Full Press Release Details
Amy Glynn / Nick Laudico
Phone: (646) 536-7023 / 7030
Email: aglynn@theruthgroup.com
Email: nlaudico@theruthgroup.com
Addus HomeCare Reports First Quarter 2011 Results
First Quarter Financial Highlights
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
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
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.
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.
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.
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
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)
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated
Statements of Income and Cash Flow Information
(amounts and shares in thousands, except per share data)
| 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)
| 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 | % |
| 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 |