Coast Dental Services Inc. Announces Agreement to Develop Dental Centers in Virginia.

TAMPA, Fla.--(BUSINESS WIRE)--March 6, 1998--Coast Dental Services Inc. (the "company") (NASDAQ:CDEN) announced Friday that they had finalized an agreement to assist Mid Coast Dental Services Inc. ("MCDS") a Virginia dental practice management company, in the development of Dental Centers in Virginia.

MCDS will contract with a professional corporation in Virginia to manage these Dental Centers and MCDS estimates that they could be managing as many as 20 to 25 Dental Centers by the end of 1999. The company will utilize a small portion of its considerable cash reserves to build, equip and lease fully equipped Dental Centers to MCDS. The company's loans will be on a senior secured basis with interest and rentals providing attractive returns to the company. The company believes the most attractive portion of this arrangement is an option it has received in connection with the agreement which provides the company with the right to acquire the operations of MCDS beginning on Dec. 31, 1999 for a price based upon a predetermined formula which should approximate what the company currently pays for its acquisitions.

Commenting on the agreement, Chairman and Chief Executive Officer Terek Diasti said: "We have worked very hard to structure a deal which allows us the future opportunity to expand into new areas in the Southeast, yet not dilute our management team. We were also looking for ways to employ our significant capital resources in a relatively secure arrangement. We believe that this deal accomplishes both short and long term goals of the company. This deal allows us to continue to focus on geographic concentration and profitable growth in our existing markets while at the same time building the foundation for potential future expansion into an exciting new market."

The company's Chief Financial Officer, Joseph R. Smith, added: "With over $45 million of available cash and a credit facility of $15 million, the company is constantly looking for ways to employ its capital to continue its rapid but selective expansion over the foreseeable future. We believe this investment is consistent with this philosophy. We are very excited about joining forces with the MCDS principals." -0- SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 

This press release contains 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 used in this press release 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: (i) the agreement with MCDS; (ii) the number of Dental Centers MCDS expects to be managing; (iii) the company's option to acquire MCDS's operations and (iv) future expansion prospects for the company going forward. 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 result of various factors. The factors that might cause such differences include, among others, the following: (i) MCDS's inability to successfully develop Dental Centers; (ii) MCDS's inability to grow and operate efficiently and profitably; (iii) MCDS's inability to pay its debts and financial obligations to the company; (iv) the company's desire to not exercise its option; (v) political developments, governmental regulations in Virginia and changes in governmental regulations; (vi) general economic and competitive business conditions and the effect thereof on demand for dental management services and those additional factors as 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 this press release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

CONTACT: Coast Dental Services Inc., Tampa

Joseph R. Smith, Chief Financial officer

813/288-1999