Almost Family, Inc. (Nasdaq:AFAM), a leading regional provider of home health nursing and personal care services, announced today its financial results for the quarter and full year ended December 30, 2016.

Twelve Month Accomplishments:

  • Established the largest home health-hospital joint venture in the nation on December 31, 2016 with Community Health System Inc., increasing our annual revenue run rate to $800 million.
  • Arranged a total financing package of one-half billion dollars with the completion of our $150 million equity offering in January of 2017 and the expansion of our existing Credit Facility to $350 million.
  • Achieved the first year of profitable results in our HealthCare Innovations segment with annual revenues approaching $30 million.
  • Formalized our commitment to implement point of care technology in our VN segment over the course of 2017.
  • Completed the integration of our 2015 and 2016 acquisitions.

Fourth Quarter Highlights (1):

  • Net service revenues of approximately $153.4 million
  • GAAP EPS of $0.35(2) per diluted share
  • Adjusted EPS of $0.59(2)
  • GAAP net income of $3.6 million
  • Adjusted net income of $6.1 million
  • Adjusted EBITDA of $13.0 million
  • Net cash from operating activities of $9.3 million

Fiscal Year Highlights (1):

  • Record Net service revenues of approximately $623.5 million
  • GAAP EPS of $1.71(2) per diluted share
  • Adjusted EPS of $2.38(2)
  • GAAP net income of $17.7 million
  • Adjusted net income of $24.6 million
  • Adjusted EBITDA of $53.5 million
  • Net cash from operating activities of $24.4 million

(1) See Non-GAAP Financial Measures starting on page 12(2) Note that comparability of EPS between years is partially impacted by changes in shares outstanding as explained further below

Management CommentsWilliam Yarmuth, Chairman and Chief Executive Officer, commented:  “In addition to reporting record revenues and continuing our growth trajectory, we are very pleased with the significant strides our Company has made over the last twelve months, foremost of which is our recent joint venture with Community Health Systems.  I am exceptionally pleased to welcome all the employees of CHS Home Health and Hospice to our growing family of care providers.  Additionally, we view the substantial expansion of capital through our new credit facility and recent public offering as validation of our strategic direction and recognition of the opportunities for the Company and our industry.”

Steve Guenthner, President added:  “As a result of our financing activities and strong operating cash flows, we have $200 million of capital availability, positioning us to continue our trajectory as a consolidator.  We are very optimistic about our ability to continue to source, negotiate, acquire and integrate quality providers.  Additionally, we plan to continue the solid foundation of work we have built with Federal and State regulators and policy makers helping them to understand how home health can be a key part of their efforts to lower costs while improving quality and patient satisfaction.”

Yarmuth concluded:  “I am particularly gratified by the progress we have made in our HealthCare Innovations segment achieving profitability in only its third full year of existence.  Our Imperium ACO enablement subsidiary is not only one of the largest but also one of the most successful ACO management organizations in the U.S.  As we move forward into 2017, we will continue our efforts to innovate and bring linkage between our HCI segment and our home health operations.  In closing, I would like to thank our more than 18,000 employees who come to work every day, ensuring our success and making lives better through home care for the hundreds of thousands of patients we serve every year.”

Fourth Quarter Financial ResultsVN segment net revenues increased $2.0 million to $107.5 million from $105.4 million in the prior year and total Medicare admissions grew by 2.0% to 23,516 from 23,062. On a same-store basis, Medicare episodic admissions outside of Florida grew by 4%, while Florida grew 1%.  VN segment contribution increased $0.8 million, or 6.0%, to $13.7 million, from $12.9 million in the prior year period.  Contribution margin as a percentage of revenue increased from 12.3% to 12.7%. 

PC segment net revenues increased $1.7 million or 4.3% to $40.3 million in 2016 from $38.6 million in 2015 primarily due to acquisitions.  PC segment contribution decreased $0.4 million as compared to the same period of last year, primarily due to rate cuts in Ohio and Connecticut’s Medicaid-sponsored behavioral health programs.  The rates cuts more than offset the earnings from acquisitions. 

