AmeriPath, Inc. Announces 2006 Second Quarter Financial Results.PALM BEACH GARDENS, Fla. -- AmeriPath, Inc. ("AmeriPath" or the "Company"), a leading provider of physician based 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. , dermatopathology der·ma·to·pa·thol·o·gy n. The histopathology of skin lesions. dermatopathology pathology that is especially concerned with lesions of the skin. , molecular diagnostic services diagnostic services, n.pl the imaging and laboratory capabilities available for determining the cause of an illness. , and other 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. services, reported its financial results for the second quarter and the six-months ended June June: see month. 30, 2006. Net revenues for the second quarter of 2006 increased 33.5% to $191.7 million from $143.6 million in the second quarter of 2005. Net revenues for the six-month period ended June 30, 2006 increased 30.7% to $362.6 million compared to $277.5 million for the six-month period ended June 30, 2005. Net revenues and results of operations include the results of Specialty Laboratories, Inc., ("Specialty"), a hospital-focused clinical reference laboratory specializing in esoteric testing esoteric test Lab medicine The analysis of 'rare' substances or molecules that are not performed in a routine clinical lab. See DORA. , from the effective date of the acquisition by AmeriPath, which was January January: see month. 31, 2006. Net revenues from Specialty for the second quarter of 2006 were $40.2 million. Net revenues from Specialty for the six-month period ended June 30, 2006 were $66.6 million. Same store net revenues for the second quarter of 2006 increased 6.7%, or $9.5 million, when compared to the second quarter of 2005. Same store net revenues for the six-month period ended June 30, 2006 increased 8.7% or $23.6 million, when compared to the six-month period ended June 30, 2005. 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 second quarter of 2006 increased to $107.9 million (56.3% of net revenues) from $74.3 million (51.7% of net revenues) in the second quarter of 2005. Costs of services for the six-month period ended June 30, 2006 increased to $204.9 million (56.5% of net revenues) from $147.8 million (53.3% of net revenues) for the six-month period ended June 30, 2005. The increases in costs of services as a percentage of net revenues are primarily due to the acquisition of Specialty and from 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 second quarter of 2006 were $39.0 million (20.3% of net revenues) compared to $27.2 million (18.9% of net revenues) in the second quarter of 2005. Selling, general and administrative expenses for the six-month period ended June 30, 2006 were $74.7 million (20.6% of net revenues) compared to $52.4 million (18.9% of net revenues) in the six-month period ended June 30, 2005. The increases in selling, general, and administrative expenses for the six-month period ended June 30, 2006 are primarily due to adding additional resources in information and technology, increased sales and marketing costs, billing conversions from third-party providers, increased Sarbanes Oxley Oxley refers to several things: People
SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123 (R) effective January 1, 2006 that requires the expensing of stock options, and the impact from the Specialty acquisition. Specialty's selling, general, and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. are higher than historical selling, general, and administrative expenses of our anatomic pathology business. The provision for doubtful accounts for the second quarter of 2006 was $19.0 million (9.9% of net revenues) compared to $18.8 million (13.1% of net revenues) in the second quarter of 2005. The provision for doubtful accounts for the six-month period ended June 30, 2006 increased to $38.8 million (10.7% of net revenues) compared to $36.4 million (13.1% of net revenues) in the six-month period ended June 30, 2005. Outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. and esoteric revenues, as a percentage of total revenues, continued to grow at a faster rate than our 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. revenues. The bad debt percentage on outpatient and esoteric revenues is generally much lower than on inpatient revenues and therefore, reduces total bad debt expense as a percentage of total revenues. Outpatient and esoteric revenues, as a percentage of total revenues, for the six-months ended June 30, 2006 were 71.6% compared to 61.0% for the six-months ended June 30, 2005. Net income for the second quarter of 2006 was $5.2 million compared to net income of $5.1 million for the comparable period of 2005. Net income for the six-month period ended June 30, 2006 was $3.1 million compared to net income of $6.8 million for the six-month period ended June 30, 2005. As previously discussed, AmeriPath completed its previously announced acquisition of Specialty Laboratories, Inc., a leading hospital-focused clinical reference laboratory on January 31, 2006. AmeriPath financed its acquisition through a combination of cash on hand, contribution of Specialty shares by its majority shareholder, additional cash equity from AmeriPath's majority stockholder, Welsh Welsh most commonly refers to:
