LOUISVILLE, Ky., Feb. 25, 2015 /PRNewswire/ -- Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing and personal care services, announced today its financial results for the three-months and year ended December 31, 2014. In a separate release today, the Company also announced an agreement to acquire the stock of WillCare which is the second largest acquisition in the Company's history.
As previously announced the Company is now, for the first time, reporting operating results for its new HealthCare Innovations segment segregated from Home Health operating results. Home Health operating results include the Company's historical Visiting Nurse and Personal Care segments and unallocated corporate expenses. Earnings from continuing operations are reconciled to the Home Health operating level to provide added visibility for investors.
Fourth Quarter Highlights:
-- Net service revenues of approximately $125 million -- Net income attributable to Almost Family, Inc. of $4.7 million, $0.50 per diluted share -- Adjusted earnings from home health operations ((1)) of $4.5 million, $0.47 per diluted share -- Visiting Nurse segment net revenues of $95.7 million and record Personal Care segment revenues of $28.9 million -- Acquired SunCrest home health operations incrementally added $0.18 to diluted EPS from continuing operations for the quarter -- Same store efficiency gains improved diluted EPS by $0.04, partially offsetting the effects of Medicare rate cuts which reduced diluted EPS by $0.05
Full Year Highlights:
-- Record net service revenues of $495.8 million -- Net income attributable to Almost Family, Inc. of $13.8 million, $1.45 per diluted share -- Adjusted earnings from home health operations ((1)) of $17.1 million, $1.81 per diluted share -- Record net revenues in all three segments: $380.8 million for Visiting Nurse, $112.5 million for Personal Care, and $2.5 million for Healthcare Innovations -- Acquired SunCrest home health operations added $0.81 to diluted EPS from continuing operations for the year -- Transition completed for the largest acquisition in the Company's history -- Same store efficiency gains improved diluted EPS by $0.31, more than offset the effects of Medicare rate cuts which reduced diluted EPS by $0.21 -- Breakeven results for the Healthcare Innovations segment
(1) See "Non-GAAP Financial Measures - Adjusted Earnings from Home Health Operations" on page 12
WillCare Acquisition
In a separate release today, Almost Family announced that it has signed a definitive agreement to acquire the stock of WillCare. WillCare, based in Buffalo NY, reported $72 million in revenue in 2014 with VN and PC branch locations in New York (11), Connecticut (3) and Ohio (1). The purchase price is expected to be between $46 and $53 million based on changes in earnings and working capital between now and the expected close sometime in the second half of FY2015 subject to New York approval. With this acquisition, Almost Family will operate over 230 branches across 15 states and its annual net revenue run rate is expected to approach the $600 million mark. The Company is reporting and commenting on the WillCare acquisition in a separate simultaneously released statement to provide clarity to investors on both its earnings and the transaction separately.
Management Comments
William Yarmuth, Chairman and Chief Executive Officer, made the following comments: "We are extremely pleased to continue the momentum of our recent activities with today's announcements. In addition to our solid 2014 financial performance we are thrilled to announce the second largest transaction in our history, the acquisition of WillCare on the heels of wrapping up our integration of the SunCrest acquisition. We are excited to have the opportunity to welcome the employees, patients and referral sources of WillCare into our growing family of home health providers."
In recent releases the Company announced a $175 million expanded credit facility through 2020, a strategic investment in NavHealth a development stage health care technology company and the creation of its new "HealthCare Innovations" reporting segment to better highlight the value of its core home health operations separately from its innovation investments.
Steve Guenthner, President, added: "Our results for the year reflect not only the successful integration of our 2013 acquisitions but also some very nice improvements in organic volume growth and cost controls that helped us partially mitigate the effect of on-going Medicare rate cuts and continue to drive earnings growth. The expansion of ACO's, increased focus on inpatient hospital readmission penalties, bundled-payment initiatives and state-level developments, including moves to Medicaid managed care all point to increasing demand for home health services. Additionally, our M&A track record and capital market and industry relationships continue to position us as a consolidator in home health."
Yarmuth concluded: "To state the obvious, we are very optimistic about the future of home health care and Almost Family in particular. We feel the positive regulatory environment, successful integration of SunCrest, acquisition of WillCare, solid progress and relationships with governmental policy makers, increased access to capital and our commitment to innovation should all combine to fuel great optimism for the future of Almost Family."
