Full Press Release Details
Investor Contact: Dennis Meulemans
Chief Financial Officer
Phone: (847) 303-5300
Email: DMeulemans@addus.com
Addus HomeCare Reports First Quarter 2013 Results
First Quarter Financial Highlights
Palatine, IL, May 2, 2013 Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home and community based services which are primarily social in nature and are provided in the
home, focused on the dual eligible population, announced today its financial results for the first quarter ended March 31, 2013.
First Quarter Review
revenues from continuing operations for the first quarter of 2013 were $63.0 million, a 7.0% increase compared to $58.9 million in the prior year quarter. Net income from continuing operations was $2.7 million, or $0.25 per diluted share, a 56.3%
increase when compared to our prior year quarter. Net income, including the gain on the sale of the Home Health business and a loss from discontinued operations, was $13.3 million, or $1.23 per diluted share.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, We feel good about our first quarter performance. Our Home &
Community business has continued to demonstrate positive growth and we are pleased with the sale and transition of our Home Health business.
Our quarter was positively impacted by a one-time $0.5 million benefit, or $0.05 per diluted share, from
Workers Opportunity Tax Credits ( WOTC ) earned in 2012 and realized in the first quarter of 2013 with the enactment of federal tax changes in early 2013.
Our first quarter 2012 results included the one-time gain realized on the sale of an agency for $0.5 million, or $0.03 per diluted share, having a positive effect on earnings in that period.
For comparative purposes, pro forma earnings from continuing operations in the first quarter of 2013 were $0.20 per diluted share, after excluding the
$0.05 per diluted share effect of the WOTC credits, compared to $0.13 per diluted share for 2012, after excluding the $0.03 per diluted share on the agency sale.
We continue our efforts to expand our relationships with managed care plans and have established offices in Detroit, MI and San Diego, CA in anticipation of the transition of state sponsored long term
care programs to managed care in these markets. There were no revenues and minimal expenses incurred related to these office openings in the quarter.
The State of Illinois passed legislation in April 2013 to increase
funding for the Illinois Department on Aging ( IDoA ) for the fiscal year ending June 30, 2013. This legislation is pending the governor s signature. As part of the legislation, IDoA was required to submit a plan to improve the
cost effectiveness of the program. As a result, IDoA initiated technical changes to the method for reimbursing providers effective May 1, 2013. We estimate that first quarter net service revenues would have been reduced by approximately $0.6
million with no corresponding reduction in the cost of service revenues, if such changes had been in effect beginning January 1, 2013.
Given the recent increase in Addus share price, it is likely Addus will be required to audit our compliance with Section 404 of the
Sarbanes-Oxley Act. If required, the Company will have to invest in additional staff and establish processes necessary to meet the documentation requirements and incur increased external audit fees to include an audit of our internal controls.
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, 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.
Addus will report its 2013 first quarter results on Thursday, May 2, 2013. Management will conduct a conference call to discuss its results at 5:00 p.m. Eastern time on May 2, 2013. The
toll-free dial-in number is (866) 515-2908, international dial-in number is (617) 399-5122, with the passcode: 25332428. A telephonic replay of the conference call will be available through midnight on May 9, 2013, by dialing
(888) 286-8010, international dial-in number is (617) 801-6888 and entering the passcode: 45033103.
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 comprehensive provider of home and community based services which are primarily social in nature and are provided in the home, 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, commercial insurers and private individuals. For more information, please visit www.addus.com.
