American Dental Partners Announces Year End 2001 Financial Results and Comments On 2002 Financial Expectations.Business/Technology Editors & Health/Medical Writers WAKEFIELD, Mass.--(BW HealthWire)--Feb. 27, 2002 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, 2001. "This past year was spent addressing the managed care 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). announced in February 2001. While profitability was negatively impacted as we carried excess capacity throughout the year, we remained focused on our balance sheet and cash flow. 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 was slightly more than the prior year, while free cash flow after subtracting capital expenditures and affiliations increased significantly," said 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. . Comparing the fourth quarter of 2001 with the same period in 2000: -- Net revenue grew to $147,410,000 from $143,644,000. -- Earnings from operations were $10,239,000 as compared to $3,949,000. -- Net earnings were $1,102,000 as compared to $1,518,000. -- 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 were $0.15 as compared to $0.21. -- Cash earnings per diluted share, calculated by adding the after-tax impact of amortization of goodwill and 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. to net earnings, was $0.23 for the fourth quarter of 2001, compared to $0.29 in 2000. Comparing the year ended 2001 with the year ended 2000: -- Net revenue grew to $147,410,000 from $143,644,000. -- Earnings from operations were $10,239,000 as compared to $15,200,000. -- Net earnings were $3,271,000 as compared to $6,169,000. -- Diluted net earnings per share were $0.45 as compared to $0.84. -- Cash earnings per diluted share, calculated by adding the after-tax impact of amortization of goodwill and intangible assets to net earnings, was $0.79 for 2001, compared to $1.16 in 2000. Patient revenue for the quarter was $50,720,000 and for the year was $207,736,000. Same market revenue growth was 7% for the quarter and 5% for the year 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 impacted by the contract terminations, same market revenue growth was 3% for the year. In response to the contract terminations and the expected impact on overall profitability, the Company made numerous changes during the course of 2001. Three dental offices were closed in Arizona, four administrative offices were consolidated into six remaining Regional Resource Groups and numerous management changes were made, including the creation of the Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. position. Despite these challenges, the Company continued to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. in its organization and affiliates. In addition to the COO (Cell Of Origin) See mobile positioning. position, the Company added resources in doctor recruiting, staff training and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. . During the year, the Company developed three new dental facilities, relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. five dental facilities and expanded four dental facilities. The Company also completed three practice affiliations that were combined with two of the Company's existing affiliated dental groups. "We are pleased to have had the financial flexibility to reinvest in our affiliates during 2001 despite the challenges we faced," said Mr. Serrao. "This can be attributed to the financial prudence we have had with our balance sheet since our founding. Just as important as this continued reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. , we remain focused on our commitment to supporting quality patient care. At the beginning of 2001, we were pleased to announce that three of our affiliates had 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. 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 "). And at the beginning of 2002, two additional affiliates received accreditation and one was re-accredited by the AAAHC. In total, nine of our affiliates are accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. , comprising 94 of our 155 dental facilities - a significant accomplishment," said Mr. Serrao. Mr. Serrao concluded, "It is clear that the actions taken in 2001 are having a positive impact on our current results. We expect the first quarter of 2002 to show sequential improvement over prior quarters and an increase over the first quarter of 2001. Further, we expect 2002 to show marked improvement over 2001." The Company is currently evaluating the applicability of Statement of Financial Accounting Standards No. 141 "Business Combinations" and Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets" to its dental group affiliation model and the impact their application might have on future amortization expense. For further discussion of these events and a comprehensive review of the fourth quarter and year end results for the period ending December 31, 2001, the Company will host its previously announced conference call on Thursday, February 28, 2002 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. 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 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 8, 2001. American Dental Partners is one of the nation's leading business partners to dental groups. The Company is affiliated with 19 dental groups which have 155 dental facilities with approximately 1,400 operatories located in 14 states. Nine of the Company's affiliates are accredited by the Accreditation Association for Ambulatory Health Care. 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 overall or regional economic conditions, contracts its affiliated dental groups have 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 Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Net revenue $36,341 $37,386 $147,410 $143,644
Operating expenses:
Salaries and benefits 17,403 17,537 70,341 68,135
Lab fees and dental supplies 5,497 5,633 22,681 21,078
Office occupancy 4,350 4,043 16,669 14,784
Other operating expenses 3,276 2,749 12,370 10,990
General corporate expenses 1,185 1,277 5,660 5,364
Special charges, exit costs (160) -- 844 --
Depreciation 1,199 1,273 5,088 4,708
Amortization of goodwill
and intangible assets 780 925 3,518 3,385
Total operating expenses 33,530 33,437 137,171 128,444
Earnings from operations 2,811 3,949 10,239 15,200
Interest expense, net 825 1,337 4,295 4,378
Earnings before income taxes 1,986 2,612 5,944 10,822
Income taxes 884 1,094 2,673 4,653
Net earnings $1,102 $1,518 $3,271 $6,169
Net earnings per common share:
Basic $0.15 $0.21 $0.46 $0.87
Diluted $0.15 $0.21 $0.45 $0.84
Weighted average common
shares outstanding:
Basic 7,171 7,131 7,183 7,119
Diluted 7,318 7,325 7,343 7,320
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
Dec. 31, Dec. 31,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents $1,540 $472
Receivables due from affiliated
dental groups 19,366 17,331
Other current assets 5,345 4,675
Total current assets 26,251 22,478
Property and equipment, net 29,605 27,840
Other non-current assets:
Goodwill, net 2,704 2,832
Intangible assets, net 76,041 78,251
Other assets 1,182 629
Total other non-current assets 79,374 82,265
Total assets $135,230 $132,583
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $15,531 $16,822
Current maturities of debt 1,597 1,593
Total current liabilities 17,128 18,415
Non-current liabilities:
Long-term debt 54,840 55,330
Other liabilities 1,486 352
Total non-current liabilities 56,326 55,682
Total liabilities 73,454 74,097
Stockholders' equity 61,776 58,486
Commitments and contingencies
Total liabilities and
stockholders' equity $135,230 $132,583
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