Fourth Quarter Financial Results
Almost Family reported fourth quarter results that included a full quarter of operating results for the following acquisitions, as compared to results for the fourth quarter of 2013:
-- The December 6, 2013 acquisition of SunCrest incrementally added $24.7 million to revenue ($21.1 million VN and $3.6 million PC) and $0.18 to diluted EPS from continuing operations, as compared to the same period in the prior year. -- The October 4, 2013 acquisition of a 61.5% interest in Imperium lowered diluted EPS from continuing operations by $0.01. -- A benefit from one-time deal, transition and other approximated $0.7 million ($0.04 per diluted share), as a $1.0 million insurance recovery of previously incurred defense costs more than offset deal costs, primarily related to WillCare.
Improved cost controls, in particular tighter adherence to agency-level labor staffing standards, improved the efficiency of care delivery lowering labor costs on improving volumes improving diluted EPS by $0.04 as compared to the same quarter of last year.
Excluding acquired revenue, Medicare rate cuts from 2014's rebasing reduced revenue and operating income by $0.9 million and diluted EPS from continuing operations by $0.05. VN segment Medicare admissions increased organically by 5.0%.
The effective tax rate for the fourth quarter of 2014 was 40.8% compared to 56.6% for the fourth quarter of 2013. The higher income tax rate in 2013 occurred primarily due to certain deal and transaction costs that were not currently deductible and that did not result in the establishment of a deferred tax asset. The Company currently anticipates a normalized effective tax rate of 40.5% and has used that rate in the presentation of income and diluted EPS from continuing operations.
Full Year Financial Results
Almost Family reported full year results that included a full twelve months of operating results for the following acquisitions, as compared to results for 2013:
-- The December 6, 2013 acquisition of SunCrest incrementally added $127.5 million to revenue ($111.3 million VN and $16.2 million PC) and $0.83 to diluted EPS from continuing operations, as compared to the prior year. -- Deal, transition and other costs approximated $5.3 million ($0.34 per diluted share) as transition and deal costs, primarily SunCrest, more than offset a $1.0 million insurance recovery of previously incurred defense costs. -- The October 4, 2013 acquisition of a 61% interest in Imperium produced break even operating results.
Improved cost controls, in particular tighter adherence to agency-level labor staffing standards, improved the efficiency of care delivery lowering labor costs on improved volumes improving diluted EPS by $0.31 as compared to last year.
Excluding acquired revenue, Medicare rate cuts in the VN segment, from 2014's rebasing cuts and sequestration for episodes ending after March 31, 2013, reduced revenue and operating income by $3.3 million and diluted EPS from continuing operations by $0.21. VN segment Medicare admissions increased organically by 1.8%.
The effective tax rate for 2014 was 41.0% compared to 41.2% for 2013.
Reclassification of Segment Reporting
As previously announced the Company has updated its segment reporting to better help investors understand the performance of its core home health operations from its innovation activities. In addition certain portions of the Company's home health operations previously reported in its Visiting Nurse Segment have been reclassified to its Personal Care Segment. These operations, which generated about $11 million in revenue in 2014, have been reclassified in line with changes in the way in which information is provided to the Company's chief operating decision maker. Additionally, the Company believes that, due to their long-term and custodial nature and primary reimbursement source (Medicaid) presentation with the Personal Care Segment would be more meaningful to investors.
