Castle Dental Centers Reports 81% Increase in Quarterly Revenues; Announces Acquisition of Two Practices in Los Angeles.HOUSTON--(BUSINESS WIRE)--Aug. 5, 1998--Castle Dental Centers, Inc. (Nasdaq/NM: CASL CASL Compact Application Solution Language (Feras Information Technologies) CASL Capital Area Soccer League (Raleigh, NC) CASL Chartered Advisor for Senior Living CASL Crosstalk Application Scripting Language ) today announced that revenues of affiliated dental practices Noun 1. dental practice - the practice of dentistry practice - the exercise of a profession; "the practice of the law"; "I took over his practice when he retired" for the second quarter ended June June: see month. 30, 1998, rose 81% to a quarterly record of $19.7 million compared with $10.9 million for the second quarter of 1997. Net income for the quarter increased to $781,000 compared with a net loss of $101,000 for the prior-year period. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased to $0.12 on 6.7 million weighted average shares outstanding compared with a loss per share of $0.03 on 3.3 million weighted average shares outstanding for the second quarter of 1997. For the six months ended June 30, 1998, revenues of affiliated dental practices increased 61% to a record $34.2 million from $21.3 million for the comparable period in 1997. Net income for the first half increased to $1.4 million from a loss of $80,000 for the prior-year period. Diluted earnings per share increased to $0.22 on 6.5 million weighted average shares outstanding compared with a loss per share of $0.02 on 3.3 million weighted average shares outstanding for the first half of 1997. The increase in weighted average shares outstanding for both periods resulted primarily from the Company's initial public offering in September September: see month. 1997 in which 2.8 million shares were issued. "We're we're Contraction of we are. we're we are very pleased to report record revenue and earnings growth in the second quarter," said Jack H. Castle, Jr., chairman and chief executive officer. "Our performance this quarter includes the contribution of Dental World, Inc. and Dental Consulting Services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , which contributed, in aggregate, approximately 20% to total revenues. We also opened three 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. dental centers during the quarter, two in Houston and one in Nashville. So far this year we have opened five de novo centers, all of which are operating well ahead of our expectations. We're on target with our plans to open a total of 12 new centers this year." Today, the Company also announced the acquisition of two dental practices in the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. area, consisting of three dental centers in Torrance, Lawndale and Canoga Park. These practices had patient revenues of $1.3 million in the past 12 months. On July 16, 1998, Castle announced the acquisition of five dental centers in Florida with annual revenues of approximately $3.4 million. The acquisitions included three dental centers in the Sarasota area, expanding Castle's network on the west coast of Florida to 14 offices, and two centers in North Fort Lauderdale Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. and Delray Beach Delray Beach, resort city (1990 pop. 47,181), Palm Beach co., SE Fla., on the Atlantic coast; settled 1895, inc. 1911. Mostly residential, Delray Beach is also the trade center for a citrus-fruit and vegetable-growing region. , marking Castle's initial entry into the rapidly growing east coast Florida market. Castle added, "The Los Angeles acquisitions we are announcing today represent our first fill-in expansion in this high-growth market since we acquired Dental Consulting Services. The Sarasota dental centers extend our Tampa/Clearwater network and will allow us to further leverage our advertising and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. in that market. The Fort Lauderdale-area centers provide our initial entry into one of the most densely populated pop·u·late tr.v. pop·u·lat·ed, pop·u·lat·ing, pop·u·lates 1. To supply with inhabitants, as by colonization; people. 2. regions of the country, and we see significant opportunities for growth in this dynamic market." In 1998 Castle has acquired 19 dental centers with more than $21 million in annual patient revenues. "We will continue to expand our network of dental practices through new offices and the acquisition of attractive dental practices that solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our market share position in existing markets, and we will continue to be opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. for platform acquisitions that enable us to enter attractive new markets," Castle said. Castle Dental Centers, Inc. develops, manages and operates integrated dental networks through contractual affiliations with general, orthodontic orthodontic (ôr´th  dän´tik),adj and multi-specialty dental practices in the U.S. Including the recently announced acquisitions, Castle manages 66 dental centers with 170 affiliated dentists Dentists can refer to one of the following:
Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. and California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). with annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. patient revenues of approximately $85 million. Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Among the key factors that may have a direct bearing on the operating results, performance or condition of the Company are fluctuations in the economy, the degree and nature of competition and the demand for the Company's services, changes in laws and regulations affecting the Company's business, the Company's inability at any time to complete acquisitions and integrate the operations of acquired businesses, and numerous other factors discussed in Castle Dental's filings with the Securities and Exchange Commission. -0-
CASTLE DENTAL CENTERS, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
1998 1997 1998 1997
Patient revenues of affiliated ------- ------- ------- -------
dental practices $19,679 $10,871 $34,220 $21,327
Amounts retained by affiliated
dental practices 4,538 2,424 8,285 4,911
------- ------- ------- -------
Net revenues 15,141 8,447 25,935 16,416
------- ------- ------- -------
Expenses:
Clinical salaries 4,447 2,460 7,638 4,824
Dental supplies and laboratory
fees 1,948 1,056 3,266 1,967
Rent and lease expense 996 621 1,755 1,258
Advertising and marketing 800 518 1,394 1,031
Depreciation and amortization 987 536 1,608 963
Other operating expenses 1,880 928 3,257 1,784
General and administrative 2,370 1,589 4,229 3,047
------- ------- ------- -------
Total expenses 13,428 7,708 23,147 14,874
------- ------- ------- -------
Operating income 1,713 739 2,788 1,542
Interest expense 493 905 617 1,683
Minority interest 58 -- 58 --
Other income (3) (3) (26) (12)
------- ------- ------- -------
Income before income taxes 1,165 (163) 2,139 (129)
Provision for income taxes 384 (62) 696 (49)
------- ------- ------- -------
Net income (loss) $ 781 $ (101) $ 1,443 $ (80)
Preferred stock accretion -- (159) -- (309)
------- ------- ------- -------
Income (loss) attributable to
common stock $ 781 $ (260) $ 1,443 $ (389)
======= ======= ======= =======
Income (loss) per common share: (1)
Basic $ 0.12 $ (0.03) $ 0.22 $ (0.02)
======= ======= ======= =======
Diluted $ 0.12 $ (0.03) $ 0.22 $ (0.02)
======= ======= ======= =======
Weighted average common and common
equivalent shares outstanding:
Basic 6,660 3,308 6,448 3,308
======= ======= ======= =======
Diluted 6,704 3,308 6,461 3,308
======= ======= ======= =======
(1) Per share information differs from loss attributable to common
stock divided by weighted average number of common and common
equivalent shares outstanding because accretion of the preferred
stock is added back to the loss attributable to common stock
under the if-converted method of arriving at common and common
equivalent shares outstanding.
CONTACT: Castle Dental Centers Inc., Houston
John M. Slack, 713/479-8264
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