Almost Family Reports Third Quarter and Year to Date 2017 Results

Confirms previously announced Hurricane impact

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| Source: Almost Family Inc

LOUISVILLE, Ky., Nov. 07, 2017 (GLOBE NEWSWIRE) -- Almost Family, Inc. (NASDAQ:AFAM), a leading national provider of home health and related services, announced today its financial results for the quarter ended September 29, 2017.  Investors are encouraged to read the Company’s press release dated October 9, 2017, “Almost Family Comments on Recent Developments Including Hurricane Impact”.

Third Quarter Highlights (1):

  • Net service revenues of approximately $194.3 million including the third quarter of operations of the CHS-JV, up 21.1% from the third quarter of 2016
  • GAAP net income of $3.2 million(3)
  • GAAP EPS of $0.23(2,3) per diluted share on 33% more shares outstanding than in the prior year
  • Adjusted EPS of $0.43(1,2,3); including the impact from the Hurricanes which lowered Adjusted EPS by $0.14(3)
  • Adjusted EBITDA of $14.6 (1,2) million; including the impact from the Hurricanes which lowered Adjusted EBITDA by $3.3 million(3)
  • Expect to record the Company’s share of the Medicare Shared Saving Program success fees under ACO contracts for the 2016 performance year in the fourth quarter of 2017 at between $2.0 million and $2.4 million
  • Clifford S. Holtz, COO of American Red Cross added to Almost Family Board of Directors

Year-to-Date Highlights (1):

  • Net service revenues of approximately $596.3 million including nine months of CHS-JV operations, up 26.9% from 2016
  • GAAP net income of $11.6 million(3)
  • Adjusted EPS of $1.53 (1,2,3)
  • Adjusted EBITDA of $49.6 (1,2,3) million
  • Year to date operating cash flows of $14.8 million
  • As of November 7, 2017, the Company has converted all of its home health branches to the new Homecare Homebase information system.  There will be no active patients remaining in the predecessor systems by the end of November 2017.  The Company has begun to experience meaningful operational efficiency gains, generally about 120 days after the end of each wave, and expects these gains to be partially reflected in its fourth quarter 2017 results and fully reflected in its results in its 2018 reporting year.

    (1) See Non-GAAP Financial Measures below
    (2) Note that comparability of EPS between years is partially impacted by changes in shares outstanding as explained further below
    (3) Impact of Hurricanes Irma and Harvey are explained further below

Management Comments
William Yarmuth, Chairman and CEO, commented:  We are very pleased with the results of our quarter and recent regulatory developments.  Over the course of this year we have successfully integrated the largest acquisition in our history.  We have also nearly completed, with minimal disruption, the implementation of HomeCare HomeBase in all 110 of our home health branches that were not previously on that system.  Lastly, we are pleased to have recovered from the substantial hurricane disruption, all the while continuing to grow our business and creating value for our shareholders over the course of this year.

Steve Guenthner, President added:  On the regulatory front, we feel we, in collaboration with others in the industry, have made a meaningful breakthrough in our work with CMS and other policy makers. In its final rule, CMS deferred implementation of the Home Health Grouper Model for further consideration in collaboration with stakeholders with a goal of shifting the focus from volume of services to a more patient-centered model.  We very much look forward to working with policy makers to help shape the next phase in the evolution of the Medicare home health payment system.

Yarmuth concluded:  I would like to thank all our employees and management team for their hard work and commitment in taking on the challenges and opportunities of the first nine months and helping to propel us to some very successful results.  Additionally, I would like to welcome Cliff Holtz who recently joined our Board of Directors.  Cliff brings a wealth of experience and knowledge and is a very welcome addition to what I feel is a very high quality committed group of directors.

