            December 31,
                                     2002                 2001

Cash                              $  17,704            $    7,103
Accounts receivable, net             22,493                18,036
Equity                               56,875                39,764
Total assets                        491,592               468,521

Debt:
Senior Term A                        22,589                24,112
Senior Term B                       120,472               121,242
13.5% Senior Subordinated Notes      15,000                15,000
9.875% Senior Subordinated Notes    170,000               170,000
Senior Notes                         64,315                59,670
Secured seller notes                  1,109                 1,182
Unsecured debt                          574                   225
Capital leases                           51                    79
Unamortized discounts                (7,253)               (7,178)
Total debt                        $ 386,857            $  384,332



                 Selected Consolidated Cash Flow Data
            For the Six Months Ended June 30, 2002 and 2001
                      (Unaudited -- In Thousands)

                                          Six Months Ended
                                               June 30,
                                      2002                 2001
Cash flows provided by
 operating activities             $   31,814           $   32,605
Capital expenditures                   6,204                6,979



Contact:
     VCA Antech, Inc.
     Tom Fuller, 310/571-6505