SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________to_______
Commission file number 1-9848
ALMOST FAMILY, INC. TM
(Exact name of registrant as specified in its charter)
Delaware 061-153720
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
9510 Ormsby Station Rd, Suite 300 40223
(Address of principal executive offices) (Zip Code)
(502) 899-5355
(Registrant's telephone number, including area code)
100 Mallard Creek Rd, Suite 400
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X____ No ____.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes _____ No __x__
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class of Common Stock $.10 par value
Shares outstanding at March 31, 2003 2,296,527
ALMOST FAMILY, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2003
and December 31, 2002 3
Consolidated Statements of Income for the Three
Months ended March 31, 2003 and 2002 4
Consolidated Statements of Cash Flows for the Three
Months ended March 31, 2003 and 2002 5
Notes to Interim Consolidated Financial Statements 6-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-18
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 19
Item 4. Controls and Procedures 19
Part II. Other Information
Items 1 through 6 20
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
ASSETS March 31, December 31,
2003 2002
------------------- ------------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $ 1,047,746 $ 973,534
Accounts receivable - net 15,284,914 17,118,539
Prepaid expenses and other current assets 605,704 602,759
Deferred tax assets 1,250,051 1,396,306
------------------- ------------------
TOTAL CURRENT ASSETS 18,188,415 20,091,138
PROPERTY AND EQUIPMENT - NET 9,410,578 9,149,782
GOODWILL 6,335,783 6,335,783
DEFERRED TAX ASSETS 212,914 212,914
OTHER ASSETS 248,226 1,010,406
------------------- ------------------
$ 34,395,916 $ 36,800,023
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 9,984,653 $ 9,272,300
Current portion - capital lease obligations 398,128 352,452
------------------ -------------------
10,382,781 9,624,752
------------------ -------------------
LONG-TERM LIABILITIES:
Revolving credit facility 11,585,465 14,482,237
Capital lease obligations 1,156,829 882,809
Mortgage and acquisition notes payable 554,418 560,118
Other liabilities 333,805 1,146,023
------------------ -------------------
TOTAL LONG-TERM LIABILITIES 13,630,517 17,071,187
------------------ -------------------
TOTAL LIABILITIES 24,013,298 26,695,939
------------------ -------------------
COMMITMENTS AND CONTINGENCIES (Note 2)
STOCKHOLDERS' EQUITY:
Common stock, par value $0.10; authorized
10,000,000 shares; 3,394,874 and 3,369,674
issued and outstanding 339,490 336,970
Treasury stock, at cost, 1,096,783 and
1,087,383 shares (7,772,048) (7,706,152)
Additional paid-in capital 26,439,304 26,335,863
Accumulated deficit (8,624,128) (8,862,597)
------------------ -------------------
TOTAL STOCKHOLDERS' EQUITY 10,382,618 10,104,084
------------------ -------------------
$ 34,395,916 $ 36,800,023
================== ===================
See accompanying notes to interim consolidated financial statements.
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
------------------ -------------------------
March 31, 2003 March 31, 2002
------------------ ---------------------
Net revenues $ 21,517,645 $ 20,550,553
Cost of services 18,029,638 16,670,454
General and administrative expenses 1,905,058 1,837,664
Depreciation and amortization expense 626,085 490,793
Provision for uncollectible accounts 380,182 348,143
Cost of restatement - 815,794
------------------- -------------------
Income before other income (expense) and 576,682 387,705
income taxes
Other income (expense):
Interest expense (179,233) (220,454)
------------------- -------------------
Income before income taxes 397,449 167,251
Income tax expense 158,980 66,933
------------------- -------------------
Net income $ 238,469 $ 100,318
=================== ===================
Earnings per share - Basic:
Weighted Average Basic Shares 2,289,465 2,499,056
------------------- -------------------
Net income $ 0.10 $ 0.04
=================== ===================
Earnings per share - Diluted:
Weighted Average Diluted Shares 2,476,900 3,006,736
------------------- -------------------
Net income $ 0.10 $ 0.03
=================== ===================
See accompanying notes to interim consolidated financial statements.
ALMOST FAMILY, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
--------------------------------------------------
March 31, 2003 March 31, 2002
---------------------- -----------------------
Cash flows from operating activities:
Net income $ 238,469 $ 100,318
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 626,085 490,793
Deferred income taxes 146,255 -
Provision for uncollectible accounts 380,182 348,143
---------------------- -----------------------
1,390,991 939,254
Change in certain net assets:
(Increase) decrease in:
Accounts receivable 1,453,443 (828,655)
Prepaid expenses and other current assets (42,409) 11,806
Other assets 762,180 21,025
Increase (decrease) in:
Accounts payable and accrued liabilities 742,163 1,313,560
Other liabilities (812,218) 19,211
---------------------- -----------------------
Net cash provided by operating activities 3,494,150 1,476,201
---------------------- -----------------------
Cash flows from investing activities:
Capital expenditures (455,404) (728,151)
---------------------- -----------------------
Net cash used in investing activities (455,404) (728,151)
---------------------- -----------------------
Cash flows from financing activities:
Net revolving credit facility payments (2,896,772) (1,093,175)
Repurchase of common shares (65,896) (18,566)
Proceeds from stock option exercises 76,150 54,600
Principal payments on debt and capital leases (78,016) (92,021)
---------------------- -----------------------
Net cash used in financing activities (2,964,534) (1,149,162)
---------------------- -----------------------
Net increase/(decrease) in cash 74,212 (401,112)
Cash and cash equivalents at beginning of period 973,534 1,928,391
---------------------- -----------------------
Cash and cash equivalents at end of period $ 1,047,746 $ 1,527,279
====================== =======================
See accompanying notes to interim consolidated financial statements.
