Coast Dental Elects Early Adoption of 1998 SOP 98-5, Revises 1998 Earnings and Expands Share Buyback Program.

TAMPA, Fla.--(BW HealthWire)--March 25, 1999--Coast Dental Services, Inc. (the "Company") (Nasdaq:CDEN) announced today that it is revising its 1998 accounting treatment, and is adopting AICPA Statement of Position (SOP) No. 98-5, "Reporting on the Cost of Start-up Activities", for certain payments made to the Company's managed professional associations in connection with the opening of denovo dental centers, effective the beginning of the calendar year 1998. This decision was made after consultation with the Company's independent accountants, consideration of practices that developed in the emerging dental practice management industry throughout 1998 in connection with such payments and in contemplation of the 1998 issuance of SOP 98-5. Restating its quarterly results in connection with changing its accounting treatment for 1998 negatively impacts reported quarterly earnings for that year. The decision to make the election will eliminate any future amortization expense related to this asset. The SOP requires the Company to reflect the change as of the beginning of the year in which it is adopted.

Previously, on February 1, 1999 the Company had announced that it had earnings of $5,254,462 or $.68 per diluted share for the year ended December 31, 1998. The effect of the Company's decision to early adopt the provisions of the SOP, reduces the announced preliminary unaudited earnings by $1,083,205 or $.14 per diluted share thereby reducing the Company's announced earnings before the cumulative effect of the change to $4,171,257 or $.54 per diluted share for the year ended December 31, 1998. The cumulative effect of the change (net of tax) on prior periods as a result of the adoption as of the beginning of 1998 is $633,813 or $.08 per diluted share.

Commenting on the change, Joseph R. Smith, CFO, stated, "The decision to early adopt SOP 98-5 will result in improved comparability of our performance to the industry, given our recent revision to the Services and Support Agreement which eliminated the $50,000 payment to our managed professional associations in connection with the opening of new centers. The decision will result in the write-off of these capitalized costs relating to the denovo dental centers in accordance with the SOP. Accordingly, there will be no further amortization expense relating to these previously deferred costs."

In another development, the Company's Board of Directors, in contemplating cash on hand, future cash requirements and the current stock price, has authorized an increase in the Company's previously announced stock repurchase program, from 500,000 shares to 1,500,000 shares. Thus far, the Company has acquired in excess of 250,000 shares since the stock repurchase plan was initiated on February 10, 1999.

Coast Dental Services, Inc. provides management services to affiliated dental care providers in Dental Centers located in Florida, Georgia and Tennessee. As of December 31, 1998 the Company had 104 Dental Centers under management, serving over 600,000 patients.

This press release and certain information provided periodically in writing or orally by the Company's officers or its agents contain statements which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act, as amended and Section 21E of the Securities Exchange Act of 1934. The words "expect", "believe", "goal", "plan", "intend", "estimate" and similar expressions and variations thereof if used are intended to specifically identify forward-looking statements. Those statements appear in a number of places in this Press Release and include statements regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: the impact of the adoption of SOP 98-5 on the Company going forward, the number of shares to be repurchased, the timing thereof and the Company's future performance. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differences are set forth in the Company's previous filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise the forward-looking statements made in the Press Release to reflect events or circumstances after the date of the Press Release or to reflect the occurrence of unanticipated events.