Full Press Release Details
| Contacts: | ||||
| Brian W. Poff | Dru Anderson | |||
| Executive Vice President, | Corporate Communications, Inc. | |||
| Chief Financial Officer | (615) 324-7346 | |||
| Addus HomeCare Corporation | dru.anderson@cci-ir.com | |||
| (469) 535-8200 | ||||
| investorrelations@addus.com |
ADDUS HOMECARE ANNOUNCES FOURTH-QUARTER 2018 FINANCIAL RESULTS
Revenues Increase 24.8 % to $139.8 Million
Net Income Increases 52.6% to $4.8 Million, or $0.36 per Diluted Share,
and Adjusted Diluted Earnings Per Share of $0.55
Adjusted EBITDA Increases 17.0% to $12.3 Million
Frisco, Texas (March 4, 2019) Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced its financial results
for the fourth quarter and year ended December 31, 2018.
Net service revenues increased 24.8% for the quarter to $139.8 million from
$112.0 million for the fourth quarter of 2017. Net income for the quarter was $4.8 million, an increase of 52.6% from $3.1 million for the fourth quarter of 2017. Net income per diluted share for the fourth quarter of 2018 was $0.36,
compared with $0.27 per diluted share for the fourth quarter of 2017, an increase of 33.3%. Adjusted net income per diluted share increased 22.2% to $0.55 for the fourth quarter of 2018 from $0.45 for the fourth quarter of 2017.
Adjusted net income per diluted share for the fourth quarter of 2018 excludes M&A expenses of $0.11, stock-based compensation expense of $0.07 and
restructuring charges of $0.02. Adjusted net income per diluted share for the fourth quarter of 2017 excludes a non-cash increase in the provision for income taxes of $1.3 million, or $0.12 per diluted
share, due to a write-down of net deferred tax assets pursuant to the Tax Cuts and Jobs Act, M&A expenses of $0.04, stock-based compensation expense of $0.04, and gain on sale and divestiture of $0.01. (See pages
8-9 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)
For 2018, net service revenues were $518.1 million, up 21.6% from $426.0 million for 2017. Net income for 2018 increased 27.9% to $17.5 million
from $13.7 million for 2017. Net income per diluted share was $1.41 for 2018, an increase of 20.5% compared with $1.17 per diluted share for 2017. Adjusted net income per diluted share increased 22.5% to $1.96 for 2018 from $1.60 for 2017.
Adjusted EBITDA increased 17.0% for the fourth quarter of 2018 to $12.3 million from $10.6 million for the fourth quarter of 2017. For 2018,
Adjusted EBITDA increased 19.1% to $43.9 million from $36.9 million in 2017.
Addus delivered solid results for the fourth quarter of
2018, marking a strong finish to our year, remarked Dirk Allison, President and Chief Executive Officer of Addus HomeCare Corporation. We are pleased with the positive trends in revenue growth for the fourth quarter, with personal care
net service revenues up 15.9%, reflecting a 13.2% increase in billable hours per business day and a 0.8% increase in revenue per billable hour, compared with the fourth quarter of 2017. Same-store revenue increased 2.4% for the fourth quarter, below
our target range of 3% to 5%, primarily due to the exclusion of a rate increase to offset the Chicago minimum wage increase in the Illinois current fiscal year budget.
ADUS Reports Fourth-Quarter 2018 Results
Our results in 2018 reflect execution of our growth strategy, as we completed several key acquisitions
during the year that added over $100 million in annualized revenue. As expected, we completed the integration of Arcadia and Ambercare during the fourth quarter, allowing us to further expand our market share and diversify our client base in
targeted markets, added Mr. Allison.
At the end of 2018, the Company had cash of $70.4 million and bank debt of $20.0 million, while
availability under its revolving credit facility was $142.9 million. Net cash provided by operating activities was $8.5 million for the fourth quarter of 2018 and $33.2 million for the full year.
