Almost Family Reports Third Quarter 2012 Results

               Almost Family Reports Third Quarter 2012 Results

SEC Staff closes investigation with no actions; Court dismisses shareholder
suit

PR Newswire

LOUISVILLE, Ky., Nov. 6, 2012

LOUISVILLE, Ky., Nov. 6, 2012 /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 and nine month
periods ended September 30, 2012.

Highlights:

  oNet service revenues of $85 million for the quarter
  oNet income was $4.1 million, or $0.44 per diluted share
  oDiluted EPS includes $0.02 for transaction related costs, excluding which
    diluted EPS would have been $0.46
  oVisiting Nurse segment net revenues were $66 million, on 2% admission
    growth overall, including 5% in Florida
  oPersonal Care segment net revenues grew to $19 million from a combination
    of the Cambridge acquisition and 5% organic volume growth
  oInvestors encouraged to consider possible implications of Hurricane Sandy
    on fourth quarter results

Comments on Results
William Yarmuth, Chief Executive Officer, commented on the results: "Our
results for the third quarter reflect the impact of normal seasonality in our
VN segment along with an apparent slowing in health care utilization
nationwide. While external market conditions continue to be somewhat
challenging, we are continuing to focus on improving the organic growth of our
business. We have been extremely pleased with the success of our operators in
tightly managing the efficiencies of their business units delivering
meaningful year over year cost savings in the VN segment."

With regard to the U.S. Securities and Exchange Commission (SEC) development
described in more detail below, Yarmuth added: "We continue to be very proud
of our track record of sound compliance and the absence of any findings of
wrongdoing at Almost Family by any of the investigatory bodies that began
probing us and others in the industry in mid-2010. I am extremely proud of
the way our management team, and most importantly our caregivers, have refused
to allow any of this to detract from our Senior Advocacy mission of providing
the highest quality care to our patients."

Third Quarter Financial Results
Almost Family reported third quarter results that included the impact of the
2012 Medicare reimbursement rate cut in the Visiting Nurse (VN) segment. The
Medicare rate cuts reduced revenue and operating income by $2.7 million and
earnings per diluted share by $0.17, while a change in certain Medicare
Advantage plans paying on a per visit versus episodic basis reduced revenue by
$0.8 million and earnings per diluted share by $0.03. While total VN
admissions increased approximately 2% and traditional Medicare episodic
admissions increased approximately 1%, total Medicare episodic admissions
declined 2.5% primarily as a result of certain Medicare Advantage plans
switching from episodic to per visit payment models.

The Company's earnings were favorably impacted by efforts to improve its
operating efficiencies and the inclusion in the quarter of a full three months
of the Cambridge Home Health Care Holdings, Inc. (Cambridge) acquisition,
which closed in early August of 2011. Improvements in operating efficiencies,
principally in the VN segment, improved earnings per diluted share by $0.17.

Net service revenues for the third quarter were $85.1 million, a 1% decrease
from $86.2 million reported in the third quarter of 2011, primarily as a
result of the VN segment's Medicare rate cut, partially offset by the
Cambridge acquisition.

Net income for the third quarter of 2012 was $4.1 million, or $0.44 per
diluted share, down from third quarter of 2011 net income of $4.8 million, or
$0.52 per diluted share.

The effective tax rate of 39.5% in the third quarter of 2012 was consistent
with the 39.4% for the third quarter of 2011.

SEC and Legal Developments
Since our last quarterly report the Company has received two favorable
determinations with respect to previously disclosed regulatory inquiries and
litigation. On November 2, 2012, the Company and those affected executive
officers and members of its board of directors were all notified by the SEC
Staff that it has concluded its investigation and does not intend to recommend
enforcement action to the Commission. Separately, on October 2, 2012 the
judge in certain shareholder derivative actions in Kentucky state court
granted the Company's motion for dismissal. Although the plaintiffs have
appealed that ruling, the Company intends to vigorously defend the appeal of
the ruling.

As previously disclosed, an April 2010 newspaper article reporting on home
health care delivery practices in the industry and at the Company triggered
inquiries to the Company from the U.S. Senate Finance Committee (SFC),
followed by theSEC. These were in turn followed by shareholder litigation
making various claims related to the newspaper article against the Company,
its board of directors and certain of its officers. As also previously
disclosed, in its October 2011 report, the SFC found no wrongdoing with regard
to Almost Family and, on February 10, 2012, the judge in certain shareholder
actions in Federal court granted the Company's motion for dismissal.

