Almost Family Reports Third Quarter 2010 Results

Third Quarter Highlights:

-- Net service revenues increased 11% to $84.9 million

-- Net income increased 29% to $7.9 million

-- Diluted EPS increased 16% to $0.85 per share on 10% more shares outstanding

-- Visiting Nurse (VN) segment net revenues rose 13% to $74.2 million

-- VN organic Medicare admission growth was 12%

-- Approximately $110 million in cash plus credit facility available to fund acquisitions

Oct 28, 2010, 07:30 ET from Almost Family, Inc.

LOUISVILLE, Ky., Oct. 28 /PRNewswire-FirstCall/ -- Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing services, announced today its financial results for the three months ended September 30, 2010.

William Yarmuth, Chief Executive Officer, commented, "Our third quarter results demonstrate the fundamental strength of our business and the success of our Senior Advocacy Mission in the communities we serve.  I am proud of our ability to continue balancing our top and bottom line growth while providing superior care to our patients.  Our Visiting Nurse (VN) segment continued to show strong organic revenue growth and the Personal Care (PC) segment continued strong margin performance."  

Third Quarter Financial Results

Almost Family reported third quarter 2010 net service revenues of $84.9 million, an 11% increase from $76.3 million in the third quarter of 2009, primarily due to a 13% increase in revenue by our VN segment.

Net income for the third quarter of 2010 was $7.9 million, or $0.85 per diluted share, compared to $6.2 million, or $0.73 per diluted share, in the third quarter of 2009 on 10% more shares outstanding.  

Third Quarter Segment Results

Net revenues in the Visiting Nurse segment for the third quarter of 2010 were $74.2 million, a 13% increase from $65.7 million in the third quarter of 2009.  The total revenue growth of $8.4 million was entirely organic.  Organic Medicare admissions growth was 12%.  Operating income before corporate expense in the VN segment for the third quarter of 2010 was $16.5 million, a 23% increase from $13.4 million in the third quarter of 2009.

While net revenues in the Personal Care (PC) segment were essentially flat for the third quarter of 2010, operating income before unallocated corporate expense increased 15% to $1.5 million from $1.3 million in the same period of 2009 due to improved cost management.

Nine Month Period Ended September 30, 2010

Almost Family reported net service revenues for the nine month period ended September 30, 2010 of $252.3 million, a 15% increase from $219.8 million in the same period of 2009.

Net income for the nine month period of 2010 was $23.7 million, or $2.54 per diluted share, compared to $17.8 million, or $2.14 per diluted share, in the nine month period of 2009 on 13% more shares outstanding.

Nine Month Period Segment Results

Net revenues in the Visiting Nurse segment for the nine month period of 2010 were $220.6 million, a 17% increase from $188.4 million in the nine month period of 2009.  The revenue growth of $32.2 million came from a 16% organic growth rate plus approximately $2.0 million from acquired operations.  Organic Medicare admissions growth was 12%.  Operating income before corporate expense in the VN segment for the nine month period of 2010 was $50.1 million, a 28% increase from $39.1 million in the nine month period of 2009.

Net revenues in the Personal Care (PC) segment for the nine month period of 2010 were consistent with 2009 while operating income before unallocated corporate expense increased 16% to $4.2 million for the nine month period of 2010 from $3.6 million in the nine month period of 2009.

Regulatory Inquiries and Shareholder Litigation

As previously announced, the Company is continuing to cooperate fully with investigators from the US Senate Finance Committee and the US Securities Exchange Commission regarding their inquiries, in addition to reviewing the derivative and shareholder class action suits filed following an April 27, 2010 Wall Street Journal article related to Medicare home health therapy services. During the quarter ended September 30, 2010 the Company incurred approximately $0.2 million ($0.02 per diluted share) in professional fees, net of anticipated insurance coverage, associated with these inquiries.  In the nine-months ended September 30, 2010 the Company incurred approximately $0.5 million ($0.03 per diluted share) in professional fees, net of anticipated insurance coverage, associated with these inquiries.

Conference Call

A conference call to review the results will begin at 11:00 a.m. ET on October 28, 2010, and will be hosted by William Yarmuth, Chief Executive Officer, and Steve Guenthner, Chief Financial Officer. To participate in the conference call, please dial 1-877-407-0789 (USA) or 1-201-689-8562 (International).  In addition, a dial-up replay of the conference call will be available beginning October 28, 2010 at 2:00 p.m. ET and ending on November 11, 2010. The replay telephone number is 1-877-870-5176 (USA) or 1-858-384-5517 (International). Passcode: 359520.  

