American Dental Partners Reports Third Quarter and Year-to-Date 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 nine-month period ended September September: see month. 30, 2004. Comparing the third quarter of 2004 with the third quarter of 2003: --Net revenue was $44,640,000 as compared to $41,659,000, an increase of 7%. --Earnings from operations were $3,692,000 as compared to $3,317,000, an increase of 11%. --Net earnings were $1,993,000 as compared to $1,536,000, an increase of 30%. --Diluted net earnings per share were $0.25 as compared to $0.20, an increase of 25%. --Diluted cash net earnings per share were $0.33 as compared to $0.28, an increase of 18%. Comparing the first nine months of 2004 with the first nine months of 2003: --Net revenue was $133,748,000 as compared to $121,703,000, an increase of 10%. --Earnings from operations were $11,809,000 as compared to $9,165,000, an increase of 29%. --Net earnings were $6,376,000 as compared to $4,371,000, an increase of 46%. --Diluted net earnings per share were $0.80 as compared to $0.58, an increase of 38%. --Diluted cash net earnings per share were $1.04 as compared to $0.83, an increase of 25%. 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 $68,265,000 for the quarter as compared to $63,043,000 for the prior year's same quarter, an increase of 8%. Same market revenue growth for the Company's affiliated dental group practices as measured by patient revenue was also 8% as the Company had no new platform affiliations in either period of comparison. 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 $7,606,000, capital expenditures were $1,911,000 and amounts paid for acquisitions and affiliations were $350,000. 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, expanded six facilities and opened one de novo [Latin, Anew.] A second time; afresh. A trial or a hearing that is ordered by an appellate court that has reviewed the record of a hearing in a lower court and sent the matter back to the original court for a new trial, as if it had not been previously heard nor decided. facility 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 third quarter ended September 30, 2004, the Company will host its previously announced conference call on Tuesday Tuesday: see week. , November November: see month. 2, 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, November 9, 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 177 dental facilities with approximately 1,573 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 Ended Nine Months Ended
September 30, September 30,
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Net revenue $44,640 $41,659 $133,748 $121,703
Operating expenses:
Salaries and benefits 19,444 18,536 57,906 53,964
Lab fees and dental
supplies 7,125 6,757 21,485 20,143
Office occupancy expenses 5,287 5,037 15,632 14,994
Other operating expenses 4,278 3,680 12,602 11,016
General corporate expenses 2,222 1,897 6,622 5,250
Depreciation expense 1,485 1,363 4,400 4,003
Amortization of intangible
assets 1,107 1,072 3,292 3,168
-------- -------- --------- ---------
Total operating
expenses 40,948 38,342 121,939 112,538
-------- -------- --------- ---------
Earnings from operations 3,692 3,317 11,809 9,165
Interest expense, net 386 628 1,243 1,889
-------- -------- --------- ---------
Earnings before income taxes 3,306 2,689 10,566 7,276
Income taxes 1,313 1,153 4,190 2,905
-------- -------- --------- ---------
Net earnings $1,993 $1,536 $6,376 $4,371
======== ======== ========= =========
Net earnings per common share:
Basic $0.26 $0.21 $0.85 $0.60
======== ======== ========= =========
Diluted $0.25 $0.20 $0.80 $0.58
======== ======== ========= =========
Weighted average common shares
outstanding:
Basic 7,635 7,345 7,521 7,308
======== ======== ========= =========
Diluted 8,130 7,586 8,019 7,550
======== ======== ========= =========
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
September 30, December 31,
2004 2003
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $3,889 $1,895
Receivables due from affiliated dental
group practices 14,494 16,611
Other current assets 5,485 5,376
------------- -------------
Total current assets 23,868 23,882
Property and equipment, net 35,898 35,216
------------- -------------
Other non-current assets:
Goodwill, net 5,095 5,095
Intangible assets, net 82,970 83,843
Other assets 857 1,036
------------- -------------
Total non-current assets 88,922 89,974
------------- -------------
Total assets $148,688 $149,072
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $21,276 $18,559
Current maturities of debt 1,131 1,407
------------- -------------
Total current liabilities 22,407 19,966
------------- -------------
Non-current liabilities:
Long-term debt 29,996 42,319
Other liabilities 12,912 12,895
------------- -------------
Total non-current liabilities 42,908 55,214
------------- -------------
Total liabilities 65,315 75,180
------------- -------------
Commitments and contingencies
Stockholders' equity 83,373 73,892
------------- -------------
Total liabilities and
stockholders' equity $148,688 $149,072
============= =============
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands)
Comparable GAAP Presentation and
Reconciliation of Non-GAAP
Financial Measures
Three Months Ended
September 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) $68,265 $63,043 8%
Other revenue 1,266 1,557 -19%
--------- ---------
Total revenue 69,531 64,600 8%
Amounts retained by affiliated dental
group practices 24,891 22,941 9%
--------- ---------
Net revenue $44,640 $41,659 7%
========= =========
Three Months Ended Three Months Ended
September 30, 2004 September 30, 2003
-------------------------------------------------
Amount % of Net % of Amount % of Net % of
Revenue Total Revenue Total
(1) Revenue (1) Revenue
(1) (1)
-------- ------- -------- ------- ------- -------
Patient revenue $68,265 98.2% $63,043 97.6%
Other revenue 1,266 1.8 1,557 2.4
-------- ------ -------- -------
Total revenue 69,531 100.0 64,600 100.0
Amounts retained
by affiliated
dental group
practices 24,891 35.8 22,941 35.5
-------- ------ -------- -------
Net revenue 44,640 100.0% 64.2 41,659 100.0% 64.5
Salaries and
benefits 19,444 43.6 28.0 18,536 44.5 28.7
Lab fees and
dental
supplies 7,125 16.0 10.2 6,757 16.2 10.5
Office
occupancy
expenses 5,287 11.8 7.6 5,037 12.1 7.8
Other operating
expenses 4,278 9.6 6.2 3,680 8.8 5.7
General
corporate
expenses 2,222 5.0 3.2 1,897 4.6 2.9
Depreciation
expense 1,485 3.3 2.1 1,363 3.3 2.1
Amortization of
intangible
assets 1,107 2.5 1.6 1,072 2.6 1.7
-------- ------ ------ -------- ------ -------
Total
operating
expenses 40,948 91.7 58.9 38,342 92.0 59.4
-------- ------ ------ -------- ------ -------
Earnings from
operations 3,692 8.3 5.3 3,317 8.0 5.1
Interest
expense, net 386 0.9 0.6 628 1.5 1.0
-------- ------ ------ -------- ------ -------
Earnings before
income taxes 3,306 7.4 4.8 2,689 6.5 4.2
Income taxes 1,313 2.9 1.9 1,153 2.8 1.8
-------- ------ ------ -------- ------ -------
Net earnings $1,993 4.5% 2.9% $1,536 3.7% 2.4%
======== ====== ====== ======== ====== =======
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 Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Reconciliation of net
earnings, as reported,
to cash net earnings: (3)
Net earnings (as reported) $1,993 $1,536 $6,376 $4,371
Add: Amortization of
intangible assets, net of tax 668 612 1,985 1,904
--------- --------- --------- ---------
Cash net earnings $2,661 $2,148 $8,361 $6,275
========= ========= ========= =========
Weighted average common shares
outstanding 8,130 7,586 8,019 7,550
========= ========= ========= =========
Diluted net earnings per share $0.25 $0.20 $0.80 $0.58
========= ========= ========= =========
Diluted cash net earnings per
share (3) $0.33 $0.28 $1.04 $0.83
========= ========= ========= =========
(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) 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 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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