ALMOST FAMILY INC - FORM 8-K - EX-99.1 - EARNINGS RELEASE

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8-K - FORM 8-K - ALMOST FAMILY INC	form8-k.htm

Exhibit 99.1

Almost Family, Inc.

Steve Guenthner

(502) 891-1000

The Ruth Group

Investor Relations

Nick Laudico/Zack Kubow

(646) 536-7030/7020

nlaudico@theruthgroup.com

zkubow@theruthgroup.com

Almost Family Reports Fourth Quarter and Full Year 2010 Results

Fourth Quarter Highlights:

·	Net service revenues increased to approximately $85 million

·	Net income and diluted EPS were $7.0 million and $0.75 per share after the costs of complying with governmental inquiries and the impact of a Medicare rate cut

·	Diluted EPS includes $0.04 of expenses related to governmental inquiries, excluding which diluted EPS would have been $0.79

·	A Medicare rate cut reduced diluted EPS in the fourth quarter by $0.08. Excluding the rate cut and the expenses related to governmental inquiries diluted EPS would have been $0.87

·	Visiting Nurse (VN) segment net revenues grew organically 10% to $74 million

·	Quarterly operating cash flow of $7.5 million

·	Approximately $166 million in cash plus credit facility available to fund acquisitions

Full Year Highlights:

·	Net service revenues increased 13% to $337 million

·	Net income increased 25% to $30.7 million

·	Diluted EPS increased 15% to $3.28 per share including $0.08 of expenses related to governmental inquiries, excluding which diluted EPS would have been $3.36

·	Excluding the Medicare rate cut and governmental inquiry costs diluted EPS would have been $3.44

·	Visiting Nurse (VN) segment net revenues rose 15% to $295 million

·	Full Year net operating cash flow of approximately $35 million

Louisville, KY, February 28, 2011 – Almost Family, Inc. (Nasdaq: AFAM), a leading regional provider of home health nursing services, announced today its financial results for the three-months and full year ended December 31, 2010.

William Yarmuth, Chief Executive Officer, commented, “Our full year operating performance marks another milestone year in our Company’s development. Our management team and over 6,000 caregivers continued their uncompromising focus on our Senior Advocacy Mission providing the highest quality home care to our patients throughout the communities we serve. Our fourth quarter and full year results demonstrate our continued ability to generate quality returns for our shareholders with strong organic revenue, cash flow and earnings growth despite the challenges from health care reform and increased scrutiny in 2010. Our strong balance sheet and operating excellence position us well for continued growth.”

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

Fourth Quarter Financial Results

Almost Family reported fourth quarter 2010 net service revenues of $84.6 million, an 8.5% increase from $78.0 million in the fourth quarter of 2009.

Net income for the fourth quarter of 2010 was $7.0 million, or $0.75 per diluted share, compared to $6.8 million, or $0.73 per diluted share, in the fourth quarter of 2009. Results for the quarter included the unfavorable impact of the 5.2% Medicare reimbursement rate cut for 2011 which reduced revenue, operating income and net income for episodes started in the fourth quarter which did not complete until 2011. This rate cut lowered revenues by approximately $1.2 million and lowered diluted EPS by approximately $0.08. Additionally, fees and expenses related to regulatory investigations lowered EPS by approximately $0.04. Without these two externally imposed items diluted EPS would have been $0.87.

Fourth Quarter Segment Results

Net revenues in the Visiting Nurse segment for the fourth quarter of 2010 were $74.3 million, a 10% increase from $67.6 million in the fourth quarter of 2009. The total revenue growth of $6.7 million came from a 10% organic growth rate plus $0.2 million from acquired operations. Organic Medicare admission and episode growth were both also 10%. Operating income before corporate expenses in the VN segment for the fourth quarter of 2010 was $16.2 million, a 9% increase from $14.9 million in the fourth quarter of 2009.

