Raleigh Area General Dentistry FINANCIAL DATA SUMMARY FOR PRACTICE 5958 9/3/2013 12:27 The following summary illustrates a projected year's income and expenses for the subject practice which incorporates an increase in fees and overhead expense but no increase in production. This summary is not a representation or warranty of future practice performance. Purchasers should obtain qualified legal and accounting counsel prior to any purchase decisions. NOTE: Practice price does not include accounts receivable. PRACTICE INCOME EXPECTED GROSS COLLECTIONS $783,102 100.0% HYGIENE COMPONENT $195,776 25.0% DENTIST COMPONENT $587,327 75.0% RETAINED SELLER PURCHASER $587,327 75.0% VARIABLE EXPENSES WAGES, PAYROLL TAX, ETC. $230,453 29.4% LABORATORY $34,082 4.4% CLINICAL SUPPLIES $60,485 7.7% OTHER VARIABLE EXPENSE $29,465 3.8% TOTAL VARIABLE EXPENSE INCREASE $354,486 45.3% FIXED EXPENSES RENT $54,780 7.0% PHONE, UTILITIES $14,195 1.8% LEGAL & ACCOUNTING $6,760 0.9% INSURANCE $7,800 1.0% OTHER FIXED EXPENSE $60,168 7.7% TOTAL FIXED EXPENSE INCREASE $143,702 18.4% DEBT SERVICE (EXCLUDES ANY REAL ESTATE MORTGAGE WHICH IS INCLUDED IN FIXED EXPENSES) INTEREST $26,508 3.4% PRINCIPAL $74,747 9.5% TOTAL DEBT SERVICE $101,255 12.9% SUMMARY EXPECTED COLLECTIONS $783,102 100.0% EXPECTED EXPENSES $498,188 63.6% DEBT SERVICE $101,255 12.9% EXPECTED NET INCOME & PERCENT OF PERSONAL PRODUCTION $183,659 31.3% PURCHASER PRODUCED PRODUCTION $587,327 75.0% EQUITY INCREASE & PERCENT OF PERSONAL PRODUCTION $74,747 12.7% TAX SAVINGS FROM DEPRECIATION & PERCENT OF PERSONAL PRODUCTION $25,421 4.3% TOTAL ECONOMIC BENEFIT-CASH, TAX SAVINGS, EQUITY & % PERSONAL PROD. $283,827 48.3% THIS CASH FLOW EXAMPLE IS BASED ON THE FOLLOWING ASSUMPTIONS: PRACTICE SALES PRICE & PERCENT OF GROSS $559,000 74% WORKING CAPITAL $38,000 TOTAL PRACTICE LOAN $597,000 PRACTICE LOAN INTEREST RATE 5.00% PRACTICE LOAN TERM IN MONTHS 84 PRACTICE MONTHLY PAYMENT $8,438 13% NA NA TOTAL OF ALL MONTHLY PAYMENT $8,438 13% ESTIMATED MONTHLY HYGIENE AND PROFIT $11,326 17% 9/3/20131:05 PM Page 1
Raleigh Area DATA SUMMARY FOR PRACTICE NUMBER 5958 The following data is provided by the owner of the practice. It is believed to the best of the owner's knowledge to be a true and accurate representation of the facts of the practice. It is the responsibility of any purchaser to verify all information contained herein and to seek qualified counsel in the interpretation and verification thereof. OFFICE DATA SQUARE FOOTAGE OF OFFICE 2,517 EXPANDABLE FOOTAGE Yes - Right of 1st refusal to lease adjacent space and purchase bldg. CURRENT MONTHLY RENTAL i.e. "1200" $4,565 PRICE PER SQUARE FOOT 21.76 IS OFFICE HANDICAPPED ACCESSIBLE? Yes NUMBER OF PARKING SPACES Many PROXIMITY OF PARKING PLACES Close TOTAL NUMBER OF EQUIPPED OPERATORIES 5 NUMBER OF PLUMBED BUT UNEQUIPPED OPERATORIES NUMBER OF OPERATORIES