EX-99.1 2 d719289dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

Investor Contact:

Dennis Meulemans

Chief Financial Officer

Phone: (847) 303-5300

Email: DMeulemans@addus.com

Addus HomeCare Reports First Quarter 2014 Results

First Quarter Financial Highlights

 

  •   Strong revenue growth despite challenging weather conditions
  •   Total net service revenues of $71.7 million for a 13.8 percent increase compared to prior year quarter
  •   Net income of $2.4 million, or $0.21 per diluted share.

Palatine, IL, May 1, 2014—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 first quarter ended March 31, 2014.

First Quarter Review

Total net service revenues from continuing operations for the first quarter of 2014 were $71.7 million, a 13.8 percent increase compared to $63.0 million in the prior year quarter. Same store sales accounted for 5.6 percent of the increase with 8.2 percent generated by recently completed acquisitions. Net income from continuing operations was $2.4 million, or $0.21 per diluted share, compared to $0.25 per diluted share in 2013, with $0.04 of the decrease attributable to an increase in income tax expense.

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated: “We are pleased with our performance for the quarter. Despite a very challenging winter across most of our service area, our direct care staff still managed to provide essential services to our at-risk population. We realized some revenue loss attributable to weather, but still achieved same store revenue growth of 5.6 percent, reflecting strong service delivery levels and continuing census growth which we attribute to the sales programs we initiated last year.”

Mr. Heaney also commented that: “During the quarter we made further progress, developing relationships and implementing technology, in preparation for the transformation to managed care. Our pilot programs with Aetna and Centene are progressing well. While some states are delaying implementation dates for dual pilot programs, we are confident of their eventual transition to managed care providers as planned. We continue to invest in technology and infrastructure, preparing our company to meet the higher standards expected by managed care.”

Same store revenues grew by 5.6 percent based in large part to an 8.0 percent increase in average same store census while acquired census added an additional 6.3 percent for total census growth of 14.3 percent when compared to the prior year quarter. Billable hours per business day increased 16.0 percent, offset by a slight decline in average revenues per billable hour.

Net income from continuing operations before taxes increased despite lost service days / hours due to inclement weather in many of our markets. Net income was also reduced by increased investment spending on information technology and a new care system, as well as higher costs related to the Company’s Sarbanes-Oxley Act Section 404 compliance program.

The Company ended the quarter with nearly $17 million in cash and $43 million available under its revolving line of credit, with $4.2 million of free cash flow generated from operations in the quarter, before considering working capital needs and investments in the new Support Center.

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 first quarter results on Thursday, May 1, 2014. Management will conduct a conference call to discuss its results at 5:00 p.m. Eastern time on May 1, 2014. The toll-free dial-in number is (866) 318-8616, international dial-in number is (617) 399-5135, with the passcode: 44259078. A telephonic replay of the conference call will be available through midnight on May 8, 2014, by dialing (888) 286-8010, international dial-in number is (617) 801-6888 and entering the passcode: 72027801.

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, 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).

# # #

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 March 31,  
     Same Store     Acquisitions     Total        
     2014     2013  

Net service revenues

    $ 66,516      $ 5,167      $ 71,683      $ 62,998   

Cost of service revenues

      49,512        3,503        53,015        47,200   
  

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      17,004        1,664        18,668        15,798   
     25.6 %      32.2 %      26.0 %      25.1 % 

General and administrative expenses

      13,318        1,085        14,403        11,510   

Depreciation and amortization

      485        10        495        546   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      13,803        1,095        14,898        12,056   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income from continuing operations

      3,201        569        3,770        3,742   

Total interest expense, net

      154        —          154        208   
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from continuing operations before taxes

      3,047        569        3,616        3,534   

Income tax expense

      1,064        198        1,262        847   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income from continuing operations

      1,983        371        2,354        2,687   
  

 

 

    

 

 

    

 

 

    

 

 

  

Discontinued operations:

         

(Loss) from home health business, net of tax

      —          —          —          (537 ) 

Gain on sale of home health business, net of tax

      —          —          —          11,111   
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings from discontinued operations

      —          —          —          10,574   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 1,983      $ 371      $ 2,354      $ 13,261   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income per share:

         

Basic

         

Continuing operations

    $ 0.19      $ 0.03      $ 0.22      $ 0.25   

Discontinued operations

      —          —          —          0.98   
  

 

