Almost Family (AFAM) 8-K Results of Operations and Financial Condition

Exhibit 99.1

  Almost Family, Inc. Steve Guenthner (502) 891-1000                 The Ruth Group Investor Relations Nick Laudico/Zack Kubow (646) 536-7030/7020 nlaudico@theruthgroup.com zkubow@theruthgroup.com  

Almost Family Reports Third Quarter 2010 Results

Third Quarter Highlights:

·   Net service revenues increased 11% to $84.9 million

·   Net income increased 29% to $7.9 million

·   Diluted EPS increased 16% to $0.85 per share on 10% more shares outstanding

·   Visiting Nurse (VN) segment net revenues rose 13% to $74.2 million

·   VN organic Medicare admission growth was 12%

·   Approximately $110 million in cash plus credit facility available to fund acquisitions

Louisville, KY, October 28, 2010 – Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing services, announced today its financial results for the three months ended September 30, 2010.

William Yarmuth, Chief Executive Officer, commented, “Our third quarter results demonstrate the fundamental strength of our business and the success of our Senior Advocacy Mission in the communities we serve.  I am proud of our ability to continue balancing our top and bottom line growth while providing superior care to our patients.  Our Visiting Nurse (VN) segment continued to show strong organic revenue growth and the Personal Care (PC) segment continued strong margin performance.”

Third Quarter Financial Results

Almost Family reported third quarter 2010 net service revenues of $84.9 million, an 11% increase from $76.3 million in the third quarter of 2009, primarily due to a 13% increase in revenue by our VN segment.

Net income for the third quarter of 2010 was $7.9 million, or $0.85 per diluted share, compared to $6.2 million, or $0.73 per diluted share, in the third quarter of 2009 on 10% more shares outstanding.

Third Quarter Segment Results

Net revenues in the Visiting Nurse segment for the third quarter of 2010 were $74.2 million, a 13% increase from $65.7 million in the third quarter of 2009.  The total revenue growth of $8.4 million was entirely organic.  Organic Medicare admissions growth was 12%.  Operating income before corporate expense in the VN segment for the third quarter of 2010 was $16.5 million, a 23% increase from $13.4 million in the third quarter of 2009.

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While net revenues in the Personal Care (PC) segment were essentially flat for the third quarter of 2010, operating income before unallocated corporate expense increased 15% to $1.5 million from $1.3 million in the same period of 2009 due to improved cost management.

Nine Month Period Ended September 30, 2010

Almost Family reported net service revenues for the nine month period ended September 30, 2010 of $252.3 million, a 15% increase from $219.8 million in the same period of 2009.

Net income for the nine month period of 2010 was $23.7 million, or $2.54 per diluted share, compared to $17.8 million, or $2.14 per diluted share, in the nine month period of 2009 on 13% more shares outstanding.

Nine Month Period Segment Results

Net revenues in the Visiting Nurse segment for the nine month period of 2010 were $220.6 million, a 17% increase from $188.4 million in the nine month period of 2009.  The revenue growth of $32.2 million came from a 16% organic growth rate plus approximately $2.0 million from acquired operations.  Organic Medicare admissions growth was 12%.  Operating income before corporate expense in the VN segment for the nine month period of 2010 was $50.1 million, a 28% increase from $39.1 million in the nine month period of 2009.

Net revenues in the Personal Care (PC) segment for the nine month period of 2010 were consistent with 2009 while operating income before unallocated corporate expense increased 16% to $4.2 million for the nine month period of 2010 from $3.6 million in the nine month period of 2009.

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 Exchange Commission regarding their inquiries, in addition to reviewing the derivative and shareholder class action suits filed following an April 27, 2010 Wall Street Journal article related to Medicare home health therapy services. During the quarter ended September 30, 2010 the Company incurred approximately $0.2 million ($0.02 per diluted share) in professional fees, net of anticipated insurance coverage, associated with these inquiries.  In the nine-months ended September 30, 2010 the Company incurred approximately $0.5 million ($0.03 per diluted share) in professional fees, net of anticipated insurance coverage, associated with these inquiries.

