LOUISVILLE, Ky., Sept. 17 /PRNewswire/ --
Almost Family, Inc. (Nasdaq: AFAM) made the following announcements today:
* The Company's Board of Directors voted to terminate its previously
adopted plan of disposition for its Visiting Nurse (VN) operations.
This decision followed a period of extensive analysis and evaluation of
numerous alternatives for the business unit.
* The decision to retain the VN operations is expected to result in a one-
time gain of approximately $1.1 million or $0.44 per share from the
reversal of previously recorded disposition charges.
* The Board of Directors voted to change the Company's fiscal year end
from March 31 to December 31 effective December 31, 2001.
The next annual meeting of the shareholders has been set for November
12, 2001.
Decision to Retain and Develop VN Operations
"After a very thorough analysis of the alternatives available to us we have
reached the conclusion that the best way to maximize value for our
shareholders is to keep this business and, in fact, to further invest in its
growth and development," said William B. Yarmuth, AFAM's Chairman and CEO.
"As we have commented in our last few earnings releases, we have been very
pleased with the performance of our Visiting Nurse operations under Medicare's
Prospective Payment System (PPS). Our management team has adapted very well
to the new reimbursement environment. So well in fact that we believe our
best way to maximize shareholder value is to give this management team the
opportunity to build the business."
With regard to the future development of Almost Family, Yarmuth added:
"The decision to keep and further develop the VN business is not a shift in
overall strategy for us. We will continue on our mission to be the nation's
premier provider of services to help seniors and other special needs adults
avoid institutional care settings for as long as possible. This decision
gives formal recognition to the fact that the VN operations can and should be
an integral part of accomplishing that mission."
Following the decision to retain and develop its VN operations, the
Company expects to, in the quarter ended September 30, 2001, report a one-time
gain of approximately $1.1 million, or $0.44 per share, resulting from the
reversal of the remainder of previously recorded accounting reserves
established for the expected costs of completing the plan of disposition. The
Company will terminate the use of discontinued operations accounting treatment
for the VN segment, the results of which will now be reported as an on-going
part of the continuing operations of the Company. The Company will follow the
prescribed rules of segment reporting for its ADHS and VN segments.
In reaching its conclusion to retain and further develop its VN
operations, the Company has taken into account the currently mandated "15%
rate cut" for Medicare reimbursement rates. Such a rate cut, if eventually
implemented, would have an adverse impact on the earnings and cash flows of
the VN operations. Although there can be no assurance, the Company believes
that, even if such a rate cut were implemented, its VN operations will remain
viable and profitable and that the visiting nurse business will continue to
present attractive opportunities for investment.
The Board was advised in its decision to retain the VN operations by the
investment banking firm of Ewing Monroe Bemiss & Co. of Richmond VA.
The following table sets forth the combined operating results of Almost
Family with the VN segment included in continuing operations for each of the
five quarters in the period ended June 30, 2001. Note that the Medicare PPS
reimbursement system went into effect at the beginning of the Company's
quarter ended December 31, 2001 (3Q 2001):
Income Statements Consolidated - With VN in Continuing Operations
1Q 2002 4Q 2001 3Q 2001 2Q 2001 1Q 2001
Net
revenues $19,273,646 $19,489,081 $19,289,863 $18,319,271 $18,116,685
Cost of sales
and
services 14,703,604 15,461,091 15,161,781 15,115,212 14,928,773
General and
administrative
expenses 2,146,656 2,032,191 1,941,390 2,058,840 2,235,666
Depreciation and
amortization
expense 404,078 300,811 413,853 384,562 448,088
Provision for
uncollectible
accounts 320,677 301,435 279,626 361,653 192,209
Income before
other income
