FY 2005 EPS from Continuing Operations up 50% over 2004, excluding
one-time items
LOUISVILLE, Ky., March 8 /PRNewswire-FirstCall/ -- Almost Family, Inc.
(Nasdaq: AFAM) today announced its operating results for the quarter and year
ended December 31, 2005.
Fourth Quarter Financial Highlights
- Net Income From Continuing Operations -- As Reported was $1,279,522 or
$0.48 per diluted share in the quarter ended December 31, 2005 as
compared to $362,994 or $0.14 per diluted share in the same quarter of
2004
- Net Income From Continuing Operations -- As Adjusted, (excluding a one-
time litigation settlement gain and the effect of changes in state
income tax valuation allowances), was $859,425 or $0.32 per diluted
share in the quarter ended December 31, 2005 as compared to $362,994 or
$0.14 per diluted share in the same quarter of 2004 for diluted EPS
growth of 131%
- Consolidated revenues increased approximately 15% over the same quarter
last year
- The Company's VN segment revenues grew 29% over the same quarter last
year.
Fiscal Year Financial 2005 Highlights
- Net Income From Continuing Operations -- As Reported was $2,883,288 or
$1.11 per diluted share in 2005 as compared to $1,620,448 or $0.63 per
diluted share in 2004
- Net Income From Continuing Operations -- As Adjusted, (excluding a one-
time litigation settlement gain and the effect of changes in state
income tax valuation allowances), was $2,463,191 or $0.94 per diluted
share in 2005 as compared to $1,620,448 or $0.63 per diluted share in
2004 for diluted EPS growth of 50%
- Consolidated revenues increased approximately 15% over last year
- The Company's VN segment revenues grew 25% over last year
- As of December 31, 2005, the Company's balance sheet reflects
approximately:
- $5 million in cash, $10 million in working capital
- $29 million total assets and $20 million in shareholders equity
- Borrowing capacity of an additional $20 million to fund growth
- During 2005, the Company invested approximately $5 million of capital
in acquisitions and startup home health agencies.
William B. Yarmuth, AFAM's Chairman and CEO commented on the results:
"We are very pleased with our operating results for the quarter and our
many accomplishments for the year. During 2005 we were able to dramatically
improve our earnings per share and EBITDA, complete acquisitions with a
combined annual revenue run rate of over $5 million, generate meaningful
internal revenue growth, dispose of non-core operations at a substantial
financial gain, pay-off substantially all our debt, and exit the year with $5
million of cash and $20 million in borrowing capacity to fuel our future
growth."
"As we move forward into 2006 and beyond we do so as a pure-play home
health platform with a strengthened and reorganized management team, improved
operating and information system infrastructure and a robust acquisition
pipeline. Combining these elements with the strongest balance sheet in the
history of our Company, we think we are exceptionally well-positioned to
continue to generate outstanding performance."
"I want to take this opportunity to express my personal thanks and
appreciation to our employees, our loyal customers and referring physicians
and all those who have made our internal growth, our newly acquired operations
and our start-up operations such a success in 2005."
Quarterly Discussion
Net Income From Continuing Operations - As Reported grew 252.5% to
$1,279,522 or $0.48 per diluted share (including a net gain on litigation
settlement of $267,426 or $0.10 per diluted share and the effect of revised
state income tax valuation allowances of $152,671 or $0.06 per diluted share)
for the December 2005 quarter as compared to $362,994 or $0.14 per diluted
share in the December 2004 quarter. Revenues grew 14.7% to $19.4 million in
the December 2005 quarter from $16.9 million in the December 2004 quarter.
Revenues in the Company's "Caretenders" Visiting Nurse (VN) segment grew
29% over the same period last year. Acquired operations contributed
approximately $1.1 million of that revenue growth while also contributing
$0.06 per diluted share to operating results in the December 2005 quarter.
The balance of the Company's revenue and earnings increase came from internal
growth.
