Addus HomeCare Reports Fourth Quarter 2010 Results
PALATINE, Ill., March 3, 2011 /PRNewswire via COMTEX/ --
Fourth Quarter Financial Highlights
- Total net service revenues grew 6.7% to $70.1 million
- Home & Community segment net service revenues increased 5.4% to $56.6 million
- Home Health segment net service revenues increased 12.9% to $13.5 million
- Net income of $1.5 million, or $0.14 per diluted share
- Accounts Receivable DSO improved by 7 days to 90 days
Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home-based social and medical services, announced today its financial results for the three months and year ended December 31, 2010.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated: "Our fourth quarter results reflect continued progress toward our plan. The Home & Community business performed reasonably well in a challenging environment while the Home Health segment increased revenues 7.9% over the prior quarter and 12.9% year-over-year. We continue to focus on improvements in both segments including investments in sales and marketing programs and the execution of our Integrated Services program.
"We are seeing improvements in our accounts receivable collections including the State of Illinois. The increased cash payments received from the State of Illinois and other payors before year end improved our overall liquidity position. In addition, we are continuing our efforts to centralize our billing and collection processes, which we expect will yield positive results. Looking ahead into 2011, we will continue to focus on driving profitable growth in both our Home & Community and Home Health segments," Heaney added.
Fourth Quarter Review
Total net service revenues for the fourth quarter 2010 were $70.1 million, a 6.7% increase compared to $65.7 million in the prior year quarter. The acquisition of CarePro contributed approximately $3.2 million in revenues in the fourth quarter.
Fourth quarter 2010 net income was $1.5 million, or $0.14 per diluted share. This compares to a net loss after preferred stock dividends of ($3.7) million, or ($0.48) per diluted share in the prior year quarter. Excluding certain one-time items and prior to deducting preferred stock dividends in the fourth quarter 2009, net income was $0.6 million, or $0.07 per diluted share.
Home & Community segment net service revenues for the fourth quarter of 2010 were $56.6 million, a 5.4% increase compared to $53.7 million in the prior year quarter. Home & Community segment revenues included approximately $2.6 million from CarePro operations and organic growth of $0.3 million. Excluding the quarter-over-quarter impact of locations closed in 2010 totaling $0.9 million in revenue, organic revenue growth from continuing operations was 2.3%. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $5.8 million, or 10.2% of revenue, compared to $4.6 million, or 8.6% of revenue, in the prior year quarter.
Home Health segment net service revenues for the fourth quarter of 2010 were $13.5 million, a 12.9% increase compared to $12.0 million in the prior year quarter. Home Health segment revenues include approximately $0.6 million from CarePro operations and organic growth of $0.9 million, or 7.7%. Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $1.6 million, or 11.5% of revenues, compared to $1.2 million, or 9.7% of revenues in the prior year quarter.
Full Year 2010 Review
Total net service revenues for the year ended December 31, 2010 were $271.7 million, a 4.8% increase compared to $259.3 million in the prior year period. The acquisition of CarePro in 2010 contributed approximately $5.7 million in revenues.
Net income for the year ended December 31, 2010 of $6.0 million, or $0.57 per diluted share. This compares to a net loss after preferred stock dividends of ($1.8) million, or ($0.66) per diluted share for the year ended December 31, 2009. Excluding one-time items, and prior to deducting preferred stock dividends, net income for 2009 was $6.0 million or $2.16 per diluted share.
Home & Community segment net service revenues for the full year 2010 were $220.8 million, a 5.1% increase compared to $210.1 million in the prior year period. CarePro operations contributed $4.6 million of the increase in revenue. Excluding the year-over-year impact of locations closed in 2010 totaling $1.2 million in revenue, organic revenue growth from continuing operations was 3.5%. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $22.7 million or 10.3% of revenues, compared to $20.4 million, or 9.7% of revenues in the prior year period.
