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): August 2, 2012

 

 

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 August 2, 2012, Addus HomeCare Corporation issued a press release announcing its earnings for the fiscal quarter ended June 30, 2012. 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 August 2, 2012.


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: August 2, 2012     By:   /s/ Dennis Meulemans
    Name:   Dennis Meulemans
    Title:   Chief Financial Officer


Exhibit Index

 

Exhibit No.

  

Description

99.1    Press release of Addus HomeCare Corporation dated August 2, 2012.
Press Release

Exhibit 99.1

LOGO

Investor Contact:

Dennis Meulemans

Chief Financial Officer

Phone:  (847) 303-5300

Email:  DMeulemans@addus.com

Addus HomeCare Reports Second Quarter 2012 Results

Second Quarter Financial Highlights

 

   

Total net service revenues were $70.3 million

 

   

Net income of $1.5 million, or $0.14 per diluted share

Palatine, IL, August 2, 2012 - Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home-based social and medical services focused on the elderly dual eligible population, announced today its financial results for the second quarter ended June 30, 2012.

Second Quarter Review

Total net service revenues for the second quarter of 2012 were $70.3 million, a 3.0% increase compared to $68.3 million in the prior year quarter. Net income for the second quarter was $1.5 million, or $0.14 per diluted share, compared to $1.3 million or $0.12 per diluted share, in the prior year quarter.

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, “Our Home & Community segment continued its steady growth during the second quarter and we maintained our focus on performance improvements in our Home Health segment.”

Home & Community segment net service revenues for the second quarter of 2012 were $58.7 million, a 6.6% increase from the prior year quarter. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 17.6% to $7.1 million, or 12.1% of revenue, in the second


quarter, compared to $6.0 million, or 10.9% of revenue, in the prior year quarter. This improvement was primarily due to an increase in average census and related billable hours, improved field productivity, lower bad debt expense as well as a continued focus on cost control.

Home Health segment net service revenues for the second quarter of 2012 were $11.6 million, a 12.2% decrease over the prior year quarter. Home Health had an operating loss, including depreciation and amortization but excluding corporate expenses, of approximately $0.1 million, or (0.4)% of revenues, compared to operating income of $0.8 million, or 6.3% of revenues, in the prior year quarter.

Six Month Review

Total net service revenues for the six months ended June 30, 2012 were $138.2 million, a 2.3% increase compared to $135.1 million in the same prior year period. Net income for the six months ended June 30, 2012 was $2.1 million, or $0.19 per diluted share, compared to $2.2 million or $0.20 per diluted share, in the same prior year period.

Home & Community segment net service revenues for the six months ended June 30, 2012 were $115.6 million, a 5.9% increase from the same prior year period. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 19.0% to $13.5 million, or 11.7% of revenue for the six months ended June 30, 2012, compared to $11.3 million, or 10.4% of revenue, in the same prior year period. This improvement was primarily due to an increase in average census and related billable hours, improved field productivity, lower bad debt expense as well as a continued focus on cost control.

Home Health segment net service revenues for the six months ended June 30, 2012 were $22.6 million, a 12.8% decrease over the same prior year period. Home Health had an operating loss, including depreciation and amortization but excluding corporate expenses, of $1.2 million, or (5.3)% of revenues, compared to operating income of $1.5 million, or 5.9% of revenues, in the same prior year period. Home Health segment net service revenues for the six months ended June 30, 2012 included an adjustment recorded in the first quarter of 2012 to estimates of accrued Medicare revenues totaling $0.9 million, which reduced profitability by $0.8 million.

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 second quarter financial results after the market close on Thursday, August 2, 2012. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on August 2, 2012. The toll-free dial-in number is (866) 813-5647 (international dial-in number is 847-619-6249), with the passcode: 32963600. A telephonic replay of the conference call will be available through midnight on August 9, 2012, by dialing (888) 843-7419 (international dial-in number is 630-652-3042) and entering the passcode 32963600.

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 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 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, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates 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 16, 2012, and in Addus HomeCare’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 10, 2012, 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 June 30,     For the Six Months Ended June 30,  
             2012                     2011                     2012                     2011          
Income Statement Information:         

Net service revenues

   $ 70,281      $ 68,252      $ 138,205      $ 135,094   

Cost of service revenues

     49,862        48,142        99,145        95,930   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     20,419        20,110        39,060        39,164   

General and administrative expenses

     17,180        16,493        34,211        32,612   

Gain on sale of agency

     —          —          (495     —     

Depreciation and amortization

     635        927        1,269        1,856   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     17,815        17,420        34,985        34,468   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     2,604        2,690        4,075        4,696   

Interest income

     —          —          (128     —     

Interest expense

     426        668        958        1,381   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest (income) expense

     426        668        830        1,381   

Income from operations before taxes

     2,178        2,022        3,245        3,315   

Income tax expense

     714        689        1,152        1,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 1,464      $ 1,333      $ 2,093      $ 2,186   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per common share:

        

Basic and diluted

   $ 0.14      $ 0.12      $ 0.19      $ 0.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares outstanding:

        

Basic

     10,761        10,746        10,761        10,746   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     10,785        10,770        10,781        10,762   
  

 

 

   

 

 

   

 

 

   

 

 

 
     For the Six Months Ended June 30,              
             2012                     2011                      

Cash Flow Information:

        

Net cash provided by operating activities

   $ 5,732      $ 29,098       

Net cash used in investing activities

     (259     (632    

Net cash used in financing activities

     (6,000     (5,177    
  

 

 

   

 

 

     

Net change in cash

     (527     23,289       

Cash at the beginning of the period

     2,020        816       
  

 

 

   

 

 

     