Impact of Hurricanes on Operating Results
Third quarter operating results for the home health, personal care, hospice and assessment business lines were adversely impacted by Hurricanes Irma and Harvey (the “Hurricanes”).  Due to the early warnings and evacuations related to these storms, the periods of disruption started well in advance of each storm actually striking affected areas, while recovery periods were elongated.  The Hurricanes impacted operations in Florida, Georgia and Texas, which are the source of approximately one quarter of the Company’s revenue.  The hurricanes resulted in lost admissions, visits, assessments and revenue.  The Company estimates operating income was lowered by approximately $3.3 million, or $0.14 EPS, in the third quarter of 2017.  Due to the proximity of these events to the end of the third quarter, there may be some residual hurricane effect on fourth quarter results. 

Third Quarter Financial Results (See Matters Impacting Comparability and Presentation below)
Home Health (HH) segment net revenues increased by 31% or $33.3 million to $141.4 million from $108.1 million in the prior year and episodic admissions grew by 35.6% to 28,148 from 20,751 as the CHS-JV acquisition more than offset the impact from the Hurricanes.  Net revenue and episodic admissions in the CHS-JV acquisition were $40.4 million and 7,665, respectively. 

Home Health segment contribution before corporate expenses increased $4.3 million, or 34.2%, to $17.0 million, from $12.7 million in the prior year period.  Home Health contribution margins as a percentage of revenue increased slightly to 12.0% from 11.7%, despite the hurricane effect partially due to synergies obtained from the Homecare Homebase conversion.  The Company estimates the hurricanes lowered third quarter 2017 revenue and contribution by $3.0 million and $2.6 million, respectively in the HH segment, resulting in a 1.6% reduction in contribution margin as a percent of revenue.

Other Home-Based Services (OHBS) segment net revenues increased $4.4 million or 10.5% to $46.4 million in 2017 from $42.0 million, primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $7.8 million for the quarter.  Personal care revenues were down $3.1 million or 7.5% from prior year on lower volumes.  Additionally, mix changes combined with rate cuts and increases in wages influenced by increases in statutory minimum wage rates in certain states negatively impacted personal care margins.  Overall OHBS segment contribution before corporate expenses increased $1.1 million, or 43.1% to $3.6 million from $2.5 million for the same period last year. 

Healthcare Innovations (HCI) segment net revenues and operating income were $6.5 million and $0.8 million in 2017 as compared to $10.3 million and $5.1 million in 2016, respectively, largely due to the prior year including $4.3 million of ACO shared savings payments.  We expect to record ACO payments in the fourth quarter of 2017 ranging from $2.0 to $2.4 million. 

Corporate expenses as a percentage of revenue increased to 4.8% in 2017 from 4.3% in 2016, primarily on higher information systems costs.  Deal, transition and other costs were $4.5 million, primarily due to the ongoing conversion of the HH segment to the Homecare Homebase information system.  Such training and related costs are expected to continue through the end of 2017, but not be significant in 2018. 

The effective tax rates for the third quarter of 2017 and 2016 were 40.8% and 37.3%, respectively. 

Increased average shares outstanding from the Company’s late January sale of common shares reduced Adjusted EPS of $0.43 for the third quarter of 2017 by $0.14.  The third quarter is fully reflective of the dilutive effect of this offering.

Year to Date Financial Results (See Matters Impacting Comparability and Presentation below)
Home Health segment net revenues increased by $113.1 million or 34.5% to $441.0 million from $327.9 million in the prior year and episodic admissions grew by 40.9% to 89,199 from 63,295 in 2016, primarily due to the CHS-JV acquisition.  Net revenue and episodic admissions in the CHS-JV were $125.2 million and 24,607, respectively.  Excluding the CHS-JV, episodic admissions grew by approximately 2%.

Home Health segment contribution before corporate expenses increased $14.1 million, or 32.9%, to $57.1 million, from $43.0 million in the prior year period.  Home Health contribution margins as a percentage of revenue decreased to 12.9% from 13.1% in the prior year, due to the combined impact of a 1% Medicare rate cut and an annual cost of living wage rate adjustment of 2%, both effective January 1, 2017.

