Exhibit 99.1
Investor Contact:
Carol Ruth / Amy Glynn
The Ruth Group
Phone: (646) 536-7004 / 7023
Email: cruth@theruthgroup.com
Email: aglynn@theruthgroup.com
Addus HomeCare Reports Third Quarter 2009 Results
Palatine, IL, November 12, 2009 - Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of a broad range of social and medical services in the home, announced today its financial results for the third quarter and nine months ended September 30, 2009.
Recent Corporate Highlights:
| • | Net service revenues for the third quarter 2009 of $66.8 million, up 6.5% |
| • | Adjusted EBITDA for the third quarter 2009 of $5.4 million, up 15.7% |
| • | Net income per diluted share for the third quarter 2009 of $0.40, up 53.8% |
| • | Initial public offering (“IPO”) of 5.4 million shares for net proceeds of $50.2 million; began trading on Nasdaq under the symbol “ADUS” on October 28, 2009 |
Mark Heaney, President and Chief Executive Officer, stated, “We are pleased to report strong financial results for the third quarter, our first earnings release since the completion of our IPO. Addus’ performance was driven by our dedicated home care providers, who continue to focus on growing our census and providing the highest level, lowest cost of care to our 23,000 consumers.”
Mr. Heaney continued, “We are gratified by the completion of our IPO. The interest from investors reflects the dedication of our professionals, who continue to leverage our integrated service model to meet the needs of patients across both segments of our business.”
Third Quarter Ended September 30, 2009 and 2008
Total net service revenues for the third quarter 2009 were $66.8 million, a 6.5% increase compared to $62.7 million in the prior year quarter.
Net service revenues in the third quarter 2009 for the Home & Community segment were $53.9 million, a 6.4% increase compared to $50.7 million in the prior year quarter. The increase in revenues was entirely the result of organic growth. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, was $5.4 million, a 14.4% increase compared to $4.8 million in the prior year quarter.
Addus HomeCare Reports Third Quarter 2009 Results
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Net service revenues in the third quarter 2009 for the Home Health segment were $12.9 million, a 7.2% increase compared to $12.0 million in the prior year quarter. This increase was comprised of $0.8 million from organic growth and $0.1 million from acquisitions completed in 2008. Home Health operating income, including depreciation and amortization but excluding corporate expenses, was $2.1 million, a 40.7% increase compared to $1.5 million in the prior year quarter.
Adjusted earnings before interest, taxes, depreciation, amortization, and stock based compensation (“Adjusted EBITDA”), for the third quarter 2009 was $5.4 million, a 15.7% increase compared to $4.6 million in the prior year quarter. The Company’s ability to leverage corporate expenses across a larger revenue base and improved performance by both segments contributed to the increase.
Net income, prior to deducting preferred stock dividends, for the third quarter 2009, was $2.1 million, a 59.4% increase from $1.3 million in the prior year quarter. Diluted earnings per share for the third quarter 2009 were $0.40 per share, compared to $0.26 per share in the prior year period. Both periods include dilutive stock options and conversion of preferred stock.
Nine Months Ended September 30, 2009 and 2008
Total net service revenues for the nine months ended September 30, 2009 were $193.6 million, a 11.5% increase compared to $173.6 million in the same period in 2008.
Net service revenues for the nine months ended September 30, 2009 in the Home & Community segment were $156.4 million, a 12.9% increase compared to $138.6 in the same period in 2008. This increase was comprised of $13.0 million from organic growth and $4.8 million from acquisitions completed in 2008. Home & Community operating income for the nine months ended September 30, 2009, including depreciation and amortization but excluding corporate expenses, was $15.8 million, a 22.7% increase compared to $12.9 million in the same period in 2008.
Net service revenues for the nine months ended September 30, 2009 in the Home Health segment was $37.2 million, a 6.3% increase compared to $35.0 million the same period in 2008. This increase was comprised of $1.8 million from organic growth and $0.4 million from acquisitions completed in 2008. Home Health operating income for the nine months ended September 30, 2009, including depreciation and amortization but excluding corporate expenses, was $5.6 million, a 42.2% increase compared to $3.9 million for the same period in 2008.
Adjusted EBITDA for the nine months ended September 30, 2009 was $14.9 million, a 21.2% increase compared to $12.3 million for the same period in 2008. The Company’s ability to leverage corporate expenses across a larger revenue base and improved performance by both segments contributed to the increase.