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying interim consolidated financial statements for the three months
ended March 31, 2003 and 2002 have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been omitted pursuant to such rules and regulations. Accordingly, the
reader of this Form 10-Q is referred to the Company's Form 10-K for the year
ended December 31, 2002 for further information. In the opinion of management of
the Company, the accompanying unaudited interim financial statements reflect all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly the financial position at March 31, 2003 and the results of operations
and cash flows for the three months ended March 31, 2003 and 2002.
The results of operations for the three months ended March 31, 2003 are not
necessarily indicative of the operating results for the year.
Net Revenues
The Company is paid for its services primarily by Federal and state third-party
reimbursement programs, commercial insurance companies, and patients. Revenues
are recorded at established rates in the period during which the services are
rendered. Appropriate allowances to give recognition to third party payment
arrangements are recorded when the services are rendered.
The Company has a significant dependence on state Medicaid reimbursement
programs. Although the Company is not aware of any significant initiatives
currently underway that would have a material adverse impact on the Medicaid
reimbursement programs or the Company, the Company could be materially impacted
by unfavorable changes in the future should they occur.
The ability of payors to meet their obligations depends upon their financial
stability, future legislation and regulatory actions. With the exception of the
matter discussed in Note 6, the Company does not believe there are any
significant credit risks associated with receivables from Federal and state
third-party reimbursement programs. The allowance for doubtful accounts
principally consists of management's estimate of amounts that may prove
uncollectible for coverage, eligibility and technical reasons.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Financial Statement Reclassifications
Certain amounts have been reclassified in the March 2002 financial statements in
order to conform them to the 2003 presentation. Such reclassifications had no
effect on previously reported net income.
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
2. COMMITMENTS AND CONTINGENCIES
Insurance Programs
Self-Insurance Programs. The Company bears significant risk under its
self-insured employee health, automobile and workers' compensation programs. A
brief description of each program is set forth below:
The Company's self-insured employee health program has an excess-loss insurance
policy that reimburses the Company for covered expenses, in excess of a specific
deductible for each covered person and an annual aggregate deductible for all
covered claims. Effective September 1, 2002, the Company moved the management of
the health program from a regional third party administrator to Cigna
Healthcare, a national insurance carrier. Additionally, as of September 1, 2002,
certain changes in the benefits were made and the rates the Company charges
employees for coverage were increased.
Under its automobile and workers' compensation self-insurance programs, the
Company bears risk up to $100,000 per incident and up to an annual aggregate
deductible. The Company carries insurance coverage for amounts in excess of the
$100,000 per incident amount and for amounts in excess of the annual aggregate
deductible. Additionally, the Company also carries umbrella coverage.
The Company records estimated liabilities for its health, automobile, and
workers' compensation self-insurance programs based on information provided by
the third-party plan administrators, historical claims experience, the life
cycle of claims, expected costs of claims incurred but not paid, and expected
costs to settle unpaid claims.
Other Insurance. The Company's properties are covered by casualty insurance
policies. The Company also carries directors and officers, general and
professional liability, and umbrella insurance. The Company's deductible amount
for general and professional claims was $5,000 per claim prior to July 1, 2001
and $25,000 thereafter.
The Company monitors its estimated self-insurance liabilities on a quarterly
basis. As facts change, it may become necessary to make adjustments that could
be material to the Company's results of operations and financial condition.
Refer to the renewal discussion below for program changes as of April 1, 2003.
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
2. COMMITMENTS AND CONTINGENCIES (Continued)
Insurance Program Renewal
The Company's insurance coverages were renewed effective April 1, 2003 with the
following changes: 1) the deductible amount for general and professional claims
was increased to $250,000, 2) the deductible amount for workers' compensation
claims was increased to $250,000 (auto remains at $100,000), 3) total premiums,
excluding the Company's exposure to claims and deductibles, for all its
non-health insurance programs increased to approximately $2.5 million for the
contract year ending March 31, 2004 as compared to approximately $1.5 million
for the contract year ended March 31, 2003.
Legal Proceedings
Franklin Capital
On January 26, 1994 Franklin Capital Associates L.P. (Franklin), Aetna Life and
Casualty Company and Aetna Casualty and Surety Company shareholders, who at one
time held approximately 320,000 shares of the Company's common stock
(approximately 13% of shares outstanding) filed suit in Chancery Court of
Williamson County, Tennessee, claiming unspecified damages not to exceed $3
million dollars in connection with registration rights they received in the
Company's acquisition of certain home health operations in February 1991. The
1994 suit alleged that the Company failed to use its best efforts to register
the shares held by the plaintiffs as required by the merger agreement. The
Company settled with both Aetna parties shortly before the case went to trial in
February 2000. In mid-trial Franklin voluntarily withdrew its complaint
reserving its legal rights to bring a new suit as allowed under Tennessee law.