USED PRIMARILY BY DENTIST(S) 3 NUMBER OF OPERATORIES USED PRIMARILY BY HYGIENIST(S) 2 WORK SCHEDULE PLANS AFTER SALE OF PRACTICE NUMBER OF UNPLUMBED AND EMPTY OPERATORIES 2 DO YOU OWN YOUR BUILDING? DO YOU WISH TO SELL THE BUILDING? WAS BUILDING APPRAISED? WHEN? APPRAISED PRICE IF NOT APPRAISED, ESTIMATED BUILDING PRICE IF NOT FOR SALE, MO. RENTAL AMOUNT ANNUAL REAL ESTATE TAXES ANNUAL REAL ESTATE INSURANCE COST DATE OF LEASE i.e. "1/1/99" DATE LEASE ENDS - i.e. "1/1/04" December 31, 2014 RENEWAL OPTIONS Landlord has provided new lease for a purchaser IS THERE AN OPTION TO PURCHASE? Yes. Also first right of refusal to lease adjacent space. BUILDING VALUE TO BE USED PURCHASER MORTGAGE INTEREST RATE PURCHASER MORTGAGE TERM - YEARS PURCHASER MONTHLY PAYMENT PURCHASER CURRENT MONTHLY RENT PRICE PER SQUARE FOOT Relocate DAYS/WEEK CURRENTLY WORKED 4.0 HOW MANY DAYS WOULD YOU PREFER TO WORK FOR BUYER DESIRED WORK DAYS/WEEK 1ST YR DESIRED WORK DAYS/WEEK 2ND YR DESIRED WORK DAYS/WEEK 3RD YR DESIRED WORK DAYS/WEEK 4TH YR DESIRED WORK DAYS/WEEK 5TH YR DESIRED WORK DAYS/WEEK 6TH YR 9/3/20131:05 PM Page 2
PRACTICE DATA MANAGEMENT CONSULTANT IN LAST 5 YRS? IF SO WHO? Yes, Jameson Management - Cain-Watters (Dallas) RESULTS DESCRIBE INTERNAL MARKETING Personal & Practice Financial Consulting DESCRIBE EXTERNAL MARKETING all marketing except websites. Website, targeted mailers. NC Board ruling has forced me to terminate HAS GROSS CHANGED SIGNIFICANTLY? WHY?, it has maintained 2012 production despite inability to advertise. LIST SEDATIONS USED - NITROUS, DOCS, IV SEDATION Nitrous Oxide IS YOUR PRACTICE MERCURY FREE - NO AMALGAM? WHAT TYPE RECALL SYSTEM WHAT TYPE COMPUTER SYSTEM Yes Schedule next visit in advance Dentrix / Dexis digital x-ray software PURCHASER MUST PERSONALLY VERIFY PATIENT POPULATION DATA & REDUCED FEE PLANS ESTIMATE NUMBER OF PTS LAST 18 MONTHS 529 AVERAGE NUMBER OF NEW PATIENTS PER MONTH 5 AVERAGE NUMBER PTS TREATED PER DAY BY DENTIST(S) 6 AVERAGE NUMBER PTS TREATED PER DAY BY HYGIENIST(S) 8 HOW FAR AHEAD IS DENTIST SCHEDULED? HOW FAR AHEAD IS HYGIENIST SCHEDULED? PRACTICE DATA % INCOME FROM CASH 20% % OF PATIENTS PAYING CASH 20% % INCOME FROM FEE FOR SERVICE INSURANCE 80% % OF PATIENTS WITH FEE FOR SERVICE INSURANCE 80% % PRACTICE INCOME FROM REDUCED FEE PLANS % OF PATIENTS WITH REDUCED FEE PLANS % PRACTICE INCOME FROM CAPTITATION % OF PATIENTS WITH CAPITATION % PRACTICE INCOME FROM MEDICAID % OF PATIENTS WITH MEDICAID % PRACTICE INCOME FROM REDUCED FEE PLANS % OF PATIENTS WITH REDUCED FEE PLANS SCHEDULING DATA One week 4-8 weeks MONDAY 8 AM - 5 PM TUESDAY 8 AM - 5 PM WEDNESDAY 8 AM - 5 PM THURSDAY 8 AM - 5 PM FRIDAY SATURDAY SUNDAY OWNER HOURS WORKED PER WEEK 40 HOURS WORKED PER WEEK HYGIENIST HOURS WORKED PER WEEK 32 DENTIST PATIENT VISITS PER YEAR 1,150 HYGIENE PATIENT VISITS PER YEAR 1,500 NUMBER OF DAYS WORKED PER YEAR 196 NUMBER OF WEEKS WORKED PER YEAR 49 COLLECTION DATA WHAT IS YOUR COLLECTION PERCENTAGE 102% ACTUAL ACCOUNTS RECEIVABLE BALANCE $57,641 WHAT IS YOUR PATIENT CREDIT BALANCE $20,047 ACCOUNTS RECEIVABLES - CURRENT $41,316 ACCOUNTS RECEIVABLES - 31-60 DAYS $9,895 ACCOUNTS RECEIVABLE - 61-90 DAYS $2,828 ACCOUNTS RECEIVABLE >90 DAYS $3,602 9/3/20131:05 PM Page 3