Addus HomeCare Reports Third Quarter 2009 Results
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Net income, prior to deducting preferred stock dividends, for the nine months ended September 30, 2009 was $5.4 million, a 83.8% increase compared to $2.9 million for the same period in the prior year. Diluted earnings per share, which includes dilutive stock options and the conversion of the preferred stock for 2009, was $1.04 per share for the nine months ended September 30, 2009 compared to a loss of $(0.18) per share for the same period in 2008.
Recent Developments
On October 1, 2009, the Company’s board of directors approved a 10.8 -for-1 stock split, increasing the number of issued and outstanding shares of common stock from 94,375 to 1,019,250. All share and per share data, except for par value, have been adjusted to reflect the stock split for all periods presented.
Addus completed its initial public offering of 5.4 million shares of common stock at $10 per share, raising net proceeds, after deducting the underwriting discount, of $50.2 million. Addus shares began trading on the Nasdaq Global Market under the ticker symbol “ADUS” on October 28, 2009. A copy of the prospectus is available at http://www.sec.gov.
Non-GAAP Financial Measure
The information provided in this release includes adjusted EBITDA, a non-GAAP financial measure, which the Company defines as net income plus depreciation and amortization, net interest expense, income tax expense 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 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 HomeCare will conduct a conference call to discuss its third quarter results on Thursday, November 12, 2009, beginning at 10:00 a.m. Eastern time. The toll-free number is (800) 599-9829 (international callers should call 617-847-8703), with the passcode: 98732272. A telephonic replay of the conference call will be available through midnight on November 26, 2009, by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 10691762.
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.
Addus HomeCare Reports Third Quarter 2009 Results
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About Addus
Addus is a comprehensive provider of a broad range of social and medical services in the home. Addus’ services include personal care and assistance with activities of daily living, skilled nursing and rehabilitative therapies, and adult day care. Addus’ consumers are individuals with special needs 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, the Veterans Health Administration, commercial insurers and private individuals. Addus has over 12,000 employees that provide services through more than 120 locations across 16 states to over 23,000 consumers.
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 changes in reimbursement, changes in government regulations, changes in Addus HomeCare’s relationships with referral sources, increased competition for Addus HomeCare’s services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in the Risk Factors section in Addus HomeCare’s Prospectus, filed with the Securities and Exchange Commission on October 29, 2009, 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)
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(amounts in thousands, except share and per share data)
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Net service revenues | $ | 66,803 | $ | 62,709 | $ | 193,608 | $ | 173,577 | ||||||||
Cost of service revenues | 47,148 | 44,844 | 136,588 | 123,580 | ||||||||||||
Gross profit | 19,655 | 17,865 | 57,020 | 49,997 | ||||||||||||
General and administrative expenses | 14,375 | 13,346 | 42,358 | 38,004 | ||||||||||||
Depreciation and amortization | 1,234 | 1,604 | 3,678 | 4,445 | ||||||||||||
Total operating expenses | 15,609 | 14,950 | 46,036 | 42,449 | ||||||||||||
Operating income | 4,046 | 2,915 | 10,984 | 7,548 | ||||||||||||
Interest expense, net | 1,021 | 1,256 | 3,189 | 3,840 | ||||||||||||
Income from operations before taxes | 3,025 | 1,659 | 7,795 | 3,708 | ||||||||||||
Income tax expense | 935 | 348 | 2,409 | 778 | ||||||||||||
Net income | 2,090 | 1,311 | 5,386 | 2,930 | ||||||||||||