Forward-Looking Statements
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 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 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 28, 2013, 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 March 31, | ||||||||
| Income Statement Information: | 2013 | 2012 | ||||||
| Net service revenues | $ | 62,998 | $ | 58,889 | ||||
| Cost of service revenues | 47,200 | 43,865 | ||||||
| Gross profit | 15,798 | 15,024 | ||||||
| General and administrative expenses | 11,510 | 11,570 | ||||||
| Gain on sale of agency | (495 | ) | ||||||
| Depreciation and amortization | 546 | 631 | ||||||
| Total operating expenses | 12,056 | 11,706 | ||||||
| Operating income from continuing operations | 3,742 | 3,318 | ||||||
| Interest expense | 208 | 404 | ||||||
| Income from operations before taxes | 3,534 | 2,914 | ||||||
| Income tax expense | 847 | 1,168 | ||||||
| Net income from continuing operations | 2,687 | 1,746 | ||||||
| Discontinued operations: | ||||||||
| Earnings (loss) from home health business, net of tax | (537 | ) | (1,117 | ) | ||||
| Gain on sale of home health business, net of tax | 11,111 | |||||||
| Earnings (losses) from discontinued operations | 10,574 | (1,117 | ) | |||||
| Net income (loss) | $ | 13,261 | $ | 629 | ||||
| Income (loss) per common share: | ||||||||
| Basic and diluted | ||||||||
| Continuing operations | $ | 0.25 | $ | 0.16 | ||||
| Discontinued operations | 0.98 | (0.10 | ) | |||||
| Basic and diluted income (loss) per common share | $ | 1.23 | $ | 0.06 | ||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 10,778 | 10,756 | ||||||
| Diluted | 10,845 | 10,760 |
| For the Three Months Ended March 31, | ||||||||
| Cash Flow Information: | 2013 | 2012 | ||||||
| Net cash provided by (used in) operating activities | $ | 13,025 | $ | (1,283 | ) | |||
| Net cash provided by investing activities | 19,480 | 207 | ||||||
| Net cash provided by (used in) financing activities | (16,458 | ) | 375 | |||||
| Net change in cash | 16,047 | (701 | ) | |||||
| Cash at the beginning of the period | 1,737 | 2,020 | ||||||
| Cash at the end of the period | $ | 17,784 | $ | 1,319 |
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| March 31, 2013 | December 31, 2012 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 17,784 | $ | 1,737 | ||||
| Accounts receivable, net | 60,640 | 71,303 | ||||||
| Prepaid expenses and other current assets | 5,515 | 7,293 | ||||||
| Assets held for sale | 245 | |||||||
| Deferred tax assets | 7,258 | 7,258 | ||||||
| Total current assets | 91,197 | 87,836 | ||||||
| Property and equipment, net | 2,476 | 2,489 | ||||||
| Other assets | ||||||||
| Goodwill | 50,496 | 50,536 | ||||||
| Intangible assets, net | 6,030 | 6,370 | ||||||
| Deferred tax assets | 2,328 | |||||||
| Investment in joint venture | 900 | |||||||
| Other assets | 251 | 298 | ||||||
| Total other assets | 57,677 | 59,532 | ||||||
| Total assets | $ | 151,350 | $ | 149,857 | ||||
| Liabilities and stockholders equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,818 | $ | 4,117 | ||||
| Accrued expenses | 35,635 | 32,717 | ||||||
| Current maturities of long-term debt | 208 | |||||||
| Deferred revenue | 17 | 2,148 | ||||||
| Total current liabilities | 40,470 | 39,190 | ||||||
| Long-term debt, less current maturities | 16,250 | |||||||
| Deferred tax liability | 3,097 | |||||||
| Total stockholders equity | 107,783 | 94,417 | ||||||
| Total liabilities and stockholders equity | $ | 151,350 | $ | 149,857 |
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2013 | 2012 | |||||||
| General: | ||||||||
| Adjusted EBITDA (in thousands) (1) | $ | 4,393 | $ | 4,016 | ||||
| States served at period end | 19 | 19 | ||||||
| Locations at period end | 96 | 96 | ||||||
| Employees at period end | 14,215 | 13,314 | ||||||
| Home & Community | ||||||||
| Average billable census | 25,817 | 24,525 | ||||||
| Billable hours (in thousands) | 3,714 | 3,470 | ||||||
| Average billable hours per census per month | 48 | 47 | ||||||
| Billable hours per business day | 58,031 | 53,354 | ||||||
| Revenues per billable hour | $ | 16.96 | $ | 16.97 | ||||
| Percentage of Revenues by Payor: | ||||||||
| State, local and other governmental programs | 95 | % | 95 | % | ||||
| Commercial | 1 | 1 | ||||||
| Private duty | 4 | % | 4 | % |
| Adjusted EBITDA (1) (Unaudited) | For the Three Months Ended March 31, | |||||||
| 2013 | 2012 | |||||||
| Reconciliation of Adjusted EBITDA to Net Income: | ||||||||
| Net income | $ | 13,261 | $ | 629 | ||||
| Less: (Earnings) loss from discontinued operations | (10,574 | ) | 1,117 | |||||
| Net income from continuing operations | 2,687 | 1,746 | ||||||
| Interest expense | 208 | 404 | ||||||
| Income tax expense | 847 | 1,168 | ||||||
| Depreciation and amortization | 546 | 631 | ||||||
| Stock-based compensation expense | 105 | 67 | ||||||
| Adjusted EBITDA | $ | 4,393 | $ | 4,016 |