Full Press Release Details
| Contacts: | ||
| Brian W. Poff | Scott Brittain | |
| Executive Vice President, | Corporate Communications, Inc. | |
| Chief Financial Officer | (615) 324-7308 | |
| Addus HomeCare Corporation | scott.brittain@cci-ir.com | |
| (630) 296-3400 | ||
| investorrelations@addus.com |
ADDUS HOMECARE ANNOUNCES THIRD-QUARTER 2016 RESULTS
Net service revenues increase 22.7% year over year to $103.5 million
GAAP diluted EPS of $0.15
Adjusted diluted EPS of $0.39
Downers Grove, Illinois (November 7, 2016) Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of personal care services
provided in the home, today announced its financial results for the third quarter and nine months ended September 30, 2016.
Net service revenues
grew 22.7% to $103.5 million for the third quarter from $84.3 million for the third quarter of 2015. Net income was $1.7 million for the third quarter of 2016 compared with $2.9 million for the third quarter last year. Net income per diluted share
was $0.15 for the third quarter of 2016, down 42.3% from $0.26 for the third quarter of 2015, while adjusted net income per diluted share increased 34.5% to $0.39 from $0.29. Adjusted net income per diluted share for the third quarter of 2016
excludes restructure charges of $0.23, stock-based compensation expense of $0.03, and severance and other costs of $0.02 and includes normalization of effective tax rate expense of $0.04. For the third quarter last year, adjusted net income per
diluted share excludes stock-based compensation expense of $0.03. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
first nine months of 2016, net service revenues increased 17.8% to $297.0 million from $252.1 million for the first nine months of 2015. Net income was $4.5 million for the latest nine months compared with $8.3 million for the same prior-year
period. Net income per diluted share for the first nine months of 2016 was $0.40, a decrease of 45.9% from $0.74 for the first nine months of 2015, while adjusted net income per diluted share increased 17.9% to $0.99 from $0.84.
Dirk Allison, President and Chief Executive Officer of Addus, remarked, We are pleased to report an outstanding third quarter for Addus. We achieved
substantial growth in revenues - including same store growth of 4.1% - and in adjusted EPS. We produced strong cash flow from operations and significantly strengthened our balance sheet, due both to our increased adjusted earnings and to the pay
down of the past-due Illinois non-Medicaid accounts receivable.
For the third quarter, revenue growth was driven by a 22.9% increase in billable
hours per business day. Revenues per billable hour declined slightly for the quarter. While the majority of the growth in billable hours per day was attributable to the first-quarter acquisition of South Shore, same store revenues contributed
meaningfully to revenue growth for the quarter.
ADUS Reports Third-Quarter 2016 Results
The favorable impact of achieving targeted run-rate savings from process improvement and cost reduction
initiatives benefitted third-quarter adjusted earnings per diluted share, as disclosed above, and is reflected in the 45.4% growth in adjusted EBITDA to $8.7 million. During the third quarter, Addus took the previously discussed write-off for the
Contact Center, which accounted for approximately $1.8 million of the $3.7 million restructure charges for the quarter. In addition, the Company closed three underperforming adult day services locations during the third quarter, accounting for the
remainder of the restructure charge.
Addus completed the third quarter of 2016 with $39.4 million in cash, $24.4 million of bank debt and $69.5 million
of availability under its revolving credit facility. Net cash provided by operating activities was $49.3 million for the quarter and $31.0 million for the first nine months of 2016.
Mr. Allison concluded, There are compelling dynamics supporting the long-term growth of the personal care industry, while increasing regulatory pressure
and operating complexity increase consolidation pressures in this highly fragmented industry. We believe Addus is well positioned in this environment, due to our scale and financial strength. We are confident in our ability to deliver high quality,
cost-effective care to our consumers. Through continued execution of proven organic growth and acquisition strategies, we expect to produce further profitable growth and increased 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 and severance and other costs. The Company defines adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, M&A expenses,
stock-based compensation expense, restructure charges and severance and other costs. 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, November 8, 2016, 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 86854992. A telephonic replay of the conference call will be available through midnight on November 15, 2016, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406)
and entering pass code 86854992.
