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Diagnósticos da América S.A. – DASA (BOVESPA: DASA3) has announced today the results related to the forth quarter of 2012.
The company’s operational and financial information are calculated on a consolidated basis and in million of Reais, based on
accounting practices extracted from the Brazilian Corporate Law, except where stated otherwise. The information herein
refers to the Company’s performance in the fourth quarter of the year 2011, compared to the third quarter of the year 2012,
except where stated otherwise.
In this quarter, DASA reached a gross revenue of R$ 604.3 million with a 0.5% growth in comparison to 4Q11. The total gross revenue for 2012 was R$ 2.490,0 million, a 4.2% increase compared to 2011. 4Q12 results were affected by a high number of holidays. If we consider four or three day weekends, there were 61 working days in 4Q11, whereas in 4Q12 there were only 58 working days.
The outpatient market reached a gross revenue of R$ 444.0 million in 4Q12 with a 0.5% growth when compared to 4Q11. Gross revenue for 2012 totaled R$ 1.833,7 million, an increase of 4.8% compared to 2011, and 73.6% of DASA’s total gross revenue.
The hospital market revenue reached R$ 58.7 million in the 4Q12, with 6.5% decrease, when compared to 4Q11. The total gross revenue for 2012 was R$ 233.3 million, a decrease of 6.8% compared to 2011, equivalent to 9.4% of DASA’s total yearly revenue.
The lab-to-lab market ended the quarter with 4,903 customers serviced in the Country. The gross revenue of this market expanded by 1.3% in the 4Q12, reaching R$ 57.9 million, which represents 9.7% of DASA’s total revenue. In 2012, total gross revenue grew by 4.4%, reaching R$ 242.7 million, 9.8% of DASA’s total gross revenue.
The public market reached revenue of R$ 43.7 million in 4Q12, with 10.2% growth and reaching 7.3% of the total revenue of DASA. In the year of 2012, gross revenue totaled R$ 180.2 million; increasing by 14.8%, and equivalent to 7.3% do DASA’s total gross revenue.
FINANCIAL PERFORMANCE HIGHLIGHTS
4th QUARTER AND 2012 RESULTS
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Revenue per Line of Service (R$ million) - Markets
Revenue per Line of Service (R$ million) – Clinical Analysis X RDI
The revenue of the same units (PSC) grew by 0.4% in the 4Q12 as compared to the 4Q11.
We ended the quarter with 523 units, of which 71 are hospital units.
In 4Q12, EBITDA amounted R$ 73.5 million, 29.7% lower than 4Q11, which was R$ 104.6 million, representing 13.4% of net revenue. Total EBITDA for 2012 was R$ 407.3 million, a decrease of 18.6% compared to the R$ 500.3 million from the year before. These values include R$ 20.4 million from the sales of real estate properties that took place in 4Q12.
441.6 444.0
62.7 58.7
57.2 57.9
39.7 43.7
4Q11 4Q12
Public Sector Lab to Lab Inpatient Outpatient
6.6%
9.5%
0.5%
1.3%
0.5%
73.5%
9.6%
601.1
73.5%
7.2%10.2%
604.3
9.7%10.4% -6.5%
1,558 1,635
832 855
2011 2012RID Clinical Analysis
2,390 2,490
5.0%
2.7%
4.2%
1,750.3 1,833.7
250.4 233.3
232.4 242.7 157.0
180.2
2011 2012
Public Sector Lab to Lab Inpatient Outpatient
6.6%
9.7%
4.2%
4.5%
4.8%73.6%
9.7%
2,390.1
73.2%
7.2%14.8%
2,490.0
9.4%10.5% -6.8%
396 398
205 206
4Q11 4Q12RID Clinical Analysis
601 604
0.6%
0.5%
0.5%
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CAPEX investments in 4Q12 totaled R$ 56.2 million; 10.9% lower than 4Q11. In 2012, the CAPEX totaled R$ 234.4 million; 21.7% higher than 2011. Those values do not include the revenue from sales of real estate properties, which was R$ 49.1 million. These investments were directed to: (i) acquisition, refurbishing and enlarging the existing PSCs, (ii) purchasing of imaging equipment and (iii) implantation and development of production and customer service system.
