Coast Dental Services, Inc. Announces Record Results for Second Quarter and the Addition of Sixteen - 16 - Dental Centers.

TAMPA, Fla.--(BW HealthWire)--July 23, 1998--Coast Dental Services, Inc. (the "Company") (NASDAQ symbol: CDEN) announced today record results in net revenue and earnings for the quarter ended June 30, 1998. The Company reported that their net revenue increased 82.9% to $8,072,108 for the second quarter of 1998 as compared to $4,414,346 for the second quarter of 1997. Gross profit increased 53.9% to $2,322,922 as compared to $1,508,969 for the same period in 1997 and net income increased 79.5% to $1,217,184 or $0.16 per diluted share, compared to $678,111 or $0.12 per diluted share for the same period in 1997.

The highlights of the second quarter:

Seven (7) Acquired Dental Centers - The Company added seven (7) acquired Dental Centers with an annual gross revenue run rate of approximately $4.1 million in the Florida market. The combined purchase price for these seven (7) newly acquired Dental was $2.7 million. On a pro forma basis, these Dental Centers would have generated approximately$3.1 million of net revenue to the Company over the past year.

Nine (9) New Internally Developed Dental Centers - The Company continued its expansion in the Atlanta, Georgia market which it began in the fourth quarter of 1997 by opening an additional five (5) internally developed Dental Centers. As of June 30, 1998, the Company had a total of fourteen (14) Dental Centers open in Atlanta. Additionally, the Company opened four (4) internally developed Dental Centers in Florida. The Company also relocated three previously acquired Dental Centers to newly constructed facilities.

Commenting on the results, Chairman and CEO Terek Diasti said, "During the first half of 1998, we accelerated our growth with the addition of 18 internally developed Dental Centers and 15 acquired Dental Centers. The additional costs associated with this accelerated growth as well as a slight softening in the revenue in some of our core Dental Centers during the early part of the quarter combined to reduce the overall margins for the quarter. During the second half of the quarter, we focused our efforts on integrating the acquired Dental Centers and developing the new Dental Centers, continuing the emphasis on our short and long term growth strategies and strategically placing building blocks for future growth. We have continued to implement operational refinements, commensurate with the growth of the Company, which included adding regional management to facilitate the more effective management of smaller regions. The Georgia market continued its rapid growth during the quarter and we are also pleased with the progress being made in the Nashville, Tennessee market. We continue to take advantage of acquisition opportunities as an integral part of the growth strategy, and we will continue to make strategic acquisitions that we can justify both as to cost and the future benefits to our shareholders. We also continue to leverage our experience with opening new internally developed Dental Centers in order to capture market opportunities efficiently as well as to facilitate further penetration of existing markets. We are very excited about our new Dental Centers and are continuing to concentrate our efforts on implementing the Coast Operating model."

Coast Dental Services, Inc. provides management services to affiliated dental care providers in Dental Centers located in Florida, Georgia and Tennessee. As of June 30, 1998, the Company has ninety-one (91) Dental Centers under management serving over 500,000 patients.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements, which may constitute "forward -looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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 as set forth from time to time in the Company's previous filings with the SEC including its recently filed Form 10-Q. The Company undertakes no obligation to publicly update or revise the forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

- Table follows - -0-

                      COAST DENTAL SERVICES, INC.
            CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
                              Quarter Ended        Six Months Ended
                                 June 30,              June 30,
                             1997       1998       1997        1998

Net revenue               $4,414,346 $8,072,108 $7,936,437 $15,360,487
Dental Center expenses:
  Staff salaries           1,382,696  2,655,601  2,413,732   4,828,109
  Dental supplies and
   lab fees                  589,726  1,168,428  1,159,947   2,211,942
  Advertising                266,516    487,992    506,714     944,063
  Rent                       452,210    962,034    765,872   1,719,704
  Depreciation               102,604    268,601    195,441     511,803
  Other                      111,625    206,530    168,163     396,180
                          ---------- ---------- ---------- -----------
    Total Dental Center
     expenses              2,905,377  5,749,186  5,209,869  10,611,801
                          ---------- ---------- ---------- -----------
    Gross profit           1,508,969  2,322,922  2,726,568   4,748,686
General and administrative
 expenses                    418,903    807,683    751,136   1,533,094
Depreciation and
 amortization                 87,042    190,853    143,391     349,979
                          ---------- ---------- ---------- -----------
    Operating profit       1,003,024  1,324,386  1,832,041   2,865,613
Interest income (expense)    108,633    455,279    114,381     988,919
                          ---------- ---------- ---------- -----------
Income before income
 taxes                     1,111,657  1,779,665  1,946,422   3,854,532
Income tax expense           433,546    562,481    617,084   1,320,198
                          ---------- ---------- ---------- -----------
Net income                $  678,111 $1,217,184 $1,329,338 $ 2,534,334
                          ========== ========== ========== ===========

Pro forma income tax expense      --         --    142,021          --
                          ---------- ---------- ---------- -----------
Pro forma net income      $  678,111 $1,217,184 $1,187,317 $ 2,534,334
                          ========== ========== ========== ===========

Basic earnings per share  $      .12 $      .16 $      .26 $       .33
                          ========== ========== ========== ===========
Pro forma basic earnings
 per share                $      .12 $      .16 $      .23 $       .33
                          ========== ========== ========== ===========

Diluted earnings per
 share                    $      .12 $      .16 $      .25 $       .33
                          ========== ========== ========== ===========
Pro forma diluted earnings
 per share                $      .12 $      .16 $      .23 $       .33
                          ========== ========== ========== ===========
Weighted average number
 of shares outstanding:
Basic                      5,731,420  7,621,084  5,210,797   7,616,034
                          ========== ========== ========== ===========
Diluted                    5,802,045  7,713,029  5,274,344   7,717,675
                          ========== ========== ========== ===========


    CONTACT:  Coast Dental Services, Inc., Tampa
               Joseph R. Smith, Chief Financial Officer
               813/288-1999