Almost Family Reports Fourth Quarter and Full Year 2012 Results

Feb 27, 2013, 07:30 ET from Almost Family, Inc.

LOUISVILLE, Ky., Feb. 27, 2013 /PRNewswire/ -- Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing and personal care services, announced today its financial results for the three months and full year ended December 31, 2012.

Fourth Quarter Highlights:

  • Net service revenues of $87 million for the quarter
  • Net income was $3.7 million, or $0.40 per diluted share
  • Diluted EPS includes $0.02 for the impact of Hurricane Sandy, excluding which diluted EPS would have been $0.42
  • Visiting Nurse segment net revenues were $67 million, on 1% admission growth overall

Full Year Highlights:

  • Net service revenues were $349 million
  • Net income was $17 million, or $1.85 per diluted share
  • Visiting Nurse segment net revenues were $271 million, on 2% admission growth overall
  • Personal Care segment net revenues grew to $77 million from a combination of the Cambridge acquisition and 5% organic volume growth

Comments on Results William Yarmuth, Chief Executive Officer, commented on the results: "All things considered, we emerge from 2012 pleased with the progress we've made and the position we're in to capitalize on our future opportunities.  We weathered storms, both literally and figuratively, that have had an impact on our quarterly operating results.  We continued to make progress in our Florida operations while dealing with the ramifications of Medicare Advantage plan changes in our northern operations."

"Looking at the year as a whole, we weathered our second straight year of Medicare rate cuts in the neighborhood of 5% and, with a keen eye on cost controls, managed to offset a meaningful portion of those cuts.  Despite all this, we increased shareholder value by paying a $2 per share special dividend at the end of December without compromising our financial capability to pursue the opportunities we see coming our way.  We enter 2013 in a very strong position with one of the strongest balance sheets in the industry."

Fourth Quarter Financial Results Almost Family reported fourth quarter results that included the impact of the 2012 Medicare reimbursement rate cut in the Visiting Nurse (VN) segment.  The Medicare rate cuts reduced revenue and operating income by $3.0 million and earnings per diluted share by $0.20. A change in certain Medicare Advantage contracts we chose to renew that pay on a per visit versus episodic basis reduced revenue by $0.7 million and earnings per diluted share by $0.03.  While total VN admissions increased approximately 1%, Medicare episodic admissions declined approximately 2% primarily as a result of those Medicare Advantage plans switching from episodic to per visit payment models. Admissions in 2011 included approximately 300 Medicare Advantage admissions under a contract that was terminated when payment switched from episodic to per visit.

Approximately 25% of our VN segment and 20% of our PC segment operations are located in the northeastern U.S. (New Jersey, Connecticut and Massachusetts), areas impacted by Hurricane Sandy which struck in late October 2012.  Earnings per share for the fourth quarter were reduced by $0.02 as a result of business disruptions due to Hurricane Sandy primarily in our New Jersey and Connecticut markets.

Net service revenues for the fourth quarter were $86.6 million, a 3% decrease from $89.3 million reported in the fourth quarter of 2011, primarily as a result of the VN segment's Medicare rate cut. 

Net income for the fourth quarter of 2012 was $3.7 million, or $0.40 per diluted share, down from fourth quarter of 2011 net income of $5.3 million, or $0.57 per diluted share.

The effective tax rate for the fourth quarter of 2012 increased to 40.1% from 38.0% for the fourth quarter of 2011, primarily as a result of the shift of earnings to states with higher tax rates and the absence of tax credits.

Fourth Quarter Segment Results VN segment fourth quarter results include the unfavorable impact of the Medicare rate cuts as well as the change of certain Medicare Advantage payors to per visit reimbursement.  As a result, VN segment fourth quarter net service revenues declined 4% to $67.3 million, from $69.8 million in the fourth quarter of 2011, while operating income before corporate expenses for the fourth quarter of 2012 declined to $8.7 million from $10.7 million reported for the fourth quarter of 2011.  Total admissions grew 1%, substantially all organic.  Sequential VN segment sales force expansion decreased EPS by $0.03.

Personal Care (PC) segment net service revenues declined slightly to $19.3 million in the fourth quarter of 2012 from $19.5 million in 2011, due to a 4% decline in volumes which was partially offset by higher rates per hour.  Operating income before unallocated corporate expenses decreased 25% or $0.8 million to $2.4 million in the fourth quarter of 2012 due to a combination of lower volumes and wage increases.