Other Home-Based Services (OHBS) segment net revenues increased $16.6 million or 13.6% to $138.5 million from $121.9 million, primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $22.1 million.  Personal care revenues were down $4.7 million or 3.9% from prior year on lower volumes.  Additionally, mix changes combined with rate cuts and increases in wages influenced by increases in statutory minimum wage rates in certain states negatively impacted personal care margins.  Overall OHBS segment contribution before corporate expenses increased $2.2 million or 24.1%, as compared to the same period of last year.

Healthcare Innovations (HCI) segment net revenues decreased $3.5 million to $16.9 million from $20.3 million, while operating income before corporate expenses decreased $4.3 million, largely due to prior year period including $4.3 million of ACO shared savings payments.

Corporate expenses as a percentage of revenue was unchanged from the prior year period at 4.5%.  Deal, transition and other costs were $17.1 million, due to the CHS-JV acquisition and the conversion of the HH segment to the Homecare Homebase information system.  Borrowings related to acquisitions increased interest expense to $5.8 million from $4.7 million in the prior year period.

Net cash from operating activities of $14.8 million was generated in the first nine months of 2017.  Accounts receivable days sales outstanding were 60 at the end of the third quarter of 2017, as compared to 57 days in the second quarter of 2017 and 53 days at the end of the fourth quarter of 2016.  Increases in days outstanding were largely driven by backlogs in final claims in our Home Health segment, a portion of which was due to the timing of Hurricane Irma in Florida, which delayed payments from Medicare into the fourth quarter.

The effective tax rates for 2017 and 2016 were 33.0% and 39.3%, respectively.  The Company’s lower effective income tax rate in 2017 was due to a change in accounting rules for excess tax benefits from the exercise of stock options and vesting of restricted shares as a result of the prospective adoption of Accounting Standards Update 2016-09 as of the first day of fiscal 2017.  Under previous accounting rules these benefits were recorded in “additional paid-in capital” rather than in the current period tax provision.  Future periods with option exercises or restricted stock vesting could lower or raise the Company’s tax provision in those periods.  Excluding these items, the Company expects its effective tax rate for 2017 to be 39.5%.

Increased average shares outstanding from the Company’s late January sale of common shares reduced Adjusted EPS of $1.53 for 2017 by $0.46. 

Medicare Program Developments
On November 1, 2017 the Centers for Medicare and Medicaid Services (CMS) released the final rule for FY2018 home health reimbursement.  Among other things, the rule also finalizes proposals for the Home Health Value-Based Purchasing (HHVBP) Model and the Home Health Quality Reporting Program (HH QRP).  CMS did not finalize the Home Health Groupings Model, but instead elected to “further engage with stakeholders to move towards a system that shifts the focus from volume of services to a more patient-centered model”.  The FY2018 impact table included in the final rule suggests the final rule is in line with the preliminary rule published earlier this year.   On September 25, 2017, the Company submitted a comment letter to CMS which provides an alternative course of action that we believe better protects Medicare beneficiaries and their right to access appropriate and necessary home health service.  The comment letter to CMS entitled “CY 2018 Home Health Prospective Payment System Rate Update – September 2017” can be found at http://www.almostfamily.com/pdf/AFAM_2018_HHPPS_Rule_Comments_and_Attachments.pdf.  Additionally, a series of responses to various other stakeholder requests from the Senate Finance Committee, the House Ways and Means Committee and CMS dating to 2013 and including AFAM executive testimony before the Congress can also be found at the above website. 

Matters Impacting Comparability and Presentation – CHS-JV and Segment Presentation
On the first day of fiscal 2017, the Company acquired an 80% controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. (NYSE:CYH) (“CHS-JV”).  Community Health Systems, Inc. ("CHS"), one of the largest publicly-traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country, retained the remaining 20%. 

In the first quarter in 2017, the Company redefined its reporting segments to include a) Home Health (HH) formerly Visiting Nurse, b) Other Home-Based Services (OHBS) which includes all other home care services outside of Home Health services and c) the Healthcare Innovations (HCI) segment.  The OHBS segment consists of the historical personal care (“personal care”) operations plus hospice services.  Prior year segment information has been reclassified to conform to new segment definitions.  In management’s opinion, this approach provides investors clarity for the largest segment, Home Health, and best aligns with the Company’s internal decision-making processes as viewed by the chief operating decision maker.