Healthcare Innovations (HCI) segment net revenues increased $4.5 million to $5.7 million, in 2016 from $1.2 million in 2015.  As a result, operating income for the HCI segment was $0.6 million.

Corporate expenses as a percentage of revenue increased to 4.8%, from 4.3% in the prior year period.  Deal, transition and other costs were $4.4 million for 2016, primarily as a result of costs related to acquisitions and the commencement of our VN Segment’s company-wide clinical system conversion to HomeCare HomeBase.  Such implementation, training and related costs began in the fourth quarter of 2016 and are expected to continue throughout 2017.  Borrowings related to acquisitions increased interest expense to $1.4 million, from $0.8 million in the prior year period.

Net cash from operating activities of $9.3 million was generated in the fourth quarter of 2016.  Home Health accounts receivable days sales outstanding were 53 at the end of the fourth quarter of 2016, as compared to 58 at the end of the fourth quarter of 2015. 

The effective tax rate for the fourth quarter of 2016 and 2015 was 34.2% and 43.0%, respectively, primarily due to certain non-deductible deal and transaction costs in 2015.  Increased shares outstanding reduced Adjusted EPS of $0.59 for the fourth quarter of 2016 by $0.02 without which it would have been $0.61.

Fiscal Financial ResultsVN segment net revenues increased $35.1 million to a record $436.1 million from $401.1 million in the prior year period and total Medicare admissions grew by 4.0% to 95,487 from 91,823.  On a same-store basis, Medicare episodic admissions outside of Florida grew organically by 4% while Florida was down 2%.  VN segment contribution increased $6.7 million, or 13.4%, to $56.6 million, from $49.9 million in the same period last year.  Contribution margin as a percentage of revenue increased to 13.0% from 12.4%. 

PC segment net revenues increased $33.7 million or 26.4% to a record $161.4 million in 2016 from $127.7 million in 2015 primarily due to acquisitions.  PC segment contribution decreased 4.7% or $0.7 million due to rate cuts in certain skilled elements of the Connecticut and Ohio Medicaid programs that more than offset earnings from acquisitions.

HCI segment net revenues increased $22.6 million to a record $26.0 million in 2016 from $3.5 million in 2015, as acquired LTS and Ingenios assessment business revenues were $20.6 million with the remainder due to higher shared savings revenue as multiple Imperium served ACOs received Medicare shared savings payments.  LTS was acquired in January 2016 and Ingenios was acquired in July 2015.  The HCI segment contribution thus improved $6.9 million, as the segment was profitable for fiscal 2016.

Corporate expenses as a percentage of revenue declined to 4.6%, from 4.9% in the prior year period.  Deal, transition and other costs grew to $11.8 million for 2016, primarily as a result of costs related to acquisitions, while the prior year included a one-time $4.2 million benefit related to legal settlements.  Borrowings related to acquisitions increased interest expense to $5.8 million, from $2.3 million 2015.

Net cash from operating activities of $24.4 million was generated in 2016, up $3.2 million from the $21.2 million generated in 2015. 

The effective tax rate for 2016 and 2015 was 38.4% and 34.5%, respectively.  Increased shares outstanding reduced Adjusted EPS of $2.38 for 2016 by $0.15 without which it would have been $2.53.

The Company noted that it will continue to pursue quality acquisitions of in-home health care service providers consistent with its stated strategy and the types of services its segments currently provide.

Acquisition of the Home Health and Hospice Assets of Community Health Systems, Inc.On Saturday, December 31, 2016 (the first day of the Company’s 2017 fiscal year), the Company completed its acquisition of a controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. for $128.0 million, subject to a working capital adjustment.  The Company expects the transaction will add approximately $200 million in revenue, all of which will be classified in the Company’s VN segment.  The transaction expands the Company’s geographic service territory to a total of 26 states.  The Company funded the acquisition purchase price in a deposit on Friday, December 30, 2016 (the last day of the Company’s 2016 fiscal year).

