2014

Addus HomeCare Reports First Quarter 2014 Results First Quarter Financial Highlights

- Strong revenue growth despite challenging weather conditions

- Total net service revenues of $71.7 million for a 13.8 percent increase compared to prior year quarter

- Net income of $2.4 million, or $0.21 per diluted share.

PALATINE, Ill., May 1, 2014 /PRNewswire/ -- 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, 2014.

First Quarter Review

Total net service revenues from continuing operations for the first quarter of 2014 were $71.7 million, a 13.8 percent increase compared to $63.0 million in the prior year quarter.  Same store sales accounted for 5.6 percent of the increase with 8.2 percent generated by recently completed acquisitions.  Net income from continuing operations was $2.4 million, or $0.21 per diluted share, compared to $0.25 per diluted share in 2013, with $0.04 of the decrease attributable to an increase in income tax expense. 

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated: "We are pleased with our performance for the quarter.  Despite a very challenging winter across most of our service area, our direct care staff still managed to provide essential services to our at-risk population.  We realized some revenue loss attributable to weather, but still achieved same store revenue growth of 5.6 percent, reflecting strong service delivery levels and continuing census growth which we attribute to the sales programs we initiated last year." 

Mr. Heaney also commented that: "During the quarter we made further progress, developing relationships and implementing technology, in preparation for the transformation to managed care.  Our pilot programs with Aetna and Centene are progressing well.  While some states are delaying implementation dates for dual pilot programs, we are confident of their eventual transition to managed care providers as planned.  We continue to invest in technology and infrastructure, preparing our company to meet the higher standards expected by managed care." 

Same store revenues grew by 5.6 percent based in large part to an 8.0 percent increase in average same store census while acquired census added an additional 6.3 percent for total census growth of 14.3 percent when compared to the prior year quarter.  Billable hours per business day increased 16.0 percent, offset by a slight decline in average revenues per billable hour.

Net income from continuing operations before taxes increased despite lost service days / hours due to inclement weather in many of our markets.  Net income was also reduced by increased investment spending on information technology and a new care system, as well as higher costs related to the Company's Sarbanes-Oxley Act Section 404 compliance program. 

The Company ended the quarter with nearly $17 million in cash and $43 million available under its revolving line of credit, with $4.2 million of free cash flow generated from operations in the quarter, before considering working capital needs and investments in the new Support Center.

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, M&A expense 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.

Conference Call

Addus will report its 2014 first quarter results on Thursday, May 1, 2014. Management will conduct a conference call to discuss its results at 5:00 p.m. Eastern time on May 1, 2014. The toll-free dial-in number is (866) 318-8616, international dial-in number is (617) 399-5135, with the passcode: 44259078. A telephonic replay of the conference call will be available through midnight on May 8, 2014, by dialing (888) 286-8010, international dial-in number is (617) 801-6888 and entering the passcode: 72027801.

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 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

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 anticipated transition to managed care providers, expected benefits and costs of acquisitions and 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, the impact of adverse weather, 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  17,  2014,  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).

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

 

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,




Same Store


Acquisitions


Total






2014


2013






















Net service revenues


$     66,516


$       5,167


$71,683


$62,998


Cost of service revenues


49,512


3,503


53,015


47,200












Gross profit


17,004


1,664


18,668


15,798




25.6%


32.2%


26.0%


25.1%


General and administrative expenses


13,318


1,085


14,403


11,510


Depreciation and amortization


485


10


495


546


Total operating expenses


13,803


1,095


14,898


12,056












Operating income from continuing operations


3,201


569


3,770


3,742












Total interest expense, net


154


-


154


208












Income from continuing operations before taxes


3,047


569


3,616


3,534


Income tax expense 


1,064


198


1,262


847












Net income from continuing operations


1,983


371


2,354


2,687












Discontinued operations:




















    (Loss) from home health business, net of tax


-


-


-


(537)


    Gain on sale of  home health business, net of tax


-


-


-


11,111












Earnings from discontinued operations


-


-


-


10,574












Net income


$       1,983


$          371


$  2,354


$13,261












Net income per share:










    Basic 










         Continuing operations


$         0.19


$         0.03


$    0.22


$    0.25


         Discontinued operations


-


-


-


0.98












    Basic income per share


$         0.19


$         0.03


$    0.22


$    1.23












    Diluted










         Continuing operations


$         0.18


$         0.03


$    0.21


$    0.25


         Discontinued operations


-


-


-


0.98












    Diluted income per share


$         0.18


$         0.03


$    0.21


$    1.23












Weighted average number of common shares outstanding:










     Basic


10,850


10,850


10,850


10,778


     Diluted


11,110


11,110


11,110


10,845




















































Cash Flow Information:






For the Three Months Ended March 31,








2014


2013












Net cash provided by operating activities






$  2,670


$13,025


Net cash (used in) provided by investing activities






(1,484)


19,480


Net cash provided by (used in) financing activities






214


(16,458)












Net change in cash






1,400


16,047


Cash at the beginning of the period






15,565


1,737


Cash at the end of the period






$16,965


$17,784


 

 

Condensed Consolidated Balance Sheets

(Amounts in thousands)















March 31, 2014


March 31, 2013


(Unaudited)

Assets








Current assets




Cash

$          16,965


$          17,784

Accounts receivable, net 

59,042


60,640

Prepaid expenses and other current assets

4,795


5,515

Deferred tax assets

8,326


7,258





Total current assets

89,128


91,197





Property and equipment, net

3,897


2,476





Other assets




Goodwill

59,986


50,496

Intangible assets, net 

8,538


6,030

Investment in joint venture

900


900

Other assets

93


251

Total other assets

69,517


57,677





Total assets

$        162,542


$        151,350





Liabilities and stockholders' equity








Current liabilities




Accounts payable

$            3,715


$            4,818

Accrued expenses

38,834


35,635

Deferred revenue

5


17





Total current liabilities

42,554


40,470





Deferred tax liability

3,441


3,097





Total stockholders' equity

116,547


107,783





Total liabilities and stockholders' equity

$        162,542


$        151,350

 

 

Key Statistical and Financial Data (Unaudited)









For the Three Months  Ended March 31,



2014


2013


General:










Adjusted EBITDA (in thousands) (1)

$        4,453


$        4,393


States served at period end

23


19


Locations at period end

128


96


Employees at period end

16,648


14,215







Home & Community










Average billable census - same store

27,872


25,817


Average billable census - acquisitions

1,625


-


Average billable census total

29,497


25,817


Billable hours (in thousands)

4,236


3,714


Average billable hours per census per month

47.9


48.0


Billable hours per business day

67,243


58,031


Revenues per billable hour

$        16.92


$        16.96












Percentage of Revenues by Payor:










State, local and other governmental programs

95

%

95

%

Commercial

1


1


Private duty

4

%

4

%






(1) We define Adjusted EBITDA as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, M&A expenses 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. 

 

 

Adjusted EBITDA (1) (Unaudited)

For the Three Months  Ended March 31,


2014


2013

Reconciliation of Adjusted EBITDA to Net Income:








Net income

$        2,354


$        13,261

Less: (Earnings) from discontinued operations, net of tax

-


(10,574)





Net income from continuing operations

2,354


2,687





Interest expense, net

154


208

Income tax expense from continuing operations

1,262


847

Depreciation and amortization

495


546

M&A expenses

65


-

Stock-based compensation expense

123


105





Adjusted EBITDA

$        4,453


$         4,393









(1) We define Adjusted EBITDA as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, M&A expenses 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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