Dialysis Corporation of America Reports Fourth Quarter and Year Ended December 31, 2006 Results


LINTHICUM, Md., Feb. 28, 2007 (PRIME NEWSWIRE) -- Dialysis Corporation of America (Nasdaq:DCAI) announced its financial results for the fourth quarter and year ended December 31, 2006. Year end chronic patient census approximated 1,600, resulting in operating revenues for the fourth quarter of 2006 of $18,199,000 compared to $12,157,000 for the same period last year, a 50% increase. Net income for the quarter was $1,121,000 or $.12 per share ($.12 diluted per share) compared to $594,000 or $.06 per share ($.06 diluted per share) for the same period last year, representing an 89% increase in net income. Operating revenues for 2006 were $62,460,000 compared to $45,392,000 for the same period last year, a 38% increase. Net income for 2006 was $3,049,000 or $.32 per share ($.32 diluted per share) compared to $1,900,000 or $.22 per share ($.20 diluted per share) for 2005, representing a 61% increase in net income.

Stephen Everett, President and Chief Executive Officer, commented, "We are very pleased with our company's continued growth and performance throughout 2006. The hard work and dedication of our staff members and physicians have resulted in superior clinical and financial performance, as well as enhanced shareholder value. We acquired a Virginia center and two Maryland centers during 2006, in addition to opening two new centers, one in Georgia and one in Pennsylvania. We recently completed the acquisition of an Ohio center and are currently developing three additional centers. In addition, we have a solid pipeline of new opportunities that we anticipate will result in additional growth in the near future."

Financial results for 2006 included (i) operating revenues of approximately $1,054,000 during the fourth quarter and $1,752,000 for 2006 for our Toledo, Ohio subsidiary, which has been consolidated for financial reporting purposes since August 1, 2006, and (ii) pre-tax costs associated with the opening of new centers of $252,000 for the fourth quarter of 2006 and $1,423,000 for 2006. Non-cash stock compensation expense of $275,000 was included in our results of operations for 2006. Additionally, we incurred costs of approximately $230,000 for review and implementation of processes related to our internal control over financial reporting and hired an employee to monitor and update our internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting.

Dialysis Corporation of America currently owns or manages 33 free-standing operating kidney hemodialysis centers in Georgia, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina and Virginia providing patients with a full range of quality in-center and at-home dialysis services, as well as providing in-hospital services in many of our markets.

This release contains forward-looking statements that are subject to risks and uncertainties that could affect the business and prospects of the company and cause actual results and plans to differ materially from those anticipated. Those factors include, but are not limited to, maintaining continued growth and profitability, delays beyond the company's control with respect to future business events, the highly competitive environment in the establishment and operation of dialysis centers, the ability to develop or acquire additional dialysis facilities, whether patient bases of the company's dialysis facilities can mature to provide profitability, the extensive regulation of dialysis operations, government rate determination for Medicare reimbursement, pricing pressure from private payors, and other risks detailed in the company's filings with the SEC, particularly as described in the company's annual report on Form 10-K for the fiscal year ended December 31, 2005. The historical results contained in this press release are not necessarily indicative of future performance of the company.

The company's press releases, corporate profile, corporate governance materials, quarterly and current reports, and other filings with the SEC are available on Dialysis Corporation of America's internet home page: http://www.dialysiscorporation.com.


           DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
                              (UNAUDITED)


                                  2006          2005          2004
                                  ----          ----          ----
 Operating revenues:
   Sales
     Medical services
      revenue                  $61,138,963   $44,686,579   $40,449,562
     Product sales                 891,242       206,941           ---
                               -----------   -----------   -----------
       Total sales revenues     62,030,205    44,893,520    40,449,562
   Other income                    430,033       498,257       536,434
                               -----------   -----------   -----------
                                62,460,238    45,391,777    40,985,996
                               -----------   -----------   -----------

 Operating costs and
  expenses:
   Cost of sales
     Cost of medical
      services                  36,968,682    27,859,804    23,545,586
     Cost of product sales         549,590       119,327           ---
                               -----------   -----------   -----------
       Total cost of sales
        revenues                37,518,272    27,979,131    23,545,586
   Selling, general and
    administrative expenses
     Corporate                   6,460,309     4,674,367     4,870,851
     Facility                    8,988,078     7,032,596     5,718,683
                               -----------   -----------   -----------
       Total                    15,448,387    11,706,963    10,589,534
   Stock compensation
    expense                        275,438           ---           ---
   Depreciation and
    amortization                 2,319,070     1,748,738     1,498,987
   Provision for doubtful
    accounts                     1,198,995       571,016     1,197,905
                               -----------   -----------   -----------
                                56,760,162    42,005,848    36,832,012
                               -----------   -----------   -----------

 Operating income                5,700,076     3,385,929     4,153,984

 Other income (expense)
   Interest income on
    officer/director note              ---         5,527         4,193
   Interest expense on
    note and advances
    payable to parent                  ---      (157,591)      (55,996)
   Other income, net               100,968       217,821        86,753
                               -----------   -----------   -----------
                                   100,968        65,757        34,950
                               -----------   -----------   -----------
 Income before income taxes,
  minority and other equity
  interests and equity in
  affiliate earnings             5,801,044     3,451,686     4,188,934

 Income tax provision            2,085,874     1,426,552     1,576,292
                               -----------   -----------   -----------

 Income before minority and
  other equity interests
  and equity in affiliate
  earnings                       3,715,170     2,025,134     2,612,642

 Minority and other equity
  interests in income of
  consolidated subsidiaries       (919,739)     (454,214)     (681,385)

 Equity in affiliate
  earnings                         253,765       328,732       282,946
                               -----------   -----------   -----------

       Net income              $ 3,049,196   $ 1,899,652   $ 2,214,203
                               ===========   ===========   ===========
 Earnings per share:
     Basic                     $       .32   $       .22   $       .27
                               ===========   ===========   ===========
     Diluted                   $       .32   $       .20   $       .25
                               ===========   ===========   ===========

 Weighted average shares
  outstanding:
     Basic                       9,484,926     8,769,399     8,256,282
                               ===========   ===========   ===========
     Diluted                     9,575,733     9,266,905     8,783,857
                               ===========   ===========   ===========


           DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES

                      SUPPLEMENTAL OPERATING DATA


                                             Year Ended
                                             December 31,
                                         -------------------    Y/Y
                                          2006        2005    Change %
                                          ----        ----   ---------
 Operating data:
 Treatments:
   Consolidated                          205,750     163,689     25.7%
   Managed                                14,343      15,483     (7.4)%
                                         -------     -------
 Total treatments                        220,093     179,172     22.8%

 Patient revenue per treatment           $297.15     $273.00      8.8%
 Non-acquired growth data:
   Non-acquired treatment growth              10%          3%
   Non-acquired revenue per treatment
    change                                     8%         (9)%

   Non-acquired patient revenue growth        19%         (6)%
 Key clinical metrics:
   Treatment adequacy (% of pts with
     Kt/V greater than 1.2)                95.50%      94.50%
   Anemia management (% of pts with
     Hgb greater than 11)                  81.20%      80.50%
   Venous access (% of pts with AVF)       47.50%      43.00%


            

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