Addus HomeCare Announces First-Quarter 2017 Results And Completion Of A New Senior Secured Credit Facility
FRISCO, Texas, May 8, 2017 /PRNewswire/ -- Addus HomeCare Corporation (NASDAQ: ADUS), a provider of comprehensive home care services, today announced its financial results for the first quarter ended March 31, 2017.
For the first quarter, net service revenues increased 9.7% to $101.6 million from $92.6 million for the first quarter of 2016. Net income was $4.3 million, or $0.37 per diluted share, for the latest quarter, compared with $157,000, or $0.01 per diluted share, for the first quarter of 2016. Adjusted net income per diluted share was $0.34, an increase of 21.4% from $0.28 for the first quarter of 2016. (See pages 7 and 8 for a reconciliation of all non-GAAP and GAAP financial measures.)
"With our first quarter financial results, we are off to a solid start in 2017," commented Dirk Allison, President and Chief Executive Officer of Addus. "We are pleased with our 4.1% increase in same store revenues for the first quarter and we are excited about our recently announced acquisition of Options Home Care. We also continue to benefit from a substantial margin increase due to continuing process improvements and cost reduction initiatives begun in 2016."
Net service revenues for the first quarter of 2017 reflected an 8.3% increase in billable hours per business day compared with the first quarter of 2016, and comparable-quarter revenues per billable hour rose 1.3%. The Company's revenue growth combined with margin improvement produced a 19.8% increase in adjusted EBITDA to $8.0 million for the quarter.
At March 31, 2017, Addus had $19.1 million in cash and $23.8 million of bank debt. Net cash provided by operating activities was $9.6 million for the first quarter, compared with net cash used by operating activities of $6.0 million for the first quarter of 2016.
Addus also announced today that it has completed a new senior secured credit facility including a $125 million revolver, a $45 million term loan and an $80 million delayed draw term loan, replacing the previous facility. The maturity of the new facility is five years, although the delayed draw term loan is only available for 18 months. Under the terms of the agreement, $100 million in incremental term debt is available for acquisitions.
Mr. Allison concluded, "Addus is well positioned in 2017 to grow both organically and through acquisitions. With the previously announced addition of Brad Bickham as Executive Vice President – Chief Operating Officer during the first quarter, our executive team is complete. We remain on-track to implement our new payroll system in July, further enhancing our efficiency and enabling us to focus more fully on growing our business. The completion of our new credit facility also significantly strengthens our ability to fund our growth. As one of the nation's leading home care providers in a growing, highly fragmented market, we remain enthusiastic about our future and our ability to increase shareholder value."
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.
Conference Call
Addus will host a conference call on Tuesday, May 9, 2017, 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 3779748. A telephonic replay of the conference call will be available through midnight on May 23, 2017, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 3779748.
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 15, 2017, 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 personal care services that are provided in the home and assist with activities of daily living. 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 March 31, 2017, Addus provided personal care services to over 34,000 consumers through 111 locations across 24 states. For more information, please visit www.addus.com.
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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 MonthsEnded March 31, | ||
|
2017 |
2016 | ||
|
Net service revenues |
$ 101,606 |
$ 92,602 | |
|
Cost of service revenues |
74,289 |
68,283 | |
|
Gross profit |
27,317 |
24,319 | |
|
26.9% |
26.3% | ||
|
General and administrative expenses |
20,905 |
22,188 | |
|
Gain on sale of adult day service centers |
(2,065) |
- | |
|
Depreciation and amortization |
1,516 |
1,478 | |
|
Total operating expenses |
20,356 |
23,666 | |
|
Operating income from continuing operations |
6,961 |
653 | |
|
Total interest expense, net |
644 |
419 | |
|
Other non-operating income |
(57) |
- | |
|
Income before income taxes |
6,374 |
234 | |
|
Income tax expense |
2,115 |
77 | |
|
Net income |
$ 4,259 |
$ 157 | |
|
Net income per diluted share |
$ 0.37 |
$ 0.01 | |
|
Weighted average number of common shares outstanding: |
|||
|
Diluted |
11,581 |
11,178 | |
|
Cash Flow Information: |
For the Three MonthsEnded March 31, | ||
|
2017 |
2016 | ||
|
Net cash provided by (used in) operating activities |
$ 9,615 |
$ (5,959) | |
|
Net cash provided by (used in) investing activities |
1,238 |
(20,791) | |
|
Net cash provided by financing activities |
290 |
31,726 | |
|
Net change in cash |
11,143 |
4,976 | |
|
Cash at the beginning of the period |
8,013 |
4,104 | |
|
Cash at the end of the period |
$ 19,156 |
$ 9,080 | |
|
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) | |||
|
March 31, | |||
|
2017 |
2016 | ||
|
Assets | |||
|
