ADDUS HOMECARE CORPORATION FRISCO, Texas, Nov. 6, 2017 /PRNewswire/ -- Addus HomeCare Corporation (NASDAQ: ADUS), a provider of comprehensive home care services, today announced its financial results for the third quarter and nine months ended September 30, 2017.
Net service revenues were $108.6 million for the third quarter, an increase of 4.9% from $103.5 million for the third quarter of 2016. Net income more than doubled to $3.4 million for the third quarter of 2017 from $1.7 million for the third quarter last year, and net income per diluted share rose 93.3% to $0.29 from $0.15. Adjusted earnings per diluted share increased 7.7% to $0.42 for the third quarter of 2017 from $0.39 for the third quarter of 2016. Adjusted earnings per diluted share for the third quarter of 2017 excluded M&A expenses of $0.04, restructure charges of $0.04, severance and other costs of $0.01 and stock-based compensation expense of $0.04. For the third quarter of 2016, adjusted earnings per diluted share excluded restructure charges of $0.23, severance and other costs of $0.02, stock-based compensation expense of $0.03 and the positive impact from normalization of effective tax rate of $0.04. Adjusted EBITDA increased 11.1% for the third quarter of 2017 to $9.6 million from $8.7 million for the third quarter of 2016. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)
For the first nine months of 2017, net service revenues increased 5.6% to $313.8 million from $297.0 million for the first nine months of 2016. Net income for the first nine months of 2017 increased 132.6% to $10.4 million from $4.5 million for the same period in 2016, and net income per diluted share rose 122.5% to $0.89 from $0.40. Adjusted net income per diluted share increased 14.1% to $1.13 for the first nine months of 2017 from $0.99 for the first nine months of 2016.
"We are proud of our solid financial results for the third quarter of 2017," commented Dirk Allison, President and Chief Executive Officer of Addus. "The improvement in our revenue growth rate compared with the second quarter reflected strong same-store revenue growth of 4.9% and the initial contribution from the acquisition of Options Home Care on August 1(st). As a result of our team's execution and ongoing efforts, we generated increased operating leverage for the quarter, with a higher gross margin and a lower general and administrative expense as a percentage of revenue."
Revenue growth for the third quarter of 2017 was comprised of a 2.8% increase in billable hours per business day compared with the third quarter last year and a 3.6% increase in revenue per billable hour.
Addus had $45.7 million in cash at the end of the third quarter of 2017 and $45.0 million of bank debt, with $97.9 million of availability under its revolving credit facility. Net cash provided by operating activities was $54.0 million for the third quarter, compared with $49.3 million for the third quarter of 2016.
Mr. Allison concluded, "During the quarter, we demonstrated our ability to integrate our new management team's first acquisition. As we approach 2018, we remain highly focused on executing our organic growth strategy, and we continue the disciplined evaluation of additional acquisition opportunities in an active pipeline of potential transactions. In a highly fragmented industry that is experiencing both rising demand and consolidation pressure, we are confident that we have the talent, infrastructure and financial resources to increase market share and shareholder value through the successful, long-term implementation of our growth strategies."
Non-GAAP Financial Measures
The information provided in this release includes adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income per diluted share as net income per diluted share, adjusted for write off of debt issuance costs, gain on sale, normalization of effective tax rate, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, write off of debt issuance costs, gain on sale, other non-operating income, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted net service revenues as net service revenues 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 net income per diluted share to net income per diluted share, a reconciliation of adjusted EBITDA to net income and a reconciliation of adjusted net service revenues to net service revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues 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, November 7, 2017, 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 90328878. A telephonic replay of the conference call will be available through midnight on November 21, 2017, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 90328878.
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 discretionary determinations by government officials, 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, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize 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 15, 2017, which is available at 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 provider of comprehensive personal care services that are provided in the home and assist with activities of daily living. Addus' consumers are primarily persons 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. At September 30, 2017, Addus provided personal care services to approximately 35,000 consumers through 114 locations across 24 states. 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 For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Net service revenues $108,592 $103,502 $313,758 $297,032
Cost of service revenues 79,539 76,079 228,877 219,594
------ ------ ------- -------
Gross profit 29,053 27,423 84,881 77,438
26.8% 26.5% 27.1% 26.1%
General and administrative expenses 19,359 21,299 57,239 59,864
Gain on sale of adult day service centers - - (2,065) -
Depreciation and amortization 1,781 1,721 4,811 4,943
Provision for doubtful accounts 2,106 1,908 6,208 5,089
----- ----- ----- -----
Total operating expenses 23,246 24,928 66,193 69,896
