Full Press Release Details
| Contacts: | ||
| Dennis Meulemans | Scott Brittain | |
| Chief Financial Officer | Corporate Communications, Inc. | |
| Addus HomeCare | (615) 324-7308 | |
| (630) 296-3400 | scott.brittain@cci-ir.com | |
| dmeulemans@addus.com |
ADDUS HOMECARE ANNOUNCES THIRD QUARTER 2014 RESULTS
Net service revenues increase 21.3% to $81.7 million
Net income from continuing operations grew to $0.29 per diluted share, up 16.0%
Downers Grove, Illinois (October 30, 2014) Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of home and community-based
services that primarily are social in nature, provided in the home and focused on the dual eligible population, today announced its financial results for the third quarter and nine months ended September 30, 2014.
For the third quarter, net service revenues increased 21.3% to $81.7 million from $67.3 million for the third quarter of 2013. Net income from continuing
operations was $3.2 million for the third quarter of 2014, a 16.9% increase from $2.8 million for the third quarter last year, while net income from continuing operations per diluted share rose 16.0% to $0.29 from $0.25.
Net service revenues for the first nine months of 2014 were $230.3 million, a 17.5% increase from $196.1 million for the same prior-year period. Net income
from continuing operations for the first nine months of 2014 was $8.3 million, or $0.75 per diluted share, compared with $8.0 million or $0.73 per diluted share for the same prior year period. Net income from continuing operations for the first nine
months of 2014 included a charge for acquisition transaction expense totaling $0.03 per diluted share. Excluding this item, adjusted net income from continuing operations per diluted share increased 6.9% to $0.78 for the first nine months of 2014
from $0.73 for the same period in 2013.
Addus produced significant profitable growth for the third quarter of 2014, as organic growth and the
impact of acquisitions since the third quarter last year drove a 21.3% increase in revenues, our highest quarterly revenue growth as a public company, commented Mark Heaney, President and Chief Executive Officer of Addus HomeCare. Our
16.9% growth in net income from continuing operations reflected anticipated expense increases for our technology rollout, SOX 404 compliance efforts and the increased amortization related to our acquisitions. Adjusted EBITDA rose 27.4% to $6.3
million for the third quarter and 18.9% to $16.6 million for the first nine months of 2014.
ADUS Reports Third Quarter 2014 Results
Third-quarter revenue growth reflected a 7.2% increase in same-store sales, with the remaining 14.1% increase
attributable to acquisitions. Average billable census increased 18.4% for the third quarter of 2014 from the third quarter last year. Same-store census grew 7.6%, with acquisitions driving the remaining 10.8% increase in census. Average revenue per
billable hour remained relatively stable at $17.03 for the third quarter of 2014 compared with $17.08 for the third quarter last year.
third quarter of 2014, Addus had $14.1 million in cash, no bank debt and $40 million of availability under its revolving credit facility. Consistent with historical payment flows from the State of Illinois, net cash used in operations was $7.4
million for the quarter, while net cash provided by operations was $7.6 million for the first nine months of 2014.
Heaney added, In addition to our
financial results, we are also pleased with our initiatives to build our sales capabilities and the resulting organic growth of our existing home and community-based services. We are also gratified by the growth generated from acquisitions, and we
continue to evaluate additional opportunities, especially in those states that are more actively engaged in transitioning dual eligible consumers to MCOs. We also continue to make important progress regarding several strategic initiatives that
support long-term growth as we enter new states and that give us competitive advantages as we grow existing markets.
As states transition
management of their dual eligible populations to managed care plans, we remain focused on positioning the Company as an integral part of the continuum of care we believe MCOs will be expected to provide these consumers. The growing impact of this
transition was evident in the third quarter, as our revenues from managed care increased to 9.5% of total net service revenues for the third quarter compared to 1.0% for the same prior-year quarter. While the majority of the managed care revenues
were generated from acquisitions, we noted a shift in same-store MCO census and revenues, with same-store revenues from MCOs growing to 2.4% of total revenue for the third quarter of 2014 compared with 1.0% for the third quarter last year and to
1.5% compared with 0.5% for the nine months ended September 30, 2014 and 2013, respectively.
