AmeriPath, Inc. Announces 2002 Third Quarter Financial Results.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)--Oct. 29, 2002 Net Revenue, Net Income and 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. Up 17%, 54% and 29%, Respectively (Excluding Special Items) 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 nine months ended September 30, 2002. 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. Third Quarter Results, Excluding Special Items Net revenue for the third quarter increased 17% over the same period of the prior year, from $106.1 million to $123.7 million. Third 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.
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 third quarter ended September 30, 2002 was $27.0 million. Nine Month Results, Excluding Special Items Net revenue for the nine months ended September 30, 2002 was $357.4 million compared to $309.9 million for the same period of 2001, an increase of 15%. EBITDA was $83.4 million in the first nine months of 2002, compared to $76.7 million in 2001, an increase of 9%. Net income, excluding special items, for the nine months was $40.1 million, or $1.29 per share, compared to $25.7 million or $0.98 per share, for the same period of 2001. Cash flow from operations for the nine months ended September 30, 2002 was $53.2 million. Revenue and Same Store Details Third quarter 2002 same store net revenue, excluding national lab business, increased 13%, or $12.4 million, compared to the prior year. National lab business for the quarter was down 28%, or $2.1 million, and acquisitions provided the remaining increase of $7.3 million. Total same store outpatient net revenue, excluding national lab business, for the quarter increased 28%, with Dermpath Diagnostics 10% and general anatomic anatomic /ana·tom·ic/ (an?ah-tom´ik) anatomical. Anatomic Related to the physical structure of an organ or organism. pathology 63% over the third quarter of 2001. Same store hospital net revenue increased $1.3 million, or 2.6%, and management service net revenue decreased $250,000, or 2.9%, compared to the same period of the prior year. 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. commented, "In many ways, AmeriPath had an excellent quarter, but at the same time, challenging. EBITDA results fell short of expectations due to higher malpractice malpractice, failure to provide professional services with the skill usually exhibited by responsible and careful members of the profession, resulting in injury, loss, or damage to the party contracting those services. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. and the short-term effect of carrying excess costs in Philadelphia, Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , and Central Florida
Central Florida is the central region of the United States state of Florida, on the East Coast. as these operations transition away from national lab business. Plans have been implemented to reduce these excess costs. Offsetting these challenges was excellent same lab growth, tremendous cash flow results, and major debt reduction." Third Quarter Special Items As disclosed in our second quarter 10-Q, we have taken a charge of $2.1 million for the 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. of intangibles as it relates to a national lab contract in Philadelphia. Also during the third quarter, the Company recorded a non-cash write down of $1.0 million related to reduction in fair value of its investment in a start up genomics company. In addition, the Company continued its efforts to restructure the managed practice business segment. In the quarter, the managed practice in Missouri was sold for a pre-tax cash gain of approximately $250,000 and our contract with a managed laboratory in northeast Georgia was terminated resulting in a non-cash pre-tax impairment charge of approximately $700,000. Exiting these contracts will open up previously restricted sales territories and provide new marketing opportunities. Results of Operations, Including Special Items Net income, including special items, for the quarter ended September 30, 2002 was $11.2 million, or $0.36 per share, compared to $8.9 million or $0.34 per share for the quarter ended September 30, 2001. Net income, including special items, for the nine months ended September 30, 2002, was $37.6 million, or $1.21 per share, compared to $21.3 million or $0.81 per share for the nine months ended September 30, 2001. 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 2003, the Company continues to estimate revenue of $530 million to $550 million and earnings per share of $1.80 to $1.85. More detailed information regarding the business, operations and financial performance of the Company through September 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 September 30, 2002, which is expected to be filed with the SEC on or prior to November 14, 2002. Conference Call As previously announced, the Company will broadcast its third quarter financial results conference call on Tuesday, October 29, 2002, at 10:00 a.m. Eastern Time over the Internet. 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,661809,1&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 A predefined linkage between one object and another. See hypertext. hyperlink - anchor 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, October 29, to 12:00 noon, October 31. The dial-in number for the telephone replay is 800-839-6713, passcode 5322716. AmeriPath is a leading national provider of cancer diagnostics, genomic, and related information services. The Company's extensive diagnostics infrastructure includes the Center for Advanced Diagnostics (CAD), a division of AmeriPath. CAD provides 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. 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) (TM), performed pursuant to an agreement with Roche Molecular Systems, Inc.), 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 Reimbursement Payment made to someone for out-of-pocket expenses has incurred. 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 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" 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)
Including Special Items
-----------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Net revenue $123,741 $106,058 $357,372 $309,855
--------- --------- --------- ---------
Operating costs and expenses:
Cost of services 61,250 50,921 174,475 148,743
Selling, general & admin.