Mr. Allison concluded, Looking ahead to 2019, we believe we are well positioned to achieve further profitable growth both from our current
operations and acquisitions. Our objectives for organic growth for the year are consistent with our targeted range of 3% to 5% for same-store revenue growth. In addition, we previously announced a definitive agreement to purchase VIP Health Care
Services, with annual revenues of approximately $50 million, and we expect to close this transaction during the second quarter of 2019. We continue to pursue other potential acquisitions in 2019 that fit with our strategic plan, and we have the
financial strength to pursue additional growth opportunities that we believe will enhance our market presence and add shareholder value.
Non-GAAP Financial Measures
The information provided in this release includes adjusted net income per diluted share,
adjusted EBITDA and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income per diluted share as net income per diluted share, adjusted for M&A
expenses, stock-based compensation expense, restructure charges, severance and other costs, write off of debt issuance costs, interest income from the State of Illinois and gain on sale of ADS. The Company defines adjusted EBITDA as net income
before interest expense, interest income, other non-operating income, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges, severance and other costs,
interest income from the State of Illinois and gain on sale of ADS. The Company defines adjusted net service revenues as net service revenues adjusted for the closure of certain sites. The Company has provided, in the financial statement tables
included in this press release, a reconciliation of adjusted net income per diluted share to net income per diluted share, a reconciliation of adjusted EBITDA to net income and a reconciliation of adjusted net service revenues to net service
revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues are 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 to 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 host a conference call on Tuesday, March 5, 2019, beginning at 9:00 a.m. Eastern time. The toll-free
dial-in number is (877) 930-8289 (international dial-in number is (253) 336-8714),
pass code 1057938. A telephonic replay of the conference call will be available through midnight on March 19, 2019, by dialing (855) 859-2056 (international dial-in
number is (404) 537-3406) and entering pass code 1057938.
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.
ADUS Reports Fourth-Quarter 2018 Results
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, will, and similar expressions. These forward-looking statements are based on our current expectations and beliefs
concerning future developments and their potential effect on us. 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 discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected
increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and 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 Addus HomeCare s relationships with referral sources, increased competition for Addus HomeCare s services, changes in the interpretation of government regulations, the
uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, our ability to effectively integrate, manage and maintain the security of our information systems, higher than
anticipated costs, lower than anticipated cost savings, any failure of Illinois to enact a minimum wage offset and/or the timing of any such enactment, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated
receipt of payments will materialize 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 14, 2018, its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2018, and its Prospectus Supplement filed with the Securities and Exchange Commission
on August 16, 2018, which are all available at 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. In addition,
