Full Press Release Details
Chief Financial Officer
Phone: (847) 303-5300
Email: DMeulemans@addus.com
Addus HomeCare Reports Second Quarter
Second Quarter Financial Highlights
Palatine, IL, August 2, 2012 - Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home-based social and medical services focused on the elderly dual eligible population, announced today its
financial results for the second quarter ended June 30, 2012.
Second Quarter Review
Total net service revenues for the second quarter of 2012 were $70.3 million, a 3.0% increase compared to $68.3 million in the prior year quarter. Net
income for the second quarter was $1.5 million, or $0.14 per diluted share, compared to $1.3 million or $0.12 per diluted share, in the prior year quarter.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, Our Home & Community segment continued its steady growth during the second quarter and we maintained our focus
on performance improvements in our Home Health segment.
Home & Community segment net service revenues for the second quarter
of 2012 were $58.7 million, a 6.6% increase from the prior year quarter. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 17.6% to $7.1 million, or 12.1% of revenue, in
quarter, compared to $6.0 million, or 10.9% of revenue, in the prior year quarter. This improvement was primarily due to an increase in average census and related billable hours, improved field
productivity, lower bad debt expense as well as a continued focus on cost control.
Home Health segment net service revenues for the second
quarter of 2012 were $11.6 million, a 12.2% decrease over the prior year quarter. Home Health had an operating loss, including depreciation and amortization but excluding corporate expenses, of approximately $0.1 million, or (0.4)% of revenues,
compared to operating income of $0.8 million, or 6.3% of revenues, in the prior year quarter.
Total net service revenues for the six months ended June 30, 2012 were $138.2 million, a 2.3% increase compared to $135.1 million in the same prior
year period. Net income for the six months ended June 30, 2012 was $2.1 million, or $0.19 per diluted share, compared to $2.2 million or $0.20 per diluted share, in the same prior year period.
Home & Community segment net service revenues for the six months ended June 30, 2012 were $115.6 million, a 5.9% increase from the same
prior year period. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 19.0% to $13.5 million, or 11.7% of revenue for the six months ended June 30, 2012, compared to
$11.3 million, or 10.4% of revenue, in the same prior year period. This improvement was primarily due to an increase in average census and related billable hours, improved field productivity, lower bad debt expense as well as a continued focus on
Home Health segment net service revenues for the six months ended June 30, 2012 were $22.6 million, a 12.8% decrease over
the same prior year period. Home Health had an operating loss, including depreciation and amortization but excluding corporate expenses, of $1.2 million, or (5.3)% of revenues, compared to operating income of $1.5 million, or 5.9% of revenues, in
the same prior year period. Home Health segment net service revenues for the six months ended June 30, 2012 included an adjustment recorded in the first quarter of 2012 to estimates of accrued Medicare revenues totaling $0.9 million, which
reduced profitability by $0.8 million.
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 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 second quarter financial results after the
market close on Thursday, August 2, 2012. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on August 2, 2012. The toll-free dial-in number is (866) 813-5647 (international dial-in number is
847-619-6249), with the passcode: 32963600. A telephonic replay of the conference call will be available through midnight on August 9, 2012, by dialing (888) 843-7419 (international dial-in number is 630-652-3042) and entering the passcode
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
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, and in Addus HomeCare s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on