Financing Activities
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.

Acquisitions
On July 14, 2017, the Company’s CHS-JV purchased assets of a Medicare-certified home health agency and related private duty company for Island Home Care in Key West, Florida.  The purchase price was $1.2 million.  Post-acquisition operating results are reported in the Company’s HH and OHBS segments.

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.

Addition of New Director
On November 6, 2017 the Company added Mr. Clifford S. Holtz as the newest member of its board of directors.  Mr. Holtz currently serves as the Chief Operating Officer of the American Red Cross where he has been instrumental in that organization’s growth and development since 2011.  Prior to his Red Cross experience Mr. Holtz has enjoyed a long and successful business career in key roles at AT&T, Nortel Networks and Qwest Communications.  He is a graduate of the University of Chicago Graduate School of Business.

 

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
        
 Quarter ended Nine months ended
 September 29, 
2017
 September 30, 
2016
 September 29, 
2017
 September 30, 
2016
Net service revenues$194,302 $160,421 $596,347 $470,114
Cost of service revenues (excluding depreciation & amortization)  103,777   86,074   314,097   251,998
Gross margin  90,525   74,347   282,250   218,116
General and administrative expenses:       
Salaries and benefits  54,840   42,952   167,743   126,134
Other  23,631   18,029   72,252   55,974
Deal, transition & other costs  4,467   2,257   17,122   7,455
Total general and administrative expenses  82,938   63,238   257,117   189,563
Operating income  7,587   11,109   25,133   28,553
Interest expense, net  1,668   1,537   5,794   4,684
Income before noncontrolling interests and income taxes  5,919   9,572   19,339   23,869
Net income - noncontrolling interests  561   1,012   2,046   689
  Income before income tax expense  5,358   8,560   17,293   23,180
Income tax expense  2,188   3,194   5,713   9,120
Net income attributable to Almost Family, Inc.$3,170 $5,366 $11,580 $14,060
        
Per share amounts-basic:       
Average shares outstanding  13,731   10,172   13,385   10,150
        
Net income attributable to Almost Family, Inc.$0.23 $0.53 $0.87 $1.39
        
Per share amounts-diluted:       
Average shares outstanding  13,941   10,310   13,627   10,328
        
Net income attributable to Almost Family, Inc.$0.23 $0.52 $0.85 $1.36
        
 

 

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
        
  (Unaudited)    
  September 29, 2017 December 30, 2016 
ASSETS       
CURRENT ASSETS:       
Cash and cash equivalents $19,149  $10,110  
Accounts receivable - net  131,873   99,212  
Prepaid expenses and other current assets  16,711   11,432  
TOTAL CURRENT ASSETS  167,733   120,754  
PROPERTY AND EQUIPMENT - NET  16,489   10,732  
GOODWILL  390,552   305,476  
OTHER INTANGIBLE ASSETS - NET  145,363   85,063  
TRANSACTION DEPOSIT   —   128,930  
ASSETS HELD FOR SALE  3,800    —  
OTHER ASSETS  7,936   7,757  
TOTAL ASSETS $731,873  $658,712  
        
LIABILITIES AND STOCKHOLDERS’ EQUITY        
 CURRENT LIABILITIES:       
Accounts payable $19,218  $12,122  
Accrued other liabilities  50,693   39,728  
TOTAL CURRENT LIABILITIES  69,911   51,850  
        
LONG-TERM LIABILITIES:       
Revolving credit facility   120,374    262,456  
Deferred tax liabilities   26,769    21,145  
Seller notes   12,761    12,500  
Other liabilities   7,270    6,581  
TOTAL LONG-TERM LIABILITIES   167,174    302,682  
TOTAL LIABILITIES   237,085    354,532  
        
