Addus HomeCare Reports Fourth Quarter 2012 Results Completes Sale of Home Health Assets Fourth Quarter Financial Highlights - Total net service revenues of $63.8 million - Total net income of $3.7 million, or $0.35 per diluted share - The Company completed the sale of substantially all of the assets of its Home Health business effective on March 1, 2013 for $20 million cash and retained a ten percent interest in the business in Illinois and California. The results of the Home Health business sold are reflected as discontinued operations for all periods presented. - Net income from continuing operations of $3.5 million, or $0.33 per diluted share PR Newswire PALATINE, Ill., March 13, 2013 PALATINE, Ill., March 13, 2013 /PRNewswire/ -- Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home-based social and medical services focused on the elderly dual eligible population, announced today its financial results for the fourth quarter and year ended December 31, 2012. Fourth Quarter Review Total net service revenues for the fourth quarter of 2012 were $63.8 million, a 9.4% increase compared to $58.3 million in the prior year quarter. Net income, including discontinued operations, was $3.7 million, or $0.35 per diluted share, a 50% increase over the prior year quarter. Net income from continuing operations was $3.5 million, or $0.33 per diluted share, a 20.2% increase when compared to prior year quarter. Continuing operations includes the results of operations previously included in the Home & Community segment and three agencies previously included in the Home Health segment. Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, "Our Home & Community segment continued to demonstrate positive growth during the fourth quarter and we are pleased with the sale of our Home Health business." Gross profit margins have declined when compared to the prior year quarter due to an increase in workers compensation expense. Fourth quarter results from continuing operations for 2012 were positively affected by Workers Opportunity Tax Credits realized in the quarter, which substantially reduced income tax expense. Fourth quarter 2011 results from continuing operations included two extraordinary items; the revaluation of contingent consideration and the receipt of prompt payment interest from the State of Illinois. Income tax expense was negatively affected in 2011 by the goodwill impairment charge taken in 2011 on the Home Health business. On a pro forma basis, earnings from continuing operations were $0.30 per diluted share in 2012, after normalizing the effective tax rate to 34.1%. Earnings from continuing operations in the fourth quarter of 2011 were $0.22 per diluted share after excluding: the effect of the revaluation of contingent consideration related to the acquisition of CarePro and the prompt payment interest received from the State of Illinois and after normalizing the annual effective tax rate to 33.0%. Twelve Month Review Total net service revenues from continuing operations for the twelve months ended December 31, 2012 were $244.3 million, a 6.2% increase compared to $230.1 million for the same prior year period. Net income for 2012, including discontinued operations, was $7.6 million or $0.71 per diluted share, compared to a reported loss in 2011 of $2.0 million or $(0.18) per diluted share. Net income from continuing operations was $9.3 million, or $0.86 per diluted share, a 10.4% increase when compared to the prior year. On a pro forma basis, earnings from continuing operations in 2012 were $0.83 per diluted share after excluding the gain from the sale of an agency which occurred in the first quarter of 2012. Pro forma earnings from continuing operations in 2011 were $0.61 per diluted share after excluding the effect of the revaluation of contingent consideration related to the acquisition of CarePro and the prompt payment interest received from the State of Illinois. The business is cyclical in nature. Payroll taxes are higher in the early quarters of the year and are reduced in the later quarters. It is anticipated unemployment taxes will increase in 2013 as a result of scheduled increases in both federal and state unemployment tax rates. Sale of Home Health Business Effective March 1, 2013, the Company completed the sale to subsidiaries of LHC Group, Inc. of substantially all of the assets used in the Company's Home Health business in Arkansas, Nevada and South Carolina, and 90% of the Home Health business in California and Illinois with the Company retaining a 10% ownership interest in those locations. The purchase price of the assets totaled approximately $20 million in cash. The net proceeds from the transaction are being used to pay off outstanding debt and for general corporate purposes. The operations represented by these assets are reflected in the Company's financial statements as discontinued operations. The revenues and expenses related to the business are reflected in the financial statements net of taxes, with taxes calculated at the statutory rates for each year. Approximately $240,000 and $346,000 of Corporate General and Administrative expenses have been included in the cost of discontinued operations for the fourth quarter of 2012 and 2011 respectively. Corporate General and Administrative expenses of $1.4 million and $1.5 million have been included in the annual results for 2012 and 2011, respectively. The Company expects the benefits of completing this transaction will be increased management focus on developing its core Home & Community business and the expansion of its programs offered to managed care plans; lower debt; and a stronger balance sheet. 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 goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, taxes, depreciation, amortization, 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 by providing investors with insight and consistency in the Company's financial reporting and presents a basis for comparison of the Company's business operations among periods, and to facilitate comparisons with the results of the Company's peers. Conference Call Addus will report its 2012 fourth quarter and year-end financial results on Wednesday, March 13, 2013. Management will conduct a conference call to discuss its results at 10:00 a.m. Eastern time on March 13, 2013. The toll-free dial-in number is (866) 700- 6293 (international dial-in number is 617-213-8835), with the passcode: 51146580. A telephonic replay of the conference call will be available through midnight on March 22, 2013, by dialing (888) 286-8010 (international dial-in number is 617-801-6888) and entering the passcode 98751970. 