Addus HomeCare Announces Third Quarter 2014 Results
For the third quarter, net service revenues increased 21.3% to
Net service revenues for the first nine months of 2014 were
"Addus produced significant profitable growth for the third quarter of 2014, as organic growth and the impact of acquisitions since the third quarter last year drove a 21.3% increase in revenues, our highest quarterly revenue growth as a public company," commented
Third-quarter revenue growth reflected a 7.2% increase in same-store sales, with the remaining 14.1% increase attributable to acquisitions. Average billable census increased 18.4% for the third quarter of 2014 from the third quarter last year. Same-store census grew 7.6%, with acquisitions driving the remaining 10.8% increase in census. Average revenue per billable hour remained relatively stable at
At the end of the third quarter of 2014, Addus had
Heaney added, "In addition to our financial results, we are also pleased with our initiatives to build our sales capabilities and the resulting organic growth of our existing home and community-based services. We are also gratified by the growth generated from acquisitions, and we continue to evaluate additional opportunities, especially in those states that are more actively engaged in transitioning dual eligible consumers to MCOs. We also continue to make important progress regarding several strategic initiatives that support long-term growth as we enter new states and that give us competitive advantages as we grow existing markets.
"As states transition management of their dual eligible populations to managed care plans, we remain focused on positioning the Company as an integral part of the continuum of care we believe MCOs will be expected to provide these consumers. The growing impact of this transition was evident in the third quarter, as our revenues from managed care increased to 9.5% of total net service revenues for the third quarter compared to 1.0% for the same prior-year quarter. While the majority of the managed care revenues were generated from acquisitions, we noted a shift in same-store MCO census and revenues, with same-store revenues from MCOs growing to 2.4% of total revenue for the third quarter of 2014 compared with 1.0% for the third quarter last year and to 1.5% compared with 0.5% for the nine months ended
Non-GAAP Financial Measures
The information provided in this release includes Adjusted EBITDA, a non-GAAP financial measure, which the Company defines as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, M&A expense and stock-based compensation expense. The Company has provided, in the financial statement tables included in this press release, a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure. Management believes that Adjusted EBITDA is useful to investors, management and others in evaluating the Company's operating performance, to provide investors with insight and consistency in the Company's financial reporting and to present a basis for comparison of the Company's business operations among periods, and to facilitate comparison with the results of the Company's peers.
Conference Call
Addus will host a conference call to discuss its results for the third quarter today beginning at
A live broadcast of the conference call will be available under the Investor Relations section of the Company's website: www.addus.com. An online replay of the conference call will also be available on the Company's website for one month, beginning approximately three hours following the conclusion of the live broadcast.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including the anticipated transition to managed care providers, expected benefits and costs of acquisitions and dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare's relationships with referral sources, increased competition for
About Addus
Addus is a comprehensive provider of home and community-based services that primarily are social in nature, provided in the home and focused on the dual eligible population. Addus' services include personal care and assistance with activities of daily living, and adult day care. Addus' consumers are individuals who are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus' payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. For more information, please visit www.addus.com.
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES |
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Condensed Consolidated Statements of Income and Cash Flow Information |
|||||||
(amounts and shares in thousands, except per share data) |
|||||||
(Unaudited) |
|||||||
Income Statement Information: |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||
2014 |
2013 |
2014 |
2013 |
||||
Net service revenues |
$ 81,658 |
$ 67,306 |
$ 230,306 |
$ 196,059 |
|||
Cost of service revenues |
59,818 |
50,080 |
169,218 |
146,422 |
|||
Gross profit |
21,840 |
17,226 |
61,088 |
49,637 |
|||
26.7% |
25.6% |
26.5% |
25.3% |
||||
General and administrative expenses |
15,773 |
12,424 |
45,576 |
36,026 |
|||
Depreciation and amortization |
1,106 |
539 |
2,684 |
1,626 |
|||
Total operating expenses |
16,879 |
12,963 |
48,260 |
37,652 |
|||
Operating income from continuing operations |
4,961 |
4,263 |
12,828 |
11,985 |
|||
Total interest expense (income), net |
180 |
(24) |
484 |
326 |
|||
Income from continuing operations before taxes |
4,781 |
4,287 |
12,344 |
11,659 |
|||
Income tax expense |
1,544 |
1,517 |
4,024 |
3,620 |
|||
Net income from continuing operations |
3,237 |
2,770 |
8,320 |
8,039 |
|||
Discontinued operations: |
|||||||
