EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact:
Robert P. Wynn Michelle D. Getty
Executive Vice President & CFO Investor Relations
AmeriPath, Inc. AmeriPath, Inc.
561-845-1850 561-712-6260
E-mail: [email protected]
AMERIPATH ANNOUNCES ASSET IMPAIRMENT AND RELATED CHARGES
Riviera Beach, FL, June 8, 2000 - AmeriPath, Inc. (Nasdaq: PATH), the largest
physician and laboratory company focused on providing anatomic pathology
diagnostic and healthcare information services, today announced that it
anticipates recording in the second quarter of 2000 a pre-tax noncash charge of
approximately $4.7 million, and related cash charges of approximately $540,000,
in connection with the impairment of intangible assets at an acquired practice
in Cleveland, Ohio. These charges will result in a reduction of net income for
the second quarter of $3.9 million, or $.18 per share, and the Company failing
to meet the analysts' quarterly earnings estimates for the first time in its
history.
As previously disclosed in the Company's 1999 annual report on Form 10-K and its
Form 10-Q for the first quarter, the Company provided services at four hospitals
and an ambulatory care facility owned by Primary Health Systems ("PHS"), a
regional hospital network in Cleveland, Ohio. During the first quarter of 2000,
PHS began implementing a plan of reorganization filed under Chapter 11 with the
U.S. Bankruptcy Court for the District of Delaware, and closed one hospital.
During the second quarter, the bankruptcy court approved the sale of two
hospitals and the ambulatory care facility to local purchasers in the Cleveland
area. The Company's contracts with these two hospitals and the ambulatory care
facility were not accepted by the purchasers, who have elected to employ their
own pathologists. One hospital has not been sold or closed and continues to do
business with the Company.
As a consequence, the reduction of profit and related cash flow requires the
Company to write off the remaining intangible assets, including goodwill,
associated with the original purchase of this practice. In addition, the Company
will record approximately $540,000 of related charges for potentially
uncollectible accounts receivable in connection with the loss of these
contracts, severance costs, and legal fees. For the first quarter of 2000, this
practice's net revenue and operating profits were $500,000 and $50,000,
respectively, which was less than 1.0% of the Company's consolidated net revenue
and operating profit.
This event could cause the Company to be in technical default of one or more
covenants under the Company's credit facility. The Company is presently seeking
to obtain a waiver of noncompliance from the lenders under such facility. Until
the formal waiver is obtained, there can be no assurance that such a waiver will
be obtained, or of the final terms or conditions of any such waiver.
James C. New, Chairman, President and Chief Executive Officer commented, "This
event does not reflect on our fundamental business model, but solely on the
financial condition of PHS. Well-run hospital organizations continue to survive
and recognize the benefits of contracting pathology services with AmeriPath. The
Company and this practice's Managing Director will continue to aggressively
market its services in the Cleveland area through its existing outpatient lab
and relationships with other hospitals in Ohio."
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The Company will broadcast a conference call on Friday, June 9, 2000 at 10:00
a.m. EDT over the Internet. This event is available through Investor Broadcast
Network's Vcall website, located at http://www.vcall.com. Listeners should go to
the website at least fifteen minutes before the event to register, download, and
install any necessary audio software. There is no charge to access the event. A
replay of the call will also be available by telephone beginning at 12:00 p.m.
June 9 to 12:00 p.m. June 10. The dial-in number is 800-633-8284, reservation
#15482672.
AmeriPath, Inc. is the nation's largest physician and laboratory company focused
on providing anatomic pathology diagnostic and healthcare information services
to physicians, hospitals, national clinical laboratories and managed care
organizations. The company presently operates in 13 states and employs 296
physicians that provide medical services through outpatient pathology
laboratories, hospital inpatient laboratories and outpatient surgery centers.
* * *
This release contains certain forward-looking statements regarding AmeriPath,
including its operations and prospects. Past performance is not necessarily
indicative of future results. In addition, AmeriPath's actual results could
differ materially from the results anticipated in these forward-looking
statements as a result of uncertainties, including risks relating to demand,
pricing, government regulation, payments and reimbursements, dependence upon
contracts and pathologists, acquisitions, integration of acquired practices, the
market for pathology services, competition, technology and other factors
identified in AmeriPath's filings with the Securities and Exchange Commission.
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Editor's Note: This release is also available at http://www.ameripath.com
