Addus HomeCare Announces Third Quarter 2014 Results

DOWNERS GROVE, Ill., Oct. 30, 2014 /PRNewswire/ -- Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of home and community-based services that primarily are social in nature, provided in the home and focused on the dual eligible population, today announced its financial results for the third quarter and nine months ended September 30, 2014.

For the third quarter, net service revenues increased 21.3% to $81.7 million from $67.3 million for the third quarter of 2013. Net income from continuing operations was $3.2 million for the third quarter of 2014, a 16.9% increase from $2.8 million for the third quarter last year, while net income from continuing operations per diluted share rose 16.0% to $0.29 from $0.25.

Net service revenues for the first nine months of 2014 were $230.3 million, a 17.5% increase from $196.1 million for the same prior-year period.  Net income from continuing operations for the first nine months of 2014 was $8.3 million, or $0.75 per diluted share, compared with $8.0 million or $0.73 per diluted share for the same prior year period. Net income from continuing operations for the first nine months of 2014 included a charge for acquisition transaction expense totaling $0.03 per diluted share. Excluding this item, adjusted net income from continuing operations per diluted share increased 6.9% to $0.78 for the first nine months of 2014 from $0.73 for the same period in 2013.

"Addus produced significant profitable growth for the third quarter of 2014, as organic growth and the impact of acquisitions since the third quarter last year drove a 21.3% increase in revenues, our highest quarterly revenue growth as a public company," commented Mark Heaney, President and Chief Executive Officer of Addus HomeCare. "Our 16.9% growth in net income from continuing operations reflected anticipated expense increases for our technology rollout, SOX 404 compliance efforts and the increased amortization related to our acquisitions.  Adjusted EBITDA rose 27.4% to $6.3 million for the third quarter and 18.9% to $16.6 million for the first nine months of 2014."

Third-quarter revenue growth reflected a 7.2% increase in same-store sales, with the remaining 14.1% increase attributable to acquisitions.  Average billable census increased 18.4% for the third quarter of 2014 from the third quarter last year.  Same-store census grew 7.6%, with acquisitions driving the remaining 10.8% increase in census.  Average revenue per billable hour remained relatively stable at $17.03 for the third quarter of 2014 compared with $17.08 for the third quarter last year.

At the end of the third quarter of 2014, Addus had $14.1 million in cash, no bank debt and $40 million of availability under its revolving credit facility.  Consistent with historical payment flows from the State of Illinois, net cash used in operations was $7.4 million for the quarter, while net cash provided by operations was $7.6 million for the first nine months of 2014. 

Heaney added, "In addition to our financial results, we are also pleased with our initiatives to build our sales capabilities and the resulting organic growth of our existing home and community-based services.  We are also gratified by the growth generated from acquisitions, and we continue to evaluate additional opportunities, especially in those states that are more actively engaged in transitioning dual eligible consumers to MCOs.  We also continue to make important progress regarding several strategic initiatives that support long-term growth as we enter new states and that give us competitive advantages as we grow existing markets. 

"As states transition management of their dual eligible populations to managed care plans, we remain focused on positioning the Company as an integral part of the continuum of care we believe MCOs will be expected to provide these consumers. The growing impact of this transition was evident in the third quarter, as our revenues from managed care increased to 9.5% of total net service revenues for the third quarter compared to 1.0% for the same prior-year quarter.  While the majority of the managed care revenues were generated from acquisitions, we noted a shift in same-store MCO census and revenues, with same-store revenues from MCOs growing to 2.4% of total revenue for the third quarter of 2014 compared with 1.0% for the third quarter last year and to 1.5% compared with 0.5% for the nine months ended September 30, 2014 and 2013, respectively."

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 host a conference call to discuss its results for the third quarter today beginning at 5:00 p.m. Eastern time. The toll-free dial-in number for the conference call is (877) 474-9501 (international dial-in number is (857) 244-7554), passcode 10423889. A telephonic replay of the conference call will be available through midnight on November 6, 2014, by dialing (888) 286-8010 (international dial-in number is (617) 801-6888) and entering passcode 54894257.

A live broadcast of the 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.

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, and in Addus HomeCare's Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission on May 7, 2014, and August 11, 2014, 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. (Unaudited tables and notes follow).

About Addus

Addus is a comprehensive provider of home and community-based services that primarily are social in nature, provided in the home and 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, managed care organizations, commercial insurers and private individuals. For more information, please visit www.addus.com.

SOURCE Addus HomeCare Corporation

Related Links

http://www.addus.com