Completion of top notch physicians recruitment for São Paulo
Maintenance of CAP (College of American Pathologists) accreditation – main international laboratories hallmark of quality
New contracts as of 1Q13: Hospital Unimed RJ and Hospital Brasília
Inauguration, in the beginning of march 2013, of the third PSC of Alta Excelência Diagnóstica brand, in São Paulo
Outpatient Market
The Outpatient market has a revenue of R$ 444.0 million in 4Q12, representing an 0.5% growth as compared to 4Q11. Total gross revenue for 2012 was R$ 1833.7 million, 4.8% higher than in 2011.
OPERATIONAL HIGHLIGHTS
FINANCIAL PERFORMANCE
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Revenue per Line of Service (R$ million) Revenue per brand (R$ million)
Outpatient Market growth was affected mainly by the centralization of call center customer service, the many holidays, some health plans presented payment problem and the company decided to minimize the risk of bad debt, as well as remodeling of installations (6 units in São Paulo) and equipment upgrade during the year, totaling 10 MRI scanners and 7 Tomography Scans. In 2013, the focus of new equipment will be expansion, which has a lesser impact on revenue, in comparison to equipment upgrade. In January 2012, we canceled a contract with a health insurance company, which also had an impact on the quarterly revenue.
Growth rate for Standard service brands continues to be higher than premium and executive brands.
During the quarter, we continue having the imaging tests revenue growth superior than clinical analysis tests revenue growth. The new equipment, the recruitment of top notch physicians and scheduling optimization have already reflected positively on our performance.
Average Requisition Price (R$) and Requisition Volume (million)
1021.4 1059.7
728.9 774.0
2011 2012
RID Clinical Analysis
58.4%
41.6%
1,750.3 1,833.7
42.2%
57.8%
3.8%
6.2%
4.8%
1,192.7 1,230.6
557.7 603.1
2011 2012Standard Premium and Executive
70,1%
29,9%
1,750.3 1,833.7
31.9%
68.1%3.2%
8.2%
4.8%
122.9124.3 124.1
128.6
124.0126.5
130.5
134.5
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Requisitions Average Requisition Price
3.73.3 3.5 3.8 3.4 3.6 3.6 3.3
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The increase of the average requisition value was due to a better imaging mix as a result of increased capacity achieved by the upgrading and addition of new equipment, particularly tomography and MRI scanner.
Hospital Market
The Hospital market generated consolidated revenues of R$ 58.7 million in 4Q12 representing a decrease of 6.5% compared to 4Q11. Gross revenue in 2012 was R$ 233.3 million, 6.8% lower than in 2011. If the São Luiz Hospitals contract were not taken into account, the Hospital Market would have grown 8.1% in 4Q12; and 11.3% in 2012.
Revenue per Line of Service (R$ million) Revenue per brand (R$ million)
Average Requisition Price (R$) and Requisition Volume (million)
In 2012, the requisition average value was influenced by renegotiation and optimization of existing contracts. The level was similar to the one attained in 2011, when we had a greater imaging mix due to the participation of São Luis Hospitals.
The lab-to-lab market ended the 4Q12 with a gross revenue of R$ 57.9 million, with a growth of 1.3%. In 2012, revenue was R$ 242.7 million, an increase of 4.5%, and the equivalent of 9.8% of total gross revenue.
The performance of this market reflects the increase in the number of requisitions per laboratory and the increase of the average revenue per lab.
This quarter results were impacted by local elections and resulting changes in city governments, which affected our clients’ operation, dependent on SUS (publicly funded health care system). This occurs every 4 years.
The competitive environment in this market has limited the more
vigorous growth.
2011 2012
232.4
4.5%
242.7 4,912 4,903
47,306 49,506
2011 2012
# of Laboratories Average Revenue/Laboratory (in R$)
Average Revenue/ requisitions (in R$) 17.4 17.5 17.8 17.6 17.2 17.2 16.8 17.2 -2.3% -2.8%
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Public Sector
Gross Operational Revenue (R$ million)
The revenue of the Public market was R$ 43.7 million in this quarter, up 10.2% when compared to 4Q11. In 2012, revenue was R$ 180.2 million, 14.8% higher than the year before.
