UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2011
ADDUS HOMECARE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-34504 | 20-5340172 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification Number) | ||
| 2401 South Plum Grove Road, Palatine, Illinois | 60067 | |||
| (Address of principal executive offices) | (Zip Code) | |||
(847) 303-5300
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
On November 3, 2011, Addus HomeCare Corporation (the “Company”) issued a press release announcing its earnings for the three and nine month periods ended September 30, 2011. A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 2.06. Material Impairments
In connection with the review of the Company’s financial statements for the period ended September 30, 2011, the Company determined that the estimated fair value of its home health reporting unit was less than the net book value of the business. This conclusion was based on the current Federal and state reimbursement environments and continued pressure on reimbursement for the Company’s home health services, combined with ongoing declines in the market capitalization of the Company and updates to the Company’s business projection and forecasts.
Accordingly, the Company recorded an estimated non-cash goodwill and intangible asset impairment charge of approximately $16.0 million for the three months ended September 30, 2011. This determination, represents an estimate, was based on a preliminary evaluation of the Company’s goodwill as of June 30, 2011 and is subject to the completion of the Company’s annual impairment test as of October 1, 2011, which may result in an adjustment, which may be material to the loss recorded in the third quarter of 2011. The goodwill impairment charge is non-cash in nature and does not affect the Company’s liquidity, cash flows from operating activities, or have any impact on future operations.
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2011 will include the estimated $16 million non-cash goodwill impairment charge.
Item 7.01. Regulation FD Disclosure
The information contained in Items 2.02 and 2.06 of this Current Report on Form 8-K is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits:
| Exhibit No. |
Description | |
| 99.1 | Press release of Addus HomeCare Corporation dated November 3, 2011. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ADDUS HOMECARE CORPORATION | ||||||
| Dated: November 3, 2011 | By: | /s/ Dennis B. Meulemans | ||||
| Name: | Dennis B. Meulemans | |||||
| Title: | Chief Financial Officer | |||||
Exhibit Index
| Exhibit No. |
Description | |
| 99.1 | Press release of Addus HomeCare Corporation dated November 3, 2011. | |
Exhibit 99.1
Investor Contact:
Amy Glynn / Nick Laudico
The Ruth Group
Phone: (646) 536-7023 / 7030
Email: aglynn@theruthgroup.com
Email: nlaudico@theruthgroup.com
Addus HomeCare Reports Third Quarter 2011 Results
Third Quarter Financial Highlights
| • | Total net service revenues were $69.4 million |
| • | Home & Community net service revenues were $56.2 million |
| • | Home Health net service revenues were $13.2 million |
| • | Net income was $1.8 million, or $0.17 per diluted share, before a $16.0 million non-cash goodwill and intangible asset impairment charge, up from net income of $1.5 million, or $0.14 per diluted share |
Palatine, IL, November 3, 2011—Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home-based social and medical services, announced today its financial results for the third quarter ended September 30, 2011.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, “Our third quarter results, before the goodwill and intangible asset impairment charge, reflect our continued progress in improving our operations.”
Third Quarter Review
Total net service revenues for the third quarter of 2011 were $69.4 million, a 0.7% decrease compared to the prior year quarter. The acquisition of Advantage Heath Systems, Inc., dba CarePro, contributed approximately $3.3 million in net service revenues in the third quarter of 2011.
Net income for the third quarter, before considering the goodwill and intangible asset impairment charge (Impairment Charge) was $1.8 million, or $0.17 per diluted share, compared to $1.5 million or $0.14 per diluted share, in the prior year quarter.
Home & Community segment net service revenues for the third quarter 2011 were $56.2 million, a 2.0% decrease from the prior year quarter. Home & Community segment revenues included approximately $2.4 million from CarePro operations. Excluding locations closed and program eliminations in select states totaling $1.5 million in revenue, same store sales of $53.8 million in revenues were consistent with the prior year quarter. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 14.9% to $6.8 million, or 12.1% of revenue, in the third quarter, compared to $5.9 million, or 10.3% of revenue, in the prior year quarter.
Home Health segment net service revenues for the third quarter of 2011 were $13.2 million, a 5.6% increase over the prior year quarter, despite a reduction in Medicare revenues estimated at $0.4 million as a result of the rate cut enacted in 2011. Home Health segment revenues included approximately $0.9 million from CarePro operations. Home Health operating income, before considering the effect of the Impairment Charge, and including depreciation and amortization but excluding corporate expenses, was $0.2 million, or 1.4% of revenues, compared to $1.1 million, or 8.5% of revenues, in the prior year quarter.
