Addus HomeCare Reports Second Quarter 2013 Results Second Quarter Financial Highlights - Total net service revenues were $65.8 million - Net income from continuing operations were $2.6 million, or $0.23 per diluted share PR Newswire PALATINE, Ill., Aug. 1, 2013 PALATINE, Ill., Aug. 1, 2013 /PRNewswire/ -- Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home and community based services, primarily social in nature and provided in the home, and focused on the dual eligible population, announced today its financial results for the second quarter ended June 30, 2013. Second Quarter Review Total net service revenues for the second quarter of 2013 were $65.8 million, an 8.8% increase compared to $60.4 million in the prior year quarter. Net income from continuing operations for the second quarter was $2.6 million, or $0.23 per diluted share, a 40.7% increase when compared to $1.8 million or $0.17 per diluted share, in the prior year quarter. Net income, including a loss from discontinued operations, was $2.4 million, or $0.22 per diluted share. Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, "We are pleased by the steady performance of our business and the increased cash collections in the quarter. We remain focused on our efforts to improve our organic sales results, develop and deploy technology to leverage our work force and position our organization to capitalize on the opportunities presented by the dual eligible demonstration projects in our core markets." Operating income, including depreciation and amortization but excluding interest and income tax expenses, increased 23.7% to $4.0 million, or 6.1% of revenue, in the second quarter, compared to $3.2 million, or 5.3% of revenue, in the prior year quarter reflecting increased leverage of our fixed costs. This improvement was primarily due to a 4.5% increase in average census and an 8.6% increase in billable hours, driven largely by improved field productivity. The Company received a $0.2 million benefit in revenues and gross margin during the quarter as changes to the State of Illinois' billing programs were not implemented until May 1, 2013. The Company incurred a $270,000 charge in the second quarter related to severance payments made for a management position terminated in the quarter. Income taxes were positively affected in the second quarter by a one-time increase in our ability to capture Work Opportunity Tax Credits estimates related to prior periods to reduce our effective tax rate by 3.0% in the quarter. The share count increased in the quarter, a function of our increased stock price and the inclusion of stock options in our diluted share counts that previously had been "under water." The impact of this dilution on our earnings per share was $0.01. Total cash flow for the quarter was a positive $21.0 million, primarily the result of a large one-time payment received from the State of Illinois at the end of June and collections made on our home health accounts receivable. Six Month Review Total net service revenues for the six months ended June 30, 2013 were $128.8 million, a 7.9% increase compared to $119.3 million in the same prior year period. Net income from continuing operations for the six months ended June 30, 2013 increased 47.1% to $5.3 million, or $0.48 per diluted share, compared to $3.6 million or $0.33 per diluted share, in the prior year period. Net income, including the loss from discontinued operations and the gain from the previously announced sale of the home health business, was $15.7 million, or $1.44 per diluted share. Operating income, including depreciation and amortization, but excluding interest and income tax expenses, increased 18.2% to $7.7 million, or 6.0% of revenue, for the six months ended June 30, 2013, compared to $6.5 million, or 5.5% of revenue in the prior year. The Company benefited from a $0.8 million increase in revenues and gross margin during this period as technical changes to the State of Illinois billing programs were not implemented until early May. 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 discontinued operations, interest 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, 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 report its 2013 second quarter financial results after the market close on Thursday, August 1, 2013. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on August 1, 2013. The toll-free dial-in number is (877) 546-5018 (international dial-in number is 857-244-7550), with the passcode: 23096859. A telephonic replay of the conference call will be available through midnight on August 8, 2013, by dialing (888) 286-8010 (international dial-in number is 617-801-6888) and entering the passcode 49225122. 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 comprehensive provider of home and community based services, primarily social in nature and provided in the home, and focused on the dual eligible 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, commercial insurers and private individuals. For more information, please visit www.