American Dental Partners Reports First Quarter 2004 Financial Results.Business Editors/Health/Medical Writers WAKEFIELD Wakefield, estate, United States Wakefield, family estate of George Washington, on the Potomac River, E Va.; part of the George Washington Birthplace National Monument (see National Parks and Monuments, table). , Mass.--(BUSINESS WIRE)--May 3, 2004 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Dental dental /den·tal/ (den´t'l) pertaining to a tooth or teeth. den·tal adj. 1. Of, relating to, or for the teeth. 2. Of, relating to, or intended for dentistry. 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 first quarter ended March 31, 2004. Comparing the first quarter of 2004 with the first quarter of 2003: -- Net revenue was $44,064,000 as compared to $39,032,000, an increase of 13%. -- Earnings from operations were $3,875,000 as compared to $2,527,000, an increase of 53%. -- Net earnings were $2,064,000 as compared to $1,171,000, an increase of 76%. -- 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 $0.26, as compared to $0.16, an increase of 63%. -- Diluted cash net earnings per share were $0.35 as compared to $0.24, an increase of 46%. Patient revenue of the Company's affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: dental group practices, which is not consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: with the Company's financial results and is a non-GAAP financial measure, was $67,348,000 for the quarter as compared to $58,224,000 for the prior year's same quarter, an increase of 16%. Same market revenue growth for the Company's affiliated dental group practices as measured by patient revenue was 11% for the quarter. For the quarter 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 $6,674,000, capital expenditures were $1,253,000 and amounts paid for acquisitions and affiliations were $560,000. The Company 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. one facility and expanded three facilities during the quarter and also completed an affiliation affiliation (  fil´ēā´sh with a practice that was combined with its existing
affiliated dental group practice in Tennessee Tennessee, state, United StatesTennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. . In addition to the ongoing 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. in its business, the Company reduced indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. by $5,210,000 during the quarter. As previously announced on April 16, 2004, Summit Partners sold all of its shares in the Company. Summit Partners is a private equity and venture capital firm and purchased its shares in the Company in January January: see month. 1996. While Summit Partners is a long-term investor Long-term investor A person who makes investments for a period of at least five years in order to finance his or her long-term goals. , its investment horizon is finite finite - compact based on the life of its respective investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company and the sale of its shares in the Company was reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of this finite life. Marty Mannion, a Managing Partner of Summit Partners, will remain a member of the Company's Board of Directors. "We are pleased with our continued strong financial performance. Our focused efforts on cash flow generation and improving our internal, same market growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. are positively impacting our operating and financial performance," 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. . "We are also pleased with the increased institutional ownership and public float of our stock following Summit Partners' sale of its holding in American Dental Partners," added Mr. Serrao. Cash net earnings per share, patient revenue, total revenue and same market revenue growth are non-GAAP financial measures. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the requirement of SEC Regulation G, please see the attached financial tables for a presentation of the most comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures and the reconciliation to the nearest GAAP measures and all additional reconciliations required by Regulation G. For further discussion of these events and a comprehensive review of the first quarter ended March 31, 2004, the Company will host its previously announced conference call on Tuesday Tuesday: see week. , May 4, 2004 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy , which will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.amdpi.com. The call will be hosted by Gregory A. Serrao, Chairman, President and Chief Executive Officer. 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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. Tuesday, May 11, 2004. American Dental Partners is one of the nation's leading business partners to dental group practices. The Company is affiliated with 19 dental group practices which have 172 dental facilities with approximately 1,531 operatories located in 17 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. . 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 group practices have with third party payors and the impact of any terminations or potential terminations of such contracts, the cost of and access to capital, fluctuations in 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 group practices, 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
March 31,
-------------------------
2004 2003
----------- -----------
Net revenue $44,064 $39,032
Operating expenses:
Salaries and benefits 19,273 17,542
Lab fees and dental supplies 7,155 6,511
Office occupancy expenses 5,164 4,930
Other operating expenses 4,159 3,622
General corporate expenses 1,920 1,580
Depreciation expense 1,436 1,280
Amortization of intangible assets 1,082 1,040
----------- -----------
Total operating expenses 40,189 36,505
----------- -----------
Earnings from operations 3,875 2,527
Interest expense, net 465 633
----------- -----------
Earnings before income taxes 3,410 1,894
Income taxes 1,346 723
----------- -----------
Net earnings $2,064 $1,171
=========== ===========
Net earnings per common share:
Basic $0.28 $0.16
=========== ===========
Diluted $0.26 $0.16
=========== ===========
