WAKEFIELD, Mass., Nov. 7, 2011 (GLOBE NEWSWIRE) -- American Dental Partners, Inc. (Nasdaq:ADPI) announced financial results today for the quarter ended September 30, 2011. The Company also issued a separate press release today announcing that it has entered into a definitive agreement to be acquired by funds affiliated with JLL Partners.
Comparing results for the third quarter of 2011 with results for the third quarter of 2010:
- Net revenue was $70,241,000 for the third quarter of 2011 as compared to $71,116,000 for the third quarter of 2010.
- Earnings from operations were $5,339,000 for the third quarter of 2011 as compared to $6,073,000 for the third quarter of 2010.
- Net earnings were $2,679,000 for the third quarter of 2011 as compared to $2,715,000 for the third quarter of 2010.
- Diluted net earnings per share were $0.17 for the third quarter of 2011 as compared to $0.17 for the third quarter of 2010.
- Non-GAAP diluted adjusted net earnings per share were $0.27 for the third quarter of 2011 as compared to $0.27 for the third quarter of 2010. Please see the attached Reconciliation of GAAP Net Earnings, as Reported, to Non-GAAP Diluted Adjusted Net Earnings.
Comparing results for the nine months ending September 30, 2011 with results for the nine months ending September 30, 2010:
- Net revenue was $219,016,000 for the nine months ending September 30, 2011 as compared to $215,336,000 for the nine months ending September 30, 2010.
- Earnings from operations were $19,333,000 for the nine months ending September 30, 2011 as compared to $20,646,000 for the nine months ending September 30, 2010.
- Net earnings were $9,106,000 for the nine months ending September 30, 2011 as compared to $8,172,000 for the nine months ending September 30, 2010.
- Diluted net earnings per share were $0.58 for the nine months ending September 30, 2011 as compared to $0.51 for the nine months ending September 30, 2010.
- Non-GAAP diluted adjusted net earnings per share were $0.89 for the nine months ending September 30, 2011 as compared to $0.83 for the nine months ending September 30, 2010. Please see the attached Reconciliation of GAAP Net Earnings, as Reported, to Non-GAAP Diluted Adjusted Net Earnings.
For the quarter ending September 30, 2011, patient revenue of the Company's affiliated dental group practices and Arizona's Tooth Doctor for Kids was $110,321,000 and same market patient revenue decreased 0.9% year-over-year. For the nine months ending September 30, 2011, patient revenue of the Company's affiliated dental group practices and Arizona's Tooth Doctor for Kids was $343,862,000 and same market patient revenue increased 0.7% year-over-year.
Cash flow from operations was $12,080,000 for the quarter and $37,521,000 for the nine months ending September 30, 2011. The Company did not complete any acquisitions during the quarter and completed nine in-market acquisitions during the nine months ending September 30, 2011. Amounts paid for acquisitions amounted to $2,713,000 for the nine months ending September 30, 2011. Capital expenditures were $7,671,000 for the quarter and $14,516,000 for the nine months ending September 30, 2011. The Company completed three de novo facilities during the quarter and completed four de novo facilities during the nine months ending September 30, 2011.
The Company recognized $535,000, $336,000 net of tax or $0.02 per diluted share, of stock-based compensation expense during the quarter, as compared to $450,000, $284,000 net of tax or $0.02 per diluted share, for the same quarter last year.
Patient Revenue of the Affiliated Practices
The Company does not consolidate the financial statements of the practices affiliated with the Company by means of service agreements with its financial statements. Patient revenue of the affiliated practices is, however, a financial measure used by the Company's management to monitor operating performance and to help identify and analyze trends of the affiliated practices that may affect the Company's business. Most of the operating expenses incurred by the Company, pursuant to the service agreements, are on behalf of the affiliated practices in the operation of dental facilities. These expenses are significantly affected by the patient revenue of the affiliated practices.
Use of Non-GAAP Financial Measures
Adjusted net earnings and adjusted net earnings excluding service agreement amortization are non-GAAP financial measures. In accordance with the requirements of Regulation G of the Securities and Exchange Commission, please see the attached financial tables for a presentation of the most comparable GAAP measures, the reconciliation to those GAAP measures and all additional reconciliations required by Regulation G.
The Company believes non-GAAP financial measures, such as adjusted net earnings and adjusted net earnings excluding service agreement amortization, are important financial measures for understanding its financial performance. Amortization expense of intangible assets related to service agreements with the affiliated practices is presented separately and excluded from the Company's adjusted net earnings excluding service agreement amortization, a non-GAAP financial measure, due to its magnitude and non-cash impact on the Company's ongoing operations and because, unlike depreciation of the Company's dental facilities, it requires no recurring capital investment. The primary limitations associated with the Company's use of non-GAAP measures are that these measures may not be directly comparable to the amounts reported by other companies. Management compensates for these limitations by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in this press release.
