AmeriPath, Inc. Announces 2004 Third Quarter and Nine Month Results.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. -- AmeriPath, Inc. ("AmeriPath" or the "Company"), a leading national provider of cancer diagnostics (1) Software routines that test hardware components (memory, keyboard, disks, etc.). Diagnostics are often stored in ROM chips and activated on startup. (2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler , genomics ge·no·mics n. The study of all of the nucleotide sequences, including structural genes, regulatory sequences, and noncoding DNA segments, in the chromosomes of an organism. , and related information services See Information Systems. , reported its financial results for the third quarter and the nine-month period ended September September: see month. 30, 2004. As noted in the 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 financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge , the merger of AmeriPath on March 27, 2003, resulted in a new basis of accounting for AmeriPath. In some cases, for ease of comparison purposes, financial data for the period after the merger, March 28, 2003 through September 30, 2003, has been added to the financial data for the period from January January: see month. 1, 2003 through March 27, 2003 (predecessor predecessor - parent period), to arrive at the nine-month combined period ended September 30, 2003. This combined data is referred to herein as nine months 2003 or the combined nine-month period ended September 30, 2003. Net revenues for the third quarter of 2004 were $127.7 million compared to $122.0 million in the third quarter of 2003. Net revenues for the nine-month period ended September 30, 2004 were $378.8 million compared to $360.9 million for the combined nine-month period ended September 30, 2003. Net revenues for the third quarter of 2003 and for the combined nine-month period ended September 30, 2003 were negatively impacted by charges to revenues of $2.2 million and $4.5 million, respectively, to reflect changes in our estimated contractual allowances resulting from an analysis of our managed care contracts. Same store net revenues, excluding revenues from national labs, for the third quarter of 2004 increased 4.6%, or $5.5 million, when compared to the third quarter of 2003. Same store net revenues, excluding revenues from national labs, for the nine-month period ended September 30, 2004 increased 6.7%, or $23.5 million, when compared to the combined nine-month period ended September 30, 2003. For the third quarter of 2004, national lab revenues were less than $0.1 million, down from $0.5 million in the third quarter of 2003. For the nine-month period ended September 30, 2004, national lab revenues were $0.2 million, down from $4.0 million for the combined nine-month period ended September 30, 2003. This decline in national lab revenues is consistent with our previous financial statement disclosures that this business would be lost. 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 (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.
Costs of services for the third quarter of 2004 increased to $67.8 million (53.1% of net revenues) from $63.2 million (51.7% of net revenues) in the third quarter of 2003. Costs of services for the nine-month period ended September 30, 2004 increased to $199.4 million (52.6% of net revenues) from $186.6 million (51.7% of net revenues) for the combined nine-month period ended September 30, 2003. The increases in costs of services as a percentage of net revenues are primarily due to increased physician compensation and increased courier A monospaced typeface originating from the typewriter that is commonly used for letters. It is still considered by many to be the "appropriate" typeface for business correspondence. and distribution costs distribution costs distribute npl → Vertriebskosten pl associated with the increased revenues from physicians' offices. Selling, general and administrative expenses for the third quarter of 2004 increased to $21.8 million (17.1% of net revenues) from $21.7 million (17.8% of net revenues) in the third quarter of 2003. Selling, general and administrative expenses for the nine-month period ended September 30, 2004 increased to $69.3 million (18.3% of net revenue) from $65.9 million (18.3% of net revenues) in the combined nine-month period ended September 30, 2003. The increases for the nine-month period ended September 30, 2004 are primarily due to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.4 million for the Company's former Chief Executive Officer, investments in information technology and expansion of our sales and marketing efforts. The provision for doubtful accounts for the third quarter of 2004 increased to $22.5 million (17.6% of net revenues) from $20.9 million (17.1% of net revenues) in the same period of 2003. The provision for doubtful accounts for the nine-month period ended September 30, 2004 increased to $58.3 million (15.4% of net revenues) from $53.8 million (14.9% of net revenues) in the combined nine-month period ended September 30, 2003. The provisions for doubtful accounts for the third quarter of 2003 and for the combined nine-month period ended September 30, 2003 were increased by charges of $4.0 million and $6.5 million, respectively, to reflect the net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of certain receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed based on our analysis of the ability to collect historical revenues and billings Billings, city (1990 pop. 81,151), seat of Yellowstone co., S Mont., on the Yellowstone River, in a valley surrounded by seven mountain ranges; inc. as a city 1885. associated with clinical professional component ("CPC (1) (Central Processing Complex) An IBM mainframe that has two or more central processors (CPs) that share memory. It is the collection of processors, memory and I/O subsystems manufactured with a single serial number, typically all contained in one cabinet. ") services. Net income for the third quarter of 2004 was $1.3 million compared to net income of $1.7 million for the same quarter of 2003. Net income for the nine-month period ended September 30, 2004 was $3.1 million compared to net income of $0.7 million for the combined nine-month period ended September 30, 2003. More detailed information regarding the business, operations and financial performance of the Company through September 30, 2004, 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, 2004, which is expected to be filed with the SEC on November November: see month. 