Full Press Release Details
Chief Financial Officer
Phone: (847) 303-5300
Email: DMeulemans@addus.com
Addus HomeCare Reports First Quarter 2012 Results
First Quarter Financial Highlights
Palatine, IL, May 3, 2012 Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home-based social and medical services focused primarily on the elderly dual eligible population, announced
today its financial results for the three months ended March 31, 2012.
First Quarter Review
Total net service revenues for the first quarter of 2012 were $67.9 million, a 1.6% increase compared to $66.8 million in the prior year quarter. Net
income for the first quarter was $0.6 million, or $0.06 per diluted share, compared to $0.9 million or $0.08 per diluted share, in the prior year quarter.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, We are pleased with the continued positive performance of the Home & Community segment but are disappointed
with the operating performance of the Home Health segment.
Net income for the first quarter of 2012 included several one-time items: a
pre-tax gain of $0.5 million relating to the sale of an agency from the Home Health division; $0.1 million received from the State of Illinois as an interest payment for delays in payments of invoices (prompt payment interest); and an adjustment to
estimates of accrued Medicare revenues totaling $0.9 million, which reduced profitability by $0.8 million. The net effect of these three one-time items is a reduction of approximately $0.01 per diluted share.
Home & Community segment net service revenues for the first quarter of 2012 were $56.9 million, a
5.1% increase from the prior year quarter. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 20.6% to $6.4 million, or 11.3% of revenue, in the first quarter, compared to
$5.3 million, or 9.8% of revenue, in the prior year quarter. This improvement was primarily due to an increase in average census and related billable hours, lower bad debt expense as a result of improved accounts receivable collections as well as a
continued focus on cost control.
Home Health segment net service revenues for the first quarter of 2012 were $11.0 million, a 13.4% decrease
over the prior year quarter. Home Health had an operating loss, including depreciation and amortization but excluding corporate expenses, of $1.2 million, or 10.6% of revenues, compared to operating income of $0.7 million, or 5.5% of revenues, in
the prior year quarter.
Excluding the impact of the previously discussed one-time items, current quarter Home Health revenues declined $0.8
million on a year-over-year basis as a result of lower admissions in ongoing operations totaling $0.5 million, Medicare rate reductions of $0.2 million and revenues lost from agencies sold / closed in December and January totaling $0.1 million.
Gross profit excluding the one-time items was $5.1 million with a corresponding reduction in gross margin from 44.8 percent to 43.1 percent. Our sales and administrative expenses have increased over the same period by $0.6 million.
April 2012, the Company received approximately $16.0 million in payments above normal levels from the State of Illinois.
The information provided in this release includes Adjusted EBITDA, a non-GAAP financial measure, which the Company
defines as earnings before goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, taxes, depreciation, amortization, 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 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 report its 2012 first quarter financial results after the market close on Thursday, May 3, 2012. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on
May 3, 2012. The toll-free dial-in number is (800) 798-2884 (international dial-in number is 617-614-6207), with the passcode: 91711411. A telephonic replay of the conference call will be available through midnight on May 10, 2012, by
dialing (888) 286-8010 (international dial-in number is 617-801-6888) and entering the passcode 10939902.
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.
Addus is a provider of a broad range of social and medical services in the home. Addus services include personal care and assistance with activities
of daily living, skilled nursing and rehabilitative therapies, and adult day care. Addus focuses on serving the needs of the elderly dual eligible population. Addus consumers are individuals with special needs 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, commercial insurers and private individuals. For more information, please
visit www.addus.com.
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 expected benefits and costs of acquisitions, management plans related to acquisitions, the possibility that expected benefits may not materialize as expected, the failure of a target company s
business to perform as expected, Addus HomeCare s inability to successfully implement integration strategies, changes in reimbursement, changes in government regulations, changes in Addus HomeCare s relationships with referral sources,
increased competition for Addus HomeCare s services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed
care organizations, changes in tax rates 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 16, 2012, 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 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 March 31, | |||||||
| 2012 | 2011 | |||||||
| Net service revenues | $ | 67,924 | $ | 66,842 | ||||
