American Dental Partners Reports Third Quarter 2003 Results and Announces New $75 Million Credit Facility.Business Editors 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)--Nov. 3, 2003 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 nine-month period ended September September: see month. 30, 2003. Comparing the third quarter of 2003 with the third quarter of 2002: -- Net revenue was $41,659,000 as compared to $37,465,000, an increase of 11%. -- Earnings from operations were $3,294,000 as compared to $2,548,000, an increase of 29%. -- Net earnings were $1,536,000 as compared to $1,100,000, an increase of 40%. -- 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 $0.20 as compared to $0.15, an increase of 33%. Comparing the first nine months of 2003 with the first nine months of 2002: -- Net revenue was $121,703,000 as compared to $109,035,000, an increase of 12%. -- Earnings from operations were $9,165,000 as compared to $8,201,000, an increase of 12%. -- Net earnings were $4,371,000 as compared to $3,600,000, an increase of 21%. -- Diluted net earnings per share were $0.58 as compared to $0.48, an increase of 21%. Total revenue, including 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 groups 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, was $64,600,000 for the quarter as compared to $56,889,000 for the prior year's same quarter, an increase of 14%. Patient revenue of the Company's affiliated dental groups was $63,043,000 for the quarter as compared to $54,957,000 for the prior year's same quarter, an increase of 15%. Same market revenue growth for the Company's affiliated dental groups as measured by patient revenue was 7% for the quarter over the prior year's third quarter. The Company said 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 for the quarter was $8,055,000, a quarterly record. Capital expenditures were $1,984,000 and amounts paid for acquisitions and affiliations were $111,000 for the quarter. The Company expanded one facility at one of its affiliated dental groups in Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces during the quarter. The Company also completed two affiliations with practices that were combined with one of its existing affiliated dental groups 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 . On October October: see month. 16, 2003 the Company successfully completed a new 3-year, $75 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. Proceeds from the new facility were used to retire the Company's existing $75 million revolving credit facility that was set to mature in July July: see month. 2004. The new credit facility was arranged by KeyBank and participating banks include Sovereign SOVEREIGN. A chief ruler with supreme power; one possessing sovereignty. (q.v.) It is also applied to a king or other magistrate with limited powers. 2. In the United States the sovereignty resides in the body of the people. Vide Rutherf. Inst. 282. Bank, Citizens Bank and Banknorth. The Company chose to negotiate a new credit facility in advance of July 2004 to take advantage of the currently favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. credit markets. The new facility includes a 75 basis point improvement in the borrowing rate spread over LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). , as compared to the retired credit facility. Further details of the facility will be included in the Company's Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended September 30, 2003 to be filed with the Securities and Exchange Commission. As a result of terminating the old facility, the Company will expense $220,000 of unamortized debt issuance costs in the fourth quarter. Total revenue, patient 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 table 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 third quarter ending September 30, 2003, the Company will host its previously announced conference call on Tuesday Tuesday: see week. , November November: see month. 4, 2003 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, November 11, 2003. 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 173 dental facilities with approximately 1,539 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, 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 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 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 Nine Months Ended
September 30, September 30,
----------------- -------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Net revenue $41,659 $37,465 $121,703 $109,035
Operating expenses:
Salaries and benefits 18,536 17,088 53,964 48,457
Lab fees and dental
supplies 6,757 6,088 20,143 18,043
Office occupancy expenses 5,037 4,681 14,994 13,528
Other operating expenses 3,703 3,342 11,016 9,785
General corporate expenses 1,897 1,415 5,250 4,301
Depreciation expense 1,363 1,287 4,003 3,719
Amortization of intangible
assets 1,072 1,016 3,168 3,001
-------- -------- --------- ---------
Total operating