these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included
in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).
Addus is a provider of home care services
that include, primarily, personal care services that assist with activities of daily living, as well as hospice and home health services. Addus consumers are primarily persons who, without these services, 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, managed care organizations, commercial insurers and private individuals. Addus currently
provides home care services to approximately 39,000 consumers through 156 locations across 24 states. For more information, please visit www.addus.com.
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (amounts and shares in thousands, except per share data) (Unaudited) | ||||||||||||||||
| Income Statement Information: | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2018 | 2017 (A) | 2018 | 2017 (B) | |||||||||||||
| Net service revenues | $ | 139,803 | $ | 112,028 | $ | 518,119 | $ | 425,994 | ||||||||
| Cost of service revenues | 101,859 | 81,243 | 379,843 | 310,119 | ||||||||||||
| Gross profit | 37,944 | 30,785 | 138,276 | 115,875 | ||||||||||||
| 27.1 | % | 27.5 | % | 26.7 | % | 27.2 | % | |||||||||
| General and administrative expenses | 28,938 | 19,662 | 105,025 | 76,902 | ||||||||||||
| (Gain) loss on sale of assets | 38 | (402 | ) | 38 | (2,467 | ) | ||||||||||
| Depreciation and amortization | 1,967 | 1,853 | 8,642 | 6,663 | ||||||||||||
| Provision for doubtful accounts | 58 | 2,202 | 272 | 8,409 | ||||||||||||
| Total operating expenses | 31,001 | 23,315 | 113,977 | 89,507 | ||||||||||||
| Operating income from continuing operations | 6,943 | 7,470 | 24,299 | 26,368 | ||||||||||||
| Interest expense | 1,179 | 841 | 5,016 | 4,472 | ||||||||||||
| Interest income | (125 | ) | (14 | ) | (2,592 | ) | (66 | ) | ||||||||
| Other income | (52 | ) | (217 | ) | ||||||||||||
| Income from continuing operations before income taxes | 5,889 | 6,695 | 21,875 | 22,179 | ||||||||||||
| Income tax expense from continuing operations | 1,213 | 3,695 | 4,498 | 8,645 | ||||||||||||
| Net income from continuing operations | 4,676 | 3,000 | 17,377 | 13,534 | ||||||||||||
| Income from discontinued operations, net of tax | 126 | 147 | 126 | 147 | ||||||||||||
| Earnings from discontinued operations | 126 | 147 | 126 | 147 | ||||||||||||
| Net income | $ | 4,802 | $ | 3,147 | $ | 17,503 | $ | 13,681 | ||||||||
| Net income per share: | ||||||||||||||||
| Continuing Operations | $ | 0.35 | $ | 0.26 | $ | 1.40 | $ | 1.16 | ||||||||
| Discontinued Operations | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||
| Weighted average number of common shares outstanding diluted | 13,381 | 11,638 | 12,383 | 11,623 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net cash provided by operating activities | $ | 8,524 | $ | 10,193 | $ | 33,203 | $ | 52,771 | ||||||||
| Net cash (used in) investing activities | (2,058 | ) | (1,160 | ) | (67,789 | ) | (24,268 | ) | ||||||||
| Net cash (used in) provided by financing activities | (83,537 | ) | (967 | ) | 51,238 | 17,238 | ||||||||||
| Net change in cash | (77,071 | ) | 8,066 | 16,652 | 45,741 | |||||||||||
| Cash at the beginning of the period | 147,477 | 45,688 | 53,754 | 8,013 | ||||||||||||
| Cash at the end of the period | $ | 70,406 | $ | 53,754 | $ | 70,406 | $ | 53,754 |
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) | ||||||||
| December 31, | ||||||||
| 2018 | 2017 (A) | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 70,406 | $ | 53,754 | ||||
| Accounts receivable, net | 108,000 | 92,888 | ||||||
| Prepaid expenses and other current assets | 7,098 | 8,379 | ||||||
| Total current assets | 185,504 | 155,021 | ||||||
| Property and equipment, net | 10,658 | 7,489 | ||||||
| Other assets | ||||||||
| Goodwill | 135,442 | 90,339 | ||||||
| Intangible assets, net | 23,784 | 16,596 | ||||||
