American Dental Partners — Q4 2010 Earnings Presentation
17 slides from American Dental Partners's earnings presentation, Mar 2, 2011
Slide 1: Fourth Quarter 2010 Earnings Conference Call
Exhibit 99.2 Fourth Quarter 2010 Earnings Conference Call March 3, 2011
Slide 2: Introductory Comments
Introductory Comments “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 i
Slide 3: Highlights
Highlights • Financial results for 4Q10 vs. 4Q09: Net revenue +6% Earnings from operations -4% Net earnings +16% • Completed one in-market acquisition • Completed two pediatric Medicaidde novos 3
Slide 4: Patient Revenue of Affiliated Practices
Patient Revenue of Affiliated Practices (a) $109.9 million vs. $101.4 million +8.4% 4% Same Market Growth • +1.0% same market growth 2% • +0.3% same market excluding 0% 4Q09 1Q10 2Q10 3Q10 4Q10 acquisitions growth -2% • -0.4% same facility growth -4% Same Practice Development Acquisitions Components
Slide 5: Income Statement
Income Statement (thousands, except per share amts) Q4 2010 2009 Change Comments Net revenue $ 70,306 $ 66,593 6% Christie Dental (12/09) and Cincinnati Dental (6/10) platform acquisitions Operating expenses: Salaries and benefits 28,709 28,068 (131) b.p. Christie Dental and Cincinnati Dental (81 b.
Slide 6: Cash Flow
Cash Flow (thousands) 4Q10 4Q09 Operating activities Patient receivable DSO @ 12/31/10 Cash flow from operating activities of 26 vs DSO @ 12/31/09 of 28 Net income and non-cash items $ 10,657 $ 7,041 Working capital items (1,705) 765 Maintenance capital expenditures Cash flow from operating activiti
Slide 7: Capitalization
Capitalization ($ millions) Leverage • $102 million debt Debt to Total Capitalization • 2.0x debt/EBITDA (bank 36% 36% 35% 34% compliance calculation) 34% $300 • $51 million available for borrowing under credit facility (bank compliance calculation) $200 4Q 2010 Share Repurchases $100 • $2.2 million
Slide 8: Diluted Earnings per Share
Diluted Earnings per Share (a) $1.50 2010 PE(b) Diluted Reported EPS $0.68 19x Diluted non-GAAP EPS (a) $1.06 12x $1.25 +56% -37% } } $1.00 $0.75 +56% +64% $0.50 $0.25 $0.00 2009 2010 Reported EPS After-tax Amortization Expense (a) See Appendix for reconciliation of non-GAAP items. (b) Calculated at
Slide 9: Return on Market Value
Return on Market Value (millions, except per share amount) 2008 2009 2010 Cash flow from operations $ 38.6 (a) $ 40.4 $ 36.3 Maintenance capital expenditures 2.8 2.3 $ 4.7 Free cash flow $ 35.8 $ 38.1 $ 31.6 Diluted shares outstanding 15.8 Share price $ 13.00 Market value of equity $ 205.4 Cash flow
Slide 10: 2011 Commentary
2011 Commentary • Maintenance capital expenditures ~$12 million • On-going facility maintenance • 92 facility Improvis EDR implementations • Growth capital expenditures of ~$17 million • 7-9 pediatric Medicaid de novo facilities • 6 private pay de novo facilities • 7 relocation and expansion facilit
Slide 11: Operating Comments
Operating Comments • Same market growth rate benefited from increases in both hours and production per hour (PPH). First quarter since 3Q08 same market growth rate excluding in-market acquisitions was positive. • Opened two de novo facilities for Texas Tooth Doctor during the quarter and six de novo
Slide 12: Operating Comments
Operating Comments • Improvis accomplishments: – EDR was implemented at 7 facilities during the quarter and at year end 57 facilities were using the EDR – Digital radiography functionality received FDA 510(k) clearance – Time keeping functionality being used by 70% of employees – Management dashboar
Slide 13: Operating Comments
Operating Comments • Employment picture and dental benefit enrollment presents internal growth challenges. (Percentage of U.S. population with a dental benefit) 200 175 58% 58% 57% 54% 55% 54% Dental Benefit Enrollment 150 54% 54% 54% Total Non-farm Employees 125 100 2001 2002 2003 2004 2005 2006 20
Slide 14: Appendix
Appendix 14
Slide 15: Appendix: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures • This presentation includes 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 reconcil
Slide 16: Non-GAAP EPS Reconciliation
Non-GAAP EPS Reconciliation (thousands, except per share amt) 2010 2009 Net earnings (as reported) $ 10,339 $ 7,729 Add: Write-off of expenses associated with debt refinancing, net of tax (a) 370 596 Add: Expenses associated with Christie Dental acquisition, net of tax (a) - 338 Add: Expenses associ
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