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 discontinued
operations, interest expense, taxes, depreciation, amortization, M&A 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 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.
ADUS Reports Third Quarter 2014 Results
Addus will host a conference call to discuss its results for the third quarter today beginning at 5:00 p.m. Eastern time. The toll-free dial-in number for the
conference call is (877) 474-9501 (international dial-in number is (857) 244-7554), passcode 10423889. A telephonic replay of the conference call will be available through midnight on November 6, 2014, by dialing (888) 286-8010
(international dial-in number is (617) 801-6888) and entering passcode 54894257.
A live broadcast of the 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.
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 anticipated transition to managed care providers, expected benefits and 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, 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 17, 2014, and in Addus
HomeCare s Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission on May 7, 2014, and August 11, 2014, 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).
ADUS Reports Third Quarter 2014 Results
Addus is a comprehensive provider of home and community-based services that primarily are social in nature, provided in the home and focused on the dual
eligible population. Addus services include personal care and assistance with activities of daily living, and adult day care. Addus consumers are individuals 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. For more information, please visit www.addus.com.
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 September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net service revenues | $ | 81,658 | $ | 67,306 | $ | 230,306 | $ | 196,059 | ||||||||
| Cost of service revenues | 59,818 | 50,080 | 169,218 | 146,422 | ||||||||||||
| Gross profit | 21,840 | 17,226 | 61,088 | 49,637 | ||||||||||||
| 26.7 | % | 25.6 | % | 26.5 | % | 25.3 | % | |||||||||
| General and administrative expenses | 15,773 | 12,424 | 45,576 | 36,026 | ||||||||||||
| Depreciation and amortization | 1,106 | 539 | 2,684 | 1,626 | ||||||||||||
| Total operating expenses | 16,879 | 12,963 | 48,260 | 37,652 | ||||||||||||
| Operating income from continuing operations | 4,961 | 4,263 | 12,828 | 11,985 | ||||||||||||
| Total interest expense (income), net | 180 | (24 | ) | 484 | 326 | |||||||||||
| Income from continuing operations before taxes | 4,781 | 4,287 | 12,344 | 11,659 | ||||||||||||
| Income tax expense | 1,544 | 1,517 | 4,024 | 3,620 | ||||||||||||
| Net income from continuing operations | 3,237 | 2,770 | 8,320 | 8,039 | ||||||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from home health business, net of tax | (203 | ) | (890 | ) | ||||||||||||
| Gain on sale of home health business, net of tax | 11,111 | |||||||||||||||
| Net income | $ | 3,237 | $ | 2,567 | $ | 8,320 | $ | 18,260 | ||||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | ||||||||||||||||
| Continuing operations | $ | 0.30 | $ | 0.26 | $ | 0.76 | $ | 0.75 | ||||||||
| Discontinued operations | (0.02 | ) | 0.95 | |||||||||||||
| Basic income per share | $ | 0.30 | $ | 0.24 | $ | 0.76 | $ | 1.70 | ||||||||
| Diluted | ||||||||||||||||
| Continuing operations | $ | 0.29 | $ | 0.25 | $ | 0.75 | $ | 0.73 | ||||||||
| Discontinued operations | (0.02 | ) | 0.93 | |||||||||||||
| Diluted income per share | $ | 0.29 | $ | 0.23 | $ | 0.75 | $ | 1.66 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 10,927 | 10,787 | 10,895 | 10,783 | ||||||||||||
| Diluted | 11,154 | 11,071 | 11,122 | 11,006 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net cash (used in) provided by operating activities | $ | (7,413 | ) | $ | (9,130 | ) | $ | 7,590 | $ | 25,103 | ||||||
