Almost Family : Report Fourth Quarter and Full Year 2016 Results

Almost Family, Inc. Steve Guenthner (502) 891-1000

FOR IMMEDIATE RELEASE March 7, 2017

Twelve Month Accomplishments:

• Established the largest home health-hospital joint venture in the nation on December 31, 2016 with Community Health System Inc., increasing our annual revenue run rate to $800 million.

• Arranged a total financing package of one-half billion dollars with the completion of our

  $150 million equity offering in January of 2017 and the expansion of our existing Credit Facility to $350 million.

• Achieved the first year of profitable results in our HealthCare Innovations segment with annual revenues approaching $30 million.

• Formalized our commitment to implement point of care technology in our VN segment over the course of 2017.

• Completed the integration of our 2015 and 2016 acquisitions.

  Fourth Quarter Highlights (1):

• Net service revenues of approximately $153.4 million

• GAAP EPS of $0.35(2) per diluted share

• Adjusted EPS of $0.59(2)

• GAAP net income of $3.6 million

• Adjusted net income of $6.1 million

• Adjusted EBITDA of $13.0 million

• Net cash from operating activities of $9.3 million

  Fiscal Year Highlights (1):

• Record Net service revenues of approximately $623.5 million

• GAAP EPS of $1.71(2) per diluted share

• Adjusted EPS of $2.38(2)

• GAAP net income of $17.7 million

• Adjusted net income of $24.6 million

• Adjusted EBITDA of $53.5 million

• Net cash from operating activities of $24.4 million

1. See Non-GAAP Financial Measures starting on page 12

2. Note that comparability of EPS between years is partially impacted by changes in shares outstanding as explained further below

VN segment net revenues increased $2.0 million to $107.5 million from $105.4 million in the prior year and total Medicare admissions grew by 2.0% to 23,516 from 23,062. On a same-store basis, Medicare episodic admissions outside of Florida grew by 4%, while Florida grew 1%. VN segment contribution increased $0.8 million, or 6.0%, to $13.7 million, from $12.9 million in the prior year period. Contribution margin as a percentage of revenue increased from 12.3% to 12.7%.

PC segment net revenues increased $1.7 million or 4.3% to $40.3 million in 2016 from $38.6 million in 2015 primarily due to acquisitions. PC segment contribution decreased $0.4 million as compared to the same period of last year, primarily due to rate cuts in Ohio and Connecticut's Medicaid- sponsored behavioral health programs. The rates cuts more than offset the earnings from acquisitions.

Healthcare Innovations (HCI) segment net revenues increased $4.5 million to $5.7 million, in 2016 from $1.2 million in 2015. As a result, operating income for the HCI segment was $0.6 million.

Corporate expenses as a percentage of revenue increased to 4.8%, from 4.3% in the prior year period. Deal, transition and other costs were $4.4 million for 2016, primarily as a result of costs related to acquisitions and the commencement of our VN Segment's company-wide clinical system conversion to HomeCare HomeBase. Such implementation, training and related costs began in the fourth quarter of 2016 and are expected to continue throughout 2017. Borrowings related to acquisitions increased interest expense to $1.4 million, from $0.8 million in the prior year period.

Net cash from operating activities of $9.3 million was generated in the fourth quarter of 2016. Home Health accounts receivable days sales outstanding were 53 at the end of the fourth quarter of 2016, as compared to 58 at the end of the fourth quarter of 2015.

The effective tax rate for the fourth quarter of 2016 and 2015 was 34.2% and 43.0%, respectively, primarily due to certain non-deductible deal and transaction costs in 2015. Increased shares outstanding reduced Adjusted EPS of $0.59 for the fourth quarter of 2016 by $0.02 without which it would have been $0.61.

VN segment net revenues increased $35.1 million to a record $436.1 million from $401.1 million in the prior year period and total Medicare admissions grew by 4.0% to 95,487 from 91,823. On a same-store basis, Medicare episodic admissions outside of Florida grew organically by 4% while Florida was down 2%. VN segment contribution increased $6.7 million, or 13.4%, to $56.6 million, from $49.9 million in the same period last year. Contribution margin as a percentage of revenue increased to 13.0% from 12.4%.

PC segment net revenues increased $33.7 million or 26.4% to a record $161.4 million in 2016 from

$127.7 million in 2015 primarily due to acquisitions. PC segment contribution decreased 4.7% or

$0.7 million due to rate cuts in certain skilled elements of the Connecticut and Ohio Medicaid programs that more than offset earnings from acquisitions.

HCI segment net revenues increased $22.6 million to a record $26.0 million in 2016 from $3.5 million in 2015, as acquired LTS and Ingenios assessment business revenues were $20.6 million with the remainder due to higher shared savings revenue as multiple Imperium served ACOs received Medicare shared savings payments. LTS was acquired in January 2016 and Ingenios was acquired in July 2015. The HCI segment contribution thus improved $6.9 million, as the segment was profitable for fiscal 2016.

Corporate expenses as a percentage of revenue declined to 4.6%, from 4.9% in the prior year period. Deal, transition and other costs grew to $11.8 million for 2016, primarily as a result of costs related

to acquisitions, while the prior year included a one-time $4.2 million benefit related to legal settlements. Borrowings related to acquisitions increased interest expense to $5.8 million, from $2.3 million 2015.

Net cash from operating activities of $24.4 million was generated in 2016, up $3.2 million from the

$21.2 million generated in 2015.

The effective tax rate for 2016 and 2015 was 38.4% and 34.5%, respectively. Increased shares outstanding reduced Adjusted EPS of $2.38 for 2016 by $0.15 without which it would have been

$2.53.

The Company noted that it will continue to pursue quality acquisitions of in-home health care service providers consistent with its stated strategy and the types of services its segments currently provide.

On Saturday, December 31, 2016 (the first day of the Company's 2017 fiscal year), the Company completed its acquisition of a controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. for $128.0 million, subject to a working capital adjustment. The Company expects the transaction will add approximately $200 million in revenue, all of which will be classified in the Company's VN segment. The transaction expands the Company's geographic service territory to a total of 26 states. The Company funded the acquisition purchase price in a deposit on Friday, December 30, 2016 (the last day of the Company's 2016 fiscal year).

On December 5, 2016 the Company announced the expansion of its credit facility from $175 million to $350 million. All of its existing bank group upsized their positions and Capital One was added to the group.

On January, 25, 2017, the Company completed a public offering of 3.5 million shares of its common stock for gross proceeds in excess of $150 million. The net proceeds of $144 million were applied to the Company's revolving credit facility, which increased credit available under the Facility from approximately $78.6 million at December 30, 2016 to approximately $204.1 million after the offering.