WAKEFIELD, Mass., July 30, 2007 (PRIME NEWSWIRE) -- American Dental Partners, Inc. (Nasdaq:ADPI) announced financial results today for the quarter and six months ended June 30, 2007.
Comparing the second quarter of 2007 with the second quarter of 2006:
* Net revenue was $66,552,000 as compared to $55,078,000, an increase of 21%. * Earnings from operations were $8,187,000 as compared to $5,723,000, an increase of 43%. * Net earnings were $4,528,000 as compared to $3,183,000, an increase of 42%. * Diluted net earnings per share were $0.34, as compared to $0.25, an increase of 36%. * Diluted cash net earnings per share were $0.41 as compared to $0.31, an increase of 32%.
Comparing the first six months of 2007 with the first six months of 2006:
* Net revenue was $132,010,000 as compared to $109,144,000, an increase of 21%. * Earnings from operations were $15,410,000 as compared to $10,811,000, an increase of 43%. * Net earnings were $8,407,000 as compared to $5,974,000, an increase of 41%. * Diluted net earnings per share were $0.64, as compared to $0.46, an increase of 39%. * Diluted cash net earnings per share were $0.77 as compared to $0.59, an increase of 31%.
Patient revenue of the Company's affiliated dental group practices increased 19.1% to $100,127,000 for the quarter, which includes $94,375,000 from dental group practices which are affiliated with the Company by means of service agreements and $5,752,000 from Arizona's Tooth Doctor for Kids. Same market patient revenue growth was 10.6% for the quarter.
Cash flow from operations was $9,897,000 for the quarter. Capital expenditures were $3,531,000 for the quarter. The Company expanded/relocated four dental facilities and completed two de novo dental facilities during the quarter. Amounts paid for affiliations and acquisitions, including contingent payments and affiliation costs, amounted to $14,744,000 for the quarter. During the quarter the Company completed one in-market affiliation, which was combined with an existing platform affiliated practice in New York. The Company, as previously announced, also completed three platform affiliations, and entered into new Service Agreements, in California, Minnesota and Texas. Affiliations and acquisitions completed during the first six months generate approximately $20 million in annualized patient revenue.
The Company incurred professional fees of approximately $780,000 during the quarter as compared to $370,000 for the prior year's same quarter related to the previously announced litigation between the Company's Minnesota subsidiary, PDHC, Ltd., and PDG, P.A., the affiliated practice at Park Dental. The Company recognized $504,000 in stock-based compensation expense, $326,000 net of tax or $0.02 per diluted share, during the quarter as compared to $374,000, $253,000 net of tax or $0.02 per diluted share, for the prior year's same quarter.
The Company's debt to total capitalization stood at 25% at June 30, 2007, compared to 23% at December 31, 2006. The Company achieved an annualized cash return on committed capital and cash return on equity for the quarter of 23% and 17%, respectively, compared to the prior year's annualized cash return on committed capital and cash return on equity for the quarter of 21% and 15%, respectively.
Cash net earnings and cash earnings from operations 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, 2007, the Company will host its previously announced conference call on Tuesday, July 31, 2007 at 10:00 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 7, 2007.
American Dental Partners is one of the nation's leading business partners to dental group practices. The Company is affiliated with 25 dental group practices which have 220 dental facilities with approximately 1,997 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 possibility that we may not realize the benefits expected from our acquisition and affiliation strategy, economic, regulatory and/or other factors outside the control of the Company, 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, 2006.
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2007 2006 2007 2006
-------- -------- -------- --------
Net revenue $ 66,552 $ 55,078 $132,010 $109,144
Operating expenses:
Salaries and benefits 27,194 22,396 55,165 44,936
Lab fees and dental supplies 10,506 8,971 20,680 17,682
Office occupancy expenses 7,273 6,482 14,409 12,817
Other operating expenses 5,559 4,850 11,060 9,668
General corporate expenses 4,144 3,378 8,051 6,730
Depreciation expense 2,206 1,939 4,310 3,851
Amortization of intangible
assets 1,483 1,339 2,925 2,649
-------- --------- -------- --------
Total operating expenses 58,365 49,355 116,600 98,333
-------- -------- -------- --------
Earnings from operations 8,187 5,723 15,410 10,811
Interest expense, net 578 470 1,203 954
Minority interest 90 0 247 0
-------- -------- -------- --------
Earnings before income taxes 7,519 5,253 13,960 9,857
Income taxes 2,991 2,070 5,553 3,883
-------- -------- -------- --------
Net earnings $ 4,528 $ 3,183 $ 8,407 $ 5,974
======== ======== ======== ========
Net earnings per common share:
Basic $ 0.36 $ 0.26 $ 0.67 $ 0.49
======== ======== ======== ========
Diluted $ 0.34 $ 0.25 $ 0.64 $ 0.46
======== ======== ======== ========
Weighted average common shares
outstanding:
Basic 12,669 12,280 12,563 12,275
======== ======== ======== ========
Diluted 13,302 12,848 13,203 12,850
======== ======== ======== ========
AMERICAN DENTAL PARTNERS, INC.
FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)
June 30, December 31,
2007 2006
--------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 5,693 $ 1,386
Accounts receivbale, net 20,535 16,373
Other current assets 7,700 6,860
--------- ---------
Total current assets 33,928 24,619
--------- ---------
Property and equipment, net 48,395 46,460
--------- ---------
Other non-current assets:
Goodwill 22,556 23,091
Intangible assets, net 113,273 101,113
Other assets 1,086 537
--------- ---------
Total non-current assets 136,915 124,741
--------- ---------
Total assets $ 219,238 $ 195,820
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 28,942 $ 29,351
Current maturities of debt 36 81
--------- ---------
Total current liabilities 28,978 29,432
--------- ---------
Non-current liabilities:
Long-term debt 42,621 33,807
Other liabilities 16,655 16,216
--------- ---------
Total non-current liabilities 59,276 50,023
--------- ---------
Total liabilities 88,254 79,455
--------- ---------
Minority interest 751 54
Commitments and contingencies
Stockholders' equity 130,233 116,311
--------- ---------
Total liabilities and stockholders' equity $ 219,238 $ 195,820
========= =========
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands, except per share amounts and statistical data)
(unaudited)
Selected statistical data
June 30, June 30, %
2007 2006 Change
--------- -------- --------
Number of dental facilities 220 195 12.8%
Number of operatories (1) 1,997 1,808 10.5%
Number of affiliated dentists (2) 524 443 18.3%
Reconciliation of GAAP earnings, as reported, to cash net earnings
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2007 2006 2007 2006
------- ------- ------- -------
Net earnings (as reported) $ 4,528 $ 3,183 $ 8,407 $ 5,974
Add: Amortization of
intangible assets, net of tax 893 811 1,761 1,605
------- ------- ------- -------
Cash net earnings (3) $ 5,421 $ 3,994 $10,168 $ 7,579
======= ======= ======= =======
Weighted average common shares
outstanding 13,302 12,848 13,203 12,850
======= ======= ======= =======
Diluted net earnings per share $ 0.34 $ 0.25 $ 0.64 $ 0.46
======= ======= ======= =======
Diluted cash net earnings per
share (3) $ 0.41 $ 0.31 $ 0.77 $ 0.59
======= ======= ======= =======
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(in thousands)
(unaudited)
Calculation of cash return on committed capital and cash return on
equity for the three and six months ended June 30, 2007 and 2006
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Earnings from operations $ 8,187 $ 5,723 $ 15,410 $ 10,811
Add back: Amortization of
intangible assets 1,483 1,339 2,925 2,649
--------- --------- --------- ---------
Cash earnings from
operations (4) $ 9,670 $ 7,062 $ 18,335 $ 13,460
========= ========= ========= =========
Annualized cash earnings
from operations $ 38,680 $ 28,248 $ 36,670 $ 26,920
========= ========= ========= =========
Average committed
capital (5) $165,951 $133,902 $161,545 $134,596
Cash return on committed
capital (4) 23% 21% 23% 20%
Net earnings $ 4,528 $ 3,183 $ 8,407 $ 5,974
Add back: Amortization of
intangible assets, net
of taxes 893 811 1,761 1,605
--------- --------- --------- ---------
Cash net earnings (3) $ 5,421 $ 3,994 $ 10,168 $ 7,579
========= ========= ========= =========
Annualized cash net
earnings $ 21,684 $ 15,976 $ 20,336 $ 15,158
========= ========= ========= =========
Average stockholders'
equity (5) $126,128 $107,078 $123,272 $105,400
Cash return on equity (4) 17% 15% 16% 14%
Patient revenue and same market patient revenue growth (6)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- % ------------------ %
2007 2006 Change 2007 2006 Change
-------- -------- ------ -------- -------- ------
Patient revenue
of affiliated
practices:
Platform dental
group practices
affiliated
with us in both
periods
of comparison $ 92,985 $ 84,047 10.6% $182,234 $166,861 9.2%
Platform dental
group
practices that
affiliated
with us
during periods
of comparison 7,142 -- -- 16,431 1,472 1016.2%
-------- -------- ----- -------- -------- -------
Total patient
revenue 100,127 84,047 19.1% 198,665 168,333 18.0%
Patient revenue
of Arizona's
Tooth Doctor
for Kids 5,752 -- -- 11,555 -- --
-------- -------- ----- -------- ------- -----
Patient revenue
of platform
dental group
practices
affiliated
with us by
means of
service
agreements 94,375 84,047 12.3% 187,110 168,333 11.2%
Amounts due to
us under service
agreements 59,559 53,832 10.6% 118,039 106,808 10.5%
-------- -------- ----- -------- -------- -----
Amounts retained
by platform
dental group
practices
affiliated with
us by means of
service
agreements $ 34,816 $ 30,215 15.2% $ 69,071 $ 61,525 12.3%
======== ======== ===== ======== ======== =====
AMERICAN DENTAL PARTNERS, INC.
Supplemental Operating Data
(unaudited)
(1) An operatory is an area where dental care is performed and
generally contains a dental chair, a hand piece delivery system
and other essential equipment.
(2) Includes full-time equivalent general or specialty dentists
employed by or contracted with the affiliated practices,
including Arizona's Tooth Doctor for Kids.
(3) Cash net earnings and diluted cash net earnings per share are not
measures of financial performance under GAAP. Cash net earnings
excludes amortization expense related to intangible assets, net
of tax. The Company incurs significant amortization expense
related to its service agreements while many companies, both in
the same industry and other industries, no longer amortize a
significant portion of their intangible assets pursuant to
Statement of Financial Accounting Standards No. 142 - Goodwill
and Other Intangible Assets. The Company believes that cash net
earnings and diluted cash net earnings per share are important
financial measures for understanding its relative financial
performance.
(4) Cash earnings from operations is not a measure of financial
performance under GAAP. The Company believes that cash return on
committed capital and cash return on equity are useful financial
measures for understanding its financial performance.
(5) Average committed capital calculated as average of beginning of
quarter and end of quarter debt, including current portion, plus
stockholders' equity. Average stockholders' equity calculated as
average of beginning of quarter and end of quarter stockholders'
equity.
(6) Includes patient revenue of affiliated dental group practices
which are not consolidated with the Company's financial results
and patient revenue of Arizona's Tooth Doctor for Kids which is
consolidated with the Company's financial results as of
December 1, 2006.