Refer to the Company's filings on Forms 10-K for 2011 and 10-Q for 2012 for a
more complete background of the matters described in this section.

Possible Impact of Hurricane Sandy
Approximately 25% of our VN segment operations are located in the northeastern
U.S. (New Jersey, Connecticut and Massachusetts), areas impacted by Hurricane
Sandy which struck in late October 2012. While we are currently unable to
predict to the extent, if any, it is reasonable to expect that this
significant weather event may have a detrimental impact on our operating
results for the quarter and thus the year ending December 31, 2012.

Third Quarter Segment Results
VN segment third quarter results include the unfavorable impact of the
Medicare rate cuts as well as the change of certain Medicare Advantage payors
to per visit reimbursement. As a result, VN segment third quarter net service
revenues declined 6% to $65.9 million, from $69.9 million in the third quarter
of 2011, while operating income before corporate expenses for the third
quarter of 2012 declined to $8.9 million from $10.2 million reported for the
third quarter of 2011. Total admissions grew 2%, substantially all organic.
Organic VN admission growth in Florida was 5%.

Primarily as a result of our Cambridge acquisition, Personal Care (PC) segment
net service revenues grew 18% or $2.9 million in the third quarter of 2012 to
$19.2 million from $16.3 million in the third quarter of 2011, while operating
income before unallocated corporate expenses increased 5%, or $0.1 million to
$2.8 million in the third quarter of 2012.

Nine Month Period Ended September 30, 2012
Almost Family reported nine month results that included: i) the favorable
impact of a full nine months of operations from our Cambridge acquisition,
which closed in early August of 2011, ii) the unfavorable impact of the 2012
Medicare reimbursement rate cut and the shift of certainMedicare Advantage
payors to per visit reimbursementin the VN segment, iii) the unfavorable
impact of higher than normal health insurance and workers compensation costs
which lowered EPS by $0.09 and iv) the unfavorable impact of higher bad debt
provision which lowered EPS by $0.04. The Medicare rate cuts reduced revenue
and operating income by $8.4 million and earnings per diluted share by $0.55.

Net income for the nine month period of 2012 was $13.6 million, or $1.46 per
diluted share, down from the nine month period of 2011 net income of $15.5
million, or $1.66 per diluted share. Fees and expenses related to
governmental inquiries did not impact the 2012 nine month period, while
lowering the 2011 nine month period EPS by approximately $0.07. Deal costs
lowered year to date 2012 and 2011 EPS by approximately $0.03.

Nine Month Period Segment Results
Net service revenues in the VN segment for the nine month period declined to
$204.2 million, a 4.5% decrease from $213.8 million in the nine month period
of 2011, after the effect of the previously mentioned Medicare rate cut and
lower Medicare volumes. Total admissions grew 3%, of which 2% was organic.

Operating income before corporate expenses in the VN segment for the nine
month period of 2012 was $30.7 million, a $4.3 million decrease from $35.0
million reported for the nine month period of 2011, primarily as a result of
the impact of the Medicare rate cut and a $0.9 million increase in bad debt
provision, both of which were partially offset by a focused effort to reduce
labor costs relative to patients served.

Primarily as a result of our Cambridge acquisition, net service revenues in
the PC segment for the nine month period of 2012 grew 57% or $21.0 million to
$57.8 million from $36.7 million in the nine month period of 2011. As a
result, operating income before unallocated corporate expenses in the PC
segment increased 40% to $7.6 million from $5.4 million in the nine month
period of 2011.

Conference Call
A conference call to review the results will begin at 11:00 a.m. ET on
November 6, 2012, and will be hosted by William Yarmuth, Chief Executive
Officer, and Steve Guenthner, President and Principal Financial Officer. To
participate in the conference call, please dial 1-877-407-4018 (USA) or
1-201-689-8471 (International). In addition, a dial-up replay of the
conference call will be available beginning November 6, 2012 at 2:00 p.m. ET
and ending on November 30, 2012. The replay telephone number is 1-877-870-5176
(USA) or 1-858-384-5517 (International). Passcode 403361. A live Web cast of
the call will also be available from the Investor Relations section of the
corporate Web site at http://www.almostfamily.com. A Web cast replay can be
accessed on the corporate Web site beginning November 6, 2012 at approximately
2:00 p.m. ET and will remain available until November 30, 2012.

