Almost Family Reports First Quarter 2011 Results
First Quarter Highlights:
- Net service revenues increased to approximately $83 million
- Net income of $5.7 million, or $0.61 per diluted share
- Diluted EPS includes $0.03 of expenses related to governmental inquiries and $0.01 for acquisition costs, excluding which, diluted EPS would have been $0.65
- Visiting Nurse segment net revenues grew to $73 million, on 8% Medicare organic admission growth
- Quarterly operating cash flow was $8.3 million
- Approximately $174 million in cash plus credit facility is available to fund acquisitions
LOUISVILLE, Ky., April 28, 2011 /PRNewswire/ -- Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing services, announced today its financial results for the three-months ended March 31, 2011.
William Yarmuth, Chief Executive Officer, commented, "Our first quarter operating results mark the Company's first full quarter with the effect of the Medicare rate cut combined with other operational challenges from health care reform. Despite these headwinds, we are pleased to announce favorable operating results and continued growth produced by the unwavering patient care focus of our Senior Advocacy Mission and our team of over 6,000. Our organic admission and revenue growth continue to produce cash flow that further strengthens our balance sheet and positions us well for continued growth."
First Quarter Financial Results
Almost Family reported first quarter results that included the impact of the Medicare reimbursement rate cut for 2011 which reduced consolidated and Visiting Nurse (VN) segment revenue and pre-tax operating income by $3.9 million. This was partially offset by volume growth.
Net service revenues for the first quarter grew to $82.6 million, a 2% increase from $81.3 million reported in the first quarter of 2010.
Net income for the first quarter of 2011 was $5.7 million, or $0.61 per diluted share, down from first quarter of 2010 net income of $7.4 million, or $0.80 per diluted share. Fees and expenses related to governmental inquiries lowered first quarter 2011 EPS by approximately $0.03 while deal costs lowered first quarter 2011 EPS by approximately $0.01, without which diluted EPS would have been $0.65. There were no investigation or acquisition costs included in operating results for the first quarter of 2010.
First Quarter Segment Results
Net service revenues in the VN segment for the first quarter grew to $72.7 million, a 1.6% increase from $71.5 million in the first quarter of 2010, after the $3.9 million effect of the previously mentioned Medicare rate cut. Organic Medicare admissions grew 8.2%, while completed episodes grew 5.7%. Operating income before corporate expenses in the VN segment for the first quarter of 2011 was $13.0 million, a $2.9 million decrease from $15.9 million reported for the first quarter of 2010 as the impact of VN admission growth offset approximately $1.0 million of the Medicare rate cut.
Net service revenues in the Personal Care (PC) segment for the first quarter of 2011 grew 1.4% or $0.1 million to $9.9 million from $9.8 million in the first quarter of 2010. Operating income before unallocated corporate expenses in the PC segment increased 24.2% to $1.5 million from $1.2 million in the first quarter of 2010. In 2011, the Company discontinued its personal care operations previously located in Boston MA.
Regulatory Inquiries and Shareholder Litigation
As previously announced, the Company is continuing to cooperate fully with investigators from the US Senate Finance Committee and the US Securities and Exchange Commission regarding their inquiries following an April 27, 2010 Wall Street Journal article related to Medicare home health therapy services. Fees and expenses associated with these inquiries and their impact on the Company's financial results are described above.
Conference Call
A conference call to review the results will begin at 11:00 a.m. ET on April 28, 2011, and will be hosted by William Yarmuth, Chief Executive Officer, and Steve Guenthner, Chief Financial Officer. To participate in the conference call, please dial 1-877-407-0789 (USA) or 1-201-689-8562 (International). In addition, a dial-up replay of the conference call will be available beginning April 28, 2011 at 2:00 p.m. ET and ending on May 12, 2011. The replay telephone number is 1-877-870-5176 (USA) or 1-858-384-5517 (International). Pin number 371592.
A live Web cast of the call will also be available from the Investor Relations section of the corporate Web site at http://www.almostfamily.com. A Web cast replay can be accessed on the corporate Web site beginning April 28, 2011 at approximately 2:00 p.m. ET and will remain available until May 28, 2011.
