Form 8-K

 

 

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): May 5, 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 May 5, 2011, Addus HomeCare Corporation issued a press release announcing its earnings for the three month period ended March 31, 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 9.01. Financial Statements and Exhibits

(d) Exhibits:

 

Exhibit

No.

  

Description

99.1    Press release of Addus HomeCare Corporation dated May 5, 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: May 5, 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 May 5, 2011.
Press Release

Exhibit 99.1

LOGO

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 First Quarter 2011 Results

First Quarter Financial Highlights

 

   

Total net service revenues grew 3.5% to $66.8 million

 

   

Home & Community segment net service revenues increased 2.7% to $54.1 million

 

   

Home Health segment net service revenues increased 6.7% to $12.7 million

 

   

Net income of $0.9 million, or $0.08 per diluted share

 

   

Accounts Receivable DSO improved sequentially by 6 days to 84 days

 

   

Accounts Receivable DSO for Illinois improved sequentially by 19 days to 122 days

Palatine, IL, May 5, 2011 - Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home-based social and medical services, announced today its financial results for the three months ended March 31, 2011.

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated: “Our results for the first quarter reflect continued progress in improving our operations. Despite a challenging rate environment, the Home & Community and Home Health revenues were up 2.7% and 6.7% on a year-over-year basis. Our DSOs improved for the majority of our payors as we continue to work on improving our collection processes.”

First Quarter Review

Total net service revenues for the first quarter 2011 were $66.8 million, a 3.5% increase compared to $64.6 million in the prior year quarter. The acquisition of CarePro contributed approximately $3.4 million in net service revenues in the first quarter of 2011.

First quarter 2011 net income was $0.9 million, or $0.08 per diluted share. This compares to net income of $1.4 million, or $0.13 per diluted share in the prior year quarter.

Home & Community segment net service revenues for the first quarter of 2011 were $54.1 million, a 2.7% increase compared to $52.7 million in the prior year quarter. Home &


Community segment revenues included approximately $2.5 million from CarePro operations. Excluding locations closed in late 2010 and program eliminations in select states totaling $2.0 million in revenue, same store sales increased by $0.9 million, or approximately 1.9%. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $5.3 million, or 9.8% of revenue in the first quarter, compared to $5.5 million, or 10.4% of revenue, in the prior year quarter.

Home Health segment net service revenues for the first quarter of 2011 were $12.7 million, a 6.7% increase compared to $11.9 million in the prior year quarter. Home Health segment revenues include approximately $1.0 million from CarePro operations with same store sales declining by $0.2 million, or 1.8%. However, after adjusting for the Medicare rate reduction in 2011 of approximately $0.4 million, same store sales increased by $0.2 million, or 1.8%. Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $0.7 million, or 5.5% of revenues, compared to $1.0 million, or 8.5% of revenues in the prior year quarter.

Cash flow from operations was $11.5 million in the first quarter of 2011 compared to $1.6 million in the prior year quarter due largely to the improved payments received from the State of Illinois, combined with an overall improvement in collections from all other payors. The cash from operations was used to reduce the outstanding balance on the Company’s line of credit and other debt.

Non-GAAP Financial Measures

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 2011 first quarter results after the market close on Thursday, May 5, 2011. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on May 5, 2011. The toll-free number is (800) 299-0433 (international callers should call 617-801-9712), with the passcode: 53099073. A telephonic replay of the conference call will be available through midnight on May 12, 2011 by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 80213754.

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 May 5, 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)


Exhibit 99.1

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Cash Flow Information

(amounts and shares in thousands, except per share data)

(Unaudited)

 

Income Statement Information:    For the Three Months Ended March 31,  
     2011     2010  

Net service revenues

   $ 66,842      $ 64,605   

Cost of service revenues

     47,788        45,785   
                

Gross profit

     19,054        18,820   

General and administrative expenses

     16,119        15,182   

Depreciation and amortization

     929        946   
                

Total operating expenses

     17,048        16,128   
                

Operating income

     2,006        2,692   

Interest expense, net

     713        718   
                

Income from operations before taxes

     1,293        1,974   

Income tax expense

     440        616   
                

Net income

   $ 853      $ 1,358   
                

Income per common share:

    

Basic

   $ 0.08      $ 0.13   
                

Diluted

   $ 0.08      $ 0.13   
                

Weighted average number of common shares outstanding:

    

Basic

     10,746        10,500   
                

Diluted

     10,754        10,500   
                
Cash Flow Information:    For the Three Months Ended March 31,  
     2011     2010  

