Full Press Release Details
| Contacts: | ||
| Don Klink | Scott Brittain | |
| Chief Financial Officer | Corporate Communications, Inc. | |
| Addus HomeCare Corporation | (615) 324-7308 | |
| (630) 296-3400 | scott.brittain@cci-ir.com | |
| investorrelations@addus.com |
ADDUS HOMECARE ANNOUNCES FIRST-QUARTER 2016 RESULTS
Net service revenues increase 13.1% year over year to $92.6 million
Process and cost improvement initiatives well underway
Adjusted diluted EPS grows 21.7% to $0.28; GAAP diluted EPS is $0.01, including write-offs
Downers Grove, Illinois (May 2, 2016) Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of personal care services primarily
provided in the home and focused on the dual eligible population, today announced its financial results for the first quarter ended March 31, 2016.
For the first quarter, net service revenues increased 13.1% to $92.6 million from $81.9 million for the first quarter of 2015. Net income was $0.2 million, or
$0.01 per share, for the first quarter of 2016 compared with net income of $2.2 million, or $0.19 per diluted share, for the first quarter of 2015. The results for the first quarter of 2016 include write-offs of $3.5 million, $2.2 million of which
were related to senior management severance and other related costs, with the remainder related to process improvement and expense reduction initiatives launched in the quarter. Excluding these costs, adjusted net income per diluted share was $0.28
for the first quarter of 2016, an increase of 21.7% compared with $0.23 for the first quarter last year. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
Dirk Allison, President and Chief Executive Officer of Addus, commented Addus produced a strong start to 2016 in the first quarter. Revenue and adjusted
EPS grew at a higher rate than in the past year. We implemented a variety of initiatives to support our strategies for growth while ensuring that costs are in line with revenues. In addition, we completed the acquisition of South Shore.
The Company s revenue growth for the first quarter reflected an 10.8% increase in billable hours per business day compared with the first quarter last
year. First-quarter billable hours per business day grew 8.6% compared with the fourth quarter of 2015. With a 0.4% increase in revenues per billable hour, comparable-quarter revenue per day increased 11.3% versus the first quarter of 2015.
As discussed in our fourth-quarter 2015 earnings release and conference call, we have been focused on process improvement initiatives that result in
expense reduction and improvement in our operating efficiency and scalability to support our growth, added Mr. Allison. We have completed a substantial portion of the plan and are actively implementing a number of these initiatives.
These initiatives resulted in $1.3 million write-offs for the first quarter. In total, we expect these initiatives to result in write-offs of $3.5 million over the first half of 2016, approximately $0.4
million of which will be cash. These initiatives are expected to produce aggregate annualized cost savings of approximately $4.1 million.
ADUS Reports First-Quarter 2016 Results
Details are as follows:
We are pleased with the progress made on these and other initiatives, which we expect to drive meaningful cost reductions by the end of 2016. Through a
disciplined focus on ensuring our investments in new initiatives generate appropriate returns, we expect to enhance our ability to provide our consumers with high quality, cost-effective care, improve our ability to add value to existing and new
customer relationships, and sustain long-term profitable growth both organically and through acquisition.
Addus completed the first quarter with
$9.1 million in cash, $22.0 million of long-term debt related to the acquisition of South Shore, $10.0 million of bank debt and $42.8 million of availability under its revolving credit facility. Net cash used in operating activities was $6.0 million
for the first quarter of 2016, compared with $0.9 million for the prior-year first quarter.
Non-GAAP Financial Measures
The information provided in this release includes adjusted diluted net income per share, Adjusted EBITDA and adjusted net service revenue, which are non-GAAP
financial measures. The Company defines adjusted diluted net income per share as diluted net income per share, adjusted for M&A expenses, restructure charges, severance and other costs and stock compensation. The Company defines Adjusted EBITDA
as earnings 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 revenue as revenue 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 diluted net income per share to diluted net income per share, a reconciliation of Adjusted EBITDA
to net income and a reconciliation of adjusted net service revenue to net service revenue, in each case, the most directly comparable GAAP measure. Management believes that adjusted diluted net income per share, adjusted EBITDA and adjusted net
service revenue 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, May 3, 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 86487320. A telephonic replay of the conference call will be available through midnight on
May 17, 2016, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 86487320.
