Exhibit 99.1
| Contacts: |
||
| Brian W. Poff | Scott Brittain | |
| Executive Vice President, | Corporate Communications, Inc. | |
| Chief Financial Officer | (615) 324-7308 | |
| Addus HomeCare Corporation | scott.brittain@cci-ir.com | |
| (630) 296-3400 | ||
| investorrelations@addus.com |
ADDUS HOMECARE ANNOUNCES FOURTH-QUARTER 2016 RESULTS
Net service revenues increase 22.3% year-over-year to $103.7 million
Net income from continuing operations of $7.5 million or $0.65 per diluted share
Adjusted EBITDA of $9.3 million and adjusted diluted EPS from continuing operations of $0.43
Downers Grove, Illinois (March 6, 2017) – Addus HomeCare Corporation (NASDAQ: ADUS), a provider of comprehensive home care services, today announced its financial results for the fourth quarter and year ended December 31, 2016.
For the fourth quarter, net service revenues increased 22.3% to $103.7 million from $84.8 million for the fourth quarter of 2015. Net income from continuing operations was $7.5 million for the latest quarter, up 144.9% from $3.1 million for the fourth quarter of 2015 and was $0.65 per diluted share, up 140.7% from $0.27 per diluted share. Adjusted net income from continuing operations per diluted share grew 34.4% to $0.43 for the fourth quarter of 2016 from $0.32 for the fourth quarter of 2015. (See pages 7 and 8 for a reconciliation of all non-GAAP and GAAP financial measures.)
For the year ended December 31, 2016, net service revenues rose 19.0% to $400.7 million from $336.8 million for 2015. Net income from continuing operations increased 5.1% to $11.9 million for 2016 from $11.4 million for 2015 and increased 2.9% to $1.05 per diluted share from $1.02 per diluted share. Adjusted net income from continuing operations per diluted share was $1.46 for 2016, up 19.7% from $1.22 for 2015. (See pages 7 and 8 for a reconciliation of all non-GAAP and GAAP financial measures.)
“Our financial results for the fourth quarter cap a very successful year for Addus,” commented Dirk Allison, President and Chief Executive Officer of Addus. “Our revenue growth and expanded profit margins reflect our initiatives throughout 2016 to streamline Addus and refocus on driving profitable growth.
“Our efforts to improve organic growth are reflected in our 5.1% increase in same store revenues for the quarter compared to the prior year. We launched process improvement and cost reduction initiatives that accounted for the majority of our fourth quarter margin improvement, highlighted by margin improvement of 360 basis points in net income from continuing operations to 7.2% and 260 basis points in adjusted EBITDA margin to 9.0%. We rebuilt our executive team and infrastructure, strengthening our ability to close, integrate, and support future acquisitions. As a result, Addus is well positioned to drive incremental margin improvements and growth, both organically and through acquisition.”
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ADUS Reports Fourth-Quarter 2016 Results
Page 2
March 6, 2017
The Company’s revenue growth for the quarter resulted primarily from the acquisition of South Shore in February 2016, as well as the increase in same store revenues. Revenues reflected a 22.2% year-over-year increase in billable hours per business day, and revenues per billable hour rose 1.6%. The Company’s revenue growth, combined with the favorable margin impact of the 2016 process improvement and cost reduction initiatives, generated 72.1% growth in adjusted EBITDA to $9.3 million for the quarter.
Addus completed 2016 with $8.0 million in cash, $24.1 million of bank debt and $79.7 million of availability under its revolving credit facility. Net cash used by operating activities for the fourth quarter was $31.7 million, largely due to the continuing volatility in the Company’s accounts receivable with the state of Illinois.
Mr. Allison concluded, “Addus enters 2017 as a growing market leader in a highly fragmented but vital sector of healthcare. We have the management team, experience and resources to execute our growth strategies and to deliver high quality, cost-effective care. We are enthusiastic about our future and our ability to deliver increased shareholder value.”