May 10, 2012, 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 HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Cash Flow Information
(amounts and shares in thousands, except per share data)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Income Statement Information: | ||||||||||||||||
| Net service revenues | $ | 70,281 | $ | 68,252 | $ | 138,205 | $ | 135,094 | ||||||||
| Cost of service revenues | 49,862 | 48,142 | 99,145 | 95,930 | ||||||||||||
| Gross profit | 20,419 | 20,110 | 39,060 | 39,164 | ||||||||||||
| General and administrative expenses | 17,180 | 16,493 | 34,211 | 32,612 | ||||||||||||
| Gain on sale of agency | (495 | ) | ||||||||||||||
| Depreciation and amortization | 635 | 927 | 1,269 | 1,856 | ||||||||||||
| Total operating expenses | 17,815 | 17,420 | 34,985 | 34,468 | ||||||||||||
| Operating income | 2,604 | 2,690 | 4,075 | 4,696 | ||||||||||||
| Interest income | (128 | ) | ||||||||||||||
| Interest expense | 426 | 668 | 958 | 1,381 | ||||||||||||
| Total interest (income) expense | 426 | 668 | 830 | 1,381 | ||||||||||||
| Income from operations before taxes | 2,178 | 2,022 | 3,245 | 3,315 | ||||||||||||
| Income tax expense | 714 | 689 | 1,152 | 1,129 | ||||||||||||
| Net income | $ | 1,464 | $ | 1,333 | $ | 2,093 | $ | 2,186 | ||||||||
| Income per common share: | ||||||||||||||||
| Basic and diluted | $ | 0.14 | $ | 0.12 | $ | 0.19 | $ | 0.20 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic | 10,761 | 10,746 | 10,761 | 10,746 | ||||||||||||
| Diluted | 10,785 | 10,770 | 10,781 | 10,762 | ||||||||||||
| For the Six Months Ended June 30, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Cash Flow Information: | ||||||||||||||||
| Net cash provided by operating activities | $ | 5,732 | $ | 29,098 | ||||||||||||
| Net cash used in investing activities | (259 | ) | (632 | ) | ||||||||||||
| Net cash used in financing activities | (6,000 | ) | (5,177 | ) | ||||||||||||
| Net change in cash | (527 | ) | 23,289 | |||||||||||||
| Cash at the beginning of the period | 2,020 | 816 | ||||||||||||||
| Cash at the end of the period | $ | 1,493 | $ | 24,105 |
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| June 30, 2012 | December 31, 2011 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 1,493 | $ | 2,020 | ||||
| Accounts receivable, net | 69,141 | 72,368 | ||||||
| Prepaid expenses and other current assets | 8,418 | 8,137 | ||||||
| Deferred tax assets | 6,336 | 6,336 | ||||||
| Total current assets | 85,388 | 88,861 | ||||||
| Property and equipment, net | 2,813 | 2,490 | ||||||
| Other assets | ||||||||
| Goodwill | 50,615 | 50,695 | ||||||
| Intangible assets, net | 7,206 | 8,044 | ||||||
| Deferred tax assets | 4,089 | 4,089 | ||||||
| Other assets | 399 | 513 | ||||||
| Total other assets | 62,309 | 63,341 | ||||||
| Total assets | $ | 150,510 | $ | 154,692 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,929 | $ | 5,266 | ||||
| Accrued expenses | 29,286 | 29,313 | ||||||
| Current maturities of long-term debt | 3,527 | 6,569 | ||||||
| Deferred revenue | 2,094 | 2,145 | ||||||
| Total current liabilities | 39,836 | 43,293 | ||||||
| Long-term debt, less current maturities | 22,000 | 24,958 | ||||||
| Total stockholders equity | 88,674 | 86,441 | ||||||
| Total liabilities and stockholders equity | $ | 150,510 | $ | 154,692 |
Segment Information (Unaudited)
| For the Three Months Ended June 30, 2012 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 58,656 | $ | 11,625 | $ | $ | 70,281 | |||||||||
| Cost of service revenues | 43,532 | 6,330 | 49,862 | |||||||||||||
| Gross profit | 15,124 | 5,295 | 20,419 | |||||||||||||
| Gross profit percentage | 25.8 | % | 45.5 | % | 29.1 | % | ||||||||||
| General and administrative expenses | 7,585 | 5,338 | 4,257 | 17,180 | ||||||||||||
| Depreciation and amortization | 461 | 4 | 170 | 635 | ||||||||||||
| Total operating expenses | 8,046 | 5,342 | 4,427 | 17,815 | ||||||||||||
| Operating income (loss) | $ | 7,078 | $ | (47 | ) | $ | (4,427 | ) | $ | 2,604 | ||||||
| Operating income percentage | 12.1 | % | -0.4 | % | -6.3 | % | 3.7 | % |