(expense) and
income taxes 1,698,631 1,393,553 1,493,213 399,004 311,949
Other income
(expense)
Interest
Expense (230,649) (184,337) (222,465) (233,398) (175,454)
Income before
income
taxes 1,467,982 1,209,216 1,270,748 165,606 136,495
Provision
(benefit)
for income
taxes 614,286 457,590 605,334 145,092 99,445
Net income
(loss) from
Continuing
Operations $853,696 $751,626 $665,414 $20,514 $37,050
Earnings Per
Share From
Continuing
Operations
Basic $ 0.34 $ 0.24 $ 0.21 $ 0.01 $ 0.01
Diluted $ 0.29 $ 0.23 $ 0.20 $ 0.01 $ 0.01
Earnings Before
Interest, Taxes,
Depreciation and
Amortization
(EBITDA) $2,102,709 $1,694,364 $1,907,066 $ 783,566 $ 760,037
Additionally, the following table presents selected supplemental data on
each of the Company's two operating segments:
Segment Data Consolidated Segment Data
1Q2002 4Q2001 3Q2001 2Q2001 1Q2001
Revenues
ADHS $12,555,117 $12,737,588 $12,621,389 $12,545,155 $11,776,440
VN 6,718,529 6,751,493 6,668,474 5,774,116 6,340,245
$19,273,646 $19,489,081 $19,289,863 $18,319,271 $18,116,685
EBITDA Before
Unallocated
Corporate
Costs $ 1,430,533 $ 1,121,244 $ 1,459,643 $ 1,595,294 $ 1,221,665
ADHS 1,150,426 920,212 774,722 (465,407) (64,059)
VN 2,580,959 2,041,456 2,234,365 1,129,887 1,157,606
Unallocated
Corporate
Costs 478,250 347,092 327,299 346,321 397,569
EBITDA $ 2,102,709 $ 1,694,364 $ 1,907,066 $ 783,566 $ 760,037
Finally, the following table reflects summary consolidated balance sheet
information as of June 30, 2001 as if discontinued operations accounting
treatment had not been used as of that reporting date:
Summary Balance Sheet Information
See Note (A)
Current Assets $20,480,000
Property, Plant & Equipment 6,870,000
Goodwill and intangibles 3,870,000
Deferred Tax Assets 1,240,000
Other Assets 1,050,000
$33,500,000
Current Liabilities $11,710,000
Debt and Capital Lease Obligations 10,740,000
Other Liabilities 700,000
23,140,000
Equity 10,360,000
$33,500,000
(A) Includes an estimate for reversal of previously recorded losses
expected to be incurred in completing plan of disposition.
The Company plans to announce earnings for the quarter and six months
ended September 30, 2001 on or about October 31, 2001 with the filing of its
Form 10Q to follow shortly thereafter. Consolidated earnings from continuing
operations for the September quarter are expected to be consistent with those
for the June quarter shown above. The report for the September quarter will
also include a supplemental unaudited statement of operations for the twelve
months ended September, which will include the first full year of operation
under the Medicare PPS reimbursement system.
Change in Year End
The Company announced today that its Board of Directors has approved a
change in the Company's yearend from March 31 to December 31, effective
December 31, 2001. The Company will report its operating results for the
nine-month period ended December 31, 2001 on Form 10K and will subsequently
report on annual periods ending December 31 thereafter. The Company believes
that those analyzing the results of operations, and in particular, those
comparing its results to others, will find that analysis and comparison to be
easier if the Company reports on a calendar year basis.
Almost Family, Inc. is an adult day health care services company focused
on providing alternatives for seniors and other special needs adults who wish
to avoid nursing home and other institutional placement. The Company has
locations in Kentucky, Maryland, Alabama, Massachusetts, Connecticut, Indiana,
Ohio, and Florida.
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 acquire or start new
visiting nurse agencies, and the Company's ability to operate profitably under
Medicare PPS, 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 effects of implementation of Medicare Prospective
Payment System, potential changes to the Medicare PPS, the ability of the
Company to maintain its level of operating performance, the cost control and
earnings objectives of its plan for operating its visiting nurse division
under Medicare PPS; 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 year ended March 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 of Almost
Family, Inc., +1-502-899-5355
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