| Cost of service revenues | 49,283 | 47,788 | ||||||
| Gross profit | 18,641 | 19,054 | ||||||
| General and administrative expenses | 17,031 | 16,119 | ||||||
| Gain on sale of agency | (495 | ) | ||||||
| Depreciation and amortization | 634 | 929 | ||||||
| Total operating expenses | 17,170 | 17,048 | ||||||
| Operating income | 1,471 | 2,006 | ||||||
| Interest income | (128 | ) | ||||||
| Interest expense | 532 | 713 | ||||||
| Total interest (income) expense | 404 | 713 | ||||||
| Income from operations before taxes | 1,067 | 1,293 | ||||||
| Income tax expense | 438 | 440 | ||||||
| Net income | $ | 629 | $ | 853 | ||||
| Income per common share: | ||||||||
| Basic | $ | 0.06 | $ | 0.08 | ||||
| Diluted | $ | 0.06 | $ | 0.08 | ||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 10,756 | 10,746 | ||||||
| Diluted | 10,760 | 10,754 |
| Cash Flow Information: | For the Three Months Ended March 31, | |||||||
| 2012 | 2011 | |||||||
| Net cash (used in) provided by operating activities | $ | (1,283 | ) | $ | 11,451 | |||
| Net cash provided by (used in) investing activities | 207 | (42 | ) | |||||
| Net cash provided by (used in) financing activities | 375 | (10,970 | ) | |||||
| Net change in cash | (701 | ) | 439 | |||||
| Cash at the beginning of the period | 2,020 | 816 | ||||||
| Cash at the end of the period | $ | 1,319 | $ | 1,255 |
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| March 31, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,319 | $ | 2,020 | ||||
| Accounts receivable, net | 73,836 | 72,368 | ||||||
| Prepaid expenses and other current assets | 7,506 | 8,137 | ||||||
| Deferred tax assets | 6,336 | 6,336 | ||||||
| Total current assets | 88,997 | 88,861 | ||||||
| Property and equipment, net | 2,563 | 2,490 | ||||||
| Other assets | ||||||||
| Goodwill | 50,655 | 50,695 | ||||||
| Intangible assets, net | 7,625 | 8,044 | ||||||
| Deferred tax assets | 4,089 | 4,089 | ||||||
| Other assets | 456 | 513 | ||||||
| Total other assets | 62,825 | 63,341 | ||||||
| Total assets | $ | 154,385 | $ | 154,692 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,720 | $ | 5,266 | ||||
| Accrued expenses | 29,410 | 29,313 | ||||||
| Current maturities of long-term debt | 5,152 | 6,569 | ||||||
| Deferred revenue | 2,216 | 2,145 | ||||||
| Total current liabilities | 40,498 | 43,293 | ||||||
| Long-term debt, less current maturities | 26,750 | 24,958 | ||||||
| Total stockholders equity | 87,137 | 86,441 | ||||||
| Total liabilities and stockholders equity | $ | 154,385 | $ | 154,692 |
Segment Information (Unaudited)
| For the Three Months Ended March 31, 2012 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 56,923 | $ | 11,001 | $ | $ | 67,924 | |||||||||
| Cost of service revenues | 42,629 | 6,654 | 49,283 | |||||||||||||
| Gross profit | 14,294 | 4,347 | 18,641 | |||||||||||||
| Gross profit percentage | 25.1 | % | 39.5 | % | 27.4 | % | ||||||||||
| General and administrative expenses | 7,408 | 5,507 | 4,116 | 17,031 | ||||||||||||
| Depreciation and amortization | 466 | 3 | 165 | 634 | ||||||||||||
| Gain on sale of agency | (495 | ) | (495 | ) | ||||||||||||
| Total operating expenses | 7,874 | 5,510 | 3,786 | 17,170 | ||||||||||||
| Operating income (loss) | $ | 6,420 | $ | (1,163 | ) | $ | (3,786 | ) | $ | 1,471 | ||||||
| Operating income percentage | 11.3 | % | -10.6 | % | -5.6 | % | 2.2 | % |
| For the Three Months Ended March 31, 2011 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 54,143 | $ | 12,699 | $ | $ | 66,842 | |||||||||
| Cost of service revenues | 40,777 | 7,011 | 47,788 | |||||||||||||
| Gross profit | 13,366 | 5,688 | 19,054 | |||||||||||||
| Gross profit percentage | 24.7 | % | 44.8 | % | 28.5 | % | ||||||||||
| General and administrative expenses | 7,431 | 4,862 | 3,826 | 16,119 | ||||||||||||
| Depreciation and amortization | 610 | 128 | 191 | 929 | ||||||||||||
| Total operating expenses | 8,041 | 4,990 | 4,017 | 17,048 | ||||||||||||
| Operating income (loss) | $ | 5,325 | $ | 698 | $ | (4,017 | ) | $ | 2,006 | |||||||
| Operating income percentage | 9.8 | % | 5.5 | % | -6.0 | % | 3.0 | % |
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| General: | ||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 2,172 | $ | 2,983 | ||||
| States served at period end | 19 | 19 | ||||||
| Locations at period end | 117 | 129 | ||||||
| Employees at period end | 14,368 | 13,168 | ||||||
| Home & Community | ||||||||
| Average census | 23,180 | 22,505 | ||||||
| Billable hours (in thousands) | 3,374 | 3,185 | ||||||
| Billable hours per business day | 52,713 | 50,556 | ||||||
| Revenues per billable hour | $ | 16.87 | $ | 17.00 | ||||
| Home Health | ||||||||
| Medicare admissions (2) | 2,171 | 2,274 | ||||||
| Non-Medicare admissions | 1,360 | 1,614 | ||||||
| Medicare revenues per episode completed | $ | 2,532 | $ | 2,618 | ||||
| Percentage of Revenues by Payor: | ||||||||
| State, local or other governmental | 83 | % | 80 | % | ||||
| Medicare | 10 | % | 12 | % | ||||
| Other | 7 | % | 8 | % |
| Adjusted EBITDA (1) (Unaudited) | For the Three Months Ended March 31, | |||||||
| 2012 | 2011 | |||||||
| Reconciliation of Adjusted EBITDA to Net Income: | ||||||||
| Net income | $ | 629 | $ | 853 | ||||
| Net interest expense | 404 | 713 | ||||||
| Income tax expense | 438 | 440 | ||||||
| Depreciation and amortization | 634 | 929 | ||||||
| Stock-based compensation expense | 67 | 48 | ||||||
| Adjusted EBITDA | $ | 2,172 | $ | 2,983 |