American Dental Partners, Inc. Reports Fourth Quarter and Year End 2000 Financial Results; Announces Developments Relating to Two Dental Benefit Providers.Business Editors WAKEFIELD, Mass.--(BUSINESS WIRE)--Feb. 26, 2001 American Dental Partners, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADPI ADPI Alpha Delta Pi Sorority ADPI American Dairy Products Institute ADPI Analog Devices (Philippines) Inc ADPI Australian Dance Performance Institute (Brisbane, QLD, Australia) ) announced financial results today for the fourth quarter and for the year ended December 31, 2000. "During the fourth quarter, we continued to achieve strong internal growth, with same market revenue growth of 12%, despite the adverse impact on many of our affiliated dental groups from the severe winter storms that occurred across much of the nation. These storms, which have been well publicized pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Adj. 1. publicized - made known; especially made widely known publicised , impacted our affiliates in seven states including Maryland, Minnesota, 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 , Oklahoma, Tennessee, Texas and Wisconsin. In addition, a tornado tornado, dark, funnel-shaped cloud containing violently rotating air that develops below a heavy cumulonimbus cloud mass and extends toward the earth. The funnel twists about, rises and falls, and where it reaches the earth causes great destruction. struck Tuscaloosa, Alabama Tuscaloosa is a city in west central Alabama in the southern United States. Located on the Black Warrior River, it is the seat of Tuscaloosa CountyGR6 and the fifth-largest city in Alabama with a population of 83,052 (2006 U.S. Census Bureau Estimate). which had an adverse impact on our Alabama affiliate. This weather occurred primarily during the month of December, and therefore our affiliated dental groups were not able to reschedule re·sched·ule tr.v. re·sched·uled, re·sched·ul·ing, re·sched·ules To schedule again or anew: rescheduled the meeting for the following week; rescheduled the debts of many developing nations. the lost time and revenue during the fourth quarter because of full patient schedules during the balance of the year, particularly in light of the holiday season. We estimate that these winter storms and the tornado cost our affiliated dental groups $548,000 in patient revenue and $366,000 in 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. . As a result, we estimate the impact in the fourth quarter to be approximately $0.03 per share," said Mr. Serrao. Comparing the fourth quarter of 2000 with the same period in 1999: --Net revenue grew to $37,386,000 from $32,467,000, an increase of 15%. --Earnings from operations increased to $3,949,000 from $3,588,00, an increase of 10%. Excluding the weather impact, operating income would have been approximately $4,315,000, an increase of 20%. --Net earnings were $1,518,000, which reflects the after-tax impact of the severe winter weather and an increase in interest expense. --Diluted net earnings per share were $0.21 compared to $0.21. Excluding the impact of the severe winter weather, net earnings per share would have been $0.24, an increase of 14%. --Cash earnings per 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. share, calculated by adding back the after-tax impact of amortization of 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. , was $0.29 for the fourth quarter of 2000, compared to $0.28 in 1999. Excluding the impact of the severe winter weather, cash earnings per diluted share would have been $0.32. Comparing the year ended 2000 with the year ended 1999: --Net revenue grew to $143,644,000 from $117,352,000, an increase of 22%. --Earnings from operations increased to $15,200,000 from $12,478,000, an increase of 22%. --Net earnings increased to $6,169,000. --Diluted net earnings per share increased to $0.84 from $0.78. Excluding the impact on fourth quarter operating results from the severe winter weather, diluted net earnings per share would have been $0.87, an increase of 12%. --Cash earnings per diluted share, calculated by adding back the after-tax impact of amortization of intangible assets, was $1.16 for 2000, compared to $1.01 in 1999. Excluding the impact on fourth quarter operating results from the severe winter weather, cash earnings per diluted share would have been $1.19. "This was a strong year for us on many fronts. During the year, we completed nine affiliations in seven states, adding 24 facilities and 169 operatories," continued Mr. Serrao. "Two of these affiliations were in new markets, New York and Tennessee, while the remaining seven transactions expanded our presence in existing markets. Additionally, two of our affiliated dental groups, Northpark Dental Group and Wilkens Dental Group, received accreditation accreditation, n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice. status from the Accreditation Association for 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. Health Care (AAAHC AAAHC Accreditation Association for Ambulatory Health Care ) during 2000." The Company also announced certain developments related to the relations which three of its affiliated dental groups have with two dental benefit providers. Park Dental, Associated Dental Care Providers and University Dental Associates received termination notices from