Nine Month Review
Total net service revenues for the nine months ended September 30, 2011 were $204.5 million, a 1.4% increase compared to the prior year period. The acquisition of CarePro contributed approximately $10.0 million in net service revenues in the first nine months of 2011.
Net income, before considering the effect of the Impairment Charge, for the first nine months of 2011 was $4.0 million, or $0.37 per diluted share. This compares to net income of $4.5 million, or $0.43 per diluted share, in the same period of 2010.
Home & Community segment net service revenues for the nine months ended September 30, 2011 were $165.3 million, a 0.7% increase compared to the prior year period. Home & Community segment revenues included approximately $7.2 million from CarePro operations. Excluding locations closed and program eliminations in select states totaling $5.9 million in revenue, same store sales increased by $1.9 million, or approximately 1.2%. Home & Community operating
income, including depreciation and amortization but excluding corporate expenses, increased 7.4% to $18.1 million, or 11.0% of revenue, in the first nine months of 2011, compared to $16.9 million, or 10.3% of revenue, in the prior year period.
Home Health segment net service revenues for the nine months ended September 30, 2011 were $39.2 million, a 4.6% increase compared to the prior year period. Home Health segment revenues included approximately $2.8 million from CarePro operations. After adjusting for the Medicare rate reduction in 2011 of approximately $1.1 million, same store sales increased by $0.4 million, or 1.2%. Home Health operating income, before considering the effect of the Impairment Charge, and including depreciation and amortization but excluding corporate expenses, was $1.7 million, or 4.4% of revenues, for the first nine months of 2011, compared to $3.8 million, or 10.0% of revenues, in the prior year period.
Cash flow from operations was $11.8 million for the first nine months of 2011, compared to $5.1 million in the same period in 2010 due largely to the improved payments received from the State of Illinois, combined with an overall improvement in collections from all other payors.
Goodwill and Intangible Asset Impairment Charge
The Company performed an interim and preliminary assessment of the fair value of its two reporting units and determined the fair value of the Home & Community reporting unit was greater than its book value indicating no initial impairment. However, the preliminary assessment of its Home Health reporting unit indicated that the estimated fair value was less than the net book value of the business. This conclusion was based on the current Federal and state reimbursement environments and continued pressure on reimbursement in the Home Health reporting unit, combined with ongoing declines in the market capitalization of the Company and updates to the Company’s business projections and forecasts. Accordingly, the Company recorded an estimated non-cash goodwill and intangible asset impairment charge of $16.0 million for the three months ended September 30, 2011. This determination represents an estimate, was based on a preliminary evaluation as of June 30, 2011 and is subject to the completion of the Company’s annual impairment test as of October 1, 2011 which may result in an adjustment, which may be material, to the loss recorded in the third quarter of 2011.
Subsequent Event
In October 2011, the Company received $2.3 million from the State of Illinois as payment for prompt payment interest for delays in payment of invoices for the State’s fiscal year ending June 30, 2011.
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, interest, 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 2011 third quarter results after the market close on Thursday, November 3, 2011. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on November 3, 2011. The toll-free number is (866) 783-2145 (international callers should call 857-350-1604), with the passcode: 95464103. A telephonic replay of the conference call will be available through midnight on November 17, 2011 by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 89880081.
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, 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 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2010, and in Addus HomeCare’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2011, 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)
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Cash Flow Information
(amounts and shares in thousands, except per share data)
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Income Statement Information: |
||||||||||||||||
| Net service revenues |
$ | 69,384 | $ | 69,842 | $ | 204,478 | $ | 201,612 | ||||||||
| Cost of service revenues |
48,373 | 49,710 | 144,303 | 142,924 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
21,011 | 20,132 | 60,175 | 58,688 | ||||||||||||
| General and administrative expenses |
16,955 | 16,277 | 49,567 | 46,972 | ||||||||||||
| Goodwill and intangible asset impairment charge |
15,989 | — | 15,989 | — | ||||||||||||
| Depreciation and amortization |