| For the Three Months Ended June 30, 2011 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 55,009 | $ | 13,243 | $ | $ | 68,252 | |||||||||
| Cost of service revenues | 41,076 | 7,066 | 48,142 | |||||||||||||
| Gross profit | 13,933 | 6,177 | 20,110 | |||||||||||||
| Gross profit percentage | 25.3 | % | 46.6 | % | 29.5 | % | ||||||||||
| General and administrative expenses | 7,304 | 5,208 | 3,981 | 16,493 | ||||||||||||
| Depreciation and amortization | 609 | 129 | 189 | 927 | ||||||||||||
| Total operating expenses | 7,913 | 5,337 | 4,170 | 17,420 | ||||||||||||
| Operating income (loss) | $ | 6,020 | $ | 840 | $ | (4,170 | ) | $ | 2,690 | |||||||
| Operating income percentage | 10.9 | % | 6.3 | % | -6.1 | % | 3.9 | % |
| For the Six Months Ended June 30, 2012 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 115,579 | $ | 22,626 | $ | $ | 138,205 | |||||||||
| Cost of service revenues | 86,161 | 12,984 | 99,145 | |||||||||||||
| Gross profit | 29,418 | 9,642 | 39,060 | |||||||||||||
| Gross profit percentage | 25.5 | % | 42.6 | % | 28.3 | % | ||||||||||
| General and administrative expenses | 14,993 | 10,845 | 8,373 | 34,211 | ||||||||||||
| Gain on sale of agency | (495 | ) | (495 | ) | ||||||||||||
| Depreciation and amortization | 927 | 7 | 335 | 1,269 | ||||||||||||
| Total operating expenses | 15,920 | 10,852 | 8,213 | 34,985 | ||||||||||||
| Operating income (loss) | $ | 13,498 | $ | (1,210 | ) | $ | (8,213 | ) | $ | 4,075 | ||||||
| Operating income percentage | 11.7 | % | -5.3 | % | -5.9 | % | 2.9 | % |
| For the Six Months Ended June 30, 2011 | ||||||||||||||||
| Home & Community | Home Health | Corporate | Total | |||||||||||||
| Net service revenues | $ | 109,152 | $ | 25,942 | $ | $ | 135,094 | |||||||||
| Cost of service revenues | 81,853 | 14,077 | 95,930 | |||||||||||||
| Gross profit | 27,299 | 11,865 | 39,164 | |||||||||||||
| Gross profit percentage | 25.0 | % | 45.7 | % | 29.0 | % | ||||||||||
| General and administrative expenses | 14,735 | 10,070 | 7,807 | 32,612 | ||||||||||||
| Depreciation and amortization | 1,219 | 257 | 380 | 1,856 | ||||||||||||
| Total operating expenses | 15,954 | 10,327 | 8,187 | 34,468 | ||||||||||||
| Operating income (loss) | $ | 11,345 | $ | 1,538 | $ | (8,187 | ) | $ | 4,696 | |||||||
| Operating income percentage | 10.4 | % | 5.9 | % | -6.1 | % | 3.5 | % |
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| General: | ||||||||||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 3,312 | $ | 3,695 | $ | 5,484 | $ | 6,697 | ||||||||
| States served at period end | 19 | 19 | 19 | 19 | ||||||||||||
| Locations at period end | 117 | 129 | 117 | 129 | ||||||||||||
| Employees at period end | 14,289 | 13,168 | 14,289 | 13,168 | ||||||||||||
| Home & Community | ||||||||||||||||
| Average census | 23,714 | 22,753 | 23,447 | 22,629 | ||||||||||||
| Billable hours (in thousands) | 3,477 | 3,229 | 6,851 | 6,414 | ||||||||||||
| Billable hours per business day | 54,334 | 50,456 | 53,522 | 50,506 | ||||||||||||
| Revenues per billable hour | $ | 16.86 | $ | 17.03 | $ | 16.86 | $ | 17.02 | ||||||||
| Home Health | ||||||||||||||||
| Medicare admissions (2) | 2,012 | 2,274 | 4,183 | 4,547 | ||||||||||||
| Non-Medicare admissions | 1,236 | 1,707 | 2,596 | 3,321 | ||||||||||||
| Medicare revenues per episode completed | $ | 2,551 | $ | 2,517 | $ | 2,565 | $ | 2,528 | ||||||||
| Percentage of Revenues by Payor: | ||||||||||||||||
| State, local or other governmental | 82 | % | 80 | % | 83 | % | 80 | % | ||||||||
| Medicare | 11 | % | 12 | % | 11 | % | 12 | % | ||||||||
| Other | 7 | % | 8 | % | 6 | % | 8 | % |
| Adjusted EBITDA (1) (Unaudited) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income: | ||||||||||||||||
| Net income | $ | 1,464 | $ | 1,333 | $ | 2,093 | $ | 2,186 | ||||||||
| Net interest expense | 426 | 668 | 830 | 1,381 | ||||||||||||
| Income tax expense | 714 | 689 | 1,152 | 1,129 | ||||||||||||
| Depreciation and amortization | 635 | 927 | 1,269 | 1,856 | ||||||||||||
| Stock-based compensation expense | 73 | 78 | 140 | 145 | ||||||||||||
| Adjusted EBITDA | $ | 3,312 | $ | 3,695 | $ | 5,484 | $ | 6,697 |