Places Carson Carson, city (1990 pop. 83,995), Los Angeles co., S Calif., an industrial and residential suburb of Los Angeles; inc. 1968. Oil refining is the major industry; fabricated metals, paper, and other products are manufactured. The California State Univ. Dominguez Hills is there. , Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic & Stowe Stowe (stō), resort town (1990 pop. 2,450), Lamoille co., N central Vt.; settled 1794, inc. 1896. It is surrounded by mountains, including Mt. Mansfield, Vermont's highest. IX, L.P., and borrowings under AmeriPath's new credit facility. Please refer to the Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. that was filed with the SEC on February February: see month. 3, 2006 and the Form 8-KA that was filed with the SEC on April 12, 2006 for more detailed information. More detailed information regarding the business, operations and financial performance of the Company through June 30, 2006, 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, 2006, which is expected to be filed with the SEC on August 14, 2006. The Company will broadcast its first quarter financial results via conference call on August 14, 2006, at 3:00 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 4:00 p.m. Eastern Time on August 14, 2006 until midnight, August 17, 2006. The dial-in number for the telephone replay is 888-286-8010, Pass Code #49456180. AmeriPath, a leading national provider of physician-based anatomic pathology, dermatopathology and molecular diagnostic services to physicians, hospitals, clinical laboratories and surgery centers, supports community-based medicine by helping physicians provide excellent and effective care for their patients. A team of subspecialized pathologists
(2) Error messages in a programmer's source code that refer to statements or syntax that the compiler or assembler services in outpatient laboratories owned, operated and managed by AmeriPath, as well as in hospitals and ambulatory Movable; revocable; subject to change; capable of alteration. An ambulatory court was the former name of the Court of King's Bench in England. It would convene wherever the king who presided over it could be found, moving its location as the king moved. surgical centers. Specialty Laboratories supports local pathology and community-based medicine by partnering with pathologists and hospitals to improve patient care and reduce episodes-of-care costs. Specialty offers hospitals an extensive menu of highly advanced clinical tests used by physicians to diagnose diagnose /di·ag·nose/ (di´ag-nos) to identify or recognize a disease. di·ag·nose v. 1. To distinguish or identify a disease by diagnosis. 2. , monitor and treat disease and a single-source solution for esoteric testing needs. The statements contained in this press release may contain "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 successful integration of the merger with Specialty Laboratories (and achievement of planned or expected synergies); ability to manage growth, access to capital on satisfactory terms, general economic conditions; 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; and marketing and promotional efforts. 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 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.
Consolidated Statements of Income
(In thousands)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Net revenues $191,692 $143,634 $362,628 $277,514
Operating costs and expenses:
Costs of services 107,940 74,276 204,866 147,776
Selling, general &
administrative 38,994 27,162 74,745 52,352
Provision for doubtful accounts 18,972 18,804 38,812 36,440
Merger-related charges 1,198 -- 1,784 --
Amortization expense 2,900 3,474 6,755 6,779
Gain on sale of practice -- -- -- (454)
-------- -------- -------- --------
Total operating costs and
expenses $170,004 $123,716 $326,962 $242,893
-------- -------- -------- --------
Income from operations 21,688 19,918 35,666 34,621
Interest expense (14,902) (11,707) (28,004) (22,935)
Change in value of derivative 453 329 746 (291)
Write-off of deferred financing
costs -- (345) (3,360) (345)
Other income, net 559 180 897 284
-------- -------- -------- --------
Income before income taxes 7,798 8,375 5,945 11,334
Provision for income taxes 2,580 3,315 2,817 4,515
-------- -------- -------- --------
Net income $ 5,218 $ 5,060 $ 3,128 $ 6,819
======== ======== ======== ========
AmeriPath, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2005 2005
----------- -----------
Cash and cash equivalents $ 8,319 $ 3,998
Restricted cash 26,960 26,684
Accounts receivable, net 126,954 84,968
Inventories 6,833 2,327
Deferred tax assets, net 11,139 10,909
Other current assets 7,734 4,963
---------- ----------
Total current assets 187,939 133,849
Property and equipment, net 93,019 49,196
Other assets 1,089,458 801,104
---------- ----------
Total assets $1,370,416 $ 984,149
========== ==========
Total current liabilities $ 93,026 $ 70,116
---------- ----------
Long-term debt 620,012 479,136
Other liabilities 48,037 33,228
Deferred tax liabilities, net 38,114 16,952
---------- ----------
Total long-term liabilities 706,163 529,316
---------- ----------
Total stockholder's equity 571,227 384,717
---------- ----------
Total liabilities and stockholder's
equity $1,370,416 $ 984,149
========== ==========
AmeriPath, Inc.
Reconciliation of Net Income to EBITDA
(In thousands)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2006 2005 2006 2005
-------- -------- -------- --------
Net income $ 5,218 $ 5,060 $ 3,128 $ 6,819
Add Back: Interest 14,903 11,707 28,004 22,935
Taxes 2,580 3,315 2,817 4,515
Depreciation and
amortization 8,476 6,135 17,017 11,939
-------- -------- -------- --------
EBITDA(1) 31,177 26,217 50,966 46,208
-------- -------- -------- --------
Plus: Gain on sale of practice -- -- -- (454)
Change in value of
derivative (453) (329) (746) 291
Merger-related charges 1,198 -- 1,784 --
SFAS 123 (R) non cash
charge 449 -- 592 --
Write-off of deferred
financing costs -- 345 3,360 345
-------- -------- -------- --------
EBITDA (excluding gain
on sale of managed
practice, change in
value of derivative,
merger-related costs,
SFAS 123 (R) non cash
stock option charges,
and write-off of
deferred financing
costs) $ 32,371 $ 26,233 $ 55,956 $ 46,390
======== ======== ======== ========
(1) EBITDA represents earnings before 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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