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 October 28, 2010 at approximately 2:00 p.m. ET and will remain available until November 28, 2010.

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share data)

Three Months Ended September 30,

2010

2009

Net service revenues

$                    84,897

$                    76,294

Cost of service revenues (excluding depreciation and amortization)

39,131

35,779

Gross margin

45,766

40,515

General and administrative expenses:

Salaries and benefits

22,874

20,800

Other

9,599

9,380

Total general and administrative expenses

32,473

30,180

Operating income

13,293

10,335

Interest expense, net

(60)

(156)

Income from continuing operations before income taxes

13,233

10,179

Income tax expense

(5,281)

(3,985)

Net income from continuing operations

7,952

6,194

Discontinued operations, net of tax benefits of $8 and $18

(12)

(28)

Net income

$                      7,940

$                      6,166

Per share amounts-basic:

Average shares outstanding

9,143

8,282

Income from continued operations

$                        0.87

$                        0.75

Loss from discontinued operations

-

-

Net income

$                        0.87

$                        0.75

Per share amounts-diluted:

Average shares outstanding

9,343

8,457

Income from continued operations

$                        0.85

$                        0.73

Loss from discontinued operations

-

-

Net income

$                        0.85

$                        0.73

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share data)

Nine Months Ended September 30,

2010

2009

Net service revenues

$ 252,281

$ 219,828

Cost of service revenues (excluding depreciation and amortization)

115,347

102,492

Gross margin

136,934

117,336

General and administrative expenses:

Salaries and benefits

68,067

60,472

Other

28,960

26,842

Total general and administrative expenses

97,027

87,314

Operating income

39,907

30,022

Interest expense, net

(210)

(673)

Income from continuing operations before income taxes

39,697

29,349

Income tax expense

(15,932)

(11,513)

Net income from continuing operations

23,765

17,836

Discontinued operations, net of tax benefits of $27 and $52

(39)

(80)

Net income

$   23,726

$   17,756

Per share amounts-basic:

Average shares outstanding

9,101

8,164

Income from continued operations

$       2.61

$       2.18

Loss from discontinued operations

-

-

Net income

$       2.61

$       2.18

Per share amounts-diluted:

Average shares outstanding

9,354

8,318

Income from continued operations

$       2.54

$       2.14

Loss from discontinued operations

-

-

Net income

$       2.54

$       2.14

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30, 2010

ASSETS

(UNAUDITED)

December 31, 2009

CURRENT ASSETS:

Cash and cash equivalents  

$            41,643

$                    19,389

Accounts receivable - net

38,905

35,121

Prepaid expenses and other current assets

3,098

2,544

Deferred tax assets

8,787

7,786

TOTAL CURRENT ASSETS

92,433

64,840

PROPERTY AND EQUIPMENT - NET

4,506

4,291

GOODWILL

100,609

99,133

OTHER INTANGIBLE ASSETS

14,311

14,538

OTHER ASSETS

576

587

$          212,435

$                  183,389

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$              4,423

$                      3,360

Accrued other liabilities

21,680

20,076

Current portion - capital leases and notes payable

1,618

1,836

TOTAL CURRENT LIABILITIES

27,721

25,272

LONG-TERM LIABILITIES:

Capital lease obligations

-

40

Notes payable

1,300

2,800

Deferred tax liabilities

7,587

5,258

Other liabilities

806

1,042

TOTAL LONG-TERM LIABILITIES

9,693

9,140

TOTAL LIABILITIES

37,414

34,412

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; 9,251 and 9,151

issued and outstanding

925

915

Treasury stock, at cost, 2 and 0 shares

(70)

-

Additional paid-in capital

96,844

94,465

Retained earnings

77,322

53,597

TOTAL STOCKHOLDERS' EQUITY

175,021

148,977

$          212,435

$                  183,389

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

                                                                      (In thousands)

Nine Months Ended September 30,

2010

2009

Cash flows from operating activities:

Net income  

$ 23,726

$ 17,756

Loss from discontinued operations

(39)

(80)