This growth was mainly due to the implementation of the the contract with Rio de Janeiro City Government. We finished the quarter with a total of 25 clients, covering a total of 589 collection points (86 Hospital Units and 503 of the Outpatient Network).
Payers
An increase in the participation of the Public Sector, individuals and HMO, can be noticed when analyzing the breakdown of gross income by payer in 4Q12 when compared to 4Q11.
(=) Net income considering effective tax rate 60.1 43.6 68.1 25.5 197.2 48.1 29.2 31.7 (12.9) 96.2
35.4%
28.0%34.0%
1.4%
-8.3%
0.8%
Income Tax Rate permanentsadjustements in
tax books
Income Taxes(Financial
Statements)
TaxLoss/GoodwillCompensation
Other Withholding tax(current)/
Income taxescash*
2012
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Includes the balanced sheet items: loans and financing, debentures and financial instruments.
As of 4Q12, we introduced the net debt calculation methodology, compatible to the one used by the fiduciary
agent.
Cash Flow Analysis (R$ million)
We have detailed under this section the main variations in the cash
flow statement.
Management Cash Flow (R$ Million) 4Q12
Accounting EBITDA 73.5
Operacional working capital 49.8
Other working capital accounts 3.1
Financial expenses (22.1)
Income tax (8.0)
Operational cash flow 96.3
Capex (56.2)
Sale of Fixed Assets 49.1
Free Cash Flow 89.2 In this quarter, cash flow was affected by the increase of working
capital and the decrease of financial expenses.
Breakdown of Net Indebtedness
R$ Millions 4Q12 4Q11
Short Term (119.8) (312.8)
Domestic Currency (105.1) (294.4)
Foreing Currency (14.7) (18.4)
Long Term (987.8) (799.5)
Domestic Currency (919.0) (721.4)
Foreign Currency (68.8) (78.1)
Total ST + LT (1,107.6) (1,112.3)
Cash and Cash equivalents 260.5 280.8
Domestic currency 228.5 249.9
Foreing currency 32.0 30.9
Net Debt (847.1) (831.4)
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Management Cash Flow (R$ Million) 2012
Accounting EBITDA 407.3
Operacional working capital 15.3
Other working capital accounts (37.0)
Financial expenses (113.7)
Income tax (24.1)
Operational cash flow 247.9
Capex (234.4)
Sale of Fixed Assets 49.1
Free Cash Flow 62.6 In 2012, operating working capital improved, and we were negatively
affected by recoverable taxes, under ―Other Working Capital
Accounts‖.
The investments in CAPEX in 4Q12 totaled R$ 56.2 million, 10.9% lower than
the same period in 2011. In 2012, the CAPEX totaled R$ 234.4 million; 21.7%
higher than 2011. This amounts do not include the sale of Real state at the
4Q12 in the amount of R$ 49,1 million.The investments were directed mostly
to: (i) purchase of imaging equipment, (ii) the acquisition, renovation and
expansion of existing units, (iii) development and deployment of production
systems and services and renovation of technology.
CAPEX (R$ millions) CAPEX Breakdown 2012
INVESTMENTS
149.0
93.1 113.4
192.5
234.4
73.0
49.3 55.8 56.2
2008 2009 2010 2011 2012 1Q12 2Q12 3Q12 4Q12
Opening and Expansion of
PSCs43.6%
Equipment26.4%
Information Technology
22.0%
Others2.3%
Real Estate5.7%
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Below is summarized the investments made in expansion and
refurbishing of PSCs, besides new PSCs.
DASA shares closed 2012 at R$ 13.19, accumulating a decrease of
17.6% in the year, versus 5.1% decrease of the Ibovespa. Over 2012,
DASA shares were transacted on 100% of Bovespa’s trading sessions,
summing up to a financial volume of R$ 7.5 billion (daily traded
average of R$ 30.6 million).