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 outcome of 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 28, 2013 and in Addus HomeCare's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 9, 2013 and August 1, 2013, 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 Six Months Ended Information: June 30, December 31, 2013 2012 2013 2012 Net service revenues $ 65,755 $ 60,440 $128,753 $119,329 Cost of service revenues 49,142 44,633 96,342 88,498 Gross profit 16,613 15,807 32,411 30,831 General and 12,092 11,959 23,602 23,529 administrative expenses Gain on sale of agency - - - (495) Depreciation and 541 631 1,087 1,262 amortization Total operating expenses 12,633 12,590 24,689 24,296 Operating income from 3,980 3,217 7,722 6,535 continuing operations Interest expense 142 426 350 830 Income from continuing 3,838 2,791 7,372 5,705 operations before taxes Income tax expense 1,256 956 2,103 2,124 Net income from 2,582 1,835 5,269 3,581 continuing operations Discontinued operations: Loss from home health (150) (371) (687) (1,488) business, net of tax Gain on sale of home health business, net of - - 11,111 - tax Earnings (losses) from (150) (371) 10,424 (1,488) discontinued operations Net income $ 2,432 $ 1,464 $ 15,693 $ 2,093 Net income (loss) per share: Basic Continuing $ 0.24 $ 0.17 $ 0.49 $ 0.33 operations Discontinued (0.01) (0.03) 0.97 (0.14) operations Basic income per $ 0.23 $ 0.14 $ 1.46 $ 0.19 share Diluted Continuing $ 0.23 $ 0.17 $ 0.48 $ 0.33 operations Discontinued (0.01) (0.03) 0.96 (0.14) operations Diluted income per $ 0.22 $ 0.14 $ 1.44 $ 0.19 share Weighted average number of common shares outstanding: Basic 10,785 10,761 10,779 10,761 Diluted 11,016 10,785 10,920 10,781 Cash Flow Information: For the Three Months Ended For the Six Months Ended June 30, June 30, 2013 2012 2013 2012 Net cash provided by $ 21,221 $ 7,015 $ 34,246 $ 5,732 operating activities Net cash provided by (used in) investing (228) (466) 19,252 (259) activities Net cash used in - (6,375) (16,458) (6,000) financing activities Net change in cash 20,993 174 37,040 (527) Cash at the beginning of 17,784 1,319 1,737 2,020 the period Cash at the end of the $ 38,777 $ 1,493 $ 38,777 $ 1,493 period Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) June 30, 2013 December 31, 2012 Assets Current assets Cash $ 38,777 $ 1,737 Accounts receivable, net 43,605 71,303 Prepaid expenses and other current 5,754 7,293 assets Assets held for sale - 245 Deferred tax assets 7,258 7,258 Total current assets 95,394 87,836 Property and equipment, net 2,502 2,489 Other assets Goodwill 50,456 50,536 Intangible assets, net 5,691 6,370 Deferred tax assets - 2,328 Investment in joint venture 900 - Other assets 212 298 Total other assets 57,259 59,532 Total assets $ 155,155 $ 149,857 Liabilities and stockholders' equity Current liabilities Accounts payable $ 5,415 $ 4,117 Accrued expenses 36,365 32,717 Current maturities of long-term debt - 208 Deferred revenue 10 2,148 Total current liabilities 41,790 39,190 Long-term debt, less current - 16,250 maturities Deferred tax liability 3,097 - Total stockholders' equity 110,268 94,417 Total liabilities and stockholders' $ 155,155 $ 149,857 equity Key Statistical and Financial Data (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2013 2012 2013 2012 General: Adjusted EBITDA (in $4,633 $3,921 $9,026 $7,937 thousands) (1) States served at 19 19 period end Locations at period 93 91 end Employees at period 14,854 13,485 end Home & Community Average billable 26,173 25,044 26,501 24,761 census Billable hours (in 3,872 3,564 7,586 7,034 thousands) Average billable hours per census per 49 47 48 48 month Billable hours per 59,569 54,831 58,806 54,108 business day Revenues per $16.98 $16.96 $16.97 $16.96 billable hour Percentage of Revenues by Payor: State, local and other govermental 94 % 95 % 94 % 95 % programs Commercial 2 1 2 1 Private duty 4 % 4 % 4 % 4 % (1) We define Adjusted EBITDA as earnings before discontinued operations, interest 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 Six Months Ended (Unaudited) June 30, June 30, 2013 2012 2013 2012 Reconciliation of Adjusted EBITDA to Net Income: Net income $2,432 $1,464 $15,693 $2,093 Less: (Earnings) loss from discontinued 150 371 (10,424) 1,488 operations, net of tax Net income from 2,582 1,835 5,269 3,581 continuing operations Interest expense 142 426 350 830 Income tax expense from 1,256 956 2,103 2,124 continuing operations Depreciation and 541 631 1,087 1,262 amortization Stock-based 112 73 217 140 compensation expense Adjusted EBITDA $4,633 $3,921 $ 9,026 $7,937 (1) We define Adjusted EBITDA as earnings before discontinued operations, interest 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 Second Quarter 2013 Results
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