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American Dental Partners Reports Fourth Quarter and Full Year 2010 Financial Results

WAKEFIELD, Mass., March 2, 2011 (GLOBE NEWSWIRE) -- American Dental Partners, Inc. (Nasdaq:ADPI) announced financial results today for the quarter and twelve months ended December 31, 2010.
/ Source: GlobeNewswire

WAKEFIELD, Mass., March 2, 2011 (GLOBE NEWSWIRE) -- 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 . 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 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.

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