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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Ladies and gentlemen, thank you very much for standing by. And welcome to the InterDent Service Corporation third quarter 2007 conference call. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded, Tuesday, November 20, 2007. I would now like to turn the conference over to [John Steinburn], CEO. Please go ahead, sir.
JOHN STEINBURN, CEO, INTERDENT SERVICE CORPORATION: Good morning. Welcome to the InterDent third quarter 2007 conference call. We've got some prepared remarks here and then we will open it up to questions in a few minutes' time. I'm John Steinburn. I'm President and CEO of InterDent. Joining me today is [Jeff Hertzig], our CFO. Before I begin, I would like you have Jeff read a brief statement regarding forward-looking statements.
JEFF HERTZIG, CFO, INTERDENT SERVICE CORPORATION: Certain statements during this conference call constitute forward-looking statements, or statements which may be deemed or construed to be forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. The words forecast, estimate, plan, anticipate, project, intend, expect, should, would, believe, trend and similar expressions, and all statements which are not historical facts are intended to identify forward-looking statements.
These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance, financial or operating, or achievements to differ from the future results, performance, financial or operating, or achievements expressed or implied by the forward-looking statements.
Please refer to our financial statements for more details. The words adjusted EBITDA and EBITDA are not intended to represent cash flow from operations in accordance with GAAP, and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. Rather, adjusted EBITDA and EBITDA are a basis upon which to assess financial performance. While adjusted EBITDA and EBITDA are frequently used as a measure of operations and the ability to meet debt service requirements, they're not necessarily comparable to other similarly titled measures of other companies due to the potential inconsistencies in the definition and the method of calculation.
The words same-office revenue and same-office EBITDA are used on a comparative basis to describe the results of those Company offices that were opened as of 9/30/07, and open for at least a full twelve months. The use of this comparison eliminates offices that were closed during 2006 and 2007, and new locations that were not opened during the comparable period.
Also, as we mentioned last quarter, we do not want to point out -- we do want to point out that from June 2001 to May 2006 the Company recognized $42,000 per month or $125,000 per quarter in both revenue and EBITDA for prepaid IT services provided to a former affiliated company, Dental Care Alliance. This was excluded from the same-store comparisons.
Lastly, in some cases we use adjusted EBITDA to make certain comparisons meaningful by excluding onetime costs or expenses that were not present in both periods.
JOHN STEINBURN: For those of you who are still awake, we will proceed with the meat of the presentation. First, I think it is appropriate to introduce myself and the other new members of the management team.
I have a long history of working with companies that are underperforming or that are in financial distress. I thank you all agree that InterDent falls into the underperforming category. My resume includes experience in a wide range of industries, from steel to truck parts to aerospace to distribution to most recently frozen food manufacturing. My resume does not however include health care. My connection to the healthcare business is more personal in nature. I have five doctors in my family, so I have spent a lot of time observing doctors and thinking about the issues that they face. My background is in both financial and operating roles. Most recently I was both CFO and COO of a publicly traded $200 million frozen food manufacturer in Southern California.
In short, here's what you can expect from the me and my new team. We will be focusing on three main themes, cost control, doctor retention and margin improvement. Over time doctor retention we think will drive increases in revenues.
I will let Jeff Hertzig introduce himself in a moment, but first I would like to outline some organizational changes that we have made in our first two months, and to mention two other new additions to the InterDent management team.
There has been a lot of changes on the operations side of the house. The Company's former COO has stepped down, along with two of the three divisional Vice Presidents. We have done away with the divisional structure altogether. The operations group is now headed by [Scott Braiman], a new addition to the management team.
Scott's title is Vice President Practice Operations. Scott spent the first half of 2007 working at InterDent as a consultant. He was part of the revenue enhancement consulting project that you are already aware of. As with his previous experience with the Company, Scott has hit the ground running in his new role.
The other new member of the team is [John Bucowski], our Vice President of Strategy. John is working on analyzing the business. He is evaluating schemes to improve doctor retention and margins Companywide.
In addition to the management changes I mentioned, we have shut down one of our three central billing offices. This has yielded a net reduction of...
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