| Deferred tax assets | 1,601 | |||||||
| Total other assets | 159,226 | 108,536 | ||||||
| Total assets | $ | 355,388 | $ | 271,046 | ||||
| Liabilities and Stockholders Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 12,238 | $ | 6,736 | ||||
| Accrued expenses | 49,204 | 44,596 | ||||||
| Current portion of long-term debt, net of debt issuance costs | 62 | 3,099 | ||||||
| Total current liabilities | 61,504 | 54,431 | ||||||
| Long-term debt, less current portion, net of debt issuance costs | 17,222 | 39,860 | ||||||
| Deferred tax liabilities, net | 494 | |||||||
| Other long-term liabilities | 635 | 446 | ||||||
| Total long-term liabilities | 18,351 | 40,306 | ||||||
| Total liabilities | 79,855 | 94,737 | ||||||
| Total stockholders equity | 275,533 | 176,309 | ||||||
| Total liabilities and stockholders equity | $ | 355,388 | $ | 271,046 |
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Net Service Revenues by Segment (Amounts in thousands) (Unaudited) | ||||||||||||||||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Personal Care | $ | 129,805 | $ | 112,028 | $ | 492,413 | $ | 425,994 | ||||||||
| Hospice | 7,085 | 18,850 | ||||||||||||||
| Home Health | 2,913 | 6,856 | ||||||||||||||
| Total Revenue | $ | 139,803 | $ | 112,028 | $ | 518,119 | $ | 425,994 |
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Key Statistical and Financial Data (Unaudited) | ||||||||||||||||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| General | ||||||||||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 12,344 | $ | 10,551 | $ | 43,948 | $ | 36,897 | ||||||||
| States served at period end | 24 | 24 | ||||||||||||||
| Locations at period end | 156 | 116 | ||||||||||||||
| Employees at period end | 33,153 | 26,097 | ||||||||||||||
| Personal Care | ||||||||||||||||
| Average billable census same store (2) | 33,992 | 34,730 | 34,056 | 35,343 | ||||||||||||
| Average billable census acquisitions | 3,575 | 3,541 | ||||||||||||||
| Average billable census total (2) | 37,567 | 34,730 | 37,597 | 35,343 | ||||||||||||
| Billable hours (in thousands) | 7,069 | 6,148 | 26,934 | 23,833 | ||||||||||||
| Average billable hours per census per month | 62.1 | 59.0 | 59.3 | 56.2 | ||||||||||||
| Billable hours per business day | 107,106 | 94,582 | 103,195 | 91,664 | ||||||||||||
| Revenues per billable hour | $ | 18.36 | $ | 18.21 | $ | 18.28 | $ | 17.86 | ||||||||
| Hospice | ||||||||||||||||
| Admissions | 418 | 1,061 | ||||||||||||||
| Average daily census | 528 | 528 | ||||||||||||||
| Average length of stay | 120.7 | 136.2 | ||||||||||||||
| Patient days | 48,540 | 128,819 | ||||||||||||||
| Revenue per patient day | $ | 145.97 | $ | $ | 146.33 | $ | ||||||||||
| Home Health | ||||||||||||||||
| New Admissions | 716 | 1,757 | ||||||||||||||
| Recertifications | 458 | 1,443 | ||||||||||||||
| Total Volume | 1,174 | 3,200 | ||||||||||||||
| Visits | 19,080 | 53,711 | ||||||||||||||
| Percentage of Revenues by Payor: | ||||||||||||||||
| Personal Care | ||||||||||||||||
| State, local and other governmental programs | 56.8 | % | 62.4 | % | 58.2 | % | 64.2 | % | ||||||||
| Managed care organizations | 36.3 | 34.8 | 35.3 | 33.1 | ||||||||||||
| Private duty | 4.0 | 2.2 | 4.1 | 2.1 | ||||||||||||
| Commercial | 1.5 | 0.6 | 1.3 | 0.6 | ||||||||||||
| Other | 1.4 | 1.1 | ||||||||||||||
| Hospice | ||||||||||||||||
| Medicare | 93.5 | % | % | 93.6 | % | % | ||||||||||
| Managed care organizations | 4.6 | 5.6 | ||||||||||||||
| Other | 1.9 | 0.8 | ||||||||||||||
| Home Health | ||||||||||||||||
| Medicare | 84.0 | % | % | 88.0 | % | % | ||||||||||
| Managed care organizations | 14.5 | 11.0 | ||||||||||||||
| Other | 1.5 | 1.0 |
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (Unaudited) | ||||||||||||||||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income: (1) | ||||||||||||||||
| Net income | $ | 4,802 | $ | 3,147 | $ | 17,503 | $ | 13,681 | ||||||||