NONCONTROLLING INTEREST - REDEEMABLE -       
HEALTHCARE INNOVATIONS   2,256    2,256  
        
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; 14,133 and 10,504 issued and outstanding   1,414    1,051  
Treasury stock, at cost, 169 and 117 shares   (5,825)   (3,258) 
Additional paid-in capital   288,329    141,233  
Retained earnings   174,962    163,763  
Almost Family, Inc. stockholders' equity   458,880    302,789  
Noncontrolling interests - nonredeemable   33,652    (865) 
TOTAL STOCKHOLDERS’ EQUITY   492,532    301,924  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 731,873  $ 658,712  

 

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
    
 Nine months ended
 September 29, 2017 September 30, 2016
Cash flows from operating activities:   
Net income attributable to Almost Family, Inc.$11,580  $14,060 
Net income attributable to noncontrolling interests  2,046    689 
Income before non-controlling interests  13,626    14,749 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization  4,924    2,813 
Provision for uncollectible accounts  11,151    10,626 
Stock-based compensation  2,094    2,013 
Loan costs amortization  706    207 
Deferred income taxes  5,624    6,081 
   38,125    36,489 
Change in certain net assets and liabilities, net of the effects of acquisitions:   
Accounts receivable  (22,302)   (12,831)
Prepaid expenses and other current assets  (4,625)   (4,451)
Other assets  (875)   (620)
Accounts payable and accrued expenses  4,476    (3,302)
Net cash provided by operating activities  14,799    15,285 
    
Cash flows of investing activities:   
Capital expenditures  (5,346)   (4,364)
Transaction deposit  128,930    - 
Acquisitions, net of cash acquired  (130,069)   (31,256)
Net cash used in investing activities  (6,485)   (35,620)
    
Cash flows of financing activities:   
Credit facility borrowings  202,934    215,430 
Credit facility repayments, net  (345,016)   (195,396)
Debt issuance fees  -    (102)
Proceeds from stock offering, net  143,908    - 
Proceeds from stock option exercises  1,505    (9)
Purchase of common stock in connection with share awards  (2,567)   (484)
Tax impact of share awards  -    257 
Principal payments on notes payable and capital leases  (39)   (56)
Net cash provided by financing activities  725    19,640 
    
Net change in cash and cash equivalents  9,039    (695)
Cash and cash equivalents at beginning of period  10,110    7,522 
Cash and cash equivalents at end of period$19,149  $6,827 
    

 

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
                
  Quarter ended     
  September 29, 2017 September 30, 2016 Change
  Amount % Rev Amount % Rev Amount %
Net service revenues:               
Home Health $ 141,434 72.8%$ 108,138 67.4%$ 33,296  30.8
Other Home-Based Services   46,378 23.9%  41,975 26.2%  4,403  10.5
Healthcare Innovations   6,490 3.3%  10,308 6.4%  (3,818) (37.0)%
    194,302 100.0%  160,421 100.0%  33,881  21.1
Operating income before corporate expenses:               
Home Health   16,992 12.0%  12,657 11.7%  4,335  34.2
Other Home-Based Services   3,579 7.7%  2,501 6.0%  1,078  43.1
Healthcare Innovations   812 12.5%  5,051 49.0%  (4,239) (83.9)%
    21,383 11.0%  20,209 12.6%  1,174  5.8
                
Corporate expenses   9,329 4.8%  6,843 4.3%  2,486  36.3
Deal, transition and other costs   4,467 2.3%  2,257 1.4%  2,210  97.9
Operating income   7,587 3.9%  11,109 6.9%  (3,522) (31.7)%
Interest expense, net   1,668 0.9%  1,537 1.0%  131  8.5
Net income - noncontrolling interests   561 0.3%  1,012 0.6%  (451) NM 
Net income before income taxes   5,358 2.8%  8,560 5.3% $ (3,202) (37.4)%
Income tax expense  2,188 1.1% 3,194 2.0%  (1,006) (31.5)%
Net income attributable to Almost Family, Inc. $ 3,170 1.6%$ 5,366 3.3%$$ (2,196) (40.9)%
                
                
Adjusted EBITDA (1) $ 14,571 7.5%$ 15,110 9.4%$$ (539) (3.6)%
Adjusted net income (1) $ 5,944 3.1%$ 6,781 4.2%$$ (837) (12.3)%
                
(1) See Non-GAAP Financial Measures below.               


