American Dental Partners Reports Third Quarter Financial Results.

Business Editors & Health/Medical Writers

WAKEFIELD, Mass.--(BUSINESS WIRE)--Nov. 4, 2002

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

"Our financial performance continues to improve highlighted by particularly strong cash flow performance," said Gregory A. Serrao, Chairman, President and Chief Executive Officer.

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

-- Net revenue was $37,465,000 as compared to $34,888,000.

-- Earnings from operations were $2,548,000 as compared to $2,376,000.

-- Net earnings were $1,100,000 as compared to $791,000.

-- Diluted net earnings per share were $0.15 as compared to $0.11.

-- Cash earnings per diluted share, calculated by adding the after-tax impact of amortization of goodwill and intangible assets to net earnings, was $0.23 compared to $0.19.

Comparing the nine months of 2002 with the same period in 2001, which included $1.5 million or $0.11 per share of special charges and unusual expenses:

-- Net revenue was $109,035,000 as compared to $106,732,000.

-- Earnings from operations were $8,201,000 as compared to

$7,101,000.

-- Net earnings were $3,600,000 as compared to $2,169,000.

-- Diluted net earnings per share were $0.48 as compared to

$0.30.

-- Cash earnings per diluted share, calculated by adding the

after-tax impact of amortization of goodwill and intangible

assets to net earnings, was $0.73 as compared to $0.54.

Patient revenue for the quarter was $54,957,000 as compared to $51,635,000 for the prior year. Same market revenue growth for the quarter was 2% over the prior year. Same market revenue growth excluding the terminated managed care contracts in 2001 was 4% for the quarter.

"Patient revenue continues to show consecutive quarterly improvement and was also greater than the prior year's quarter. Cash flow from operations remained strong at $4.2 million for the quarter. Year to date we have generated $12.3 million of operating cash flow which is 56% greater than the prior year," said Mr. Serrao.

"During the quarter we continued to invest in our business for future growth. We completed one de novo facility and two practice expansions. In addition, as previously announced, we affiliated with 1st Advantage Dental which marked our entry into Eastern New York, Massachusetts and Vermont," 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 $3.5 million of indebtedness. We will continue to use prudence with our cash flow, balancing reinvestment with financial strength," concluded Mr. Serrao.

For further discussion of these events and a comprehensive review of the third quarter ending September 30, 2002, the Company will host its previously announced conference call on Tuesday, November 5, 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 Chief Executive Officer. 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, November 12, 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 169 dental facilities with approximately 1,450 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         Nine Months
                                   Ended                Ended
                                September 30,        September 30,
                               2002      2001       2002       2001


Net revenue                  $37,465   $34,888    $109,035   $106,732
Operating expenses:
   Salaries and benefits      17,088    16,094      48,457     48,601
   Lab fees and dental
    supplies                   6,088     5,539      18,043     17,184
   Office occupancy            4,681     4,248      13,528     12,319
   Other operating expenses    3,342     2,978       9,785      9,094
   General corporate
    expenses                   1,415     1,370       4,301      4,475
   Depreciation                1,287     1,259       3,719      3,889
   Amortization of goodwill
    and intangible assets      1,016     1,024       3,001      3,065
   Special charges                 -         -           -      1,004
       Total operating
        expenses              34,917    32,512     100,834     99,631

Earnings from operations       2,548     2,376       8,201      7,101
   Interest expense, net         755     1,042       2,341      3,470
Earnings before income
 taxes                         1,793     1,334       5,860      3,631
   Income taxes                  693       543       2,260      1,462
   Net earnings               $1,100      $791      $3,600     $2,169

Net earnings per common
 share:
   Basic                       $0.15     $0.11       $0.50      $0.30
   Diluted                     $0.15     $0.11       $0.48      $0.30
Weighted average common
 shares outstanding:
   Basic                       7,230     7,162       7,213      7,186
   Diluted                     7,460     7,304       7,436      7,351


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

                                                   Sept. 30,  Dec. 31,
                                                     2002       2001
                                                  (unaudited)
ASSETS
Current assets:
   Cash and cash equivalents                            $786   $1,540
   Receivables due from affiliated dental groups      18,775   19,366
   Other current assets                                5,527    5,345
       Total current assets                           25,088   26,251

Property and equipment, net                           30,651   29,605
Other non-current assets:
   Goodwill, net                                       5,017    2,704
   Intangible assets, net                             84,383   85,146
   Other assets                                          687      629
       Total other non-current assets                 90,087   88,479
       Total assets                                 $145,826 $144,335

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses             $15,986  $15,531
   Current maturities of debt                          1,561    1,597
       Total current liabilities                      17,547   17,128
Non-current liabilities:
   Long-term debt                                     51,919   54,840
   Other liabilities                                  10,666   10,591
       Total non-current liabilities                  62,585   65,431
       Total liabilities                              80,132   82,559

Stockholders' equity                                  65,694   61,776
Commitments and contingencies
       Total liabilities and stockholders' equity   $145,826 $144,335