LOUISVILLE, Ky., May 6, 2014 /PRNewswire/ -- Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing and personal care services, announced today its financial results for the three months ended March 31, 2014.
First Quarter Highlights:
-- Record net service revenues of $120.0 million -- Net income attributable to Almost Family, Inc. of $1.3 million, or $0.13 per diluted share -- Diluted EPS from continuing operations of $0.14 including $0.20 of acquisition related expenses, excluding which diluted EPS would have been $0.34 -- Visiting Nurse segment net revenues were $95.7 million and Personal Care segment revenues were $24.3 million -- Results include a full quarter of operating results from the acquisition of SunCrest on December 6, 2013 which added $0.13 to diluted EPS from continuing operations for the quarter
Comments on First Quarter 2014 Results
William Yarmuth, Chief Executive Officer, commented on the quarter: "We are pleased with our results for the quarter. Our integration of SunCrest continues on target and we remain focused on adapting our operations to the challenges presented by the initiation of rebasing. We continue to be extremely positive about the opportunity our SunCrest operations present for the long term growth of our organization. We strongly believe home health care will play an ever increasing role in managing health care costs and we will continue to look to acquisitions in this area as a key component of our approach to building shareholder value."
Steve Guenthner, President, added: "Consistent with the statements in our 2013 year-end release, we experienced some disruption of admission volumes in the highly competitive Florida market, where we have meaningful overlap with our acquired SunCrest branches. We will continue to work through this expected integration challenge over the balance of 2014. The Medicare rebasing adjustments to home health reimbursement will force us to address every opportunity to control costs without compromising the quality of care we provide to our patients. That is a challenge that we are currently addressing and on which we will continue to focus as we move forward."
Yarmuth concluded: "We want to thank our nearly 12,000 caring employees for their commitment and dedication to improving the lives of our patients, while helping us prudently and efficiently manage the costs of providing these critical patient services."
The Company noted that rate cuts resulting from Medicare's previously announced rebasing of home health reimbursement rates are being phased in over the four-year period from 2014 through 2017.
First Quarter Financial Results
Almost Family reported first quarter results that included a full quarter of operating results for the following acquisitions, as compared to our results for the first quarter of 2013:
-- The December 6, 2013 acquisition of SunCrest added $33.8 million to revenue ($29.9 million VN and $3.9 million PC) and $0.13 to diluted EPS from continuing operations. -- As previously disclosed, one-time transaction costs, severance, wind-down, lease abandonment and transition costs related to the SunCrest transaction are expected to be between $7 million and $8 million incurred over the period from closing through the end of 2014. Approximately $3.1 million ($0.20 per diluted share) of such costs were incurred in the quarter ended March 31, 2014. -- The July 19, 2013 acquisition of Indiana Home Care Network added $2.6 million of revenue to the VN segment and $0.01 to diluted EPS from continuing operations -- The October 4, 2013 acquisition of our 61% interest in Imperium lowered diluted EPS from continuing operations by $0.01. Operating costs of $243,000 associated with Imperium are included in our corporate expenses. Imperium did not generate any material revenue in the period.
Medicare rate cuts, from sequestration for episodes ending after March 31, 2013, combined with 2014's rebasing cuts, reduced revenue and operating income by $1.8 million and diluted EPS from continuing operations by $0.12. VN segment Medicare admissions decreased organically by 5.8%, primarily in our Florida operations where we have overlap with SunCrest operations. Our PC segment hours of service and revenues grew by 5.3% organically and 8.0% through acquisition.
Our effective tax rate for the first quarter of 2014 was 41.5% compared to 37.1% for the first quarter of 2013. The higher year to date 2014 income tax rate from continuing operations was primarily due to a benefit recognized in the first quarter of 2013 resulting from the January 2, 2013 retroactive extension of the Work Opportunity Tax Credit (WOTC). The WOTC has not yet been extended for 2014.
Discontinued Operations
In the first quarter of 2014, the Company's VN segment exited a market in the Northeast through the closure of a branch location. In conjunction with the SunCrest acquisition, the Company acquired some operations which had been discontinued prior to acquisition. During the quarter ended June 30, 2013, the Company completed the sale of two Alabama locations, which operated in the VN segment. The operations and any related gain on sale for these operations were reclassified from continuing operations into discontinued operations for all periods presented.