                
  Nine months ended     
  September 29, 2017 September 30, 2016 Change
  Amount % Rev Amount % Rev Amount %
Net service revenues:               
Home Health $ 440,962 73.9%$ 327,899 69.7%$ 113,063  34.5%
Other Home-Based Services   138,495 23.2%  121,871 25.9%  16,624  13.6%
Healthcare Innovations   16,890 2.8%  20,344 4.3%  (3,454) (17.0)%
    596,347 100.0%  470,114 100.0%  126,233  26.9%
Operating (loss) income before corporate expenses:               
Home Health   57,087 12.9%  42,964 13.1%  14,123  32.9%
Other Home-Based Services   11,444 8.3%  9,223 7.6%  2,221  24.1%
Healthcare Innovations   796 4.7%  5,098 25.1%  (4,302) (84.4)%
    69,327 11.6%  57,285 12.2%  12,042  21.0%
                
Corporate expenses   27,072 4.5%  21,277 4.5%  5,795  27.2%
Deal, transition and other costs   17,122 2.9%  7,455 1.6%  9,667  129.7%
Operating income   25,133 4.2%  28,553 6.1%  (3,420) (12.0)%
Interest expense, net   5,794 1.0%  4,684 1.0%  1,110  23.7%
Net income - noncontrolling interests   2,046 0.3%  689 0.1%  1,357  NM 
Net income before income taxes   17,293 2.9%  23,180 4.9% $ (5,887) (25.4)%
Income tax expense  5,713 1.0% 9,120 1.9%  (3,407) (37.4)%
Net income attributable to Almost Family, Inc. $ 11,580 1.9%$ 14,060 3.0%$$ (2,480) (17.6)%
                
                
Adjusted EBITDA (1) $ 49,605 8.3%$ 41,229 8.8%$  8,376  20.3%
Adjusted net income (1) $ 20,870 3.5%$ 18,570 4.0%$  2,300  12.4%
                
(1) See Non-GAAP Financial Measures below.               

 

HOME HEALTH OPERATING METRICS
                
  Quarter ended     
  September 29, 2017 September 30, 2016 Change
  Amount % Rev Amount % Rev Amount %
Locations   241     168    73   43.5%
                
All payors:               
Admissions   38,314     25,788     12,526   48.6%
Census   30,809     23,177     7,632   32.9%
Visits   898,786     711,998     186,788   26.2%
Cost per visit $ 79   $ 76   $ 3   3.6%
G&A expense per census $ 1,748   $ 1,791   $ (43)  (2.4)%
                
Episodic:               
Admissions   28,148     20,751     7,397   35.6%
Census   23,466     18,045     5,421   30.0%
Episodes   42,773     32,260     10,513   32.6%
Visits    703,390     574,505     128,885   22.4%
Revenue  (in thousands) $ 119,617  84.6$ 94,709  87.6$ 24,908   26.3%
Revenue per episode $ 2,797   $ 2,936   $ (139)  (4.7)%
Visits per episode   16.4     17.8     (1.4)  (7.7)%
                
Non-episodic:               
Admissions   10,166     5,037     5,129   101.8%
Census   7,343     5,132     2,211   43.1%
Visits   195,396     137,493     57,903   42.1%
Revenue  (in thousands) $ 21,817  15.4$ 13,429  12.4$ 8,388   62.5%
Revenue per visit $ 112   $ 98   $ 14   14.3%
Visits per admission   19.2     27.3     (8.1)  (29.6)%
                

 

 HOME HEALTH OPERATING METRICS 
 
  Nine months ended     
  September 29, 2017 September 30, 2016 Change
  Amount % Rev Amount % Rev Amount %
Locations   241     168    73   43.5%
                
