LOUISVILLE, Ky., Aug. 14 /PRNewswire-FirstCall/ --
Almost Family, Inc. (Nasdaq: AFAM) today announced its operating results
for the three and six-month periods ended June 30, 2002.
Three-Month Results
The Company reported net income of $526,776 or $0.18 per diluted share in
the quarter ended June 30, 2002 versus net income of $726,047 or $0.25 per
diluted share in the quarter ended June 30, 2001. Revenues increased between
periods principally due to increased attendance in the Company's adult day
care centers. Earnings for the June 2002 quarter were impacted by additional
costs related to the growth and development of its Adult Day Health Services
Segment. The additional costs occurred primarily as a result of increased
labor and insurance costs associated with the on-going development and volume
growth in the segment. The Company also incurred additional general and
administrative costs associated with an increase in the amount of staff
resources devoted to training, auditing, and information systems. The
Company's VN segment showed continued growth in both revenue and operating
income. The Company continues to commit significant resources to its
operational model under the Medicare PPS reimbursement system especially in
light of the uncertainty surrounding the proposed rate cut scheduled to take
effect October 2002.
Results of operations for the three months ended June 30, 2002 and 2001
are set forth in the table below:
2002 2001 (1) Change
Amount % Rev Amount % Rev Amount %
Net Revenues:
Adult day health
services $13,682,392 65.6% $12,555,117 65.1% $1,127,275 9.0%
Visiting nurse
services 7,161,024 34.4% 6,718,529 34.9% 442,495 6.6%
$20,843,416 100.0% $19,273,646 100.0% $1,569,770 8.1%
Operating income:
Adult day health
services $560,557 4.1% $1,056,304 5.5% $(495,747) -46.9%
Visiting nurse
services 1,013,243 14.1% 874,310 4.5% 138,933 15.9%
1,573,800 7.6% 1,930,614 10.0% (356,814) -18.5%
Unallocated corporate
expenses 516,398 2.5% 447,692 2.3% 68,706 15.3%
EBIT 1,057,402 5.1% 1,482,922 7.7% (425,520) -28.7%
Interest
expense 179,498 0.9% 230,650 1.2% (51,152) -22.2%
Income taxes 351,128 1.8% 526,225 2.7% (175,096) -33.3%
Net income from
continuing
operations $526,776 2.4% $726,047 3.8% $(199,272) -27.4%
Net income per share:
Basic:
Weighted average
shares 2,499,447 2,505,435 (5,988)
$0.21 $0.29 $(0.08)
Diluted:
Weighted average
shares 2,948,255 2,884,467 63,788
$0.18 $0.25 $(0.07)
EBITDA (2) $1,619,630 7.8% $1,887,000 9.8% $(267,370) -14.2%
Effective tax rate 40% 42% (2%)
(1) Where appropriate, amounts for these periods have been restated and
reclassified as discussed in the Company's Form 10-K for the nine-
months ended December 31, 2001.
(2) Earnings before interest, taxes, depreciation and amortization.
William B. Yarmuth, AFAM's Chairman and CEO commented on the operating
results. "Our operating results for the quarter clearly indicate that our
business is strong and growing from a customer perspective. Our volume
growth, particularly in our in-center adult day care (ADC) programs is
stronger than we have shown for quite awhile. At the same time though we are
experiencing some unfavorable cost trends that we are working to address. As
we work through these issues over the next several months we believe that we
will do a much more effective job of bringing these costs under control. We
remain very positive about our business and continue to invest in its growth."
With regard to reimbursement matters, C. Steven Guenthner, AFAM's CFO
added: "The outcome of the currently legislated Medicare home health
reimbursement rate cut is the most significant issue facing the entire home
health industry. The rate cut of about 5% is scheduled to go into effect on
October 1, 2002. There has been significant public policy discussion about
potentially eliminating this rate cut, which, was initially mandated by the
Balanced Budget Act of 1997. While the US House of Representatives has passed
legislation eliminating the rate cut, unless the Senate and the President take
similar actions the cut will go into effect in October."