12, 2004. The Company will broadcast its third quarter financial results via conference call on Wednesday Wednesday: see week. , November 10, 2004, at 4:00 p.m. Eastern Time. All bondholders are encouraged to participate. This event is available through the Company's website, http://www.ameripath.com. Listeners should go to the website at least fifteen minutes before the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those unable to attend the live broadcast, a replay of the webcast will be available for the next 2 months on our website. There is no charge to access the event. A replay of the call will also be available by telephone beginning at 6:00 p.m., November 10, 2004 to 5:00 p.m., November 15, 2004. The dial-in number for the telephone replay is (866) 346-2404, Pass Code #2498. 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 CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. ), 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 adj. 1. being in the original position; not having been moved or transferred to another location; as, an in-situ investigator s>.Adj. 1. 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 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. 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 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. " 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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 hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. 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
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 annual, quarterly, and other reports and 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
(In thousands)
(Unaudited)
Three Months Ended
September 30,
-------------------
2004 2003
--------- ---------
Net revenues $127,712 $122,045
Operating costs and expenses:
Costs of services 67,795 63,150
Selling, general & administrative 21,816 21,730
Provision for doubtful accounts 22,455 20,888
Amortization expense 2,753 2,463
Merger-related charges -- --
Restructuring costs -- --
Asset impairment and related
charges -- --
--------- ---------
Total operating costs and expenses $114,819 $108,231
--------- ---------
Income from operations 12,893 13,814
Interest expense (11,130) (11,132)
Change in value of derivative 511 --
Write-off of deferred financing costs -- --
Other income, net 112 146
--------- ---------
Income before income taxes 2,386 2,828
Provision for income taxes 1,062 1,108
--------- ---------
Net income (loss) $1,324 $1,720
========= =========
(Predecessor) (Successor) (Combined)
(Successor) Period from Period from Nine
Nine Months January 1, March 28, Months
Ended 2003 through 2003 through Ended
Sept. 30, March 27, Sept. 30, Sept. 30,
2004 2003 2003 2003
------------ ------------- ------------ ----------
Net revenues $378,829 $118,957 $241,948 $360,905
Operating costs and
expenses:
Costs of services 199,415 62,145 124,466 186,611
Selling, general
& administrative 69,275 21,726 44,189 65,915
Provision for
doubtful
accounts 58,279 14,997 38,798 53,795
Amortization
expense 8,321 3,107 5,558 8,665
Merger-related
charges -- 10,010 2,404 12,414
Restructuring
costs -- 1,196 2,044 3,240
Asset impairment
and related
charges 586 -- -- --
------------ ------------- ------------ ----------
Total operating
costs and expenses $335,876 $113,181 $217,459 $330,640
------------ ------------- ------------ ----------
Income from
operations 42,953 5,776 24,489 30,265
Interest expense (33,297) (1,180) (23,142) (24,322)
Change in value of
derivative (764) -- -- --
Write-off of
deferred financing
costs (3,829) (957) -- (957)
Other income, net 292 33 161 194
------------ ------------- ------------ ----------
Income before income
taxes 5,355 3,672 1,508 5,180
Provision for income
taxes 2,219 2,131 2,344 4,475
------------ ------------- ------------ ----------
Net income (loss) $3,136 $1,541 $(836) $705
============ ============= ============ ==========
AmeriPath, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2004 2003
------------- ------------
(unaudited)
Cash and cash equivalents $20,757 $23,536
Restricted cash 21,138 12,825
Accounts receivable, net 80,633 81,595
Inventories 2,427 1,903
Income tax receivable -- 1,384
Deferred tax asset, net 13,331 13,331
Other current assets 5,629 4,469
------------- ------------
Total current assets 143,915 139,043
Property and equipment, net 27,708 27,103
Other assets 748,655 746,607
------------- ------------
Total assets $920,278 $912,753
============= ============
Total current liabilities $66,745 $52,955
------------- ------------
Long-term debt 465,212 489,008
Other liabilities 27,193 17,232
Deferred tax liabilities, net 15,048 14,883
------------- ------------
Total long-term liabilities 507,453 521,123
------------- ------------
Total stockholder's equity 346,080 338,675
------------- ------------
Total liabilities and stockholder's
equity $920,278 $912,753
============= ============
AmeriPath, Inc.