About American Dental Partners, Inc.
American Dental Partners is one of the nation's leading business partners to dental group practices. The Company is affiliated with 27 dental group practices, which have 282 dental facilities with approximately 2,404 operatories located in 21 states.
Use of Forward-Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of the historical information contained in this press release, the matters described herein contain "forward-looking" statements that involve risk and uncertainties that may individually or collectively affect the matters herein described, including but not limited to the Company's risks associated with overall or regional economic conditions, dependence upon affiliated dental practices, contracts the affiliated practices have with third-party payors, government regulation of the dental industry, impact of health care reform, dependence upon service agreements and the impact of any terminations or potential terminations of such contracts, business interruptions, the outcome of pending litigation and the Company's acquisition and affiliation strategy, which are detailed from time to time in the "Risk Factors" section of the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K and quarterly reports on Form 10-Q.
| AMERICAN DENTAL PARTNERS, INC. | ||||
| FINANCIAL HIGHLIGHTS | ||||
| (in thousands, except per share amounts) | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Net revenue | $ 70,241 | $ 71,116 | $ 219,016 | $ 215,336 |
| Operating expenses: | ||||
| Salaries and benefits | 28,294 | 29,242 | 86,738 | 87,579 |
| Lab fees and dental supplies | 10,776 | 10,759 | 34,145 | 32,495 |
| Office occupancy expenses | 9,655 | 9,611 | 28,638 | 27,867 |
| Other operating expenses | 7,453 | 6,932 | 22,455 | 20,357 |
| General corporate expenses | 3,023 | 3,054 | 10,972 | 10,370 |
| Depreciation expense | 3,125 | 2,903 | 9,060 | 8,610 |
| Amortization of intangible assets | 2,576 | 2,542 | 7,675 | 7,412 |
| Total operating expenses | 64,902 | 65,043 | 199,683 | 194,690 |
| Earnings from operations | 5,339 | 6,073 | 19,333 | 20,646 |
| Interest expense, net | 1,028 | 1,710 | 4,136 | 7,088 |
| Earnings before income taxes | 4,311 | 4,363 | 15,197 | 13,558 |
| Income taxes | 1,602 | 1,605 | 6,007 | 5,237 |
| Consolidated net earnings | 2,709 | 2,758 | 9,190 | 8,321 |
| Noncontrolling interest | 30 | 43 | 84 | 149 |
| Net earnings | $ 2,679 | $ 2,715 | $ 9,106 | $ 8,172 |
| Net earnings per common share: | ||||
| Basic | $ 0.17 | $ 0.17 | $ 0.59 | $ 0.52 |
| Diluted | $ 0.17 | $ 0.17 | $ 0.58 | $ 0.51 |
| Weighted average common shares outstanding: | ||||
| Basic | 15,451 | 15,695 | 15,432 | 15,712 |
| Diluted | 15,700 | 15,991 | 15,726 | 16,032 |
| AMERICAN DENTAL PARTNERS, INC. | ||
| FINANCIAL HIGHLIGHTS | ||
| (in thousands) | ||
| (unaudited) | ||
| September 30, | December 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 3,507 | $ 4,798 |
| Short-term investments | 2,215 | -- |
| Accounts receivable, net | 19,061 | 19,403 |
| Other current assets | 13,301 | 13,085 |
| Total current assets | 38,084 | 37,286 |
| Property and equipment, net | 59,308 | 53,095 |
| Other non-current assets: | ||
| Goodwill | 90,750 | 90,750 |
| Intangible assets, net | 180,005 | 185,669 |
| Other assets | 5,118 | 5,556 |
| Total non-current assets | 275,873 | 281,975 |
| Total assets | $ 373,265 | $ 372,356 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 27,969 | $ 22,664 |
| Other current liabilities | 9,153 | 9,943 |
| Current maturities of debt | 8,038 | 8,156 |
| Total current liabilities | 45,160 | 40,763 |
| Non-current liabilities: | ||
| Long-term debt | 73,350 | 92,250 |
| Other liabilities | 47,575 | 43,909 |
| Total non-current liabilities | 120,925 | 136,159 |
| Total liabilities | 166,085 | 176,922 |
| Noncontrolling interest | 562 | 462 |
| Commitments and contingencies | ||
| Stockholders' equity | 206,618 | 194,972 |
| Total liabilities and stockholders' equity | $ 373,265 | $ 372,356 |
| AMERICAN DENTAL PARTNERS, INC. | ||
| SUPPLEMENTAL OPERATING DATA | ||
| (unaudited) | ||
