Addus HomeCare Reports Third Quarter 2012 Results and Exploration of Strategic Alternatives for the Home Health Division
Third Quarter Review
Total net service revenues for the third quarter of 2012 were
Home & Community segment net service revenues for the third quarter of 2012 were
Nine Month Review
Total net service revenues for the nine months ended
Home & Community segment net service revenues for the nine months ended
Exploration of Strategic Alternatives
The Company has decided to explore strategic alternatives relative to its home health services business and has retained
Chief Operating Officer to Leave
The Company announced today that
Mr. Heaney stated, "We appreciate Daniel's contributions to Addus, especially with respect to his driving key operational and financial metrics. Daniel's leadership has been valuable in positioning the Company for the future, and we wish Daniel the best in his future endeavors."
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 goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, taxes, depreciation, amortization, 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 2012 third quarter financial results after the market close on
A live broadcast of
About Addus
Addus is a 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 focuses on serving the needs of the elderly dual eligible population. 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, commercial insurers and private individuals. For more information, please visit www.addus.com.
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 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
Investor Contact:
Chief Financial Officer
Phone: (847) 303-5300
Email: DMeulemans@addus.com
(Unaudited tables and notes follow)
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES |
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Condensed Consolidated Statements of Income and Cash Flow Information |
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(amounts and shares in thousands, except per share data) |
|||||||
(Unaudited) |
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Income Statement Information: |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||
2012 |
2011 |
2012 |
2011 |
||||
Net service revenues |
$ 71,006 |
$ 69,384 |
$ 209,211 |
$ 204,478 |
|||
Cost of service revenues |
50,687 |
48,373 |
149,832 |
144,303 |
|||
Gross profit |
20,319 |
21,011 |
59,379 |
60,175 |
|||
General and administrative expenses |
16,486 |
16,955 |
50,697 |
49,567 |
|||
Goodwill and intangible asset impairment charge |
- |
15,989 |
- |
15,989 |
|||
Gain on sale of agency |
- |
- |
(495) |
- |
|||
Depreciation and amortization |
639 |
927 |
1,908 |
2,783 |
|||
Total operating expenses |
17,125 |
33,871 |
52,110 |
68,339 |
|||
Operating income (loss) |
3,194 |
(12,860) |
7,269 |
(8,164) |
|||
Interest income |
- |
- |
(128) |
- |
|||
Interest expense |
407 |
548 |
1,365 |
1,929 |
|||
Total interest expense, net |
407 |
548 |
1,237 |
1,929 |
|||
Income (loss) from operations before taxes |
2,787 |
(13,408) |
6,032 |
(10,093) |
|||
Income tax expense (benefit) |
990 |
(6,745) |
2,142 |
(5,616) |
|||
Net income (loss) |
$ 1,797 |
$ (6,663) |
$ 3,890 |
$ (4,477) |
|||
Income (loss) per common share: |
|||||||
Basic and diluted |
$ 0.17 |
$ (0.62) |
$ 0.36 |
$ (0.42) |
|||
Weighted average number of common shares outstanding: |
|||||||
Basic |
10,761 |
10,746 |
10,761 |
10,746 |
|||
Diluted |
10,773 |
10,746 |
10,764 |
10,746 |
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Cash Flow Information: |
For the Nine Months Ended September 30, |
||||||
2012 |
2011 |
||||||
