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 FOURTH QUARTER 2014 RESULTS
Net service revenues increase 18.3% to $82.6 million
Adjusted diluted earnings per share from continuing operations grows 38.5% to $0.36
Net income from continuing operations per diluted share grows 17.9% to $0.33
Downers Grove, Illinois (March 5, 2015) 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 fourth quarter and year ended December 31, 2014.
For the fourth quarter, net service revenues grew 18.3% to $82.6 million from $69.9 million for the fourth quarter of 2013. Net income from continuing
operations was $3.6 million for the fourth quarter of 2014, or $0.33 per diluted share, compared with $3.1 million, or $0.28 per diluted share, for the fourth quarter last year. Adjusted diluted earnings per share from continuing operations grew
38.5% to $0.36 for the fourth quarter of 2014, which exclude legal and consulting expenses related to acquisition activity in both 2014 and 2013 and a favorable impact of higher than expected Worker Opportunity Tax Credits realized in 2013. (See
page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
Net service revenues for 2014 increased
17.7% to $312.9 million from $265.9 million for 2013. Net income from continuing operations for 2014 was $12.0 million, or $1.08 per diluted share, compared with $11.2 million, or $1.01 per diluted share, for 2013. Adjusted diluted earnings per
share from continuing operations grew 14.0% to $1.14 in 2014, which exclude expenses related to acquisition activity in both 2014 and 2013 and a favorable impact of higher than expected Worker Opportunity Tax Credits realized in 2013, including
amounts related to 2012.
We had a strong fourth quarter to complete a successful 2014 for Addus, said Mark Heaney, President and Chief
Executive Officer of Addus HomeCare. We produced significant revenue growth and improved profit margins versus the fourth quarter of 2013, driven by double-digit growth in billable census. These results reflected our continued organic growth
with traditional payors and the ongoing transition of dual eligible consumers to managed care. As a result of this transition, managed care revenues increased to 15.4% of total net revenues compared with 2.1% for the fourth quarter of 2013. Our
fourth quarter results also reflected the full-year impact of our 2013 acquisitions and our acquisition of Aid & Assist at Home in June 2014. We were further pleased to announce our most recent acquisition in early January 2015 of Priority
Home Health Care, Inc., in Ohio, a state in the forefront of transitioning its long-term care programs to managed care organizations (MCOs).
ADUS Reports Fourth Quarter 2014 Results
Addus remains fully engaged in positioning itself to benefit from the ongoing transition to MCOs in
many states across the country. Our initiatives include our marketing and sales efforts with existing and potential MCO customers and our focused acquisition activities. We also continue our investments in our technology infrastructure to transform
a historically paper-based industry and connect our consumers to the healthcare industry electronically.
In addition, we strengthened the depth of
our executive management team during the fourth quarter by naming Maxine Hochhauser as Chief Operating Officer and promoting Darby Anderson to Chief Business Development and Strategy Officer. These appointments recognize both our near and long-term
business development opportunities and our continuing efforts to differentiate Addus through superior execution as the leading home care company serving MCOs.
The Company s 18.3% growth in net revenue for the quarter was driven by an increase in same-store sales of 7.4% and in revenues from acquisitions of
10.9%. These increases reflected a 14.7% rise in average billable census for the quarter. In addition, average billable hours per census per month grew 2.5% for the quarter, and revenue per billable hour increased 0.6%.
Profit margins also increased for the quarter, with gross profit margin up 150 basis points as a percentage of net revenue. These improvements, combined with
revenue growth, produced a 46.8% increase in adjusted EBITDA to $7.1 million for the fourth quarter of 2014 from $4.8 million of the same prior-year quarter. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
At the end of 2014, Addus had $13.4 million in cash, no bank debt and $40 million of availability under its revolving credit facility. Net cash utilized on
operations was $0.6 million for the fourth quarter, and net cash generated by operations was $7.0 million for full-year 2014.
The Company believes the material weaknesses in internal controls that existed on December 31, 2013, have been remediated, which will be reflected in the
Company s 2014 Annual Report on Form 10-K; however, the audit and final testing are not yet complete.