Financing ActivitiesOn December 5, 2016 the Company announced the expansion of its credit facility from $175 million to $350 million.  All of its existing bank group upsized their positions and Capital One was added to the group.

On January, 25, 2017, the Company completed a public offering of 3.5 million shares of its common stock for gross proceeds in excess of $150 million.  The net proceeds of $144 million were applied to the Company’s revolving credit facility, which increased credit available under the Facility from approximately $78.6 million at December 30, 2016 to approximately $204.1 million after the offering.

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(UNAUDITED)
 
    Three months ended   Fiscal Year
    December 30, 2016   January 1, 2016     2016       2015  
Net service revenues   $ 153,427     $ 145,217     $ 623,541     $ 532,214  
Cost of service revenues (excluding depreciation & amortization)     83,475       77,696       335,472       281,842  
Gross margin     69,952       67,521       288,069       250,372  
General and administrative expenses:                
Salaries and benefits     42,222       38,856       168,356       147,849  
Other     16,615       18,241       72,939       66,000  
Deal, transition & other costs     4,387       4,835       11,842       4,139  
Total general and administrative expenses     63,224       61,932       253,137       217,988  
Operating income     6,728       5,589       34,932       32,384  
Interest expense, net     (1,442 )     (823 )     (5,776 )     (2,287 )
Income before income taxes     5,286       4,766       29,156       30,097  
Income tax expense     (1,864 )     (2,097 )     (10,984 )     (10,556 )
Net income     3,422       2,669       18,172       19,541  
Net loss (gain) - noncontrolling interests     170       137       (519 )     468  
Net income attributable to Almost Family, Inc.   $ 3,592     $ 2,806     $ 17,653     $ 20,009  
                 
Per share amounts-basic:                
Average shares outstanding     10,162       9,775       10,153       9,505  
                 
Net income attributable to Almost Family, Inc.   $ 0.35     $ 0.29     $ 1.74     $ 2.11  
                 
Per share amounts-diluted:                
Average shares outstanding     10,330       10,000       10,346       9,745  
                 
Net income attributable to Almost Family, Inc.   $ 0.35     $ 0.28     $ 1.71     $ 2.05  
                 
 

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    December 30, 2016   January 1, 2016
ASSETS            
CURRENT ASSETS:            
Cash and cash equivalents   $ 10,110     $ 7,522  
Accounts receivable - net     99,212       92,270  
Prepaid expenses and other current assets     11,432       9,672  
TOTAL CURRENT ASSETS     120,754       109,464  
PROPERTY AND EQUIPMENT - NET     10,732       10,000  
GOODWILL     305,476       277,061  
OTHER INTANGIBLE ASSETS - NET     85,063       64,629  
TRANSACTION DEPOSIT     128,930        
OTHER ASSETS     7,757       3,615  
TOTAL ASSETS   $ 658,712     $ 464,769  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
CURRENT LIABILITIES:            
Accounts payable   $ 12,122     $ 12,297  
Accrued other liabilities     39,728       42,524  
TOTAL CURRENT LIABILITIES     51,850       54,821  
             
LONG-TERM LIABILITIES:            
Revolving credit facility     262,456       113,790  
Deferred tax liabilities     21,145       13,094  
Seller notes     12,500       6,556  
Other liabilities     6,581       2,608  
TOTAL LONG-TERM LIABILITIES     302,682       136,048  
TOTAL LIABILITIES     354,532       190,869  
             