 

    

 

 

    

 

 

    

 

 

  

Basic income per share

    $ 0.19      $ 0.03      $ 0.22      $ 1.23   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

         

Continuing operations

    $ 0.18      $ 0.03      $ 0.21      $ 0.25   

Discontinued operations

      —          —          —          0.98   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted income per share

    $ 0.18      $ 0.03      $ 0.21      $ 1.23   
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average number of common shares outstanding:

         

Basic

      10,850        10,850        10,850        10,778   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

      11,110        11,110        11,110        10,845   
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash Flow Information:

 

     For the Three Months Ended March 31,  
     2014     2013  

Net cash provided by operating activities

    $ 2,670      $ 13,025   

Net cash (used in) provided by investing activities

      (1,484 )      19,480   

Net cash provided by (used in) financing activities

      214        (16,458 ) 
  

 

 

    

 

 

  

Net change in cash

      1,400        16,047   

Cash at the beginning of the period

      15,565        1,737   
  

 

 

    

 

 

  

Cash at the end of the period

    $ 16,965      $ 17,784   
  

 

 

    

 

 

  

Condensed Consolidated Balance Sheets

(Amounts in thousands)

 

     March 31, 2014      March 31, 2013  
     (Unaudited)  

Assets

      

Current assets

      

Cash

    $ 16,965       $ 17,784   

Accounts receivable, net

      59,042         60,640   

Prepaid expenses and other current assets

      4,795         5,515   

Deferred tax assets

      8,326         7,258   
  

 

 

     

 

 

  

Total current assets

      89,128         91,197   
  

 

 

     

 

 

  

Property and equipment, net

      3,897         2,476   
  

 

 

     

 

 

  

Other assets

      

Goodwill

      59,986         50,496   

Intangible assets, net

      8,538         6,030   

Investment in joint venture

      900         900   

Other assets

      93         251   
  

 

 

     

 

 

  

Total other assets

      69,517         57,677   
  

 

 

     

 

 

  

Total assets

    $ 162,542       $ 151,350   
  

 

 

     

 

 

  

Liabilities and stockholders’ equity

      

Current liabilities

      

Accounts payable

    $ 3,715       $ 4,818   

Accrued expenses

      38,834         35,635   

Deferred revenue

      5         17   
  

 

 

     

 

 

  

Total current liabilities

      42,554         40,470   
  

 

 

     

 

 

  

Deferred tax liability

      3,441         3,097   

Total stockholders’ equity

      116,547         107,783   
  

 

 

     

 

 

  

Total liabilities and stockholders’ equity

    $ 162,542       $ 151,350   
  

 

 

     

 

 

  

Key Statistical and Financial Data (Unaudited)

 

     For the Three Months Ended
March 31,		  
     2014     2013  

General:

     

Adjusted EBITDA (in thousands) (1)

    $ 4,453      $ 4,393   

States served at period end

      23        19   

Locations at period end

      128        96   

Employees at period end

      16,648        14,215   

Home & Community

     

Average billable census - same store

      27,872        25,817   

Average billable census - acquisitions

      1,625        —     

Average billable census total

      29,497        25,817   

Billable hours (in thousands)

      4,236        3,714   

Average billable hours per census per month

      47.9        48.0   

Billable hours per business day

      67,243        58,031   

Revenues per billable hour

    $ 16.92      $ 16.96   

Percentage of Revenues by Payor:

     

State, local and other govermental programs

      95 %      95 % 

Commercial

      1        1   

Private duty

      4 %      4 % 

 

(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 EBITDA (1) (Unaudited)

    For the Three Months Ended
March 31,		  
     2014      2013  

Reconciliation of Adjusted EBITDA to Net Income:

      

Net income

    $ 2,354       $ 13,261   

Less: (Earnings) from discontinued operations, net of tax

      —           (10,574 ) 
  

 

 

     

 

 

  

Net income from continuing operations

      2,354         2,687   

Interest expense, net

      154         208   

Income tax expense from continuing operations

      1,262         847   

Depreciation and amortization

      495         546   

M&A expenses

      65         —     

Stock-based compensation expense

      123         105   
  

 

 

     

 

 

  

Adjusted EBITDA

    $ 4,453       $ 4,393   
  

 

 

     

 

 

  

 

(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.