AmeriPath, Inc. Announces 2000 Fourth Quarter and Year-End Financial Results.Business Editors RIVIERA BEACH Riviera Beach (rəvēr`ə), resort city (1990 pop. 27,639), Palm Beach co., SE Fla., on Lake Worth (a lagoon); inc. 1922. Research and development firms are located in the growing city. , Fla.--(BUSINESS WIRE)--Feb. 27, 2001 Quarterly Net Revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , and Same Practice Revenue Increase 29%, 30% and 15%, Respectively (Excluding Special Charges) AmeriPath, Inc. (Nasdaq:PATH), the largest physician and laboratory company focused on providing anatomic anatomic /ana·tom·ic/ (an?ah-tom´ik) anatomical. Anatomic Related to the physical structure of an organ or organism. pathology pathology, study of the cause of disease and the modifications in cellular function and changes in cellular structure produced in any cell, organ, or part of the body by disease. , cancer diagnostic, genomics, and healthcare information services See Information Systems. , reported its financial results for the fourth quarter and year ended December 31, 2000. As previously announced, AmeriPath acquired Pathology Consultants of America, Inc. ("Inform DX") effective November 30, 2000. This acquisition was accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and, therefore, all financial information in this press release includes the combined results and financial position of AmeriPath and Inform DX. All reported earnings per share amounts are on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. AmeriPath's Unaudited Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Statements of Operations included in this press release present AmeriPath's results with and without the special charges described below. Fourth Quarter Combined Financial Results, Excluding Special Charges Net revenue from combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
Year-End Combined Financial Results Excluding Special Charges For the year ended December 31, 2000, AmeriPath reported combined net revenue of $335.3 million, an increase of 30% over the $257.4 million reported for the year ended December 31, 1999. Of this increase, $44.3 million resulted from the operations of practices acquired during 1999 and 2000. Same practice net revenue for 2000 increased by $33.6 million, or 14%, over the prior year. Same practice outpatient net revenue increased $23.8 million, or 24%, same practice hospital net revenue increased $6.5 million, or 5%, and management service revenue increased $3.3 million, or 15%, compared to the same period of the prior year. For the year ended December 31, 2000, EBITDA was $84.5 million or 25.2% of net revenue, compared to $66.0 million, or 25.6% of net revenue for 1999. This was a 28% annual increase. Net income from combined operations for the year was $28.0 million, or $1.16 per share, reflecting the full year's dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of Inform DX on the full year's results (excluding the special charges). This compares to net income of $22.7 million, or a diluted $1.01 per share, for the year ended December 31, 1999. The diluted weighted average number of shares outstanding for the year ended December 31, 2000 was 24.2 million as compared to 22.5 million for 1999. Combined Results of Operations, Including Special Charges For the fourth quarter of 2000, the Company had a net loss of $(3.2) million or $(0.13) per share. For the year ended December 31, 2000, the Company had net income of $11.5 million, or $0.47 per share. During the year ended December 31, 2000, Inform DX recorded $1.6 million of accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the on previously outstanding Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . Approximately $1.5 million of this accretion related to a share exchange agreement resulting in the early conversion of the Redeemable Preferred Stock into common stock of Inform DX. In addition, as previously disclosed during the second quarter of 2000, the Company recorded an asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and related charges of $5.2 million in connection with the bankruptcy of a regional hospital network in Ohio. Both the accretion and this impairment were considered special charges for the year ended December 31, 2000. Special Charges In addition, during the fourth quarter ended December 31, 2000, AmeriPath recorded special charges totaling $15.7 million. AmeriPath expects to record an additional $6.5 million of merger and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs in the first quarter of 2001. The following summarizes these special charges by category for the fourth quarter of 2000 and first quarter estimates for 2001 (in millions).
