ADDUS HOMECARE CORPORATION DOWNERS GROVE, Ill., May 2, 2016 /PRNewswire/ -- Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of personal care services primarily provided in the home and focused on the dual eligible population, today announced its financial results for the first quarter ended March 31, 2016.
For the first quarter, net service revenues increased 13.1% to $92.6 million from $81.9 million for the first quarter of 2015. Net income was $0.2 million, or $0.01 per share, for the first quarter of 2016 compared with net income of $2.2 million, or $0.19 per diluted share, for the first quarter of 2015. The results for the first quarter of 2016 include write-offs of $3.5 million, $2.2 million of which were related to senior management severance and other related costs, with the remainder related to process improvement and expense reduction initiatives launched in the quarter. Excluding these costs, adjusted net income per diluted share was $0.28 for the first quarter of 2016, an increase of 21.7% compared with $0.23 for the first quarter last year. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
Dirk Allison, President and Chief Executive Officer of Addus, commented, "Addus produced a strong start to 2016 in the first quarter. Revenue and adjusted EPS grew at a higher rate than in the past year. We implemented a variety of initiatives to support our strategies for growth while ensuring that costs are in line with revenues. In addition, we completed the acquisition of South Shore."
The Company's revenue growth for the first quarter reflected an 10.8% increase in billable hours per business day compared with the first quarter last year. First-quarter billable hours per business day grew 8.6% compared with the fourth quarter of 2015. With a 0.4% increase in revenues per billable hour, comparable-quarter revenue per day increased 11.3% versus the first quarter of 2015.
"As discussed in our fourth-quarter 2015 earnings release and conference call, we have been focused on process improvement initiatives that result in expense reduction and improvement in our operating efficiency and scalability to support our growth," added Mr. Allison. "We have completed a substantial portion of the plan and are actively implementing a number of these initiatives. These initiatives resulted in $1.3 million write-offs for the first quarter. In total, we expect these initiatives to result in write-offs of $3.5 million over the first half of 2016, approximately $0.4 million of which will be cash. These initiatives are expected to produce aggregate annualized cost savings of approximately $4.1 million."
Details are as follows:
-- The closing of our Contact Center facility, as part of returning control
of customer service and scheduling to our local teams, resulted in a
$0.2 million first-quarter write-off, and an expected $2.3 million
second quarter write-off ($0.4 million of which is cash). These
initiatives are expected to generate $1.2 million in annualized savings
beginning in the second quarter;
-- Changes in our telecommunications operations, resulted in a $0.2 million
first-quarter write off and will generate an expected $1.6 million in
annualized savings, with the majority occurring in the second half of
the year;
-- Changes in our payroll process are expected to result in $1.3 million in
annualized savings beginning early in the fourth quarter; and
-- The write-off of development costs relating to software that will no
longer be used by Addus, resulted in a $0.9 million write-off in the
first quarter.
"We are pleased with the progress made on these and other initiatives, which we expect to drive meaningful cost reductions by the end of 2016. Through a disciplined focus on ensuring our investments in new initiatives generate appropriate returns, we expect to enhance our ability to provide our consumers with high quality, cost-effective care, improve our ability to add value to existing and new customer relationships, and sustain long-term profitable growth both organically and through acquisition."
Addus completed the first quarter with $9.1 million in cash, $22.0 million of long-term debt related to the acquisition of South Shore, $10.0 million of bank debt and $42.8 million of availability under its revolving credit facility. Net cash used in operating activities was $6.0 million for the first quarter of 2016, compared with $0.9 million for the prior-year first quarter.
Non-GAAP Financial Measures
The information provided in this release includes adjusted diluted net income per share, Adjusted EBITDA and adjusted net service revenue, which are non-GAAP financial measures. The Company defines adjusted diluted net income per share as diluted net income per share, adjusted for M&A expenses, restructure charges, severance and other costs and stock compensation. The Company defines Adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted net service revenue as revenue adjusted for the closure of certain sites. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted diluted net income per share to diluted net income per share, a reconciliation of Adjusted EBITDA to net income and a reconciliation of adjusted net service revenue to net service revenue, in each case, the most directly comparable GAAP measure. Management believes that adjusted diluted net income per share, adjusted EBITDA and adjusted net service revenue are 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 on Tuesday, May 3, 2016, beginning at 9:00 a.m. Eastern time. The toll-free dial-in number is (877) 930-8289 (international dial-in number is (253) 336-8714), pass code 86487320. A telephonic replay of the conference call will be available through midnight on May 17, 2016, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 86487320.
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.
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. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. 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 consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected 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, higher than anticipated costs, estimation inaccuracies in future revenues, margins, earnings and growth, 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 11, 2016, 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. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).
About Addus
Addus is a comprehensive provider of home and community-based services that primarily are personal in nature, provided in the home and focused on the dual eligibility 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.