Home Health segment net service revenues for the year ended December 31, 2010 were $51.0 million, a 3.6% increase compared to $49.2 million in the prior year period. Home Health segment revenues include approximately $1.1 million attributable to CarePro operations. Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $5.3 million or 10.4% of revenues, compared to $6.8 million, or 13.7% of revenues in the prior year period.
The information provided in this release includes Adjusted EBITDA, a non-GAAP financial measure, which the Company defines as net income plus depreciation and amortization, net interest expense, income tax 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 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 report its 2010 fourth quarter and year-end financial results after the market close on Thursday, March 3, 2011. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on March 3, 2011. The toll-free number is (866) 788-0547 (international callers should call 857-350-1685), with the passcode: 86231686. A telephonic replay of the conference call will be available through midnight on March 10, 2011 by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 79269733.
A live broadcast of Addus HomeCare's 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.
About Addus
Addus is a comprehensive provider of a broad range of social and medical services in the home. Addus' services include personal care and assistance with activities of daily living, skilled nursing and rehabilitative therapies, and adult day care. Addus' consumers are individuals with special needs 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, the Veterans Health Administration, commercial insurers and private individuals.
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 expected benefits and costs of acquisitions, management plans related to acquisitions, the possibility that expected benefits may not materialize as expected, the failure of a target company's business to perform as expected, Addus HomeCare's inability to successfully implement integration strategies, changes in reimbursement, changes in government regulations, changes in Addus HomeCare's relationships with referral sources, increased competition for Addus HomeCare's services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in the Risk Factors section in Addus HomeCare's Prospectus, filed with the Securities and Exchange Commission on October 29, 2009, in Addus HomeCare's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 29, 2010, and in Addus HomeCare's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 10, 2010, each of which is available at http://www.sec.gov. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(Unaudited tables and notes follow)
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ADDUS HOMECARE CORPORATION AND SUBSIDIARIES |
||||||||
|
Condensed Consolidated Statements of Income |
||||||||
|
(amounts and shares in thousands, except per share data) |
||||||||
|
(Unaudited) |
||||||||
|
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||
|
2010 |
2009 |
2010 |
2009 |
|||||
|
Net service revenues |
$ 70,120 |
$ 65,697 |
$ 271,732 |
$ 259,305 |
||||
|
Cost of service revenues |
48,929 |
46,105 |
191,853 |
182,693 |
||||
|
Gross profit |
21,191 |
19,592 |
79,879 |
76,612 |
||||
|
General and administrative expenses |
16,869 |
17,566 |
63,841 |
59,924 |
