ADDUS HOMECARE CORPORATION DOWNERS GROVE, Ill., July 31, 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 second quarter ended June 30, 2014.
Second Quarter Review
Total net service revenues from continuing operations for the second quarter of 2014 were $77.0 million, a 17.1% increase compared to $65.8 million in the prior year quarter. Same store sales accounted for 6.7% increase with 10.4% generated by recently completed acquisitions. Net income from continuing operations was $2.7 million, or $0.25 per diluted share, compared to $0.24 per diluted share in 2013. Acquisitions contributed $245K of net income or $0.02 per diluted share.
Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated: "We are pleased with our performance for the quarter. Revenue growth, both for our same stores and for our new acquisitions remains strong, driven by an 8.7% increase in average census in the quarter in our same stores."
Mr. Heaney also said, "We welcome the employees of Aid & Assist who give us a stronger presence in Tennessee, a key managed care state. Our first month of ownership has been very positive. The next step in the integration process is to merge our existing business into Aid for improved efficiency and effectiveness."
Heaney continued, "Focusing on the needs of our growing managed care payors continues to be a strategic focus of the organization. Our pilot programs with Aetna and Centene are progressing well and we are seeing increased census from these important projects. Based on projections from the State of Illinois, we anticipate between 20% to 30% of our Illinois caseload will transition to managed care in September."
Same store average census grew 8.7%. Acquired census added an additional 7.9% for total census growth of 16.6% compared to the prior year quarter. Billable hours per business day increased 20.9%, offset by a slight decline in average revenues per billable hour.
Four consistently underperforming offices were closed in the quarter. These offices, located in New Jersey and Washington represented approximately $2.6 million in annualized revenues.
General and administrative expenses include $536K of one time M&A expense which reduced earnings by $0.03 per diluted share.
The estimated increase in Work Opportunity Tax Credits to be awarded in 2014 reduced our effective tax rate for the quarter to 30.9%, with an estimated overall rate for 2014 of 32.8%. This increased earnings by an estimated $0.02 per diluted share. Proforma earnings per share were $0.26 per diluted share after taking into effect M&A expenses and the change in our effective tax rate.
Net income from continuing operations increased 5.7% to $2.7 million. Adjusted EBITDA increased 27.8% in the quarter to $5.9 million.
Cash flow for the quarter was positive with $14.3 million provided by operating activities, driven by solid operational performance and substantial payments on accounts receivable from the State of Illinois. The Company ended the quarter with $19.5 million in cash and $40 million available under its revolving line of credit.
Six Month Review
Total net service revenues for the six months ended June 30, 2014 were $148.6 million, a 15.5% increase compared to $128.8 million in the same prior year period.
Net income from continuing operations for the six months ended June 30, 2014 was $5.1 million, or $0.46 per diluted share, compared to $5.3 million or $0.48 per diluted share, in the prior year period. This decline in earnings was due to the M&A expenses noted above and an increase in depreciation and amortization expenses related primarily to acquisitions, which reduced earnings by an additional $0.03 per diluted share.
2013 results were favorably affected by substantially lower effective tax rates in 2013 than experienced in 2014 (32.8% in 2014 vs. 28.5% in 2013). The net effect of the lower tax rates in 2013 was to increase earnings in that year by $0.03 per diluted share. Proforma earnings per diluted share would have been $0.49 per diluted share in 2014 after taking into effect M&A expenses noted above, compared to proforma adjusted earnings per diluted share of $0.45 in 2013 after normalizing for the lower tax rate experienced in that year, representing a 8.9% increase over 2013 results.
Adjusted EBITDA for the six months ended June 30, 2014 increased 14.9% to $10.4 million. Cash flow for the six month period ended June 30, 2014 was positive with $16.9 million provided by operating activities.
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 second quarter results on Thursday, July 31, 2014. Management will conduct a conference call to discuss its results at 5:00 p.m. Eastern time on July 31, 2014. The toll-free dial-in number is (866) 318-8618, international dial-in number is (617) 399-5137, with the passcode: 27134714. A telephonic replay of the conference call will be available through midnight on August 7, 2014, by dialing (888) 286-8010, international dial-in number is (617) 801-6888 and entering the passcode: 27510159.