All payors:               
Admissions   119,499     81,630     37,869   46.4%
Census   31,243     23,237     8,006   34.5%
Visits   2,812,594     2,183,295     629,299   28.8%
Cost per visit $ 77   $ 73   $ 3   4.5%
G&A expense per census $ 5,388   $ 5,374   $ 14   0.3%
                
Episodic:               
Admissions   89,199     63,295     25,904   40.9%
Census   23,959     17,917     6,042   33.7%
Episodes   133,973     97,575     36,398   37.3%
Visits    2,216,441     1,751,313     465,128   26.6%
Revenue  (in thousands) $ 376,670  85.4$ 285,446  87.1$ 91,224   32.0%
Revenue per episode $ 2,812   $ 2,925   $ (114)  (3.9)%
Visits per episode   16.5     17.9     (1.4)  (7.8)%
                
Non-episodic:               
Admissions   30,300     18,335     11,965   65.3%
Census   7,284     5,320     1,964   36.9%
Visits   596,153     431,982     164,171   38.0%
Revenue  (in thousands) $ 64,292  14.6$ 42,453  12.9$ 21,839   51.4%
Revenue per visit $ 108   $ 98   $ 10   9.7%
Visits per admission   19.7     23.6     (3.9)  (16.5)%

 

OTHER HOME-BASED SERVICES OPERATING METRICS
                  
  Quarter ended      
  September 29, 2017  September 30, 2016  Change
  Amount % Rev  Amount % Rev  Amount %
Personal Care:                 
Locations   75      80      (5) (6.3)%
Admissions   2,259      2,638       (379) (14.4)%
Census   12,475      14,092       (1,617) (11.5)%
Hours of service   1,783,018      1,953,224       (170,206) (8.7)%
Hours per patient per week   11.0      10.7       0.3  3.1%
Revenue  (in thousands) $ 38,572  83.2% $ 41,688   99.3% $ (3,116) (7.5)%
Operating income (in thousands) $ 2,228    $ 2,540     $ (312) (12.3)%
Revenue per hour $ 21.63    $ 21.34     $ 0.29  1.4%
Cost per hour $ 13.30    $ 13.39     $ (0.09) (0.7)%
                  
Hospice:                 
Locations   16      1      15  NM 
Admissions   680      33       647  NM 
Census   492      22       470  NM 
Length of stay   60      40       20  50.0%
Revenue  (in thousands) $ 7,807  16.8% $ 287   0.7% $ 7,520  NM 
Operating income (loss) (in thousands) $ 1,351    $ (39)    $ 1,390  NM 
Revenue per day $ 169    $ 142     $ 27  19.0%


                  
  Nine months ended      
  September 29, 2017  September 30, 2016  Change
  Amount % Rev  Amount % Rev  Amount %
Personal Care:                 
Locations   75      80      (5) (6.3)%
Admissions   7,137      7,675       (538) (7.0)%
Census   12,669      13,177       (508) (3.9)%
Hours of service   5,425,767      5,659,370       (233,603) (4.1)%
Hours per patient per week   11.0     11.0       (0.0) (0.3)%
Revenue  (in thousands) $ 116,374 84.0% $ 121,075  99.3% $ (4,701) (3.9)%
Operating income (in thousands) $ 7,489    $ 9,285     $ (1,796) (19.3)%
Revenue per hour $ 21.45    $ 21.39     $ 0.05  0.3%
Cost per hour $13.15    $ 13.39     $ (0.24) (1.8)%
                  
Hospice:                 
Locations   16      1      15  NM 
Admissions   2,188      82       2,106  NM 
Census   482      21      461  NM 
Length of stay   58      38       20  51.7%
Revenue  (in thousands) $ 22,122 16.0% $ 796  0.7% $ 21,326  NM 
Operating income (loss) (in thousands) $ 3,955    $ (62)    $ 4,017  NM 
Revenue per day $168    $ 141     $27  19.0%

 

HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA
            
  Quarter ended     
  September 29, 2017 September 30, 2016  Change
  Amount Amount  Amount %
            