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 provider of a broad range of social and medical services in the home. Addus' services include personal care and assistance with activities of daily living and adult day care. Addus focuses on serving the needs of the elderly dual eligible population. Addus' consumers are individuals with special needs 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 visitwww.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 expected benefits and costs of 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 outcomeof discussions with managed care organizations, changes in tax rates 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 16, 2012, and in Addus HomeCare's Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission on May 10, 2012, August 9, 2012 and November 1, 2012, each of 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) Investor Contact: Dennis Meulemans Chief Financial Officer Phone: (847) 303-5300 Email: DMeulemans@addus.com 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 For the Three Months Ended For the Year Ended Information: December 31, December 31, 2012 2011 2012 2011 Net service revenues $63,775 $58,304 $244,315 $230,105 Cost of service revenues 46,238 41,475 180,264 168,632 Gross profit 17,537 16,829 64,051 61,473 General and administrative 11,652 11,945 46,362 45,858 expenses Gain on sale of agency - - (495) - Revaluation of contingent - (469) - (469) consideration Depreciation and 624 705 2,521 3,167 amortization Total operating expenses 12,276 12,181 48,388 48,556 Operating income from 5,261 4,648 15,663 12,917 continuing operations Interest income (27) (2,263) (155) (2,263) Interest expense 358 595 1,723 2,524 Total interest expense, 331 (1,668) 1,568 261 net Income from operations 4,930 6,316 14,095 12,656 before taxes Income tax expense 1,427 3,402 4,807 4,244 Net income from continuing 3,503 2,914 9,288 8,412 operations Discontinued operations: Earnings (loss) from discontinued operations, 242 (418) (1,653) (10,393) net of tax Net income (loss) $ 3,745 $ 2,496 $ 7,635 $ (1,981) Income (loss) per common share: Basic and diluted Continuing $ 0.33 $ 0.27 $ 0.86 $ 0.78 operations Discontinued 0.02 (0.04) (0.15) (0.96) operations Basic and diluted income (loss) per common $ 0.35 $ 0.23 $ 0.71 $ (0.18) share Weighted average number of common shares outstanding: Basic 10,772 10,754 10,764 10,752 Diluted 10,807 10,756 10,784 10,752 Cash Flow Information: For the Three Months Ended For the Year Ended December 31, December 31, 2012 2011 2012 2011 Net cash provided by $ 6,069 $ 4,132 $ 15,405 $ 15,947 operating activities Net cash used in investing (101) (274) (619) (1,051) activities Net cash used in financing (5,944) (3,135) (15,069) (13,692) activities Net change in cash 24 723 (283) 1,204 Cash at the beginning of 1,713 1,297 2,020 816 the period Cash at the end of the $ 1,737 $ 2,020 $ 1,737 $ 2,020 period Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) December 31, 2012 December 31, 2011 Assets Current assets Cash $ $ 1,737 2,020 Accounts receivable, net 71,303 72,368 Prepaid expenses and other current 7,293 8,137 assets Assets held for sale 245 239 Deferred tax assets 7,258 6,336 Total current assets 87,836 89,100 Property and equipment, net 2,489 2,251 Other assets Goodwill 50,536 50,695 Intangible assets, net 6,370 8,044 Deferred tax assets 2,328 4,089 Other assets 298 513 Total other assets 59,532 63,341 Total assets $ $ 149,857 154,692 Liabilities and stockholders' equity Current liabilities Accounts payable $ $ 4,117 5,266 Accrued expenses 32,717 29,313 Current maturities of long-term debt 208 6,569 Deferred revenue 2,148 2,145 Total current liabilities 39,190 43,293 Long-term debt, less current 16,250 24,958 maturities Total stockholders' equity 94,417 86,441 Total liabilities and stockholders' $ $ equity 149,857 154,692 Key Statistical and Financial Data (Unaudited) For the Three Months Ended For the Twelve Months December 31, EndedDecember 31, 2012 2011 2012 2011 General: Adjusted EBITDA $6,330 $4,351 $15,786 $15,200 (in thousands) (1) States served at 19 19 period end Locations at 96 96 period end Employees at 13,836 12,463 period end Home & Community Average billable 25,508 24,285 25,104 23,877 census Billable hours (in 3,754 3,438 14,388 13,504 thousands) Average billable hours per census 49 47 48 47 per month Billable hours per 56,879 52,892 55,126 51,938 business day Revenues per $16.99 $16.96 $16.98 $17.04 billable hour Percentage of Revenues by Payor: State, local and other govermental 95 % 95 % 95 % 94 % programs Commercial 1 1 1 1 Private duty 4 % 4 % 4 % 5 % (1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, taxes, depreciation, amortization, 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) For the Three Months Ended For the Twelve Months (Unaudited) December 31, EndedDecember 31, 2012 2011 2012 2011 Reconciliation of Adjusted EBITDA to Net Income: Net income (loss) $3,745 $2,496 $ 7,635 $ (1,981) Goodwill and intangible asset - - - 15,989 impairment charge Revaluation of contingent - (469) - (469) consideration Net interest expense 331 (1,668) 1,568 261 Income tax expense 1,566 3,131 3,708 (2,485) (benefit) Depreciation and 626 771 2,534 3,554 amortization Stock-based 62 90 341 331 compensation expense Adjusted EBITDA $6,330 $4,351 $15,786 $15,200 (1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, revaluation of contingent consideration, net interest (income) expense, taxes, depreciation, amortization, 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. SOURCE Addus HomeCare Corporation Website: http://www.addus.com
Addus HomeCare Reports Fourth Quarter 2012 Results Completes Sale of Home Health Assets
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