AmeriPath, Inc. Announces 2002 Second Quarter Financial Results; Net Revenue, EPS and Net Income Up 15%, 26% and 51% Respectively.Business Editors/Health & Medical Writers 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)--July 30, 2002 AmeriPath, Inc. (Nasdaq:PATH), a leading national provider of cancer diagnostics, genomic genomic pertaining to a genome. genomic clone see clone. genomic DNA the DNA sequences making up the genome of an individual. genomic library see gene bank. , and related information services See Information Systems. , reported its financial results for the quarter and six months ended June 30, 2002. Net revenue for the second quarter increased 15% over the same period of the prior year, from $105.1 million to $120.7 million. Net income for the quarter was $13.8 million, an increase of $4.7 million, or 51%, over the 2001 second quarter net income of $9.1 million. Earnings per share for the quarter increased 26% to $0.44 from $0.35 for the second quarter of 2001. 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. "We're pleased with our strong second quarter performance," said James C. New, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of AmeriPath. "During the quarter, we expanded our relationship with Aetna's Florida HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, clients as well as their national PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there clients, grew our CAD 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. business by 60% and benefited from strong outpatient revenue growth. We also had strong same store revenue at 9%, and when calculated without the national clinical lab business and the closing of a lab in Alabama, exceeded 13%." Six Months' Financial Results, Excluding Special Charges Incurred in March 2001 Net revenue for the six months ended June 30, 2002 was $233.6 million compared to $203.8 million for the same period of 2001, an increase of 15%. Net income for the six months was $26.4 million, or $0.85 per share compared to $16.9 million or $0.65 per share, excluding special charges, for the same period of 2001. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the six months was $26.2 million, or $0.84 per share. Revenue and Same Store Details Second quarter 2002 same store net revenue increased 9%, or $9.8 million, compared to the prior year, while acquisitions provided the remaining increase of $5.8 million. Same store outpatient net revenue for the quarter increased $6.1 million, or 13% (which included a negative $2.7 million for lost national lab and Alabama business), same store hospital net revenue increased $3.3 million, or 7%, and management service net revenue increased $0.4 million, or 5%, compared to the same period of the prior year. 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 Second quarter 2002 earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Guidance AmeriPath reiterates its previous guidance for the year 2002 of $480 million to $490 million in net revenue and earnings per share of $1.73 to $1.77. For the year 2003, the Company expects revenue to be in the range of $530 million to $550 million. The net revenue guidance for 2003 assumes a $23 million reduction in national clinical lab revenue, of which the Company expects to replace over time 50% to 75% of the unit volume with retail business at higher reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates. Revenue guidance also includes an anticipated reduction of $5.0 million in Medicare reimbursements. AmeriPath estimates organic growth, including the replacement of national lab work, of $40 million to $50 million, with the balance of the revenue increase coming from acquisitions. Earnings per share for 2003 are anticipated to be $1.80 to $1.85. Mr. New continued, "As we implement our regional strategy of developing our 14 primary lab locations, we feel confident in our ability to gain higher priced, higher margin retail business as we transition away from our largest national lab contractor." More detailed information regarding the business, operations and financial performance of the Company through June 30, 2002, and related and other matters, will be included in the Company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2002, which is expected to be filed with the SEC on or prior to August 14, 2002. Conference Call As previously announced, the Company will broadcast its second quarter financial results conference call on Tuesday, July 30, 2002, at 10:00 a.m. Eastern Time over the Internet. In addition, this conference call will also provide additional information on 2003 guidance. All stockholders and investors are encouraged to participate. This event is available through AmeriPath's website, located at http://www.ameripath.com, or CCBN's website, located at http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. =PATH&script=1020&item_id=ew,646423,1&layout=6. (Due to the length of this URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. , it may be necessary to copy and paste To copy files from one location to another or to copy text and images from one document to another. All modern operating systems and applications have a copy and paste capability that is typically selected from an Edit menu. See cut and paste and Win Copy between windows. this hyperlink into your Internet browser's URL address field.) Listeners should go to the website at least fifteen minutes before the call to register and to 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 at both websites. There is no charge to access the event. A replay of the call will also be available by telephone beginning at 12:00 noon, July 30, to 12:00 noon, August 1. The dial-in number for the telephone replay is 800-633-8284, ID #20748940. AmeriPath is a leading national provider of cancer diagnostics, genomics, and related information services. The Company's extensive diagnostics infrastructure includes the Center for Advanced Diagnostics (CAD), a division of AmeriPath. CAD provides specialized diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease and information services including Fluorescence fluorescence (fl  rĕs`əns), luminescence in which light of a visible color is emitted from a substance under stimulation or excitation by light or other forms of electromagnetic In-Situ