In April 2000, Franklin re-filed its lawsuit. The second trial took place in
February 2003. In April 2003 the court issued a ruling in favor of the
plaintiffs awarding damages of $984,970. The Company believes the Court erred
both in its finding of liability and in its determination of the amount of
damages. The Company intends to seek appellate review of the lower court
decision. As a part of the appeal the Company will be required to post a bond,
supported by a letter of credit, in the amount of the trial court's final order,
until the appeal court issues a review order. Such a letter of credit will
reduce amounts that would otherwise be available under the Company's revolving
credit facility.
Based on the advice of legal counsel, the Company's management believes that
the damage award by the lower court does not create a "probable"
loss as set forth in Statement of Financial Accounting Standards No. 5,
"Accounting for Contingencies". Accordingly, no provision for the damages award
has been recorded in the accompanying financial statements. Should the facts and
circumstances change in the future to the extent that such a loss appears
probable, the Company would record a provision at that time.
Based on the advice of legal counsel, the Company's management believes it has
strong grounds for appealing the trial court's decision and intends to
vigorously pursue its appeal. The Company can give no assurance that it will be
successful in its appeal.
Other Claims and Suits
The Company is currently, and from time to time, subject to other claims and
suits arising in the ordinary course of its business, including claims for
damages for personal injuries. In the opinion of management, the ultimate
resolution of any of these other pending claims and legal proceedings will not
have a material effect on the Company's financial position or results of
operations.
ALMOST FAMILY, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3. SEGMENT DATA
The Company operates in two reportable business segments: Adult Day Health
Services (ADHS), and Visiting Nurses (VN). Reportable segments have been
identified based upon how management has organized the business by services
provided to customers and the criteria in SFAS 131, "Disclosures about Segments
of an Enterprise and Related Information". The Company's ADHS segment includes
the aggregation of its Adult Day Care (ADC) in-center operations and in-home
personal care operations, both of which provide predominantly long-term health
care and custodial services that enable recipients to avoid nursing home
admission. Sources of reimbursement, reimbursement rates per day and
contribution margins from the Company's ADC and in-home personal care operations
are alike. The Company's VN segment provides skilled medical services in
patients' homes largely to enable recipients to reduce or avoid periods of
hospitalization and/or nursing home care. Approximately 90% of the VN segment
revenues are generated from the Medicare program. VN Medicare revenues are
generated on a per episode basis rather than a fee per visit or day of care.
Certain general and administrative expenses incurred at the corporate level have
not been allocated to the segments. The Company has operations in Alabama,
Connecticut, Florida, Indiana, Kentucky, Maryland, Massachusetts, and Ohio.
Three Months Ended March 31,
------------------------------
2003 2002
----------------- ---------------
Net Revenues
Adult day health services $ 13,911,776 $ 13,185,301
Visiting nurses 7,605,869 7,365,252
----------------- ---------------
$ 21,517,645 $ 20,550,553
================= ===============
Operating Income
Adult day health services $ 176,962 $ 614,677
Visiting nurses 951,429 1,123,514
----------------- ---------------
1,128,391 1,738,191
Corporate/unallocated (1) 551,709 1,350,486
----------------- ---------------
Operating income $ 576,682 $ 387,705
================= ===============
(1)The three months ended March 31, 2002 includes approximately
$816,000 related to the cost of conducting an investigation of the
restatement of the financial statements.
4. Capitalized Software Development Costs
Consistent with AICPA Statement of Position 98-1, the Company capitalizes the
cost of internally developed computer software developed for the Company's own
use. Software development costs of approximately $297,000 and $288,000 were
capitalized in the three months ended March 31, 2003 and 2002, respectively.
Capitalized software development costs are amortized over a three-year period
following the initial implementation of the software.
5. Acquisition of Ohio Home Care Provider
On July 18, 2002, the Company acquired the business and assets of Medlink of
Ohio (Medlink). Medlink is a provider of in-home personal care services with
branch operations in Cleveland and Akron, Ohio.
The purchase price was approximately $3.2 million, $2.9 million of which was
funded from the Company's bank credit facility. The balance was financed with a
three-year note payable to the seller. The acquired operations added
approximately $1.9 million to revenues and $221,000 to consolidated pre-tax
income for the quarter ended March 31, 2003.
The unaudited pro forma consolidated results of operations of the Company as if
this acquisition had been made at the beginning of 2002 are as follows:
Three Months Ended March, 31,
----------------------------------------------
2003 2002
------------------- -----------------------
Revenues $ 21,517,645 $ 22,291,539
Net income 238,469 214,605
Earnings per share:
Basic $ 0.10 $ 0.09
Diluted $ 0.10 $ 0.07
6. Kentucky Transportation Program
Prior to July 1, 2002, the Medicaid program of the Commonwealth of Kentucky
managed its transportation program internally. Effective July 1, 2002 the
Medicaid program contracted with an independent broker (the Broker) for the
management of its transportation reimbursement program in the Louisville KY
area. The Broker then contracted with the Company, among others, for the
provision of transportation services to Medicaid beneficiaries. Company services
pursuant to the contract are limited to transportation of Medicaid beneficiaries
who also attend the Company's in-center adult day care programs. The Broker
almost immediately began to encounter significant financial difficulties and has
paid the Company for only a small portion of the amounts due for services
rendered. On October 22, 2002, three of the Broker's other contracted providers
filed a motion with U.S. Bankruptcy Court to liquidate the Broker under Chapter
7 of the Federal Bankruptcy Code.