Q4 2000 Q1 2001
------- -------
Merger and Restructuring Costs
(cash and noncash) $6.2 $6.5
Provision for Uncollectible
Accounts Receivable (noncash) 5.2 --
Asset Impairment (noncash) 4.3 --
--- --
Total Special Charges $15.7 $6.5
===== ====
Based on the above, the special charges for the fourth quarter of 2000 and the first quarter of 2001 are estimated to be $22.2 million. The Company has discussed these special charges with its bank syndicate and received an amendment on November 29, 2000 to allow $17.5 million of certain charges to be excluded from its covenant computations. The $4.7 million of charges in excess of the $17.5 million allowed resulted from the formalization for·mal·ize tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es 1. To give a definite form or shape to. 2. a. To make formal. b. of the Inform DX integration plans, and are expected to result in further synergies. These additional charges could cause the Company to be in technical default of one or more of its covenants under its credit facility at the end of the first quarter of 2001. The Company is currently discussing these additional charges with its lenders and requesting to exclude them from its covenant computations. The Company believes an agreement will be reached, but until that time, there can be no assurance as to the final terms and conditions of an agreement or the impact, if any, on the Company. Merger and Restructuring Costs The merger and restructuring costs relate to AmeriPath's acquisition of Inform DX and include transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , change in control payments and costs related to the closing of the Inform DX corporate office in Nashville. AmeriPath expects to record an additional $6.5 million of merger and restructuring costs in the first quarter of 2001 related primarily to the consolidation or closing of the overlapping operations of Inform DX in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Pennsylvania. Based on its current plans, AmeriPath expects to complete the closing of the Nashville operations by the end of the second quarter and the integration of the New York and Pennsylvania operations by the end of the third quarter of this year. The restructuring of the combined operations of AmeriPath and Inform DX should result in annual operating synergies of $4.5 to $5.5 million, approximately $1.5 million higher than previous cost savings estimates. Since the majority of the positive effect of such savings on operations will not begin to be realized until the second half of 2001, AmeriPath expects the acquisition of Inform DX to be nominally dilutive for the first six months and accretive for the year 2001. Provision for Uncollectible Accounts Uncollectible account An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay. Receivables During the fourth quarter, AmeriPath, reviewed the collectibility of Inform DX's accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying in light of historical collections, aging of accounts receivable, AmeriPath's reserve methods and policies, and billing and collection performance. In addition, two of Inform DX's labs converted billing systems in the fourth quarter of 1999. As the result of these conversions, the billings and collections for 2000 were negatively impacted. Based on this review and evaluation, AmeriPath recorded an additional estimated provision for uncollectible accounts receivable of $5.2 million in the fourth quarter. Since the majority of this adjustment relates to the Company's (formerly, Inform DX's) managed practices, the charge was recorded as a reduction of net revenue. Asset Impairment During the fourth quarter, AmeriPath recorded a pre-tax noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. of approximately $4.3 million related to the impairment of certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . $3.3 million of such charge relates to Quest Diagnostics' termination of its contract with AmeriPath in South Florida, effective December 31, 2000. The potential maximum charge for this contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). was previously disclosed in the Company's 2000 third quarter Form 10-Q Form 10-Q See 10-Q. . Although the Company has aggressively marketed and retained a portion of this operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , accounting rules require a charge to be taken as there is no longer a contract. In addition, during the fourth quarter, a hospital in South Florida where AmeriPath had the pathology contract, requested proposals for its pathology services, and AmeriPath was unsuccessful in retaining this contract. Based upon the remaining projected cash flow from this hospital network, the Company determined that the intangible assets were impaired and recorded a pre-tax noncash charge of approximately $1.0 million. Acquisitions In addition to Inform DX, in the fourth quarter, the Company acquired one other major practice, located in Oklahoma. The practice, with facilities in Oklahoma City Oklahoma City (1990 pop. 444,719), state capital, and seat of Oklahoma co., central Okla., on the North Canadian River; inc. 1890. The state's largest city, it is an important livestock market, a wholesale, distribution, industrial, and financial center, and a farm and Tulsa, has approximately $12 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. net revenue with 19 physicians, two outpatient laboratories and 16 hospital contracts. For the year 2000, AmeriPath completed eight acquisitions, including Inform DX and Oklahoma, adding an aggregate of $75 million of annualized net revenue, 115 physicians, 15 outpatient laboratories, and 69 hospital contracts. As a result of these acquisitions, the Company operates in the additional states of Missouri, Tennessee, Colorado, Oklahoma, California, Massachusetts, and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , and has enhanced its position and presence in New York, Pennsylvania, Texas and Florida. The Center for Advanced Diagnostics (CAD) In the year 2000, AmeriPath opened its new 10,000 square foot facility in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. . The operation has state-of-the-art diagnostic equipment and is staffed by high quality Ph.D. and M.D. personnel. The Company believes that CAD is on the fast track for growth, offering a full array of esoteric es·o·ter·ic adj. 1. a. Intended for or understood by only a particular group: an esoteric cult. See Synonyms at mysterious. b. diagnostics, including polymerase chain reaction polymerase chain reaction (pŏl`ĭmərās') (PCR), laboratory process in which a particular DNA segment from a mixture of DNA chains is rapidly replicated, producing a large, readily analyzed sample of a piece of DNA; the process is (PCR PCR polymerase chain reaction. PCR abbr. polymerase chain reaction Polymerase chain reaction (PCR) ), flow cytometry flow cytometry (flōˑ sī·t  ˑ·m , molecular genetics molecular geneticsn. The branch of genetics that deals with hereditary transmission and variation on the molecular level. , cytogenetics cytogenetics /cy·to·ge·net·ics/ (-je-net´iks) the branch of genetics devoted to cellular constituents concerned in heredity, i.e. chromosomes. , specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. immunohistochemistry, and minimal residual disease residual disease Oncology Malignant cells or neoplasia that remains after any form–chemotherapy, surgery, RT–of 