In December 2005, the Tennessee Court of Appeals issued its ruling in the
Franklin Litigation, a long contested contract case dating back to 1994. The
court partially overturned the findings of the trial court thus lowering the
amount of damages previously assessed to and recorded by the Company. The
Company and the plaintiff subsequently entered into a settlement agreement on
this case which resulted in a one-time net of tax gain of $267,426 or $0.10
per diluted share being recorded in the Company's results for the quarter and
year ended December 31, 2005. Additionally, the Company's income tax
provision for the fourth quarter of 2005 included a one-time reduction of
$152,671 or $0.06 per diluted share resulting from changes in state income tax
valuation allowances relating to the anticipated realization of net operating
loss carry-forwards.
Net income including discontinued operations, was $1,483,036 or $0.56 per
diluted share in the quarter ended December 31, 2005 and $156,196 or $0.06 per
diluted share in 2004.
Results of operations for the quarters ended December 31, 2005 and 2004
are set forth in the tables below:
December December
2005 2004 Change
Amount % Rev Amount % Rev Amount %
Net revenues
Visiting
Nurses $10,628,021 54.8% $8,222,216 48.7% $2,405,805 29.3%
Personal
Care 8,748,558 45.2% 8,672,972 51.3% 75,586 0.9%
$19,376,579 100.0% $16,895,188 100.0% $2,481,391 14.7%
Operating
income
Visiting
Nurses $1,595,079 8.2% $1,151,525 6.8% $443,554 38.5%
Personal
Care 1,165,151 6.0% 750,374 4.4% 414,777 55.3%
2,760,230 14.2% 1,901,899 11.3% 858,331 45.1%
Unallocated
corporate
expenses 1,471,215 7.6% 1,303,367 7.7% 167,848 12.9%
1,289,015 6.7% 598,532 3.5% 690,483 115.4%
Litigation
settlement gain (267,426) -1.4% - 0.0% (267,426) NM
Interest
expense/(income) (69,433) -0.4% 26,728 0.2% (96,161) -359.8%
Pre-tax income 1,625,874 8.4% 571,804 3.4% 1,054,070 184.3%
Income taxes 346,352 1.8% 208,810 1.2% 137,542 65.9%
Net income from
continuing
operations $1,279,522 6.6% $362,994 2.1% $916,528 252.5%
Income (loss)
from discontinued
operations, net
of tax (1,911) (206,798) 204,887 NM
Gain on sale of
ADC segment, net
of tax 205,425 - 205,425 NM
Net income $1,483,036 $156,196 $1,326,840 849.5%
Diluted earnings
per share
Diluted shares
outstanding 2,652,876 2,592,541 60,335 2.3%
Continuing
operations $0.48 $0.14 $0.34 242.9%
Discontinued
operations - (0.08) 0.08 NM
Gain on sale
of ADC segment 0.08 - 0.08 NM
$0.56 $0.06 $0.50 NM
Continuing
Operations As
Adjusted,
(excluding
one-time
litigation
income tax
settlement gain
and one-time
income tax
item)
EBITDA $1,497,010 $937,987 $559,023 59.6%
Net income $859,425 $362,994 $496,431 136.8%
Diluted EPS $0.32 $0.14 $0.18 131.4%
Effective tax
rate 36.7% 36.5% 0.2%
Year End Results
Net Income From Continuing Operations - As Reported grew 78% to $2,883,288
or $1.11 per diluted share for the year ended December 2005 (including a net
gain on litigation settlement of $267,426 or $0.10 per diluted share and the
effect of revised state income tax valuation allowances of $152,671 or $0.06
per diluted share) as compared to $1,620,448 or $0.63 per diluted share in
2004. Revenues grew 15% to $75.6 million in 2005 from $65.8 million in 2004.
Revenues in the VN segment grew 25% over the same period last year.
Acquired operations contributed approximately $3.1 million of that revenue
growth while also contributing $0.16 per diluted share to operating results in
2005. The balance of the Company's revenue and earnings increase came from
internal growth.
Net income including discontinued operations, was $7,868,468 or $3.02 per
diluted share (including a gain on the sale of the adult day care segment of
$5,205,698 or $2.00 per diluted share) in the year ended December 31, 2005 and
$1,256,976 or $0.49 per diluted share in 2004.