Loss from home health business, net of tax |
- |
(203) |
- |
(890) |
|||
Gain on sale of home health business, net of tax |
- |
- |
- |
11,111 |
|||
Net income |
$ 3,237 |
$ 2,567 |
$ 8,320 |
$ 18,260 |
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Net income (loss) per share: |
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Basic |
|||||||
Continuing operations |
$ 0.30 |
$ 0.26 |
$ 0.76 |
$ 0.75 |
|||
Discontinued operations |
- |
(0.02) |
- |
0.95 |
|||
Basic income per share |
$ 0.30 |
$ 0.24 |
$ 0.76 |
$ 1.70 |
|||
Diluted |
|||||||
Continuing operations |
$ 0.29 |
$ 0.25 |
$ 0.75 |
$ 0.73 |
|||
Discontinued operations |
- |
(0.02) |
- |
0.93 |
|||
Diluted income per share |
$ 0.29 |
$ 0.23 |
$ 0.75 |
$ 1.66 |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
10,927 |
10,787 |
10,895 |
10,783 |
|||
Diluted |
11,154 |
11,071 |
11,122 |
11,006 |
|||
Cash Flow Information: |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||
2014 |
2013 |
2014 |
2013 |
||||
Net cash (used in) provided by operating activities |
$ (7,413) |
$ (9,130) |
$ 7,590 |
$ 25,103 |
|||
Net cash (used in) provided by investing activities |
(1,958) |
(183) |
(13,149) |
19,082 |
|||
Net cash used in (provided by) financing activities |
3,904 |
- |
4,118 |
(16,458) |
|||
Net change in cash |
(5,467) |
(9,313) |
(1,441) |
27,727 |
|||
Cash at the beginning of the period |
19,591 |
38,777 |
15,565 |
1,737 |
|||
Cash at the end of the period |
$ 14,124 |
$ 29,464 |
$ 14,124 |
$ 29,464 |
Condensed Consolidated Balance Sheets |
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(Amounts in thousands) |
|||
(Unaudited) |
|||
September 30, |
|||
2014 |
2013 |
||
Assets |
|||
Current assets |
|||
Cash |
$ 14,124 |
$ 29,464 |
|
Accounts receivable, net |
62,121 |
54,516 |
|
Prepaid expenses and other current assets |
6,937 |
6,167 |
|
Deferred tax assets |
8,326 |
7,258 |
|
Total current assets |
91,508 |
97,405 |
|
Property and equipment, net |
7,646 |
2,471 |
|
Other assets |
|||
Goodwill |
64,237 |
50,416 |
|
Intangible assets, net |
11,043 |
5,352 |
|
Investment in joint venture |
900 |
900 |
|
Other assets |
13 |
173 |
|
Total other assets |
76,193 |
56,841 |
|
Total assets |
$ 175,347 |
$ 156,717 |
|
Liabilities and stockholders' equity |
|||
Current liabilities |
|||
Accounts payable |
$ 3,613 |
$ 4,379 |
|
Current portion of capital lease obligations |
978 |
- |
|
Accrued expenses |
41,434 |
36,401 |
|
Deferred revenue |
3 |
19 |
|
Total current liabilities |
46,028 |
40,799 |
|
Capital lease obligations, less current portion |
2,926 |
- |
|
Deferred tax liability |
3,441 |
3,097 |
|
Total stockholders' equity |
122,952 |
112,821 |
|
Total liabilities and stockholders' equity |
$ 175,347 |
$ 156,717 |
|
Key Statistical and Financial Data (Unaudited) |
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For the Three Months |
For the Nine Months |
|||||||
2014 |
2013 |
2014 |
2013 |
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General: |
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Adjusted EBITDA (in thousands) (1) |
$ 6,305 |
$ 4,950 |
$ 16,617 |
$ 13,976 |
||||
States served at period end |
- |
- |
22 |
21 |
||||
Locations at period end |
- |
- |
132 |
94 |
||||
Employees at period end |
- |
- |
17,504 |
13,660 |
||||
Home & Community |
||||||||
Average billable census - same store |
29,118 |
27,058 |
30,665 |
26,411 |
||||
Average billable census - acquisitions |
2,914 |
- |
2,088 |
- |
||||
Average billable census total |
32,032 |
27,058 |
32,753 |
26,411 |
||||
Billable hours (in thousands) |
4,749 |
3,941 |
13,511 |
11,517 |
||||
Average billable hours per census per month |
49.9 |
48.5 |
45.8 |
48.5 |
||||
Billable hours per business day |
74,912 |
59,735 |
70,737 |
59,107 |
||||
Revenues per billable hour |
$ 17.03 |
$ 17.08 |
$ 17.05 |
$ 17.02 |
||||
Percentage of Revenues by Payor: |
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State, local and other governmental programs |
85.9 |
% |
94.0 |
% |
88.6 |
% |
94.0 |
% |
Managed Care |
9.5 |
1.0 |
6.8 |
0.5 |
||||
Private duty |
3.5 |
4.0 |
3.5 |
4.0 |
||||
Commercial |
1.1 |
% |
1.0 |
% |
1.1 |
% |
1.5 |
% |
(1) We define Adjusted EBITDA as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, M&A expenses and stock-based compensation expense. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP. |
Adjusted EBITDA (1) (Unaudited) |
For the Three Months |
For the Nine Months |
|||||
2014 |
2013 |
2014 |
2013 |
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Reconciliation of Adjusted EBITDA to Net Income: |
|||||||
Net income |
$ 3,237 |
$ 2,567 |
$ 8,320 |
$ 18,260 |
|||
Less: (Earnings) from discontinued operations, net of tax |
- |
203 |
- |
(10,221) |
|||
Net income from continuing operations |
3,237 |
2,770 |
8,320 |
8,039 |
|||
Interest expense, net |
180 |
(24) |
484 |
326 |
|||
Income tax expense from continuing operations |
1,544 |
1,517 |
4,024 |
3,620 |
|||
Depreciation and amortization |
1,106 |
539 |
2,684 |
1,626 |
|||
M&A expenses |
7 |
- |
543 |
- |
|||
Stock-based compensation expense |
231 |
148 |
562 |
365 |
|||
Adjusted EBITDA |
$ 6,305 |
$ 4,950 |
$ 16,617 |
$ 13,976 |
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(1) We define Adjusted EBITDA as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, M&A expenses and stock-based compensation expense. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP. |
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SOURCE
Dennis Meulemans, Chief Financial Officer, Addus HomeCare, (630) 296-3400, dmeulemans@addus.com; Scott Brittain, Corporate Communications, Inc., (615) 324-7308, scott.brittain@cci-ir.com