Reconciliation of Net Income to EBITDA (Unaudited)
(In thousands)
Three Months Ended
September 30,
------------------
2004 2003
------------------
Net Income (Loss) $1,324 $1,720
Add Back:Interest 11,130 11,132
Taxes 1,062 1,108
Depreciation and amortization 4,979 4,657
-------- -------
EBITDA(1) 18,495 18,617
-------- -------
Plus: Merger-related charges -- --
Restructuring costs -- --
Asset impairment and related charges -- --
Change in value of derivative 511 --
Severance costs - former CEO -- --
Write-off of deferred financing costs -- --
-------- -------
EBITDA (excluding merger-related charges,
restructuring costs, asset impairment and
related charges, change in value of
derivative, severance costs, and write-off
of deferred financing costs) $19,006 $18,617
-------- -------
Plus: Contractual allowance charge -- 2,228
Provision for doubtful accounts charge -- 3,975
-------- -------
EBITDA (excluding merger-related charges,
restructuring costs, asset impairment and
related charges, change in value of
derivative, severance costs, write-off of
deferred financing costs, charge for
contractual allowance and charge for
provision for doubtful accounts) $19,006 $24,820
-------- -------
(Successor)
(Predecessor) Period from (Combined)
(Successor) Period from March 28, Nine
Nine Months January 1, 2003 Months
Ended 2003 through through Ended
Sept. 30, March 27, Sept. 30, Sept. 30,
2004 2003 2003 2003
----------- ------------ ----------- ----------
Net Income
(Loss) $3,136 $1,541 $(836) $705
Add Back:Interest 33,297 1,180 23,142 24,322
Taxes 2,219 2,131 2,344 4,475
Depreciation
and
amortization 15,014 5,237 9,982 15,219
-------- ------- -------- --------
EBITDA(1) 53,666 10,089 34,632 44,721
-------- ------- -------- --------
Plus: Merger-related
charges -- 10,010 2,404 12,414
Restructuring
costs -- 1,196 2,044 3,240
Asset
impairment
and related
charges 586 -- -- --
Change in
value of
derivative 764 -- -- --
Severance
costs -
former CEO 1,400 -- -- --
Write-off of
deferred
financing
costs 3,829 957 -- 957
-------- ------- -------- --------
EBITDA
(excluding
merger-
related
charges,
restructuring
costs, asset
impairment
and related
charges,
change in
value of
derivative,
severance
costs, and
write-off of
deferred
financing
costs) $60,245 $22,252 $39,080 $61,332
-------- ------- -------- --------
Plus: Contractual
allowance
charge -- -- 4,528 4,528
Provision for
doubtful
accounts
charge -- -- 6,475 6,475
-------- ------- -------- --------
EBITDA
(excluding
merger-
related
charges,
restructuring
costs, asset
impairment
and related
charges,
change in
value of
derivative,
severance
costs, write-
off of
deferred
financing
costs, charge
for
contractual
allowance and
charge for
provision for
doubtful
accounts) $60,245 $22,252 $50,083 $72,335
-------- ------- -------- --------
(1) EBITDA represents income from operations plus interest, taxes,
depreciation and amortization. EBITDA, a non-GAAP financial measure,
is presented herein because management believes it is a widely
accepted financial indicator of the ability to incur and service debt.
Our presentation of EBITDA is intended to supplement, and not replace
our presentation of net income or other GAAP measures. Our calculation
of EBITDA may not be comparable to similarly titled measures reported
by other companies.
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