ADUS Reports First-Quarter 2016 Results
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
Forward-Looking Statements
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 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, estimation inaccuracies in future revenues, margins, earnings and growth, 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 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. 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 comprehensive provider of home
and community-based services that primarily are personal in nature, provided in the home and focused on the dual eligibility 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 First-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 March 31, | |||||||
| 2016 | 2015 | |||||||
| Net service revenues | $ | 92,602 | $ | 81,915 | ||||
| Cost of service revenues | 68,283 | 59,989 | ||||||
| Gross profit | 24,319 | 21,926 | ||||||
| 26.3 | % | 26.8 | % | |||||
| General and administrative expenses | 22,188 | 17,153 | ||||||
| Depreciation and amortization | 1,478 | 1,146 | ||||||
| Total operating expenses | 23,666 | 18,299 | ||||||
| Operating income from continuing operations | 653 | 3,627 | ||||||
| Total interest expense, net | 419 | 173 | ||||||
| Income before income taxes | 234 | 3,454 | ||||||
| Income tax expense | 77 | 1,292 | ||||||
| Net income | $ | 157 | $ | 2,162 | ||||
| Net income per diluted share: | $ | 0.01 | $ | 0.19 | ||||
| Weighted average number of common shares outstanding: | ||||||||
| Diluted | 11,178 | 11,162 | ||||||
| Cash Flow Information: | For the Three Months Ended March 31, | |||||||
| 2016 | 2015 | |||||||
| Net cash (used in) provided by operating activities | $ | (5,959 | ) | $ | (904 | ) | ||
| Net cash (used in) investing activities | (20,791 | ) | (4,981 | ) | ||||
| Net cash (used in) provided by financing activities | 31,726 | (82 | ) | |||||
| Net change in cash | 4,976 | (5,967 | ) | |||||
| Cash at the beginning of the period | 4,104 | 13,363 | ||||||
| Cash at the end of the period | $ | 9,080 | $ | 7,396 |
ADUS Reports First-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 9,080 | $ | 7,396 | ||||
| Accounts receivable, net | 105,771 | 74,370 | ||||||
| Prepaid expenses and other current assets | 3,933 | 6,158 | ||||||
| Deferred tax assets | 8,640 | 8,508 | ||||||
| Total current assets | 127,424 | 96,432 | ||||||
| Property and equipment, net | 7,683 | 8,075 | ||||||
| Other assets | ||||||||
| Goodwill | 73,931 | 66,088 | ||||||
| Intangible assets, net | 19,280 | 11,540 | ||||||
| Investment in joint venture | 900 | 900 | ||||||
| Other assets | 255 | |||||||
| Total other assets | 94,111 | 78,783 | ||||||
| Total assets | $ | 229,218 | $ | 183,290 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,275 | $ | 2,995 | ||||
| Accrued expenses | 41,201 | 38,295 | ||||||
| Current portion of long-term debt | 2,217 | 993 | ||||||
| Current portion of contingent earn-out obligation | 1,250 | 1,000 | ||||||
| Total current liabilities | 48,943 | 43,283 | ||||||
| Long-term debt, less current portion | 31,070 | 2,425 | ||||||
| Contingent earn-out obligation, less current portion | 1,120 | |||||||
| Deferred tax liability | 6,815 | 5,845 | ||||||
| Total long-term liabilities | 37,885 | 9,390 | ||||||
| Total liabilities | 86,828 | 52,673 | ||||||
| Total stockholders equity | 142,390 | 130,617 | ||||||
| Total liabilities and stockholders equity | $ | 229,218 | $ | 183,290 |
ADUS Reports First-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
| For the Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| General: | ||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 6,655 | $ | 5,400 | ||||
| States served at period end | 23 | 22 | ||||||
| Locations at period end | 120 | 132 | ||||||
| Employees at period end | 21,559 | 20,660 | ||||||
| Home & Community: | ||||||||
| Average billable census - same store (2) | 32,344 | 32,648 | ||||||
| Average billable census - acquisitions (3) | 1,291 | |||||||
| Average billable census total | 33,635 | 32,648 | ||||||
| Billable hours (in thousands) | 5,353 | 4,754 | ||||||
| Average billable hours per census per month | 53.7 | 48.5 | ||||||
| Billable hours per business day | 83,648 | 75,468 | ||||||
| Revenues per billable hour | $ | 17.30 | $ | 17.23 | ||||
| Percentage of Revenues by Payor: | ||||||||
| State, local and other governmental programs | 73.2 | % | 77.7 | % | ||||
| Managed care organizations | 23.1 | 18.3 | ||||||
| Private duty | 2.7 | 3.1 | ||||||
| Commercial | 1.0 | % | 0.9 | % |
ADUS Reports First-Quarter 2016 Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
| For the Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Reconciliation of Adjusted EBITDA to Net Income: (1) | ||||||||
| Net income | $ | 157 | $ | 2,162 | ||||
| Interest expense, net | 419 | 173 | ||||||
| Income tax expense | 77 | 1,292 | ||||||
| Depreciation and amortization | 1,478 | 1,146 | ||||||
| M&A expenses | 696 | 291 | ||||||
| Stock-based compensation expense | 337 | 336 | ||||||
| Restructure charge | 895 | |||||||
| Severance and other costs | 2,596 | |||||||
| Adjusted EBITDA | $ | 6,655 | $ | 5,400 | ||||
| Reconciliation of Diluted Net Income per Share to Adjusted Diluted Earnings per Share: (2) | ||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.19 | ||||
| Acquisition-related transaction expense per share | 0.04 | 0.02 | ||||||
| Restructure charge | 0.05 | |||||||
| Severance and other costs | 0.16 | |||||||
| Stock compensation | 0.02 | 0.02 | ||||||
| Adjusted diluted earnings per share | $ | 0.28 | $ | 0.23 | ||||
| Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (3) | ||||||||
| Net service revenues | $ | 92,602 | $ | 81,915 | ||||
| Revenue associated with the closure of certain sites | (2,678 | ) | ||||||
| Adjusted net service revenues | $ | 92,602 | $ | 79,237 |