The Company is engaged in discussions with Kentucky Medicaid officials for the
resolution of amounts due the Company for provision of these transportation
services to Kentucky Medicaid beneficiaries. Additionally along with other
affected providers the Company is assessing all its legal options in this
matter. As of March 31, 2003 and December 31, 2002, the Broker owed the Company
approximately $500,000 for services provided through those dates, which amount
is included in accounts receivable, net on the accompanying balance sheets.
Although the Company currently believes it will be successful in ultimately
collecting the amounts currently due it under this arrangement, there can be no
assurance that such amounts will in fact be collected. Should it become evident
in the future that a material amount will not be collectible, the Company would,
at that time, record an additional provision for uncollectible accounts.
7. Stock-Based Compensation
Stock options are granted under various stock compensation programs to employees
and independent directors. The Company accounts for stock option grants in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." For purposes of pro forma disclosures, the estimated
fair value of the options is amortized to expense over the options' vesting
period. The Company's pro forma information is as follows.
Three Months Ended
------------------------------------------
March 31, March 31,
2003 2002
--------------------- ------------------
Net income as reported $ 238,469 $ 100,318
Pro forma stock-based compensation 10,699 10,699
expense, net of tax
Pro forma net income $ 227,770 $ 89,619
Earnings per common share:
Basic - as reported $ 0.10 $ 0.04
Basic - pro forma $ 0.10 $ 0.04
Diluted - as reported $ 0.10 $ 0.03
Diluted - proforma $ 0.09 $ 0.03
8. Earnings Per Common Share
There were no adjustments required to be made to net income for purposes of
computing basic and diluted earnings per common share. A reconciliation of the
weighted average shares outstanding used in the calculation of basic and diluted
earnings per common share is as follows:
Three Months Ended
----------------------------------------
March 31, March 31,
2003 2002
------------------ -------------------
Shares used to compute basic earnings
per common share
2,289,465 2,499,056
Dilutive effect of stock options 187,435 507,680
------------------- -------------------
Shares used to compute diluted earnings
per common share 2,476,900 3,006,736
=================== ===================
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statements - Forward Outlook and Risks
Some of the matters discussed in this filing include forward-looking statements.
Statements that are predictive in nature, that depend upon or refer to future
events or conditions or that include words such as "expects," "anticipates,"
"intends," "plans," "believes," "estimates," "thinks," and similar expressions
are forward-looking statements. The Company cautions investors that any
forward-looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements as a result of various factors including, but not
limited to, those set forth in the section on Cautionary Statements - Forward
Outlook and Risks in Part I, and the Notes to the Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, in the Company's Form 10-K for the year ended December 31, 2002.
Although we believe that these statements are based upon reasonable assumptions,
we can give no assurance that the anticipated results will be achieved. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on these forward-looking statements. These forward-looking statements
are made as of the date of this filing. We assume no obligation to update or
revise them or provide reasons why actual results may differ.
Critical Accounting Policies
Refer to the "Critical Accounting Policies" section of Management's Discussion
and Analysis of Financial Condition and Results of Operations included in the
Form 10-K for the year ended December 31, 2002 for a detailed discussion of the
Company's critical accounting policies.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2003 Compared with Three Months
Ended March 31, 2002
Three Months Ended March 31,
Consolidated 2003 2002 Change
------------ --------------------------- ------------------------------ --------------------------
---------------- ---------- ------------------ ----------- -------------- -----------
Amount % Rev Amount % Rev Amount %
---------------- ---------- ------------------ ----------- -------------- -----------
Net revenues ADHS $ 13,911,776 64.7% $ 13,185,301 64.2% $ 726,475 5.5%
VN 7,605,869 35.3% 7,365,252 35.8% 240,617 3.3%
---------------- ------------------ --------------
$ 21,517,645 100.0% $ 20,550,553 100.0% $ 967,092 4.7%
================ ================== ==============
Operating income ADHS $ 176,962 1.3% $ 614,677 4.4% $ (437,716) -71.2%
VN 951,429 12.5% 1,123,514 15.3% (172,085) -15.3%
---------------- ------------------ --------------
1,128,391 5.2% 1,738,191 8.5% (609,800) -35.1%
Unallocated corporate expenses 551,709 2.6% 1,350,486 6.6% (798,777) -59.1%
---------------- ------------------ --------------
Income before interest expense
and income taxes 576,682 2.7% 387,705 1.9% 188,977 48.7%
Interest expense 179,233 0.8% 220,454 1.1% (41,221) -18.7%
Income taxes 158,980 0.7% 66,933 0.3% 92,047 137.5%
---------------- ------------------ --------------
Net income $ 238,469 1.1% $ 100,318 0.5% $ 138,151 137.7%
=============== ================== ==============
The Company's net revenues grew approximately $1 million or 4.7%. The
acquisition of Medlink OH accounted for approximately $1.9 million of the
revenue growth between periods while other ADHS revenues decreased due to the
closure of three adult day care centers and the impact of severe winter weather
on sales volumes in 2003. VN segment revenues grew 3% as strong volume growth
more than offset the revenue effect of a 5.3% Medicare rate cut. Operating
income before unallocated corporate expense decreased from the same period last
year primarily as a result of the impact of severe winter weather, the Medicare
rate cut and increased staffing costs. Unallocated corporate expenses in 2002
included approximately $816,000, consisting primarily of professional fees,
related to the cost of conducting an investigation into the restatement of the
Company's financial statements for the fiscal years ending March 31, 2001 and
2000. The Medlink acquisition added approximately $221,000 to pre-tax income in
the quarter ended March 31, 2003.