WHAT PERCENTAGE OF THE PRACTICE INCOME IS: WHAT SERVICES ARE REFERRED OUT? REVENUES SOURCES IS ANY OF YOUR REPORTED INCOME FROM ANY OTHER HYGIENIST PRODUCTION 25% OPERATIVE 8% PEDODONTICS 1% ORTHODONTICS 3% IMPLANTS 2% REMOVABLE PROSTHETICS 2% FIXED PROSTHETICS 17% ENDODONTICS 3% PERIODONTICS 10% ORAL SURGERY 8% COSMETIC 3% TMJ TREATMENT 2% SOFT TISSUE MANAGEMENT 4% SOURCE THAN PATIENT TREATMENT FROM THIS PRACTICE? IF SO HOW MUCH IN CURRENT PERIOD? IF SO, HOW MUCH FOR LAST YEAR? IF SO HOW MUCH FOR THE PREVIOUS YEAR? WHAT IS THE SOURCE OF THIS OTHER INCOME? DIAGNOSTIC 12% TOTAL 100% FEE SCHEDULE ADULT PROPHY 01110 $142 TWO SURFACE ANTERIOR COMPOSITE 02331 $274 CORE BUILD-UP 02950 $410 CROWN - GOLD/PORCELAIN 02750 $1,495 ANTERIOR CANAL ROOT CANAL 03310 $902 PANORAMIC X-RAY 00330 $130 TWO SURFACE POSTERIOR COMPOSITE 02392 $301 CROWN - PORCELAIN CERAMIC 02740 $1,495 LABIAL PORCELAIN VENEER 02962 $1,521 BICUSPID ROOT CANAL 03320 $1,059 AVERAGE OF FEES $773 PERCENT OF FEE PARITY 142% DEMOGRAPHIC DATA WHAT IS APPROX. POPULATION OF YOUR CITY OR TOWN 140,000 WHAT IS APPROX. POPULATION OF YOUR DRAWING AREA 250,000 APPROXIMATE NUMBER OF GENERAL DENTAL PRACTICES WITHIN MAJOR EMPLOYERS IN AREA RTP, SAS, many employers in Raleigh, Cary and surrounding towns. DESCRIBE ANY MAJOR ECONOMIC CHANGES IN YOUR DRAWING AREA ne except for the general economic downturn in 2007-2008 9/3/20131:05 PM Page 4
STAFF DATA POSITION YEAR STAY? VALUE OF BENEFITS ANNUAL SALARY AND/OR COMMISSION PERCENT RECEPTIONIST 2012 Yes $21/hour OFFICE MANAGER 2012 Yes $22.50/hour INSURANCE OTHER FRONT DESK 2013 $20/hour BOOKKEEPER ASSISTANT 2013 Yes $20/hour ASSISTANT 2013 Yes $15/hour ASSISTANT ASSISTANT ASSISTANT HYGIENIST 2013 Contract with DenTemps Pati $29/hour HYGIENIST HYGIENIST HYGIENIST LAB TECHNICIAN LAB TECHNICIAN WHAT BENEFITS DO YOU PROVIDE FOR THE STAFF? FT Employees (30 hrs/weekly) 50% health insurance/ 401K/PSP, PTO and vacation pay. COST OF BENEFITS PROVIDED FOR EACH EMPLOYEE 4640 DO YOU HIRE ANY UNPAID FAMILY MEMBERS? WHAT POSITION DO THEY HOLD AND WHAT IS THE ESTIMATED FAIR MARKET VALUE OF THEIR JOB? ARE THERE ANY EMPLOYEES WHO ARE PAID MORE OR LESS THAN THE NORMAL SALARY FOR THEIR POSITION? WHAT POSITIONS AND WHAT IS AMOUNT OF OVER/UNDER COMPENSATION FOR EACH Spouse is the "OTHER FRONT DESK" employee at annual salary of $25,000 and would not continue and position would not be filled again. COLLECTION CENTERS YEAR TO DATE LAST YEAR TWO YEARS AGO PERIOD 1/1/2013-8 /14 /2013 2012 2011 GROSS COLLECTIONS $583,799 $ $ OWNER COLLECTIONS $466,922 $ $ HYGIENIST COLLECTIONS $116,877 $ $ COLLECTIONS $ $ $ COLLECTIONS $ $ $ COLLECTIONS $ $ $ COLLECTIONS SALARY IN DOLLARS OR COMMISSION PERCENT $ OR % HYGIENIST SALARY IN DOLLARS OR COMMISSION PERCENT $ OR % 9/3/20131:05 PM Page 5
