Addus HomeCare Reports Fourth Quarter 2012 Results Completes Sale of Home Health Assets

  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
 
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