Dental Care Alliance Reports Record Third Quarter Results

Business Wire, Nov 6, 1998

SARASOTA, Fla.--(BW HealthWire)--Nov. 6, 1998--Dental Care Alliance Inc. (Nasdaq/NM:DENT) ("DCA") today reported that revenues increased 253% for the third quarter ended Sept. 30, 1998 to $8,030,406 compared to revenues of $2,275,396 in the corresponding period of the previous year.

Of the increase in revenues, $590,000 is attributable to growth within existing practices and the balance relates to new affiliations. Net income reached $964,137 or $0.14 cents per diluted share on 7,071,644 shares for the quarter compared to $45,648 or $0.01 per diluted share on 4,330,810 shares in the third quarter last year.

For the nine months ended Sept. 30, 1998, revenue increased to $20,127,121 versus $4,909,040 for the first nine months of 1997. 1998 nine month net income was $2,498,878 or $0.35 per diluted share compared to $34,759 or $0.01 per diluted share for the same period in 1997.

Dr. Steven Matzkin, chief executive officer, stated, "DCA continues to execute on its growth strategy, which combines a strong emphasis on same-store growth with targeted acquisitions.

"In fact, same-store growth of 13.5 percent this quarter exceeded even our own expectations, and can be partially attributed to the initial rollout of our enhanced training and mentoring programs to new and existing affiliates during the quarter.

"While we believe 10 percent same-store growth is a more realistic, sustainable goal, this outstanding performance is tangible evidence of the positive effect DCA's management techniques and staff can have on our affiliated practices."

"Our acquisition program also continued on track," Dr. Matzkin continued. "During the third quarter, we added six new managed dental centers representing an additional $4 million in annualized net patient revenue. We expanded into the greater Chicago area market with the acquisition of three northwest Indiana practices. DCA now has $48 million in annualized net patient revenue under management."

Dental Care Alliance managed 55 dental practices as of Sept. 30, 1998 compared to 20 practices as of Sept. 30, 1997.

Dental Care Alliance is a dental practice management company providing management and licensing services to dental practices in Florida, Georgia, Michigan and Indiana. The company currently manages 55 dental practices, of which 35 are located in Florida, nine in Michigan, eight in Georgia and three in Indiana.

Dental Care Alliance has recently announced its intention to merge with Gentle Dental Services Inc., (Nasdaq:GNTL) the leading provider of dental management services in the western U.S. and one of the largest providers in the country.

The company provides dental management services to 91 locations in California, Oregon, Washington, Idaho and Hawaii, with a current annual run rate of patient revenues of approximately $142 million.

This news release contains forward-looking statement within the meaning of section 27A of the Securities Act of 1933 and Section 21B of the Securities and Exchange Act of 1934. The company's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause such a difference include, among others, the pace of development and acquisition activity, the dependence on management agreements, the PA's and affiliated dentists, the reimbursement rates for dental services, and other risks detailed in the company's Securities and Exchange Commission filings. -0-

                      DENTAL CARE ALLIANCE INC.
                   FINANCIAL HIGHLIGHTS (Unaudited)

                         Quarter Ended            Nine Months Ended
                          September 30,             September 30,
                       1998         1997         1998          1997

Management fees    $ 7,859,224  $ 2,220,997 $ 19,661,806  $ 4,692,756
Consulting and
 licensing fees, net   171,182       54,399      465,315      216,284
   Total revenues    8,030,406    2,275,396   20,127,121    4,909,040
Staff salaries
 and benefits        2,127,601      693,063    5,449,512    1,294,446
Dental supplies        562,703      177,981    1,393,777      391,315
Lab fees               864,970      254,600    2,176,457      627,610
Marketing              310,659       86,404      734,273      263,031
Occupancy costs        914,637      281,895    2,192,823      614,980
Other                  560,785      259,127    1,389,025      585,621
  Total managed
   dental center
   expenses          5,341,355    1,753,070   13,335,867    3,777,003
                     ---------    ---------   ----------    ---------
                     2,689,051      522,326    6,791,254    1,132,037
General and
 administration        933,249      361,596    2,539,889      870,582
Depreciation and
 amortization          309,075       45,484      698,827       87,062
                     ---------      -------    ---------      -------
                     1,242,324      407,080    3,238,716      957,644

  Operating income   1,446,727      115,246    3,552,538      174,393
Interest income        189,416       28,642      665,399       73,606
Interest expense       (68,440)     (19,297)    (151,468)     (27,797)
                       -------       ------      -------       ------
                       120,976        9,345      513,931       45,809
  Income before
   income taxes      1,567,703      124,591    4,066,469      220,202
Income taxes           603,566       48,943    1,567,591       84,943
  Net income       $   964,137  $    75,648 $  2,498,878  $   135,259

Adjustment to
 redemption value of
 common and preferred
 securities             ----          ----        ----        (10,500)
Cumulative preferred
 stock dividend         ----        (30,000)       ----       (90,000)
  Net income
   applicable to
   common shares   $   964,137  $    45,648 $  2,498,878  $    34,759

Net income per
 common share:
  Basic            $      0.14  $      0.01 $       0.36  $      0.01
  Diluted          $      0.14  $      0.01 $       0.35  $      0.01
Weighted average
 common shares
 outstanding:
  Basic              6,999,957    4,243,341    6,985,295    4,169,197
  Diluted            7,071,644    4,330,810    7,084,768    4,256,666



                      DENTAL CARE ALLIANCE INC.
                         FINANCIAL HIGHLIGHTS

                           September 30,            December 31,
                               1998                    1997
                            (unaudited)              (audited)

ASSETS
  Current assets          $  15,784,757            $  22,167,219
  Property and
   equipment, net             3,738,091                1,113,050
  Non-current assets         14,903,299                5,274,218

    Total assets          $  34,426,147            $  28,554,487

LIABILITIES AND
 STOCKHOLDERS' EQUITY
  Current liabilities     $   3,783,093            $   2,410,475
  Long-term liabilities       3,493,613                1,590,187
  Stockholders' equity       27,149,441               24,553,825
                             ----------               ----------
                          $  34,426,147            $  28,554,487