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data) Three Months Ended March 31, ---------------------------- 2014 2013 ---- ---- Net service revenues $120,032 $85,453 Cost of service revenues (excluding 65,532 45,445 depreciation & amortization) --- Gross margin 54,500 40,008 General and administrative expenses: Salaries and benefits 33,658 24,351 Other 15,409 10,368 Deal and transition costs 3,115 11 ----- --- Total general and administrative expenses 52,182 34,730 Operating income 2,318 5,278 Interest expense, net (347) (18) ---- --- Income before income taxes 1,971 5,260 Income tax expense (817) (1,950) ---- ------ Net income from continuing operations 1,154 3,310 Discontinued operations: Loss from operations, net of tax of ($48) and ($51) (70) (63) Gain on sale, net of tax - - --- --- Loss on discontinued operations (70) (63) --- --- Net income 1,084 3,247 Net loss - noncontrolling interests 189 - --- --- Net income attributable to Almost Family, Inc. $1,273 $3,247 ====== ====== Per share amounts-basic: Average shares outstanding 9,293 9,254 Income from continuing operations attributable to Almost Family, Inc. $0.14 $0.36 Discontinued operations (0.01) (0.01) ----- ----- Net income attributable to Almost Family, Inc. $0.13 $0.35 ===== ===== Per share amounts-diluted: Average shares outstanding 9,426 9,338 Income from continuing operations attributable to Almost Family, Inc. $0.14 $0.36 Discontinued operations (0.01) (0.01) ----- ----- Net income attributable to Almost Family, Inc. $0.13 $0.35 ===== =====
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March 31, 2014 ASSETS (UNAUDITED) December 31, 2013 ---------- ----------------- CURRENT ASSETS: Cash and cash equivalents $8,359 $12,246 Accounts receivable -net 62,367 61,651 Prepaid expenses and other current assets 8,708 10,278 Deferred tax assets 13,532 11,532 ------ ------ TOTAL CURRENT ASSETS 92,966 95,707 PROPERTY AND EQUIPMENT - NET 7,450 8,142 GOODWILL 193,208 192,575 OTHER INTANGIBLE ASSETS 55,052 55,075 OTHER ASSETS 718 774 --- --- TOTAL ASSETS $349,394 $352,273 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $10,688 $11,526 Accrued other liabilities 37,654 38,916 Current portion - notes payable and capital leases 167 702 --- --- TOTAL CURRENT LIABILITIES 48,509 51,144 LONG-TERM LIABILITIES: Revolving credit facility 53,000 56,000 Deferred tax liabilities 27,081 25,580 Other liabilities 1,680 1,856 ----- ----- TOTAL LONG- TERM LIABILITIES 81,761 83,436 TOTAL LIABILITIES 130,270 134,580 NONCONTROLLING INTEREST - REDEEMABLE 3,639 3,639 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; 9,542 and 9,500 issued and outstanding 954 950 Treasury stock, at cost, 92 and 91 shares (2,393) (2,340) Additional paid-in capital 104,161 103,858 Noncontrolling interest - nonredeemable (299) (203) Retained earnings 113,062 111,789 ------- ------- TOTAL STOCKHOLDERS' EQUITY 215,485 214,054 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $349,394 $352,273 ======== ========
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Three Months Ended March 31, ---------------------------- 2014 2013 ---- ---- Cash flows from operating activities: Net income $1,084 $3,247 Loss on discontinued operations, net of tax (70) (63) --- --- Net income from continuing operations 1,154 3,310 Adjustments to reconcile income to net cash provided by operating activities: Depreciation and amortization 1,102 627 Provision for uncollectible accounts 2,144 1,036 Stock-based compensation 414 287 Deferred income taxes (362) 90 4,452 5,350 Change in certain net assets and liabilities, net of the effects of acquisitions: Accounts receivable (2,907) (366) Prepaid expenses and other current assets 1,554 1,624 Other assets 55 52 Accounts payable and accrued expenses (2,770) 2,714 ------ ----- Net cash provided by operating activities 384 9,374 --- ----- Cash flows from investing activities: Capital expenditures (350) (688) Acquisitions, net of cash acquired - - --- --- Net cash used in investing activities (350) (688) ---- ---- Cash flows from financing activities: Credit facility repayments (3,000) - Proceeds from stock options exercises 39 - Purchase of common stock in connection with share awards (52) - Tax impact of share awards (54) - Payment of special dividend (35) - Principal payments on notes payable and capital leases (558) - Net cash used in financing activities (3,660) - ------ --- Cash flows from discontinued operations Operating activities (261) (168) Investing activities - (2) --- --- Net cash used in discontinued operations (261) (170) ---- ---- Net change in cash and cash equivalents (3,887) 8,516 Cash and cash equivalents at beginning of period 12,246 26,120 Cash and cash equivalents at end of period $8,359 $34,636 ====== =======