Non-GAAP Financial Measures
The information provided in this release includes adjusted diluted earnings per share from continuing operations and adjusted EBITDA, which are non-GAAP
financial measures. The Company defines adjusted diluted earnings per share from continuing operations as diluted earnings per share from continuing operations, adjusted for M&A expenses and tax benefit from worker opportunity tax credits. The
Company defines adjusted EBITDA 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 diluted earnings per share from continuing operations to diluted earnings per share from continuing operations, and a reconciliation of adjusted EBITDA to net income, in each case, the
most directly comparable GAAP measure. Management believes that adjusted diluted earnings per share from continuing operations and adjusted EBITDA 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
ADUS Reports Fourth Quarter 2014 Results
Addus will host a conference call to discuss its results for the fourth quarter today beginning at 5:00 p.m. Eastern time. The toll-free dial-in number for the
conference call is (866) 383-8009 (international dial-in number is (617) 597-5342), passcode 14146906. A telephonic replay of the conference call will be available through midnight on March 12, 2015, by dialing (888) 286-8010
(international dial-in number is (617) 801-6888) and entering passcode 88120633.
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, August 11, 2014 and November 7, 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).
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.
ADUS Reports Fourth Quarter 2014 Results
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 December 31, | For the Year Ended December 31, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net service revenues | $ | 82,636 | $ | 69,882 | $ | 312,942 | $ | 265,941 | ||||||||
| Cost of service revenues | 59,989 | 51,780 | 229,207 | 198,202 | ||||||||||||
| Gross profit | 22,647 | 18,102 | 83,735 | 67,739 | ||||||||||||
| 27.4 | % | 25.9 | % | 26.8 | % | 25.5 | % | |||||||||
| General and administrative expenses | 16,259 | 14,092 | 61,834 | 50,118 | ||||||||||||
| Depreciation and amortization | 1,146 | 534 | 3,830 | 2,160 | ||||||||||||
| Total operating expenses | 17,405 | 14,626 | 65,664 | 52,278 | ||||||||||||
| Operating income from continuing operations | 5,242 | 3,476 | 18,071 | 15,461 | ||||||||||||
| Total interest expense (income), net | 196 | 160 | 680 | 486 | ||||||||||||
| Income from continuing operations before taxes | 5,046 | 3,316 | 17,391 | 14,975 | ||||||||||||
| Income tax expense | 1,403 | 192 | 5,428 | 3,812 | ||||||||||||
| Net income from continuing operations | 3,643 | 3,124 | 11,963 | 11,163 | ||||||||||||
| Discontinued operations: | ||||||||||||||||
| Income (expense) from home health business, net of tax | 280 | (90 | ) | 280 | (980 | ) | ||||||||||
| (Loss) gain on sale of home health business, net of tax | (2,149 | ) | 8,962 | |||||||||||||
| Net income | $ | 3,923 | $ | 885 | $ | 12,243 | $ | 19,145 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | ||||||||||||||||
| Continuing operations | $ | 0.33 | $ | 0.29 | $ | 1.10 | $ | 1.03 | ||||||||
| Discontinued operations | 0.03 | (0.21 | ) | 0.02 | 0.74 | |||||||||||
| Basic income per share | $ | 0.36 | $ | 0.08 | $ | 1.12 | $ | 1.77 | ||||||||
| Diluted | ||||||||||||||||
| Continuing operations | $ | 0.33 | $ | 0.28 | $ | 1.08 | $ | 1.01 | ||||||||
| Discontinued operations | 0.02 | (0.20 | ) | 0.02 | 0.72 | |||||||||||
| Diluted income per share | $ | 0.35 | $ | 0.08 | $ | 1.10 | $ | 1.73 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 10,929 | 10,838 | 10,900 | 10,826 | ||||||||||||
| Diluted | 11,143 | 11,154 | 11,114 | 11,075 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net cash (used in) provided by operating activities | $ | (562 | ) | $ | 2,290 | $ | 7,028 | $ | 27,393 | |||||||
| Net cash (used in) provided by investing activities | (484 | ) | (16,189 | ) | (13,633 | ) | 2,893 | |||||||||
| Net cash (used in) provided by financing activities | 285 | 4,403 | (16,458 | ) | ||||||||||||
| Net change in cash | (761 | ) | (13,899 | ) | (2,202 | ) | 13,828 | |||||||||
| Cash at the beginning of the period | 14,124 | 29,464 | 15,565 | 1,737 | ||||||||||||
