PALATINE, IL, Nov. 4, 2010 /PRNewswire via COMTEX/ --

Third Quarter Financial Highlights

• Total net service revenues grew 4.5% to $69.8 million
• Home & Community segment net service revenues increased 6.4% to $57.3 million
• Home Health segment net service revenues decreased 3.0% to $12.5 million
• Net income of $1.5 million, or $0.14 per diluted share

Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home-based social and medical services, announced today its financial results for the three and nine months ended September 30, 2010.

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, "We are disappointed with our performance in the third quarter. While our largest division, Home & Community, performed well, our Home Health business was well below our expectations. However, we expect that Home Health will become a growing contributor due to the investments we've made.

"We remain focused on the Company's accounts receivable collections and continue to make progress. In addition, the CarePro acquisition is proceeding smoothly and the business is performing in line with our expectations," Heaney added.

Third Quarter Review

Total net service revenues for the quarter ended September 30, 2010 were $69.8 million, a 4.5% increase compared to $66.8 million in the prior year quarter. The acquisition of Advantage Health Systems, which we refer to as CarePro, contributed approximately $2.5 million in revenues in the third quarter.

Third quarter 2010 net income of $1.5 million, or $0.14 per diluted share, including $0.01 per share in acquisition related expenses, was based on 10.7 million diluted shares outstanding. This compares to net income after preferred stock dividends of $0.9 million, or $0.40 per diluted share based on 5.2 million diluted shares outstanding, in the prior year period. Net income in the third quarter of 2009 before preferred stock dividends was $2.1 million.

Adjusted earnings before interest, taxes, depreciation, amortization, and stock-based compensation ("Adjusted EBITDA") for the third quarter of 2010 was $3.9 million, compared to $5.4 million in the prior year quarter. Contributing to the decrease in adjusted EBITDA in the current quarter was a decrease of $1.0 million in the Home Health segment due principally to lower starts of care in Integrated Services, $0.4 million in pre-tax separation costs related to the resignation of the Company's CFO and executive recruitment costs, and $0.2 million in pre-tax class action litigation costs. Additionally, the Company recorded a pre-tax reduction in management bonuses of approximately $1.0 million in the third quarter of 2010.

Home & Community segment net service revenues for the third quarter of 2010 were $57.3 million, a 6.4% increase compared to $53.9 million in the prior year quarter. The total segment revenue growth of $3.4 million came from a 2.5% organic growth rate plus $2.0 million from CarePro operations. Organic revenue growth was driven by the Illinois rate increase and ongoing sales efforts.

Home & Community gross profit margin increased to 25.3% in the third quarter of 2010, compared to 24.9% in the third quarter of 2009. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $5.9 million, or 10.3% of revenue, compared to $5.4 million, or 10.1% of revenue, in the prior year quarter.

Home Health segment net service revenues for the third quarter of 2010 were $12.5 million, a 3.0% decrease compared to $12.9 million in the prior year quarter. Home Health segment revenues include approximately $0.5 million from CarePro operations. The decrease in revenues was largely the result of lower starts of care in Integrated Services.

Home Health gross profit margin was 45.0% in the third quarter of 2010, compared to 48.2% in the prior year period. Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $1.1 million, or 8.5% of revenues, compared to $2.1 million, or 15.9% of revenues, in the prior year quarter. The decline in Home Health operating income was primarily due to lower starts of care in the Integrated Services program, a slight increase in visits per episode and investments related to the expansion of the sales force.

Nine Month Review

Total net service revenues for the nine months ended September 30, 2010 were $201.6 million, a 4.1% increase compared to $193.6 million in the prior year period. The acquisition of CarePro contributed approximately $2.5 million in revenues.

Net income for the nine months ended September 30, 2010 of $4.5 million, or $0.43 per diluted share, including $0.02 per share in acquisition related expenses, was based on 10.6 million diluted shares outstanding. This compares to net income after preferred stock dividends of $1.9 million, or $1.04 per diluted share based on 5.2 million diluted shares outstanding, for the nine months ended September 30, 2009. Net income for the first nine months of 2009 before preferred stock dividends was $5.4 million.

Adjusted EBITDA for the nine months ended September 30, 2010 was $11.9 million, compared to $14.9 million in the prior year period.

Home & Community segment net service revenues for the first nine months of 2010 were $164.2 million, a 5.0% increase compared to $156.4 million in the prior year period. The total segment revenue growth of $7.8 million was attributable to a 3.7% organic growth rate plus $2.0 million in revenue from CarePro operations.

Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $16.9 million, compared to $15.8 million in the prior year period.

Home Health segment net service revenues for the nine months ended September 30, 2010 were $37.5 million, a 0.6% increase compared to $37.2 million in the prior year period. Home Health segment revenues include approximately $0.5 million attributable to CarePro operations.

Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $3.8 million, compared to $5.6 million 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 third quarter and nine months financial results after the market close on Thursday, November 4, 2010. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on November 4, 2010. The toll-free number is (866) 314-9013 (international callers should call 617-213-8053), with the passcode: 15474536. A telephonic replay of the conference call will be available through midnight on November 11, 2010, by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 70303689.

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 August 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)

SOURCE Addus HomeCare Corporation