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 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, 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, March 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 49572841. A telephonic replay of the conference call will be available through midnight on March 21, 2017, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 49572841.
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.
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ADUS Reports Fourth-Quarter 2016 Results
Page 3
March 6, 2017
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 11, 2016, 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, which are provided in the home. Addus’ services provide assistance with activities of daily living and adult day care. 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 December 31, 2016, Addus provided personal care services to over 33,000 consumers through 114 locations across 24 states. For more information, please visit www.addus.com.
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ADUS Reports Fourth-Quarter 2016 Results
Page 4
March 6, 2017
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 December 31, |
For the Year Ended December 31, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net service revenues |
$ | 103,656 | $ | 84,760 | $ | 400,688 | $ | 336,815 | ||||||||
| Cost of service revenues |
75,000 | 62,567 | 294,593 | 245,492 | ||||||||||||
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| Gross profit |
28,656 | 22,193 | 106,095 | 91,323 | ||||||||||||
| 27.6 | % | 26.2 | % | 26.5 | % | 27.1 | % | |||||||||
| General and administrative expenses |
19,260 | 17,966 | 84,213 | 70,582 | ||||||||||||
| Depreciation and amortization |
1,703 | 1,212 | 6,647 | 4,717 | ||||||||||||
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| Total operating expenses |
20,963 | 19,178 | 90,860 | 75,299 | ||||||||||||
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| Operating income from continuing operations |
7,693 | 3,015 | 15,235 | 16,024 | ||||||||||||
| Interest expense |
572 | 258 | 2,332 | 786 | ||||||||||||
| Interest income |
(2,766 | ) | (23 | ) | (2,812 | ) | (47 | ) | ||||||||
| Other income |
(80 | ) | — | (206 | ) | — | ||||||||||
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| Income from continuing operations before income taxes |
9,967 | 2,780 | 15,921 | 15,285 | ||||||||||||
| Income tax (benefit) expense from continuing operations |
2,496 | (271 | ) | 3,994 | 3,932 | |||||||||||
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| Net income from continuing operations |
7,471 | 3,051 | 11,927 | 11,353 | ||||||||||||
| Discontinued operations: |
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| Income from Home Health Business, net of tax |
97 | 270 | 97 | 270 | ||||||||||||
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| Earnings from discontinued operations |
97 | 270 | 97 | 270 | ||||||||||||
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| Net income |
$ | 7,568 | $ | 3,321 | $ | 12,024 | $ | 11,623 | ||||||||
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| Diluted net income per share: |
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| Continuing Operations |
$ | 0.65 | $ | 0.27 | $ | 1.05 | $ | 1.02 | ||||||||
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| Discontinued Operations |
$ | 0.01 | $ | 0.02 | $ | 0.01 | $ | 0.02 | ||||||||
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| Weighted average number of common shares outstanding: |
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| Diluted |
11,494 | 11,220 | 11,349 | 11,189 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended December 31, |
For the Year Ended December 31, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net cash (used in) provided by operating activities |
$ | (31,734 | ) | $ | (4,680 | ) | $ | (743 | ) | $ | 4,106 | |||||
| Net cash (used in) investing activities |
(121 | ) | (5,012 | ) | (21,738 | ) | (10,724 | ) | ||||||||
| Net cash (used in) provided by financing activities |
422 | (1,081 | ) | 26,390 | (2,641 | ) | ||||||||||
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| Net change in cash |
(31,433 | ) | (10,773 | ) | 3,909 | (9,259 | ) | |||||||||
| Cash at the beginning of the period |
