News

WAKEFIELD, MASSACHUSETTS - Jul 27, 2009 - American Dental Partners, Inc. (NASDAQ:ADPI) announced financial results today for the quarter and six months ended June 30, 2009. 

Comparing actual results for the second quarter of 2009 and pro forma results for the second quarter of 2008 (see “Litigation Settlement Accounting” and “Supplemental Operating Data” tables for an explanation of the pro forma results):

• Net revenue was $70,378,000 as compared to pro forma net revenue of $70,032,000.
• Earnings from operations were $7,454,000 as compared to pro forma earnings from operations of $5,599,000. 
• Net earnings were $3,012,000 as compared to pro forma net earnings of $1,818,000.
• Diluted net earnings per share were $0.23 as compared to pro forma diluted net earnings per share of $0.14.
• Diluted cash net earnings per share were $0.33 as compared to pro forma diluted cash net earnings per share of $0.24.

Comparing actual results for the first six months of 2009 and pro forma results for the first six months of 2008 (see “Litigation Settlement Accounting” and “Supplemental Operating Data” tables for an explanation of the pro forma results):

• Net revenue was $139,763,000 as compared to pro forma net revenue of $140,086,000.
• Earnings from operations were $13,403,000 as compared to pro forma earnings from operations of $11,051,000. 
• Net earnings were $4,433,000 as compared to pro forma net earnings of $3,590,000.
• Diluted net earnings per share were $0.34 as compared to pro forma diluted net earnings per share of $0.27.
• Diluted cash net earnings per share were $0.55 as compared to pro forma diluted cash net earnings per share of $0.48.

Operating Results

Patient revenue of the Company’s affiliated dental group practices was $107,046,000 for the quarter, which includes $100,772,000 from dental group practices which are affiliated with the Company by means of service agreements and $6,274,000 from Arizona’s Tooth Doctor for Kids.  Same market patient revenue growth was 0.8% for the quarter and (0.1)% excluding in-market affiliations. 

Cash flow from operations was $14,307,000 for the quarter.  Capital expenditures were $1,409,000. The Company completed one facility relocation and consolidated two facilities during the quarter.  Amounts paid for affiliations and acquisitions, including contingent amounts and affiliation costs, amounted to $136,000 for the quarter. The Company completed one in-market affiliation which generated approximately $50,000 of patient revenue from date of affiliation for the quarter and is expected to generate patient revenue of approximately $200,000 on an annualized basis.

The Company recognized $385,000 in stock-based compensation expense, $232,000 net of tax or $0.02 per diluted share, during the quarter as compared to $479,000, $292,000 net of tax or $0.02 per diluted share, for the prior year’s same quarter.

The Company’s revolving credit facility and term loan, both of which are senior secured facilities, mature on January 20, 2010 and accordingly have been classified as a current liability as of June 30, 2009.  The Company continues to explore alternatives to re-finance the senior secured facilities with its existing lenders and others, with the objective of refinancing its indebtedness on a longer term basis rather than incurring the costs associated with short-term extension of the maturity. 

Litigation Settlement Accounting

The Company’s 2008 financial results reflect income and expenses, including non-cash items, required by generally accepted accounting principles associated with the February 29, 2008 settlement of litigation among PDG, P.A. (“PDG”), PDHC, Ltd., one of the Company’s subsidiaries, and the Company.  In addition to its 2008 actual results, the Company has provided a pro forma financial presentation to exclude the income and expense items related to the litigation settlement.

Cash net earnings, cash earnings from operations and the pro forma 2008 financial results are non-GAAP financial measures.  In accordance with the requirement of SEC Regulation G, please see the attached financial tables for a presentation of the most comparable GAAP measures and the reconciliation to the nearest GAAP measure and all additional reconciliations required by Regulation G.

For further discussion of these events and a comprehensive review of the second quarter ended June 30, 2009, the Company will host its previously announced conference call on Tuesday, July 28, 2009 at 9:00 a.m. EDT, which will be broadcast live over the Internet at www.amdpi.com.  The call will be hosted by Gregory A. Serrao, Chairman, President and Chief Executive Officer.  To access the webcast, participants should visit the Investor Relations section of the website at least fifteen minutes prior to the start of the conference call to download and install any necessary audio software.  A replay of the webcast will be available at www.amdpi.com approximately two hours after the call through 6:00 p.m. EDT, Tuesday, August 4, 2009.

American Dental Partners is one of the nation's leading business partners to dental group practices.  The Company is affiliated with 26 dental group practices which have 242 dental facilities with approximately 2,131 operatories located in 18 states.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of the historical information contained in this news release, the matters described herein contain “forward-looking” statements that involve risk and uncertainties that may individually or collectively impact the matters herein described, including but not limited to the Company’s risks associated with its ability to refinance its credit facilities on satisfactory terms, overall or regional economic conditions, dependence upon affiliated dental practices, contracts its affiliated practices have with third-party payors, dependence upon service agreements and government regulation of the dental industry, the impact of any terminations or potential terminations of such contracts and the Company’s acquisition and affiliation strategy, which are detailed from time to time in the “Risk Factors” section of the Company's SEC reports, including the annual report on Form 10-K for the year ended December 31, 2008.

 
AMERICAN DENTAL PARTNERS, INC.

FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
(unaudited)

AMERICAN DENTAL PARTNERS, INC.

FINANCIAL HIGHLIGHTS
(in thousands)

(unaudited)

AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)

Pro forma consolidated statement of income
for the three months ended June 30, 2008

AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)

Pro forma consolidated statement of income
for the six months ended June 30, 2008

       
AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)

Change in consolidated statement of income
for the three and six months ended June 30, 2009 and 2008

 
AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)


Selected statistical data

 


Patient revenue and same market patient revenue growth (k)