Income from continuing operations

23,765

17,836

Adjustments to reconcile income from continuing operations to

net cash provided by operating activities:

Depreciation and amortization

2,102

1,753

Provision for uncollectible accounts

2,592

3,164

Stock-based compensation

1,308

1,219

Gain from sale of asset

(2)

-

Deferred income taxes

1,327

(658)

31,092

23,314

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

(Increase) decrease in:  

Accounts receivable

(6,376)

(6,643)

Prepaid expenses and other current assets

(692)

46

Other assets

11

(58)

Increase (decrease) in:

Accounts payable and accrued expenses

3,281

(23)

Net cash provided by operating activities

27,316

16,636

Cash flows from investing activities:

Capital expenditures

(1,963)

(1,245)

Cash proceeds from sale of asset

13

-

Acquisitions, net of cash acquired

(2,326)

(6,406)

Net cash used in investing activities

(4,276)

(7,651)

Cash flows from financing activities:

   Net revolving credit facility repayments

-

(23,998)

Proceeds from exercise of stock options

381

84

Purchase of common stock in connection with exercise of stock options

(628)

(6)

Tax benefit from exercise of non-qualified stock options

1,258

211

Net proceeds from issuance of common stock

-

27,967

Principal payments on capital leases and notes payable

(1,758)

(4,392)

Net cash used in financing activities

(747)

(134)

Cash flows from discontinued operations:

Operating activities

(39)

(80)

Investing activities

-

-

Financing activities

-

-

Net cash used in discontinued operations

(39)

(80)

Net increase  in cash and cash equivalents

22,254

8,771

Cash and cash equivalents at beginning of period

19,389

1,301

Cash and cash equivalents at end of period

$ 41,643

$ 10,072

Summary of non-cash investing and financing activities:

Value of stock withheld in lieu of payroll taxes

$      628

$          6

Acquisitions funded by notes payable

$         -

$   1,200

ALMOST FAMILY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(UNAUDITED)

(In thousands)

Three Months ended September 30,

2010

2009

Change

Amount

% Rev

Amount

% Rev

Amount

%

Net service revenues:

Visiting Nurse

$   74,155

87.3%

$   65,739

86.2%

$     8,416

12.8%

Personal Care

10,742

12.7%

10,555

13.8%

187

1.8%

$   84,897

100.0%

$   76,294

100.0%

$     8,603

11.3%

Operating income before corporate expenses:

Visiting Nurse

$   16,536

22.3%

$   13,413

20.4%

$     3,123

23.3%

Personal Care

1,475

13.7%

1,287

12.2%

188

14.6%

18,011

21.2%

14,700

19.3%

3,311

22.5%

Corporate expenses

4,718

5.6%

4,365

5.7%

353

8.1%

Operating income

13,293

15.7%

10,335

13.5%

2,958

28.6%

Interest expense, net

60

0.1%

156

0.2%

(96)

-61.5%

Income tax expense

5,281

6.2%

3,985

5.2%

1,296

32.5%

Net income from continuing operations

$     7,952

9.4%

$     6,194

8.1%

$     1,758

28.4%

EBITDA from continuing operations

$   14,466

17.0%

$   11,384

14.9%

$     3,082

27.1%

ALMOST FAMILY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(UNAUDITED)

(In thousands)

Nine Months Ended September 30,

2010

2009

Change

Amount

% Rev

Amount

% Rev

Amount

%

Net service revenues:

Visiting Nurse

$       220,643

87.5%

$       188,444

85.7%

$         32,199

17.1%

Personal Care

           31,638

12.5%

           31,385

14.3%

                253

0.8%

$       252,281

100.0%

$       219,829

100.0%

$         32,452

14.8%

Operating income before corporate expenses:

Visiting Nurse

$         50,118

22.7%

$         39,070

20.7%

$         11,048

28.3%

Personal Care

             4,222

13.3%

             3,630

11.6%

                592

16.3%

           54,340

21.5%

           42,700

19.4%

           11,640

27.3%

Corporate expenses

           14,433

5.7%

           12,678

5.8%

             1,755

13.8%

Operating income

           39,907

15.8%

           30,022

13.7%

             9,885

32.9%

Interest expense, net

                210

0.1%

                673

0.3%

              (463)