1º treatment detection. In addition to diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease , CAD is able to perform developmental work for diagnostic manufacturers, clinical research organizations (CROs), and large pharmaceutical companies using AmeriPath's access to normal, abnormal, and cancerous tissue. Genomics Collaborative, Inc. (GCI GCI Ground Circuit Interrupter GCI Getty Conservation Institute GCI Global Commerce Initiative GCI Green Cross International (non-profit international environmental organization) GCI Growth Competitiveness Index GCI Great Cities Institute ) AmeriPath's relationship with Genomics Collaborative, Inc. has continued to grow. The Company announced recently, in cooperation with GCI and Cambridge Healthtech Institute, the development of genomics educational programs aimed at practicing physicians. The first series of programs will take place in 2001 with three conferences scheduled for May and June. The tissue banking program is growing. The Company is now collecting specimens from a large number of hospitals and is working with GCI to meet customer demand. Dermpath Diagnostics In the fourth quarter, the Company established a separate sales and marketing division called Dermpath Diagnostics. A separate sales force with appropriate support structure has been established specifically to market AmeriPath's tremendous dermatopathology resources across the country. Dermpath Diagnostics' mission is to facilitate the mobilization mobilization Organization of a nation's armed forces for active military service in time of war or other national emergency. It includes recruiting and training, building military bases and training camps, and procuring and distributing weapons, ammunition, uniforms, of AmeriPath's 22 regional dermatopathology lab centers, 60 dermatopathologists, and the Ackerman Academy of Dermatopathology to grow its dermatopathology business and increase the Company's estimated 16% U.S. market share in dermatopathology. CEO's Perspective James C. New, Chairman and Chief Executive Officer of AmeriPath, commented: "The fourth quarter was the culmination of a very exciting year for AmeriPath. For the year, we grew our net revenue by over 30% through the acquisition and integration of eight practices, and the Company's increased focus on same practice growth, yielding 14% for the year. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. results met or exceeded analysts' revised estimates Revised estimate The third estimate of GDP released about three months after the measurement period. (published following the Company's announcement of the Inform DX acquisition). Our management was truly enhanced by the addition of Brian Carr, President, James Billington, Senior Vice President of Operations, Gregory Marsh, Vice President and Chief Financial Officer, and a number of other new key people. We have the team in place to take us to new levels. I was again this year particularly pleased with our physician retention rate of over 90%. Finally, AmeriPath's new business efforts in all areas including genomics and esoteric testing esoteric test Lab medicine The analysis of 'rare' substances or molecules that are not performed in a routine clinical lab. See DORA. , are beginning to pay dividends in terms of additional revenues. We have signed a record number of new managed care and hospital contracts." More detailed information regarding the business, operations and financial performance of the Company through December 31, 2000, and related and other matters, will be included in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2000, which is expected to be filed with the SEC prior to March 31, 2001. As previously announced, the Company will broadcast its fourth quarter and year-end financial results conference call on Tuesday, February 27, 2001, at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy over the Internet. All stockholders and investors are encouraged to participate. This event is available through CCBN's Street Events website, located at http://www.streetevents.com. Listeners should go to the website and enter the Individual Investor Center at least fifteen minutes before the call to register, download, and install any necessary audio software. For those unable to attend the live broadcast, a replay will be available for the next 60 days. There is no charge to access the event. A replay of the call will also be available by telephone beginning at 12:00 p.m., February 27 to 12:00 p.m., February 28. The dial-in number is 800-642-1687, ID #642973. AmeriPath, Inc. is the nation's largest company focused on providing anatomic pathology, cancer diagnostics, genomics, and physician and laboratory healthcare information services to physicians, hospitals, national clinical laboratories and managed care organizations. The Company's 425 physicians provide medical services through 42 outpatient pathology laboratories, 224 hospital inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. laboratories, and 64 outpatient surgery Outpatient Surgery, also referred to as ambulatory surgery or same-day surgery, is surgery that does not require an overnight hospital stay. The term “outpatient” arises from the fact that surgery patients may go home do not need an overnight hospital centers in 21 states. The statements of James C. New, and other statements contained in this press release may include "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " which are based on management's current beliefs and expectations. Past performance is not necessarily indicative of future results. In addition, forward-looking statements - which are identified by words such as "may", "should", "believe", "expect", "anticipate", "estimate" and similar expressions - as well as any financial and operating estimates, forecasts and/or projections, are subject to a number of risks and uncertainties, many of which involve factors or circumstances which are beyond the Company's ability to control. These factors, risks and uncertainties could cause actual results to differ materially from historical results or those expected, estimated or anticipated. These include factors, risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc demand for pathology and related services, pricing, federal and state regulation (and compliance), reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates, government and third party payments, dependence upon pathologists (and need to retain), key personnel and contracts, completion and integration of acquisitions and affiliations (and achievement of expected synergies and/or cost savings), cost and availability of financing, competitive factors and technology. The forward looking statements included in this press release are made as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company undertakes no obligation to update or revise any such statements, whether as result of new developments, new information or otherwise. Further information regarding risks, uncertainties and other factors that could affect the Company's financial or operating results, or which could cause actual results to differ materially from those expected, estimated or anticipated, are included in the Company's Form 10-K for the year ended December 31, 1999 and subsequent filings with the SEC. Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : This release is also available at http://www.ameripath.com
AmeriPath, Inc.