Cash at the end of the period

   $ 1,493      $ 24,105       
  

 

 

   

 

 

     


Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

 

     June 30, 2012      December 31, 2011  

Assets

     

Current assets

     

Cash

   $ 1,493       $ 2,020   

Accounts receivable, net

     69,141         72,368   

Prepaid expenses and other current assets

     8,418         8,137   

Deferred tax assets

     6,336         6,336   
  

 

 

    

 

 

 

Total current assets

     85,388         88,861   
  

 

 

    

 

 

 

Property and equipment, net

     2,813         2,490   
  

 

 

    

 

 

 

Other assets

     

Goodwill

     50,615         50,695   

Intangible assets, net

     7,206         8,044   

Deferred tax assets

     4,089         4,089   

Other assets

     399         513   
  

 

 

    

 

 

 

Total other assets

     62,309         63,341   
  

 

 

    

 

 

 

Total assets

   $ 150,510       $ 154,692   
  

 

 

    

 

 

 

Liabilities and stockholders’ equity

     

Current liabilities

     

Accounts payable

   $ 4,929       $ 5,266   

Accrued expenses

     29,286         29,313   

Current maturities of long-term debt

     3,527         6,569   

Deferred revenue

     2,094         2,145   
  

 

 

    

 

 

 

Total current liabilities

     39,836         43,293   
  

 

 

    

 

 

 

Long-term debt, less current maturities

     22,000         24,958   

Total stockholders’ equity

     88,674         86,441   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 150,510       $ 154,692   
  

 

 

    

 

 

 


Segment Information (Unaudited)

 

     For the Three Months Ended June 30, 2012  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 58,656      $ 11,625      $ —        $ 70,281   

Cost of service revenues

     43,532        6,330        —          49,862   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     15,124        5,295        —          20,419   

Gross profit percentage

     25.8     45.5       29.1

General and administrative expenses

     7,585        5,338        4,257        17,180   

Depreciation and amortization

     461        4        170        635   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     8,046        5,342        4,427        17,815   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 7,078      $ (47   $ (4,427   $ 2,604   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income percentage

     12.1     -0.4     -6.3     3.7

 

     For the Three Months Ended June 30, 2011  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 55,009      $ 13,243      $ —        $ 68,252   

Cost of service revenues

     41,076        7,066        —          48,142   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     13,933        6,177        —          20,110   

Gross profit percentage

     25.3     46.6       29.5

General and administrative expenses

     7,304        5,208        3,981        16,493   

Depreciation and amortization

     609        129        189        927   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     7,913        5,337        4,170        17,420   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 6,020      $ 840      $ (4,170   $ 2,690   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income percentage

     10.9     6.3     -6.1     3.9

 

     For the Six Months Ended June 30, 2012  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 115,579      $ 22,626      $ —        $ 138,205   

Cost of service revenues

     86,161        12,984        —          99,145   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     29,418        9,642        —          39,060   

Gross profit percentage

     25.5     42.6       28.3

General and administrative expenses

     14,993        10,845        8,373        34,211   

Gain on sale of agency

     —          —          (495     (495

Depreciation and amortization

     927        7        335        1,269   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     15,920        10,852        8,213        34,985   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 13,498      $ (1,210   $ (8,213   $ 4,075   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income percentage

     11.7     -5.3     -5.9     2.9

 

     For the Six Months Ended June 30, 2011  
     Home & Community     Home Health     Corporate     Total  

Net service revenues

   $ 109,152      $ 25,942      $ —        $ 135,094   

Cost of service revenues

     81,853        14,077        —          95,930   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     27,299        11,865        —          39,164   

Gross profit percentage

     25.0     45.7       29.0

General and administrative expenses

     14,735        10,070        7,807        32,612   

Depreciation and amortization

     1,219        257        380        1,856   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     15,954        10,327        8,187        34,468   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

   $ 11,345      $ 1,538      $ (8,187   $ 4,696   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income percentage

     10.4     5.9     -6.1     3.5


Key Statistical and Financial Data (Unaudited)

 

     For the Three Months Ended June 30,     For the Six Months Ended June 30,  
             2012                     2011                     2012             2011          

General:

        

Adjusted EBITDA (in thousands) (1)

   $ 3,312      $ 3,695      $ 5,484      $ 6,697   

States served at period end

     19        19        19        19   

Locations at period end

     117        129        117        129   

Employees at period end

     14,289        13,168        14,289        13,168   

Home & Community

        

Average census

     23,714        22,753        23,447        22,629   

Billable hours (in thousands)

     3,477        3,229        6,851        6,414   

Billable hours per business day

     54,334        50,456        53,522        50,506   

Revenues per billable hour

   $ 16.86      $ 17.03      $ 16.86      $ 17.02   

Home Health

        

Medicare admissions (2)

     2,012        2,274        4,183        4,547   

Non-Medicare admissions

     1,236        1,707        2,596        3,321   

Medicare revenues per episode completed

   $ 2,551      $ 2,517      $ 2,565      $ 2,528   

Percentage of Revenues by Payor:

        

State, local or other governmental

     82     80     83     80

Medicare

     11     12     11     12

Other

     7     8     6     8

 

(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.
(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 June 30,      For the Six Months Ended June 30,  
             2012                      2011                      2012                      2011          

Reconciliation of Adjusted EBITDA to Net Income:

           

Net income

   $ 1,464       $ 1,333       $ 2,093       $ 2,186   

Net interest expense

     426         668         830         1,381   

Income tax expense

     714         689         1,152         1,129   

Depreciation and amortization

     635         927         1,269         1,856   

Stock-based compensation expense

     73         78         140         145   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 3,312       $ 3,695       $ 5,484       $ 6,697   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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.