||||
|
Depreciation and amortization |
1,091 |
1,235 |
4,046 |
4,913 |
||||
|
Total operating expenses |
17,960 |
18,801 |
67,887 |
64,837 |
||||
|
Operating income |
3,231 |
791 |
11,992 |
11,775 |
||||
|
Interest expense, net |
681 |
3,584 |
3,004 |
6,773 |
||||
|
Income (loss) from operations before taxes |
2,550 |
(2,793) |
8,988 |
5,002 |
||||
|
Income tax expense (benefit) |
1,013 |
(1,009) |
2,960 |
1,400 |
||||
|
Net income (loss) |
1,537 |
(1,784) |
6,028 |
3,602 |
||||
|
Less: Preferred stock dividends |
- |
(1,946) |
- |
(5,387) |
||||
|
Net income (loss) attributable to common shareholders |
$ 1,537 |
$ (3,730) |
$ 6,028 |
$ (1,785) |
||||
|
Income (loss) per common share: |
||||||||
|
Basic |
$ 0.14 |
$ (0.48) |
$ 0.57 |
$ (0.66) |
||||
|
Diluted |
$ 0.14 |
$ (0.48) |
$ 0.57 |
$ (0.66) |
||||
|
Weighted average number of common shares outstanding: |
||||||||
|
Basic |
10,745 |
7,715 |
10,604 |
2,707 |
||||
|
Diluted |
10,745 |
7,715 |
10,606 |
2,707 |
||||
|
Condensed Consolidated Balance Sheets |
||||
|
(Amounts in thousands) |
||||
|
(Unaudited) |
||||
|
December 31, 2010 |
December 31, 2009 |
|||
|
Assets |
||||
|
Current assets |
||||
|
Cash |
$ 816 |
$ 518 |
||
|
Accounts receivable, net |
70,954 |
70,491 |
||
|
Prepaid expenses and other current assets |
7,704 |
6,937 |
||
|
Deferred tax assets |
6,324 |
5,700 |
||
|
Income taxes receivable |
- |
732 |
||
|
Total current assets |
85,798 |
84,378 |
||
|
Property and equipment, net |
2,923 |
3,133 |
||
|
Other assets |
||||
|
Goodwill |
63,930 |
59,482 |
||
|
Intangible assets, net |
13,570 |
13,082 |
||
|
Deferred tax assets |
- |
509 |
||
|
Other assets |
703 |
731 |
||
|
Total other assets |
78,203 |
73,804 |
||
|
Total assets |
$ 166,924 |
$ 161,315 |
||
|
Liabilities and stockholders' equity |
||||
|
Current liabilities |
||||
|
Accounts payable |
$ 3,304 |
$ 3,763 |
||
|
Accrued expenses |
26,529 |
25,557 |
||
|
Current maturities of long-term debt |
5,158 |
7,388 |
||
|
Deferred revenue |
2,141 |
2,189 |
||
|
Total current liabilities |
37,132 |
38,897 |
||
|
Long-term debt, less current maturities |
40,027 |
41,851 |
||
|
Deferred tax liabilities |
562 |
- |
||
|
Other long-term liabilities |
1,112 |
- |
||
|
Total stockholders' equity |
88,091 |
80,567 |
||
|
Total liabilities and stockholders' equity |
$ 166,924 |
$ 161,315 |
||
|
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES |
||||
|
Condensed Consolidated Statements of Cash Flows |
||||
|
(Amounts in thousands) |
||||
|
(Unaudited) |
||||
|
For the Year Ended |
||||
|
December 31, 2010 |
December 31, 2009 |
|||
|
Net Income |
$ 6,028 |
$ 3,602 |
||
|
Adjustments to reconcile net income to net cash provided by operating activities |
||||
|
Depreciation and amortization |
4,046 |
4,913 |
||
|
Deferred income taxes |
447 |
(735) |
||
|
Change in fair value of financial instrument |
(191) |
(586) |
||
|
Stock-based compensation |
255 |
297 |
||
|
Contingent purchase price deemed interest expense |
- |
1,802 |
||
|
Write-off of debt issuance costs |
- |
794 |
||
|
Amortization of debt issuance costs |
179 |
590 |
||
|
Provision for doubtful accounts |
4,429 |
4,514 |
||
|
Changes in operating assets and liabilities: |
||||
|
Accounts receivable |
(4,892) |
(25,768) |
||
|
Prepaid expenses and other assets |
(767) |
(1,790) |
||
|
Accounts payable |
(459) |
(116) |
||
|
Accrued expenses |
944 |
3,816 |