Current assets |
|||
|
Cash |
$ 19,156 |
$ 9,080 | |
|
Accounts receivable, net |
116,174 |
105,771 | |
|
Prepaid expenses and other current assets |
3,959 |
3,933 | |
|
Total current assets |
139,289 |
118,784 | |
|
Property and equipment, net |
7,049 |
7,683 | |
|
Other assets |
|||
|
Goodwill |
73,906 |
73,931 | |
|
Intangible assets, net |
14,367 |
19,280 | |
|
Deferred tax assets, net |
3,153 |
1,825 | |
|
Investment in joint venture |
900 |
900 | |
|
Total other assets |
92,326 |
95,936 | |
|
Total assets |
$ 238,664 |
$ 222,403 | |
|
Liabilities and Stockholders' Equity | |||
|
Current liabilities |
|||
|
Accounts payable |
$ 5,453 |
$ 4,275 | |
|
Accrued expenses |
44,215 |
41,201 | |
|
Current portion of long-term debt, net of debt issuance costs |
2,551 |
2,217 | |
|
Current portion of contingent earn-out obligation |
- |
1,250 | |
|
Total current liabilities |
52,219 |
48,943 | |
|
Long-term debt, less current portion, net of debt issuance costs |
21,877 |
31,070 | |
|
Total liabilities |
74,096 |
80,013 | |
|
Total stockholders' equity |
164,568 |
142,390 | |
|
Total liabilities and stockholders' equity |
$ 238,664 |
$ 222,403 | |
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ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Key Statistical and Financial Data (Unaudited) | |||
|
For the Three MonthsEnded March 31, | |||
|
2017 |
2016 | ||
|
General: |
|||
|
Adjusted EBITDA (in thousands) (1) |
$ 7,971 |
$ 6,655 | |
|
States served at period end |
24 |
23 | |
|
Locations at period end |
111 |
120 | |
|
Employees at period end |
23,060 |
21,559 | |
|
Home & Community: |
|||
|
Average billable census - same store (2) |
32,769 |
32,505 | |
|
Average billable census - acquisitions (3) |
1,179 |
1,073 | |
|
Average billable census total |
33,948 |
33,578 | |
|
Billable hours (in thousands) |
5,800 |
5,353 | |
|
Average billable hours per census per month |
56.9 |
53.1 | |
|
Billable hours per business day |
89,223 |
82,361 | |
|
Revenues per billable hour |
$ 17.52 |
$ 17.30 | |
|
Percentage of Revenues by Payor: |
|||
|
State, local and other governmental programs |
64.9% |
73.2% | |
|
Managed care organizations |
32.3 |
23.1 | |
|
Private duty |
2.1 |
2.7 | |
|
Commercial |
0.7 |
1.0 | |
|
(1) We define Adjusted EBITDA as earnings adjusted for interest expense, taxes, depreciation, amortization,M&A expenses, stock-based compensation expense and restructure and severance 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. | |||
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(2) Exited sites would have reduced same store census for the three months ended March 31, 2016 by 217. | |||
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(3) The average billable census in acquisitions of 218 for the three months ended March 31, 2016 was reclassified to average billable census - same stores for comparability purposes. The average billable census for the three months ended March 31, 2017 was prorated for the date of the acquisition. | |||
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ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (Unaudited) | |||
|
For the Three Months Ended March 31, | |||
|
2017 |
2016 | ||
|
Reconciliation of Adjusted EBITDA to Net Income: (1) |
|||
|
Net income |
$ 4,259 |
$ 157 | |
|
Interest expense, net |
644 |
419 | |
|
Gain on sale of adult day service centers |
(2,065) |
- | |
|
Other non-operating income |
(57) |
- | |
|
Income tax expense |
2,115 |
77 | |
|
Depreciation and amortization |
1,516 |
1,478 | |
|
M&A expenses |
244 |
696 | |
|
Stock-based compensation expense |
427 |
337 | |
|
Restructuring charges |
- |
1,312 | |
|
Severance and other costs |
888 |
2,179 | |
|
Adjusted EBITDA |
$ 7,971 |
$ 6,655 | |
|
Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share: (2) |
|||
|
Diluted earnings per share |
$ 0.37 |
$ 0.01 | |
|
Gain on sale of adult day service centers per diluted share |
(0.11) |
- | |
|
M&A expenses per diluted share |
0.01 |
0.04 | |
|
Restructuring charges per diluted share |
- |
0.08 | |
|
Severance and other costs per diluted share |
0.05 |
0.13 | |
|
Stock-based compensation expense per diluted share |
0.02 |
0.02 | |
|
Adjusted net income per diluted share |
$ 0.34 |
$ 0.28 | |
|
Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (3) |
|||
|
Net service revenues |
$ 101,606 |
$ 92,602 | |
|
Revenue associated with the closure of certain sites |
(624) |
(1,037) | |
|
Adjusted net service revenues |
$ 100,982 |
$ 91,565 | |
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(1) We define Adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense and restructure and severance 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. | |||
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(2) We define Adjusted diluted earnings per share as earnings per share, adjusted for M&A expenses, stock compensation expense and restructure and severance costs. Adjusted diluted earnings per 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. | |||
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(3) We define Adjusted net service revenues as revenue 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 income, operating income or any other measure of financial performance calculated in accordance with GAAP. | |||
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SOURCE Addus HomeCare Corporation