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (UNAUDITED) Three Months Ended Twelve Months Ended December 31, December 31, ------------ ------------ 2014 2013 2014 2013 ---- ---- ---- ---- Net revenues $124,756 $96,587 $495,829 $356,912 Cost of service revenues (excluding depreciation & amortization) 66,390 51,580 263,994 190,548 ------ ------ ------- ------- Gross margin 58,366 45,007 231,835 166,364 General and administrative expenses: Salaries and benefits 35,750 27,743 141,359 102,498 Other 15,366 12,644 60,522 44,750 Deal, transition and other (701) 3,336 5,312 4,323 ---- ----- ----- ----- Total general and administrative expenses 50,415 43,723 207,193 151,571 Operating income 7,951 1,284 24,642 14,793 Interest expense, net (362) (127) (1,435) (167) ---- ---- ------ ---- Income before income taxes 7,589 1,157 23,207 14,626 Income tax expense (3,266) (756) (9,511) (6,020) ------ ---- ------ ------ Net income from continuing operations 4,323 401 13,696 8,606 Discontinued operations: Loss from operations, net of tax of ($5), ($17), ($121) and $882 - (254) (172) (729) Gain on sale, net of tax of $973 - 3 - 171 --- --- --- --- Loss on discontinued operations - (251) (172) (558) --- ---- ---- ---- Net income 4,323 150 13,524 8,048 Net income - noncontrolling interests 424 178 239 178 --- --- --- --- Net income attributable to Almost Family, Inc. $4,747 $328 $13,763 $8,226 ====== ==== ======= ====== Per share amounts-basic: Average shares outstanding 9,352 9,308 9,333 9,279 Income from continuing operations attributable to Almost Family, Inc. $0.51 $0.06 $1.49 $0.95 Discontinued operations - (0.03) (0.02) (0.06) --- ----- ----- ----- Net income attributable to Almost Family, Inc. $0.51 $0.03 $1.47 $0.89 ===== ===== ===== ===== Per share amounts-diluted: Average shares outstanding 9,474 9,401 9,462 9,374 Income from continuing operations attributable to Almost Family, Inc. $0.50 $0.06 $1.47 $0.94 Discontinued operations - (0.03) (0.02) (0.06) --- ----- ----- ----- Net income attributable to Almost Family, Inc. $0.50 $0.03 $1.45 $0.88 ===== ===== ===== =====
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2014 ASSETS (UNAUDITED) December 31, 2013 ---------- ----------------- CURRENT ASSETS: Cash and cash equivalents $6,886 $12,246 Accounts receivable - net 74,894 59,902 Prepaid expenses and other current assets 10,420 9,854 Deferred tax assets 12,772 12,881 ------ ------ TOTAL CURRENT ASSETS 104,972 94,883 PROPERTY AND EQUIPMENT - NET 5,575 8,120 GOODWILL 192,523 192,489 OTHER INTANGIBLE ASSETS 54,402 53,174 OTHER ASSETS 558 775 --- --- TOTAL ASSETS $358,030 $349,441 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $9,257 $12,057 Accrued other liabilities 42,326 42,496 Current portion - notes payable and capital leases 51 702 --- --- TOTAL CURRENT LIABILITIES 51,634 55,255 LONG-TERM LIABILITIES: Revolving credit facility 46,447 56,000 Deferred tax liabilities 24,052 18,661 Other 2,705 1,815 ----- ----- TOTAL LONG-TERM LIABILITIES 73,204 76,476 TOTAL LIABILITIES 124,838 131,731 NONCONTROLLING INTEREST - REDEEMABLE - 3,639 3,639 HEALTHCARE INNOVATIONS 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; 9,574 and 9,500 issued and outstanding 957 950 Treasury stock, at cost, 94 and 92 shares of common stock (2,393) (2,340) Additional paid-in capital 105,863 103,858 Noncontrolling interest - nonredeemable (420) (186) Retained earnings 125,546 111,789 ------- ------- TOTAL STOCKHOLDERS' EQUITY 229,553 214,071 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $358,030 $349,441 ======== ========
ALMOST FAMILY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Twelve months Ended December 31, -------------------------------- 2014 2013 ---- ---- Cash flows of operating activities: Net income $13,524 $8,048 Loss on discontinued operations, net of tax (172) (558) ---- ---- Net income from continuing operations 13,696 8,606 Adjustments to reconcile income to net cash of operating activities: Depreciation and amortization 4,103 2,862 Provision for uncollectible accounts 9,413 5,378 Stock-based compensation 1,814 1,465 Deferred income taxes 5,500 2,099 34,526 20,410 Change in certain net assets and liabilities, net of the effects of acquisitions: Accounts receivable (24,824) (4,440) Prepaid expenses and other current assets (824) 4,229 Other assets 215 235 Accounts payable and accrued expenses (2,431) (888) ------ ---- Net cash provided by operating activities 6,662 19,546 ----- ------ Cash flows of investing activities: Capital expenditures (1,232) (2,502) Acquisitions, net of cash acquired (969) (88,465) ---- ------- Net cash used in investing activities (2,201) (90,967) ------ ------- Cash flows of financing activities: Credit facility repayments, net (9,553) 56,000 Proceeds from stock options exercises 156 11 Purchase of common stock in connection with share awards (52) (20) Tax impact of share awards 40 (62) Payment of special dividend in connection with share awards (35) - Principal payments on notes payable and capital leases (702) (720) Net cash (used in) provided by financing activities (10,146) 55,209 ------- ------ Cash flows from discontinued operations Operating activities 323 (742) Investing activities 2 3,080 --- ----- Net cash provided by discontinued operations 325 2,338 --- ----- Net change in cash and cash equivalents (5,360) (13,874) Cash and cash equivalents at beginning of period 12,246 26,120 Cash and cash equivalents at end of period $6,886 $12,246 ====== =======
ALMOST FAMILY, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (UNAUDITED) (In thousands) Three Months Ended December 31, ------------------------------- 2014 2013 Change ---- ---- ------ Amount % Rev Amount % Rev Amount % ------ ----- ------ ----- ------ --- Home Health Operations Net service revenues: Visiting Nurse $95,724 76.8% $72,055 74.8% $23,669 32.8% Personal Care 28,850 23.2% 24,336 25.2% 4,514 18.5% ------ ------ ----- 124,574 100.0% 96,391 100.0% 28,183 29.2% ------- ------ ------ Operating income before corporate expenses: Visiting Nurse 11,703 12.2% 8,142 11.3% 3,561 43.7% Personal Care 3,268 11.3% 2,688 11.0% 580 21.6% ----- ----- --- 14,971 12.0% 10,830 11.2% 4,141 38.2% Healthcare Innovations Revenue 182 196 (14) -7.1% Operating income before (408) -224.2% (482) -245.9% 74 -15.4% noncontrolling interest Corporate expenses 7,313 5.9% 5,728 5.9% 1,585 27.7% Deal and transition costs (701) -0.6% 3,336 3.5% (4,037) -121.0% ---- ----- ------ Operating income 7,951 6.4% 1,284 1.3% 6,667 519.2% Interest expense, net (362) -0.3% (127) -0.1% (235) 185.0% Income tax expense (3,266) -2.6% (756) -0.8% (2,510) 332.0% ------ ---- ------ Net income from continuing operations $4,323 3.5% $401 0.4% $3,922 978.1% ====== ==== ====== Adjusted EBITDA from home health operations $9,148 7.3% $6,477 6.7% $2,671 41.2% Adjusted earnings from home health operations $4,479 3.6% $2,740 2.8% $1,739 63.5%
ALMOST FAMILY, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (UNAUDITED) (In thousands) Twelve months Ended December 31, -------------------------------- 2014 2013 Change ---- ---- ------ Amount % Rev Amount % Rev Amount % ------ ----- ------ ----- ------ --- Home Health Operations Net service revenues: Visiting Nurse $380,788 77.2% $263,789 73.9% $116,999 44.4% Personal Care 112,497 22.8% 92,927 26.1% 19,570 21.1% ------- ------ ------ 493,285 100.0% 356,716 100.0% 136,569 38.3% ------- ------- ------- Operating income before corporate expenses: Visiting Nurse 46,224 12.1% 29,533 11.2% 16,691 56.5% Personal Care 12,968 11.5% 11,599 12.5% 1,369 11.8% ------ ------ ----- 59,192 12.0% 41,132 11.5% 18,060 43.9% Healthcare Innovations Revenue 2,544 196 2,348 1198.0% Operating income before (13) -0.5% (482) -245.9% 469 -97.3% noncontrolling interest Corporate expenses 29,225 5.9% 21,534 6.0% 7,691 35.7% Deal and transition costs 5,312 1.1% 4,323 1.2% 989 22.9% ----- ----- --- Operating income 24,642 5.0% 14,793 4.1% 9,849 66.6% Interest expense, net (1,435) -0.3% (167) 0.0% (1,268) 759.3% Income tax expense (9,511) -1.9% (6,020) -1.7% (3,491) 58.0% ------ ------ ------ Net income from continuing operations $13,696 2.8% $8,606 2.4% $5,090 59.1% ======= ====== ====== Adjusted EBITDA from home health operations 35,775 7.2% 24,017 6.7% 11,758 49.0% Adjusted earnings from home health operations $17,100 3.4% $11,533 3.2% $5,568 48.3%