Conference Call

A conference call to review the results will begin at 11:00 a.m. ET on October 28, 2010, 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 October 28, 2010 at 2:00 p.m. ET and ending on November 11, 2010. The replay telephone number is 1-877-870-5176 (USA) or 1-858-384-5517 (International). Passcode: 359520.

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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 October 28, 2010 at approximately 2:00 p.m. ET and will remain available until November 28, 2010.

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ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)
	Three Months Ended September 30,
	2010			2009
Net service revenues	$	84,897		$	76,294
Cost of service revenues (excluding depreciation and amortization)		39,131			35,779
Gross margin		45,766			40,515
General and administrative expenses:
Salaries and benefits		22,874			20,800
Other		9,599			9,380
Total general and administrative expenses		32,473			30,180
Operating income		13,293			10,335
Interest expense, net		(60	)		(156	)
Income from continuing operations before income taxes		13,233			10,179
Income tax expense		(5,281	)		(3,985	)
Net income from continuing operations		7,952			6,194
Discontinued operations, net of tax benefits of $8 and $18		(12	)		(28	)
Net income	$	7,940		$	6,166
Per share amounts-basic:
Average shares outstanding		9,143			8,282
Income from continued operations	$	0.87		$	0.75
Loss from discontinued operations		-			-
Net income	$	0.87		$	0.75
Per share amounts-diluted:
Average shares outstanding		9,343			8,457
Income from continued operations	$	0.85		$	0.73
Loss from discontinued operations		-			-
Net income	$	0.85		$	0.73

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ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)
	Nine Months Ended September 30,
	2010			2009
Net service revenues	$	252,281		$	219,828
Cost of service revenues (excluding depreciation and amortization)		115,347			102,492
Gross margin		136,934			117,336
General and administrative expenses:
Salaries and benefits		68,067			60,472
Other		28,960			26,842
Total general and administrative expenses		97,027			87,314
Operating income		39,907			30,022
Interest expense, net		(210	)		(673	)
Income from continuing operations before income taxes		39,697			29,349
Income tax expense		(15,932	)		(11,513	)
Net income from continuing operations		23,765			17,836
Discontinued operations, net of tax benefits of $27 and $52		(39	)		(80	)
Net income	$	23,726		$	17,756
Per share amounts-basic:
Average shares outstanding		9,101			8,164
Income from continued operations	$	2.61		$	2.18
Loss from discontinued operations		-			-
Net income	$	2.61		$	2.18
Per share amounts-diluted:
Average shares outstanding		9,354			8,318
Income from continued operations	$	2.54		$	2.14
Loss from discontinued operations		-			-
Net income	$	2.54		$	2.14

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ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
	September 30, 2010
ASSETS	(UNAUDITED)			December 31, 2009
CURRENT ASSETS:
Cash and cash equivalents	$	41,643		$	19,389
Accounts receivable - net		38,905			35,121
Prepaid expenses and other current assets		3,098			2,544
Deferred tax assets		8,787			7,786
TOTAL CURRENT ASSETS		92,433			64,840
PROPERTY AND EQUIPMENT - NET		4,506			4,291
GOODWILL		100,609			99,133
OTHER INTANGIBLE ASSETS		14,311			14,538
OTHER ASSETS		576			587
	$	212,435		$	183,389
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,423		$	3,360
Accrued other liabilities		21,680			20,076
Current portion - capital leases and notes payable		1,618			1,836
TOTAL CURRENT LIABILITIES		27,721			25,272
LONG-TERM LIABILITIES:
Capital lease obligations		-			40
Notes payable		1,300			2,800
Deferred tax liabilities		7,587			5,258
Other liabilities		806			1,042
TOTAL LONG-TERM LIABILITIES		9,693			9,140
TOTAL LIABILITIES		37,414			34,412
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; 9,251 and 9,151
issued and outstanding		925			915
Treasury stock, at cost, 2 and 0 shares		(70	)		-
Additional paid-in capital		96,844			94,465
Retained earnings		77,322			53,597
TOTAL STOCKHOLDERS' EQUITY		175,021			148,977
	$	212,435		$	183,389