||
|
Deferred revenue |
(48) |
14 |
||
|
Income taxes |
732 |
(272) |
||
|
Net cash (used in) provided by operating activities |
10,703 |
(8,925) |
||
|
Acquisitions of businesses, net of acquired cash |
(5,588) |
(14,177) |
||
|
Purchases of property and equipment |
(612) |
(671) |
||
|
Net cash used in investing activities |
(6,200) |
(14,848) |
||
|
Net proceeds from issuance of common stock |
- |
47,480 |
||
|
Payments on term-loan |
- |
(53,368) |
||
|
Net payments on revolving credit loans |
- |
(7,694) |
||
|
Borrowings on new term loan |
5,000 |
- |
||
|
Net borrowings (repayments) on new credit facility |
(5,250) |
38,500 |
||
|
Payments on preferred stock dividends |
- |
(1,673) |
||
|
Payments on dividend notes |
(1,250) |
(5,117) |
||
|
Net borrowings (repayments) on other notes |
(2,554) |
806 |
||
|
Debt issuance costs |
(151) |
(756) |
||
|
Net cash provided by (used in) financing activities |
(4,205) |
18,178 |
||
|
Net change in cash |
298 |
(5,595) |
||
|
Cash at the beginning of period |
518 |
6,113 |
||
|
Cash at the end of the period |
$ 816 |
$ 518 |
||
|
Segment Information (Unaudited) |
||||||||
|
For the Three Months Ended December 31, 2010 |
||||||||
|
Home & Community |
Home Health |
Corporate |
Total |
|||||
|
Net service revenues |
$ 56,596 |
$ 13,524 |
$ - |
$ 70,120 |
||||
|
Cost of service revenues |
42,100 |
6,829 |
- |
48,929 |
||||
|
Gross profit |
14,496 |
6,695 |
- |
21,191 |
||||
|
Gross profit percentage |
25.6% |
49.5% |
30.2% |
|||||
|
General and administrative expenses |
7,971 |
4,982 |
3,916 |
16,869 |
||||
|
Depreciation and amortization |
739 |
159 |
193 |
1,091 |
||||
|
Total operating expenses |
8,710 |
5,141 |
4,109 |
17,960 |
||||
|
Operating income |
$ 5,786 |
$ 1,554 |
$ (4,109) |
$ 3,231 |
||||
|
Operating income percentage |
10.2% |
11.5% |
-5.9% |
4.6% |
||||
|
For the Three Months Ended December 31, 2009 |
||||||||
|
Home & Community |
Home Health |
Corporate |
Total |
|||||
|
Net service revenues |
$ 53,720 |
$ 11,977 |
$ - |
$ 65,697 |
||||
|
Cost of service revenues |
39,544 |
6,561 |
- |
46,105 |
||||
|
Gross profit |
14,176 |
5,416 |
- |
19,592 |
||||
|
Gross profit percentage |
26.4% |
45.2% |
29.8% |
|||||
|
General and administrative expenses |
8,710 |
4,069 |
4,787 |
17,566 |
||||
|
Depreciation and amortization |
844 |
188 |
203 |
1,235 |
||||
|
Total operating expenses |
9,554 |
4,257 |
4,990 |
18,801 |
||||
|
Operating income |
$ 4,622 |
$ 1,159 |
$ (4,990) |
$ 791 |
||||
|
Operating income percentage |
8.6% |
9.7% |
-7.6% |
1.2% |
||||
|
For the Year Ended December 31, 2010 |
||||||||
|
Home & Community |
Home Health |
Corporate |
Total |
|||||
|
Net service revenues |
$ 220,752 |
$ 50,980 |
$ - |
$ 271,732 |
||||
|
Cost of service revenues |
164,636 |
27,217 |
- |
191,853 |
||||
|
Gross profit |
56,116 |
23,763 |
- |
79,879 |
||||
|
Gross profit percentage |
25.4% |
46.6% |
29.4% |
|||||
|
General and administrative expenses |
30,745 |
17,817 |
15,279 |
63,841 |
||||
|
Depreciation and amortization |
2,686 |
638 |
722 |
4,046 |
||||
|
Total operating expenses |
33,431 |
18,455 |
16,001 |
67,887 |
||||
|
Operating income |
$ 22,685 |
$ 5,308 |
$ (16,001) |
$ 11,992 |
||||
|
Operating income percentage |
10.3% |
10.4% |
-5.9% |
4.4% |
||||
|
For the Year Ended December 31, 2009 |
||||||||
|
Home & Community |
Home Health |
Corporate |
Total |
|||||
|
Net service revenues |
