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March 17, 2005
AMERIPATH, INC. ANNOUNCES 2004 FOURTH QUARTER AND
FULL YEAR 2004 FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
Contact: David
L. Redmond, Executive Vice President & CFO
561-712-6226
dredmond@ameripath.com
Palm Beach Gardens, FL, March 17, 2005 – AmeriPath,
Inc. (“AmeriPath” or the “Company”),
a leading national provider of cancer diagnostics,
genomics, and related information services, reported
its financial results for the fourth quarter and
the year ended December 31, 2004. As noted in the
consolidated financial statements, the merger of
AmeriPath on March 27, 2003, resulted in a new basis
of accounting for AmeriPath. In some cases, for ease
of comparison purposes, financial data for the period
after the merger, March 28, 2003 through December
31, 2003, has been added to the financial data for
the period from January 1, 2003 through March 27,
2003 (predecessor period), to arrive at the 12-month
combined period ended December 31, 2003. The financial
data for the period January 1, 2003 through March
27, 2003 include the results of the predecessor operations
for the period from January 1, 2003 through March
31, 2003 since operating results for the two business
days from March 27, 2003 to March 31, 2003 are not
material to either period presented. This combined
data may be referred to herein as year 2003, 2003
or the combined twelve-month period ended December
31, 2003.
Net revenues for the fourth quarter of 2004 were $128.4
million compared to $124.1 million in the fourth quarter
of 2003. Net revenues for the year ended December 31,
2004 were $507.3 million compared to $485.0 million
for the combined twelve-month period ended December
31, 2003.
Same store net revenues for the fourth quarter of
2004 increased 3.3%, or $4.0 million, when compared
to the fourth quarter of 2003. Same store net revenues
for the year ended December 31, 2004 increased 5.8%
or $27.1 million when compared to the combined twelve-month
period ended December 31, 2003.
EBITDA (earnings before interest, taxes, depreciation
and amortization), which is a non-GAAP financial measure,
for the fourth quarter of 2004 was $14.1 million compared
to $21.8 million for the fourth quarter of 2003. EBITDA
for the year ended December 31, 2004 was $67.8 million
compared to $66.5 million for the combined twelve-month
period ended December 31, 2003. A reconciliation of
net income to EBITDA is found in the attached table.
Costs of services for the fourth quarter of 2004 increased
to $71.5 million (55.7% of net revenues) from $65.3
million (52.6% of net revenues) in the fourth quarter
of 2003. Costs of services for the year ended December
31, 2004 increased to $271.0 million (53.4% of net
revenues) from $251.9 million (51.9% of net revenues)
for the combined twelve-month period ended December
31, 2003. The increases in costs of services as a percentage
of net revenues are primarily due to increases in physician
compensation both from adjustments to existing contracts
and from additional physicians added in select specialties,
and from increased courier and distribution costs associated
with the increased revenues from physicians’ offices.
Selling, general and administrative expenses for the
fourth quarter of 2004 increased to $26.4 million (20.6%
of net revenues) from $21.4 million (17.2% of net revenues)
in the fourth quarter of 2003. Selling, general and
administrative expenses for the year ended December
31, 2004 increased to $95.7 million (18.9% of net revenue)
from $87.3 million (18.0% of net revenues) in the combined
twelve-month period ended December 31, 2003. The increases
are primarily due to investments in information technology,
expansion of the sales and marketing efforts, increases
in audit costs and related costs due to Sarbanes-Oxley,
and the severance costs associated with the CEO in
January 2004 and the COO in November 2004.
The provision for doubtful accounts for the fourth
quarter of 2004 increased to $18.2 million (14.2% of
net revenues) from $17.6 million (14.2% of net revenues)
in the same period of 2003. The provision for doubtful
accounts for the year ended December 31, 2004 increased
to $76.5 million (15.1% of net revenues) from $71.4
million (14.7% of net revenues) in the combined twelve-month
period ended December 31, 2003.
Net loss for the fourth quarter of 2004 was $1.6 million
compared to net income of $4.7 million for the same
quarter of 2003. Net income for the year ended December
31, 2004 was $1.5 million compared to net income of
$5.4 million for the combined twelve-month period ended
December 31, 2003.
More detailed information regarding the business,
operations and financial performance of the Company
through December 31, 2004, and related and other matters
will be included in the Company’s Form 10-K for
the year ended December 31, 2004, which is expected
to be filed with the SEC on March 18, 2005.
The Company will broadcast its fourth quarter financial
results via conference call on Friday, March 18, 2005,
at 9:00 a.m. Eastern Time. All bondholders are encouraged
to participate. This event is available through the
Company’s website, http://www.ameripath.com.
Listeners should go to the website at least fifteen
minutes before the call to register, download, and
install any necessary audio software. For those unable
to attend the live broadcast, a replay of the webcast
will be available for the next 2 months on our website.
There is no charge to access the event. A replay of
the call will also be available by telephone beginning
at 1:00 pm, March 18th to 5:00 pm, March 21st. The
dial-in number for the telephone replay is (866) 445-8290,
Pass Code #7289.
AmeriPath is a leading national provider of cancer
diagnostics, genomics, and related information services.
The Company’s extensive diagnostics infrastructure
includes the Center for Advanced Diagnostics (CAD),
a division of AmeriPath. CAD provides specialized diagnostic
testing and information services including Fluorescence
In-Situ Hybridization (FISH), Flow Cytometry, DNA Analysis,
Polymerase Chain Reaction (PCR), Molecular Genetics,
Cytogenetics and HPV Typing. Additionally, AmeriPath
provides clinical trial and research development support
to firms involved in developing new cancer and genomic
diagnostics and therapeutics.
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......................................................................................................
The statements contained in this press release may
include "forward-looking statements'' within the
meaning of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements - which are
sometimes identified by words such as "may", "should", "believe'', "expect'', "anticipate'', "estimate" and
similar expressions and which include any financial
or operating estimates, forecasts or projections -
are subject to a number of risks and uncertainties,
many of which involve factors or circumstances that
are beyond the Company's control. These risks and uncertainties
could cause actual results to differ materially from
results anticipated by forward-looking statements.
These risks and uncertainties include: the extent of
success of the Company's operating initiatives and
growth strategies; ability to manage growth; access
to capital on satisfactory terms; general economic
conditions; terrorism or an escalation of hostilities
or war; competition and changes in competitive factors;
federal and state healthcare regulation (and compliance);
reimbursement rates under government and third party
healthcare programs and the payments received under
such programs; changes in coding; changes in technology;
dependence upon pathologists and customer contracts;
the ability to attract, motivate, and retain pathologists;
labor, technology and insurance costs; marketing and
promotional efforts; the availability of pathology
practices in appropriate locations that the Company
is able to acquire on suitable terms or develop; and
the successful completion and integration of acquisitions
(and achievement of planned or expected synergies).
The forward-looking statements in this press release
are made as of the date hereof based on management's
current beliefs and expectations, and the Company undertakes
no obligation to update or revise any such statements.
Further information regarding risks, uncertainties
and other factors that could affect the Company's financial
or operating results or that could cause actual results
to differ materially from those expected, estimated
or anticipated, are included in the Company's annual,
quarterly, and other reports and filings with the SEC.