------ ------ ------ ------
Operating income from continuing operations 5,807 2,495 18,688 7,542
Total interest expense, net 840 632 3,579 1,714
Other non-operating income (64) (126) (165) (126)
--- ---- ---- ----
Income before income taxes 5,031 1,989 15,274 5,954
Income tax expense 1,623 290 4,908 1,498
----- --- ----- -----
Net income $3,408 $1,699 $10,366 $4,456
====== ====== ======= ======
Net income per diluted share: $0.29 $0.15 $0.89 $0.40
===== ===== ===== =====
Weighted average number of common 11,631 11,417 11,616 11,227
shares outstanding - diluted
Cash Flow Information: For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Net cash provided by operating activities $53,953 $49,256 $42,578 $30,991
Net cash used in investing activities (23,737) (457) (23,108) (21,617)
Net cash (used in) provided by (401) (17,593) 18,205 25,968
financing activities
---
Net change in cash 29,815 31,206 37,675 35,342
Cash at the beginning of the period 15,873 8,240 8,013 4,104
------ ----- ----- -----
Cash at the end of the period $45,688 $39,446 $45,688 $39,446
======= ======= ======= =======
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
September 30,
-------------
2017 2016
---- ----
Assets
Current assets
Cash $45,688 $39,446
Accounts receivable, net 96,335 80,454
Prepaid expenses and other current assets 6,267 4,485
----- -----
Total current assets 148,290 124,385
------- -------
Property and equipment, net 7,494 5,993
----- -----
Other assets
Goodwill 91,821 73,851
Intangible assets, net 16,243 16,671
Deferred tax assets 3,153 1,825
Investment in joint venture 900 900
--- ---
Total other assets 112,117 93,247
------- ------
Total assets $267,901 $223,625
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $4,910 $4,268
Accrued expenses 46,942 43,929
Current portion of long-term debt, net of debt issuance costs 3,407 2,244
----- -----
Total current liabilities 55,259 50,441
Long-term debt, less current portion, net of debt issuance costs 40,372 22,723
------ ------
Total liabilities 95,631 73,164
------ ------
Total stockholders' equity 172,270 150,461
------- -------
Total liabilities and stockholders' equity $267,901 $223,625
======== ========
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
General:
Adjusted EBITDA (in thousands) (1) $9,612 $8,652 $26,137 $22,808
States served at period end - - 24 24
Locations at period end - - 114 118
Employees at period end - - 26,407 22,140
Home & Community
Average billable census - same store (2) 33,592 34,292 33,833 32,786
Average billable census - acquisitions 1,343 - 1,343 -
Average billable census total (2) 34,935 34,292 35,176 32,786
Billable hours (in thousands) 6,049 5,972 17,685 17,154
Average billable hours per census per month 57.7 58.1 55.9 56.2
Billable hours per business day 93,054 90,490 90,692 87,522
Revenues per billable hour $17.95 $17.33 $17.74 $17.32
Percentage of Revenues by Payor:
State, local and other governmental programs 63.6% 70.8% 64.8% 72.0%
Managed care organizations 34.0 25.8 32.5 24.4
Private duty 1.8 2.3 2.0 2.5
Commercial 0.6% 1.1% 0.7% 1.1%
(1) We define Adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, write off of debt
issuance costs, gain on sale, other non-operating income, M&A expenses, stock-based compensation expense, restructure
charges 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 September 30, 2016 by 470 and the nine months
ended September 30, 2016 by 432.
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2017 2016 2017 2016
---- ---- ---- ----
Reconciliation of Adjusted EBITDA to Net Income: (1)
Net income $3,408 $1,699 $10,366 $4,456
Interest expense, net 840 632 2,255 1,714
Write off debt issuance costs - - 1,323 -
Gain on sale of adult day service centers - - (2,065) -
Other non-operating income (64) (126) (165) (126)
Income tax expense 1,623 290 4,908 1,498
Depreciation and amortization 1,781 1,721 4,811 4,943
M&A expenses 692 43 1,343 785
Stock-based compensation expense 727 445 1,818 1,264
Restructure charges 507 3,690 551 5,243
Severance and other costs 98 258 992 3,031
--- --- --- -----
Adjusted EBITDA $9,612 $8,652 $26,137 $22,808
====== ====== ======= =======
Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share: (2)
Net income per diluted share $0.29 $0.15 $0.89 $0.40
Write off debt issuance costs per diluted share - - 0.09 -
Gain on sale of adult day service centers per - - (0.12) -
diluted share
Normalization of effective tax rate - (0.04) - (0.04)
M&A expenses per diluted share 0.04 - 0.08 0.05
Restructure charges per diluted share 0.04 0.23 0.03 0.32
Severance and other costs per diluted share 0.01 0.02 0.06 0.18
Stock-based compensation expense per 0.04 0.03 0.10 0.08
diluted share
---
Adjusted net income diluted share $0.42 $0.39 $1.13 $0.99
===== ===== ===== =====
Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (3)
Net service revenues $108,592 $103,502 $313,758 $297,032
Revenues associated with the closure of (87) (1,634) (1,340) (4,493)
certain sites
---
Adjusted net service revenues $108,505 $101,868 $312,418 $292,539
======== ======== ======== ========
(1) We define Adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, write off of debt issuance
costs, gain on sale, other non-operating income, M&A expenses, stock-based compensation expense, restructure charges 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 net income per diluted share as net income per diluted share, adjusted for write off of debt issuance costs, gain
on sale, normalization of effective tax rate, M&A expenses, stock-based compensation expense, restructure charges and severance
and other costs. Adjusted net income per diluted 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 net service revenues 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 service revenues or any
other measure of financial performance calculated in accordance with GAAP.
View original content:http://www.prnewswire.com/news-releases/addus-homecare-announces-third-quarter-2017-financial-results-300550137.html
SOURCE Addus HomeCare Corporation
