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Brig, here. plus only 6 million shares

Castle Dental Reports Second Quarter Results
8/14/2003 4:33:00 PM
HOUSTON, Aug 14, 2003 /PRNewswire-FirstCall via COMTEX/ -- Castle Dental Centers, Inc. (OTC Bulletin Board: CASL) today reported that it had net income of $21.5 million, $0.15 per share, for the three months ended June 30, 2003, including a gain of $21.8 million on early extinguishment of debt related to the financial restructuring completed in May. Excluding the gain on extinguishment of debt and related restructuring costs, the Company earned $424,000 on patient revenues of $24.1 million in the second quarter of 2003, compared to a loss of $0.7 million on patient revenues of $25.1 million in the second quarter of 2002. The decline in revenues resulted primarily from the closing of eight dental centers in the past year. Revenues from existing dental centers were flat to last year.
For the six months ended June 30, 2003, Castle Dental reported net income of $22.0 million, $0.20 per share, including the gain on early extinguishment of debt, compared to a loss of $39.8 million, $6.21 per share, in the first six months of 2002. The loss in 2002 included a $37.0 million charge related to goodwill impairment resulting from the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Excluding these unusual charges and restructuring costs, the Company earned $1.0 million in the first six months of 2003 compared to a loss of $1.7 million in the prior year period. Patient revenues of $48.5 million were $2.1 million, or 4.1% lower than patient revenues in the first six months of 2002. The lower revenues resulted from the closing of eight dental centers as same store revenues increased by 0.7%.
Excluding unusual charges, restructuring costs and severance costs primarily associated with the previously announced resignation of the Company's president in June, earnings before interest, taxes, depreciation and amortization (EBITDA) was $2.2 million for the quarter ended June 30, 2003, a 38% increase from EBITDA of $1.6 million in the second quarter of 2002. For the six months ended June 30, 2003, EBITDA was $5.1 million, 53% higher than EBITDA of $3.2 million for the comparable period of 2002.
During the second quarter 2003, the Company also completed the previously announced recapitalization and debt restructuring. This included the sale of $12.4 million in preferred stock and subordinated notes and the restructuring of the Company's senior credit facility, resulting in a significant reduction in outstanding debt. At June 30, 2003, total debt outstanding was $20.2 million compared to $51.4 million at December 31, 2002.
Net income and loss excluding unusual charges and restructuring costs and other charges and EBITDA are non-generally accepted accounting principle ("GAAP") financial measures. Please see the attached table 3 for a reconciliation of the most comparable GAAP measure to the non-GAAP measures presented in this press release.
Castle Dental Centers, Inc. develops, manages and operates integrated dental networks through contractual affiliations with general, orthodontic and multi-specialty dental practices in the U.S. Castle manages 75 dental centers with approximately 160 affiliated dentists in Texas, Florida, Tennessee and California with annual patient revenues of approximately $100 million.
Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Among the key factors that may have a direct bearing on the Company are fluctuations in the economy, the degree and nature of competitions and the demand for the Company's services, changes in laws and regulations affecting the Company's business, the Company's inability at any time to complete acquisitions and integrate the operations of acquired businesses, and numerous other factors discussed in Castle Dental's filings with the Securities and Exchange Commission.
SOURCE Castle Dental Centers, Inc.
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