39,446 | 14,877 | 4,104 | 13,363 | ||||||||||||
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| Cash at the end of the period |
$ | 8,013 | $ | 4,104 | $ | 8,013 | $ | 4,104 | ||||||||
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ADUS Reports Fourth-Quarter 2016 Results
Page 5
March 6, 2017
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| Assets | ||||||||
| Current assets |
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| Cash |
$ | 8,013 | $ | 4,104 | ||||
| Accounts receivable, net |
116,999 | 84,959 | ||||||
| Prepaid expenses and other current assets |
5,998 | 4,858 | ||||||
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| Total current assets |
131,010 | 93,921 | ||||||
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| Property and equipment, net |
6,648 | 8,619 | ||||||
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| Other assets |
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| Goodwill |
73,906 | 68,844 | ||||||
| Intangible assets, net |
15,413 | 10,351 | ||||||
| Investment in joint venture |
900 | 900 | ||||||
| Deferred tax assets, net |
3,153 | 1,825 | ||||||
| Other assets |
— | 1,337 | ||||||
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| Total other assets |
93,372 | 83,257 | ||||||
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| Total assets |
$ | 231,030 | $ | 185,797 | ||||
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| Liabilities and stockholders’ equity | ||||||||
| Current liabilities |
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| Accounts payable |
$ | 4,486 | $ | 4,748 | ||||
| Accrued expenses |
42,603 | 35,082 | ||||||
| Current portion of long-term debt, net of debt issuance costs |
2,531 | 1,109 | ||||||
| Current portion of contingent earn-out obligation |
— | 1,250 | ||||||
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| Total current liabilities |
49,620 | 42,189 | ||||||
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| Long-term debt, less current portion, net of debt issuance costs |
22,482 | 1,882 | ||||||
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| Total long-term liabilities |
22,482 | 1,882 | ||||||
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| Total liabilities |
72,102 | 44,071 | ||||||
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| Total stockholders’ equity |
158,928 | 141,726 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 231,030 | $ | 185,797 | ||||
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ADUS Reports Fourth-Quarter 2016 Results
Page 6
March 6, 2017
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
(Unaudited)
| For the Three Months Ended December 31, |
For the Year Ended December 31, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| General: |
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| Adjusted EBITDA (in thousands) (1) |
$ | 9,284 | $ | 5,394 | $ | 32,094 | $ | 23,627 | ||||||||
| States served at period end |
— | — | 24 | 22 | ||||||||||||
| Locations at period end |
— | — | 114 | 119 | ||||||||||||
| Employees at period end |
— | — | 23,070 | 21,395 | ||||||||||||
| Home & Community: |
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| Average billable census - same store (2) |
32,855 | 32,471 | 32,803 | 32,630 | ||||||||||||
| Average billable census - acquisitions (3) |
1,242 | 126 | 1,141 | 126 | ||||||||||||
| Average billable census total |
34,097 | 32,597 | 33,944 | 32,756 | ||||||||||||
| Billable hours (in thousands) |
5,934 | 4,930 | 23,088 | 19,556 | ||||||||||||
| Average billable hours per census per month |
58.0 | 50.4 | 56.7 | 49.8 | ||||||||||||
| Billable hours per business day |
91,288 | 74,697 | 88,460 | 75,214 | ||||||||||||
| Revenues per billable hour |
$ | 17.47 | $ | 17.19 | $ | 17.35 | $ | 17.22 | ||||||||
| Percentage of Revenues by Payor: |
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| State, local and other governmental programs |
66.0 | 77.3 | 70.4 | 77.7 | ||||||||||||
| Managed care organizations |
30.7 | 18.8 | 26.1 | 18.3 | ||||||||||||
| Private duty |
2.2 | 2.9 | 2.4 | 3.0 | ||||||||||||
| Commercial |
1.1 | 1.0 | 1.1 | 1.0 | ||||||||||||
| (1) | We define Adjusted EBITDA as net income before interest expense, other non-operating income, taxes, depreciation, amortization, 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 December 31, 2015 by 273 and the twelve months ended December 31, 2015 by 540. |