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ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)	Nine Months Ended September 30,
	2010			2009
Cash flows from operating activities:
Net income	$	23,726		$	17,756
Loss from discontinued operations		(39	)		(80	)
Income from continuing operations		23,765			17,836
Adjustments to reconcile income from continuing operations to
net cash provided by operating activities:
Depreciation and amortization		2,102			1,753
Provision for uncollectible accounts		2,592			3,164
Stock-based compensation		1,308			1,219
Gain from sale of asset		(2	)		-
Deferred income taxes		1,327			(658	)
		31,092			23,314
Change in certain net assets and liabilities, net of the effects of acquisitions:
(Increase) decrease in:
Accounts receivable		(6,376	)		(6,643	)
Prepaid expenses and other current assets		(692	)		46
Other assets		11			(58	)
Increase (decrease) in:
Accounts payable and accrued expenses		3,281			(23	)
Net cash provided by operating activities		27,316			16,636
Cash flows from investing activities:
Capital expenditures		(1,963	)		(1,245	)
Cash proceeds from sale of asset		13			-
Acquisitions, net of cash acquired		(2,326	)		(6,406	)
Net cash used in investing activities		(4,276	)		(7,651	)
Cash flows from financing activities:
Net revolving credit facility repayments		-			(23,998	)
Proceeds from exercise of stock options		381			84
Purchase of common stock in connection with exercise of stock options		(628	)		(6	)
Tax benefit from exercise of non-qualified stock options		1,258			211
Net proceeds from issuance of common stock		-			27,967
Principal payments on capital leases and notes payable		(1,758	)		(4,392	)
Net cash used in financing activities		(747	)		(134	)
Cash flows from discontinued operations:
Operating activities		(39	)		(80	)
Investing activities		-			-
Financing activities		-			-
Net cash used in discontinued operations		(39	)		(80	)
Net increase  in cash and cash equivalents		22,254			8,771
Cash and cash equivalents at beginning of period		19,389			1,301
Cash and cash equivalents at end of period	$	41,643		$	10,072
Summary of non-cash investing and financing activities:
Value of stock withheld in lieu of payroll taxes	$	628		$	6
Acquisitions funded by notes payable	$	-		$	1,200

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ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(UNAUDITED)
(In thousands)
	Three Months ended September 30,
	2010					2009					Change
	Amount		% Rev			Amount		% Rev			Amount			%
Net service revenues:
Visiting Nurse	$	74,155		87.3	%	$	65,739		86.2	%	$	8,416			12.8	%
Personal Care		10,742		12.7	%		10,555		13.8	%		187			1.8	%
	$	84,897		100.0	%	$	76,294		100.0	%	$	8,603			11.3	%
Operating income before corporate expenses:
Visiting Nurse	$	16,536		22.3	%	$	13,413		20.4	%	$	3,123			23.3	%
Personal Care		1,475		13.7	%		1,287		12.2	%		188			14.6	%
		18,011		21.2	%		14,700		19.3	%		3,311			22.5	%
Corporate expenses		4,718		5.6	%		4,365		5.7	%		353			8.1	%
Operating income		13,293		15.7	%		10,335		13.5	%		2,958			28.6	%
Interest expense, net		60		0.1	%		156		0.2	%		(96	)		-61.5	%
Income tax expense		5,281		6.2	%		3,985		5.2	%		1,296			32.5	%
Net income from continuing operations	$	7,952		9.4	%	$	6,194		8.1	%	$	1,758			28.4	%
EBITDA from continuing operations	$	14,466		17.0	%	$	11,384		14.9	%	$	3,082			27.1	%

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ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(UNAUDITED)
(In thousands)
	Nine Months Ended September 30,
	2010					2009					Change
	Amount		% Rev			Amount		% Rev			Amount			%
Net service revenues:
Visiting Nurse	$	220,643		87.5	%	$	188,444		85.7	%	$	32,199			17.1	%
Personal Care		31,638		12.5	%		31,385		14.3	%		253			0.8	%
	$	252,281		100.0	%	$	219,829		100.0	%	$	32,452			14.8	%
Operating income before corporate expenses:
Visiting Nurse	$	50,118		22.7	%	$	39,070		20.7	%	$	11,048			28.3	%
Personal Care		4,222		13.3	%		3,630		11.6	%		592			16.3	%
		54,340		21.5	%		42,700		19.4	%		11,640			27.3	%
Corporate expenses		14,433		5.7	%		12,678		5.8	%		1,755			13.8	%
Operating income		39,907		15.8	%		30,022		13.7	%		9,885			32.9	%
Interest expense, net		210		0.1	%		673		0.3	%		(463	)		-68.8	%
Income tax expense		15,932		6.3	%		11,513		5.2	%		4,419			38.4	%
Net income from continuing operations	$	23,765		9.4	%	$	17,836		8.1	%	$	5,929			33.2	%
EBITDA from continuing operations	$	43,317		17.2	%	$	32,994		15.0	%	$	10,323			31.3	%