expense 21,851 18,089 62,542 53,475
Provision for doubtful
accounts 14,759 12,617 42,873 35,823
Amortization expense 2,892 4,677 8,477 13,857
Merger-related costs -- -- -- 7,103
Asset impairment and related
charges 2,753 -- 2,753 --
--------- --------- --------- ---------
Total operating costs and
expenses 103,505 86,304 291,120 259,001
--------- --------- --------- ---------
Income from operations 20,236 19,754 66,252 50,854
Interest expense (1,129) (4,443) (3,259) (13,880)
Write down of Genomics
investment (1,000) -- (1,000) --
Other income (expense), net 403 (74) 534 70
--------- --------- --------- ---------
Income before income taxes 18,510 15,237 62,527 37,044
Provision for income taxes 7,343 6,369 24,950 15,788
--------- --------- --------- ---------
Net income $11,167 $8,868 $37,577 $21,256
========= ========= ========= =========
========= ========= ========= =========
Diluted net income per share $0.36 $0.34 $1.21 $0.81
========= ========= ========= =========
Weighted average shares
outstanding 31,019 26,390 31,106 26,147
========= ========= ========= =========
AmeriPath, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Excluding Special Items
-----------------------
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Net revenue $123,741 $106,058 $357,372 $309,855
--------- --------- --------- ---------
Operating costs and expenses:
Cost of services 61,250 50,921 174,475 148,743
Selling, general & admin.
expense 21,851 18,089 62,542 53,475
Provision for doubtful
accounts 14,759 12,617 42,873 35,823
Amortization expense 2,892 4,677 8,477 13,857
Merger-related costs -- -- -- --
Asset impairment and related
charges -- -- -- --
--------- --------- --------- ---------
Total operating costs
and expenses 100,752 86,304 288,367 251,898
--------- --------- --------- ---------
Income from operations 22,989 19,754 69,005 57,957
Interest expense (1,129) (4,443) (3,259) (13,880)
Write down of Genomics investment -- -- -- --
Other income (expense), net 150 (74) 281 70
--------- --------- --------- ---------
Income before income taxes 22,010 15,237 66,027 44,147
Provision for income taxes 8,324 6,369 25,931 18,414
--------- --------- --------- ---------
Net income $13,686 $8,868 $40,096 $25,733
========= ========= ========= =========
========= ========= ========= =========
Diluted net income per share $0.44 $0.34 $1.29 $0.98
========= ========= ========= =========
Weighted average shares
outstanding 31,019 26,390 31,106 26,147
========= ========= ========= =========
AmeriPath, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30,
2002 December 31,
(unaudited) 2001
------------ ------------
Cash and cash equivalents $ 5,459 $ 4,808
Accounts receivable, net 93,399 81,595
Inventories 1,169 1,892
Other current assets 20,340 15,780
------------ ------------
Total current assets 120,367 104,075
Property and equipment, net 24,234 24,118
Other assets 516,913 476,269
------------ ------------
Total assets $ 661,514 $ 604,462
============ ============
Total current liabilities $ 60,215 $ 47,255
------------ ------------
Revolving loan 86,000 90,000
Subordinated notes and other debt 2,399 2,853
Other liabilities 1,386 2,690
Deferred taxes 67,884 62,474
------------ ------------
Total long-term liabilities 157,669 158,017
------------ ------------
Total stockholders' equity 443,630 399,190
------------ ------------
Total liabilities and
stockholders' equity $ 661,514 $ 604,462
============ ============
AmeriPath, Inc.
Reconciliation of EBITDA, Excluding Special Items
(Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net income $13,686 $8,868 $40,096 $25,733
Add back: Interest (1) 1,065 4,320 3,071 13,525
Taxes 8,324 6,369 25,931 18,414
Depreciation
and amortization 4,874 6,514 14,335 19,012
-------- -------- -------- --------
EBITDA $27,949 $26,071 $83,433 $76,684
======== ======== ======== ========
(1) Excludes amortization of deferred debt issuance costs which is
included in depreciation and amortization.
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