Weighted average common shares
outstanding:
Basic 7,391 7,266
=========== ===========
Diluted 7,858 7,518
=========== ===========
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
March 31, December 31,
2004 2003
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $2,151 $1,895
Receivables due from affiliated dental
group practices 15,528 16,611
Other current assets 5,751 5,376
------------ -------------
Total current assets 23,430 23,882
Property and equipment, net 35,074 35,216
------------ -------------
Other non-current assets:
Goodwill, net 5,095 5,095
Intangible assets, net 83,301 83,843
Other assets 979 1,036
------------ -------------
Total non-current assets 89,375 89,974
------------ -------------
Total assets $147,879 $149,072
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $19,387 $18,559
Current maturities of debt 1,373 1,407
------------ -------------
Total current liabilities 20,760 19,966
------------ -------------
Non-current liabilities:
Long-term debt 37,143 42,319
Other liabilities 12,919 12,895
------------ -------------
Total non-current liabilities 50,062 55,214
------------ -------------
Total liabilities 70,822 75,180
------------ -------------
Commitments and contingencies
Stockholders' equity 77,057 73,892
------------ -------------
Total liabilities and
stockholders' equity $147,879 $149,072
============ =============
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands)
Comparable GAAP Presentation and
Reconciliation of Non-GAAP
Financial Measures
Three Months Ended
March 31,
-----------------
2004 2003 % Growth
-------- ------ --------
Reconciliation of total revenue to net
revenue and patient
revenue same market growth : (1)
Patient revenue
Dental group practices affiliated with
the Company in both periods of
comparison (2) $64,444 $58,224 11%
Dental group practices that completed
affiliations with the Company during
periods of comparison 2,904 - -
-------- -------- -------
Total 67,348 58,224 16%
Other revenue 1,295 1,729 -25%
-------- -------- -------
Total revenue 68,643 59,953 14%
Amounts retained by affiliated dental group
practices 24,579 20,921 17%
-------- -------- -------
Net revenue $44,064 $39,032 13%
======== ======== =======
Three Months Ended Three Months Ended
March 31, 2004 March 31, 2003
------------------------- ------------------------
% of % of % of % of
Net Total Net Total
Amount Revenue Revenue Amount Revenue Revenue
-------- -------- ------- -------- ------- -------
Reconciliation of expense trends to
net revenue and total revenue:
Adjusted gross
revenue -
affiliated dental
group practices $67,348 98.1% $58,224 97.1%
Other revenue 1,295 1.9 1,729 2.9
-------- ------- -------- --------
Total revenue 68,643 100.0 59,953 100.0
Amounts
retained by
affiliated
dental group
practices 24,579 35.8 20,921 34.9
-------- ------- -------- --------
Net revenue 44,064 100.0% 64.2 39,032 100.0% 65.1
Salaries and
benefits 19,273 43.7 28.1 17,542 44.9 29.3
Lab fees and
dental
supplies 7,155 16.2 10.4 6,511 16.7 10.9
Office
occupancy
expenses 5,164 11.7 7.5 4,930 12.6 8.2
Other
operating
expenses 4,159 9.4 6.1 3,622 9.3 6.0
General
corporate
expenses 1,920 4.4 2.8 1,580 4.0 2.6
Depreciation
expense 1,436 3.3 2.1 1,280 3.3 2.1
Amortization
of intangible
assets 1,082 2.5 1.6 1,040 2.7 1.7
-------- ------- ------- -------- ------- --------
Total
operating
expenses 40,189 91.2 58.5 36,505 93.5 60.9
-------- ------- ------- -------- ------- --------
Earnings from
operations 3,875 8.8 5.6 2,527 6.5 4.2
Interest
expense, net 465 1.1 0.7 633 1.6 1.1
-------- ------- ------- -------- ------- --------
Earnings before
income taxes 3,410 7.7 5.0 1,894 4.9 3.2
Income taxes 1,346 3.0 2.0 723 1.9 1.2
-------- ------- ------- -------- ------- --------
Net earnings $2,064 4.7% 3.0% $1,171 3.0% 2.0%
======== ======= ======= ======== ======= ========
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands, except per share amounts)
Comparable GAAP Presentation and
Reconciliation of Non-GAAP
Financial Measures (Continued)
Three Months Ended
March 31,
----------------------
2004 2003
--------- ----------
Reconciliation of net earnings, as
reported,
to cash net earnings: (3)
Net earnings (as reported) $2,064 $1,171
Add: Amortization of intangible assets,
net of tax 655 643
--------- ----------
Cash net earnings 2,719 1,814
========= ==========
Weighted average common shares outstanding 7,858 7,518
========= ==========
Diluted net earnings per share $0.26 $0.16
========= ==========
Diluted cash net earnings per share (3) $0.35 $0.24
========= ==========
(1) Patient and total revenue are not measures of financial
performance under GAAP. Total revenue includes patient revenue
of the Company's affiliated dental group practices, for which
their results of operations are not consolidated with the
Company's financial statements. The Company uses these
non-GAAP financial measures to analyze operating trends and to
help manage its business. The Company believes that total
revenue and patient revenue and the expense ratios derived
from total revenue are useful measures to analyze operating
trends.
(2) Same market revenue excludes affiliations in new markets that
occurred during the periods of comparison. Same market patient
revenue is comprised of revenue of the Company's affiliated
dental group practices which are not consolidated into the
Company's financial statements. The Company believes that same
market patient revenue growth is important for understanding
its financial performance.
(3) Diluted cash net earnings and diluted cash net earnings per
share are not measures of financial performance under GAAP.
Diluted cash net earnings excludes amortization expense
related to intangible assets, net of tax. The Company incurs
significant amortization expense related to its service
agreements while many companies, both in the same industry and
other industries, no longer amortize a significant portion of
their intangible assets pursuant to Statement of Financial
Accounting Standards No. 142 - Goodwill and Other Intangible
Assets. The Company believes that diluted cash net earnings
and diluted cash net earnings per share are important
financial measures for understanding its relative financial
performance.
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