Addus HomeCare Reports Second Quarter 2013 Results

PALATINE, Ill., Aug. 1, 2013 /PRNewswire/ -- Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home and community based services, primarily social in nature and provided in the home, and focused on the dual eligible population, announced today its financial results for the second quarter ended June 30, 2013.

Second Quarter Review

Total net service revenues for the second quarter of 2013 were $65.8 million, an 8.8% increase compared to $60.4 million in the prior year quarter.  Net income from continuing operations for the second quarter was $2.6 million, or $0.23 per diluted share, a 40.7% increase when compared to $1.8 million or $0.17 per diluted share, in the prior year quarter.  Net income, including a loss from discontinued operations, was $2.4 million, or $0.22 per diluted share. 

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, "We are pleased by the steady performance of our business and the increased cash collections in the quarter.  We remain focused on our efforts to improve our organic sales results, develop and deploy technology to leverage our work force and position our organization to capitalize on the opportunities presented by the dual eligible demonstration projects in our core markets." 

Operating income, including depreciation and amortization but excluding interest and income tax expenses, increased 23.7% to $4.0 million, or 6.1% of revenue, in the second quarter, compared to $3.2 million, or 5.3% of revenue, in the prior year quarter reflecting increased leverage of our fixed costs.  This improvement was primarily due to a 4.5% increase in average census and an 8.6% increase in billable hours, driven largely by improved field productivity.  The Company received a $0.2 million benefit in revenues and gross margin during the quarter as changes to the State of Illinois' billing programs were not implemented until May 1, 2013. 

The Company incurred a $270,000 charge in the second quarter related to severance payments made for a management position terminated in the quarter.  Income taxes were positively affected in the second quarter by a one-time increase in our ability to capture Work Opportunity Tax Credits estimates related to prior periods to reduce our effective tax rate by 3.0% in the quarter. 

The share count increased in the quarter, a function of our increased stock price and the inclusion of stock options in our diluted share counts that previously had been "under water."  The impact of this dilution on our earnings per share was $0.01.

Total cash flow for the quarter was a positive $21.0 million, primarily the result of a large one-time payment received from the State of Illinois at the end of June and collections made on our home health accounts receivable.

Six Month Review

Total net service revenues for the six months ended June 30, 2013 were $128.8 million, a 7.9% increase compared to $119.3 million in the same prior year period.  Net income from continuing operations for the six months ended June 30, 2013 increased 47.1% to $5.3 million, or $0.48 per diluted share, compared to $3.6 million or $0.33 per diluted share, in the prior year period.  Net income, including the loss from discontinued operations and the gain from the previously announced sale of the home health business, was $15.7 million, or $1.44 per diluted share. 

Operating income, including depreciation and amortization, but excluding interest and income tax expenses, increased 18.2% to $7.7 million, or 6.0% of revenue, for the six months ended June 30, 2013, compared to $6.5 million, or 5.5% of revenue in the prior year.  The Company benefited from a $0.8 million increase in revenues and gross margin during this period as technical changes to the State of Illinois billing programs were not implemented until early May. 

Non-GAAP Financial Measures

The information provided in this release includes Adjusted EBITDA, a non-GAAP financial measure, which the Company defines as earnings before discontinued operations, interest expense, taxes, depreciation, amortization, and stock-based compensation expense.  The Company has provided, in the financial statement tables included in this press release, a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure. Management believes that Adjusted EBITDA is useful to investors, management and others in evaluating the Company's operating performance, to provide investors with insight and consistency in the Company's financial reporting and to present a basis for comparison of the Company's business operations among periods, and to facilitate comparison with the results of the Company's peers.

Conference Call

Addus will report its 2013 second quarter financial results after the market close on Thursday, August 1, 2013.  Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on August 1, 2013. The toll-free dial-in number is (877) 546-5018 (international dial-in number is 857-244-7550), with the passcode: 23096859. A telephonic replay of the conference call will be available through midnight on August 8, 2013, by dialing (888) 286-8010 (international dial-in number is 617-801-6888) and entering the passcode 49225122.

A live broadcast of Addus HomeCare's conference call will be available under the Investor Relations section of the Company's website: www.addus.com. An online replay of the conference call will also be available on the Company's website for one month, beginning approximately three hours following the conclusion of the live broadcast.

About Addus

Addus is a comprehensive provider of home and community based services, primarily social in nature and provided in the home, and focused on the dual eligible population.  Addus' services include personal care and assistance with activities of daily living, and adult day care.  Addus' consumers are individuals who are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus' payor clients include federal, state and local governmental agencies, commercial insurers and private individuals.  For more information, please visit www.addus.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including the expected benefits and costs of dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus  HomeCare's relationships with referral sources, increased competition for Addus HomeCare's services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates and other risks set forth in the Risk Factors section in Addus HomeCare's Annual Report on Form 10-K filed with the Securities and Exchange  Commission  on  March  28,  2013 and in Addus HomeCare's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 9, 2013 and August 1, 2013, each of  which is available at http://www.sec.gov. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. (Unaudited tables and notes follow).

Investor Contact:
Dennis Meulemans
Chief Financial Officer
Phone: (847) 303-5300
Email: DMeulemans@addus.com

SOURCE Addus HomeCare Corporation