American Dental Partners, Inc. Reports Second Quarter and First Half 2001 Results.Business Editors WAKEFIELD, Mass.--(BUSINESS WIRE)--Aug. 6, 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) ) reported financial results today for the quarter and six-month period ended June 30, 2001. "We are successfully managing the business through the challenges created by the previously announced contract terminations 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). by Cigna Dental and Protective Life. Our operating results during the second quarter were in line with guidance previously given," said Gregory A. Serrao, Chief Executive Officer. "Despite these contract terminations, which impacted this quarter greater than last quarter, we are pleased this quarter's 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 reached record levels," added Mr. Serrao. Comparing the second quarter of 2001 with the same period in 2000: -- Net revenue grew to $36,568,000 from $35,227,000, an increase of 4%. -- Earnings from operations decreased to $2,979,000 from $3,886,000. -- Net earnings decreased to $1,011,000 from $1,659,000. -- Diluted net earnings per share decreased to $0.14 from $0.23. -- Cash earnings per diluted 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. , decreased to $0.22 from $0.31. As previously announced, the Company made several operational and managerial changes during the first quarter and recorded $886,000 of non-recurring after-tax expenses. Comparing the first half of 2001, excluding these non-recurring expenses, with the same period in 2000: -- Net revenue grew to $74,664,000 from $69,357,000, an increase of 8%. -- Earnings from operations decreased to $6,417,000 from $7,316,000. -- Net earnings decreased to $2,264,000 from $3,127,000. -- 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. net earnings per share decreased to $0.31 from $0.43. -- Cash earnings per diluted share, calculated by adding back the after-tax impact of amortization of intangible assets, decreased to $0.48 from $0.58. Patient revenue during the quarter was $51,690,000. Same market revenue growth was 7% for the quarter excluding the affiliates whose operations were disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. by the contract terminations. Including the affiliates being impacted by the contract terminations, same market revenue growth was 3%. "Same market revenue growth was impacted by the profound change in revenue mix some of our affiliates are undergoing as the shift away from deeply discounted plans can have a short term negative impact on revenue. We are pleased that the impact on profitability from the contract terminations has largely been isolated to our Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). affiliate. Despite the challenges of the past two quarters resulting from the contract terminations, we are encouraged by the progress our affiliated dental groups have been able to achieve and we hope to demonstrate continued progress during the third quarter," said Mr. Serrao. "We are pleased 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 collection efforts during the quarter resulted in cash flow from operations of $3.3 million. The strong cash flow allowed us the flexibility to continue to invest in our business," added Mr. Serrao. "With the recent weakness in our share price, we purchased additional shares on the open market under our previously authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and . Also during the quarter, we completed an affiliation with Southern Tier The Southern Tier is a geographical term that refers to the counties of New York State west of the Catskill Mountains along the northern border of Pennsylvania. The region is bordered to the south by the Northern Tier of Pennsylvania, and together these regions are known as Dental, which joined our existing 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 affiliate, and we completed three practice relocations. We intend to continue to invest capital prudently in our business," concluded Mr. Serrao. For further discussion of these events and a comprehensive review of the second quarter and the period ending June 30, 2001, the Company will host a conference call on Tuesday, August 7, 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, August 10, 2001. American Dental Partners, Inc. is one of the nation's leading business partners to group dental practices Noun 1. dental practice - the practice of dentistry practice - the exercise of a profession; "the practice of the law"; "I took over his practice when he retired" . The Company is affiliated with 19 dental groups and operates 154 dental facilities with more than 1,300 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)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
Actual Pro Forma
2001 2000 2001 2001 2000
Net revenue $36,568 $35,227 $74,664 $74,664 $69,357
Operating
expenses:
Salaries and
benefits 17,300 16,716 35,327 35,327 33,176
Lab fees and
dental
supplies 5,801 5,110 11,645 11,645 10,010
Office
occupancy 4,027 3,561 8,071 8,071 6,935
Other
operating
expenses 2,941 2,749 6,116 5,938 5,446
General
corporate
expenses 1,272 1,271 3,105 2,813 2,685
Special
charges,
exit costs -- -- 1,004 -- --
Depreciation 1,320 1,110 2,630 2,630 2,192
Amortization
of
intangibles
assets 928 824 1,823 1,823 1,597
Total
operating
expenses 33,589 31,341 69,721 68,247 62,041
Earnings from
operations 2,979 3,886 4,943 6,417 7,316
Interest
expense,
net 1,141 950 2,428 2,428 1,796
Earnings
before
income taxes 1,838 2,936 2,515 3,989 5,520
Income taxes 827 1,277 1,137 1,725 2,393
Net earnings $ 1,011 $ 1,659 $ 1,378 $ 2,264 $ 3,127
Net earnings
per common
share:
Basic $ 0.14 $ 0.23 $ 0.19 $ 0.31 $ 0.44
Diluted $ 0.14 $ 0.23 $ 0.19 $ 0.31 $ 0.43
Weighted
average
common
shares
outstanding:
Basic 7,218 7,099 7,199 7,199 7,112
Diluted 7,362 7,307 7,384 7,384 7,316
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
June 30, December 31,
2001 2000
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 1,241 $ 472
Receivables due from affiliated
dental groups 18,250 17,331
Other current assets 4,994 4,675
Total current assets 24,485 22,478
Property and equipment, net 29,508 27,840
Non-current assets:
Intangible assets, net 80,200 81,083
Other assets 1,068 1,182
Total non-current assets 81,268 82,265
Total assets $135,261 $132,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 16,542 $ 16,822
Current maturities of debt 1,603 1,593
Total current liabilities 18,145 18,415
Non-current liabilities:
Long-term debt 57,131 55,330
Other liabilities 280 352
Total non-current
liabilities 57,411 55,682
Total liabilities 75,556 74,097
Stockholders' equity 59,705 58,486
Commitments and contingencies
Total liabilities and
stockholders' equity $135,261 $132,583
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