| Selected Statistical Data | ||
| September 30, | ||
| 2011 | 2010 | |
| Number of dental facilities | 282 | 275 |
| Number of operatories (a) | 2,404 | 2,378 |
| Number of affiliated dentists (b) | 566 | 574 |
| (a) 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. | ||
| (b) Includes full-time equivalent general or specialty dentists employed by or | ||
| contracted with the affiliated practices and Arizona's Tooth Doctor for Kids. | ||
| Patient Revenue and Same Market Patient Revenue Growth (c) | ||||||
| (in thousands) | ||||||
| Three Months Ended | Nine Months Ended | |||||
| September 30, | % | September 30, | % | |||
| 2011 | 2010 | Change | 2011 | 2010 | Change | |
| Total patient revenue (c): | ||||||
| Platform dental group practices affiliated with | ||||||
| the Company in both periods of comparison | $ 110,313 | $ 111,318 | -0.9% | $ 329,907 | $ 327,494 | 0.7% |
| Platform dental group practices that affiliated with | ||||||
| the Company during periods of comparison | 8 | -- | -- | 13,955 | 6,516 | 114.2% |
| Total patient revenue | 110,321 | 111,318 | -0.9% | 343,862 | 334,010 | 2.9% |
| Patient revenue of Arizona's Tooth Doctor for Kids | 4,848 | 5,645 | -14.1% | 14,492 | 17,050 | -15.0% |
| Patient revenue of practices affiliated with the Company | ||||||
| by means of service agreements | 105,473 | 105,673 | -0.2% | 329,370 | 316,960 | 3.9% |
| Net revenue due to the Company under service agreements | 64,978 | 64,958 | 0.0% | 203,349 | 196,594 | 3.4% |
| Amounts retained by practices affiliated with the Company | ||||||
| by means of service agreements | $ 40,495 | $ 40,715 | -0.5% | $ 126,021 | $ 120,366 | 4.7% |
| (c) Includes patient revenue of Arizona's Tooth Doctor for Kids, which is consolidated with the Company's financial | ||||||
| results, and patient revenue of affiliated practices that are not consolidated with the Company's financial results. | ||||||
| AMERICAN DENTAL PARTNERS, INC. | ||||||
| SUPPLEMENTAL OPERATING DATA | ||||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Components of Same Market Patient Revenue Growth (in thousands) | ||||||
| Three Months Ended | Nine Months Ended | |||||
| September 30, | % | September 30, | % | |||
| 2011 | 2010 | Change | 2011 | 2010 | Change | |
| Existing facilities (d) | $ 107,414 | $ 110,375 | -2.7% | $ 321,039 | $ 324,006 | -0.9% |
| De novo facilities (e) | 1,213 | 494 | 145.5% | 4,928 | 2,357 | 109.1% |
| Expanded/relocated facilities (e) | 352 | 334 | 5.4% | 998 | 1,016 | -1.8% |
| Same market growth excluding acquisitions | 108,979 | 111,203 | -2.0% | 326,965 | 327,379 | -0.1% |
| Acquired facilities (e) | 1,334 | 115 | 1060.0% | 2,942 | 115 | 2458.3% |
| Same market patient revenue growth | $ 110,313 | $ 111,318 | -0.9% | $ 329,907 | $ 327,494 | 0.7% |
| (d) Includes facilities in both periods of comparison. | ||||||
| (e) Includes facilities completed or acquired in either period of comparison. | ||||||
| Reconciliation of GAAP Net Earnings, as Reported, to Non-GAAP Diluted Adjusted Net Earnings | ||||
| (in thousands, except per share amounts) | ||||
| Three Months Ended, September 30, | Nine Months Ended, September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| GAAP net earnings (as reported) | $ 2,679 | $ 2,715 | $ 9,106 | $ 8,172 |
| Add: Write-off of expenses associated with debt refinancing, net of tax (f) | -- | -- | 219 | 377 |
| Add: Expenses associated with Cincinnati Dental Services affiliation, net of tax (f) | -- | 32 | -- | 207 |
| Adjusted net earnings | 2,679 | 2,747 | 9,325 | 8,756 |
| Add: Amortization of service agreements, net of tax (f) | 1,597 | 1,597 | 4,601 | 4,520 |
| Adjusted net earnings excluding service agreement amortization | $ 4,276 | $4,344 | $ 13,926 | $ 13,276 |
| Weighted average diluted shares outstanding | 15,700 | 15,991 | 15,726 | 16,032 |
| Diluted adjusted net earnings per share | $ 0.17 | $ 0.17 | $ 0.59 | $ 0.55 |
| Diluted adjusted net earnings excluding service agreement amortization per share | $ 0.27 | $ 0.27 | $ 0.89 | $ 0.83 |
| (f) Tax effected at effective tax rate in the period reported. | ||||