927 | 1,058 | 2,783 | 2,955 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
33,871 | 17,335 | 68,339 | 49,927 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income (loss) |
(12,860 | ) | 2,797 | (8,164 | ) | 8,761 | ||||||||||
| Interest expense, net |
548 | 855 | 1,929 | 2,323 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations before taxes |
(13,408 | ) | 1,942 | (10,093 | ) | 6,438 | ||||||||||
| Income tax expense (benefit) |
(4,359 | ) | 463 | (3,230 | ) | 1,947 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | (9,049 | ) | $ | 1,479 | $ | (6,863 | ) | $ | 4,491 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) per common share: |
||||||||||||||||
| Basic |
$ | (0.84 | ) | $ | 0.14 | $ | (0.64 | ) | $ | 0.43 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | (0.84 | ) | $ | 0.14 | $ | (0.64 | ) | $ | 0.43 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of common shares outstanding: |
||||||||||||||||
| Basic |
10,746 | 10,681 | 10,746 | 10,561 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
10,746 | 10,681 | 10,746 | 10,561 | ||||||||||||
|
|
|
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|
|
|
|
|
|||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||
| 2011 | 2010 | |||||||||||||||
| Cash Flow Information: |
||||||||||||||||
| Net cash provided by operating activities |
$ | 11,815 | $ | 5,074 | ||||||||||||
| Net cash used in investing activities |
(777 | ) | (6,111 | ) | ||||||||||||
| Net cash provided by (used in) financing activities |
(10,557 | ) | 1,131 | |||||||||||||
|
|
|
|
|
|||||||||||||
| Net change in cash |
481 | 94 | ||||||||||||||
| Cash at the beginning of the period |
816 | 518 | ||||||||||||||
|
|
|
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|
|||||||||||||
| Cash at the end of the period |
$ | 1,297 | $ | 612 | ||||||||||||
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|
|||||||||||||
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
| September 30, 2011 | December 31, 2010 | |||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash |
$ | 1,297 | $ | 816 | ||||
| Accounts receivable, net |
69,918 | 70,954 | ||||||
| Prepaid expenses and other current assets |
10,753 | 7,704 | ||||||
| Deferred tax assets |
6,338 | 6,324 | ||||||
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|
|
|
|||||
| Total current assets |
88,306 | 85,798 | ||||||
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|
|
|||||
| Property and equipment, net |
2,482 | 2,923 | ||||||
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|
|
|||||
| Other assets |
||||||||
| Goodwill |
50,735 | 63,930 | ||||||
| Intangible assets, net |
8,592 | 13,570 | ||||||
| Deferred tax assets |
5,666 | — | ||||||
| Other assets |
560 | 703 | ||||||
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|
|
|
|
|||||
| Total other assets |
65,553 | 78,203 | ||||||
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|
|||||
| Total assets |
$ | 156,341 | $ | 166,924 | ||||
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| Liabilities and stockholders’ equity |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 4,661 | $ | 3,304 | ||||
| Accrued expenses |
33,241 | 26,529 | ||||||
| Current maturities of long-term debt |
6,250 | 5,158 | ||||||
| Deferred revenue |
2,318 | 2,141 | ||||||
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|
|||||
| Total current liabilities |
46,470 | 37,132 | ||||||
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|
|||||
| Long-term debt, less current maturities |
28,402 | 40,027 | ||||||
| Deferred tax liabilities |
— | 562 | ||||||
| Other long-term liabilities |
— | 1,112 | ||||||
| Total stockholders’ equity |
81,469 | 88,091 | ||||||
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|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 156,341 | $ | 166,924 | ||||
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|
|||||
Segment Information (Unaudited)
| For the Three Months Ended September 30, 2011 | ||||||||||||||||
| 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 | ||||||||||||
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|
|||||||||
| 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 | ||||||||||||
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|
|
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|
|
|
|||||||||
| Total operating expenses |
7,991 | 22,031 | 3,849 | 33,871 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Operating income (loss) |
$ | 6,798 | $ | (15,809 | ) | $ | (3,849 | ) | $ | (12,860 | ) | |||||
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|
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|
|||||||||
| Operating income, excluding impairment charge |
$ | 6,798 | $ | 180 | $ | (3,849 | ) | $ | 3,129 | |||||||
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|
|||||||||
| Operating income percentage, excluding impairment charge |
12.1 | % | 1.4 | % | -5.5 | % | 4.5 | % | ||||||||
| For the Three Months Ended September 30, 2010 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues |
$ | 57,311 | $ | 12,531 | $ | — | $ | 69,842 | ||||||||
| Cost of service revenues |
42,812 | 6,898 | — | 49,710 | ||||||||||||
|