Less: Preferred stock dividends | (1,157 | ) | (1,038 | ) | (3,441 | ) | (3,114 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | 933 | $ | 273 | $ | 1,945 | $ | (184 | ) | |||||||
Income (loss) per common share: | ||||||||||||||||
Basic | $ | 0.92 | $ | 0.27 | $ | 1.91 | $ | (0.18 | ) | |||||||
Diluted | $ | 0.40 | $ | 0.26 | $ | 1.04 | $ | (0.18 | ) | |||||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 1,019,250 | 1,019,250 | 1,019,250 | 1,019,250 | ||||||||||||
Diluted | 5,162,358 | 5,117,927 | 5,167,261 | 1,019,250 | ||||||||||||
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
(Unaudited)
| September 30, 2009 | December 31, 2008 | |||||
Assets | ||||||
Current assets | ||||||
Cash | $ | 2,620 | $ | 6,113 | ||
Accounts receivable, net | 62,506 | 49,237 | ||||
Prepaid expenses and other current assets | 6,977 | 5,147 | ||||
Deferred tax assets | 4,391 | 3,826 | ||||
Income taxes receivable | – | 460 | ||||
Total current assets | 76,494 | 64,783 | ||||
Property and equipment, net | 3,064 | 3,421 | ||||
Other assets | ||||||
Goodwill | 48,186 | 47,926 | ||||
Intangible assets, net | 14,070 | 17,035 | ||||
Deferred tax assets | 907 | 1,223 | ||||
Other assets | 2,111 | 1,360 | ||||
Total other assets | 65,274 | 67,544 | ||||
Total assets | $ | 144,832 | $ | 135,748 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities | ||||||
Accounts payable | $ | 3,887 | $ | 3,879 | ||
Accrued expenses | 29,675 | 22,721 | ||||
Current maturities of long-term debt | 10,223 | 7,101 | ||||
Deferred revenue | 1,871 | 2,175 | ||||
Total current liabilities | 45,656 | 35,876 | ||||
Preferred stock dividends | 12,663 | 9,222 | ||||
Long-term debt, less current maturities | 49,781 | 56,075 | ||||
Total stockholders’ equity | 36,732 | 34,575 | ||||
Total liabilities and stockholders’ equity | $ | 144,832 | $ | 135,748 | ||
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, 2009 | September 30, 2008 | |||||||
Net Income | $ | 5,386 | $ | 2,930 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation and amortization | 3,678 | 4,445 | ||||||
Deferred income taxes | (249 | ) | (641 | ) | ||||
Change in fair value of financial instrument | (395 | ) | 216 | |||||
Stock-based compensation | 210 | 277 | ||||||
Amortization of debt issuance costs | 530 | 318 | ||||||
Provision for doubtful accounts | 2,097 | 1,755 | ||||||
Gain on sale of assets | – | (14 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (15,366 | ) | (6,928 | ) | ||||
Prepaid expenses and other assets | (1,830 | ) | (3,175 | ) | ||||
Income taxes receivable | 460 | – | ||||||
Checks issued against future deposits | – | (3,956 | ) | |||||
Accounts payable | 862 | 494 | ||||||
Accrued expenses | 7,040 | 7,972 | ||||||
Deferred revenue | (304 | ) | 133 | |||||
Income taxes | (367 | ) | (292 | ) | ||||
Net cash provided by operating activities | 1,752 | 3,534 | ||||||
Acquisitions of businesses, net of acquired cash | (1,717 | ) | (4,809 | ) | ||||
Proceeds from sale of equipment | – | 17 | ||||||
Purchases of property and equipment | (356 | ) | (259 | ) | ||||
Net cash used in investing activities | (2,073 | ) | (5,051 | ) | ||||
Borrowings on term-loan | – | 5,700 | ||||||
Payments on term-loan | (4,987 | ) | (3,529 | ) | ||||
Net borrowings (repayments) on revolving credit loan | 306 | 2,213 | ||||||
Net borrowings (repayments) on other notes | 1,509 | (29 | ) | |||||
Net cash provided by (used in) financing activities | (3,172 | ) | 4,355 | |||||
Net change in cash | (3,493 | ) | 2,838 | |||||
Cash at the beginning of period | 6,113 | 21 | ||||||
Cash at the end of the period | $ | 2,620 | $ | 2,859 | ||||
Segment Information (Unaudited)
| For the Three Months Ended September 30, 2009 | |||||||||||||
| Home & Community | Home Health | Corporate | Total | ||||||||||
Net service revenues | $ | 53,886 | $ | 12,917 | $ | – | $ | 66,803 | |||||
Cost of service revenues | 40,459 | 6,689 | – | 47,148 | |||||||||
Gross profit | 13,427 | 6,228 | – | 19,655 | |||||||||
General and administrative expenses | 7,149 | 3,990 | 3,236 | 14,375 | |||||||||
Depreciation and amortization | 844 | 188 | 202 | 1,234 | |||||||||
Total operating expenses | 7,993 | 4,178 | 3,438 | 15,609 | |||||||||
