Coast Dental Services Inc. Anticipates Revenues and Earnings Shortfall.

Business Editors

TAMPA, Fla.--(BUSINESS WIRE)--Dec. 23, 1999

Coast Dental Services Inc. (the "Company") (Nasdaq:CDEN) a leading developer and operator of Dental Centers announced today that its revenues and net income would not meet Wall Street's expectations for the fourth quarter ending Dec. 31, 1999. The Company disclosed that it expects gross revenues at managed Dental Centers for the period to be approximately $15.0 to $15.4 million and its net loss for the quarter to be approximately $200,000 to $300,000 or ($0.03) to ($0.05) per share prior to one-time non-recurring charges. After non-recurring charges, the net loss is expected to be approximately $800,000 to $1,000,000 or ($0.13) to ($0.16) per share. The non-recurring charges relate principally to an employee benefit program implemented for all employees in the fourth quarter.

The Company disclosed that its financial performance has been impacted primarily by lower than expected revenues and increased expenses associated with the large number of new dentists and newer de novo Dental Centers which the Company has added. The Company believes the large percentage of new dentists and newer Dental Centers has had a significant impact on its ability to timely recognize the desired benefits associated with implementing the Coast Operating Model on a system wide basis. The increased expenses at the Dental Centers are expected to continue to negatively impact the Company for the immediate future. However, in light of the Company's previously announced slow down in opening new Dental Centers, the Company expects to be able to continue to focus its efforts on implementing the Coast Model and improving the performance of its existing Dental Centers.

In addition to the benefit package implemented, which is designed to assist in the longer-term retention of employees, the Company has recognized amounts related to compensation and replacement of certain management members who have terminated employment. Other one-time charges, relate to transactions that the Company will not consummate. The after-tax effect of all these non-recurring charges approximates $750,000.

Terek Diasti, Chairman and CEO of the Company indicated: "We are disappointed for our shareholders. However, we appreciate the diligent efforts of our affiliated professionals and employees and believe that over time our combined efforts will achieve overall Company success. Management is resolved to working diligently in 2000 on its business plan to raise the level of the Company's performance."

Coast Dental Services Inc. provides practice management services to affiliated dental care providers in Dental Centers located in Florida, Georgia, Tennessee and Virginia. As of Nov. 30, 1999, the Company managed 130 Dental Centers.

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 expectations of the company, with respect to the Company's future prospects. 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 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.