ALMOST FAMILY, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED STATEMENTS OF INCOME |
||||
(UNAUDITED) |
||||
(In thousands, except per share data) |
||||
Three Months Ended March 31, |
||||
2011 |
2010 |
|||
Net service revenues |
$ 82,594 |
$ 81,312 |
||
Cost of service revenues (excluding depreciation and amortization) |
38,965 |
37,206 |
||
Gross margin |
43,629 |
44,106 |
||
General and administrative expenses: |
||||
Salaries and benefits |
24,339 |
22,274 |
||
Other |
9,687 |
9,287 |
||
Total general and administrative expenses |
34,026 |
31,561 |
||
Operating income |
9,603 |
12,545 |
||
Interest expense, net |
(55) |
(89) |
||
Income before income taxes |
9,548 |
12,456 |
||
Income tax expense |
(3,843) |
(5,013) |
||
Net income |
$ 5,705 |
$ 7,443 |
||
Per share amounts-basic: |
||||
Average shares outstanding |
9,205 |
9,071 |
||
Net income |
$ 0.62 |
$ 0.82 |
||
Per share amounts-diluted: |
||||
Average shares outstanding |
9,329 |
9,326 |
||
Net income |
$ 0.61 |
$ 0.80 |
||
ALMOST FAMILY, INC. AND SUBSIDIARIES |
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
(in thousands) |
|||||
March 31, 2011 |
|||||
ASSETS |
(UNAUDITED) |
December 31, 2010 |
|||
CURRENT ASSETS: |
|||||
Cash and cash equivalents |
$ 55,462 |
$ 47,943 |
|||
Accounts receivable - net |
41,106 |
39,772 |
|||
Prepaid expenses and other current assets |
6,105 |
3,513 |
|||
Deferred tax assets |
7,325 |
8,521 |
|||
TOTAL CURRENT ASSETS |
109,998 |
99,749 |
|||
PROPERTY AND EQUIPMENT - NET |
4,283 |
4,514 |
|||
GOODWILL |
101,060 |
101,060 |
|||
OTHER INTANGIBLE ASSETS |
14,258 |
14,285 |
|||
OTHER ASSETS |
533 |
519 |
|||
$ 230,132 |
$ 220,127 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||
CURRENT LIABILITIES: |
|||||
Accounts payable |
$ 5,746 |
$ 5,424 |
|||
Accrued other liabilities |
23,612 |
20,529 |
|||
Current portion - capital leases and notes payable |
141 |
1,695 |
|||
TOTAL CURRENT LIABILITIES |
29,499 |
27,648 |
|||
LONG-TERM LIABILITIES: |
|||||
Notes payable |
1,325 |
1,325 |
|||
Deferred tax liabilities |
9,160 |
8,763 |
|||
Other liabilities |
140 |
223 |
|||
TOTAL LONG-TERM LIABILITIES |
10,625 |
10,311 |
|||
TOTAL LIABILITIES |
40,124 |
37,959 |
|||
STOCKHOLDERS' EQUITY: |
|||||
Preferred stock, par value $0.05; authorized |
|||||
2,000 shares; none issued or outstanding |
- |
- |
|||
Common stock, par value $0.10; authorized |
|||||
25,000; 9,364 and 9,239 |
|||||
issued and outstanding |
937 |
924 |
|||
Treasury stock, at cost, 8 and 4 shares |
(297) |
(139) |
|||
Additional paid-in capital |
99,353 |
97,073 |
|||
Retained earnings |
90,015 |
84,310 |
|||
TOTAL STOCKHOLDERS' EQUITY |
190,008 |
182,168 |
|||
$ 230,132 |
$ 220,127 |
||||
ALMOST FAMILY, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
(UNAUDITED) |
||||
(in thousands) |
||||
Three Months Ended March 31, |
||||
2011 |
2010 |
|||
Cash flows from operating activities: |
||||
Net income |
$ 5,705 |
$ 7,443 |
||
Adjustments to reconcile income to net cash provided by operating activities: |
||||
Depreciation and amortization |
745 |
669 |
||
Provision for uncollectible accounts |
605 |
814 |
||
Stock-based compensation |
392 |
430 |
||
Deferred income taxes |
1,592 |
1,059 |
||
9,039 |
10,415 |
|||
Change in certain net assets and liabilities, net of the effects of acquisitions: |
||||
(Increase) decrease in: |
||||
Accounts receivable |
(1,939) |
(1,882) |
||
Prepaid expenses and other current assets |
248 |
293 |
||
Other assets |
(14) |
6 |
||
Increase in: |
||||
Accounts payable and accrued expenses |
929 |
4,750 |
||
Net cash provided by operating activities |
8,263 |
13,582 |
||
Cash flows from investing activities: |
||||
Capital expenditures |
(434) |
(467) |