Full Year Ended December 31, 2012 Almost Family reported full year results that included: i) the favorable impact of a full year of operations from our Cambridge acquisition, which closed in early August of 2011, ii) the unfavorable impact of the 2012 Medicare reimbursement rate cut and iii) the unfavorable impact of the change of certain Medicare Advantage payors to per visit reimbursement for contracts we chose to renew, which lowered EPS by $0.06.  The Medicare rate cuts reduced revenue and operating income by $12.3 million and earnings per diluted share by $0.80.

Net income for 2012 was $17.3 million, or $1.85 per diluted share, down from 2011 net income of $20.8 million, or $2.22 per diluted share.  Fees and expenses related to governmental inquiries did not impact 2012, while lowering 2011 EPS by approximately $0.08.  Deal costs lowered both 2012 and 2011 EPS by approximately $0.03 and $0.04, respectively.

Full Year Segment Results Net service revenues in the VN segment for 2012 declined to $271.5 million, a 4.3% decrease from $283.6 million in 2011, after the effect of the previously mentioned Medicare rate cut.  Total admissions grew 2%, of which all was organic. 

Operating income before corporate expenses in the VN segment for 2012 was $39.4 million, a $6.3 million decrease from $45.7 million reported for 2011, primarily as a result of the impact of the Medicare rate cut, the shift of certain Medicare Advantage contracts we chose to renew to per visit reimbursement and a $0.9 million increase in bad debt provision, which were partially offset by a focused effort to reduce labor costs relative to patients served.

Primarily as a result of our Cambridge acquisition, net service revenues in the PC segment for 2012 grew 37% or $20.8 million to $77.0 million from $56.3 million 2011.  As a result, operating income before unallocated corporate expenses in the PC segment increased 16% to $10.0 million from $8.7 million 2011. 

Conference Call A conference call to review the results will begin at 11:00 a.m. ET on February 27, 2013, and will be hosted by William Yarmuth, Chief Executive Officer, and Steve Guenthner, President and Principal Financial Officer. To participate in the conference call, please dial 1-877-407-4018 (USA) or 1-201-689-8471 (International).  In addition, a dial-up replay of the conference call will be available beginning February 27, 2013 at 2:00 p.m. ET and ending on March 13, 2013. The replay telephone number is 1-877-870-5176 (USA) or 1-858-384-5517 (International). Passcode 409361.  A live Web cast of the call will also be available from the Investor Relations section of the corporate Web site at http://www.almostfamily.com. A Web cast replay can be accessed on the corporate Web site beginning February 27, 2013 at approximately 2:00 p.m. ET and will remain available until March 27, 2013.

Almost Family, Inc.                       

Steve Guenthner

(502) 891-1000

 

The Ruth Group

Investor Relations

Nick Laudico/Zack Kubow

(646) 536-7030/7020

nlaudico@theruthgroup.com

zkubow@theruthgroup.com

 

 ALMOST FAMILY, INC. AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME 

 (UNAUDITED) 

 (In thousands, except per share data) 

 Three Months Ended December 31, 

 Year Ended December 31, 

2012

2011

2012

2011

 Net service revenues 

$            86,554

$            89,331

$          348,524

$          339,853

 Cost of service revenues (excluding       depreciation & amortization) 

45,252

45,126

180,824

167,066

 Gross margin 

41,302

44,205

167,700

172,787

 General and administrative expenses: 

 Salaries and benefits 

24,793

24,744

98,441

97,526

 Other 

10,305

10,869

40,715

40,700

 Total general and administrative      expenses 

35,098

35,613

139,156

138,226

 Operating income 

6,204

8,592

28,544

34,561

 Interest expense, net 

(17)

(39)

(104)

(180)

 Income before income taxes 

6,187

8,553

28,440

34,381

 Income tax expense 

(2,482)

(3,248)

(11,156)

(13,579)

 Net income 

$              3,705

$              5,305

$            17,284

$            20,802

 Per share amounts-basic: 

 Average shares outstanding 

9,280

9,296

9,285

9,278

 Net income 

$                0.40

$                0.57

$                1.86

$                2.24

 Per share amounts-diluted: 

 Average shares outstanding 

9,313

9,328

9,324

9,360

 Net income 

$                0.40

$                0.57

$                1.85

$                2.22

 