Net cash provided by operating activities |
$ 9,336 |
$ 11,815 |
|||||
Net cash used in investing activities |
(518) |
(777) |
|||||
Net cash used in financing activities |
(9,125) |
(10,557) |
|||||
Net change in cash |
(307) |
481 |
|||||
Cash at the beginning of the period |
2,020 |
816 |
|||||
Cash at the end of the period |
$ 1,713 |
$ 1,297 |
Condensed Consolidated Balance Sheets |
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(Amounts in thousands) |
|||
(Unaudited) |
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September 30, 2012 |
December 31, 2011 |
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Assets |
|||
Current assets |
|||
Cash |
$ 1,713 |
$ 2,020 |
|
Accounts receivable, net |
71,400 |
72,368 |
|
Prepaid expenses and other current assets |
8,602 |
8,137 |
|
Deferred tax assets |
6,336 |
6,336 |
|
Total current assets |
88,051 |
88,861 |
|
Property and equipment, net |
2,852 |
2,490 |
|
Other assets |
|||
Goodwill |
50,576 |
50,695 |
|
Intangible assets, net |
6,787 |
8,044 |
|
Deferred tax assets |
4,089 |
4,089 |
|
Other assets |
347 |
513 |
|
Total other assets |
61,799 |
63,341 |
|
Total assets |
$ 152,702 |
$ 154,692 |
|
Liabilities and stockholders' equity |
|||
Current liabilities |
|||
Accounts payable |
$ 4,589 |
$ 5,266 |
|
Accrued expenses |
33,081 |
29,313 |
|
Current maturities of long-term debt |
1,902 |
6,569 |
|
Deferred revenue |
2,020 |
2,145 |
|
Total current liabilities |
41,592 |
43,293 |
|
Long-term debt, less current maturities |
20,500 |
24,958 |
|
Total stockholders' equity |
90,610 |
86,441 |
|
Total liabilities and stockholders' equity |
$ 152,702 |
$ 154,692 |
Segment Information (Unaudited) |
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For the Three Months Ended September 30, 2012 |
|||||||
Home & Community |
Home Health |
Corporate |
Total |
||||
Net service revenues |
$ 59,581 |
$ 11,425 |
$ - |
$ 71,006 |
|||
Cost of service revenues |
44,520 |
6,167 |
- |
50,687 |
|||
Gross profit |
15,061 |
5,258 |
- |
20,319 |
|||
Gross profit percentage |
25.3% |
46.0% |
28.6% |
||||
General and administrative expenses |
7,079 |
5,364 |
4,043 |
16,486 |
|||
Depreciation and amortization |
458 |
4 |
177 |
639 |
|||
Total operating expenses |
7,537 |
5,368 |
4,220 |
17,125 |
|||
Operating income (loss) |
$ 7,524 |
$ (110) |
$ (4,220) |
$ 3,194 |
|||
Operating income percentage |
12.6% |
-1.0% |
-5.9% |
4.5% |
|||
For the Three Months Ended September 30, 2011 |
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Home & Community |
Home Health |
Corporate |
Total |
||||
Net service revenues |
$ 56,157 |
$ 13,227 |
$ - |
$ 69,384 |
|||
Cost of service revenues |
41,368 |
7,005 |
- |
48,373 |
|||
Gross profit |
14,789 |
6,222 |
- |
21,011 |
|||
Gross profit percentage |
26.3% |
47.0% |
30.3% |
||||
General and administrative expenses |
7,382 |
5,914 |
3,659 |
16,955 |
|||
Goodwill and intangible asset impairment charge |
- |
15,989 |
- |
15,989 |
|||
Depreciation and amortization |
609 |
128 |
190 |
927 |
|||
Total operating expenses |
7,991 |
22,031 |
3,849 |
33,871 |
|||
Operating income (loss) |
$ 6,798 |
$ (15,809) |
$ (3,849) |
$ (12,860) |
|||
Operating income, excluding impairment charge |
$ 6,798 |
$ 180 |
$ (3,849) |
$ 3,129 |
|||
Operating income percentage,excluding impairment charge |
12.1% |
1.4% |
-5.5% |
4.5% |
|||
For the Nine Months Ended September 30, 2012 |
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Home & Community |
Home Health |
Corporate |
Total |
||||
Net service revenues |
$ 175,160 |
$ 34,051 |
$ - |
$209,211 |
|||
Cost of service revenues |
130,681 |
19,151 |
- |
149,832 |
|||
Gross profit |
44,479 |
14,900 |