NONCONTROLLING INTEREST - REDEEMABLE -            
HEALTHCARE INNOVATIONS     2,256       3,639  
             
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; 10,504 and 10,125 issued and outstanding     1,051       1,013  
Treasury stock, at cost, 117 and 103 shares     (3,258 )     (2,731 )
Additional paid-in capital     141,233       127,253  
Retained earnings     163,763       145,456  
Almost Family, Inc. stockholders' equity     302,789       270,991  
Noncontrolling interest - nonredeemable     (865 )     (730 )
TOTAL STOCKHOLDERS’ EQUITY     301,924       270,261  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 658,712     $ 464,769  

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  Fiscal Year
    2016       2015  
Cash flows from operating activities:      
Net income $ 18,172     $ 19,541  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   4,445       3,927  
Provision for uncollectible accounts   11,708       12,743  
Stock-based compensation   2,760       2,121  
Loan costs amortization   336       281  
Deferred income taxes   8,725       3,914  
    46,146       42,527  
Change in certain net assets and liabilities, net of the effects of acquisitions:      
Accounts receivable   (18,701 )     (17,393 )
Prepaid expenses and other current assets   (377 )     2,402  
Other assets   (1,215 )     (585 )
Accounts payable and accrued expenses   (1,410 )     (5,745 )
Net cash provided by operating activities   24,443       21,206  
       
Cash flows of investing activities:      
Capital expenditures   (6,206 )     (3,117 )
Cost basis investment   -       (1,000 )
Transaction deposit   (128,930 )     -  
Acquisitions, net of cash acquired   (31,486 )     (82,578 )
Net cash used in investing activities   (166,622 )     (86,695 )
       
Cash flows of financing activities:      
Credit facility borrowings   389,328       233,425  
Credit facility repayments   (240,662 )     (166,082 )
Debt issuance fees   (3,900 )     (1,161 )
Proceeds from stock option exercises   230       128  
Purchase of common stock in connection with share awards   (527 )     (338 )
Tax impact of share awards   353       215  
Payment of special dividend in connection with share awards   -       (50 )
Principal payments on notes payable and capital leases   (55 )     (12 )
Net cash provided by financing activities   144,767       66,125  
       
Net change in cash and cash equivalents   2,588       636  
Cash and cash equivalents at beginning of period   7,522       6,886  
Cash and cash equivalents at end of period $ 10,110     $ 7,522  
       

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(UNAUDITED)
(In thousands)
 
    Three Months Ended            
    December 30, 2016   January 1, 2016   Change  
    Amount   % Rev   Amount   % Rev   Amount   %  
Home Health Operations                                
Net service revenues:                                
Visiting Nurse   $ 107,450     72.7 %   $ 105,424     73.2 %   $ 2,026     1.9 %  
Personal Care     40,293     27.3 %     38,626     26.8 %     1,667     4.3 %  
      147,743     100.0 %     144,050     100.0 %     3,693     2.6 %  
Operating income before corporate expenses:                                
Visiting Nurse     13,695     12.7 %     12,916     12.3 %     779     6.0 %  
Personal Care     4,239     10.5 %     4,600     11.9 %     (361 )   -7.8 %  
      17,934     12.1 %     17,516     12.2 %     418     2.4 %  
Healthcare Innovations Operations                                
Revenue     5,684     100.0 %     1,167     100.0 %     4,517     387.1 %  
Operating income (loss)     559     9.8 %     (783 )   -67.1 %     1,342     -171.4 %  
                                 
Corporate expenses     7,378     4.8 %     6,309     4.3 %     1,069     16.9 %  
Deal, transition and other costs     4,387     2.9 %     4,835     3.3 %     (448 )   -9.3 %  
Operating income     6,728     4.4 %     5,589     3.8 %     1,139     20.4 %  
Interest expense, net     (1,442 )   -0.9 %     (823 )   -0.6 %     (619 )   75.2 %  
Income tax expense     (1,864 )   -1.2 %     (2,097 )   -1.4 %     233     -11.1 %  
Net income   $ 3,422     2.2 %   $ 2,669     1.8 %   $ 753     28.2 %  
                                 
Adjusted EBITDA (1)   $ 13,029     8.5 %   $ 12,028     8.3 %   $ 1,001     8.3 %  
Adjusted net income (1)   $ 6,115     4.0 %   $ 5,803     4.0 %   $ 311     5.4 %  

(1) See Non-GAAP Financial Measures starting on page 12.