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ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS
	Three Months Ended September 30,
	2010					2009					Change
	Amount		% Rev			Amount		% Rev			Amount			%
Average number of locations		88					82					6			7.3	%
All payors:
Patients Months		51,382					47,744					3,638			7.6	%
Admissions		14,359					12,878					1,481			11.5	%
Billable Visits		469,992					416,328					53,664			12.9	%
Medicare Statisitics:
Revenue (in thousands)	$	67,786		91.4	%	$	59,381		90.3	%	$	8,405			14.2	%
Billable visits		394,668					360,681					33,987			9.4	%
Admissions		13,030					11,616					1,414			12.2	%
Episodes		21,763					19,479					2,284			11.7	%
Revenue per completed episode	$	3,156				$	3,002				$	154			5.1	%
Visits per episode		18.1					17.8					0.3			1.7	%
PERSONAL CARE
RESULTS OF OPERATION
	Three Months Ended September 30,
		2010					2009				Change
	Amount					Amount					Amount			%
Average number of locations		23					23					-			0.0	%
Admissions		710					804					(94	)		-11.7	%
Patient months of care		11,645					11,822					(177	)		-1.5	%
Patient days of care		154,565					152,272					2,293			1.5	%
Billable hours		581,171					590,662					(9,491	)		-1.6	%
Revenue per billable hour	$	18.48				$	17.87				$	0.61			3.4	%

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ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS
	Nine Months Ended September 30,
	2010					2009					��	Change
	Amount		% Rev			Amount		% Rev				Amount			%
Average number of locations		86					78						8			10.3	%
All payors:
Patients Months		153,753					137,805						15,948			11.6	%
Admissions		43,436					38,532						4,904			12.7	%
Billable Visits		1,407,168					1,194,139						213,029			17.8	%
Medicare Statisitics:
Revenue (in thousands)	$	202,290		91.7	%	$	169,098		89.7	%		$	33,192			19.6	%
Billable visits		1,177,389					1,025,210						152,179			14.8	%
Admissions		39,390					34,968						4,422			12.6	%
Episodes		64,042					56,703						7,339			12.9	%
Revenue per completed episode	$	3,139				$	2,943					$	196			6.7	%
Visits per episode		18.0					17.5						0.5			2.9	%
PERSONAL CARE
RESULTS OF OPERATION
	Nine Months Ended September 30,
		2010					2009					Change
	Amount					Amount						Amount			%
Average number of locations		23					23						-			0.0	%
Admissions		2,295					2,445						(150	)		-6.1	%
Patient months of care		35,275					35,340						(65	)		-0.2	%
Patient days of care		456,188					448,331						7,857			1.8	%
Billable hours		1,735,586					1,756,498						(20,912	)		-1.2	%
Revenue per billable hour	$	18.23				$	17.87					$	0.36			2.0	%

Non-GAAP Financial Measure

The information provided in 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:

EBITDA is defined as income before depreciation and amortization, net interest expense and income taxes. 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

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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 Continuing Operations Net Income to EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA
(In thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
Net income from continuing operations	$	7,952	$	6,194	$	23,765	$	17,836
Add back:
Interest expense		60		156		210		673
Income tax expense		5,281		3,985		15,932		11,513
Depreciation and amortization		736		601		2,102		1,753
Amortization of stock-based compensation		437		447		1,308		1,219
Earnings before interest, income taxes, depreciation and amortization (EBITDA) from continuing operations	$	14,466	$	11,383	$	43,317	$	32,994

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, Connecticut, New Jersey, Ohio, Massachusetts, Alabama, Missouri, 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 100 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 o perations; 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; potential audits and investigations by governmental and regulatory agencies; 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, 2009, 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.

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