Operating income | $ | 5,434 | $ | 2,050 | $ | (3,438 | ) | $ | 4,046 | ||||
| For the Three Months Ended September 30, 2008 | |||||||||||||
| Home & Community | Home Health | Corporate | Total | ||||||||||
Net service revenues | $ | 50,663 | $ | 12,046 | $ | – | $ | 62,709 | |||||
Cost of service revenues | 38,246 | 6,598 | – | 44,844 | |||||||||
Gross profit | 12,417 | 5,448 | – | 17,865 | |||||||||
General and administrative expenses | 6,491 | 3,761 | 3,094 | 13,346 | |||||||||
Depreciation and amortization | 1,174 | 230 | 200 | 1,604 | |||||||||
Total operating expenses | 7,665 | 3,991 | 3,294 | 14,950 | |||||||||
Operating income | $ | 4,752 | $ | 1,457 | $ | (3,294 | ) | $ | 2,915 | ||||
| For the Nine Months Ended September 30, 2009 | |||||||||||||
| Home & Community | Home Health | Corporate | Total | ||||||||||
Net service revenues | $ | 156,387 | $ | 37,221 | $ | – | $ | 193,608 | |||||
Cost of service revenues | 117,079 | 19,509 | – | 136,588 | |||||||||
Gross profit | 39,308 | 17,712 | – | 57,020 | |||||||||
General and administrative expenses | 21,022 | 11,538 | 9,798 | 42,358 | |||||||||
Depreciation and amortization | 2,511 | 581 | 586 | 3,678 | |||||||||
Total operating expenses | 23,533 | 12,119 | 10,384 | 46,036 | |||||||||
Operating income | $ | 15,775 | $ | 5,593 | $ | (10,384 | ) | $ | 10,984 | ||||
| For the Nine Months Ended September 30, 2008 | |||||||||||||
| Home & Community | Home Health | Corporate | Total | ||||||||||
Net service revenues | $ | 138,550 | $ | 35,027 | $ | – | $ | 173,577 | |||||
Cost of service revenues | 104,388 | 19,192 | – | 123,580 | |||||||||
Gross profit | 34,162 | 15,835 | – | 49,997 | |||||||||
General and administrative expenses | 18,138 | 11,213 | 8,653 | 38,004 | |||||||||
Depreciation and amortization | 3,164 | 689 | 592 | 4,445 | |||||||||
Total operating expenses | 21,302 | 11,902 | 9,245 | 42,449 | |||||||||
Operating income | $ | 12,860 | $ | 3,933 | $ | (9,245 | ) | $ | 7,548 | ||||
Key Statistical and Financial Data (Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
General: | ||||||||||||||||
Adjusted EBITDA (in thousands) (1) | $ | 5,350 | $ | 4,625 | $ | 14,872 | $ | 12,270 | ||||||||
States served at period end | 16 | 16 | ||||||||||||||
Locations at period end | 120 | 122 | ||||||||||||||
Employees at period end | 12,567 | 12,422 | ||||||||||||||
Home & Community | ||||||||||||||||
Average weekly census | 20,236 | 19,936 | 20,176 | 19,184 | ||||||||||||
Billable hours (in thousands) | 3,248 | 3,162 | 9,600 | 8,991 | ||||||||||||
Billable hours per business day | 50,750 | 49,406 | 50,262 | 46,828 | ||||||||||||
Revenues per billable hour | $ | 16.59 | $ | 16.02 | $ | 16.29 | $ | 15.41 | ||||||||
Home Health | ||||||||||||||||
Average weekly census: | ||||||||||||||||
Medicare | 1,451 | 1,292 | 1,439 | 1,245 | ||||||||||||
Non-Medicare | 1,579 | 1,397 | 1,550 | 1,388 | ||||||||||||
Medicare admissions (2) | 1,995 | 1,811 | 5,797 | 5,059 | ||||||||||||
Medicare revenues per episode completed | $ | 2,514 | $ | 2,667 | $ | 2,517 | $ | 2,635 | ||||||||
Percentage of Revenues by Payor: | ||||||||||||||||
State, local or other governmental | 81.1 | % | 83.0 | % | 81.6 | % | 82.3 | % | ||||||||
Medicare | 11.8 | % | 11.4 | % | 11.8 | % | 11.6 | % | ||||||||
Other | 7.1 | % | 5.6 | % | 6.6 | % | 6.1 | % | ||||||||
| (1) | We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense. 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) | Medicare admissions represents the aggregate number of new cases approved for Medicare services during a specified period. |
Adjusted EBITDA (1) (Unaudited) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
Reconciliation of Adjusted EBITDA to Net Income: | ||||||||||||
Net income | $ | 2,090 | $ | 1,311 | $ | 5,386 | $ | 2,930 | ||||
Net interest expense | 1,021 | 1,256 | 3,189 | 3,840 | ||||||||
Income tax expense | 935 | 348 | 2,409 | 778 | ||||||||
Depreciation and amortization | 1,234 | 1,604 | 3,678 | 4,445 | ||||||||
Stock-based compensation expense | 70 | 106 | 210 | 277 | ||||||||
Adjusted EBITDA | $ | 5,350 | $ | 4,625 | $ | 14,872 | $ | 12,270 | ||||
| (1) | We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense. 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. |