    Fiscal Year            
    2016     2015     Change  
    Amount   % Rev   Amount   % Rev   Amount   %  
Home Health Operations                                
Net service revenues:                                
Visiting Nurse   $ 436,147     73.0 %   $ 401,051     75.8 %   $ 35,096     8.8 %  
Personal Care     161,367     27.0 %     127,712     24.2 %     33,655     26.4 %  
      597,514     100.0 %     528,763     100.0 %     68,751     13.0 %  
Operating income before corporate expenses:                                
Visiting Nurse     56,574     13.0 %     49,872     12.4 %     6,702     13.4 %  
Personal Care     13,509     8.4 %     14,170     11.1 %     (661 )   -4.7 %  
      70,083     11.7 %     64,042     12.1 %     6,041     9.4 %  
Healthcare Innovations Operations                                
Revenue     26,027     100.0 %     3,451     100.0 %     22,576     654.2 %  
Operating income (loss)     5,657     21.7 %     (1,217 )   -35.3 %     6,874     564.8 %  
                                 
Corporate expenses     28,966     4.6 %     26,302     4.9 %     2,664     10.1 %  
Deal, transition and other costs     11,842     1.9 %     4,139     0.8 %     7,703     186.1 %  
Operating income     34,932     5.6 %     32,384     6.1 %     2,548     7.9 %  
Interest expense, net     (5,776 )   -0.9 %     (2,287 )   -0.4 %     (3,489 )   152.6 %  
Income tax expense     (10,984 )   -1.8 %     (10,556 )   -2.0 %     (428 )   4.1 %  
Net income   $ 18,172     2.9 %   $ 19,541     3.7 %   $ (1,369 )   -7.0 %  
                                 
Adjusted EBITDA (1)   $ 53,515     8.6 %   $ 42,571     8.0 %   $ 10,944     25.7 %  
Adjusted net income (1)   $ 24,640     4.0 %   $ 20,746     3.9 %   $ 3,894     18.8 %  

(1) See Non-GAAP Financial Measures starting on page 12.

VISITING NURSE SEGMENT OPERATING METRICS
 
    Three Months Ended            
    December 30, 2016   January 1, 2016   Change  
    Amount   %   Amount   %   Amount   %  
Average number of locations     169           165           4     2.4 %  
                                 
All payors:                                
Patient months     87,091           90,354           (3,263 )   -3.6 %  
Admissions     25,946           26,423           (477 )   -1.8 %  
Billable visits     686,982           694,783           (7,801 )   -1.1 %  
                                 
Medicare:                                
Admissions     23,516     91 %     23,062     87 %     454     2.0 %  
Revenue (in thousands)   $ 101,798     95 %   $ 96,897     92 %   $ 4,901     5.1 %  
Revenue per admission   $ 4,329         $ 4,202         $ 127     3.0 %  
Billable visits     616,077     90 %     614,182     88 %     1,895     0.3 %  
Recertifications     12,906           12,804           102     0.8 %  
Payor mix % of Admissions                                
Traditional Medicare Episodic     83.6 %         83.2 %         0.4 %      
Replacement Plans Paid Episodically     6.3 %         4.4 %         1.9 %      
Replacement Plans Paid Per Visit     10.1 %         12.4 %         -2.3 %      
                                 
