American Dental Partners, Inc. (Nasdaq:ADPI) announced financial
results today for the quarter and twelve months ended December 31,
2010.
Comparing results for the fourth quarter of 2010 with results
for the fourth quarter of 2009:
- Net revenue was $70,306,000 for the fourth quarter of 2010 as
compared to $66,593,000 for the fourth quarter of 2009.
- Earnings from operations were $5,560,000 for the fourth quarter
of 2010 as compared to $5,773,000 for the fourth quarter of
2009.
- Net earnings were $2,167,000 for the fourth quarter of 2010 as
compared to $1,865,000 for the fourth quarter of 2009.
- Diluted net earnings per share were $0.14 for the fourth
quarter of 2010 as compared to $0.12 for the fourth quarter of
2009.
- Non-GAAP diluted adjusted net earnings, excluding service
agreement amortization, per share were $0.23 for the fourth quarter
of 2010 as compared to $0.22 for the fourth quarter of 2009.
Comparing results for the twelve months ended December 31, 2010
with results for the twelve months ended December 31, 2009:
- Net revenue was $285,642,000 for the twelve months ended
December 31, 2010 as compared to $274,342,000 for the twelve months
ended December 31, 2009.
- Earnings from operations were $26,206,000 for the twelve months
ended December 31, 2010 as compared to $24,848,000 for the twelve
months ended December 31, 2009.
- Net earnings were $10,339,000 for the twelve months ended
December 31, 2010 as compared to $7,729,000 for the twelve months
ended December 31, 2009.
- Diluted net earnings per share were $0.65 for the twelve months
ended December 31, 2010 as compared to $0.55 for the twelve months
ended December 31, 2009.
- Non-GAAP diluted adjusted net earnings, excluding service
agreement amortization, per share were $1.06 for the twelve months
ended December 31, 2010 as compared to $1.00 for the twelve months
ended December 31, 2009.
For the quarter, patient revenue of the Company's affiliated
dental group practices and Arizona's Tooth Doctor for Kids was
$109,878,000 and same market patient revenue increased
1.0%. For the twelve months ended December 31, 2010, patient
revenue of the Company's affiliated dental group practices and
Arizona's Tooth Doctor for Kids was $443,888,000 and same market
patient revenue declined 1.7%.
Cash flow from operations was $8,952,000 for the quarter and
$36,270,000 for the twelve months ended December 31,
2010. Amounts paid for acquisitions amounted to $535,000
during the quarter and $21,108,000 for the twelve months ended
December 31, 2010. The Company completed one in-market
acquisition during the quarter and one platform acquisition and
three in-market acquisitions during the twelve months ended
December 31, 2010. The acquisition completed during the
quarter generated approximately $164,000 of patient revenue in the
quarter and is expected to generate patient revenue of
approximately $640,000 on an annualized basis. Acquisitions
completed during the year generated approximately $11,807,000 of
patient revenue in the quarter and are expected to generate patient
revenue of approximately $21,000,000 on an annualized
basis. Capital expenditures were $3,614,000 for the quarter
and $8,964,000 for the twelve months ended December 31,
2010. The Company completed two de novo facilities during the
quarter, and it completed six de novo facilities and relocated one
dental facility during the twelve months ended December 31,
2010.
The Company recognized $338,000 of professional fees, $203,000
net of tax or $0.01 per diluted share, for the twelve months ended
December 31, 2010, associated with its acquisition of Cincinnati
Dental Services. The Company recognized $561,000 of
professional fees, $338,000 net of tax or $0.02 per diluted share,
for the quarter ended December 31, 2009 and twelve months ended
December 31, 2009, associated with its acquisition of Christie
Dental Partners. These fees have been included in general
corporate expenses.
The Company recognized $615,000 of expenses, $370,000 net of tax
or $0.02 per diluted share, associated with the refinancing of its
indebtedness for the twelve months ended December 31,
2010. The Company recognized $989,000 of expenses, $596,000
net of tax or $0.04 per diluted share, associated with the
refinancing of its indebtedness for the twelve months ended
December 31, 2009. These expenses have been included in
interest expense.
The Company recognized $450,000, $253,000 net of tax or $0.02
per diluted share, of stock-based compensation expense during the
quarter, as compared to $436,000, $263,000 net of tax or $0.02 per
diluted share, for the same quarter last year. These expenses
have been included in general corporate expenses.
Under the Company's share repurchase program, the Company
repurchased 185,000 shares of its common stock for $2,230,000 at an
average price of $12.09 per share during the quarter and 407,000
shares of its common stock for $4,698,000 at an average price of
$11.56 per share for the twelve months ended December 31,
2010. The Company has $5,302,000 remaining under its
$10,000,000 repurchase authorization.