-68.8%

Income tax expense

           15,932

6.3%

           11,513

5.2%

             4,419

38.4%

Net income from continuing operations

$         23,765

9.4%

$         17,836

8.1%

$           5,929

33.2%

EBITDA from continuing operations

$         43,317

17.2%

$         32,994

15.0%

$         10,323

31.3%

ALMOST FAMILY, INC. AND SUBSIDIARIES

VISITING NURSE SEGMENT OPERATING METRICS

Three Months Ended September 30,

2010

2009

Change

Amount

% Rev

Amount

% Rev

Amount

%

Average number of locations

88

82

6

7.3%

All payors:

Patients Months

51,382

47,744

3,638

7.6%

Admissions

14,359

12,878

1,481

11.5%

Billable Visits

469,992

416,328

53,664

12.9%

Medicare Statistics:

Revenue (in thousands)

$      67,786

91.4%

$      59,381

90.3%

$      8,405

14.2%

Billable visits

394,668

360,681

33,987

9.4%

Admissions

13,030

11,616

1,414

12.2%

Episodes

21,763

19,479

2,284

11.7%

Revenue per completed episode

$        3,156

$        3,002

$         154

5.1%

Visits per episode

18.1

17.8

0.3

1.7%

PERSONAL CARE

RESULTS OF OPERATION

Three Months Ended September 30,

2010

2009

Change

Amount

Amount

Amount

%

Average number of locations

23

23

-

0.0%

Admissions

710

804

(94)

-11.7%

Patient months of care

11,645

11,822

(177)

-1.5%

Patient days of care

154,565

152,272

2,293

1.5%

Billable hours

581,171

590,662

(9,491)

-1.6%

Revenue per billable hour

$        18.48

$        17.87

$        0.61

3.4%

ALMOST FAMILY, INC. AND SUBSIDIARIES

VISITING NURSE SEGMENT OPERATING METRICS

Nine Months Ended September 30,

2010

2009

Change

Amount

% Rev

Amount

% Rev

Amount

%

Average number of locations

86

78

8

10.3%

All payors:

Patients Months

153,753

137,805

15,948

11.6%

Admissions

43,436

38,532

4,904

12.7%

Billable Visits

1,407,168

1,194,139

213,029

17.8%

Medicare Statistics:

Revenue (in thousands)

$  202,290

91.7%

$  169,098

89.7%

$ 33,192

19.6%

Billable visits

1,177,389

1,025,210

152,179

14.8%

Admissions

39,390

34,968

4,422

12.6%

Episodes

64,042

56,703

7,339

12.9%

Revenue per completed episode

$      3,139

$      2,943

$      196

6.7%

Visits per episode

18.0

17.5

0.5

2.9%

PERSONAL CARE

RESULTS OF OPERATION

Nine Months Ended September 30,

2010

2009

Change

Amount

Amount

Amount

%

Average number of locations

23

23

-

0.0%

Admissions

2,295

2,445

(150)

-6.1%

Patient months of care

35,275

35,340

(65)

-0.2%

Patient days of care

456,188

448,331

7,857

1.8%

Billable hours

1,735,586

1,756,498

(20,912)

-1.2%

Revenue per billable hour

$      18.23

$      17.87

$     0.36

2.0%

Non-GAAP Financial Measure

The information provided in the tables in this release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (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:

EBITDA is defined as income before depreciation and amortization, net interest expense and income taxes. 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 Continuing Operations Net Income to EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES

RECONCILIATION OF EBITDA

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2010

2009

2010

2009

Net income from continuing operations

$           7,952

$           6,194

$         23,765

$         17,836

Add back:

Interest expense

60

156

210

673

Income tax expense

5,281

3,985

15,932

11,513

Depreciation and amortization

736

601

2,102

1,753

Amortization of stock-based compensation

437

447

1,308

1,219

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

$         14,466

$         11,383

$         43,317

$         32,994

About Almost Family

Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing services, with branch locations in Florida, Kentucky, Connecticut, New Jersey, Ohio, Massachusetts, Alabama, Missouri, 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 100 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 third 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; government regulation; health care reform; pricing pressures from Medicare, Medicaid and other third-party payers; changes in laws and interpretations of laws relating to the healthcare industry; potential audits and investigations by governmental and regulatory agencies; 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, 2009, 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.

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

SOURCE Almost Family, Inc.



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