Non-Medicare:                                
Admissions     2,430     9 %     3,361     13 %     (931 )   -27.7 %  
Revenue (in thousands)   $ 5,652     5 %   $ 8,527     8 %   $ (2,875 )   -33.7 %  
Revenue per admission   $ 2,326         $ 2,537         $ (211 )   -8.3 %  
Billable visits     70,905     10 %     80,601     12 %     (9,696 )   -12.0 %  
Recertifications     1,594           1,310           284     21.7 %  
Payor mix % of Admissions                                
Medicaid & other governmental     22.3 %         30.1 %         -7.8 %      
Private payors     77.7 %         69.9 %         7.8 %      
PERSONAL CARE SEGMENT OPERATING METRICS
 
    Three Months Ended            
    December 30, 2016   January 1, 2016   Change  
    Amount       Amount       Amount   %  
Average number of locations     79         73         6     8.2 %  
                                 
Admissions     1,996         2,076         (80 )   -3.9 %  
Patient months of care     43,615         36,605         7,010     19.2 %  
Billable hours     1,866,311         1,757,886         108,425     6.2 %  
Revenue per billable hour   $ 21.59       $ 21.97       $ (0.38 )   -1.7 %  

       

                                 
VISITING NURSE SEGMENT OPERATING METRICS  
                                 
    Fiscal Year            
    2016       2015   Change  
    Amount   %   Amount   %   Amount   %  
Average number of locations     166           163           3     1.8 %  
                                 
All payors:                                
Patient months     357,971           333,343           24,628     7.4 %  
Admissions     107,520           102,381           5,139     5.0 %  
Billable visits     2,861,962           2,621,443           240,519     9.2 %  
                                 
Medicare:                                
Admissions     95,487     89 %     91,823     90 %     3,664     4.0 %  
Revenue (in thousands)   $ 414,814     95 %   $ 377,724     94 %   $ 37,090     9.8 %  
Revenue per admission   $ 4,344         $ 4,114         $ 231     5.6 %  
Billable visits     2,537,873     89 %     2,364,404     90 %     173,469     7.3 %  
Recertifications     51,731           48,743           2,988     6.1 %  
Payor mix % of Admissions                                
Traditional Medicare Episodic     82.8 %         83.3 %         -0.5 %      
Replacement Plans Paid Episodically     5.5 %         4.1 %         1.4 %      
Replacement Plans Paid Per Visit     11.7 %         12.6 %         -0.9 %      
                                 
Non-Medicare:                                
Admissions     12,033     11 %     10,558     10 %     1,475     14.0 %  
Revenue (in thousands)   $ 21,333     5 %   $ 23,327     6 %   $ (1,994 )   -8.5 %  
Revenue per admission   $ 1,773         $ 2,209         $ (437 )   -19.8 %  
Billable visits     324,089     11 %     257,039     10 %     67,050     26.1 %  
Recertifications     4,063           2,329           1,734     74.5 %  
Payor mix % of Admissions                                
Medicaid & other governmental     37.8 %         30.6 %         7.2 %      
Private payors     62.2 %         69.4 %         -7.2 %      
                                 
PERSONAL CARE OPERATING METRICS  
                                 
    Fiscal Year            
    2016   2015   Change  
    Amount       Amount       Amount   %  
Average number of locations     75         65         10     15.4 %  
                                 
Admissions     9,671         6,879         2,792     40.6 %  
Patient months of care     165,995         108,512         57,483     53.0 %  
Billable hours     7,441,565         5,747,214         1,694,351     29.5 %  
Revenue per billable hour   $ 21.68       $ 22.22       $ (0.54 )   -2.4 %  

HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA
 
    Three Months Ended            
    December 30, 2016   January 1, 2016     Change  
    Amount   Amount     Amount   %  
In-home Assessments     19,641       3,432       16,209     NM    
                         
Medicare ACO enrollees under management     121,881       83,133       38,748     46.6 %  
ACOs under contract     15       11       4     36.4 %  
Assets   $ 60,159     $ 22,024     $ 38,135     173.2 %  
Liabilities   $ 15,735     $ (1,525 )   $ 17,260     NM    
Non-controlling interest - redeemable   $ 2,256     $ 3,639     $ (1,383 )   -38.0 %  
Non-controlling interest - nonredeemable   $ (71 )   $ (144 )   $ 73     -50.7 %  
                         