| Net cash (used in) provided by investing activities | (1,958 | ) | (183 | ) | (13,149 | ) | 19,082 | |||||||||
| Net cash used in (provided by) financing activities | 3,904 | 4,118 | (16,458 | ) | ||||||||||||
| Net change in cash | (5,467 | ) | (9,313 | ) | (1,441 | ) | 27,727 | |||||||||
| Cash at the beginning of the period | 19,591 | 38,777 | 15,565 | 1,737 | ||||||||||||
| Cash at the end of the period | $ | 14,124 | $ | 29,464 | $ | 14,124 | $ | 29,464 |
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| September 30, | ||||||||
| 2014 | 2013 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 14,124 | $ | 29,464 | ||||
| Accounts receivable, net | 62,121 | 54,516 | ||||||
| Prepaid expenses and other current assets | 6,937 | 6,167 | ||||||
| Deferred tax assets | 8,326 | 7,258 | ||||||
| Total current assets | 91,508 | 97,405 | ||||||
| Property and equipment, net | 7,646 | 2,471 | ||||||
| Other assets | ||||||||
| Goodwill | 64,237 | 50,416 | ||||||
| Intangible assets, net | 11,043 | 5,352 | ||||||
| Investment in joint venture | 900 | 900 | ||||||
| Other assets | 13 | 173 | ||||||
| Total other assets | 76,193 | 56,841 | ||||||
| Total assets | $ | 175,347 | $ | 156,717 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,613 | $ | 4,379 | ||||
| Current portion of capital lease obligations | 978 | |||||||
| Accrued expenses | 41,434 | 36,401 | ||||||
| Deferred revenue | 3 | 19 | ||||||
| Total current liabilities | 46,028 | 40,799 | ||||||
| Capital lease obligations, less current portion | 2,926 | |||||||
| Deferred tax liability | 3,441 | 3,097 | ||||||
| Total stockholders equity | 122,952 | 112,821 | ||||||
| Total liabilities and stockholders equity | $ | 175,347 | $ | 156,717 |
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| General: | ||||||||||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 6,305 | $ | 4,950 | $ | 16,617 | $ | 13,976 | ||||||||
| States served at period end | 22 | 21 | ||||||||||||||
| Locations at period end | 132 | 94 | ||||||||||||||
| Employees at period end | 17,504 | 13,660 | ||||||||||||||
| Home & Community | ||||||||||||||||
| Average billable census same store | 29,118 | 27,058 | 30,665 | 26,411 | ||||||||||||
| Average billable census acquisitions | 2,914 | 2,088 | ||||||||||||||
| Average billable census total | 32,032 | 27,058 | 32,753 | 26,411 | ||||||||||||
| Billable hours (in thousands) | 4,749 | 3,941 | 13,511 | 11,517 | ||||||||||||
| Average billable hours per census per month | 49.9 | 48.5 | 45.8 | 48.5 | ||||||||||||
| Billable hours per business day | 74,912 | 59,735 | 70,737 | 59,107 | ||||||||||||
| Revenues per billable hour | $ | 17.03 | $ | 17.08 | $ | 17.05 | $ | 17.02 | ||||||||
| Percentage of Revenues by Payor: | ||||||||||||||||
| State, local and other governmental programs | 85.9 | % | 94.0 | % | 88.6 | % | 94.0 | % | ||||||||
| Managed Care | 9.5 | 1.0 | 6.8 | 0.5 | ||||||||||||
| Private duty | 3.5 | 4.0 | 3.5 | 4.0 | ||||||||||||
| Commercial | 1.1 | % | 1.0 | % | 1.1 | % | 1.5 | % |
| Adjusted EBITDA (1) (Unaudited) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income: | ||||||||||||||||
| Net income | $ | 3,237 | $ | 2,567 | $ | 8,320 | $ | 18,260 | ||||||||
| Less: (Earnings) from discontinued operations, net of tax | 203 | (10,221 | ) | |||||||||||||
| Net income from continuing operations | 3,237 | 2,770 | 8,320 | 8,039 | ||||||||||||
| Interest expense, net | 180 | (24 | ) | 484 | 326 | |||||||||||
| Income tax expense from continuing operations | 1,544 | 1,517 | 4,024 | 3,620 | ||||||||||||
| Depreciation and amortization | 1,106 | 539 | 2,684 | 1,626 | ||||||||||||
| M&A expenses | 7 | 543 | ||||||||||||||
| Stock-based compensation expense | 231 | 148 | 562 | 365 | ||||||||||||
| Adjusted EBITDA | $ | 6,305 | $ | 4,950 | $ | 16,617 | $ | 13,976 |