The effective income tax rate was approximately 40% of income before income
taxes for 2003 and 2002.
Adult Day Health Services (ADHS) Segment-Three Months
The Company's ADHS segment includes the aggregation of its ADC in-center
operations and in-home personal care operations, both of which provide
predominantly long-term health care and custodial services that enable patients
to avoid nursing home admission. Sources of reimbursement, reimbursement rates
per day and contribution margins from the Company's ADC and personal care
operations are alike.
Three Months Ended March 31,
2003 2002 Change
-------------------------- ---------------------------- ---------------------------
--------------- ---------- ----------------- ---------- ---------------- ----------
Amount % Rev Amount % Rev Amount %
--------------- ---------- ----------------- ---------- ---------------- ----------
Net Revenues $13,911,776 100.0% $ 13,185,301 100.0% $ 726,475 5.5%
Cost of Services 12,338,062 88.7% 11,355,147 86.1% 982,915 8.7%
General & Administrative 856,043 6.2% 782,011 5.9% 74,032 9.5%
Depreciation & Amortization 332,441 2.4% 241,397 1.8% 91,044 37.7%
Uncollectible Accounts 208,268 1.5% 192,069 1.5% 16,199 8.4%
--------------- ----------------- ----------------
Operating Income $ 176,962 1.3% $ 614,677 4.7% $ (437,715) -71.2%
=============== ================= ================
Admissions 848 970 (122) -12.6%
Patient months of care 15,305 14,381 924 6.4%
Patient days of care 192,600 182,860 9,740 5.3%
Revenue Per Patient Day $ 72.23 $ 72.11 $ 0.12 0.2%
ADC In-Center
Average Weekday Attendance 1,192 1,305 (113) -8.7%
Center Capacity 1,691 1,791 (100) -5.6%
Center Occupancy Rate 70.5% 72.9% -2.4% -3.3%
ADHS revenues increased 5.5% to $13.9 million for the three months ended March
31, 2003 from $13.2 million in the same quarter of the prior year for a total
increase of $726,475. The acquisition of Medlink Ohio, an in home personal care
operation, increased revenues approximately $1.9 million. ADHS revenues
excluding the Medlink acquisition: 1) decreased approximately $200,000 due to
the closure of adult day centers in Seymour CT, Mentor OH and Miami FL in late
2002, 2) decreased approximately $465,000 in adult day centers in operation in
both periods, primarily due to unusually severe winter weather in February 2003,
3) decreased approximately $320,000 due to reimbursement changes in KY Medicaid
programs enacted in July 2002 and 4) decreased approximately $190,000 due to
lower sales volumes in certain in-home personal care business units. Average
revenue per day of care was approximately the same in both periods as rate
increases have been insignificant. Occupancy in the adult day care centers was
70.5% of capacity in 2003 and 72.9% in 2002.
Cost of services as a percent of revenues increased to 88.7% in 2003 from 86.1%
in 2002 primarily as a result of unusually severe winter weather in February
2003 and higher staffing costs in the adult day centers. Severe winter weather
significantly reduces attendance in the Company's adult day care centers.
General and administrative expenses increased significantly with the addition of
staff support for
information systems, operational audits, training and employee communications.
Depreciation and amortization increased primarily due to the addition of new
guest transportation vans and investments in information technology.
ADHS Seasonality
The Company's ADHS segment normally experiences seasonality in its operating
results. Specifically, the quarters ended December and March typically generate
lower operating income than the quarters ended June and September as the holiday
season and winter weather tend to temporarily lower ADC in-center attendance. As
discussed above, weather in February 2003 was especially unfavorable,
particularly in the Baltimore MD area where the Company operates 10 adult day
care centers.
Visiting Nurse (VN) Segment-Three Months
The Company's VN segment provides skilled medical services in patients' homes to
enable recipients to reduce or avoid periods of hospitalization and/or nursing
home care. Approximately 90% of the VN segment revenues come from the Medicare
program and are generated on a per episode basis rather than a daily fee basis
as in ADHS.