- |
59,379 |
|||
Gross profit percentage |
25.4% |
43.8% |
28.4% |
||||
General and administrative expenses |
22,072 |
16,209 |
12,416 |
50,697 |
|||
Gain on sale of agency |
- |
- |
(495) |
(495) |
|||
Depreciation and amortization |
1,385 |
11 |
512 |
1,908 |
|||
Total operating expenses |
23,457 |
16,220 |
12,433 |
52,110 |
|||
Operating income (loss) |
$ 21,022 |
$ (1,320) |
$ (12,433) |
$ 7,269 |
|||
Operating income percentage |
12.0% |
-3.9% |
-5.9% |
3.5% |
|||
For the Nine Months Ended September 30, 2011 |
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Home & Community |
Home Health |
Corporate |
Total |
||||
Net service revenues |
$ 165,309 |
$ 39,169 |
$ - |
$204,478 |
|||
Cost of service revenues |
123,221 |
21,082 |
- |
144,303 |
|||
Gross profit |
42,088 |
18,087 |
- |
60,175 |
|||
Gross profit percentage |
25.5% |
46.2% |
29.4% |
||||
General and administrative expenses |
22,117 |
15,984 |
11,466 |
49,567 |
|||
Goodwill and intangible asset impairment charge |
- |
15,989 |
- |
15,989 |
|||
Depreciation and amortization |
1,828 |
385 |
570 |
2,783 |
|||
Total operating expenses |
23,945 |
32,358 |
12,036 |
68,339 |
|||
Operating income (loss) |
$ 18,143 |
$ (14,271) |
$ (12,036) |
$ (8,164) |
|||
Operating income, excluding impairment charge |
$ 18,143 |
$ 1,718 |
$ (12,036) |
$ 7,825 |
|||
Operating income percentage,excluding impairment charge |
11.0% |
4.4% |
-5.9% |
3.8% |
Key Statistical and Financial Data (Unaudited) |
|||||||
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||
2012 |
2011 |
2012 |
2011 |
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General: |
|||||||
Adjusted EBITDA (in thousands) (1) |
$3,972 |
$4,152 |
$9,456 |
$10,849 |
|||
States served at period end |
19 |
19 |
|||||
Locations at period end |
117 |
120 |
|||||
Employees at period end |
14,222 |
13,601 |
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Home & Community |
|||||||
Average census |
24,138 |
23,026 |
23,677 |
22,761 |
|||
Billable hours (in thousands) |
3,521 |
3,323 |
10,377 |
9,736 |
|||
Billable hours per business day |
54,169 |
51,127 |
54,298 |
50,716 |
|||
Revenues per billable hour |
$16.93 |
$16.90 |
$16.88 |
$ 16.98 |
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Home Health |
|||||||
Medicare admissions (2) |
2,008 |
2,233 |
6,168 |
6,826 |
|||
Non-Medicare admissions |
1,213 |
1,558 |
3,777 |
4,909 |
|||
Medicare revenues per episode completed |
$2,571 |
$2,426 |
$2,571 |
$ 2,494 |
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Percentage of Revenues by Payor: |
|||||||
State, local or other governmental |
82% |
80% |
83% |
80% |
|||
Medicare |
11% |
12% |
11% |
13% |
|||
Other |
7% |
8% |
6% |
7% |
(1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, 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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(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 September 30, |
For the Nine Months Ended September 30, |
|||||
2012 |
2011 |
2012 |
2011 |
||||
Reconciliation of Adjusted EBITDA to Net Income: |
|||||||
Net income (loss) |
$1,797 |
$(6,663) |
$3,890 |
$ (4,477) |
|||
Goodwill and intangible asset impairment charge |
- |
15,989 |
- |
15,989 |
|||
Net interest expense |
407 |
548 |
1,237 |
1,929 |
|||
Income tax expense (benefit) |
990 |
(6,745) |
2,142 |
(5,616) |
|||
Depreciation and amortization |
639 |
927 |
1,908 |
2,783 |
|||
Stock-based compensation expense |
139 |
96 |
279 |
241 |
|||
Adjusted EBITDA |
$3,972 |
$ 4,152 |
$9,456 |
$10,849 |
|||
(1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, 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. |
SOURCE