Dialysis Corporation of America Reports Second Quarter 2008 Results

LINTHICUM, Md., Aug. 6 /PRNewswire-FirstCall/ — Dialysis Corporation of America announced its financial results for the second quarter of 2008. Operating revenues for the second quarter were $20,836,000 compared to $18,485,000 for the same period last year, a 13% increase, and $41,321,000 for the first half of 2008 compared to $35,376,000 for the same period last year, a 17% increase. Net income for the quarter was $663,000 or $.07 per share ($.07 diluted per share) compared to $753,000 or $.08 per share ($.08 diluted per share) for the same period last year, and $1,112,000 or $.12 per share ($.12 diluted per share) for the first half of 2008 compared to $1,136,000 or $.12 per share ($.12 diluted per share) for the same period last year.

Stephen Everett, President and Chief Executive Officer, commented, “With the exception of a few non-recurring expense items during the quarter, our financial performance was on target with company expectations. Additionally, DCA’s clinical quality results continue to rank well above industry averages, which is a critical component of both our short and long term goals. Our company’s technical and financial infrastructure continues to build with the recent addition of a clinical reporting software system, which will be deployed throughout the organization over the next couple of years. Finally, I am pleased to announce that our new center in Camp Hill Pennsylvania was certified by Medicare earlier this week and is in the process of bringing new patients into our system. We anticipate this center to be treating approximately 75 patients within its first full year of operation.”

Financial results included: (i) a non-recurring reserve of $375,000 for patients with terminated benefits, reimbursement rates less than anticipated, and non-collectable receivables from a patient; (ii) pre-tax costs associated with the opening of new centers of $62,000 for the second quarter of 2008 compared to $112,000 for the same period last year, and $238,000 for the first half of 2008 compared to $318,000 for the same period last year; and (iii) non-cash stock and option compensation expense of $82,000 for the second quarter of 2008 compared to $88,000 for the same period last year and $156,000 for the first half of 2008 compared to $201,000 for the same period last year.

Dialysis Corporation of America will be hosting a conference call in conjunction with its earnings release for the second quarter of 2008. The conference call will be held on Thursday, August 7, 2008 at 10:00 a.m. EDT. The call is accessible either by dialing 1-800-930-7709 (enter pass-code 4743188), or by simulcast on the internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=132142 . Participants may be asked to provide the title of the conference call, which is “Dialysis Corporation of America 2nd Quarter Earnings.” A replay of the conference call will be available on the company’s website, http://www.dialysiscorporation.com/, for a period of thirty days following the conference call.

Dialysis Corporation of America currently owns 36 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.