Performance In Stock Exchange (DASA ON versus IBOVESPA)
Novembro de 2004 = 100
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VOLUME (R$) DASA3 IBOVESPA
INVESTMENTS
2011 1H12 3Q12Forecast
4Q12
Total
2012
Opening of PSCs 9 11 8 3 22
Standard 7 10 8 3 21
Mega 2 1 0 0 1
Refurbishing/expansion of PSCs 45 13 13 2 28
Tomography installation 10 4 3 0 7
MRI installation 5 3 6 1 10
Total equipment 15 7 9 1 17
Other refurbishing 30 6 4 1 11
CAPITAL MARKET
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Close R$ (12/28/2012) 13.19
2012 High (R$ per Share) 17.45
2011 Low (R$ per Share) 11.02
% Chg. In 2012 -17.6%
Market Cap (R$ MM) 4,112.7
Market Cap (US$ MM) 2,013.2
Free Float 97.22%
Outstanding Shares 311,803,015
Bovespa - DASA ON
Trading Volume (R$ Thousand/day) Number of trades /day
Issue of Debentures On October 15, 2012, the Board of Directors approved the making of the third issue by the Company, in a single series, of up to 25,000 (twenty-five thousand) non-convertible, unsecured debentures, with unit face value of R$ 10,000.00 (ten thousand Brazilian reais), with total amount of up to R$ 250,000,000.00 (two hundred fifty million Brazilian reais) ("Debentures"), to be placed by means of a public offering of distribution with restricted placement efforts, under the terms of the CVM Instruction no. 476, dated January 16, 2009, as amended ("Offering"). The Debentures will be valid for four years as of their Issue Date (as defined below), will not be subject to monetary restatement and the debit balance of the face value of each Debenture will be levied by compensatory interest corresponding to 100% (one hundred percent) of
Bovespa Information
Novembro de 2004 = 100
HIGHLIGHTS OF THE QUARTER
18,594
25,864
30,721
2010 2011 2012
18.8%
1,294
2,889
5,001
2010 2011 2012
73.1%
4th QUARTER AND 2012 RESULTS
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the accrued variation of the average daily rates of the DI – one-day Interbank Deposits, "over extra-group", expressed as annual percentage, base of 252 (two hundred fifty-two) business days, calculated and disclosed on a daily basis by CETIP S.A.- Mercados Organizados, in the daily newsletter available at its website in Internet (http://www.cetip.com.br) ("Taxa DI"), added by a surtax of 0.80% (zero point eighty percent) per year, base of 252 (two hundred fifty-two) business days ("Surtax", and, together with the DI Rate, "Remuneration"), calculated in an exponential and cumulative manner pro rata temporis per business days elapsed, from the Issue Date (as defined below) or the payment date of the Remuneration immediately before, according to the case, to the effective payment date. The unit face value will be amortized in 4 (four) annual and consecutive installments, as follows: I. 3 (three) installments, each one in the amount corresponding to 25% (twenty-five percent) of the unit face value of each Debenture, due on October 25, 2013, October 25, 2014 and October 25, 2015; and II. 1 (one) installment, in the amount corresponding to the debt balance of the unit face value of each Debenture, due on October 25, 2016. The Remuneration will be paid every semester, on the 25th (twenty-fifth) day of April and October, in which the first payment shall occur on April 25, 2013 and the last, on October 25, 2016, without prejudice to the payments in view of the early redemption of Debentures, early amortization of Debentures and/or acceleration of the obligations derived from Debentures. The financial settlement of the offering took place on 10/31/2012 in the amount of R$ R$ 250,303,500.00 (two hundred fifty million, three hundred three thousand, five hundred Brazilian reais) and the net proceeds of the offering were used (i) for the early redemption of all third-issue commercial promissory notes of the Company; and (ii) the balance for the Company’s working capital reinforcement. Early redemption of Promissory Notes
On October 23, 2012, the General Meeting of Holders of Third-Issue Commercial Promissory Notes was held. The holder of all outstanding Commercial Notes resolved and approved the request for consent formulated by the Issuer to carry out the early redemption of all the outstanding Commercial Notes, with their consequent cancellation, to occur on any date as of the date of this Meeting, without the need of prior notice or express consent of the Holder, or any other formality, under the terms of the Instruction of the Brazilian Securities and Exchange Commission no. 134, dated November 1st, 1990, as amended. Thus, the Issuer may, as long as the conditions below are verified, carry out the early redemption unilaterally, and the redemption is made
