Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Addus HomeCare Corp | d126517d8k.htm |
Exhibit 99.1
| Contacts: |
||
| Brian W. Poff | Scott Brittain | |
| Executive Vice President, Chief Financial Officer |
Corporate Communications, Inc. | |
| (615) 324-7308 | ||
| Addus HomeCare Corporation | scott.brittain@cci-ir.com | |
| (630) 296-3400 | ||
| investorrelations@addus.com |
ADDUS HOMECARE ANNOUNCES SECOND-QUARTER 2016 RESULTS
Net service revenues increase 17.6% year over year to $100.9 million
GAAP diluted EPS of $0.23
Adjusted diluted EPS of $0.31
Downers Grove, Illinois (August 1, 2016) – Addus HomeCare Corporation (NASDAQ: ADUS), a comprehensive provider of personal care services primarily provided in the home and focused on the dual eligible population, today announced its financial results for the second quarter and six months ended June 30, 2016.
For the second quarter, net service revenues were $100.9 million, a 17.6% increase from $85.8 million for the second quarter of 2015. Net income was $2.6 million, or $0.23 per diluted share, for the second quarter of 2016 compared with $3.3 million, or $0.29 per diluted share, for the second quarter last year. Adjusted net income per diluted share was $0.31 for the second quarter of 2016 compared with $0.32 for the second quarter of 2015. Adjusted net income per diluted share for the second quarter of 2016 excludes senior management severance costs of $0.04, stock-based compensation expense of $0.03 and restructure charges of $0.01 related to process improvement and expense reduction initiatives launched in the first quarter. For the second quarter last year, adjusted net income per diluted share excludes stock-based compensation expense of $0.02 and M&A expenses of $0.01. (See page 7 for a reconciliation of all non-GAAP and GAAP financial measures.)
For the first six months of 2016, net service revenues increased 15.4% to $193.5 million from $167.7 million for the first half of 2015. Net income was $2.8 million, or $0.25 per diluted share, for the first six months of 2016 compared with $5.4 million, or $0.48 per diluted share, for the same prior-year period. Adjusted net income per diluted share was $0.61 for the first half of 2016, up 10.9% from $0.55 for the first six months of 2015.
“We are pleased with the Company’s operating and financial performance for the second quarter,” commented Dirk Allison, President and Chief Executive Officer of Addus. “Our 17.6% revenue growth took us above milestone quarterly revenues of $100 million for the first time. Excluding revenues for the previously announced closed locations, adjusted net service revenues increased 21.5% for the second quarter of 2016 from the second quarter last year, driven by both an increase in same store sales of 4.0% and the first-quarter acquisition of South Shore. Billable hours per day increased 16.3% for the latest quarter compared with the second quarter of 2015, while revenues per billable hour increased 1.2%. Compared with the first quarter of 2016, billable hours per day increased 8.9%.
- MORE -
ADUS Reports Second-Quarter 2016 Results
Page 2
August 1, 2016
“We have made substantial progress on our process improvement and expense reduction initiatives launched in the first quarter. We continue to expect that these initiatives will produce aggregate annualized cost savings of over $4.1 million. We achieved some initial savings in the second quarter and expect to produce a material level of savings in the second half of 2016. We also expect further savings in the second half of 2016 as our provision for doubtful accounts returns to a more normal range of approximately 1.0% to 1.2% of revenue compared with 1.8% for the second quarter.”
Due to potential leasing activity, the Company has delayed the Contact Center write-off of $2.3 million that, as mentioned in the first-quarter earnings call, was expected during the second quarter. This write-off could be taken in the third quarter if this activity is not completed as currently expected.
Mr. Allison concluded, “As previously discussed, after focusing during the first half of 2016 on the most pressing issues addressed by our process improvement and expense reduction initiatives, we have now shifted our primary focus in the second half of the year to refining and implementing our organic and acquisition growth strategies. We remain confident of the underlying industry dynamics that support the long-term growth of the personal care service industry, as well as the opportunities we have as a scaled industry leader to gain market share in a highly fragmented industry. We believe we are executing well in preparing our infrastructure for future growth. We are fully committed to expanding our business through the delivery of high quality, cost-effective care to our consumers, and in so doing, to producing long-term profitable growth and increased shareholder value.”
Addus completed the second quarter with $8.2 million in cash, $42.5 million of debt and $46.4 million of availability under its revolving credit facility. Net cash used in operating activities was $12.3 million for the second quarter of 2016, compared with net cash provided by operations of $35.9 million for the second quarter of 2015. Due to recent legislation, Addus expects that its $67.9 million account receivable with the state of Illinois, related to services the Company provides the state’s non-Medicaid consumers, will be brought current during the third quarter, although no assurances can be given that this action will occur. The Company also expects to receive over $1.0 million in prompt payment interest for these past due amounts.
Non-GAAP Financial Measures
The information provided in this release includes adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income per diluted share as net income per diluted share, adjusted for M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. The Company defines adjusted net service revenues as net service revenues adjusted for the closure of certain sites. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted net income per diluted share to net income per diluted share, a reconciliation of adjusted EBITDA to net income and a reconciliation of adjusted net service revenues to net service revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues are 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.
