Addus HomeCare Announces Third-Quarter 2016 Results
Net service revenues grew 22.7% to
For the first nine months of 2016, net service revenues increased 17.8% to
For the third quarter, revenue growth was driven by a 22.9% increase in billable hours per business day. Revenues per billable hour declined slightly for the quarter. While the majority of the growth in billable hours per day was attributable to the first-quarter acquisition of South Shore, same store revenues contributed meaningfully to revenue growth for the quarter.
The favorable impact of achieving targeted run-rate savings from process improvement and cost reduction initiatives benefitted third-quarter adjusted earnings per diluted share, as disclosed above, and is reflected in the 45.4% growth in adjusted EBITDA to
Addus completed the third quarter of 2016 with
Mr. Allison concluded, "There are compelling dynamics supporting the long-term growth of the personal care industry, while increasing regulatory pressure and operating complexity increase consolidation pressures in this highly fragmented industry. We believe Addus is well positioned in this environment, due to our scale and financial strength. We are confident in our ability to deliver high quality, cost-effective care to our consumers. Through continued execution of proven organic growth and acquisition strategies, we expect to produce further profitable growth and increased shareholder value."
Non-GAAP Financial Measures
The information provided in this release includes adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income per diluted share as net income per diluted share, adjusted for M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted net service revenues as net service revenues adjusted for the closure of certain sites. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted net income per diluted share to net income per diluted share, a reconciliation of adjusted EBITDA to net income and a reconciliation of adjusted net service revenues to net service revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues are 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 on
A live broadcast of
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. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. 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 discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected 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
About Addus
Addus is a provider of comprehensive personal care services, which are provided in the home. Addus' services provide assistance with activities of daily living and adult day care. Addus' consumers are primarily persons 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. At
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (amounts and shares in thousands, except per share data) (Unaudited) |
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Income Statement Information: |
For the Three Months |
For the Nine Months |
||
2016 |
2015 |
2016 |
2015 |
|
Net service revenues |
$ 103,502 |
$ 84,331 |
$ 297,032 |
$ 252,055 |
Cost of service revenues |
76,079 |
60,809 |
219,594 |
182,925 |
Gross profit |
27,423 |
23,522 |
77,438 |
69,130 |
26.5% |
27.9% |
26.1% |
27.4% |
|
General and administrative expenses |
23,207 |
18,041 |
64,953 |
52,617 |
Depreciation and amortization |
1,721 |
1,197 |
4,943 |
3,504 |
Total operating expenses |
24,928 |
19,238 |
69,896 |
56,121 |
Operating income from continuing operations |
2,495 |
4,284 |
7,542 |
13,009 |
Total interest expense, net |
632 |
163 |
1,714 |
505 |
Other income |
126 |
- |
126 |
- |
Income before income taxes |
1,989 |
4,121 |
5,954 |
12,504 |
Income tax expense |
290 |
1,234 |
1,498 |
4,202 |
Net income |
$ 1,699 |
$ 2,887 |
$ 4,456 |
$ 8,302 |
Net income per diluted share: |
$ 0.15 |
$ 0.26 |
$ 0.40 |
$ 0.74 |
Weighted average number of common |
||||
Diluted |
11,417 |
11,247 |
11,227 |
11,183 |
Cash Flow Information: |
For the Three Months |
For the Nine Months |
||
2016 |
2015 |
2016 |
2015 |
|
Net cash provided by (used in) operating |
$ 49,256 |
$ (26,258) |
$ 30,991 |
$ 8,786 |
Net cash (used in) investing activities |
(457) |
(555) |
(21,617) |
(5,712) |
Net cash (used in) provided by financing activities |
(17,593) |
(334) |
25,968 |
(1,560) |
Net change in cash |
31,206 |
(27,147) |
35,342 |
1,514 |
Cash at the beginning of the period |
8,240 |
42,024 |
4,104 |
13,363 |
Cash at the end of the period |
$ 39,446 |
$ 14,877 |
$ 39,446 |
$ 14,877 |
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) |
||
September 30, |
||
2016 |
2015 |
|
Assets |
||
Current assets |
||
Cash |
$ 39,446 |
$ 14,877 |
Accounts receivable, net |
80,454 |
78,395 |
Prepaid expenses and other current assets |
4,485 |
7,644 |
Deferred tax assets |
8,640 |
8,508 |
Total current assets |
133,025 |
109,424 |
Property and equipment, net |
5,993 |
8,187 |
Other assets |
||
Goodwill |
73,851 |
65,962 |
Intangible assets, net |
16,671 |
10,179 |
Investment in joint venture |
900 |
900 |
Other assets |
- |
404 |
Total other assets |
91,422 |
77,445 |
Total assets |
$ 230,440 |
$ 195,056 |
Liabilities and stockholders' equity |
||
Current liabilities |
||
Accounts payable |
$ 4,268 |
$ 4,869 |
Accrued expenses |
43,929 |
42,118 |
Current portion of long-term debt, net of debt issuance costs |
2,244 |