Results of operations for the years ended December 31, 2005 and 2004 are
set forth in the tables below:
December December
2005 2004 Change
Amount % Rev Amount % Rev Amount %
Net revenues
Visiting
Nurses $40,265,311 53.2% $32,227,614 49.0% $8,037,697 24.9%
Personal
Care 35,354,834 46.8% 33,542,824 51.0% 1,812,010 5.4%
$75,620,145 100.0% $65,770,438 100.0% 9,849,707 15.0%
Operating income
Visiting
Nurses $5,939,874 7.9% $5,320,428 8.1% $619,446 11.6%
Personal
Care 3,857,528 5.1% 2,719,120 4.1% 1,138,408 41.9%
9,797,402 13.0% 8,039,548 12.2% 1,757,854 21.9%
Unallocated
corporate
expenses 5,707,350 7.5% 5,090,094 7.7% 617,256 12.1%
4,090,052 5.4% 2,949,454 4.5% 1,140,598 38.7%
Litigation
settlement gain (267,426) -0.4% - 0.0% (267,426) NM
Interest expense 112,608 0.1% 270,842 0.4% (158,234) -58.4%
Pre-tax income 4,244,870 5.6% 2,678,612 4.1% 1,566,258 58.5%
Income taxes 1,361,582 1.8% 1,058,164 1.6% 303,418 28.7%
Net income from
continuing
operations $2,883,288 3.8% $1,620,448 2.5% $1,262,840 77.9%
Income (loss)
from discontinued
operations,
net of tax (220,518) (363,472) 142,954 -39.3%
Gain on sale
of ADC segment 5,205,698 - 5,205,698 NM
Net income $7,868,468 $1,256,976 $6,611,492 526.0%
Diluted earnings
per share
Diluted shares
outstanding 2,607,930 2,567,468 40,462 1.6%
Continuing
operations $1.11 $0.63 $0.48 76.2%
Discontinued
operations (0.09) (0.14) 0.05 -35.7%
Gain on sale of
ADC segment 2.00 - 2.00 NM
$3.02 $0.49 $2.53 516.3%
Continuing
Operations -- As
Adjusted,
(excluding
litigation
settlement gain
and one-time
income tax item):
EBITDA $5,279,617 $4,317,913 $961,703 22.3%
Net income $2,463,191 $1,620,447 $842,744 52.0%
Diluted EPS $0.94 $0.63 $0.31 49.6%
Effective tax
rate 38.1% 39.5% -1.4%
Non-GAAP Financial Measure
The information provided in the tables in this release includes certain
non-GAAP financial measures as defined under Securities and Exchange
Commission (SEC) rules. In accordance with SEC rules, the Company has
provided, in the supplemental information and the footnotes to the tables, a
reconciliation of those measures to the most directly comparable GAAP
measures.
Net Income From Continuing Operations -- As Adjusted
Although "Net Income From Continuing Operations - As Adjusted" is a non-
GAAP financial measure, management believes that the presentation of net
income as calculated using a normalized tax rate, which excludes the
nonrecurring tax benefits as described in Note 1, and excluding the litigation
settlement gain as described in Note 2, is a useful adjunct to "Net Income
From Continuing Operations - As Reported" under GAAP because it measures the
Company's financial performance in a consistent manner between the results for
the fourth quarters and fiscal years 2005 and 2004 and since these adjustments
represent special or non-recurring items. For these reasons, management
believes that "Net Income From Continuing Operations - As Adjusted" is useful
to investors. Investors should not view "Net Income From Continuing
Operations - As Adjusted" as an alternative to the GAAP measure of net income.
The following table sets forth a reconciliation of Net Income From
Continuing Operations -- As Reported to Net Income From Continuing Operations
-- As Adjusted:
Quarter Ended December 31, Year Ended December 31,
2005 2004 2005 2004
Net income from
continuing
operations - - As
Reported $1,279,522 $362,994 $2,883,288 $1,620,447
One-time items:
Reduction in state
income tax
valuation
allowance (Note 1) (152,671) - (152,671) -
Litigation settlement
gain (Note 2) (267,426) - (267,426) -
Net income from
continuing operations
- - As Adjusted $859,425 $362,994 $2,463,191
$1,620,447
Continuing Operations
Earnings Per Diluted
Share:
As Reported $0.48 $0.14 $1.11 $0.63
As Adjusted $0.32 $0.14 $0.94 $0.63
Note 1: The Company's income tax provision for 2005 included a one-time
reduction of $152,671 or $0.06 per diluted share resulting from
changes in state income tax valuation allowances relating to the
anticipated realization of net operating loss carry-forwards.
