News

WAKEFIELD, MASSACHUSETTS - Feb 24, 2010 - American Dental Partners, Inc. (NASDAQ: ADPI) announced financial results today for the quarter and year ended December 31, 2009.

Comparing results for the fourth quarter of 2009 with results for the fourth quarter of 2008:

• Net revenue was $66,593,000 for the fourth quarter of 2009 as compared to $65,110,000 for the fourth quarter of 2008.
• Earnings from operations were $5,773,000 for the fourth quarter of 2009 as compared to $5,270,000 for the fourth quarter of 2008.
• Net earnings were $1,865,000 for the fourth quarter of 2009 as compared to $1,310,000 for the fourth quarter of 2008.
• Diluted net earnings per share were $0.12 for the fourth quarter of 2009 as compared to $0.10 for the fourth quarter of 2008.
• Diluted cash net earnings per share were $0.20 for the fourth quarter of 2009 as compared to $0.21 for the fourth quarter of 2008.

Comparing results for the year 2009 with actual and pro forma results for the year 2008 (see "Supplemental Operating Data" for an explanation of the pro forma results):

• Net revenue was $274,342,000 for 2009 as compared to $291,108,000 and pro forma $273,411,000 for 2008.
• Earnings from operations were $24,848,000 for 2009 as compared to $60,190,000 and pro forma $21,526,000 for 2008.
• Net earnings were $7,729,000 for 2009 as compared to $30,118,000 and pro forma $6,528,000 for 2008.
• Diluted net earnings per share were $0.55 for 2009 as compared to $2.29 and pro forma $0.50 for 2008.
• Diluted cash net earnings per share were $0.94 for 2009 as compared to $2.71 and pro forma $0.91 for 2008.

Patient revenue of the Company's affiliated dental group practices was $101,376,000 for the quarter, which includes $95,831,000 from dental group practices that are affiliated with the Company by means of service agreements and $5,545,000 from Arizona's Tooth Doctor for Kids. Same market patient revenue growth was .1% for the quarter and (.3%) excluding in-market affiliations. For the full year, patient revenue of the Company's affiliated dental group practices was $418,405,000, which includes $393,697,000 from dental group practices that are affiliated with the Company by means of service agreements and $24,708,000 from Arizona's Tooth Doctor for Kids. Same market revenue growth was (.1%) for the year and (.8%) excluding in-market affiliations.

Cash flow from operations was $7,806,000 for the quarter and $40,445,000 for the year. Amounts paid for affiliations and acquisitions, including contingent amounts and affiliation costs, amounted to $27,899,000 during the quarter and $28,393,000 for the year. The Company completed one platform affiliation and two in-market practice acquisitions during the quarter. During the year, the Company completed one platform affiliation and four in-market practice acquisitions, which were combined with existing platform affiliates. Affiliations and acquisitions completed during the quarter generated approximately $1,900,000 of patient revenue and are expected to generate patient revenue of approximately $27,100,000 on an annualized basis. Capital expenditures were $1,946,000 for the quarter and $6,401,000 for the year. The Company completed two de novo dental facilities during the quarter. During the year, the Company completed five de novo dental facilities and expanded and/or relocated two dental facilities.

The Company recognized during the quarter $561,000 of professional fees, $338,000 net of tax or $0.02 per diluted share, which has been included in general corporate expenses, associated with its acquisition of Christie Dental Partners.

The Company recognized $436,000 of stock-based compensation expense, which has been included in general corporate expenses, $263,000 net of tax or $0.02 per diluted share, during the quarter as compared to $450,000, $275,000 net of tax or $0.02 per diluted share, for the same quarter last year.

In December 2009, all of the parties to the lawsuit entitled "In re American Dental Partners, Inc. Securities Litigation," filed in the United States District Court for the District of Massachusetts under civil action number 1:08-CV-10119-RGS, entered into a settlement agreement. The Court has preliminarily approved the settlement, and a final hearing on the settlement will be held in March 2010. The settlement is being funded entirely by the Company's insurance carrier with no out-of-pocket contribution being made by the Company or any of its executive officers. The Company recorded a liability of $6,000,000 and a corresponding receivable in the fourth quarter. These amounts are recorded in accrued expenses and other current assets on the balance sheet.

Cash net earnings, cash earnings from operations and the pro forma 2008 financial results 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 and the reconciliation to the nearest GAAP measure and all additional reconciliations required by Regulation G.

The Company uses non-GAAP financial measures such as cash net earnings and cash earnings from operations as important financial measures for understanding its relative financial performance. These measures exclude amortization expense, net of tax. The Company incurs significant amortization expense related to its service agreements while many companies, both in the same industry and other industries, do not amortize based on changes in authoritative literature for goodwill and other intangibles. In addition, the Company believes it is useful to provide non-GAAP pro forma financial presentation to exclude temporary and non-recurring items such that investors may better understand future trends of our underlying and 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.

For further discussion of these events and a comprehensive review of the fourth quarter ended December 31, 2009, the Company will host its previously announced conference call on Thursday, February 25, 2010 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 Investor Relations section of the website at least fifteen 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 pm EST, Thursday, March 4, 2010.

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 268 dental facilities with approximately 2,259 operatories located in 19 states.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of the historical information contained in this news 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 the annual report on Form 10-K and quarterly reports on Form 10-Q.

AMERICAN DENTAL PARTNERS, INC.

FINANCIAL HIGHLIGHTS
(in thousands)
(unaudited)

AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)

Pro forma consolidated statement of income
for the twelve months ended December 31, 2008

AMERICAN DENTAL PARTNERS, INC.
SUPPLEMENTAL OPERATING DATA
(in thousands, except per share amounts and selected statistical data)
(unaudited)

Selected statistical data

Patient revenue and same market patient revenue growth (g)