Net cash provided by operating activities

   $ 11,451      $ 1,597   

Net cash used in investing activities

     (42     (200

Net cash used in financing activities

     (10,970     (695
                

Net change in cash

     439        702   

Cash at the beginning of the period

     816        518   
                

Cash at the end of the period

   $ 1,255      $ 1,220   
                


Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

 

     March 31, 2011      December 31, 2010  

Assets

     

Current assets

     

Cash

   $ 1,255       $ 816   

Accounts receivable, net

     64,845         70,954   

Prepaid expenses and other current assets

     6,937         7,704   

Deferred tax assets

     6,338         6,324   
                 

Total current assets

     79,375         85,798   
                 

Property and equipment, net

     2,724         2,923   
                 

Other assets

     

Goodwill

     63,891         63,930   

Intangible assets, net

     12,882         13,570   

Other assets

     667         703   
                 

Total other assets

     77,440         78,203   
                 

Total assets

   $ 159,539       $ 166,924   
                 

Liabilities and stockholders’ equity

     

Current liabilities

     

Accounts payable

   $ 3,524       $ 3,304   

Accrued expenses

     28,621         26,529   

Current maturities of long-term debt

     5,582         5,158   

Deferred revenue

     2,484         2,141   
                 

Total current liabilities

     40,211         37,132   
                 

Long-term debt, less current maturities

     28,652         40,027   

Deferred tax liabilities

     562         562   

Other long-term liabilities

     1,122         1,112   

Total stockholders’ equity

     88,992         88,091   
                 

Total liabilities and stockholders’ equity

   $ 159,539       $ 166,924   
                 


Segment Information (Unaudited)

 

     For the Three Months Ended March 31, 2011  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 54,143      $ 12,699      $ —        $ 66,842   

Cost of service revenues

     40,777        7,011        —          47,788   
                                

Gross profit

     13,366        5,688        —          19,054   

Gross profit percentage

     24.7     44.8       28.5

General and administrative expenses

     7,431        4,862        3,826        16,119   

Depreciation and amortization

     610        128        191        929   
                                

Total operating expenses

     8,041        4,990        4,017        17,048   
                                

Operating income

   $ 5,325      $ 698      $ (4,017   $ 2,006   
                                

Operating income percentage

     9.8     5.5     -6.0     3.0
     For the Three Months Ended March 31, 2010  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 52,701      $ 11,904      $ —        $ 64,605   

Cost of service revenues

     39,274        6,511        —          45,785   
                                

Gross profit

     13,427        5,393        —          18,820   

Gross profit percentage

     25.5     45.3       29.1

General and administrative expenses

     7,322        4,224        3,636        15,182   

Depreciation and amortization

     614        163        169        946   
                                

Total operating expenses

     7,936        4,387        3,805        16,128   
                                

Operating income

   $ 5,491      $ 1,006      $ (3,805   $ 2,692   
                                

Operating income percentage

     10.4     8.5     -5.9     4.2


Key Statistical and Financial Data (Unaudited) (3)

 

     For the Three Months Ended
March 31,
 
     2011     2010  

General:

    

Adjusted EBITDA (in thousands) (1)

   $ 2,983      $ 3,700   

States served at period end

     19        16   

Locations at period end

     129        123   

Employees at period end

     13,168        12,911   

Home & Community

    

Average weekly census

     20,860        20,193   

Billable hours (in thousands)

     3,185        3,171   

Billable hours per business day

     50,556        50,333   

Revenues per billable hour

   $ 17.00      $ 16.62   

Home Health

    

Average weekly census:

    

Medicare

     1,460        1,464   

Non-Medicare

     1,510        1,537   

Medicare admissions (2)

     2,156        2,240   

Medicare revenues per episode completed

   $ 2,482      $ 2,544   

Percentage of Revenues by Payor:

    

State, local or other governmental

     80     81

Medicare

     12     11

Other

     8     8

 

(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.
(3) Key statistical and financial data for the three months ended March 31, 2011 includes the acquisition of Advantage Health Systems, Inc.


Adjusted EBITDA (1) (Unaudited)

   For the Three Months Ended
March 31,
 
     2011      2010  

Reconciliation of Adjusted EBITDA to Net Income:

     

Net income

   $ 853       $ 1,358   

Net interest expense

     713         718   

Income tax expense

     440         616   

Depreciation and amortization

     929         946   

Stock-based compensation expense

     48         62   
                 

Adjusted EBITDA

   $ 2,983       $ 3,700   
                 

 

(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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