VISITING NURSE SEGMENT OPERATING METRICS Three Months Ended December 31, ------------------------------- 2014 2013 Change Amount Amount Amount % ------ ------ ------ --- Average number of locations 160 130 30 23.1% All payors: Patient months 80,232 58,949 21,283 36.1% Admissions 24,612 17,489 7,123 40.7% Billable visits 631,145 480,727 150,418 31.3% Medicare: Admissions 21,782 88.5% 15,292 87.4% 6,490 42.4% Revenue (in thousands) $90,446 94.5% $68,676 95.3% $21,770 31.7% Revenue per admission 4,152 4,491 $(339) -7.5% Billable visits 566,868 89.8% 446,618 92.9% 120,250 26.9% Recertifications 11,913 9,258 2,655 28.7% Payor mix % of Admissions Traditional Medicare Episodic 84.2% 92.1% -7.9% Replacement Plans Paid Episodically 3.3% 2.9% 0.4% Replacement Plans Paid Per Visit 12.5% 5.0% 7.5% Non-Medicare: Admissions 2,830 11.5% 2,197 12.6% 633 28.8% Revenue (in thousands) $5,278 5.5% $3,379 4.7% $1,899 56.2% Revenue per admission 1,865 1,538 $327 21.3% Billable visits 64,277 10.2% 34,109 7.1% 30,168 88.4% Recertifications 499 403 96 23.8% Payor mix % of Admissions Medicaid & other governmental 25.6% 17.7% 7.9% Private payors 74.4% 82.3% -7.9% PERSONAL CARE OPERATING METRICS Three Months Ended December 31, ------------------------------- 2014 2013 Change ---- ---- ------ Amount Amount Amount % ------ ------ ------ --- Average number of locations 61 62 (1) -1.6% Admissions 1,619 1,204 415 34.5% Patient months of care 22,858 20,439 2,419 11.8% Billable hours 1,315,575 1,230,409 85,166 6.9% Revenue per billable hour $21.93 $19.78 $2.15 10.9% HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA Three Months Ended December 31, ------------------------------- 2014 2013 Change ---- ---- ------ Amount Amount Amount % ------ ------ ------ --- Medicare enrollees under management 53,901 28,735 25,166 87.6% ACOs under contract 7 3 4 133.3% Net income - noncontrolling interest (156) (186) 30 -16.1% Assets 9,287 9,642 (355) -3.7% Liabilities 180 645 (465) -72.1% Non-controlling interest - redeemable 3,639 3,639 - 0.0% Non-controlling interest - nonredeemable (5) (186) 181 -97.3%
VISITING NURSE SEGMENT OPERATING METRICS Twelve Months Ended December 31, -------------------------------- 2014 2013 Change Amount Amount Amount % ------ ------ ------ --- Average number of locations 167 111 56 50.5% All payors: Patient months 319,430 214,279 105,151 49.1% Admissions 98,634 64,304 34,330 53.4% Billable visits 2,507,067 1,759,864 747,203 42.5% Medicare: Admissions 87,650 88.9% 58,441 90.9% 29,209 50.0% Revenue (in thousands) $357,144 93.8% $254,012 96.3% $103,132 40.6% Revenue per admission 4,075 4,346 $(272) -6.3% Billable visits 2,259,896 90.1% 1,668,346 94.8% 591,550 35.5% Recertifications 47,875 33,597 14,278 42.5% Payor mix % of Admissions Traditional Medicare Episodic 84.0% 91.9% -7.9% Replacement Plans Paid Episodically 3.4% 2.6% 0.8% Replacement Plans Paid Per Visit 12.7% 5.5% 7.2% Non-Medicare: Admissions 10,984 11.1% 5,863 9.1% 5,121 87.3% Revenue (in thousands) $23,644 6.2% $9,777 3.7% $13,867 141.8% Revenue per admission 2,153 1,668 $485 29.1% Billable visits 247,171 9.9% 91,518 5.2% 155,653 170.1% Recertifications 1,865 1,230 635 51.6% Payor mix % of Admissions Medicaid & other governmental 23.3% 24.1% -0.8% Private payors 76.7% 75.9% 0.8% PERSONAL CARE OPERATING METRICS Twelve Months Ended December 31, -------------------------------- 2014 2013 Change ---- ---- ------ Amount Amount Amount % ------ ------ ------ --- Average number of locations 61 61 - 0.0% Admissions 6,458 4,723 1,735 36.7% Patient months of care 89,880 80,045 9,835 12.3% Billable hours 5,304,089 4,682,590 621,499 13.3% Revenue per billable hour $21.21 $19.85 $1.36 6.9% HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA Twelve Months Ended December 31, -------------------------------- 2014 2013 Change ---- ---- ------ Amount Amount Amount % ------ ------ ------ --- Medicare enrollees under management 53,901 28,735 25,166 87.6% ACOs under contract 7 3 4 133.3% Net income - noncontrolling interest (5) (186) 181 -97.3% Assets 9,287 9,642 (355) -3.7% Liabilities 180 645 (465) -72.1% Non-controlling interest - redeemable 3,639 3,639 - 0.0% Non-controlling interest - nonredeemable (5) (186) 181 -97.3%
Non-GAAP Financial Measures
The information provided in some of the tables in this release includes certain non-GAAP financial measures as defined under SEC rules. In accordance with SEC rules, the Company has provided, in the supplemental information, a reconciliation of those measures to the most directly comparable GAAP measures.