ACO Management:           
Medicare ACO enrollees under management   141,556    121,881   19,675   16.1%
ACOs under contract   15    14   1   7.1%
Revenue (in thousands) $ 767  $ 4,619 $ (3,852)  (83.4)%
Operating (loss) income (in thousands) $ (386) $ 3,832 $ (4,218)  110.1%
            
Assessment Services           
Assessments   24,452    21,019   3,433   16.3%
Revenue (in thousands) $ 5,723  $ 5,689 $ 34   0.6%
Operating income (in thousands) $ 1,198  $ 1,219 $ (21)  (1.7)%
            


            
  Nine months ended     
  September 29, 2017 September 30, 2016  Change
  Amount Amount  Amount %
            
ACO Management:           
Medicare ACO enrollees under management   141,556    121,881   19,675   16.1
ACOs under contract   15    14   1   7.1
Revenue (in thousands) $ 1,957  $ 4,955 $ (2,998)  (60.5)%
Operating (loss) income (in thousands) $ (1,355) $ 2,961 $ (4,316)  145.8
            
Assessment Services           
Assessments   61,948    56,414   5,534   9.8
Revenue (in thousands) $ 14,933  $ 15,389 $ (456)  (3.0)%
Operating income (in thousands) $ 2,151  $ 2,137 $ 14   0.7
               

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 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)
              
  Quarter ended Nine months ended 
(in thousands) September 29, 
2017
 September 30, 
2016
 September 29, 
2017
 September 30, 
2016
 
Net income attributable to Almost Family, Inc. $ 3,170 $ 5,366 $ 11,580 $ 14,060 
              
Addbacks:             
Deal, transition and other costs, net of tax   2,774   1,415   9,290   4,510 
Adjusted net income attributable to Almost Family, Inc. $ 5,944 $ 6,781 $ 20,870 $ 18,570 
              
Per share amounts-diluted:             
Average shares outstanding   13,941   10,310   13,627   10,328 
              
Net income attributable to Almost Family, Inc. $ 0.23 $ 0.52 $ 0.85 $ 1.36 
              
Addbacks:             
Deal, transition and other costs, net of tax   0.20   0.14   0.68   0.44 
Adjusted net income attributable to Almost Family, Inc. $ 0.43 $ 0.66 $ 1.53 $ 1.80 
              

Adjusted EBITDA
Adjusted earnings before interest, income and franchise taxes, depreciation and amortization, amortization of stock-based compensation, deal, transition and other (Adjusted 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 Adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity.  Management routinely calculates and communicates Adjusted EBITDA and believes that it is useful to investors because it provides a common analytical indicator within its 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 the Company’s 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)
               
  Quarter ended Nine months ended 
(in thousands) September 29, 
2017
 September 30, 
2016
 September 29, 
2017
  September 30, 
2016
 
Net income $ 3,170 $ 5,366 $ 11,580  $ 14,060 
Add back:              
Net (loss) income - noncontrolling interests   561   1,012   2,046    689 
Interest expense   1,668   1,537   5,794    4,684 
Income tax expense   2,188   3,194   5,713    9,120 
Franchise taxes   230   182   697    454 
Depreciation and amortization   1,607   950   4,559    2,754 
Stock-based compensation   680   612   2,094    2,013 
Deal, transition and other costs   4,467   2,257   17,122    7,455 
Adjusted EBITDA $ 14,571 $ 15,110 $ 49,605  $ 41,229 
               

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. 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 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; changes to the Medicare Shared Savings Programs; 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; unanticipated difficulties or expenditures relating to acquisition transactions, including, without limitation, difficulties that result in the failure to achieve expected synergies, efficiencies and cost savings from a transaction within the expected time period (if at all); 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; changes in the marketplace and regulatory environment for Health Risk Assessments and the Company’s self-insurance risks.  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 December 30, 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 332 branch locations in 26 states, including its joint venture with Community Health Systems, Inc. (CHS) (NYSE:CYH). Almost Family, Inc. and its subsidiaries operate Home Health, Other Home-Based Services and HealthCare Innovations segments.