||
Acquisitions, net of cash acquired |
- |
(1) |
||
Net cash used in investing activities |
(434) |
(468) |
||
Cash flows from financing activities: |
||||
Proceeds from exercise of stock options |
43 |
107 |
||
Purchase of common stock in connection with share awards |
(391) |
(31) |
||
Tax benefit from share awards |
1,592 |
21 |
||
Principal payments on capital leases and notes payable |
(1,554) |
(1,600) |
||
Net cash used in financing activities |
(310) |
(1,503) |
||
Net increase in cash and cash equivalents |
7,519 |
11,611 |
||
Cash and cash equivalents at beginning of period |
47,943 |
19,389 |
||
Cash and cash equivalents at end of period |
$ 55,462 |
$ 31,000 |
||
Summary of non-cash investing and financing activities: |
||||
Settlement of Directors Deferred Compensation Plan |
$ 501 |
$ - |
||
ALMOST FAMILY, INC. AND SUBSIDIARIES |
|||||||||
RESULTS OF OPERATIONS |
|||||||||
(UNAUDITED) |
|||||||||
(In thousands) |
|||||||||
Three Months Ended March 31, |
|||||||||
2011 |
2010 |
Change |
|||||||
Amount |
% Rev |
Amount |
% Rev |
Amount |
% |
||||
Net service revenues: |
|||||||||
Visiting Nurse |
$ 72,690 |
88.0% |
$ 71,541 |
88.0% |
$ 1,149 |
1.6% |
|||
Personal Care |
9,904 |
12.0% |
9,771 |
12.0% |
133 |
1.4% |
|||
$ 82,594 |
100.0% |
$ 81,312 |
100.0% |
$ 1,282 |
1.6% |
||||
Operating income before corporate expenses: |
|||||||||
Visiting Nurse |
$ 13,010 |
17.9% |
$ 15,883 |
22.2% |
$ (2,873) |
-18.1% |
|||
Personal Care |
1,459 |
14.7% |
1,176 |
12.0% |
283 |
24.1% |
|||
14,469 |
17.5% |
17,059 |
21.0% |
(2,590) |
-15.2% |
||||
Corporate expenses |
4,866 |
5.9% |
4,514 |
5.6% |
352 |
7.8% |
|||
Operating income |
9,603 |
11.6% |
12,545 |
15.4% |
(2,942) |
-23.5% |
|||
Interest expense, net |
55 |
0.1% |
89 |
0.1% |
(34) |
-38.2% |
|||
Income tax expense |
3,843 |
4.7% |
5,013 |
6.2% |
(1,170) |
-23.3% |
|||
Net income |
$ 5,705 |
6.9% |
$ 7,443 |
9.2% |
$ (1,738) |
-23.4% |
|||
EBITDA |
$ 10,740 |
13.0% |
$ 13,644 |
16.8% |
$ (2,904) |
-21.3% |
|||
ALMOST FAMILY, INC. AND SUBSIDIARIES |
|||||||||
VISITING NURSE SEGMENT OPERATING METRICS |
|||||||||
Three Months Ended March 31, |
|||||||||
2011 |
2010 |
Change |
|||||||
Amount |
% Rev |
Amount |
% Rev |
Amount |
% |
||||
Average number of locations |
91 |
84 |
7 |
8.3% |
|||||
All payors: |
|||||||||
Patients Months |
52,486 |
50,528 |
1,958 |
3.9% |
|||||
Admissions |
15,675 |
14,664 |
1,011 |
6.9% |
|||||
Billable Visits |
479,807 |
460,223 |
19,584 |
4.3% |
|||||
Medicare Statistics: |
|||||||||
Revenue (in thousands) |
$ 67,304 |
92.6% |
$ 65,698 |
91.8% |
$ 1,606 |
2.4% |
|||
Billable visits |
407,502 |
381,958 |
25,544 |
6.7% |
|||||
Admissions |
14,352 |
13,268 |
1,084 |
8.2% |
|||||
Recertifications |
8,327 |
8,104 |
223 |
2.8% |
|||||
Episodes Completed |
21,427 |
20,262 |
1,165 |
5.7% |
|||||
Revenue per completed episode |
$ 2,998 |
$ 3,133 |
$ (135) |
-4.3% |
|||||
Visits per episode |
18.0 |
18.0 |
- |
0.0% |
|||||
PERSONAL CARE OPERATING METRICS |
|||||||||
Three Months Ended March 31, |
|||||||||
2011 |
2010 |
Change |
|||||||
Amount |
Amount |
Amount |
% |
||||||
Average number of locations |
23 |
23 |
- |
0.0% |
|||||
Admissions |
781 |
792 |
(11) |
-1.4% |
|||||
Patient months of care |
10,949 |
11,300 |
(351) |
-3.1% |
|||||
Patient days of care |
140,631 |
141,232 |
(601) |
-0.4% |
|||||
Billable hours |
551,514 |
556,339 |
(4,825) |
-0.9% |
|||||
Revenue per billable hour |
$17.96 |
$17.56 |
$0.39 |
2.2% |
|||||
Non-GAAP Financial Measure