Adjusted Earnings from Home Health Operations
Adjusted earnings from home health operations 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 presentation of adjusted earnings from home health operations provides investors with pertinent information to enable comparison of financial performance between periods by excluding certain items that the Company believes are not representative of its ongoing operations due to the nature of the items.
The following tables set forth a reconciliation of net income attributable to Almost Family, Inc. to adjusted earnings from home health operations:
ALMOST FAMILY, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EARNINGS FROM HOME HEALTH OPERATIONS (In thousands) Three Months Ended Twelve months Ended December 31, December 31, ------------ ------------ (in thousands) 2014 2013 2014 2013 ---- ---- ---- ---- Net income attributable to Almost Family, Inc. $4,747 $328 $13,763 $8,226 Addbacks: Deal, transition and other, net of tax (417) 1,985 3,160 2,572 Loss on discontinued operations, net of tax - 251 172 558 Adjusted earnings 4,330 2,564 17,095 11,356 Healthcare Innovation operating loss after NCI, net of tax 149 176 5 176 Adjusted earnings from home health operations $4,479 $2,740 $17,100 $11,533 ====== ====== ======= ======= Per share amounts-diluted: Average shares outstanding 9,474 9,401 9,462 9,374 Net income attributable to Almost Family, Inc. $0.50 $0.03 $1.45 $0.88 Addbacks: Deal, transition and other, net of tax (0.04) 0.21 0.34 0.27 Loss on discontinued operations, net of tax - 0.03 0.02 0.06 Adjusted earnings 0.46 0.27 1.81 1.21 Healthcare Innovation operating loss after NCI, net of tax 0.01 0.02 0.00 0.02 Adjusted earnings from home health operations $0.47 $0.29 $1.81 $1.23 ===== ===== ===== =====
Adjusted EBITDA from Home Health Operations
Adjusted earnings before interest, income tax, depreciation and amortization, amortization of stock-based compensation, deal, transition and other and healthcare innovation operating loss (Adjusted EBTIDA from Home Health Operations) 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 Adjusted EBITDA from Home Health Operations are significant components in understanding and evaluating financial performance and liquidity. Management routinely calculates and communicates Adjusted EBITDA from Home Health Operations and believes that it is useful to investors because it provides a common analytical indicator within our industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value. Adjusted EBITDA is also used in certain covenants contained in our credit agreement.
The following tables set forth a reconciliation of net income from continuing operations to Adjusted EBITDA from Home Health Operations:
ALMOST FAMILY, INC. AND SUBSIDIARIES RECONCILIATION OF ADJUSTED EBITDA FROM HOME HEALTH OPERATIONS (In thousands) Three Months Ended Twelve months Ended December 31, December 31, ------------ ------------ (in thousands) 2014 2013 2014 2013 ---- ---- ---- ---- Net income from continuing operations $4,323 $401 $13,696 $8,606 Add back: Interest expense 362 127 1,435 167 Income tax expense 3,266 756 9,511 6,020 Depreciation and amortization 938 857 4,103 2,862 Stock-based compensation from home health operations 478 426 1,814 1,465 Deal and transition costs (701) 3,336 5,312 4,323 Adjusted EBITDA 8,666 5,903 35,871 23,443 Healthcare Innovation operating loss 482 574 (96) 574 Adjusted EBITDA from home health operations $9,148 $6,477 $35,775 $24,017 ====== ====== ======= =======
About Almost Family, Inc.
Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing services, with branch locations in Florida, Ohio, Tennessee, Kentucky, Connecticut, New Jersey, Massachusetts, Indiana, Pennsylvania, Georgia, Missouri, Illinois, Mississippi and Alabama (in order of revenue significance). Almost Family, Inc. and its subsidiaries operate a Medicare-certified segment, a personal care segment and a healthcare innovations segment. Almost Family operates over 220 branch locations in fourteen 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 including obtaining synergies, integration objectives and anticipated timelines; 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; the ability of the Company to integrate, manage and keep secure our information systems; 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, 2013, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and "Risk Factors." With regard to the Company's investments in its HealthCare Innovations segment, there can be no assurance that its operational and developmental objectives will be realized or that any savings in healthcare spending or any future participation in Medicare Shared Savings Program payments will be realized. The Company undertakes no obligation to update or revise its forward-looking statements.
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SOURCE Almost Family, Inc.