Note 2: In December 2005, the Tennessee Court of Appeals issued its
ruling in the Franklin Litigation, a long contested contract case
dating back to 1994. The court partially overturned the findings
of the trial court thus lowering the amount of damages previously
assessed to and recorded by the Company. The Company and the
plaintiff subsequently entered into a settlement agreement on
this case which resulted in a one-time net of tax gain of
$267,426 or $0.10 per diluted share being recorded in the
Company's results for the quarter and year ended December 31,
2005.
EBITDA:
EBITDA is defined as income before depreciation and amortization, net
interest expense and income taxes. EBITDA is not a measure of financial
performance under accounting principles generally accepted in the United
States of America. It should not be considered in isolation or as a
substitute for net income, operating income, cash flows from operating,
investing or financing activities, or any other measure calculated in
accordance with generally accepted accounting principles. The items excluded
from EBITDA are significant components in understanding and evaluating
financial performance and liquidity. Management routinely calculates and
communicates EBITDA and believes that it is useful to investors because it is
commonly used as an analytical indicator within our industry to evaluate
performance, measure leverage capacity and debt service ability, and to
estimate current or prospective enterprise value. EBITDA is also used in
measurements of borrowing availability and certain covenants contained in our
credit agreement.
The following table sets forth a reconciliation of Continuing Operations
Net Income -- As Adjusted to EBITDA:
Quarter Ended December 31, Year Ended December 31,
2005 2004 2005 2004
Net income from
continuing
operations - - As
Adjusted $859,425 $362,994 $2,463,191 $1,620,447
Add back:
Interest expense
(income) (69,433) 26,728 112,608 270,842
Income taxes 499,023 208,810 1,514,253 1,058,164
Depreciation &
amortization 207,995 339,455 1,189,565 1,368,460
Earnings from
continuing operations
Before Interest,
Income Taxes,
Depreciation &
Amortization
(EBITDA) - -
As Adjusted $1,497,010 $937,987 $5,279,617 $4,317,913
Sale of ADC Operations
On September 30, 2005 the Company completed the previously announced sale
of its ADC operating segment for $13.6 million in cash plus assumption of
certain liabilities. The transaction resulted in the reporting of an after
tax gain of approximately $5.2 million or $2.00 per diluted share reported in
the year ended December 31, 2005.
Almost Family, Inc.(TM) and subsidiaries (collectively "Almost Family") is
a leading regional provider of home health services. The Company has service
locations in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Indiana and
Alabama (in order of revenue significance).
All statements, other than statements of historical facts, included in
this news release, including the objectives and expectations of management for
future operating results, the Company's ability to accelerate growth in its
home health operations, the Company's ability to generate VN revenue growth,
the Company's ability to acquire visiting nurse agencies at prices it is
willing to pay, the Company's ability to increase the efficiency and
effectiveness of its sales and marketing efforts, the Company's ability to
attract investment of additional capital, the Company's ability to generate
positive cash flows, and the Company's expectations with regard to market
conditions, are forward-looking statements. These forward-looking statements
are based on the Company's current expectations. Although the Company believes
that the expectations expressed or implied in such forward-looking statements
are reasonable, there can be no assurance that such expectations will prove to
be correct.
Because forward-looking statements involve risks and uncertainties, the
Company's actual results could differ materially. The potential risks and
uncertainties which could cause actual results to differ materially could
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 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; 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, 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 Securities and
Exchange Commission filing on Form 10-K for the year ended December 31, 2004,
in particular information under the headings "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
Company disclaims any intent or obligation to update its forward-looking
statements.
SOURCE Almost Family, Inc.
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Related links:
http://www.almost-family.com
Company News On-Call:
http://www.prnewswire.com/comp/784275.html
CONTACT:
William Yarmuth or Steve Guenthner, of Almost
Family, Inc., +1-502-891-1000
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