expenses 38,365 34,917 112,538 100,834
-------- -------- --------- ---------
Earnings from operations 3,294 2,548 9,165 8,201
Interest expense, net 628 755 1,889 2,341
-------- -------- --------- ---------
Earnings before income taxes 2,666 1,793 7,276 5,860
Income taxes 1,130 693 2,905 2,260
-------- -------- --------- ---------
Net earnings $1,536 $1,100 $4,371 $3,600
======== ======== ========= =========
Net earnings per common share:
Basic $0.21 $0.15 $0.60 $0.50
======== ======== ========= =========
Diluted $0.20 $0.15 $0.58 $0.48
======== ======== ========= =========
Weighted average common shares
outstanding:
Basic 7,345 7,230 7,308 7,213
======== ======== ========= =========
Diluted 7,586 7,460 7,550 7,436
======== ======== ========= =========
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
September December
30, 31,
2003 2002
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $823 $844
Receivables due from affiliated dental groups 16,982 17,631
Other current assets 5,619 5,375
--------- ---------
Total current assets 23,424 23,850
Property and equipment, net 33,037 31,925
--------- ---------
Other non-current assets:
Goodwill, net 5,074 5,045
Intangible assets, net 84,907 83,575
Other assets 458 620
--------- ---------
Total non-current assets 90,439 89,240
--------- ---------
Total assets $146,900 $145,015
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $19,524 $15,920
Current maturities of debt 1,756 1,586
--------- ---------
Total current liabilities 21,280 17,506
--------- ---------
Non-current liabilities:
Long-term debt 42,803 49,677
Other liabilities 10,735 10,916
--------- ---------
Total non-current liabilities 53,538 60,593
--------- ---------
Total liabilities 74,818 78,099
--------- ---------
Stockholders' equity 72,082 66,916
Commitments and contingencies
--------- ---------
Total liabilities and stockholders'
equity $146,900 $145,015
========= =========
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands)
Comparable GAAP Presentation and
Reconciliation of Non-GAAP
Financial Measures
Three Months Ended
September 30,
-----------------
%
2003 2002 Growth
-------- -------- -------
Reconciliation of total revenue to net
revenue and patient revenue same market
growth (1)
Patient revenue:
Dental groups affiliated with the
Company prior to 2002(2) $56,565 $52,634 7%
Dental groups that completed
affiliations with the Company during
2002 and 2003 6,478 2,323 179%
-------- -------- -------
Total 63,043 54,957 15%
Other revenue 1,557 1,932 -19%
-------- -------- -------
Total revenue 64,600 56,889 14%
Amounts retained by affiliated dental groups 22,941 19,424 18%
-------- -------- -------
Net revenue $41,659 $37,465 11%
======== ======== =======
Three Months Ended Three Months Ended
September 30, 2003 September 30, 2002
------------------------------------------------
Amount % of % of Amount % of % of
Total Net Total Net
Revenue Revenue Revenue Revenue
(1) (1) (1) (1)
------------------------------------------------
Patient revenue $63,043 97.6% $54,957 96.6%
Other revenue 1,557 2.4 1,932 3.4
---------------- ----------------
Total revenue 64,600 100.0 56,889 100.0
Amounts retained
by affiliated
dental groups 22,941 35.5 19,424 34.1
---------------- ----------------
Net revenue 41,659 64.5 100.0% 37,465 65.9 100.0%
Salaries and
benefits 18,536 28.7 44.5 17,088 30.0 45.6
Lab fees and
dental supplies 6,757 10.5 16.2 6,088 10.7 16.2
Office occupancy
expenses 5,037 7.8 12.1 4,681 8.2 12.5
Other operating
expenses 3,703 5.7 8.9 3,342 5.9 8.9
General corporate
expenses 1,897 2.9 4.6 1,415 2.5 3.8
Depreciation
expense 1,363 2.1 3.3 1,287 2.3 3.4
Amortization of
intangible
assets 1,072 1.7 2.6 1,016 1.8 2.7
------------------------------------------------
Total operating
expenses 38,365 59.4 92.1 34,917 61.4 93.2
------------------------------------------------
Earnings from
operations 3,294 5.1 7.9 2,548 4.5 6.8
Interest expense,
net 628 1.0 1.5 755 1.3 2.0
------------------------------------------------
Earnings before income
taxes 2,666 4.1 6.4 1,793 3.2 4.8
Income taxes 1,130 1.7 2.7 693 1.2 1.8
------------------------------------------------
Net earnings $1,536 2.4% 3.7% $1,100 1.9% 2.9%
================================================
(1) Patient and total revenue are not measures of financial performance under GAAP. Total revenue includes patient revenue of the Company's affiliated dental groups, 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 an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. operating trends and to help manage its business. The Company believes that total revenue and patient revenue and the expense ratios derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from total revenue are useful measures to analyze operating trends. (2) Same market revenue excludes affiliations that occurred after July 1, 2002. Same market patient revenue is comprised of revenue of the Company's affiliated dental groups, 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. |
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