OCA Announces Agreement in Principle to Settle Lawsuits and Disputes with 60 Doctors, Provides Update on Center Growth and Annual Report, and Announces New Management Appointment

Business Wire,  April 14, 2005  

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METAIRIE, La. -- OCA, Inc. (NYSE: OCA) today announced that it has reached an agreement in principle to settle lawsuits and disputes pending between its subsidiary OrthAlliance, Inc. and 60 affiliated practitioners, who represent 54 affiliated practices. Fifty-one of the practitioners are currently engaged in litigation with OrthAlliance. All of these practices are reflected as inactive practices in OCA's financial statements.

Under the terms of the proposed settlement, the practices would buyout of their service agreements and all parties would dismiss their claims. The proposed settlement is subject to execution and closing of definitive settlement agreements and delivery of the buyout amounts, which is expected to occur within 45 days. The Company anticipates that the proposed settlement would result in a non-cash loss on the sale of certain intangible and other assets associated with these practices. The lawsuits generally involve mutual allegations of breach of contract and allegations by the practices that their service agreements with OrthAlliance are void under certain state laws.

Bart F. Palmisano, Sr., Chief Executive Officer of the Company, commented: "We are pleased with this proposed settlement. It would permit us to put a large majority of our pending lawsuits behind us and focus, with renewed energy, on growing our business and providing high quality business services to our affiliated practices."

Center Growth

The Company also announced that it began 2005 with a total of approximately 565 affiliated centers in the United States and abroad (excluding inactive practices, which are engaged in litigation with the Company and/or ceased paying service fees). The Company opened 55 new centers in 2004 and 15 new centers during the first quarter of 2005. It currently estimates that it will open a total of 60 to 70 new centers during 2005.

The Company also currently estimates that its comparable center revenue for centers that were open throughout 2003 and 2004 grew by approximately 5% during 2004, as compared to 2003 on a pro forma basis as if the Company adopted FIN 46R effective January 1, 2003. The Company anticipates that its overall total patient revenue for 2004 will reflect a decline from total patient revenue for 2003 on a pro forma basis, due to a decrease in revenue from practices that became inactive practices or bought out of their service agreements since January 1, 2003.

Mr. Palmisano further commented: "We continue to focus on developing new centers for high-performing affiliated practices that are seeking to expand. We opened about twice as many new centers during 2004 than during the prior year. Although de novo orthodontic centers typically take about two years to ramp up to maturity, we believe that they provide a predictable vehicle for future growth of our business. I look forward to discussing our growth prospects more fully on our upcoming conference call with investors."

Management Appointment

The Company also announced that it has appointed Cathy M. Green to serve as Chief Accounting Officer and direct the Company's financial accounting area. Ms. Green, 39, most recently served as Vice-President, Chief Financial Officer and Treasurer of Bollinger Shipyards, Inc., a leading vessel construction and repair company based in the New Orleans area, since September 2002. She served as Bollinger's Corporate Controller from September 1999 to September 2002. Ms. Green was employed by Ernst & Young LLP in Houston, Texas as a Senior Audit Manager from September 1998 to September 1999. She also served as Corporate Controller and Chief Financial Officer of Ceanic, Inc., a publicly traded oilfield services company headquartered in Houston, Texas, from January 1995 to August 1998. Ms. Green was an Audit Manager with the New Orleans office of Price Waterhouse LLP from January 1988 until December 1994. She received a B.S. in Accounting from the University of New Orleans and is a Certified Public Accountant.

The Company also intends to appoint Ms. Green to serve as Interim Chief Financial Officer upon the departure of its current Chief Financial Officer, David E. Verret, until a permanent successor is appointed. Mr. Verret has notified the Company that he has accepted a position as Chief Financial Officer of a privately-held company in the New Orleans area and will resign his position with the Company in May 2005.

Mr. Palmisano commented: "I am excited to welcome Cathy aboard. She has an extensive accounting and financial background and I look forward to working with her to organize her department further and accelerate our financial reporting. I also want to thank David for his many years of hard work for OCA. He has played an important role in helping OCA achieve success, and we wish him the very best in his new position."

Status of Form 10-K

As previously announced, the Company has delayed the filing of its annual report on Form 10-K for the year ended December 31, 2004. The Company has not yet completed the closing procedures required to prepare and finalize its annual financial statements or its assessment of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002. The Company continues to review certain accounting matters and certain accounts of its Japanese subsidiary. The Company has obtained a waiver and extension from the lenders under its credit facility with respect to filing the Form 10-K and delivering audited 2004 financial statements to the lenders. The waiver and extension extends the deadline under the credit facility for filing the Form 10-K to May 31, 2005; however, filing of the Form 10-K could be delayed beyond that date if the Company experiences delays in completing its financial statements or assessing its internal controls.