Will Be Pure Play Home Care Company Approaching $80 Million Revenue
LOUISVILLE, Ky., Aug. 3 /PRNewswire-FirstCall/ -- Almost Family, Inc.
(Nasdaq: AFAM) announced that it has entered into a definitive agreement for
the sale of its Adult Day Care Segment operations to Active Services, Inc.
(Active Services) in an asset sale.
The purchase price consists of $13.6 million cash plus assumption of
approximately $1.4 million of debt. In return, Active Services will acquire
substantially all the assets and assume certain working capital liabilities
related to Almost Family's 19 medical adult day care centers which generate
approximately $21 million in annual revenues. The transaction, which is
subject to certain conditions including regulatory approvals and third-party
consents, is expected to close by October 1, 2005.
Pure Play Home Health Company Approaching $80 Million Revenue
Following the transaction, Almost Family will be a pure play home health
care company with two operating segments: Caretenders Visiting Nurse (VN)
Medicare-certified operations with a current annual revenue run rate of
approximately $43 million and its Personal Care (PC) home health operations
with a current annual revenue run rate of approximately $35 million. Almost
Family has home health operations in Florida, Kentucky, Ohio, Connecticut,
Massachusetts and Alabama.
$20 Million Capital Available for Home Health Acquisitions
Proceeds of the transaction are expected to be used to repay substantially
all outstanding debt (excluding certain seller financing) and leave
approximately $4 million in cash available. Cash on hand, combined with
borrowing capacity on its senior credit facility, will make over $20 million
of capital immediately available to fund the Company's acquisition and
development activities. The Company expects that amount of capital, plus
internally generated growth and free cash flow, to be sufficient to take it to
over $100 million in revenues.
Disposition Accretive to EPS
The disposition is expected to be immediately accretive to earnings per
share.
Transaction Gain Expected
Subject to final purchase price adjustments, the Company expects to report
an after-tax gain of $5-$6 million ($2.20-$2.60 per basic share) on closing of
the transaction.
Company Commentary
William B. Yarmuth, Almost Family's Chairman and CEO commented on this
latest development: "As stated in our business plan, Almost Family is
continuing to shift its focus to the accelerated development of our home
health operations. This transaction frees all our remaining management time
and capital to pursue a more aggressive, single-minded pursuit of home health
development while also placing our adult day care operations in the hands of a
well-capitalized experienced company with a singular focus on adult day care."
"While we are pleased with the transaction, we have somewhat mixed
emotions. We want to express our sincere gratitude to our ADC segment
managers and employees for their tremendous commitment to quality, their many
years of service dedicated to the care of their members, and for helping us
make our ADC segment what it is today," continued Yarmuth.
Yarmuth concluded: "Our next milestone is to take the Company past the
$100 million mark in home health care revenues. This management team will
continue to build momentum in its acquisition and start-up activities fueled
by the availability of some $20 million of available investment capital."
The Company has noted in its previous announcements that it is actively
pursuing a number of potential acquisitions in Florida and other states and
expects that it will be able to complete additional transactions over the
course of the next year. The Company's 2004 Form 10-K includes a description
of its business plan which calls for an increase in emphasis on the Visiting
Nurse segment.
Additional Information Next Week
The Company's next Form 10Q, to be filed within the next two weeks, will
provide a more detailed disclosure and discussion of the financial
implications of this transaction.
Almost Family, Inc.(TM) and subsidiaries (collectively "Almost Family") is
a leading regional provider of home health nursing services and adult day
health services. The Company has service locations in Florida, Kentucky,
Ohio, Maryland, Connecticut, Massachusetts, Alabama and Indiana (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
the Company's ability to complete the contemplated divestiture of its adult
day care segment, the expectation that the divesture will be accretive to
earnings per share, future operating results of its home health agencies, the
Company's ability to acquire visiting nurse agencies at prices it is willing
to pay, 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 acquired agency to maintain its level of
admissions and operating performance, our ability to integrate acquired
agencies into our operations; 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 potential effect of changes in competition for home health
agency admissions. 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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