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, and in Addus HomeCare's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 7, 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).
Investor Contact:
Dennis Meulemans
Chief Financial Officer
Phone: (630)-296-3400
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 June 30
----------------------------------
Same Store Acquisitions Total
---------- ------------ -----
2014 2013
---- ----
Net service revenues $70,158 $6,807 $76,965 $65,755
Cost of service revenues 51,604 4,781 56,385 49,142
------ ----- ------ ------
Gross profit 18,554 2,026 20,580 16,613
26.4% 29.8% 26.7% 25.3%
General and administrative
expenses 13,743 1,656 15,399 12,092
Depreciation and amortization 1,068 15 1,083 541
----- --- ----- ---
Total operating expenses 14,811 1,671 16,482 12,633
------ ----- ------ ------
Operating income from continuing
operations 3,743 355 4,098 3,980
Total interest expense, net 151 - 151 142
--- --- --- ---
Income from continuing
operations before taxes 3,592 355 3,947 3,838
Income tax expense 1,108 110 1,218 1,256
----- --- ----- -----
Net income from continuing
operations 2,484 245 2,729 2,582
----- --- ----- -----
Discontinued operations:
Loss from home health business,
net of tax - - - (150)
Loss from discontinued
operations - - - (150)
--- --- --- ----
Net income $2,484 $245 $2,729 $2,432
====== ==== ====== ======
Net income per share:
Basic
Continuing operations $0.23 $0.02 $0.25 $0.24
Discontinued operations - - - (0.01)
Basic income per share $0.23 $0.02 $0.25 $0.23
===== ===== ===== =====
Diluted
Continuing operations $0.23 $0.02 $0.25 $0.23
Discontinued operations - - - (0.01)
Diluted income per share $0.23 $0.02 $0.25 $0.22
===== ===== ===== =====
Weighted average number of
common shares outstanding:
Basic 10,903 10,903 10,903 10,785
====== ====== ====== ======
Diluted 11,138 11,138 11,138 11,016
====== ====== ====== ======
Cash Flow Information: For the Three Months Ended June
30
-------------------------------
2014 2013
---- ----
Net cash provided by operating
activities $14,263 $21,221
Net cash used in investing
activities (11,687) (228)
Net change in cash 2,576 20,993
Cash at the beginning of the
period 16,965 17,784
------ ------
Cash at the end of the period $19,541 $38,777
======= =======
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 Six Months Ended June 30
--------------------------------
Same Store Acquisitions Total
---------- ------------ -----
2014 2013
---- ----
Net service revenues $136,674 $11,974 $148,648 $128,753
Cost of service revenues 101,116 8,284 109,400 96,342
------- ----- ------- ------
Gross profit 35,558 3,690 39,248 32,411
26.0% 30.8% 26.4% 25.2%
General and administrative
expenses 27,061 2,741 29,802 23,602
Depreciation and amortization 1,553 25 1,578 1,087
----- --- ----- -----
Total operating expenses 28,614 2,766 31,380 24,689
------ ----- ------ ------
Operating income from continuing
operations 6,944 924 7,868 7,722
Total interest expense, net 305 - 305 350
--- --- --- ---
Income from continuing
operations before taxes 6,639 924 7,563 7,372
Income tax expense 2,172 308 2,480 2,103
----- --- ----- -----
Net income from continuing
operations 4,467 616 5,083 5,269
----- --- ----- -----
Discontinued operations:
Loss from home health business,
net of tax - - - (687)
Gain on sale of home health
business, net of tax - - - 11,111
--- --- --- ------
Earnings from discontinued
operations - - - 10,424
--- --- --- ------
Net income $4,467 $616 $5,083 $15,693
====== ==== ====== =======
Net income per share:
Basic
Continuing operations $0.41 $0.06 $0.47 $0.49
Discontinued operations - - - 0.97
Basic income per share $0.41 $0.06 $0.47 $1.46
===== ===== ===== =====
