Addus HomeCare Reports First Quarter 2012 Results
First Quarter Financial Highlights

PALATINE, Ill., May 3, 2012 /PRNewswire/ -- 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

Subsequent Event

During the month of April 2012, the Company received approximately $16.0 million in payments above normal levels from the State of Illinois.

 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.

Conference Call

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.

About Addus

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.

Investor Contact:
Dennis Meulemans
Chief Financial Officer
Phone:  (847) 303-5300
Email:  DMeulemans@addus.com

(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)

(Unaudited)






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)

(Unaudited)

















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%


 

(1) We define Adjusted EBITDA 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. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.







(2) Medicare admissions represents the aggregate number of new cases approved for Medicare services during a specified period.

 

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













(1) We define Adjusted EBITDA 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. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP. 

 

 


 

 

SOURCE Addus HomeCare Corporation

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