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)
                                Three Months Ended     Nine months Ended
                                September 30,          September 30,
                                2012        2011        2012        2011
Net service revenues          $ 85,128    $ 86,207    $ 261,970   $ 250,521
Cost of service revenues
(excluding                      44,518      43,345      135,573     121,940
 depreciation &
amortization)
Gross margin                  40,610      42,862      126,397     128,581
General and administrative
expenses:
Salaries and benefits         23,769      24,832      73,648      72,783
Other                         10,049      9,993       30,409      29,831
Total general and
administrative                  33,818      34,825      104,057     102,614
 expenses
Operating income              6,792       8,037       22,340      25,967
Interest expense, net         (17)        (41)        (87)        (140)
Income before income taxes    6,775       7,996       22,253      25,827
Income tax expense            (2,676)     (3,154)     (8,674)     (10,331)
Net income                    $  4,099   $  4,842   $  13,579  $  15,496
Per share amounts-basic:
Average shares outstanding    9,256       9,296       9,262       9,271
Net income                    $   0.44  $   0.52  $        $   
                                                        1.47        1.67
Per share amounts-diluted:
Average shares outstanding    9,315       9,346       9,329       9,359
Net income                    $   0.44  $   0.52  $        $   
                                                        1.46        1.66

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
                                 September 30, 2012
ASSETS                         (UNAUDITED)              December 31, 2011
CURRENT ASSETS:
Cash and cash equivalents     $              $         
                                 42,716                   33,693
Accounts receivable - net      48,135                   45,166
Prepaid expenses and other      6,607                    6,437
current assets
Deferred tax assets            7,373                    7,470
TOTAL CURRENT ASSETS           104,831                  92,766
PROPERTY AND EQUIPMENT - NET   5,043                    5,229
GOODWILL                       133,416                  132,653
OTHER INTANGIBLE ASSETS        19,987                   19,709
OTHER ASSETS                   419                      465
                                 $               $         
                                 263,696                 250,822
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable               $             $         
                                 6,096                     6,489
Accrued other liabilities      20,686                   21,129
Current portion - capital       500                      1,200
leases and notes payable
TOTAL CURRENT LIABILITIES      27,282                   28,818
LONG-TERM LIABILITIES:
Notes payable                  625                      1,125
Deferred tax liabilities       16,096                   13,631
Other liabilities              613                      951
TOTAL LONG-TERM LIABILITIES    17,334                   15,707
TOTAL LIABILITIES              44,616                   44,525
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; 9,420 and 9,381
issued and outstanding         942                      938
Treasury stock, at cost, 89 and (2,283)                  (431)
13 shares
Additional paid-in capital     101,730                  100,678
Retained earnings              118,691                  105,112
TOTAL STOCKHOLDERS' EQUITY     219,080                  206,297
                                 $               $         
                                 263,696                 250,822

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
                                             Nine Months Ended September 30,
                                             2012                2011
Cash flows from operating activities:
Net income                                $ 13,579           $ 15,496
Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation and amortization              1,911               2,170
Provision for uncollectible accounts       2,022               1,394
Stock-based compensation                   1,128               1,040
Deferred income taxes                      2,817               2,464
                                             21,457              22,564
Change in certain net assets and
liabilities, net of the effects of
acquisitions:
Decrease (increase) in:
Accounts receivable                        (5,589)             (810)
Prepaid expenses and other current assets  (457)               250
Other assets                               45                  60
Decrease in:
Accounts payable and accrued expenses      (1,241)             (2,718)
Net cash provided by operating activities  14,215              19,346
Cash flows from investing activities:
Capital expenditures                       (1,530)             (1,860)
Acquisitions, net of cash acquired         (538)               (35,689)
Net cash used in investing activities      (2,068)             (37,549)
Cash flows from financing activities:
Proceeds from exercise of stock options    70                  292
Purchase of common stock in connection with (1,852)             (440)
share awards
Tax impact of share awards                 (142)               1,614
Principal payments on capital leases and    (1,200)             (1,595)
notes payable
Net cash used in financing activities      (3,124)             (129)
Net change in cash and cash equivalents    9,023               (18,332)
Cash and cash equivalents at beginning of   33,693              47,943
period
Cash and cash equivalents at end of period $ 42,716           $ 29,611
Summary of non-cash investing and financing
activities:
Settlement of Directors Deferred            $     -        $    501
Compensation Plan
Acquisitions funded by notes payable       $     -        $  1,000