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(amounts and shares in thousands, except per share data)
(Unaudited)
Income Statement Information: For the Three Months
Ended March 31,
---------------
2016 2015
---- ----
Net service revenues $92,602 $81,915
Cost of service revenues 68,283 59,989
------ ------
Gross profit 24,319 21,926
26.3% 26.8%
General and administrative expenses 22,188 17,153
Depreciation and amortization 1,478 1,146
----- -----
Total operating expenses 23,666 18,299
------ ------
Operating income from continuing operations 653 3,627
Total interest expense, net 419 173
--- ---
Income before income taxes 234 3,454
Income tax expense 77 1,292
--- -----
Net income $157 $2,162
==== ======
Net income per diluted share: $0.01 $0.19
===== =====
Weighted average number of common shares outstanding:
Diluted 11,178 11,162
Cash Flow Information: For the Three Months
Ended March 31,
---------------
2016 2015
---- ----
Net cash (used in) provided by operating activities $(5,959) $(904)
Net cash (used in) investing activities (20,791) (4,981)
Net cash (used in) provided by financing activities 31,726 (82)
------ ---
Net change in cash 4,976 (5,967)
Cash at the beginning of the period 4,104 13,363
----- ------
Cash at the end of the period $9,080 $7,396
====== ======
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
March 31,
---------
2016 2015
---- ----
Assets
------
Current assets
Cash $9,080 $7,396
Accounts receivable, net 105,771 74,370
Prepaid expenses and other current assets 3,933 6,158
Deferred tax assets 8,640 8,508
----- -----
Total current assets 127,424 96,432
------- ------
Property and equipment, net 7,683 8,075
----- -----
Other assets
Goodwill 73,931 66,088
Intangible assets, net 19,280 11,540
Investment in joint venture 900 900
Other assets - 255
--- ---
Total other assets 94,111 78,783
------ ------
Total assets $229,218 $183,290
======== ========
Liabilities and stockholders' equity
------------------------------------
Current liabilities
Accounts payable $4,275 $2,995
Accrued expenses 41,201 38,295
Current portion of long-term debt 2,217 993
Current portion of contingent earn-out obligation 1,250 1,000
----- -----
Total current liabilities 48,943 43,283
------ ------
Long-term debt, less current portion 31,070 2,425
Contingent earn-out obligation, less current portion - 1,120
Deferred tax liability 6,815 5,845
----- -----
Total long-term liabilities 37,885 9,390
------ -----
Total liabilities 86,828 52,673
------ ------
Total stockholders' equity 142,390 130,617
------- -------
Total liabilities and stockholders' equity $229,218 $183,290
======== ========
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
(Unaudited)
For the Three Months
Ended March 31,
---------------
2016 2015
---- ----
General:
Adjusted EBITDA (in thousands) (1) $6,655 $5,400
States served at period end 23 22
Locations at period end 120 132
Employees at period end 21,559 20,660
Home & Community:
Average billable census - same store (2) 32,344 32,648
Average billable census - acquisitions (3) 1,291 -
Average billable census total 33,635 32,648
Billable hours (in thousands) 5,353 4,754
Average billable hours per census per month 53.7 48.5
Billable hours per business day 83,648 75,468
Revenues per billable hour $17.30 $17.23
Percentage of Revenues by Payor:
State, local and other governmental programs 73.2% 77.7%
Managed care organizations 23.1 18.3
Private duty 2.7 3.1
Commercial 1.0% 0.9%
(1) We define Adjusted EBITDA as
earnings adjusted for interest
expense, taxes, depreciation,
amortization, M&A expenses,
stock-based compensation expense
and restructure and severance and
other costs. 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.
(2) Exited sites would have reduced
same store census for the three
months ended March 31, 2015 by
959.
(3) The average billable census in
acquisitions of 2,914 for the
three months ended March 31, 2015
was reclassified to average
billable census -same stores for
comparability purposes. The
average billable census for the
three months ended March 31, 2016
was prorated for the date of the
acquisition.
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
(Unaudited)
For the Three Months
Ended March 31,
---------------
2016 2015
---- ----
Reconciliation of Adjusted EBITDA to Net Income: (1)
Net income $157 $2,162
Interest expense, net 419 173
Income tax expense 77 1,292
Depreciation and amortization 1,478 1,146
M&A expenses 696 291
Stock-based compensation expense 337 336
Restructure charge 895 -
Severance and other costs 2,596 -
----- ---
Adjusted EBITDA $6,655 $5,400
====== ======
Reconciliation of Diluted Net Income per Share to
Adjusted Diluted Earnings per Share: (2)
Diluted earnings per share $0.01 $0.19
Acquisition-related transaction expense per share 0.04 0.02
Restructure charge 0.05 -
Severance and other costs 0.16 -
Stock compensation 0.02 0.02
---- ----
Adjusted diluted earnings per share $0.28 $0.23
===== =====
Reconciliation of Net Service Revenues to
Adjusted Net Service Revenues: (3)
Net service revenues $92,602 $81,915
Revenue associated with the closure of certain sites - (2,678)
--- ------
Adjusted net service revenues $92,602 $79,237
======= =======
(1) We define
Adjusted
EBITDA as
earnings
before
interest
expense,
taxes,
depreciation,
amortization,
M&A expenses,
stock-based
compensation
expense and
restructure
and severance
and other
costs.
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.
(2) We define
adjusted
diluted net
income per
share as
earnings per
share,
adjusted for
M&A expenses,
restructure
and severance
and other
costs and
stock
compensation.
Adjusted
diluted
earnings per
share 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.
(3) We define
Adjusted net
service
revenues as
revenue
adjusted for
the closure of
certain sites.
Adjusted net
service
revenues 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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/addus-homecare-announces-first-quarter-2016-results-300261036.html
SOURCE Addus HomeCare Corporation