| Cash at the end of the period | $ | 13,363 | $ | 15,565 | $ | 13,363 | $ | 15,565 |
ADUS Reports Fourth Quarter 2014 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| December 31, | ||||||||
| 2014 | 2013 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 13,363 | $ | 15,565 | ||||
| Accounts receivable, net | 68,333 | 61,354 | ||||||
| Prepaid expenses and other current assets | 7,168 | 6,235 | ||||||
| Deferred tax assets | 8,508 | 8,326 | ||||||
| Total current assets | 97,372 | 91,480 | ||||||
| Property and equipment, net | 7,695 | 2,634 | ||||||
| Other assets | ||||||||
| Goodwill | 64,220 | 60,026 | ||||||
| Intangible assets, net | 10,347 | 8,762 | ||||||
| Investment in joint venture | 900 | 900 | ||||||
| Other assets | 269 | 132 | ||||||
| Total other assets | 75,736 | 69,820 | ||||||
| Total assets | $ | 180,803 | $ | 163,934 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,951 | $ | 4,633 | ||||
| Current portion of capital lease obligations | 986 | |||||||
| Current portion of contingent earn-out obligation | 1,000 | |||||||
| Accrued expenses | 37,268 | 40,904 | ||||||
| Total current liabilities | 43,205 | 45,537 | ||||||
| Long-term liabilities | ||||||||
| Deferred tax liabilities | 5,845 | 3,441 | ||||||
| Capital lease obligations, less current portion | 2,677 | |||||||
| Contingent earn-out obligation, less current portion | 1,120 | 1,100 | ||||||
| Total long-term liabilities | 9,642 | 4,541 | ||||||
| Total liabilities | 52,847 | 50,078 | ||||||
| Total stockholders equity | 127,956 | 113,856 | ||||||
| Total liabilities and stockholders equity | $ | 180,803 | $ | 163,934 |
ADUS Reports Fourth Quarter 2014 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| General: | ||||||||||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 7,076 | $ | 4,821 | $ | 23,759 | $ | 18,796 | ||||||||
| States served at period end | 22 | 21 | ||||||||||||||
| Locations at period end | 129 | 121 | ||||||||||||||
| Employees at period end | 18,054 | 16,585 | ||||||||||||||
| Operations: | ||||||||||||||||
| Average billable census - same store | 29,166 | 27,522 | 28,725 | 26,689 | ||||||||||||
| Average billable census - acquisitions | 2,914 | 453 | 2,294 | 113 | ||||||||||||
| Average billable census total | 32,080 | 27,975 | 31,019 | 26,802 | ||||||||||||
| Billable hours (in thousands) | 4,825 | 4,104 | 18,335 | 15,621 | ||||||||||||
| Average billable hours per census per month | 50.1 | 48.9 | 49.3 | 48.6 | ||||||||||||
| Billable hours per business day | 75,385 | 62,175 | 71,903 | 59,850 | ||||||||||||
| Revenues per billable hour | $ | 17.13 | $ | 17.03 | $ | 17.07 | $ | 17.02 | ||||||||
| Percentage of Revenues by Payor: | ||||||||||||||||
| State, local and other governmental programs | 80.3 | % | 93.1 | % | 86.4 | % | 93.6 | % | ||||||||
| Managed Care | 15.4 | 2.1 | 9.1 | 1.0 | ||||||||||||
| Private duty | 3.2 | 3.6 | 3.4 | 3.9 | ||||||||||||
| Commercial | 1.1 | % | 1.2 | % | 1.1 | % | 1.5 | % |
ADUS Reports Fourth Quarter 2014 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP AND GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share data)
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: (1) | ||||||||||||||||
| Net income | $ | 3,923 | $ | 885 | $ | 12,243 | $ | 19,145 | ||||||||
| Less: (Earnings) from discontinued operations, net of tax | (280 | ) | 2,239 | (280 | ) | (7,982 | ) | |||||||||
| Net income from continuing operations | 3,643 | 3,124 | 11,963 | 11,163 | ||||||||||||
| Interest expense, net | 196 | 160 | 680 | 486 | ||||||||||||
| Income tax expense from continuing operations | 1,403 | 192 | 5,428 | 3,812 | ||||||||||||
| Depreciation and amortization | 1,146 | 534 | 3,830 | 2,160 | ||||||||||||
| M&A expenses | 423 | 660 | 1,031 | 660 | ||||||||||||
| Stock-based compensation expense | 265 | 151 | 827 | 515 | ||||||||||||
| Adjusted EBITDA | $ | 7,076 | $ | 4,821 | $ | 23,759 | $ | 18,796 | ||||||||
| Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share: (2) | ||||||||||||||||
| Diluted earnings per share from continuing operations | $ | 0.33 | $ | 0.28 | $ | 1.08 | $ | 1.01 | ||||||||
| M&A expenses | 0.03 | 0.04 | 0.06 | 0.04 | ||||||||||||
| Tax benefit from worker opportunity tax credits | (0.06 | ) | (0.05 | ) | ||||||||||||
| Adjusted diluted earnings per share from continuing operations | $ | 0.36 | $ | 0.26 | $ | 1.14 | $ | 1.00 |