| Less: (Earnings) from discontinued operations, net of tax | (126 | ) | (147 | ) | (126 | ) | (147 | ) | ||||||||
| Net income from continuing operations | 4,676 | 3,000 | 17,377 | 13,534 | ||||||||||||
| Interest expense, net | 828 | 827 | 4,451 | 3,083 | ||||||||||||
| Interest income from Illinois | (2,253 | ) | ||||||||||||||
| Secondary offering costs | 124 | 189 | ||||||||||||||
| Write off debt issuance costs | 226 | 226 | 1,323 | |||||||||||||
| Write down deferred tax asset/impact of Tax Reform Act | 1,305 | 1,305 | ||||||||||||||
| Loss on sale of assets | 38 | 38 | ||||||||||||||
| Gain on sale of joint ventures/adult day service centers | (402 | ) | (2,467 | ) | ||||||||||||
| Other non-operating income | (52 | ) | (217 | ) | ||||||||||||
| Income tax expense | 1,213 | 2,390 | 4,498 | 7,340 | ||||||||||||
| Depreciation and amortization | 1,967 | 1,853 | 8,642 | 6,663 | ||||||||||||
| M&A expenses | 1,790 | 774 | 4,989 | 2,116 | ||||||||||||
| Stock-based compensation expense | 1,148 | 734 | 4,109 | 2,552 | ||||||||||||
| Restructure charges | 297 | 76 | 1,035 | 627 | ||||||||||||
| Severance and other costs | 37 | 46 | 647 | 1,038 | ||||||||||||
| Adjusted EBITDA | $ | 12,344 | $ | 10,551 | $ | 43,948 | $ | 36,897 | ||||||||
| Reconciliation of Adjusted Net Income to Net Income: (2) | ||||||||||||||||
| Net income | $ | 4,802 | $ | 3,147 | $ | 17,503 | $ | 13,681 | ||||||||
| Earnings from discontinued operations, net of tax | (126 | ) | (147 | ) | (126 | ) | (147 | ) | ||||||||
| Interest income from Illinois, net of tax | (1,790 | ) | ||||||||||||||
| Write down deferred tax asset from Tax Reform Act per diluted share | 1,554 | 1,554 | ||||||||||||||
| Gain on sale of joint ventures/adult day service centers, net of tax | (276 | ) | (1,532 | ) | ||||||||||||
| Write off debt issuance costs, net of tax | 909 | |||||||||||||||
| Other non-operating income, net of tax | (36 | ) | (149 | ) | ||||||||||||
| M&A expenses, net of tax | 1,415 | 533 | 3,954 | 1,455 | ||||||||||||
| Stock-based compensation expense, net of tax | 903 | 504 | 3,256 | 1,754 | ||||||||||||
| Restructuring charges, net of tax | 331 | 52 | 969 | 431 | ||||||||||||
| Severance and other costs, net of tax | 29 | 32 | 512 | 713 | ||||||||||||
| Adjusted Net Income | $ | 7,354 | $ | 5,363 | $ | 24,278 | $ | 18,669 |
ADUS Reports Fourth-Quarter 2018 Results
| ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Continued) (amounts in thousands, except per share data) (Unaudited) | ||||||||||||||||
| For the Three Months Ended December 31, | For the Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share: (3) | ||||||||||||||||
| Net income per diluted share | $ | 0.35 | $ | 0.26 | $ | 1.40 | $ | 1.16 | ||||||||
| Interest income from Illinois per diluted share | (0.14 | ) | ||||||||||||||
| Write down deferred tax asset from Tax Reform Act per diluted share | 0.12 | 0.12 | ||||||||||||||
| Write off debt issuance costs per diluted share | 0.09 | |||||||||||||||
| Gain on sale of adult day service centers per diluted share | (0.12 | ) | ||||||||||||||
| Gain on sale of joint venture divestiture per diluted share | (0.01 | ) | (0.01 | ) | ||||||||||||
| M&A expenses per diluted share | 0.11 | 0.04 | 0.32 | 0.12 | ||||||||||||
| Restructure charges per diluted share | 0.02 | 0.08 | 0.03 | |||||||||||||
| Severance and other costs per diluted share | 0.04 | 0.06 | ||||||||||||||
| Stock-based compensation expense per diluted share | 0.07 | 0.04 | 0.26 | 0.15 | ||||||||||||
| Adjusted Net Income Per Diluted Share | $ | 0.55 | $ | 0.45 | $ | 1.96 | $ | 1.60 | ||||||||
| Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (4) | ||||||||||||||||
| Net service revenues | $ | 139,803 | $ | 112,028 | $ | 518,119 | $ | 425,994 | ||||||||
| Revenues associated with the closure of certain sites | 2 | (1,339 | ) | |||||||||||||
| Adjusted Net Service Revenues | $ | 139,803 | $ | 112,028 | $ | 518,121 | $ | 424,655 |