The information provided in some of the tables in this release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. In accordance with SEC rules, the Company has provided, in the supplemental information and the footnotes to the tables, a reconciliation of those measures to the most directly comparable GAAP measures.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA) is not a measure of financial performance under accounting principles generally accepted in the United States of America. It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles. The items excluded from EBITDA are significant components in understanding and evaluating financial performance and liquidity. Management routinely calculates and communicates EBITDA and believes that it is useful to investors because it is commonly used as an analytical indicator within our industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. EBITDA is also used in certain covenants contained in our credit agreement.
The following tables set forth a reconciliation of net income to EBITDA:
(In thousands) |
||||
Three Months Ended March 31, |
||||
2011 |
2010 |
|||
Net income |
$ 5,705 |
$ 7,443 |
||
Add back: |
||||
Interest expense |
55 |
89 |
||
Income tax expense |
3,843 |
5,013 |
||
Depreciation and amortization |
745 |
669 |
||
Amortization of stock-based compensation |
392 |
430 |
||
Earnings before interest, income taxes, depreciation and amortization (EBITDA) |
$ 10,740 |
$ 13,644 |
||
About Almost Family
Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing services, with branch locations in Florida, Kentucky, New Jersey, Connecticut, Ohio, Massachusetts, Missouri, Alabama, Illinois, Pennsylvania, and Indiana (in order of revenue significance). Almost Family, Inc. and its subsidiaries operate a Medicare-certified segment and a personal care segment. Altogether, Almost Family operates over 110 branch locations in 11 U.S. states.
Forward Looking Statements
All statements, other than statements of historical facts, included in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "project," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. These forward-looking statements are based on the Company's current plans, expectations and projections about future events.
Because forward-looking statements involve risks and uncertainties, the Company's actual results could differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. The potential risks and uncertainties which could cause actual results to differ materially include: regulatory approvals or third party consents may not be obtained, the impact of further changes in healthcare reimbursement systems, including the ultimate outcome of potential changes to Medicare reimbursement for home health services and to Medicaid reimbursement due to state budget shortfalls; the ability of the Company to maintain its level of operating performance and achieve its cost control objectives; changes in our relationships with referral sources; the ability of the Company to integrate acquired operations; government regulation; health care reform; pricing pressures from Medicare, Medicaid and other third-party payers; changes in laws and interpretations of laws relating to the healthcare industry; and the Company's self-insurance risks. For a more complete discussion regarding these and other factors which could affect the Company's financial performance, refer to the Company's various filings with the Securities and Exchange Commission, including its filing on Form 10-K for the year ended December 31, 2010, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and "Risk Factors." The Company undertakes no obligation to update or revise its forward-looking statements.
Almost Family, Inc. Steve Guenthner (502) 891-1000 |
The Ruth Group Investor Relations Nick Laudico/Zack Kubow (646) 536-7030/7020 |
|
SOURCE Almost Family, Inc.
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