$ 210,107 |
$ 49,198 |
$ - |
$ 259,305 |
||||
|
Cost of service revenues |
156,623 |
26,070 |
- |
182,693 |
||||
|
Gross profit |
53,484 |
23,128 |
- |
76,612 |
||||
|
Gross profit percentage |
25.5% |
47.0% |
29.5% |
|||||
|
General and administrative expenses |
29,732 |
15,607 |
14,585 |
59,924 |
||||
|
Depreciation and amortization |
3,355 |
769 |
789 |
4,913 |
||||
|
Total operating expenses |
33,087 |
16,376 |
15,374 |
64,837 |
||||
|
Operating income |
$ 20,397 |
$ 6,752 |
$ (15,374) |
$ 11,775 |
||||
|
Operating income percentage |
9.7% |
13.7% |
-5.9% |
4.5% |
||||
|
Key Statistical and Financial Data (Unaudited) |
||||||||
|
For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||
|
2010 |
2009 |
2010 |
2009 |
|||||
|
General: |
||||||||
|
Adjusted EBITDA (in thousands) (1) |
$ 4,380 |
$ 2,111 |
$ 16,293 |
$ 16,985 |
||||
|
States served at period end |
19 |
16 |
||||||
|
Locations at period end |
129 |
122 |
||||||
|
Employees at period end |
13,284 |
12,559 |
||||||
|
Home & Community |
||||||||
|
Average weekly census |
21,337 |
20,198 |
20,878 |
20,182 |
||||
|
Billable hours (in thousands) |
3,337 |
3,235 |
13,132 |
12,835 |
||||
|
Billable hours per business day |
53,823 |
50,547 |
51,905 |
50,333 |
||||
|
Revenues per billable hour |
$ 16.94 |
$ 16.61 |
$ 16.81 |
$ 16.37 |
||||
|
Home Health |
||||||||
|
Average weekly census: |
||||||||
|
Medicare |
1,481 |
1,393 |
1,485 |
1,427 |
||||
|
Non-Medicare |
1,566 |
1,464 |
1,491 |
1,528 |
||||
|
Medicare admissions (2) |
2,140 |
1,937 |
8,330 |
7,734 |
||||
|
Medicare revenues per episode completed |
$ 2,727 |
$ 2,593 |
$ 2,634 |
$ 2,569 |
||||
|
Percentage of Revenues by Payor: |
||||||||
|
State, local or other governmental |
79% |
81% |
80% |
81% |
||||
|
Medicare |
13% |
12% |
12% |
12% |
||||
|
Other |
8% |
7% |
8% |
7% |
||||
|
(1) We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, 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. |
||||||||
|
(2) Medicare admissions represents the aggregate number of new cases approved for Medicare services during a specified period. |
||||||||
|
Adjusted EBITDA (1) (Unaudited) |
For the Three Months Ended December 31, |
For the Year Ended December 31, |
||||||
|
2010 |
2009 |
2010 |
2009 |
|||||
|
Reconciliation of Adjusted EBITDA to Net Income: |
||||||||
|
Net income (loss) |
$ 1,537 |
$ (1,784) |
$ 6,028 |
$ 3,602 |
||||
|
Net interest expense |
681 |
3,584 |
3,004 |
6,773 |
||||
|
Income tax expense (benefit) |
1,013 |
(1,009) |
2,960 |
1,400 |
||||
|
Depreciation and amortization |
1,091 |
1,235 |
4,046 |
4,913 |
||||
|
Stock-based compensation expense |
58 |
85 |
255 |
297 |
||||
|
Adjusted EBITDA |
$ 4,380 |
$ 2,111 |
$ 16,293 |
$ 16,985 |
||||
|
(1) We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, 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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Investor Contact: |
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Amy Glynn / Nick Laudico |
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The Ruth Group |
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Phone: (646) 536-7023 / 7030 |
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Email: aglynn@theruthgroup.com |
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Email: nlaudico@theruthgroup.com |
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SOURCE Addus HomeCare Corporation