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 Third-Quarter 2016 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, 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, management plans related to 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, higher than anticipated costs, lower than anticipated cost savings, 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 11, 2016, which is 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 comprehensive
personal care services, which are provided in the home. Addus services provide assistance with activities of daily living and adult day care. Addus consumers are primarily persons 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, managed care organizations, commercial insurers and private individuals. At September 30,
2016, Addus provided personal care services to approximately 34,000 consumers through 118 locations across 24 states. For more information, please visit www.addus.com.
ADUS Reports Third-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(amounts and shares in thousands, except per share data)
| Income Statement Information: | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net service revenues | $ | 103,502 | $ | 84,331 | $ | 297,032 | $ | 252,055 | ||||||||
| Cost of service revenues | 76,079 | 60,809 | 219,594 | 182,925 | ||||||||||||
| Gross profit | 27,423 | 23,522 | 77,438 | 69,130 | ||||||||||||
| 26.5 | % | 27.9 | % | 26.1 | % | 27.4 | % | |||||||||
| General and administrative expenses | 23,207 | 18,041 | 64,953 | 52,617 | ||||||||||||
| Depreciation and amortization | 1,721 | 1,197 | 4,943 | 3,504 | ||||||||||||
| Total operating expenses | 24,928 | 19,238 | 69,896 | 56,121 | ||||||||||||
| Operating income from continuing operations | 2,495 | 4,284 | 7,542 | 13,009 | ||||||||||||
| Total interest expense, net | 632 | 163 | 1,714 | 505 | ||||||||||||
| Other income | 126 | 126 | ||||||||||||||
| Income before income taxes | 1,989 | 4,121 | 5,954 | 12,504 | ||||||||||||
| Income tax expense | 290 | 1,234 | 1,498 | 4,202 | ||||||||||||
| Net income | $ | 1,699 | $ | 2,887 | $ | 4,456 | $ | 8,302 | ||||||||
| Net income per diluted share: | $ | 0.15 | $ | 0.26 | $ | 0.40 | $ | 0.74 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Diluted | 11,417 | 11,247 | 11,227 | 11,183 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | 49,256 | $ | (26,258 | ) | $ | 30,991 | $ | 8,786 | |||||||
| Net cash (used in) investing activities | (457 | ) | (555 | ) | (21,617 | ) | (5,712 | ) | ||||||||
| Net cash (used in) provided by financing activities | (17,593 | ) | (334 | ) | 25,968 | (1,560 | ) | |||||||||
| Net change in cash | 31,206 | (27,147 | ) | 35,342 | 1,514 | |||||||||||
| Cash at the beginning of the period | 8,240 | 42,024 | 4,104 | 13,363 | ||||||||||||
| Cash at the end of the period | $ | 39,446 | $ | 14,877 | $ | 39,446 | $ | 14,877 |
ADUS Reports Third-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| September 30, | ||||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 39,446 | $ | 14,877 | ||||
| Accounts receivable, net | 80,454 | 78,395 | ||||||
| Prepaid expenses and other current assets | 4,485 | 7,644 | ||||||
| Deferred tax assets | 8,640 | 8,508 | ||||||
| Total current assets | 133,025 | 109,424 | ||||||
| Property and equipment, net | 5,993 | 8,187 | ||||||
| Other assets | ||||||||
| Goodwill | 73,851 | 65,962 | ||||||
| Intangible assets, net | 16,671 | 10,179 | ||||||
| Investment in joint venture | 900 | 900 | ||||||
| Other assets | 404 | |||||||
| Total other assets | 91,422 | 77,445 | ||||||
| Total assets | $ | 230,440 | $ | 195,056 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,268 | $ | 4,869 | ||||