- MORE -
ADUS Reports Second-Quarter 2016 Results
Page 3
August 1, 2016
Conference Call
Addus will host a conference call on Tuesday, August 2, 2016, beginning at 9:00 a.m. Eastern time. The toll-free dial-in number is (877) 930-8289 (international dial-in number is (253) 336-8714), pass code 23328455. A telephonic replay of the conference call will be available through midnight on August 16, 2016, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 23328455.
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.
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. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. 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 discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and 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, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize 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 11, 2016, which is available at 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. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).
About Addus
Addus is a provider of comprehensive home and community based personal care services, which are primarily provided in the home and focused on the dual eligible population. Addus’ services provide assistance with activities of daily living and adult day care. Addus’ consumers are primarily persons 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, managed care organizations, commercial insurers and private individuals. At June 30, 2016, Addus provided personal care services to approximately 34,000 consumers through 121 locations across 24 states. For more information, please visit www.addus.com.
- MORE -
ADUS Reports Second-Quarter 2016 Results
Page 4
August 1, 2016
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(amounts and shares in thousands, except per share data)
(Unaudited)
| Income Statement Information: | For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net service revenues |
$ | 100,927 | $ | 85,809 | $ | 193,529 | $ | 167,724 | ||||||||
| Cost of service revenues |
75,232 | 62,127 | 143,515 | 122,116 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
25,695 | 23,682 | 50,014 | 45,608 | ||||||||||||
| 25.5 | % | 27.6 | % | 25.8 | % | 27.2 | % | |||||||||
| General and administrative expenses |
19,557 | 17,423 | 41,746 | 34,576 | ||||||||||||
| Depreciation and amortization |
1,744 | 1,161 | 3,222 | 2,307 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
21,301 | 18,584 | 44,968 | 36,883 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income from continuing operations |
4,394 | 5,098 | 5,046 | 8,725 | ||||||||||||
| Total interest expense, net |
663 | 169 | 1,082 | 342 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes |
3,731 | 4,929 | 3,964 | 8,383 | ||||||||||||
| Income tax expense |
1,131 | 1,676 | 1,207 | 2,968 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 2,600 | $ | 3,253 | $ | 2,757 | $ | 5,415 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income per diluted share |
$ | 0.23 | $ | 0.29 | $ | 0.25 | $ | 0.48 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of common shares outstanding: |
||||||||||||||||
| Diluted |
11,385 | 11,212 | 11,217 | 11,188 | ||||||||||||
| Cash Flow Information: | For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Net cash (used in) provided by operating activities |
$ | (12,306 | ) | $ | 35,948 | $ | (18,265 | ) | $ | 35,044 | ||||||
| Net cash (used in) investing activities |
(369 | ) | (554 | ) | (21,160 | ) | (5,157 | ) | ||||||||
| Net cash (used in) provided by financing activities |
11,835 | (766 | ) | 43,561 | (1,226 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in cash |
(840 | ) | 34,628 | 4,136 | 28,661 | |||||||||||
| Cash at the beginning of the period |
9,080 | 7,396 | 4,104 | 13,363 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash at the end of the period |
$ | 8,240 | $ | 42,024 | $ | 8,240 | $ | 42,024 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
-MORE-
ADUS Reports Second-Quarter 2016 Results
Page 5
August 1, 2016
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
| June 30, | ||||||||
| 2016 | 2015 | |||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash |
$ | 8,240 | $ | 42,024 | ||||
| Accounts receivable, net |
121,124 | 47,063 | ||||||
| Prepaid expenses and other current assets |
4,520 | 4,249 | ||||||
| Deferred tax assets |
8,640 | 8,508 | ||||||
|
|
|
|
|
|||||
| Total current assets |
142,524 | 101,844 | ||||||
|
|
|
|
|
|||||
| Property and equipment, net |
7,634 | 8,062 | ||||||
|
|
|
|
|
|||||
| Other assets |
||||||||
| Goodwill |
73,891 | 66,002 | ||||||
| Intangible assets, net |
17,953 | 10,946 | ||||||
| Investment in joint venture |
900 | 900 | ||||||
| Other assets |
— | 261 | ||||||
|
|
|
|
|
|||||
| Total other assets |
92,744 | 78,109 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 242,902 | $ | 188,015 | ||||
|
|
|
|
|
|||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 4,590 | $ | 3,507 | ||||
| Accrued expenses |
40,715 | 39,586 | ||||||
| Current portion of long-term debt, net of debt issuance costs |
2,286 | 1,091 | ||||||
| Current portion of contingent earn-out obligation |
— | 920 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
