Addus HomeCare Reports Second Quarter 2012 Results
Second Quarter Financial Highlights

PALATINE, Ill., Aug. 2, 2012 /PRNewswire/ -- 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 the second 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.

Six Month Review

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 cost control.

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.

Conference Call

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 32963600.

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, 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.

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 June 30,


For the Six Months Ended June 30,


2012


2011


2012


2011









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









































Cash Flow Information:

For the Six Months Ended June 30,






2012


2011













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)

(Unaudited)







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%









(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

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

















(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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