| (3) | The average billable census in acquisitions of 554 and 592 for the three months and twelve months ended December 31, 2015, respectively, was reclassified to average billable census - same stores for comparability purposes. |
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ADUS Reports Fourth-Quarter 2016 Results
Page 7
March 6, 2017
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share data)
(Unaudited)
| For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income: (1) |
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| Net income |
$ | 7,568 | $ | 3,321 | $ | 12,024 | $ | 11,623 | ||||||||
| Less: (Earnings) from discontinued operations, net of tax |
(97 | ) | (270 | ) | (97 | ) | (270 | ) | ||||||||
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| Net income from continuing operations |
7,471 | 3,051 | 11,927 | 11,353 | ||||||||||||
| Interest expense |
572 | 258 | 2,332 | 786 | ||||||||||||
| Interest income |
(2,766 | ) | (23 | ) | (2,812 | ) | (47 | ) | ||||||||
| Other non-operating income |
(80 | ) | — | (206 | ) | — | ||||||||||
| Income tax (benefit) expense from continuing operations |
2,496 | (271 | ) | 3,994 | 3,932 | |||||||||||
| Depreciation and amortization |
1,703 | 1,212 | 6,647 | 4,717 | ||||||||||||
| M&A expenses |
337 | 455 | 1,122 | 1,013 | ||||||||||||
| Stock-based compensation expense |
(192 | ) | 412 | 1,072 | 1,573 | |||||||||||
| Restructuring charges |
(457 | ) | — | 4,787 | — | |||||||||||
| Severance and other costs |
200 | — | 3,231 | — | ||||||||||||
| IRS accrual |
— | 300 | — | 300 | ||||||||||||
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| Adjusted EBITDA |
$ | 9,284 | $ | 5,394 | $ | 32,094 | $ | 23,627 | ||||||||
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| Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share: (2) |
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| Net income per diluted share |
$ | 0.65 | $ | 0.27 | $ | 1.05 | $ | 1.02 | ||||||||
| Worker Opportunity Tax Credits per share |
— | (0.09 | ) | — | — | |||||||||||
| Cost associated with IRS accrual per share |
— | 0.03 | — | 0.03 | ||||||||||||
| Reserve adjustment for Workers Compensation per share |
— | 0.05 | — | — | ||||||||||||
| Interest income from State of Illinois |
(0.17 | ) | — | (0.17 | ) | — | ||||||||||
| Normalization of effective tax rate |
(0.04 | ) | — | (0.06 | ) | — | ||||||||||
| M&A expenses per diluted share |
0.02 | 0.03 | 0.07 | 0.07 | ||||||||||||
| Restructuring charges per diluted share |
(0.03 | ) | — | 0.30 | — | |||||||||||
| Severance and other costs per diluted share |
0.01 | — | 0.20 | — | ||||||||||||
| Stock-based compensation expense per diluted share |
(0.01 | ) | 0.03 | 0.07 | 0.10 | |||||||||||
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| Adjusted net income per diluted share |
$ | 0.43 | $ | 0.32 | $ | 1.46 | $ | 1.22 | ||||||||
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ADUS Reports Fourth-Quarter 2016 Results
Page 8
March 6, 2017
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Continued)
(amounts in thousands, except per share data)
(Unaudited)
| For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
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| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (3) |
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| Net service revenues |
$ | 103,656 | $ | 84,760 | $ | 400,688 | $ | 336,815 | ||||||||
| Revenues associated with the closure of certain sites |
— | (596 | ) | (1,076 | ) | (5,068 | ) | |||||||||
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| Adjusted net service revenues |
$ | 103,656 | $ | 84,164 | $ | 399,612 | $ | 331,747 | ||||||||
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| (1) | We define Adjusted EBITDA as net income before interest expense, other non-operating income, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructuring 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 worker opportunity tax credits, the IRS accrual, workers compensation, interest income from the State of Illinois, M&A expenses, normalization of the effective tax rate, stock-based compensation expense, restructuring 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. |
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