    Fiscal Year            
    2016   2015     Change  
    Amount   Amount     Amount   %  
In-home Assessments     75,814     5,394     70,420   NM    
                         
Medicare enrollees under management     121,881     83,133     38,748   46.6 %  
ACOs under contract     15     11     4   36.4 %  

Non-GAAP Financial MeasuresThe 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 Net Income and Adjusted Earnings Per Share Adjusted net income and adjusted earnings per share 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 net income and adjusted earnings per share 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 table sets forth a reconciliation of net income attributable to Almost Family, Inc. to adjusted net income:

ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(In thousands)
 
    Three Months Ended   Fiscal Year  
(in thousands)   December 30, 2016   January 1, 2016   2016   2015  
Net income attributable to Almost Family, Inc.   $ 3,592   $ 2,806   $ 17,653   $ 20,009  
                           
Addbacks:                          
Deal, transition and other, net of tax     2,523     2,997     6,987     737  
Adjusted net income attributable to Almost Family, Inc.   $ 6,115   $ 5,803   24,640   $ 20,746  
                           
Per share amounts-diluted:                          
Average shares outstanding     10,330     10,000     10,346     9,745  
                           
Net income attributable to Almost Family, Inc.   $ 0.35   $ 0.28   $ 1.71   $ 2.05  
                           
Addbacks:                          
Deal, transition and other, net of tax     0.24     0.30     0.68     0.08  
Adjusted net income attributable to Almost Family, Inc.   $ 0.59   $ 0.58   $ 2.38   $ 2.13  
                           

Adjusted EBITDA Adjusted earnings before interest, income tax, depreciation and amortization, amortization of stock-based compensation, deal, transition and other (Adjusted EBTIDA) 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 Operations are significant components in understanding and evaluating financial performance and liquidity.  Management routinely calculates and communicates Adjusted EBITDA 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 table sets forth a reconciliation of net income to Adjusted EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(In thousands)
 
    Three Months Ended   Fiscal Year  
(in thousands)   December 30, 2016   January 1, 2016   2016     2015  
Net income   $ 3,422   $ 2,669   $ 18,172     $ 19,541  
Add back:                            
Interest expense     1,442     823     5,776       2,287  
Income tax expense     1,864     2,097     10,984       10,556  
Depreciation and amortization     1,167     938     3,981       3,927  
Stock-based compensation     747     666     2,760       2,121  
Deal, transition and other costs     4,387     4,835     11,842       4,139  
Adjusted EBITDA   $ 13,029   $ 12,028   $ 53,515     $ 42,571  
                             

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including statements related to the offering and the expected use of the net proceeds. These forward-looking statements are based on current plans, expectations, projections, forecasts and assumptions about future events that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “could,” “would,” “estimate,” “project,” “forecast,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “target,” or similar terms, variations of those terms or the negative of those terms. While forward-looking statements reflect good faith beliefs, assumptions and expectations, they are not guarantees of future performance, and the Company undertakes no obligation to update or revise its forward-looking statements. The forward-looking statements in this news release are based on a variety of assumptions that may not be realized and that are subject to significant risks and uncertainties, including that the offering may not be completed. For a more complete discussion regarding 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 January 1, 2016, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and “Risk Factors.”

About Almost Family, Inc.

Almost Family, Inc., founded in 1976, is a leading national provider of home healthcare services, with 340 branch locations in 26 states, following the completion of its joint venture transaction with Community Health Systems, Inc. (CHS) (NYSE:CYH). Almost Family, Inc. and its subsidiaries operate a visiting nurse segment, a personal care segment and a HealthCare Innovations segment.

 

Almost Family, Inc.
Steve Guenthner
(502) 891-1000
Community Health Systems (NYSE:CYH)
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