Cigna Dental of its provider agreements with these three affiliates. In addition, and unrelated to Cigna Dental, Associated Dental Care Providers received notice of 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). from Protective Life Corporation. The Company's affiliates have received proposed terms for new provider contracts from both Cigna Dental and Protective Life that are materially different from the current agreements. The affiliates find the proposed terms unacceptable. While the four terminated contracts represented approximately $24.1 million in net patient revenue in 2000, the Company believes that the net impact to the dental groups should be far less than the revenue numbers would suggest as the Company is working with its affiliated dental groups to retain existing patients. While difficult to ascertain the impact precisely, the Company believes the disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. being caused by the termination notices may impact net income for the first and second quarters of 2001 by $0.05-$0.10 per share per quarter. For further discussion of these events and a comprehensive review of the fourth quarter and year end results for the period ending December 31, 2000, the Company will host a conference call on Tuesday, February 27, 2001 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy , which will be broadcast live over the Internet at www.amdpi.com. The call will be hosted by Gregory A. Serrao, Chairman, President 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. . To access the webcast, participants should visit the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the website at least fifteen minutes prior to the start of the conference call to 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. A replay of the webcast will be available at www.amdpi.com and www.streetevents.com approximately two hours after the call through 6:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. Friday March 2, 2001. American Dental Partners, Inc. is one of the nation's leading business partners to dental groups in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Company is affiliated with 19 dental groups and operates 156 dental facilities with approximately 1,400 operatories located in 14 states. Note: Some of the information in this press release contains "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. The words "believe," "expect," "anticipate," "project," and similar expressions, among others, identify forward-looking statements. Forward-looking statements speak only as of the date the statement was made. Such forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied. Certain factors that might cause such a difference include, among others, the Company's risks associated with its affiliated dental groups' contracts with third party payors and the impact of any terminations or potential terminations of such contracts, the cost of and access to capital, the tight labor markets labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience , the Company's acquisition and affiliation strategy, management of rapid growth, dependence upon affiliated dental groups, dependence upon service agreements and government regulation of the dental industry. Additional risks, uncertainties and other factors are set forth in the "Risk Factors" section of the Company's Registration Statement on Form S-4 (File No. 333-56941).
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
Three Months Ended Years Ended
December 31, December 31,
2000 1999 2000 1999
(unaudited)
Net revenue 37,386 $32,467 $143,644 $117,352
Operating expenses:
Salaries and benefits 17,537 15,841 68,135 57,417
Lab fees and dental
supplies 5,633 4,322 21,078 15,866
Office occupancy 4,043 3,190 14,784 11,321
Other operating expenses 2,749 2,512 10,990 9,235
General corporate expenses 1,277 1,261 5,364 4,814
Depreciation 1,273 1,007 4,708 3,642
Amortization of intangible
assets 925 746 3,385 2,579
Total operating expenses 33,437 28,879 128,444 104,874
Earnings from operations 3,949 3,588 15,200 12,478
Interest expense, net 1,337 692 4,378 1,877
Earnings before income taxes 2,612 2,896 10,822 10,601
Income taxes 1,094 1,259 4,653 4,588
Net earnings $1,518 $1,637 $6,169 $6,013
Net earnings per common
share:
Basic $0.21 $0.22 $0.87 $0.80
Diluted $0.21 $0.21 $0.84 $0.78
Weighted average common
shares outstanding:
Basic 7,131 7,528 7,119 7,513
Diluted 7,325 7,746 7,320 7,745
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
Dec. 31, Dec. 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $472 $2,325
Receivables due from affiliated dental groups 17,331 9,637
Other current assets 4,675 5,001
Total current assets 22,478 16,963
Property and equipment, net 27,840 23,006
Non-current assets:
Intangible assets, net 81,083 69,175
Other assets 1,182 856
Total non-current assets 82,265 70,031
Total assets $132,583 $110,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $16,822 $15,439
Current maturities of debt 1,593 1,502
Total current liabilities 18,415 16,941
Non-current liabilities:
Long-term debt 55,330 40,249
Other liabilities 352 581
Total non-current liabilities 55,682 40,830
Total liabilities 74,097 57,771
Stockholders' equity 58,486 52,229
Commitments and contingencies
Total liabilities and stockholders' equity $132,583 $110,000
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