Condensed Consolidated Statements of
Operations (Unaudited)
(In thousands, except per share data)
Including Special Charges
-------------------------
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
---------------------------------------------
Net revenue $87,596 $71,981 $330,094 $257,432
---------------------------------------------
Operating costs
and expenses:
Cost of services 45,199 35,720 163,390 122,685
Selling, general &
admin. expense 15,751 12,534 58,411 47,159
Provision for
doubtful accounts 9,720 6,743 34,040 25,289
Amortization expense 4,395 3,703 16,172 12,827
Merger-related costs 6,209 -- 6,209 --
Asset impairment and
related charges 4,317 -- 9,562 --
---------------------------------------------
Total operating costs
and expenses 85,591 58,700 287,784 207,960
---------------------------------------------
Income from operations 2,005 13,281 42,310 49,472
Interest expense (4,743) (2,845) (15,376) (9,573)
Other income (expense),
net 22 89 226 286
---------------------------------------------
Income (loss) before
income taxes (2,716) 10,525 27,160 40,185
Provision for income
taxes 498 4,483 14,068 17,474
---------------------------------------------
Net income (loss) (3,214) 6,042 13,092 22,711
Accretion of
redeemable preferred
stock -- (32) (1,604) (131)
---------------------------------------------
Net income (loss)
available to common
shareholders $(3,214) $6,010 $11,488 $22,580
=============================================
Diluted net income
(loss) per share $(0.13) $0.26 $0.47 $1.00
=============================================
Weighted average
shares outstanding 25,644 22,768 24,237 22,516
=============================================
Excluding Special Charges
-------------------------
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
---------------------------------------------
Net revenue $92,846 $71,981 $335,344 $257,432
---------------------------------------------
Operating costs
and expenses:
Cost of services 45,199 35,720 163,390 122,685
Selling, general &
admin. expense 15,751 12,534 58,411 47,159
Provision for
doubtful accounts 9,770 6,743 34,090 25,289
Amortization expense 4,395 3,703 16,172 12,827
Merger-related costs -- -- -- --
Asset impairment and
related charges -- -- -- --
---------------------------------------------
Total operating
costs and expenses 75,115 58,700 272,063 207,960
---------------------------------------------
Interest expense (4,743) (2,845) (15,376) (9,573)
Other income (expense),
net 22 89 226 286
---------------------------------------------
Income (loss) before
income taxes 13,010 10,525 48,131 40,185
Provision for
income taxes 5,249 4,483 20,119 17,474
---------------------------------------------
Net income (loss) 7,761 6,042 28,012 22,711
Accretion of redeemable
preferred stock -- -- -- --
---------------------------------------------
Net income (loss)
available to common
shareholders $7,761 $6,042 $28,012 $22,711
=============================================
Diluted net income
(loss) per share $0.30 $0.27 $1.16 $1.01
=============================================
Weighted average
shares outstanding 25,644 22,768 24,237 22,516
=============================================
AmeriPath, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
December 31, December 31,
2000 1999
------------- ------------
Cash and cash equivalents $ 2,418 $ 1,713
Accounts receivable, net 70,939 57,788
Inventories 1,406 995
Other current assets 12,831 7,610
--------- ---------
Total current assets 87,594 68,106
Property and equipment, net 23,580 16,540
Other assets 457,039 393,987
--------- ---------
Total assets $ 568,213 $ 478,633
========= =========
Total current liabilities $ 46,779 $ 25,913
--------- ---------
Revolving loan 197,216 165,800
Subordinated notes 3,476 1,884
Other liabilities 2,369 1,059
Deferred taxes 68,708 62,259
--------- ---------
Total long term liabilities 271,769 231,002
--------- ---------
Convertible Preferred Stock -- 15,504
--------- ---------
Total stockholders' equity 249,665 206,214
--------- ---------
Total liabilities and
stockholders' equity $ 568,213 $ 478,633
========= =========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion