American Dental Partners, Inc. (Nasdaq:ADPI) announced financial
results today for the quarter ended June 30, 2011.
Comparing results for the second quarter of 2011 with results
for the second quarter of 2010:
- Net revenue was $73,953,000 for the second quarter of 2011 as
compared to $72,366,000 for the second quarter of 2010.
- Earnings from operations were $5,987,000 for the second quarter
of 2011 as compared to $7,959,000 for the second quarter of
2010.
- Net earnings were $2,629,000 for the second quarter of 2011 as
compared to $3,112,000 for the second quarter of 2010.
- Diluted net earnings per share were $0.17 for the second
quarter of 2011 as compared to $0.19 for the second quarter of
2010.
- Non-GAAP diluted adjusted net earnings per share were $0.28 for
the second quarter of 2011 as compared to $0.32 for the second
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 six months ending June 30, 2011 with
results for the six months ending June, 30, 2010:
- Net revenue was $148,775,000 for the six months ending June 30,
2011 as compared to $144,220,000 for the six months ending June 30,
2010.
- Earnings from operations were $13,994,000 for the six months
ending June 30, 2011 as compared to $14,573,000 for the six months
ending June 30, 2010.
- Net earnings were $6,427,000 for the six months ending June 30,
2011 as compared to $5,457,000 for the six months ending June 30,
2010.
- Diluted net earnings per share were $0.41 for the six months
ending June 30, 2011 as compared to $0.34 for the six months ending
June 30, 2010.
- Non-GAAP diluted adjusted net earnings per share were $0.61 for
the six months ending June 30, 2011 as compared to $0.56 for the
six months ending June 30, 2010. Please see the attached
Reconciliation of GAAP Net Earnings, as Reported, to Non-GAAP
Diluted Adjusted Net Earnings.
For the quarter, patient revenue of the Company's affiliated
dental group practices and Arizona's Tooth Doctor for Kids was
$115,953,000 and same market patient revenue increased 1.0%
year-over-year. For the six months ending June 30, 2011,
patient revenue of the Company's affiliated dental group practices
and Arizona's Tooth Doctor for Kids was $233,541,000 and same
market patient revenue increased 1.4%
year-over-year.
Cash flow from operations was $11,904,000 for the quarter and
$25,441,000 for the six months ending June 30, 2011. Amounts
paid for acquisitions amounted to $2,563,000 during the quarter and
$2,713,000 for the six months ending June 30, 2011. The
Company completed seven in-market acquisitions during the quarter
and nine in-market acquisitions during the six months ending June
30, 2011. Acquisitions completed during the quarter generated
approximately $692,000 of patient revenue in the quarter and are
expected to generate patient revenue of approximately $3,300,000 on
an annualized basis. Capital expenditures were $4,469,000 for
the quarter and $6,845,000 for the six months ending June 30,
2011. The Company completed one de novo facility during the
six months ending June 30, 2011.
The Company recognized $545,000, $323,000 net of tax or $0.02
per diluted share, of stock-based compensation expense during the
quarter, as compared to $432,000, $260,000 net of tax or $0.02 per
diluted share, for the same quarter last year.
As previously announced, the Company refinanced its credit
facility in May 2011 by entering into an amended $180,000,000
senior secured credit facility, which includes a $100,000,000
revolving credit facility and an $80,000,000 term loan
facility. As a result, included in interest expense, net, for
the quarter was $370,000 of expenses associated with the amendment
of the Company's credit facility, $219,000 net of tax or $0.01 per
diluted share.
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.
Conference Call
For further discussion of these events and a comprehensive
review of the quarter ending June 30, 2011, the Company will host
its previously announced conference call on Tuesday, July 26, 2011
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 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., EDT, Tuesday, August 2, 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 2,387 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 June 30, |
Six Months Ended
June 30, |
| |
2011 |
2010 |
2011 |
2010 |
| |
|
|
|
|
| Net revenue |
$ 73,953 |
$ 72,366 |
$ 148,775 |
$ 144,220 |
| Operating expenses: |
|
|
|
|
| Salaries and benefits |
29,196 |
28,735 |
58,444 |
58,337 |
| Lab fees and dental
supplies |
11,790 |
10,668 |
23,369 |
21,736 |
| Office occupancy expenses |
9,509 |
9,131 |
18,983 |
18,256 |
| Other operating expenses |
7,682 |
6,878 |
15,002 |
13,425 |
| General corporate
expenses |
4,160 |
3,669 |
7,949 |
7,316 |
| Depreciation expense |
3,070 |
2,862 |
5,935 |
5,707 |
| Amortization of intangible
assets |
2,559 |
2,464 |
5,099 |
4,870 |
| Total operating expenses |
67,966 |
64,407 |
134,781 |
129,647 |
| Earnings from operations |
5,987 |
7,959 |
13,994 |
14,573 |
| Interest expense, net |
1,525 |
2,726 |
3,108 |
5,378 |
| Earnings before income taxes |
4,462 |
5,233 |
10,886 |
9,195 |
| Income taxes |
1,818 |
2,082 |
4,405 |
3,632 |
| Consolidated net earnings |
2,644 |
3,151 |
6,481 |
5,563 |
| Noncontrolling interest |
15 |
39 |
54 |
106 |
| Net earnings |
$ 2,629 |
$ 3,112 |
$ 6,427 |
$ 5,457 |
| |
|
|
|
|
| Net earnings per common share: |
|
|
|
|
| Basic |
$ 0.17 |
$ 0.20 |
$ 0.42 |
$ 0.35 |
| Diluted |
$ 0.17 |
$ 0.19 |
$ 0.41 |
$ 0.34 |
| Weighted average common shares
outstanding: |
|
|
|
|
| Basic |
15,430 |
15,728 |
15,422 |
15,721 |
| Diluted |
15,753 |
16,056 |
15,738 |
16,055 |
| |
|
|
|
|
| |
| AMERICAN DENTAL
PARTNERS, INC. |
| |
|
|
| FINANCIAL
HIGHLIGHTS |
| (in
thousands) |
|
(unaudited) |
| |
|
|
| |
June 30, 2011 |
December 31,
2010 |
| ASSETS |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 4,657 |
$ 4,798 |
| Short-term investments |
1,850 |
-- |
| Accounts receivable, net |
19,379 |
19,403 |
| Other current assets |
12,098 |
13,085 |
| Total current assets |
37,984 |
37,286 |
| |
|
|
| Property and equipment, net |
55,690 |
53,095 |
| Other non-current assets: |
|
|
| Goodwill |
90,750 |
90,750 |
| Intangible assets, net |
182,581 |
185,669 |
| Other assets |
5,254 |
5,556 |
| Total non-current assets |
278,585 |
281,975 |
| Total assets |
$ 372,259 |
$ 372,356 |
| |
|
|
| LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
| Current liabilities: |
|
|
| Accounts payable and accrued
expenses |
$ 26,142 |
$ 22,664 |
| Other current liabilities |
9,933 |
9,943 |
| Current maturities of debt |
8,078 |
8,156 |
| Total current liabilities |
44,153 |
40,763 |
| Non-current liabilities: |
|
|
| Long-term debt |
78,500 |
92,250 |
| Other liabilities |
45,984 |
43,909 |
| Total non-current
liabilities |
124,484 |
136,159 |
| Total liabilities |
168,637 |
176,922 |
| |
|
|
| Noncontrolling interest |
521 |
462 |
| |
|
|
| Commitments and contingencies |
|
|
| Stockholders' equity |
203,101 |
194,972 |
| Total liabilities and
stockholders' equity |
$ 372,259 |
$ 372,356 |
| |
| AMERICAN DENTAL
PARTNERS, INC. |
| |
|
|
| SUPPLEMENTAL OPERATING
DATA |
|
(unaudited) |
| |
|
|
| Selected Statistical
Data |
| |
|
|
| |
Three Months
Ended June 30, |
| |
2011 |
2010 |
| |
|
|
| Number of dental facilities |
278 |
275 |
| Number of operatories (a) |
2,387 |
2,379 |
| Number of affiliated dentists (b) |
579 |
581 |
| |
|
|
| (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 June 30, |
|
Six Months Ended
June 30, |
|
| |
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
| Total patient revenue (c): |
|
|
|
|
|
|
| Platform dental group practices
affiliated with the Company in both periods of comparison |
$ 111,320 |
$ 110,169 |
1.0% |
$ 224,031 |
$ 220,955 |
1.4% |
| Platform dental group practices
that affiliated with the Company during periods of
comparison |
4,633 |
1,737 |
166.7% |
9,510 |
1,737 |
447.5% |
| Total patient revenue |
115,953 |
111,906 |
3.6% |
233,541 |
222,692 |
4.9% |
| Patient revenue of Arizona's Tooth Doctor for
Kids |
4,592 |
5,639 |
-18.6% |
9,644 |
11,405 |
-15.4% |
| Patient revenue of practices affiliated with
the Company by means of service agreements |
111,361 |
106,267 |
4.8% |
223,897 |
211,287 |
6.0% |
| Net revenue due to the Company under service
agreements |
68,935 |
66,134 |
4.2% |
138,371 |
131,636 |
5.1% |
| Amounts retained by practices affiliated with
the Company by means of service agreements |
$ 42,426 |
$ 40,133 |
5.7% |
$ 85,526 |
$ 79,651 |
7.4% |
| |
|
|
|
|
|
|
| (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 (in thousands) |
| |
|
|
|
|
| |
Three
Months Ended June 30, |
|
Six
Months Ended June 30, |
|
| |
2011 |
2010 |
%
Change |
2011 |
2010 |
% Change |
| Existing facilities (d) |
$ 109,019 |
$ 109,806 |
-0.7% |
$ 219,964 |
$ 219,997 |
0.0% |
| De novo facilities (e) |
820 |
33 |
-- |
1,814 |
274 |
562.0% |
| Expanded/relocated facilities (e) |
333 |
330 |
0.9% |
646 |
684 |
-5.6% |
| Same market growth excluding
acquisitions |
110,172 |
110,169 |
0.0% |
222,424 |
220,955 |
0.7% |
| Acquired facilities (e) |
1,148 |
-- |
-- |
1,607 |
-- |
-- |
| Same market patient revenue growth |
$ 111,320 |
$ 110,169 |
1.0% |
$ 224,031 |
$ 220,955 |
1.4% |
| |
|
|
|
|
|
|
| (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, June 30, |
Six Months Ended,
June 30, |
| |
2011 |
2010 |
2011 |
2010 |
| |
|
|
|
|
| GAAP net earnings (as reported) |
$ 2,629 |
$ 3,112 |
$ 6,427 |
$ 5,457 |
| Add: Write-off of expenses associated
with debt refinancing, net of tax (f) |
219 |
370 |
219 |
372 |
| Add: Expenses associated with Cincinnati
Dental Services affiliation, net of tax (f) |
-- |
123 |
-- |
174 |
| Adjusted net earnings |
2,848 |
3,605 |
6,646 |
6,003 |
| Add: Amortization of service agreements,
net of tax (f) |
1,506 |
1,475 |
3,017 |
2,928 |
| Adjusted net earnings excluding service
agreement amortization |
$ 4,354 |
$5,080 |
$ 9,663 |
$ 8,931 |
| |
|
|
|
|
| Weighted average diluted shares
outstanding |
15,753 |
16,056 |
15,738 |
16,055 |
| Diluted adjusted net earnings per share |
$ 0.18 |
$ 0.22 |
$ 0.42 |
$ 0.37 |
| Diluted adjusted net earnings excluding
service agreement amortization per share |
$ 0.28 |
$ 0.32 |
$ 0.61 |
$ 0.56 |
| |
|
|
|
|
| (f) Tax effected at
effective tax rate in the period reported. |
|
|
|
|
CONTACT: American Dental Partners, Inc.
401 Edgewater Place, Suite 430
Wakefield, MA 01880
Phone: 781/224-0880
Fax: 781/224-4216
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
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