Diluted
Continuing operations $0.40 $0.06 $0.46 $0.48
Discontinued operations - - - 0.96
Diluted income per share $0.40 $0.06 $0.46 $1.44
===== ===== ===== =====
Weighted average number of
common shares outstanding:
Basic 10,878 10,878 10,878 10,779
====== ====== ====== ======
Diluted 11,121 11,121 11,121 10,920
====== ====== ====== ======
Cash Flow Information: For the Six Months Ended June 30
--------------------------------
2014 2013
---- ----
Net cash provided by operating
activities $16,933 $34,246
Net cash (used in) provided by
investing activities (13,171) 19,252
Net cash provided by (used in)
financing activities 214 (16,458)
--- -------
Net change in cash 3,976 37,040
Cash at the beginning of the
period 15,565 1,737
------ -----
Cash at the end of the period $19,541 $38,777
======= =======
Condensed Consolidated Balance Sheets
(Amounts in thousands)
June 30, 2014 June 30, 2013
------------- -------------
(Unaudited)
Assets
------
Current assets
Cash $19,541 $38,777
Accounts
receivable,
net 48,725 43,605
Prepaid
expenses
and
other
current
assets 4,555 5,754
Deferred
tax
assets 8,326 7,258
----- -----
Total
current
assets 81,147 95,394
------ ------
Property
and
equipment,
net 6,958 2,502
----- -----
Other assets
Goodwill 64,324 50,456
Intangible
assets,
net 11,753 5,691
Investment
in
joint
venture 900 900
Other
assets 53 212
--- ---
Total
other
assets 77,030 57,259
------ ------
Total
assets $165,135 $155,155
======== ========
Liabilities and stockholders' equity
------------------------------------
Current liabilities
Accounts
payable $4,769 $5,415
Accrued
expenses 37,438 36,365
Deferred
revenue 3 10
--- ---
Total
current
liabilities 42,210 41,790
------ ------
Deferred
tax
liability 3,441 3,097
Total
stockholders'
equity 119,484 110,268
------- -------
Total
liabilities
and
stockholders'
equity $165,135 $155,155
======== ========
Key Statistical and
Financial Data
(Unaudited)
-------------------
For the Three Months For the Six Months Ended
Ended June 30 June 30
--------------------- -------------------------
2014 2013 2014 2013
---- ---- ---- ----
General:
Adjusted EBITDA (in
thousands) (1) $5,922 $4,633 $10,373 $9,026
States served at
period end 22 19
Locations at period
end 133 93
Employees at period
end 17,754 14,854
Home & Community
Average billable
census -same store 28,453 26,173 28,163 26,501
Average billable
census -
acquisitions 2,070 - 1,847 -
Average billable
census total 30,523 26,173 30,010 26,501
Billable hours (in
thousands) 4,536 3,872 8,773 7,586
Average billable
hours per census
per month 49.5 49.0 48.7 48.0
Billable hours per
business day 72,006 59,569 69,076 58,806
Revenues per
billable hour $16.97 $16.98 $16.94 $16.97
Percentage of
Revenues by Payor:
State, local and
other governmental
programs 89% 94% 90% 94%
Managed Care 6 1 5 1
Private duty 4 4 4 4
Commercial 1% 1% 1% 1%
(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 For the Three Months For the Six Months Ended
EBITDA Ended June 30 June 30
(1)
(Unaudited)
------------ --------------------- -------------------------
2014 2013 2014 2013
---- ---- ---- ----
Reconciliation
of
Adjusted
EBITDA
to
Net
Income:
Net
income $2,729 $2,432 $5,083 $15,693
Less:
(Earnings)
from
discontinued
operations,
net
of
tax - 150 - (10,424)
Net
income
from
continuing
operations 2,729 2,582 5,083 5,269
Interest
expense,
net 151 142 305 350
Income
tax
expense
from
continuing
operations 1,218 1,256 2,480 2,103
Depreciation
and
amortization 1,078 541 1,573 1,087
M&A
expenses 536 - 601 -
Stock-
based
compensation
expense 210 112 331 217
--- --- --- ---
Adjusted
EBITDA $5,922 $4,633 $10,373 $9,026
====== ====== ======= ======
(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
