American Dental Partners Reports Second Quarter and First Half 2004 Results.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. -- 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 quarter and six-month period ended June June: see month. 30, 2004. Comparing the second quarter of 2004 with the second quarter of 2003: --Net revenue was $45,044,000 as compared to $41,012,000, an increase of 10%. --Earnings from operations were $4,242,000 as compared to $3,321,000, an increase of 28%. --Net earnings were $2,319,000 as compared to $1,664,000, an increase of 39%. --Diluted net earnings per share were $0.29 as compared to $0.22, an increase of 32%. --Diluted cash net earnings per share were $0.37 as compared to $0.31, an increase of 19%. Comparing the first six months of 2004 with the first six months of 2003: --Net revenue was $89,108,000 as compared to $80,044,000, an increase of 11%. --Earnings from operations were $8,117,000 as compared to $5,848,000, an increase of 39%. --Net earnings were $4,383,000 as compared to $2,835,000, an increase of 55%. --Diluted net earnings per share were $0.55 as compared to $0.38, an increase of 45%. --Diluted cash net earnings per share were $0.72 as compared to $0.55, an increase of 31%. 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 $68,882,000 for the quarter as compared to $61,473,000 for the prior year's same quarter, an increase of 12%. 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 $6,377,000, capital expenditures were $1,544,000 and amounts paid for acquisitions and affiliations were $1,889,000. The Company expanded four facilities during the quarter and also completed affiliations with practices that were combined with its existing affiliated dental group practices in 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 , Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York and Texas. 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 $3,857,000 during the quarter. 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 second quarter ended June 30, 2004, the Company will host its previously announced conference call on Tuesday Tuesday: see week. , August 3, 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, August 10, 2004. 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 176 dental facilities with approximately 1,554 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, the 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 affiliation (  fil´ēā´sh 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 Six Months
Ended Ended
June 30, June 30,
--------------------------------
2004 2003 2004 2003
------- ------- ------- -------
Net revenue $45,044 $41,012 $89,108 $80,044
Operating expenses:
Salaries and benefits 19,189 17,886 38,462 35,428
Lab fees and dental supplies 7,205 6,875 14,360 13,386
Office occupancy expenses 5,181 5,027 10,345 9,957
Other operating expenses 4,165 3,714 8,324 7,336
General corporate expenses 2,480 1,773 4,400 3,353
Depreciation expense 1,479 1,360 2,915 2,640
Amortization of intangible assets 1,103 1,056 2,185 2,096
------- ------- ------- -------
Total operating expenses 40,802 37,691 80,991 74,196
------- ------- ------- -------
Earnings from operations 4,242 3,321 8,117 5,848
Interest expense, net 392 628 857 1,261
------- ------- ------- -------
Earnings before income taxes 3,850 2,693 7,260 4,587
Income taxes 1,531 1,029 2,877 1,752
------- ------- ------- -------
Net earnings $ 2,319 $ 1,664 $ 4,383 $ 2,835
======= ======= ======= =======
Net earnings per common share:
Basic $ 0.31 $ 0.23 $ 0.59 $ 0.39
======= ======= ======= =======
Diluted $ 0.29 $ 0.22 $ 0.55 $ 0.38
======= ======= ======= =======
Weighted average common shares
outstanding:
Basic 7,537 7,312 7,464 7,289
======= ======= ======= =======
Diluted 8,057 7,557 7,961 7,538
======= ======= ======= =======
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
June 30, Dec. 31,
2004 2003
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 1,812 $ 1,895
Receivables due from affiliated dental group
practices 14,743 16,611
Other current assets 5,755 5,376
-------- --------