 

 ALMOST FAMILY, INC. AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

December 31, 2012

 ASSETS 

(UNAUDITED)

December 31, 2011

 CURRENT ASSETS: 

 Cash and cash equivalents  

$                        26,120

$                    33,693

 Accounts receivable - net 

49,971

45,166

 Prepaid expenses and other current assets 

7,021

6,221

 Deferred tax assets 

6,580

7,470

 TOTAL CURRENT ASSETS 

89,692

92,550

 PROPERTY AND EQUIPMENT - NET 

5,401

5,229

 GOODWILL 

133,418

132,653

 OTHER INTANGIBLE ASSETS 

19,967

19,709

 OTHER ASSETS 

781

1,019

$                      249,259

$                  251,160

 LIABILITIES AND STOCKHOLDERS' EQUITY 

 CURRENT LIABILITIES: 

 Accounts payable 

$                          4,599

$                      6,489

 Accrued other liabilities 

21,874

21,467

 Current portion - capital leases and notes payable 

625

1,200

 TOTAL CURRENT LIABILITIES 

27,098

29,156

 LONG-TERM LIABILITIES: 

 Notes payable 

500

1,125

 Deferred tax liabilities 

16,785

13,630

 Other liabilities 

561

952

 TOTAL LONG-TERM LIABILITIES 

17,846

15,707

 TOTAL LIABILITIES 

44,944

44,863

 STOCKHOLDERS' EQUITY: 

 Preferred stock, par value $0.05; authorized 

 2,000 shares; none issued or outstanding 

-

-

 Common stock, par value $0.10; authorized 

 25,000; 9,421 and 9,381 

 issued and outstanding 

942

938

 Treasury stock, at cost, 91 and 13 shares 

(2,320)

(431)

 Additional paid-in capital 

101,945

100,678

 Retained earnings 

103,748

105,112

 TOTAL STOCKHOLDERS' EQUITY 

204,315

206,297

$                      249,259

$                  251,160

 

 ALMOST FAMILY, INC. AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (UNAUDITED) 

 (In thousands) 

 Year Ended December 31, 

2012

2011

 Cash flows from operating activities: 

 Net income  

$                 17,284

$                 20,802

 Adjustments to reconcile income to net cash provided by operating activities: 

 Depreciation and amortization 

2,578

2,816

 Provision for uncollectible accounts 

2,825

2,355

 Stock-based compensation 

1,473

1,422

 Deferred income taxes 

3,753

4,371

27,913

31,766

 Change in certain net assets and liabilities, net of the effects of acquisitions: 

 (Increase) decrease in:  

 Accounts receivable 

(8,228)

(1,641)

 Prepaid expenses and other current assets 

(1,137)

633

 Other assets 

236

252

 (Decrease) increase in: 

 Accounts payable and accrued expenses 

(1,751)

(5,075)

 Net cash provided by operating activities 

17,033

25,935

 Cash flows from investing activities: 

 Capital expenditures 

(2,487)

(2,890)

 Acquisitions, net of cash acquired 

(538)

(38,064)

 Net cash used in investing activities 

(3,025)

(40,954)

 Cash flows from financing activities: 

 Proceeds from exercise of stock options 

70

288

 Purchase of common stock in connection with share awards 

(1,889)

(440)

 Tax benefit from stock-based compensation 

-

1,614

 Payment of special dividend 

(18,562)

-

 Principal payments on notes payable 

(1,200)

(693)

 Net cash used in financing activities 

(21,581)

769

 Net change in cash and cash equivalents 

(7,573)

(14,250)

 Cash and cash equivalents at beginning of period 

33,693

47,943

 Cash and cash equivalents at end of period 

$                26,120

$                33,693

 Summary of non-cash investing and financing activities: 

 Settlement of Directors Deferred Compensation Plan 

$                          -

$                     501

 Acquisitions funded by notes payable 

$                          -

$                  1,000

 Dividends declared, not paid 

$                        86

$                          -

 

 ALMOST FAMILY, INC. AND SUBSIDIARIES 

 RESULTS OF OPERATIONS 

 (UNAUDITED) 

 (In thousands) 

 Three Months Ended December 31, 

2012

2011

 Change 

 Amount 

 % Rev 

 Amount 

 % Rev 

 Amount 

%

Net service revenues:

 Visiting Nurse 

$        67,279

77.7%

$        69,801

78.1%

$        (2,522)

-3.6%

 Personal Care 

19,275

22.3%

19,530

21.9%

(255)

-1.3%

86,554

100.0%

89,331

100.0%

(2,777)

-3.1%

Operating income before corporate

expenses:

Visiting Nurse 

8,726

13.0%

10,740

15.4%

(2,014)

-18.8%

 Personal Care 

2,446

12.7%

3,264

16.7%

(818)

-25.1%

11,172

12.9%

14,004

15.7%

(2,832)

-20.2%

Corporate expenses

4,968

5.7%

5,412

6.1%

(444)

-8.2%

Operating income

6,204

7.2%

8,592

9.6%

(2,388)

-27.8%

Interest expense, net

(17)

0.0%

(39)

0.0%

22

-56.4%

Income tax expense

(2,482)

-2.9%

(3,248)

-3.6%

766

-23.6%

Net income

$          3,705

4.3%

$          5,305

5.9%

$        (1,600)

-30.2%

EBITDA

$          7,217

8.3%

$          9,621

10.8%

$        (2,404)

-25.0%

 ALMOST FAMILY, INC. AND SUBSIDIARIES 

 RESULTS OF OPERATIONS 

 (UNAUDITED) 

 (In thousands) 

 Year Ended December 31, 

2012

2011

 Change 

 Amount 

 % Rev 

 Amount 

 % Rev 

 Amount 

%

Net service revenues:

 Visiting Nurse 

$      271,477

77.9%

$      283,596

83.4%

$      (12,119)

-4.3%

 Personal Care 

77,047

22.1%

56,257

16.6%

20,790

37.0%

348,524

100.0%

339,853

100.0%

8,671

2.6%

Operating income before corporate expenses:

 Visiting Nurse 

39,424

14.5%

45,744

16.1%

(6,320)

-13.8%

 Personal Care 

10,029

13.0%

8,682

15.4%

1,347

15.5%

49,453

14.2%

54,426

16.0%

(4,973)

-9.1%

Corporate expenses

20,909

6.0%

19,865

5.8%

1,044

5.3%

Operating income

28,544

8.2%

34,561

10.2%

(6,017)

-17.4%

Interest expense, net

(104)

0.0%

(180)

-0.1%

76

-42.2%

Income tax expense

(11,156)

-3.2%

(13,579)

-4.0%

2,423

-17.8%

Net income

$        17,284

5.0%

$        20,802

6.1%

$        (3,518)

-16.9%

EBITDA

$        32,595

9.4%

$        38,799

11.4%

$        (6,204)

-16.0%

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

VISITING NURSE SEGMENT OPERATING METRICS

Three Months Ended December 31,

2012

2011

Change

Amount

% Rev

Amount

% Rev

Amount

%

Average number of locations

106

106

-

0.0%

All payors:

Patients months

54,251

53,446

805

1.5%

Admissions

15,770

15,611

159

1.0%

Billable visits

474,340

475,097

(757)

-0.2%

Medicare Statistics (1):

Revenue (in thousands)

$       60,396

89.8%

$      64,393

92.3%

$   (3,997)

-6.2%

Billable visits

384,806

400,718

(15,912)

-4.0%

Admissions

13,668

13,995

(327)

-2.3%

Recertifications

7,994

8,238

(244)

-3.0%

Episodes completed

21,184

21,845

(661)

-3.0%

Revenue per completed episode

$         2,882

$        2,996

$      (114)

-3.8%

Visits per episode

17.8

18.2

(0.4)

-2.2%

(1)  Episodic data which includes Medicare Advantage plans that pay episodically

PERSONAL CARE OPERATING METRICS

Three Months Ended December 31,

2012

2011

Change

Amount

Amount

Amount

%

Average number of locations

61

60

1

1.7%

Admissions

1,072

1,019

53

5.2%

Patient months of care

17,280

17,091

189

1.1%

Patient days of care

263,854

255,581

8,273

3.2%

Billable hours

1,044,996

1,093,408

(48,412)

-4.4%

Revenue per billable hour

$         18.44

$        17.86

$       0.58

3.2%

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

VISITING NURSE SEGMENT OPERATING METRICS

Year Ended December 30,

2012

2011

Change

Amount

% Rev

Amount

% Rev

Amount

%

Average number of locations

108

98

10

10.2%

All payors:

Patients months

217,563

215,342

2,221

1.0%

Admissions

63,164

61,775

1,389

2.2%

Billable visits

1,890,103

1,935,967

(45,864)

-2.4%

Medicare Statistics (1):

Revenue (in thousands)

$     246,329

90.7%

$    261,960

92.4%

$  (15,631)

-6.0%

Billable visits

1,544,958

1,616,288

(71,330)

-4.4%

Admissions

55,369

56,007

(638)

-1.1%

Recertifications

31,862

32,549

(687)

-2.1%

Episodes completed

86,686

87,533

(847)

-1.0%

Revenue per completed episode

$         2,850

$        3,002

$       (152)

-5.1%

Visits per episode

17.5

18.1

(0.6)

-3.3%

(1)  Episodic data which includes Medicare Advantage plans that pay episodically

PERSONAL CARE OPERATING METRICS

Year Ended December 30,

2012

2011

Change

Amount

Amount

Amount

%

Average number of locations

60

30

30

100.0%

Admissions

4,319

3,262

1,057

32.4%

Patient months of care

69,304

53,802

15,502

28.8%

Patient days of care

1,017,530

755,002

262,528

34.8%

Billable hours

4,202,386

3,120,715

1,081,671

34.7%

Revenue per billable hour

$         18.33

$        18.03

$        0.30

1.7%

Non-GAAP Financial Measure The information provided in some of the tables in this release includes certain non-GAAP financial measures as defined under SEC rules.  In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those measures to the most directly comparable GAAP measures.

EBITDA Earnings before interest, income taxes, depreciation and amortization (EBITDA) is not a measure of financial performance under accounting principles generally accepted in the United States of America.  It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from EBITDA are significant components in understanding and evaluating financial performance and liquidity. Management routinely calculates and communicates EBITDA and believes that it is useful to investors because it is commonly used as an analytical indicator within our industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. EBITDA is also used in certain covenants contained in our credit agreement.

The following tables set forth a reconciliation of net income to EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES

RECONCILIATION OF EBITDA

(In thousands)

Three Months Ended

December 31,

Year Ended December 31,

2012

2011

2012

2011

Net income

$           3,705

$           5,305

$        17,284

$        20,802

Add back:

Interest expense

17

39

104

180

Income tax expense

2,482

3,248

11,156

13,579

Depreciation and amortization

667

646

2,578

2,816

Amortization of stock-based     compensation

346

383

1,473

1,422

Earnings before interest, income taxes, depreciation and amortization (EBITDA)

$           7,217

$           9,621

$        32,595

$        38,799

About Almost Family Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing and personal care services with locations in Florida, Ohio, Kentucky, Connecticut, New Jersey, Massachusetts, Missouri, Alabama, Illinois, Pennsylvania and Indiana (in order of revenue significance).  Almost Family, Inc. and its subsidiaries operate a Medicare-certified segment and a personal care segment.  Altogether, Almost Family operates over 160 branch locations in 11 U.S. states. 

Forward Looking Statements All statements, other than statements of historical facts, included in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "project," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. These forward-looking statements are based on the Company's current plans, expectations and projections about future events.

Because forward-looking statements involve risks and uncertainties, the Company's actual results could differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. The potential risks and uncertainties which could cause actual results to differ materially include: regulatory approvals or Fourth party consents may not be obtained; the impact of further changes in healthcare reimbursement systems, including the ultimate outcome of potential changes to Medicare reimbursement for home health services and to Medicaid reimbursement due to state budget shortfalls; the ability of the Company to maintain its level of operating performance and achieve its cost control objectives; changes in our relationships with referral sources; the ability of the Company to integrate acquired operations including obtaining synergies, integration objectives and anticipated timelines; government regulation; health care reform; pricing pressures from Medicare, Medicaid and other Fourth-party payers; changes in laws and interpretations of laws relating to the healthcare industry; and the Company's self-insurance risks.  For a more complete discussion regarding these and other factors which could affect the Company's financial performance, refer to the Company's various filings with the Securities and Exchange Commission, including its filing on Form 10-K for the year ended December 31, 2012, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and "Risk Factors." The Company undertakes no obligation to update or revise its forward-looking statements.

SOURCE Almost Family, Inc.



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http://www.almostfamily.com