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(UNAUDITED)
(In thousands)
                    Three Months Ended September 30,
                    2012                2011                Change
                    Amount   % Rev  Amount   % Rev  Amount    %
Net service
revenues:
Visiting Nurse    $ 65,880  77.4%    $ 69,897  81.1%    $  (4,017) -5.7%
Personal Care     19,248     22.6%    16,310     18.9%    2,938       18.0%
                    85,128     100.0%   86,207     100.0%   (1,079)     -1.3%
Operating income
before corporate
expenses:
Visiting Nurse    8,906      13.5%    10,192     14.6%    (1,286)     -12.6%
Personal Care     2,822      14.7%    2,687      16.5%    135         5.0%
                    11,728     13.8%    12,879     14.9%    (1,151)     -8.9%
Corporate expenses  4,936      5.8%     4,842      5.6%     94          1.9%
Operating income    6,792      8.0%     8,037      9.3%     (1,245)     -15.5%
Interest expense,   (17)       0.0%     (41)       0.0%     24          -58.5%
net
Income tax expense  (2,676)    -3.1%    (3,154)    -3.7%    478         -15.2%
Net income          $  4,099 4.8%     $  4,842 5.6%     $         -15.3%
                                                            (743)
EBITDA              $  7,825 9.2%     $  9,042 10.5%    $  (1,217) -13.5%

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(UNAUDITED)
(In thousands)
                    Nine Months Ended September 30,
                    2012                2011                Change
                    Amount   % Rev  Amount   % Rev  Amount    %
Net service
revenues:
Visiting Nurse    $ 204,198  77.9%    $ 213,794  85.3%    $  (9,596) -4.5%
Personal Care     57,772     22.1%    36,727     14.7%    21,045      57.3%
                    261,970    100.0%   250,521    100.0%   11,449      4.6%
Operating income
before corporate
expenses:
Visiting Nurse    30,698     15.0%    35,004     16.4%    (4,306)     -12.3%
Personal Care     7,583      13.1%    5,418      14.8%    2,165       40.0%
                    38,281     14.6%    40,422     16.1%    (2,141)     -5.3%
Corporate expenses  15,941     6.1%     14,455     5.8%     1,486       10.3%
Operating income    22,340     8.5%     25,967     10.4%    (3,627)     -14.0%
Interest expense,   (87)       0.0%     (140)      -0.1%    53          -37.9%
net
Income tax expense  (8,674)    -3.3%    (10,331)   -4.1%    1,657       -16.0%
Net income          $  13,579 5.2%     $  15,496 6.2%     $  (1,917) -12.4%
EBITDA              $  25,379 9.7%     $  29,177 11.6%    $  (3,798) -13.0%

ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS
                         Three Months Ended September 30,
                         2012                2011             Change
                         Amount       % Rev  Amount    % Rev  Amount     %
Average number of        107                 100              7          7.0%
locations
All payors:
Patients months          53,215              52,927           288        0.5%
Admissions               15,285              15,047           238        1.6%
Billable visits          432,110             448,377          (16,267)   -3.6%
Medicare Statistics (1):
Revenue (in thousands)   $  59,713  90.6%  $ 64,508  92.3%  $ (4,795)  -7.4%
Billable visits          375,412             400,111          (24,699)   -6.2%
Admissions               13,316              13,662           (346)      -2.5%
Recertifications         7,952               8,143            (191)      -2.3%
Episodes completed       20,677              21,176           (499)      -2.4%
Revenue per completed    $   2,865        $  3,008        $  (143) -4.8%
episode
Visits per episode       17.7                18.3             (0.6)      -3.3%
(1) Episodic data which includes Medicare Advantage plans that pay
episodically
PERSONAL CARE OPERATING METRICS
                         Three Months Ended September 30,
                         2012                2011             Change
                         Amount              Amount           Amount     %
Average number of        60                  48               12         25.0%
locations
Admissions               1,055               904              151        16.7%
Patient months of care   17,684              14,917           2,767      18.5%
Patient days of care     263,703             215,359          48,344     22.4%
Billable hours           1,053,652           904,213          149,439    16.5%
Revenue per billable     $   18.27        $  18.04        $   0.23 1.3%
hour

ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS
                       Nine Months Ended September 30,
                       2012                2011              Change
                       Amount       % Rev  Amount     % Rev  Amount      %
Average number of      109                 95                14          14.7%
locations
All payors:
Patients months        163,313             161,017           2,296       1.4%
Admissions             47,381              46,187            1,194       2.6%
Billable visits        1,325,488           1,361,384         (35,896)    -2.6%
Medicare Statistics
(1):
Revenue (in thousands) $ 185,933   91.1%  $ 197,567 92.4%  $ (11,634) -5.9%
Billable visits        1,160,603           1,215,570         (54,967)    -4.5%
Admissions             41,715              42,037            (322)       -0.8%
Recertifications       23,875              24,328            (453)       -1.9%
Episodes completed     65,136              65,630            (494)       -0.8%
Revenue per completed  $   2,841        $               $        -5.3%
episode                                    3,000            (159)
Visits per episode     17.5                18.1              (0.6)       -3.3%
(1) Episodic data which includes Medicare Advantage plans that pay
episodically
PERSONAL CARE OPERATING METRICS
                       Nine Months Ended September 30,
                       2012                2011              Change
                       Amount              Amount            Amount      %
Average number of      60                  31                29          93.5%
locations
Admissions             3,256               2,243             1,013       45.2%
Patient months of care 52,020              36,711            15,309      41.7%
Patient days of care   748,675             499,270           249,405     50.0%
Billable hours         3,193,973           2,027,307         1,166,666   57.5%
Revenue per billable   $   18.09        $               $         -0.2%
hour                                       18.12            (0.03)

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 and
the footnotes to the tables, a reconciliation of those measures to the most
directly comparable GAAP measures.

EBITDA
Earnings before interest, income taxes, depreciation and amortization (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 EBITDA are significant components in
understanding and evaluating financial performance and liquidity. Management
routinely calculates and communicates 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. EBITDA is
also used in certain covenants contained in our credit agreement.

The following tables set forth a reconciliation of net income to EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA
(In thousands)
                                        Three Months Ended  Nine Months Ended
                                        September 30,       September 30,
                                        2012       2011     2012      2011
Net income                              $ 4,099    $ 4,842  $ 13,579  $ 15,496
Add back:
Interest expense                        17         41       87        140
Income tax expense                      2,676      3,154    8,674     10,331
Depreciation and amortization           651        695      1,911     2,170
Amortization of stock-based             382        310      1,128     1,040
 compensation
Earnings before interest, income taxes, $ 7,825    $ 9,042  $ 25,379  $ 29,177
depreciation and amortization (EBITDA)

About Almost Family
Almost Family, Inc., founded in 1976, is a leading regional provider of home
health nursing and personal care services in Florida, Ohio, Kentucky,
Connecticut, New Jersey, Massachusetts, Missouri, Alabama, Illinois,
Pennsylvania and Indiana (in order of revenue significance). Almost Family,
Inc. and its subsidiaries operate a Medicare-certified segment and a personal
care segment. Altogether, Almost Family operates over 160 branch locations in
11 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, 2011, in particular information under the headings
"Special Caution Regarding Forward-Looking Statements" and "Risk Factors." The
Company undertakes no obligation to update or revise its forward-looking
statements.

                    The Ruth Group

                    Investor Relations
Almost Family, Inc.
                    Nick Laudico/Zack Kubow
Steve Guenthner
                    (646) 536-7030/7020
(502) 891-1000
                    nlaudico@theruthgroup.com

                    zkubow@theruthgroup.com

SOURCE Almost Family, Inc.

Website: http://www.almostfamily.com
 
Press spacebar to pause and continue. Press esc to stop.