Three Months Ended March 31,
2003 2002 Change
-------------------------- ----------------------------- --------------------------
-------------- ----------- ------------------ ---------- --------------- ----------
Amount % Rev Amount % Rev Amount %
-------------- ----------- ------------------ ---------- --------------- ----------
Revenues $ 7,605,869 100.0% $ 7,365,252 100.0% $ 240,617 3.3%
Cost of Services 5,691,576 74.8% 5,315,307 72.2% 376,269 7.1%
General & Administrative 560,484 7.4% 553,589 7.5% 6,895 1.2%
Depreciation & Amortization 230,466 3.0% 216,768 2.9% 13,698 6.3%
Uncollectible Accounts 171,914 2.3% 156,074 2.1% 15,840 10.1%
-------------- ------------------ ---------------
Operating Income $ 951,429 12.5% $ 1,123,514 15.3% $ (172,085) -15.3%
============== ================== ===============
Admissions 2,478 2,348 130 5.5%
Patient Months of Care 6,238 5,903 335 5.7%
Revenue per Patient Month $ 1,219 $ 1,248 $ (29) -2.3%
A Medicare rate decrease of approximately 5.3% went into effect October 1, 2002.
As a result, revenues for the quarter ended March 31, 2003 were approximately
$376,000 lower than they would have been if the rate cut had not been enacted.
Despite the rate cut, VN revenues grew by a net $240,617 or 3% on admission and
patient month growth of nearly 6%. The Company had the same number of agencies
in operation in both periods.
Costs of services, primarily labor and related costs, grew faster than revenue
primarily due to the Medicare rate cut and secondarily due to increased costs of
staffing, particularly for nurses. The decrease in revenue per patient month
resulted primarily from the reimbursement changes described above.
VN Seasonality
The Company's VN segment normally experiences seasonality in its operating
results. Specifically, the VN Segment typically generates lower operating income
in the quarter ended September than in the other quarters due to the seasonality
of senior population in the Company's south Florida markets.
Insurance Programs
Self-Insurance Programs. The Company bears significant risk under its
self-insured employee health, automobile and workers' compensation programs. A
brief description of each program is set forth below:
The Company's self-insured employee health program has an excess-loss insurance
policy that reimburses the Company for covered expenses, in excess of a specific
deductible for each covered person and an annual aggregate deductible for all
covered claims. Effective September 1, 2002, the Company moved the management of
the health program from a regional third party administrator to Cigna
Healthcare, a national insurance carrier. Additionally, as of September 1, 2002,
certain changes in the benefits were made and the rates the Company charges
employees for coverage were increased.
Under its automobile and workers' compensation self-insurance programs, the
Company bears risk up to $100,000 per incident and up to an annual aggregate
deductible. The Company carries insurance coverage for amounts in excess of the
$100,000 per incident amount and for amounts in excess of the annual aggregate
deductible. Additionally, the Company also carries umbrella coverage.
The Company records estimated liabilities for its health, automobile, and
workers' compensation self-insurance programs based on information provided by
the third-party plan administrators, historical claims experience, the life
cycle of claims, expected costs of claims incurred but not paid, and expected
costs to settle unpaid claims.
Other Insurance. The Company's properties are covered by casualty insurance
policies. The Company also carries directors and officers, general and
professional liability, and umbrella insurance. The Company's deductible amount
for general and professional claims was $5,000 per claim prior to July 1, 2001
and $25,000 thereafter.
The Company monitors its estimated self-insurance liabilities on a quarterly
basis. As facts change, it may become necessary to make adjustments that could
be material to the Company's results of operations and financial condition.
Refer to the renewal discussion below for program changes as of April 1, 2003.
Insurance Program Renewal
The Company's insurance coverages were renewed effective April 1, 2003 with the
following changes: 1) the deductible amount, for general and professional claims
was increased to $250,000, 2) the deductible amount for workers' compensation
claims was increased to $250,000 (auto remains at $100,000), 3) total premiums,
excluding the Company's exposure to claims and deductibles, for all its
non-health insurance programs increased to approximately $2.5 million for the
contract year ending March 31, 2004 as compared to approximately $1.5 million
for the contract year ended March 31, 2003.
Liquidity and Capital Resources
Revolving Credit Facility
The Company has a $22.5 million credit facility with Bank One Kentucky NA with
an expiration date of December 31, 2003. On February 7, 2003, the bank formally
committed to an extension through June 30, 2004. The credit facility bears
interest at the bank's prime rate plus a margin (ranging from 0% to 1.0%,
currently 0%) dependent upon total leverage and is secured by substantially all
assets and the stock of the Company's subsidiaries. The weighted average
interest rates were 4.25% and 5.75% for the quarters ended March 31, 2003 and
2002, respectively. The interest rate in effect at March 31, 2003 was 4.25%. The
Company pays a commitment fee of 0.5% per annum on the unused facility balance.
Borrowings are available equal to the greater of: a) a multiple of earnings
before interest, taxes, depreciation and amortization (as defined) or b) an
asset based formula, primarily based on accounts receivable. Borrowings under
the facility may be used for working capital, capital expenditures,
acquisitions, development and growth of the business and other corporate
purposes. As of March 31, 2003 the formula permitted approximately $18.0 million
to be used, of which approximately $11.6 million was outstanding. Additionally,
an irrevocable letter of credit, totaling $3.0 million, was outstanding in
connection with the Company's self-insurance programs. Thus, a total of $14.6
million was either outstanding or committed as of March 31, 2003 while an
additional $3.4 million was available for use. The Company's revolving credit
facility is subject to various financial covenants. As of March 31, 2003, the
Company was in compliance with the covenants.