Yarmuth concluded: "Clearly, conditions in the 2002 business environment
are presenting all of us with some meaningful challenges. The cost of doing
business is increasing and, at least for now, our profit margins have declined
a bit from the same period last year. On a very positive note, we did
complete the acquisition of Medlink on July 15, which we expect to add around
$6 million of revenues to our business. Our balance sheet and our operating
cash flow are strong. We were able to make substantial investments in our
facilities and information systems and still pay debt down by over $3 million
in the quarter. We are also continuing our stock repurchase program to the
extent permitted under securities laws. As a long-term player in the health
care industry, we know we are subject to periodic challenges and we are proud
of our track record in dealing with them. We remain highly confident in our
mission, our management, our ability to overcome these near term issues and in
particular about the long-term future of our business."
Six-Months Results
Results of operations for the six months ended June 30, 2002 and 2001 are
set forth in the table below:
2002 2001(1) Change
Amount % Rev Amount % Rev Amount %
Net Revenues:
Adult day health
services $26,867,694 64.9% $25,292,705 65.1% $1,574,989 6.2%
Visiting nurse
services 14,526,275 35.1% 13,533,793 34.9% 992,482 7.3%
41,393,969 100.0% 38,826,498 100.0% 2,567,471 6.6%
Operating income:
Adult day health
services 1,131,220 4.2% 1,895,275 4.9% (764,055) -40.3%
Visiting nurse
services 2,136,757 14.7% 1,458,139 10.8% 678,618 46.5%
3,267,977 15.7% 3,353,414 8.6% (85,437) -2.5%
Unallocated corporate
expenses 1,822,870 4.4% 869,895 2.2% 952,975 109.6%
EBIT 1,445,107 6.9% 2,483,519 6.4%( 1,038,412) -41.8%
Interest expense 399,952 1.9% 414,987 1.1% (15,035) -3.6%
Income taxes 418,062 2.2% 909,867 2.3% (491,805) -54.1%
Net income from
continuing
operations $627,093 2.9% $1,158,665 3.0% $(531,572) -45.9%
Net income per share:
Basic:
Weighted average
shares 2,499,254 2,826,766 (327,512)
$0.25 $0.41 $(0.16)
Diluted:
Weighted average
shares 2,969,291 3,092,965 (123,674)
$0.21 $0.37 $(0.16)
EBITDA (2) $2,498,127 12.0% $3,169,580 8.2% $(671,453) -21.2%
Effective tax rate 40% 44% (4%)
(1) Where appropriate, amounts for these periods have been restated and
reclassified as discussed in the Company's Form 10-K for the nine-
months ended December 31, 2001.
(2) Earnings before interest, taxes, depreciation and amortization.
Unallocated corporate expenses in the six months ended June 30, 2002
include approximately $816,000, consisting primarily of professional fees,
related to the cost of conducting the investigation into the restatement of
the Company's financial statements as previously discussed. There can be no
assurance that additional costs will not be incurred in subsequent periods.
The Company filed its Form 10-Q with the Securities and Exchange
Commission today. Please refer to that filing for additional information.
Almost Family, Inc. is a health services company providing adult day
health care services focused on providing alternatives for seniors and other
special needs adults who wish to avoid nursing home and other institutional
1placement. The Company also operates a chain of Medicare-certified home
health agencies under the trade name "Caretenders(TM)." The Company has
operations in Alabama, Connecticut, Florida, Indiana, Kentucky, Maryland,
Massachusetts, and Ohio.
Contact: William Yarmuth or Steve Guenthner (502) 899-5355.
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 better control its costs,
expected trends in medical costs, the Company's ability to operate profitably
under Medicare PPS with lower rates, 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 the impact of further changes in healthcare reimbursement systems,
including the ultimate outcome of potential changes to Medicare PPS payment
rates, the ability of the Company to maintain its level of operating
performance, cost control objectives; government regulation; health care
reform; pricing pressures from Medicaid and other third-party payers; and
changes in laws and interpretations of laws relating to the healthcare
industry. 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 nine months
ended December 31, 2001, 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/gh/cnoc/comp/784275.html
CONTACT:
William Yarmuth or Steve Guenthner,
+1-502-899-5355, both of Almost Family, Inc.
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