Hybridization hybridization /hy·brid·iza·tion/ (hi?brid-i-za´shun)1. crossbreeding; the act or process of producing hybrids. 2. molecular hybridization 3. (FISH), Flow Cytometry flow cytometry (flōˑ sī·t  ˑ·m , DNA Analysis DNA analysis Any technique used to analyze genes and DNA. See Chromosome walking, DNA fingerprinting, Footprinting, In situ hybridization, Jeffries' probe, Jumping libraries, PCR, RFLP analysis, Southern blot hybridization. , 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) ), Molecular Genetics molecular genetics n. 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. and HPV HPV human papillomavirus. HPV abbr. human papilloma virus Human papilloma virus (HPV) Typing. Additionally, AmeriPath provides clinical trial and research development support to firms involved in developing new cancer and genomic diagnostics and therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. . The statements contained in this press release 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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements - which are sometimes identified by words such as "may", "should", "believe", "expect", "anticipate", "estimate" and similar expressions and which include any financial or operating estimates, forecasts or projections - are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. These risks and uncertainties could cause actual results to differ materially from results anticipated by forward-looking statements. These risks and uncertainties include: the extent of success of the Company's operating initiatives and growth strategies; ability to manage growth; access to capital on satisfactory terms; general economic conditions; terrorism or an escalation es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. of hostilities or war; competition and changes in competitive factors; federal and state healthcare regulation (and compliance); reimbursement rates under government and third party healthcare programs and the payments received under such programs; changes in coding; changes in technology; dependence upon pathologists and customer contracts; the ability to attract, motivate, and retain pathologists; labor, technology and insurance costs; professional liability claims; marketing and promotional efforts; the availability of pathology practices in appropriate locations that the Company is able to acquire on suitable terms or develop; and the successful completion and integration of acquisitions (and achievement of planned or expected synergies). The forward-looking statements in this press release are made as of the date hereof based on management's current beliefs and expectations, and the Company undertakes no obligation to update or revise any such statements. Further information regarding risks, uncertainties and other factors that could affect the Company's financial or operating results or that could cause actual results to differ materially from those expected, estimated or anticipated are included in the Company's reports filed 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)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------------------
2002 2001 2002 2001 2001(a)
------------------- ----------------------------
Net revenue $120,739 $105,052 $233,631 $203,797 $203,797
------------------- ----------------------------
Operating costs
and expenses:
Cost of services 58,885 49,390 113,225 97,822 97,822
Selling, general
& admin. expense 20,641 18,168 40,690 35,386 35,386
Provision for
doubtful accounts 14,440 12,548 28,114 23,206 23,206
Amortization
expense 2,803 4,654 5,585 9,180 9,180
Merger-related
costs -- -- -- 7,103 --
------------------- ----------------------------
Total operating
costs and
expenses 96,769 84,760 187,614 172,697 165,594
------------------- ----------------------------
Income from
operations 23,970 20,292 46,017 31,100 38,203
Interest expense (1,078) (4,695) (2,131) (9,437) (9,437)
Other income, net 46 120 132 144 144
------------------- ----------------------------
Income before
income taxes 22,938 15,717 44,018 21,807 28,910
Provision for
income taxes 9,175 6,570 17,607 9,419 12,045
------------------- ----------------------------
Net income $13,763 $9,147 $26,411 $12,388 $16,865
=================== ============================
Diluted net income
per share $0.44 $0.35 $0.85 $0.48 $0.65
=================== ============================
Weighted average
shares outstanding 31,232 26,139 31,230 26,065 26,065
=================== ============================
(a) Excluding merger-related charges incurred in March 2001.
AmeriPath, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30,
2002 December 31,
(unaudited) 2001
----------- -----------
Cash and cash equivalents $ 1,768 $ 4,808
Accounts receivable, net 89,039 81,595
Inventories 1,431 1,892
Other current assets 15,505 15,780
----------- -----------
Total current assets 107,743 104,075
Property and equipment, net 24,392 24,118
Other assets 511,145 476,269
----------- -----------
Total assets $ 643,280 $ 604,462
=========== ===========
Total current liabilities $ 43,757 $ 47,255
----------- -----------
Revolving loan 98,550 90,000
Subordinated notes and other debt 2,743 2,853
Other liabilities 1,650 2,690
Deferred taxes 65,554 62,474
----------- -----------
Total long term liabilities 168,497 158,017
----------- -----------
Total stockholders' equity 431,026 399,190
----------- -----------
Total liabilities and
stockholders' equity $ 643,280 $ 604,462
=========== ===========
AmeriPath, Inc.
Reconciliation of EBITDA
(Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001(b)
-------------------- --------------------
Net income $13,763 $9,147 $26,411 $16,865
Add back: Interest (1) 1,014 4,578 2,006 9,205
Taxes 9,175 6,570 17,607 12,045
Depreciation
and amortization 4,778 6,369 9,461 12,497
-------------------- --------------------
EBITDA $28,730 $26,664 $55,485 $50,612
==================== ====================
(b) Excludes merger-related charges incurred in March 2001.
(1) Excludes amortization of deferred debt issuance costs which
are included in depreciation and amortization.
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