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|
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|
|
|||||||||
| Gross profit |
14,499 | 5,633 | — | 20,132 | ||||||||||||
| Gross profit percentage |
25.3 | % | 45.0 | % | 28.8 | % | ||||||||||
| General and administrative expenses |
7,871 | 4,415 | 3,991 | 16,277 | ||||||||||||
| Depreciation and amortization |
712 | 158 | 188 | 1,058 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
8,583 | 4,573 | 4,179 | 17,335 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
$ | 5,916 | $ | 1,060 | $ | (4,179 | ) | $ | 2,797 | |||||||
|
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|
|
|
|
|
|
|
|||||||||
| Operating income percentage |
10.3 | % | 8.5 | % | -6.0 | % | 4.0 | % | ||||||||
| For the Nine Months Ended September 30, 2011 | ||||||||||||||||
| 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 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| 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 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
23,945 | 32,358 | 12,036 | 68,339 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Operating income (loss) |
$ | 18,143 | $ | (14,271 | ) | $ | (12,036 | ) | $ | (8,164 | ) | |||||
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|
|||||||||
| Operating income, excluding impairment charge |
$ | 18,143 | $ | 1,718 | $ | (12,036 | ) | $ | 7,825 | |||||||
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|
|||||||||
| Operating income percentage, excluding impairment charge |
11.0 | % | 4.4 | % | -5.9 | % | 3.8 | % | ||||||||
| For the Nine Months Ended September 30, 2010 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues |
$ | 164,156 | $ | 37,456 | $ | — | $ | 201,612 | ||||||||
| Cost of service revenues |
122,536 | 20,388 | — | 142,924 | ||||||||||||
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|
|||||||||
| Gross profit |
41,620 | 17,068 | — | 58,688 | ||||||||||||
| Gross profit percentage |
25.4 | % | 45.6 | % | 29.1 | % | ||||||||||
| General and administrative expenses |
22,774 | 12,835 | 11,363 | 46,972 | ||||||||||||
| Depreciation and amortization |
1,947 | 479 | 529 | 2,955 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
24,721 | 13,314 | 11,892 | 49,927 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
$ | 16,899 | $ | 3,754 | $ | (11,892 | ) | $ | 8,761 | |||||||
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|
|
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|
|||||||||
| Operating income percentage |
10.3 | % | 10.0 | % | -5.9 | % | 4.3 | % | ||||||||
Key Statistical and Financial Data (Unaudited) (3)
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| General: |
||||||||||||||||
| Adjusted EBITDA (in thousands) (1) |
$ | 4,152 | $ | 3,924 | $ | 10,849 | $ | 11,913 | ||||||||
| States served at period end |
19 | 19 | ||||||||||||||
| Locations at period end |
120 | 134 | ||||||||||||||
| Employees at period end |
13,601 | 13,861 | ||||||||||||||
| Home & Community |
||||||||||||||||
| Average census |
23,026 | 23,333 | 22,761 | 22,471 | ||||||||||||
| Billable hours (in thousands) |
3,323 | 3,371 | 9,736 | 9,795 | ||||||||||||
| Billable hours per business day |
51,127 | 51,867 | 50,716 | 51,017 | ||||||||||||
| Revenues per billable hour |
$ | 16.90 | $ | 17.00 | $ | 16.98 | $ | 16.76 | ||||||||
| Home Health |
||||||||||||||||
| Average census: |
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| Medicare |
1,634 | 1,410 | 1,519 | 1,482 | ||||||||||||
| Non-Medicare |
1,706 | 1,511 | 1,621 | 1,509 | ||||||||||||
| Medicare admissions (2) |
2,210 | 2,027 | 6,773 | 6,342 | ||||||||||||
| Medicare revenues per episode completed |
$ | 2,426 | $ | 2,646 | $ | 2,494 | $ | 2,587 | ||||||||
| Percentage of Revenues by Payor: |
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| State, local or other governmental |
80 | % | 81 | % | 80 | % | 80 | % | ||||||||
| Medicare |
12 | % | 11 | % | 13 | % | 12 | % | ||||||||
| Other |
8 | % | 8 | % | 7 | % | 8 | % | ||||||||
| (1) | We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, 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. |
| (3) | Key statistical and financial data for the three and nine months ended September 30, 2011 includes the acquisition of Advantage Health Systems, Inc. |
Adjusted EBITDA (1) (Unaudited)
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income (loss): |
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| Net income (loss) |
$ | (9,049 | ) | $ | 1,479 | $ | (6,863 | ) | $ | 4,491 | ||||||
| Goodwill and intangible asset impairment charge |
15,989 | — | 15,989 | — | ||||||||||||
| Net interest expense |
548 | 855 | 1,929 | 2,323 | ||||||||||||
| Income tax expense (benefit) |
(4,359 | ) | 463 | (3,230 | ) | 1,947 | ||||||||||
| Depreciation and amortization |
927 | 1,058 | 2,783 | 2,955 | ||||||||||||
| Stock-based compensation expense |
96 | 69 | 241 | 197 | ||||||||||||
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| Adjusted EBITDA |
$ | 4,152 | $ | 3,924 | $ | 10,849 | $ | 11,913 | ||||||||
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| (1) | We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, 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. |