Total current assets 22,310 23,882
Property and equipment, net 35,199 35,216
-------- --------
Other non-current assets:
Goodwill, net 5,095 5,095
Intangible assets, net 83,727 83,843
Other assets 915 1,036
-------- --------
Total non-current assets 89,737 89,974
-------- --------
Total assets $147,246 $149,072
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 19,012 $ 18,559
Current maturities of debt 1,302 1,407
-------- --------
Total current liabilities 20,314 19,966
-------- --------
Non-current liabilities:
Long-term debt 33,357 42,319
Other liabilities 12,929 12,895
-------- --------
Total non-current liabilities 46,286 55,214
-------- --------
Total liabilities 66,600 75,180
-------- --------
Commitments and contingencies
Stockholders' equity 80,646 73,892
-------- --------
Total liabilities and stockholders' equity $147,246 $149,072
======== ========
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands)
Comparable GAAP Presentation and
Reconciliation of Non-GAAP
Financial Measures
Three Months Ended
June 30,
------------------
%
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) $66,155 $59,465 11%
Dental group practices that completed
affiliations with the Company during
periods of comparison 2,727 2,008 36%
------- -------
Total 68,882 61,473 12%
Other revenue 1,307 1,741 -25%
------- -------
Total revenue 70,189 63,214 11%
Amounts retained by affiliated dental group
practices 25,145 22,202 13%
------- -------
Net revenue $45,044 $41,012 10%
======= =======
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
-------------------------------------------------
% of Our % of % of Our % of
Net Total Net Total
Revenue Revenue Revenue Revenue
Amount (1) (1) Amount (1) (1)
-------------------------------------------------
Patient revenue $68,882 98.1% $61,473 97.2%
Other revenue 1,307 1.9 1,741 2.8
------- -------- ------- --------
Total revenue 70,189 100.0 63,214 100.0
Amounts retained
by affiliated
dental group
practices 25,145 35.8 22,202 35.1
------- -------- ------- --------
Net revenue 45,044 100.0% 64.2 41,012 100.0% 64.9
Salaries and
benefits 19,189 42.6 27.3 17,886 43.6 28.3
Lab fees and dental
supplies 7,205 16.0 10.3 6,875 16.8 10.9
Office occupancy
expenses 5,181 11.5 7.4 5,027 12.3 8.0
Other operating
expenses 4,165 9.2 5.9 3,714 9.1 5.9
General corporate
expenses 2,480 5.5 3.5 1,773 4.3 2.8
Depreciation expense 1,479 3.3 2.1 1,360 3.3 2.2
Amortization of
intangible assets 1,103 2.4 1.6 1,056 2.6 1.7
----------------------- -----------------------
Total operating
expenses 40,802 90.6 58.1 37,691 91.9 59.6
----------------------- -----------------------
Earnings from
operations 4,242 9.4 6.0 3,321 8.1 5.3
Interest expense,
net 392 0.9 0.6 628 1.5 1.0
----------------------- -----------------------
Earnings before
income taxes 3,850 8.5 5.5 2,693 6.6 4.3
Income taxes 1,531 3.4 2.2 1,029 2.5 1.6
----------------------- -----------------------
Net earnings $ 2,319 5.1% 3.3% $ 1,664 4.1% 2.6%
======================= =======================
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 Six Months
Ended Ended
June 30, June 30,
-------------------------------
2004 2003 2004 2003
------ ------ ------ ------
Reconciliation of net earnings, as
reported,
to cash net earnings: (3)
Net earnings (as reported) $2,319 $1,664 $4,383 $2,835
Add: Amortization of intangible assets,
net of tax 664 653 1,320 1,295
------ ------ ------ ------
Cash net earnings $2,983 $2,317 $5,703 $4,130
====== ====== ====== ======
Weighted average common shares
outstanding 8,057 7,557 7,961 7,538
====== ====== ====== ======
Diluted net earnings per share $ 0.29 $ 0.22 $ 0.55 $ 0.38
====== ====== ====== ======
Diluted cash net earnings per share (3) $ 0.37 $ 0.31 $ 0.72 $ 0.55
====== ====== ====== ======
(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 into the Company's
financial statements. The Company uses these and other 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 market 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
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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