March 23, 2006
AMERIPATH, INC. ANNOUNCES 2005 FOURTH QUARTER AND FULL
YEAR 2005 FINANCIAL RESULTS
FOR IMMEDIATE RELEASE:
Contact: David L. Redmond, Executive Vice President
and
Chief Financial Officer
Phone Number: 561.712.6226
E-mail address: dredmond@ameripath.com
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Palm Beach Gardens, FL, March 23, 2006 – AmeriPath,
Inc. (“AmeriPath” or the “Company”),
a leading provider of physician based anatomic pathology,
dermatopathology, and molecular diagnostic services,
reported its financial results for the fourth quarter
and the year ended December 31, 2005.
Net revenues for the fourth quarter of 2005 increased
11.0% to $142.6 million from $128.4 million in the fourth
quarter of 2004. Net revenues for the year ended December
31, 2005 increased 11.1% to $563.6 million compared to
$507.3 million for the year ended December 31, 2004.
Same store net revenues for the fourth quarter of 2005
increased 10.0%, or $12.6 million, when compared to the
fourth quarter of 2004. Same store net revenues for the
year ended December 31, 2005 increased 7.7%, or $38.5
million, when compared to the year ended December 31,
2004.
EBITDA (earnings before interest, taxes, depreciation
and amortization), which is a non-GAAP financial measure,
for the fourth quarter of 2005 was $21.8 million compared
to $14.1 million for the fourth quarter of 2004. EBITDA
for the year ended December 31, 2005 was $90.7 million
compared to $67.8 million for the year ended December
31, 2004. A reconciliation of net income to EBITDA is
found in the attached table.
Costs of services for the fourth quarter of 2005 increased
to $75.7 million (53.1% of net revenues) from $71.5 million
(55.7% of net revenues) in the fourth quarter of 2004.
Costs of services for the year ended December 31, 2005
increased to $300.2 million (53.3% of net revenues) from
$271.0 million (53.4% of net revenues) for the year ended
December 31, 2004.
Selling, general and administrative expenses for the
fourth quarter of 2005 were $29.5 million (20.7% of net
revenues) compared to $26.4 million (20.6% of net revenues)
in the fourth quarter of 2004. Selling, general and administrative
expenses for the year ended December 31, 2005 increased
to $109.2 million (19.4% of net revenue) from $95.7 million
(18.9% of net revenues) in the year ended December 31,
2004. The increases in the fourth quarter and year ended
December 31, 2005 are primarily from adding additional
resources in information technology and sales and marketing.
The provision for doubtful accounts for the fourth quarter
of 2005 was $19.3 million (13.5% of net revenues) compared
to $18.2 million (14.2% of net revenues) in the fourth
quarter of 2004. The provision for doubtful accounts
for the year ended December 31, 2005 decreased to $73.8
million (13.1% of net revenues) from $76.5 million (15.1%
of net revenues) in the year ended December 31, 2004.
Outpatient revenues, as a percentage of revenues, continued
to grow at a faster rate than the inpatient revenues.
The bad debt percentage on outpatient revenues is generally
much lower than on inpatient revenues and therefore reduces
total bad debt expense as a percentage of revenues. Outpatient
revenues, as a percentage of total revenue, for the three
months and year ended December 31, 2005 were 61.9% and
60.5%, respectively compared to 55.6% and 53.7%, respectively
in the comparable periods of 2004.
Net income for the fourth quarter of 2005 was $0.2 million
compared to a net loss of $1.6 million for the same quarter
of 2004. Net income for the year ended December 31, 2005
was $9.9 million compared to net income of $1.5 million
for the year ended December 31, 2004.
On January 31, 2006, AmeriPath completed its previously
announced acquisition of Specialty Laboratories, Inc,
a leading hospital-focused clinical reference laboratory.
AmeriPath financed its acquisition through a combination
of cash on hand, contribution of Specialty shares by
its majority shareholder, additional cash equity from
AmeriPath’s majority stockholder, Welsh Carson,
Anderson & Stowe IX, L.P., and borrowings under AmeriPath’s
new credit facility. Please refer to the Form 8-K that
was filed with the SEC on February 3, 2006 for more detailed
information.
More detailed information regarding the business, operations
and financial performance of the Company through December
31, 2005, and related and other matters will be included
in the Company’s Form 10-K for the year ended December
31, 2005, which is expected to be filed with the SEC
on March 24, 2006.
The Company will broadcast its fourth quarter financial
results via conference call on Thursday, March 23, 2006,
at 3:00 p.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 5:00 p.m. Eastern Time on March
23rd until midnight, March 27th. The dial-in number for
the telephone replay is (888) 286-8010, Pass Code #63057174.
AmeriPath, a leading national provider of physician-based
anatomic pathology, dermatopathology and molecular diagnostic
services to physicians, hospitals, clinical laboratories
and surgery centers, supports community-based medicine
by helping physicians provide excellent and effective
care for their patients. A team of subspecialized pathologists
and Ph.D. scientists provide medical expertise, diagnostic
quality, and personal consultation services. AmeriPath’s
team of more than 400 highly trained, board-certified
pathologists provide medical diagnostics services in
outpatient laboratories owned, operated and managed by
AmeriPath, as well as in hospitals and ambulatory surgical
centers.
Specialty Laboratories supports local pathology and
community-based medicine by partnering with pathologists
and hospitals to improve patient care and reduce episodes-of-care
costs. Specialty offers hospitals an extensive menu of
highly advanced clinical tests used by physicians to
diagnose, monitor and treat disease and a single-source
solution for esoteric testing needs.
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The statements contained in this press release may contain “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 successful integration
of the merger with Specialty Laboratories (and achievement
of planned or expected synergies); ability to manage
growth, access to capital on satisfactory terms, general
economic conditions; 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;
and marketing and promotional efforts. 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.
