EX-99.1 2 d163655dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

Contacts:   
Don Klink    Scott Brittain
Chief Financial Officer    Corporate Communications, Inc.
Addus HomeCare Corporation    (615) 324-7308
(630) 296-3400    scott.brittain@cci-ir.com
investorrelations@addus.com   

ADDUS HOMECARE ANNOUNCES FIRST-QUARTER 2016 RESULTS

Net service revenues increase 13.1% year over year to $92.6 million

Process and cost improvement initiatives well underway

Adjusted diluted EPS grows 21.7% to $0.28; GAAP diluted EPS is $0.01, including write-offs

Downers Grove, Illinois (May 2, 2016) – 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.”

 

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ADUS Reports First-Quarter 2016 Results

Page 2

May 2, 2016

 

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.

 

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ADUS Reports First-Quarter 2016 Results

Page 3

May 2, 2016

 

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.

 

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ADUS Reports First-Quarter 2016 Results

Page 4

May 2, 2016

 

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   
  

 

 

    

 

 

  

 

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ADUS Reports First-Quarter 2016 Results

Page 5

May 2, 2016

 

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   
  

 

 

     

 

 

  

 

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ADUS Reports First-Quarter 2016 Results

Page 6

May 2, 2016

 

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.

 

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ADUS Reports First-Quarter 2016 Results

Page 7

May 2, 2016

 

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.

 

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