American Dental Partners Reports Second Quarter and First Half 2002 Results.

Business Editors & Health/Medical Writers

WAKEFIELD, Mass.--(BUSINESS WIRE)--Aug. 5, 2002

American Dental Partners, Inc. (NASDAQ:ADPI) announced financial results today for the quarter and six-month period ended June 30, 2002.

"Our financial performance this past quarter showed continued improvement over the prior quarter and the prior year. Patient revenues increased, earnings from operations improved and cash flow from operations remained strong," said Gregory A. Serrao, Chairman, President and CEO.

Comparing the second quarter of 2002 with the second quarter of 2001:

-- Net revenue was $74,687,000 as compared to $74,664,000.

-- Earnings from operations were $5,653,000 as compared to $4,725,000.

-- Net earnings were $2,500,000 as compared to $1,378,000.

-- Diluted net earnings per share were $0.34 as compared to $0.19.

-- Cash earnings per diluted share, calculated by adding the after-tax impact of amortization of goodwill and intangible assets to net earnings, was $0.50 as compared to $0.35.

Comparing the first half of 2002 with the first half of 2001, which included $1.5 million or $0.11 per share of special charges and unusual expenses:

-- Net revenue was $74,687,000 as compared to $74,664,000.

-- Earnings from operations were $5,653,000 as compared to $4,725,000.

-- Net earnings were $2,500,000 as compared to $1,378,000.

-- Diluted net earnings per share were $0.34 as compared to $0.19.

-- Cash earnings per diluted share, calculated by adding the after-tax impact of amortization of goodwill and intangible assets to net earnings, was $0.50 as compared to $0.35.

Patient revenue for the quarter was $53,460,000. Same market revenue growth for the quarter was 3% over the prior year. Same market revenue growth excluding the terminated managed care contracts in 2001 was 9% for the quarter.

"Patient revenue is now showing consecutive quarterly improvement and was also greater than the prior year's quarter. Earnings from operations margins also have improved for three consecutive quarters, and during the quarter cash flow from operations remained strong at $4 million. For the first of half of 2002, we have generated more than $8 million of operating cash flow," said Mr. Serrao.

"During the quarter we continued to invest in our business for future growth. We completed two practice relocations and one practice affiliation that was combined with one of our existing affiliates. In addition, as previously announced, we entered the dental laboratory market through the acquisition of two dental labs in Buffalo, New York. And subsequent to quarter end, we affiliated with 1st Advantage Dental," added Mr. Serrao. "Our improving financial performance has allowed us to continue to reinvest in our business for future growth, while at the same time strengthen our financial position. Since the beginning of the year, we have retired nearly $3 million of indebtedness. We will continue to use prudence with our cash flow, balancing growth with financial strength," concluded Mr. Serrao.

The Company completed its evaluation of the applicability of Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets" to its dental group affiliation model. The Company's affiliations do not qualify as business combinations, or acquisitions, and as such will continue to amortize its intangibles assets pursuant to SFAS No. 142.

For further discussion of these events and a comprehensive review of the second quarter ending June 30, 2002, the Company will host its previously announced conference call on Tuesday, August 6, 2002 at 10:00 a.m. EST, 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 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  Tuesday, August 13, 2002.

American Dental Partners is one of the nation's leading business partners to dental groups. The Company is affiliated with 22 dental groups which have 168 dental facilities with approximately 1,500 operatories located in 16 states. In addition, the Company provides dental laboratory services through a wholly-owned subsidiary, Voss Dental Lab.

Note: Some of the information in this press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act 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, 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 fluctuations in labor markets, 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              Six Months
                              Ended                    Ended
                             June 30,                 June 30,
                         2002        2001         2002        2001

Net revenue            $37,836      $36,568      $74,687     $74,664
Operating expenses:
  Salaries and
   benefits             17,319       17,300       34,486      35,327
  Lab fees and
   dental supplies       6,305        5,801       11,955      11,645
  Office occupancy       4,442        4,027        8,847       8,071
  Other operating
   expenses              3,196        2,941        6,443       6,116
  General corporate
   expenses              1,458        1,272        2,886       3,105
  Depreciation           1,209        1,320        2,432       2,630
  Amortization of
   goodwill and
   intangible assets       997        1,037        1,985       2,041
  Special charges            -            -            -       1,004
    Total operating
     expenses           34,926       33,698       69,034      69,939
Earnings from
 operations              2,910        2,870        5,653       4,725
  Interest expense,
   net                     770        1,141        1,586       2,428
Earnings before
 income taxes            2,140        1,729        4,067       2,297
  Income taxes             817          718        1,567         919
  Net earnings        $  1,323     $  1,011     $  2,500    $  1,378

Net earnings per
 common share:
  Basic              $    0.18    $    0.14     $   0.35   $    0.19
  Diluted            $    0.18    $    0.14     $   0.34   $    0.19

Weighted average
 common shares
 outstanding:
  Basic                  7,207        7,218        7,205       7,199
  Diluted                7,461        7,362        7,425       7,384


                    AMERICAN DENTAL PARTNERS, INC.
                         FINANCIAL HIGHLIGHTS
                            (in thousands)

                                        June 30,       December 31,
                                         2002              2001
                                      (unaudited)
ASSETS
Current assets:
  Cash and cash equivalents         $    1,677         $    1,540
  Receivables due from
   affiliated dental groups             18,577             19,366
  Other current assets                   5,338              5,345
    Total current assets                25,592             26,251

Property and equipment, net             29,493             29,605
Other non-current assets:
  Goodwill, net                          5,369              2,704
  Intangible assets, net                83,514             85,146
  Other assets                             543                629
     Total other non-current
      assets                            89,426             88,479
     Total assets                     $144,511           $144,335

LIABILITIES AND STOCKHOLDERS'
 EQUITY
Current liabilities:
  Accounts payable and accrued
   expenses                          $  15,843          $  15,531
  Current maturities of debt             1,580              1,597
     Total current liabilities          17,423             17,128
Non-current liabilities:
  Long-term debt                        51,965             54,840
  Other liabilities                     10,701             10,591
     Total non-current
      liabilities                       62,666             65,431
     Total liabilities                  80,089             82,559

Stockholders' equity                    64,422             61,776
Commitments and contingencies
     Total liabilities and
      stockholders' equity             $144,511           $144,335