As discussed in the notes to the financial statements, the Company expects its
appeal of the trial court ruling in the Franklin Capital Associates, L.P. to
require the issuance of a letter of credit in the amount of the damages finally
awarded by the trial court. Such letter of credit will reduce the amount of
borrowings that would otherwise be available under the credit facility.
The Company believes that this facility will be sufficient to fund its operating
needs for at least the next year. Management will continue to evaluate
additional capital, including possible debt and equity investments in the
Company, to support a more rapid development of the business than would be
possible with internal funds.
On-Going Stock Buy Back Program
In March 2001 the Company's Board of Directors authorized up to $1 million to be
used to acquire shares of the Company's common stock. In April 2001, the Company
initiated a stock repurchase plan in compliance with Rule 10b-18 of the
Securities Exchange Act of 1934. This plan permits purchases to take place
selectively from time to time in open market purchases through a broker or in
privately negotiated transactions. Through March 31, 2003, a total of 90,071
shares have been repurchased under this program in open market purchases. A
total of $843,112 has been expended in these open market purchases for an
average acquisition cost of $9.36 per share. In the quarter ended March 31,
2003, 9,400 shares were purchased for $65,896 for an average acquisition cost of
$7.01 per share.
Cash Flows
Key elements to the Consolidated Statements of Cash Flows for the three months
ending March 31, 2003 and 2002 were:
Net Change in Cash and Cash Equivalents 2003 2002
- --------------------------------------- ---------------- --------------
Provided by (used in)
Operating activities $ 3,494,150 $ 1,476,201
Investing activities (455,404) (728,151)
Financing activities (2,964,534) (1,149,162)
----------------- ---------------
Net increase (decrease) in cash and cash
equivalents $ 74,212 $ (401,112)
================= ===============
2003
Net cash provided by operating activities resulted principally from current
period income, net of changes in accounts receivable, accounts payable and
accrued expenses. Accounts receivable days revenues outstanding were 70 at March
31, 2003, down from 80 at December 31, 2002 due primarily to the collection of
Medicare cost report settlements. Net cash used in investing activities resulted
principally from improvements in information systems and replacement capital
expenditures in the Company's operations. Net cash used by financing activities
resulted primarily from net repayments on the Company's revolving credit
facility, the redemption of common shares and payments of capital lease
obligations and term debt.
2002
Net cash provided by operating activities resulted principally from current
period income, net of changes in accounts receivable, accounts payable and
accrued expenses. The increase in accounts receivable resulted from a small
increase in days revenues outstanding. Days revenues outstanding were 81 at
March 31, 2002, up from 78 at December 31, 2001. The change in accounts payable
and accrued liabilities consisted principally of the costs incurred related to
the restatement of the Company's financial statements for the years ended March
31, 2001 and 2000. Net cash used in investing activities resulted principally
from amounts invested in adult day health services expansion activities and
improvements in information systems. Net cash used by financing activities
resulted primarily from repayments on the Company's credit facility and payment
of capital lease obligations and term debt.
Health Care Reform
The health care industry has experienced, and is expected to continue to
experience, extensive and dynamic change. In addition to economic forces and
regulatory influences, continuing political debate is subjecting the health care
industry to significant reform. Health care reforms have been enacted as
discussed elsewhere in this document. Proposals for additional changes are
continuously formulated by departments of the Federal government, Congress, and
state legislatures.
Government officials can be expected to continue to review and assess
alternative health care delivery systems and payment methodologies. Changes in
the law or new interpretations of existing laws may have a dramatic effect on
the definition of permissible or impermissible activities, the relative cost of
doing business, and the methods and amounts of payments for medical care by both
governmental and other payers. Legislative changes to "balance the budget" and
slow the annual rate of growth of expenditures are expected to continue. Such
future changes may further impact reimbursement. There can be no assurance that
future legislation or regulatory changes will not have a material adverse effect
on the operations of the Company.
Federal and State legislative proposals continue to be introduced that would
impose more limitations on payments to providers of health care services such as
the Company. Economic conditions are such that many states have enacted, or are
considering enacting, measures that are designed to reduce their Medicaid
expenditures.
The Company cannot predict what additional government regulations may be enacted
in the future affecting its business or how existing or future laws and
regulations might be interpreted, or whether the Company will be able to comply
with such laws and regulations in its existing or future markets.
Refer to the section on Cautionary Statements - Forward Outlook and Risks in
Part I, and the Notes to the Financial Statements and Management's Discussion
and Analysis of Financial Condition and Results of Operations in the Company's
Form 10-K for the year ended December 31, 2002 for additional information.
Health Insurance Portability and Accountability Act (HIPAA)
The Health Insurance Portability and Accountability Act (HIPAA) was enacted by
the Federal government on August 12, 1996, and requires organizations to adhere
to certain standards to protect data integrity, confidentiality and
availability. HIPAA also mandates, among other things, that the Department of
Health and Human Services adopt standards for the exchange of electronic health
information in an effort to encourage overall administrative simplification and
enhance the effectiveness and efficiency of the health care industry. Management
has implemented changes in its operations to comply with the privacy aspects of
HIPAA and believes it has achieved compliance by the April 14, 2003 deadline.