1,100 |
Current portion of contingent earn-out obligation |
- |
1,250 |
Total current liabilities |
50,441 |
49,337 |
Long-term debt, less current portion, net of debt issuance costs |
22,723 |
2,162 |
Deferred tax liability |
6,815 |
5,832 |
Total long-term liabilities |
29,538 |
7,994 |
Total liabilities |
79,979 |
57,331 |
Total stockholders' equity |
150,461 |
137,725 |
Total liabilities and stockholders' equity |
$ 230,440 |
$ 195,056 |
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Key Statistical and Financial Data (Unaudited) |
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For the Three Months |
For the Nine Months |
|||
2016 |
2015 |
2016 |
2015 |
|
General: |
||||
Adjusted EBITDA (in thousands) (1) |
$ 8,652 |
$ 5,950 |
$ 22,808 |
$ 18,233 |
States served at period end |
- |
- |
24 |
21 |
Locations at period end |
- |
- |
118 |
122 |
Employees at period end |
- |
- |
22,140 |
19,642 |
Home & Community |
||||
Average billable census - same store (2) |
33,041 |
32,407 |
32,786 |
32,808 |
Average billable census - acquisitions (3) |
1,251 |
- |
1,107 |
- |
Average billable census total |
34,292 |
32,407 |
33,893 |
32,808 |
Billable hours (in thousands) |
5,972 |
4,860 |
17,154 |
14,626 |
Average billable hours per census per month |
58.1 |
50.0 |
56.2 |
49.5 |
Billable hours per business day |
90,490 |
73,635 |
87,522 |
75,004 |
Revenues per billable hour |
$ 17.33 |
$ 17.35 |
$ 17.32 |
$ 17.23 |
Percentage of Revenues by Payor: |
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State, local and other governmental programs |
70.8 |
78.1 |
72.0 |
77.8 |
Managed care organizations |
25.8 |
18.1 |
24.4 |
18.2 |
Private duty |
2.3 |
2.8 |
2.5 |
3.0 |
Commercial |
1.1 |
1.0 |
1.1 |
1.0 |
(1) We define Adjusted EBITDA as net income before interest expense, other non-operating income, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. 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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(2) Exited sites would have reduced same store census for the three months ended September 30, 2015 by 357. |
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(3) The average billable census in acquisitions of 607 for the three months ended September 30, 2015 was reclassified to average billable census - same stores for comparability purposes. The average billable census for the three months ended September 30, 2016 was prorated for the date of the acquisition. |
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (Unaudited) |
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For the Three Months |
For the Nine Months |
|||
2016 |
2015 |
2016 |
2015 |
|
Reconciliation of Adjusted EBITDA to Net Income: (1) |
||||
Net income |
$ 1,699 |
$ 2,887 |
$ 4,456 |
$ 8,302 |
Interest expense, net |
632 |
163 |
1,714 |
505 |
Other non-operating income |
(126) |
- |
(126) |
- |
Income tax expense |
290 |
1,234 |
1,498 |
4,202 |
Depreciation and amortization |
1,721 |
1,197 |
4,943 |
3,504 |
M&A expenses |
43 |
57 |
785 |
558 |
Stock-based compensation expense |
445 |
412 |
1,264 |
1,162 |
Restructure charges |
3,690 |
- |
5,243 |
- |
Severance and other costs |
258 |
- |
3,031 |
- |
Adjusted EBITDA |
$ 8,652 |
$ 5,950 |
$ 22,808 |
$ 18,233 |
Reconciliation of Net Income per Diluted Share to |
||||
Net income per diluted share |
$ 0.15 |
$ 0.26 |
$ 0.40 |
$ 0.74 |
M&A expenses per diluted share |
- |
- |
0.05 |
0.03 |
Normalization of effective tax rate |
(0.04) |
- |
(0.04) |
- |
Restructure charges per diluted share |
0.23 |
- |
0.32 |
- |
Severance and other costs per diluted share |
0.02 |
- |
0.18 |
- |
Stock-based compensation expense per diluted share |
0.03 |
0.03 |
0.08 |
0.07 |
Adjusted net income diluted share |
$ 0.39 |
$ 0.29 |
$ 0.99 |
$ 0.84 |
Reconciliation of Net Service Revenues to Adjusted |
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Net service revenues |
$ 103,502 |
$ 84,331 |
$ 297,032 |
$ 252,055 |
Revenues associated with the closure of certain sites |
(225) |
(396) |
(721) |
(7,410) |
Adjusted net service revenues |
$ 103,277 |
$ 83,935 |
$ 296,311 |
$ 244,645 |
(1) We define Adjusted EBITDA as net income before interest expense, other non-operating income, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. 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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(2) We define Adjusted net income per diluted share as net income per diluted share, adjusted for M&A expenses, normalization of the effective tax rate, stock-based compensation expense, restructure charges and severance and other costs. Adjusted net income per diluted share 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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(3) We define Adjusted net service revenues as net service revenues adjusted for the closure of certain sites. Adjusted net service revenues 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 service revenues or any other measure of financial performance calculated in accordance with GAAP. |
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SOURCE
Brian W. Poff, Executive Vice President, Chief Financial Officer, Addus HomeCare Corporation, (630) 296-3400, investorrelations@addus.com or Scott Brittain, Corporate Communications, Inc., (615) 324-7308, scott.brittain@cci-ir.com