47,591 | 45,104 | ||||||
|
|
|
|
|
|||||
| Long-term debt, less current portion, net of debt issuance costs |
40,178 | 2,440 | ||||||
| Contingent earn-out obligation, less current portion |
— | 200 | ||||||
| Deferred tax liability |
6,815 | 5,845 | ||||||
|
|
|
|
|
|||||
| Total long-term liabilities |
46,993 | 8,485 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
94,584 | 53,589 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
148,318 | 134,426 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 242,902 | $ | 188,015 | ||||
|
|
|
|
|
|||||
-MORE-
ADUS Reports Second-Quarter 2016 Results
Page 6
August 1, 2016
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| General: |
||||||||||||||||
| Adjusted EBITDA (in thousands)(1) |
$ | 7,501 | $ | 6,883 | $ | 14,154 | $ | 12,283 | ||||||||
| States served at period end |
— | — | 24 | 21 | ||||||||||||
| Locations at period end |
— | — | 121 | 127 | ||||||||||||
| Employees at period end |
— | — | 22,385 | 19,067 | ||||||||||||
| Home & Community: |
||||||||||||||||
| Average billable census - same store(2) |
32,892 | 32,487 | 32,618 | 32,217 | ||||||||||||
| Average billable census - acquisitions(3) |
1,274 | 728 | 1,075 | 791 | ||||||||||||
| Average billable census total |
34,166 | 33,215 | 33,693 | 33,008 | ||||||||||||
| Billable hours (in thousands) |
5,829 | 5,011 | 11,182 | 9,766 | ||||||||||||
| Average billable hours per census per month |
56.9 | 50.3 | 55.3 | 49.3 | ||||||||||||
| Billable hours per business day |
91,071 | 78,302 | 87,360 | 76,896 | ||||||||||||
| Revenues per billable hour |
$ | 17.32 | $ | 17.12 | $ | 17.31 | $ | 17.17 | ||||||||
| Percentage of Revenues by Payor: |
||||||||||||||||
| State, local and other governmental programs |
72.2 | % | 77.7 | % | 72.7 | % | 77.7 | % | ||||||||
| Managed care organizations |
24.3 | 18.1 | 23.7 | 18.1 | ||||||||||||
| Private duty |
2.5 | 3.2 | 2.6 | 3.2 | ||||||||||||
| Commercial |
1.0 | % | 1.0 | % | 1.0 | % | 1.0 | % | ||||||||
| (1) | We define Adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. 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. |
| (2) | Exited sites would have reduced same store census for the three months ended June 30, 2015 by 959. |
| (3) | The average billable census in acquisitions of 2,914 for the three months ended June 30, 2015 was reclassified to average billable census - same stores for comparability purposes. The average billable census for the three months ended June 30, 2016 was prorated for the date of the acquisition. |
-MORE-
ADUS Reports Second-Quarter 2016 Results
Page 7
August 1, 2016
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
(Unaudited)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income:(1) |
|
|||||||||||||||
| Net income |
$ | 2,600 | $ | 3,253 | $ | 2,757 | $ | 5,415 | ||||||||
| Interest expense, net |
663 | 169 | 1,082 | 341 | ||||||||||||
| Income tax expense |
1,131 | 1,676 | 1,207 | 2,969 | ||||||||||||
| Depreciation and amortization |
1,744 | 1,161 | 3,222 | 2,307 | ||||||||||||
| M&A expenses |
45 | 209 | 741 | 501 | ||||||||||||
| Stock-based compensation expense |
483 | 415 | 819 | 750 | ||||||||||||
| Restructure charges |
242 | — | 1,554 | — | ||||||||||||
| Severance and other costs |
593 | — | 2,772 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 7,501 | $ | 6,883 | $ | 14,154 | $ | 12,283 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share:(2) |
||||||||||||||||
| Net income per diluted share |
$ | 0.23 | $ | 0.29 | $ | 0.25 | $ | 0.48 | ||||||||
| M&A expenses per diluted share |
— | 0.01 | 0.04 | 0.03 | ||||||||||||
| Restructure charges per diluted share |
0.01 | — | 0.10 | — | ||||||||||||
| Severance and other costs per diluted share |
0.04 | — | 0.17 | — | ||||||||||||
| Stock-based compensation expense per diluted share |
0.03 | 0.02 | 0.05 | 0.04 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net income diluted share |
$ | 0.31 | $ | 0.32 | $ | 0.61 | $ | 0.55 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Reconciliation of Net Service Revenues to Adjusted Net Service Revenues:(3) |
| |||||||||||||||
| Net service revenues |
$ | 100,927 | $ | 85,809 | $ | 193,529 | $ | 167,724 | ||||||||
| Revenues associated with the closure of certain sites |
(252 | ) | (2,926 | ) | (496 | ) | (7,013 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net service revenues |
$ | 100,675 | $ | 82,883 | $ | 193,033 | $ | 160,711 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | We define Adjusted EBITDA as net income before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. 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. |
| (2) | We define Adjusted net income per diluted share as net income per diluted share, adjusted for M&A expenses, stock-based compensation expense, restructure charges and severance and other costs. Adjusted net income per diluted share 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. |
| (3) | We define Adjusted net service revenues as net service revenues adjusted for the closure of certain sites. Adjusted net service revenues 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 service revenues or any other measure of financial performance calculated in accordance with GAAP. |
-END-