The cost of complying with privacy standards is not expected to have a material
effect on the Company's results of operations or financial position. Management
is in the process of implementing changes in its operations to comply with the
electronic transaction and code sets aspects of HIPAA and anticipates that the
Company will be able to fully and timely comply with those requirements.
Independent of HIPAA requirements, the Company has been developing new
information systems with improved functionality to facilitate improved billing
and collection activities, reduced administrative costs and improved management
decision support information. The Company has incorporated the HIPAA mandated
electronic transaction and code sets into this new software.
Regulations with regard to the security components of HIPAA, have only recently
been published. Those regulations are required to be implemented by April 2005.
Management cannot at this time estimate the cost of compliance with the security
regulations.
Impact of Inflation
Management does not believe that inflation has had a material effect on income
during the past several years.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Derivative Instruments
The Company does not use derivative instruments.
Market Risk of Financial Instruments
The Company's primary market risk exposure with regard to financial instruments
is to changes in interest rates.
At March 31, 2003, a hypothetical 100 basis point increase in short-term
interest rates would result in a reduction of approximately $115,000 in annual
pre-tax earnings from continuing operations.
ITEM 4. CONTROLS AND PROCEDURES.
Within the 90 days prior to the filing date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 12a-15. Based
upon that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective. Disclosure controls and procedures are controls and procedures that
are designed to ensure that information required to be disclosed in Company
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms.
There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
we carried out this evaluation.
Commission File No. 1-9848
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On January 26, 1994 Franklin Capital Associates L.P. (Franklin), Aetna Life and
Casualty Company and Aetna Casualty and Surety Company shareholders, who at one
time held approximately 320,000 shares of the Company's common stock
(approximately 13% of shares outstanding) filed suit in Chancery Court of
Williamson County, Tennessee, claiming unspecified damages not to exceed $3
million dollars in connection with registration rights they received in the
Company's acquisition of certain home health operations in February 1991. The
1994 suit alleged that the Company failed to use its best efforts to register
the shares held by the plaintiffs as required by the merger agreement. The
Company settled with both Aetna parties shortly before the case went to trial in
February 2000. In mid-trial Franklin voluntarily withdrew its complaint
reserving its legal rights to bring a new suit as allowed under Tennessee law.
In April 2000, Franklin re-filed its lawsuit. The second trial took place in
February 2003. In April 2003 the court issued a ruling in favor of the
plaintiffs awarding damages of $984,970. The Company believes the Court erred
both in its finding of liability and in its determination of the amount of
damages. The Company intends to seek appellate review of the lower court
decision. As a part of the appeal the Company will be required to post a bond,
supported by a letter of credit, in the amount of the trial court's final order,
until the appeal court issues a review order. Such a letter of credit will
reduce amounts that would otherwise be available under the Company's revolving
credit facility.
Based on the advice of legal counsel, the Company's management believes
that the damage award by the lower court does not create a "probable"
loss as set forth in Statement of Financial Accounting Standards No. 5,
"Accounting for Contingencies". Accordingly, no provision for the damages award
has been recorded in the accompanying financial statements. Should the facts and
circumstances change in the future to the extent that such a loss appears
probable, the Company would record a provision at that time.
Based on the advice of legal counsel, the Company's management believes it has
strong grounds for appealing the trial court's decision and intends to
vigorously pursue its appeal. The Company can give no assurance that it will be
successful in its appeal.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6
(a) Exhibits
99.1
Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2
Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
The Company filed a Form 8-K dated March 11, 2003, Item 5, to
report the date of the Company's annual meeting of
shareholders.
The Company filed a Form 8-K dated March 31, 2003, Item 12, to
report the issuance of a press release announcing its
operating results for the three and twelve-month periods ended
December 31, 2002.
The Company filed a Form 8-K dated April 11, 2003, Item 5, to
report the ruling of the Chancery Court for Williamson County,
Tennessee.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 15, 2003
ALMOST FAMILY, INC.
BY /s/ William B. Yarmuth
----------------------------
William B. Yarmuth,
Chairman of the Board, President
and Chief Executive Officer
BY /s/ C. Steven Guenthner
---------------------------
C. Steven Guenthner,
Senior Vice President and
Chief Financial Officer
CERTIFICATIONS
I, William B. Yarmuth, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Almost Family, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003
BY /s/ William B. Yarmuth
- --------------------------
William B. Yarmuth
Chairman of the Board, President &
Chief Executive Officer
I, C. Steven Guenthner, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Almost Family, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 15, 2003
BY /s/ C. Steven Guenthner
- ---------------------------
C. Steven Guenthner
Senior Vice President & Chief Financial Officer
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Almost Family, Inc. (the
"Company") on Form 10-Q for the period ended March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, William
B. Yarmuth, Chairman of the Board, President and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ William B. Yarmuth
----------------------
William B. Yarmuth
Chairman of the Board, President and
Chief Executive Officer
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Almost Family, Inc. (the
"Company") on Form 10-Q for the period ended March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, C.
Steven Guenthner, Senior Vice President and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ C. Steven Guenthner
-----------------------
C. Steven Guenthner
Senior Vice President and
Chief Financial Officer