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. The Company incurs
significant amortization expense related to its service agreements
in contrast to many companies, in the same and other industries,
that do not amortize intangible assets based on authoritative
literature for goodwill and other intangible assets. Expenses
related to the Company's debt refinancing and professional fees
related to the Company's acquisitions have also been excluded from
the Company's non-GAAP financial measures. The Company
believes these items should be presented separately due to their
magnitude and non-recurring impact to the Company's ongoing
operations. 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.
Conference Call
For further discussion of these events and a comprehensive
review of the quarter ended December 31, 2010, the Company will
host its previously announced conference call on Thursday, March 3,
2011 at 9:00 a.m., EST, 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 Investors section
of the website at least 15 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., EST, Thursday, March 10, 2011.
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 26 dental group practices, which have 278 dental facilities
with approximately 2,389 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 |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Net revenue |
$ 70,306 |
$ 66,593 |
$ 285,642 |
$274,342 |
Operating expenses: |
|
|
|
|
Salaries and benefits |
28,709 |
28,068 |
116,288 |
117,429 |
Lab fees and dental supplies |
10,352 |
9,550 |
42,847 |
39,691 |
Office occupancy expenses |
9,510 |
8,638 |
37,377 |
34,326 |
Other operating expenses |
6,938 |
5,734 |
27,295 |
23,739 |
General corporate expenses |
3,867 |
3,471 |
14,237 |
13,709 |
Depreciation expense |
2,821 |
3,034 |
11,431 |
11,137 |
Amortization of intangible assets |
2,549 |
2,325 |
9,961 |
9,463 |
Total operating expenses |
64,746 |
60,820 |
259,436 |
249,494 |
Earnings from operations |
5,560 |
5,773 |
26,206 |
24,848 |
Interest expense, net |
1,666 |
2,571 |
8,754 |
11,055 |
Earnings before income taxes |
3,894 |
3,202 |
17,452 |
13,793 |
Income taxes |
1,709 |
1,272 |
6,946 |
5,475 |
Consolidated net earnings |
2,185 |
1,930 |
10,506 |
8,318 |
Noncontrolling interest |
18 |
65 |
167 |
589 |
Net earnings |
$ 2,167 |
$ 1,865 |
$ 10,339 |
$ 7,729 |
|
|
|
|
|
Net earnings per common share: |
|
|
|
|
Basic |
$ 0.14 |
$ 0.12 |
$ 0.66 |
$ 0.55 |
Diluted |
$ 0.14 |
$ 0.12 |
$ 0.65 |
$ 0.55 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
15,422 |
15,682 |
15,639 |
13,946 |
Diluted |
15,754 |
16,009 |
15,965 |
14,155 |
|
AMERICAN DENTAL
PARTNERS, INC. |
|
FINANCIAL
HIGHLIGHTS |
(in
thousands) |
(unaudited) |
|
|
|
|
December 31, |
December 31, |
|
2010 |
2009 |
ASSETS |
Current assets: |
|
|
Cash and cash equivalents |
$ 4,798 |
$ 6,807 |
Accounts receivable, net |
19,403 |
20,811 |
Other current assets |
19,085 |
15,285 |
Total current assets |
43,286 |
42,903 |
|
|
|
Property and equipment, net |
53,095 |
53,766 |
Other non-current assets: |
|
|
Goodwill |
90,750 |
86,852 |
Intangible assets, net |
185,669 |
180,573 |
Other assets |
5,556 |
5,912 |
Total non-current assets |
281,975 |
273,337 |
Total assets |
$ 378,356 |
$ 370,006 |
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 28,664 |
$ 27,211 |
Other current liabilities |
9,943 |
11,810 |
Current maturities of debt |
8,156 |
8,685 |
Total current liabilities |
46,763 |
47,706 |
Non-current liabilities: |
|
|
Long-term debt |
92,250 |
93,506 |
Other liabilities |
43,909 |
41,478 |
Total non-current liabilities |
136,159 |
134,984 |
Total liabilities |
182,922 |
182,690 |
|
|
|
Noncontrolling interest |
462 |
1,857 |
|
|
|
Commitments and contingencies |
|
|
Stockholders' equity |
194,972 |
185,459 |
Total liabilities and stockholders'
equity |
$ 378,356 |
$ 370,006 |
|
AMERICAN DENTAL
PARTNERS, INC. |
|
SUPPLEMENTAL OPERATING
DATA |
(unaudited) |
|
Selected statistical
data |
|
|
|
|
December
31, |
|
2010 |
2009 |
|
|
|
Number of dental facilities |
278 |
268 |
Number of operatories (a) |
2,389 |
2,259 |
Number of affiliated dentists (b) |
576 |
533 |
|
|
|
(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 |
|
Twelve Months
Ended |
|
|
December
31, |
% |
December
31, |
% |
|
2010 |
2009 |
Change |
2010 |
2009 |
Change |
Total patient revenue (c): |
|
|
|
|
|
|
Platform dental group practices
affiliated with the Company in both periods of comparison |
$ 100,546 |
$ 99,515 |
1.0% |
$ 408,298 |
$ 415,565 |
-1.7% |
Platform dental group practices that
affiliated with the Company during periods of
comparison |
9,332 |
1,861 |
-- |
35,590 |
2,840 |
-- |
Total patient revenue |
109,878 |
101,376 |
8.4% |
443,888 |
418,405 |
6.1% |
Patient revenue of Arizona's Tooth Doctor for
Kids |
4,700 |
5,545 |
-15.2% |
21,750 |
24,708 |
-12.0% |
Patient revenue of practices affiliated with
the Company by means of service agreements |
105,178 |
95,831 |
9.8% |
422,138 |
393,697 |
7.2% |
Net revenue due to the Company under service
agreements |
65,098 |
60,482 |
7.6% |
261,692 |
247,103 |
5.9% |
Amounts retained by practices affiliated with
the Company by means of service agreements |
$ 40,080 |
$ 35,349 |
13.4% |
$ 160,446 |
$ 146,594 |
9.4% |
|
|
|
|
|
|
|
(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 |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
December
31, |
% |
December
31, |
% |
|
2010 |
2009 |
Change |
2010 |
2009 |
Change |
Existing facilities (d) |
$ 98,379 |
$ 98,808 |
-0.4% |
$ 394,769 |
$ 406,158 |
-2.8% |
De novo facilities (e) |
941 |
168 |
460.1% |
6,581 |
4,390 |
49.9% |
Expanded/relocated facilities (e) |
501 |
539 |
-7.1% |
4,095 |
4,377 |
-6.4% |
Same market growth excluding
acquisitions |
99,821 |
99,515 |
0.3% |
405,445 |
414,925 |
-2.3% |
Acquired facilities (e) |
725 |
-- |
-- |
2,853 |
640 |
345.8% |
Same market patient revenue growth |
$ 100,546 |
$ 99,515 |
1.0% |
$ 408,298 |
$ 415,565 |
-1.7% |
|
|
|
|
|
|
|
(d) Includes facilities in
both periods of comparison. |
(e) Includes facilities
completed or acquired in either period of comparison. |
|
Reconciliation of GAAP
earnings, as reported, to non-GAAP earnings and adjusted net
earnings |
(in thousands, except
per share amounts) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
Twelve Months
Ended December 31, |
|
2010 |
2010 |
2009 |
2009 |
2010 |
2010 |
2009 |
2009 |
|
GAAP |
Non-GAAP |
GAAP |
Non-GAAP |
GAAP |
Non-GAAP |
GAAP |
Non-GAAP |
|
|
|
|
|
|
|
|
|
Net earnings (as reported) |
$ 2,167 |
$ 2,167 |
$ 1,865 |
$ 1,865 |
$ 10,339 |
$ 10,339 |
$ 7,729 |
$ 7,729 |
Add: Write-off of expenses
associated with debt refinancing, net of tax (f) |
-- |
-- |
-- |
-- |
-- |
370 |
-- |
596 |
Add: Expenses associated with
Christie Dental acquisition, net of tax (f) |
-- |
-- |
-- |
338 |
-- |
-- |
-- |
338 |
Add: Expenses associated with
Cincinnati Dental Services acquisition, net of tax (f) |
-- |
-- |
-- |
-- |
-- |
203 |
-- |
-- |
Adjusted net earnings |
2,167 |
2,167 |
1,865 |
2,203 |
10,339 |
10,912 |
7,729 |
8,663 |
Add: Amortization related to service
agreements, net of tax (f) |
1,422 |
1,422 |
1,394 |
1,394 |
5,960 |
5,960 |
5,509 |
5,509 |
Adjusted net earnings excluding service
agreement amortization |
$ 3,589 |
$ 3,589 |
$ 3,259 |
$ 3,597 |
$ 16,299 |
$ 16,872 |
$ 13,238 |
$ 14,172 |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
outstanding |
15,754 |
15,754 |
16,009 |
16,009 |
15,965 |
15,965 |
14,155 |
14,155 |
Diluted adjusted net earnings per share |
$ 0.14 |
$ 0.14 |
$ 0.12 |
$ 0.14 |
$ 0.65 |
$ 0.68 |
$ 0.55 |
$ 0.61 |
Diluted adjusted net earnings excluding
service agreement amortization per share |
$ 0.23 |
$ 0.23 |
$ 0.20 |
$ 0.22 |
$ 1.02 |
$ 1.06 |
$ 0.94 |
$ 1.00 |
|
|
|
|
|
|
|
|
|
(f) Tax effected at effective tax
rate in the period reported. |
CONTACT: Gregory A. Serrao
Chairman, President and
Chief Executive Officer
781-224-0880
Breht T. Feigh
Executive Vice President,
Chief Financial Officer and Treasurer
781-224-0880
American Dental Partners, Inc.
401 Edgewater Place, Suite 430
Wakefield, MA 01880
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