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through CETIP, as the Commercial Notes are under electronic custody at CETIP. The early redemption is conditioned to the effective completion of the issue, in a single series of simple non-convertible, unsecured, third-issue Debentures of the Company, which will be scope of a public offering of distribution with restricted placement efforts, under the terms of Law no. 6.385, dated December 7, 1976, as amended, of the Instruction of the Brazilian Securities and Exchange Commission no. 476, dated January 16, 2009, as amended, and other applicable legal and regulatory provisions ("Offering"), and will mandatorily take place (i) on the settlement date of the Offering, and (ii) upon the use of funds obtained in the Offering. The early redemption will be carried out by the Issuer, upon the payment of the Face Value of all the outstanding Commercial Notes, added by the Remuneration, calculated pro rata temporis from the Issue Date to the effective payment date, without any premium or additional penalty. Once the early redemption of all outstanding Commercial Notes is carried out under the terms approved by this Meeting, the Commercial Notes will be deemed settled. In order to avoid doubts, the early redemption referred to herein, already approved by the Company’s Board of Directors, in a meeting of the body held on October 15, 2012, is expressly approved by the Holder regardless of the provisions of the charters of the Commercial Notes prohibiting the early redemption, without needing to replace such charters, acknowledging the express consent of all the interested parties. The financial settlement of the early redemption took place on 10/31/2012 in the amount of R$ 162,734,277.00 (one hundred sixty-two million, seven hundred thirty-four thousand, two hundred seventy-seven Brazilian reais). Public Class Action Diagnósticos da América S.A. ("Company" or "DASA") hereby informs, pursuant to the terms of CVM Rule No. 358, dated as of January 3, 2002, as amended, that was served, together with its subsidiary Laboratórios Médicos Mr. Sérgio Franco Ltda., in the proceedings of the Public Class Action in course at a labor court of Rio de Janeiro, which, in brief, challenges the form adopted to engage specialized medical companies in the area of image diagnosis support, therefore requiring the engagement of doctors under employment regime and indemnification for collective moral damages in the amount of R$20 million. The Company strongly believes that, due to the specific characteristics involved, the form adopted for such engagements, in addition to being lawful and in strict compliance with all applicable legal provisions, is
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supported by favorable court precedents, as disclosed and explained by the Company in items 4.1 and 4.3 of its reference form. The Company will timely submit its defense in the proceedings of the relevant suit. Cytolab acquisition
At the Extraordinary Shareholders’ General Assembly held on November 30th, 2012, it was fully and unanimously approved, with the abstention of shareholder National Pension Service, the acquisition of Cytolab – Laboratório de Anatomia Patológica, Citologia Diagnóstica e Análises Clínicas Ltda., as stated in the relevant document, which resulted in the closing of the acquired company, whose rights and obligations were transferred to the Company, in accordance to the relevant legislation (Lei n.º 6.404/76 Artigo 227; and Código Civil Artigo 1.116). Board of Directors Election
On December 28th, 2012, Mr. Antônio Carlos Gaeta was elected Vice President of Business, and Ms. Lilian Cristina Pacheco Lira was elected Legal Director.
Board of Directors Election
On December 7th, 2013, Ms. Cynthia May Hobbs Pinho was elected Vice
President and CFO. The name of the position currently ascribed to Mr.
Carlos Elder Maciel de Aquino was changed from Director (without any
specific designation) to Accounting and Infrastructure Director.
CADE approval – Cytolab
The Administrative Council of Economic Defense (CADE) approved in its
16th Ordinary Ruling Session, on February 20th, 2013, the referred
object in Ato de Concentração [Merger Operation Act] nº
08012.007540/2011-58, concerning the acquisition of Cytolab –
Laboratório de Anatomia Patológica, Citopatologia Diagnóstica e
Análises Clínicas Ltda. ("Cytolab"), provided a change is made in the
geographical coverage under the clause that established the non-
competition policy with sales people. The Company will do all that is
necessary to comply with such provision, within the time limit
determined by CADE.
HIGHLIGHTS OF THE SUBSEQUENT QUARTER
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* Since 1Q12, the PDA is being considered under the "discounts" the income statement