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 payers, 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, 2007. 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)                                    Three Months Ended      Six Months Ended                                        June 30,                June 30,                                    2008        2007        2008        2007   Operating revenues:      Sales:       Medical services        revenue               $20,519,222 $18,117,808 $40,714,224 $34,714,715       Product sales              317,017     300,531     607,103     531,591         Total sales revenues  20,836,239  18,418,339  41,321,327  35,246,306      Other income                    —      66,849         —     129,409                               20,836,239  18,485,188  41,321,327  35,375,715   Operating costs and expenses:      Cost of sales revenues:       Cost of medical        services               12,661,921  10,894,244  25,019,706  21,296,708       Cost of product sales      173,746     182,244     334,481     325,705        Total cost of sales         revenues              12,835,667  11,076,488  25,354,187  21,622,413      Selling, general and       administrative expenses:         Corporate              2,449,491   1,893,397   4,838,035   3,541,920         Facility               2,996,083   2,862,590   6,078,242   5,592,913          Total                 5,445,574   4,755,987  10,916,277   9,134,833      Stock compensation expense   81,884      87,505     156,485     201,475      Depreciation and       amortization               678,831     655,226   1,341,403   1,290,962      Provision for doubtful       accounts                   649,113     353,083   1,079,143     709,180                               19,691,069  16,928,289  38,847,495  32,958,863    Operating income             1,145,170   1,556,899   2,473,832   2,416,852    Other income (expense), net     12,857     (27,981)    (29,210)   (37,208)    Income before income taxes    and minority interest       1,158,027   1,528,918   2,444,622   2,379,644    Income tax provision           305,170     520,649     684,908     866,421    Income before minority    interest                      852,857   1,008,269   1,759,714   1,513,223    Minority interest in income      of consolidated      subsidiaries               (190,198)   (255,142)   (648,143)  (376,876)        Net income                $662,659    $753,127  $1,111,571  $1,136,347    Earnings per share:       Basic                         $.07        $.08        $.12        $.12       Diluted                       $.07        $.08        $.12        $.12    Weighted average shares    outstanding:             Basic               9,579,766   9,573,244   9,579,931  9,572,178             Diluted             9,613,663   9,611,096   9,614,819  9,611,599                 DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES                        CONSOLIDATED BALANCE SHEETS                                (UNAUDITED)                                                     June 30,    December 31,                                                     2008          2007                      ASSETS   Current assets:     Cash and cash equivalents                   $3,692,475      $2,447,820     Accounts receivable, net                    20,951,827      20,159,926     Inventories, net                             2,457,504       2,006,661     Deferred income tax asset                      998,000         998,000     Other current assets                         2,412,264       3,313,406                Total current assets             30,512,070      28,925,813    Property and equipment                        30,573,834      28,766,423     Less accumulated depreciation and      amortization                               13,337,405      12,264,029                                                 17,236,429      16,502,394    Goodwill                                      10,549,501       8,576,893   Other assets                                     681,580         841,092              Total other assets                 11,231,081       9,417,985                                                $58,979,580     $54,846,192          LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities:     Accounts payable and accrued expenses      $10,203,537     $10,224,199     Income taxes payable                               —          33,297     Current portion of long-term debt               67,000          56,000     Acquisition liabilities                      1,323,020             —              Total current liabilities          11,593,557      10,313,496    Deferred income taxes                            574,000         574,000   Long-term debt, less current portion           7,820,156       7,009,419              Total liabilities                  19,987,713      17,896,915    Minority interest in subsidiaries              5,645,317       4,942,797    Commitments and Contingencies    Stockholders’ equity:     Common stock                                    95,797          95,736     Additional paid-in capital                  15,816,220      15,587,782     Retained earnings                           17,434,533      16,322,962              Total stockholders’ equity         33,346,550      32,006,480                                                $58,979,580     $54,846,192                 DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES                         SUPPLEMENTAL OPERATING DATA                                (Unaudited)                                  Three Months Ended June 30,  Period-to-Period                                    2008           2007          Change%   Operating data:   Treatments:       Consolidated                68,021         60,235              12.9%       Managed                         —          2,771           (100.0)%   Total treatments                68,021         63,006               8.0%    Patient revenue per treatment  $301.66        $300.79                .3%   Same center growth data:       Same center treatment        growth                       5%             5%       Same center revenue per        treatment change            (1)%            4%       Same center patient        revenue growth               4%             9%                                    Six Months Ended June 30,  Period-to-Period                                    2008           2007          Change%   Operating data:   Treatments:       Consolidated               133,342        117,082              13.9%       Managed                         —          5,461           (100.0)%   Total treatments               133,342        122,543               8.8%    Patient revenue per treatment  $305.34        $296.50               3.0%   Same center growth data:       Same center treatment        growth                       6%             7%       Same center revenue per        treatment change             2%             1%       Same center patient        revenue growth               8%             9%                                   2nd Quarter   1st Quarter                                    2008           2008   Key clinical metrics:       Treatment adequacy        (% of pts with        Kt/V greater than 1.2)      96%            96%       Anemia management        (% of pts with Hgb        greater than 11)            82%            80%       Venous access (%        of pts with AVF)            55%            55%  

Dialysis Corporation of America

CONTACT: Stephen Everett, President and CEO of Dialysis Corporation ofAmerica, +1-410-694-0500

Web site: http://www.dialysiscorporation.com/