ALMOST FAMILY, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (UNAUDITED) (In thousands) Three Months Ended March 31, ---------------------------- 2014 2013 Change ---- ---- ------ Amount % Rev Amount % Rev Amount % ------ ----- ------ ----- ------ --- Net service revenues: Visiting Nurse $95,756 79.8% $66,551 77.9% $29,205 43.9% Personal Care 24,276 20.2% 18,902 22.1% 5,374 28.4% ------ ------ ----- 120,032 100.0% 85,453 100.0% 34,579 40.5% ------- ------ ------ Operating income before corporate expenses: Visiting Nurse 9,507 9.9% 8,337 12.5% 1,170 14.0% Personal Care 2,524 10.4% 1,998 10.6% 526 26.3% ----- ----- --- 12,031 10.0% 10,335 12.1% 1,696 16.4% Deal and transition costs 3,115 2.6% 11 0.0% 3,104 NM Corporate expenses 6,598 5.5% 5,046 5.9% 1,552 30.8% ----- ----- ----- Operating income 2,318 1.9% 5,278 6.2% (2,960) -56.1% Interest expense, net (347) -0.3% (18) 0.0% (329) NM Income tax expense (817) -0.7% (1,950) -2.3% 1,133 -58.1% ---- ------ ----- Net income from continuing operations $1,154 1.0% $3,310 3.9% $(2,156) -65.1% ====== ====== ======= Adjusted EBITDA from continuing operations $6,949 5.8% $6,203 7.3% $746 12.0%
ALMOST FAMILY, INC. AND SUBSIDIARIES VISITING NURSE SEGMENT OPERATING METRICS Three Months Ended March 31, ---------------------------- 2014 2013 Change Amount Amount Amount % ------ ------ ------ --- Average number of locations 172 102 70 68.6% All payors: Patient months 81,451 54,582 26,869 49.2% Admissions 25,189 16,253 8,936 55.0% Billable visits 656,976 469,291 187,685 40.0% Medicare: Admissions 22,475 89% 14,956 92% 7,519 50.3% Revenue (in thousands) $88,872 93% $61,738 93% $27,134 44.0% Revenue per admission $3,954 $4,128 $(174) -4.2% Billable visits 570,864 87% 400,783 85% 170,081 42.4% Recertifications 11,880 7,960 3,920 49.2% Payor mix % of Admissions Traditional Medicare Episodic 83.3% 91.0% -7.7% Replacement Plans Paid Episodically 3.1% 2.6% 0.5% Replacement Plans Paid Per Visit 13.6% 6.4% 7.2% Non-Medicare: Admissions 2,714 11% 1,297 8% 1,417 109.3% Revenue (in thousands) $6,884 7% $4,814 7% $2,070 43.0% Revenue per admission $2,536 $3,712 $(1,175) -31.7% Billable visits 86,112 13% 68,508 15% 17,604 25.7% Recertifications 1,514 1,337 177 13.2% Payor mix % of Admissions Medicaid & other governmental 23.8% 28.5% -4.7% Private payors 76.2% 71.5% 4.7% PERSONAL CARE OPERATING METRICS Three Months Ended March 31, ---------------------------- 2014 2013 Change ---- ---- ------ Amount Amount Amount % ------ ------ ------ --- Average number of locations 61 61 - 0.0% Admissions 1,436 1,089 347 31.9% Patient months of care 19,594 17,339 2,255 13.0% Billable hours 1,267,045 1,069,437 197,608 18.5% Revenue per billable hour $19.16 $17.67 $1.48 8.4%
Non-GAAP Financial Measure
The information provided in some of the tables in this release includes certain non-GAAP financial measures as defined under SEC rules. In accordance with SEC rules, the Company has provided, in the supplemental information, a reconciliation of those measures to the most directly comparable GAAP measures.
Adjusted EBITDA
Earnings before interest, income taxes, depreciation and amortization (Adjusted 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 Adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity. Management routinely calculates and communicates Adjusted 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. Adjusted EBITDA is also used in certain covenants contained in our credit agreement.
The following tables set forth a reconciliation of net income to Adjusted EBITDA:
ALMOST FAMILY, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA (In thousands) Three Months Ended March 31, ---------------------------- (in thousands) 2014 2013 ---- ---- Net income from continuing operations $1,154 $3,310 Add back: Interest expense 347 18 Income tax expense 817 1,950 Depreciation and amortization 1,102 627 Amortization of stock- based compensation 414 287 Earnings before interest, income taxes, depreciation and amortization (EBITDA) from continuing operations 3,834 6,192 Deal and transition costs 3,115 11 Adjusted EBITDA from continuing operations $6,949 $6,203 ====== ======
About Almost Family, Inc.
Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing services, with branch locations in Florida, Ohio, Tennessee, Kentucky, Connecticut, New Jersey, Massachusetts, Indiana, Pennsylvania, Georgia, Missouri, Illinois, Mississippi and Alabama (in order of revenue significance). Almost Family, Inc. and its subsidiaries operate a Medicare-certified segment and a personal care segment. Almost Family operates over 230 branch locations in fourteen 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 including obtaining synergies, integration objectives and anticipated timelines; 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; 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, 2013, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and "Risk Factors." With regard to the Company's recent investment in Imperium, in particular given that it is a development stage enterprise, there can be no assurance that its operational and developmental objectives will be realized or that any savings in healthcare spending or any participation in Medicare Shared Savings Program payments will be realized. The Company undertakes no obligation to update or revise its forward-looking statements.
Almost Family, Inc. The Ruth Group Steve Guenthner Investor Relations (502) 891-1000 Nick Laudico (646) 536-7030 nlaudico@theruthgroup.com
SOURCE Almost Family, Inc.