CONFORMITY DATA DOES YOUR PRACTICE MEET OSHA STANDARDS? WHY NOT? Yes DOES YOUR PRACTICE MEET HIPAA STANDARDS? WHY NOT? Yes ANY DISCIPLINARY ACTION IN LAST 7 YRS? EXPLAIN Yes. Current boad action underway. ANY PRACTICE LAWSUITS FILED IN PAST TEN YRS. EXPLAIN. DESCRIBE ANY HEALTH PROBLEMS WHICH WOULD AFFECT ne INSURANCE EXPLANATION YOUR PRACTICE OF DENTISTRY TOTAL EXPENSE FOR INSURANCE IN CURRENT PERIOD $13,768 HOW MUCH OF TOTAL IS FOR OWNER HEALTH INSURANCE? HOW MUCH OF TOTAL IS FOR STAFF HEALTH INSURANCE? $3,768 HOW MUCH OF TOTAL IS FOR OTHER OWNER BENEFITS? $7,000 HOW MUCH OF TOTAL IS FOR MALPRACTICE INSURANCE? $3,000 HOW MUCH FOR TOTAL IS FOR BUILDING INSURANCE? TAXES AND LICENSES EXPLANATION TOTAL EXPENSE FOR TAXES HOW MUCH OF TOTAL IS FOR PAYROLL TAXES? HOW MUCH OF TOTAL IS FOR STAFF PAYROLL TAX? HOW MUCH OF TOTAL IS FOR OWNER PAYROLL TAX? HOW MUCH OF TOTAL IS AD VALOREM (PRACTICE EQUIP)? HOW MUCH OF TOTAL IS FOR REAL ESTATE TAXES? PENSION EXPLANATION TOTAL EXPENSES FOR PENSION PLAN HOW MUCH OF TOTAL IS FOR STAFF $0 HOW MUCH OF TOTAL IS FOR OWNER? $1 BENEFITS EXPLANATION TOTAL EXPENSE FOR EMPLOYEE BENEFITS REDUCED FEE PLANS HOW MUCH OF TOTAL IS FOR STAFF? HOW MUCH OF TOTAL IS FOR OWNER? NAME OF PLAN PAYS WHAT PERCENT OF YOUR STANDARD FEE Courtesy to Senior Citizens 10% older than 65 Courtesy to County and City Workers (Raleigh/Cary) 10% Courtesy for pre-payment of sizeable treatment plans 5% 9/3/20131:05 PM Page 6
DESCRIBE YOUR PRACTICE, STAFF, PATIENTS, COMMUNITY, AND PRACTICE PHILOSOPHY Ours is a fee for service general dentistry practice offering high quality treatment using the latest technology and materials. We provide services in all the dental specialties and are able to complete multidisciplinary, comprehensive treatment plans start to finish, with little need to engage specialists. We diagnose and treat periodontal disease, and as a result most adults are on periodontal maintenance every 3 to 4 months. We have a core group of very loyal, long-term patients appreciative of excellent quality care. Most patients are well-educated professionals with good incomes, dental insurance and an appreciation for quality dental care and excellent customer service. Over the years we have lost patients who have chosen to go in-network with their insurance plans. With some marketing, well-optimized websites, targeted mailers and perhaps signing on with a few of the best insurance plans, annual production will grow considerably. Prior to the economic downturn in 2007-2008 I had produced/collected over $1,000,000 per year. 9/3/20131:05 PM Page 7