| Accrued expenses | 43,929 | 42,118 | ||||||
| Current portion of long-term debt, net of debt issuance costs | 2,244 | 1,100 | ||||||
| Current portion of contingent earn-out obligation | 1,250 | |||||||
| Total current liabilities | 50,441 | 49,337 | ||||||
| Long-term debt, less current portion, net of debt issuance costs | 22,723 | 2,162 | ||||||
| Deferred tax liability | 6,815 | 5,832 | ||||||
| Total long-term liabilities | 29,538 | 7,994 | ||||||
| Total liabilities | 79,979 | 57,331 | ||||||
| Total stockholders equity | 150,461 | 137,725 | ||||||
| Total liabilities and stockholders equity | $ | 230,440 | $ | 195,056 |
ADUS Reports Third-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| General: | ||||||||||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 8,652 | $ | 5,950 | $ | 22,808 | $ | 18,233 | ||||||||
| States served at period end | 24 | 21 | ||||||||||||||
| Locations at period end | 118 | 122 | ||||||||||||||
| Employees at period end | 22,140 | 19,642 | ||||||||||||||
| Home & Community | ||||||||||||||||
| Average billable census - same store (2) | 33,041 | 32,407 | 32,786 | 32,808 | ||||||||||||
| Average billable census - acquisitions (3) | 1,251 | 1,107 | ||||||||||||||
| Average billable census total | 34,292 | 32,407 | 33,893 | 32,808 | ||||||||||||
| Billable hours (in thousands) | 5,972 | 4,860 | 17,154 | 14,626 | ||||||||||||
| Average billable hours per census per month | 58.1 | 50.0 | 56.2 | 49.5 | ||||||||||||
| Billable hours per business day | 90,490 | 73,635 | 87,522 | 75,004 | ||||||||||||
| Revenues per billable hour | $ | 17.33 | $ | 17.35 | $ | 17.32 | $ | 17.23 | ||||||||
| Percentage of Revenues by Payor: | ||||||||||||||||
| State, local and other governmental programs | 70.8 | 78.1 | 72.0 | 77.8 | ||||||||||||
| Managed care organizations | 25.8 | 18.1 | 24.4 | 18.2 | ||||||||||||
| Private duty | 2.3 | 2.8 | 2.5 | 3.0 | ||||||||||||
| Commercial | 1.1 | 1.0 | 1.1 | 1.0 |
ADUS Reports Third-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income: (1) | ||||||||||||||||
| Net income | $ | 1,699 | $ | 2,887 | $ | 4,456 | $ | 8,302 | ||||||||
| Interest expense, net | 632 | 163 | 1,714 | 505 | ||||||||||||
| Other non-operating income | (126 | ) | (126 | ) | ||||||||||||
| Income tax expense | 290 | 1,234 | 1,498 | 4,202 | ||||||||||||
| Depreciation and amortization | 1,721 | 1,197 | 4,943 | 3,504 | ||||||||||||
| M&A expenses | 43 | 57 | 785 | 558 | ||||||||||||
| Stock-based compensation expense | 445 | 412 | 1,264 | 1,162 | ||||||||||||
| Restructure charges | 3,690 | 5,243 | ||||||||||||||
| Severance and other costs | 258 | 3,031 | ||||||||||||||
| Adjusted EBITDA | $ | 8,652 | $ | 5,950 | $ | 22,808 | $ | 18,233 | ||||||||
| Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share: (2) | ||||||||||||||||
| Net income per diluted share | $ | 0.15 | $ | 0.26 | $ | 0.40 | $ | 0.74 | ||||||||
| M&A expenses per diluted share | 0.05 | 0.03 | ||||||||||||||
| Normalization of effective tax rate | (0.04 | ) | (0.04 | ) | ||||||||||||
| Restructure charges per diluted share | 0.23 | 0.32 | ||||||||||||||
| Severance and other costs per diluted share | 0.02 | 0.18 | ||||||||||||||
| Stock-based compensation expense per diluted share | 0.03 | 0.03 | 0.08 | 0.07 | ||||||||||||
| Adjusted net income diluted share | $ | 0.39 | $ | 0.29 | $ | 0.99 | $ | 0.84 | ||||||||
| Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (3) | ||||||||||||||||
| Net service revenues | $ | 103,502 | $ | 84,331 | $ | 297,032 | $ | 252,055 | ||||||||
| Revenues associated with the closure of certain sites | (225 | ) | (396 | ) | (721 | ) | (7,410 | ) | ||||||||
| Adjusted net service revenues | $ | 103,277 | $ | 83,935 | $ | 296,311 | $ | 244,645 |