Net revenues in the Personal Care (PC) segment for the fourth quarter of 2010 were flat at $10.4 million in the fourth quarter of 2010 and 2009. Operating income before unallocated corporate expenses in the PC segment was also flat at $1.5 million in the fourth quarter of 2010 and 2009.

Full Year Financial Results

Almost Family reported net service revenues for the year ended December 31, 2010 of $336.9 million, a 13% increase from $297.8 million in the same period of 2009. Full year net income for 2010 was $30.7 million, or $3.28 per diluted share, compared to $24.6 million, or $2.86 per diluted share, for 2009 on 9% more diluted shares outstanding. The Medicare rate cut described above also lowered fiscal year revenues by approximately $1.2 million and lowered diluted EPS by approximately $0.08. Additionally, fees and expenses related to regulatory investigations lowered EPS by approximately $0.08. Without these two externally imposed items diluted EPS would have been $3.44.

Full year net cash provided by operating activities increased 28% to $34.8 million in 2010 from $27.1 million in 2009.

Full Year Segment Results

Net revenues in the Visiting Nurse segment for 2010 were $294.9 million, a 15% increase from $256.1 million for the year ended December 31, 2009. The total revenue growth of $38.9 million came

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

from a 14% organic growth rate plus $2.2 million from acquired operations. Operating income before corporate expenses in the VN segment for 2010 was $66.3 million, a 23% increase from $54.0 million in the same period of 2009.

Full year net revenues in the Personal Care (PC) segment for 2010 were $42.0 million, a 0.5% increase from $41.8 million in 2009. Operating income before unallocated corporate expenses in the PC segment for the twelve month period of 2010 was $5.7 million, an 11% increase from $5.2 million in the twelve month period of 2009.

Regulatory Inquiries and Shareholder Litigation

As previously announced, the Company is continuing to cooperate fully with investigators from the US Senate Finance Committee and the US Securities and Exchange Commission regarding their inquiries following an April 27, 2010 Wall Street Journal article related to Medicare home health therapy services. Fees and expenses associated with these inquiries and their impact on the Company’s financial results are described above.

Conference Call

A conference call to review the results will begin at 11:00 a.m. ET on February 28, 2011, and will be hosted by William Yarmuth, Chief Executive Officer, and Steve Guenthner, Chief Financial Officer. To participate in the conference call, please dial 1-877-407-0789 (USA) or 1-201-689-8562 (International). In addition, a dial-up replay of the conference call will be available beginning February 28, 2011 at 2:00 p.m. ET and ending on March 13, 2011. The replay telephone number is 1-877-870-5176 (USA) or 1-858-384-5517 (International). Pin number 367130.

A live Web cast of the call will also be available from the Investor Relations section of the corporate Web site at http://www.almostfamily.com. A Web cast replay can be accessed on the corporate Web site beginning February 28, 2011 at approximately 2:00 p.m. ET and will remain available until March 27, 2011.

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share data)

	Three months ended December 31,
	2010			2009
Net service revenues	$	84,643		$	78,020
Cost of service revenues (excluding depreciation and amortization)		38,417			36,072
Gross margin		46,226			41,948
General and administrative expenses:
Salaries and benefits		23,388			21,118
Other		11,022			8,852
Total general and administrative expenses		34,410			29,970
Operating income		11,816			11,978
Interest expense, net		(56	)		(129	)
Income before income taxes		11,760			11,849
Income tax expense		(4,773	)		(5,041	)
Net income	$	6,987		$	6,808


Per share amounts-basic:
Average shares outstanding		9,149			9,057
Net income	$	0.76		$	0.75

Per share amounts-diluted:
Average shares outstanding		9,363			9,308
Net income	$	0.75		$	0.73

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)

	Year Ended December 31,
	2010			2009
Net service revenues	$	336,924		$	297,849
Cost of service revenues (excluding depreciation and amortization)		153,763			138,565
Gross margin		183,161			159,284
General and administrative expenses:
Salaries and benefits		91,455			81,589
Other		40,049			35,826
Total general and administrative expenses		131,504			117,415
Operating income		51,657			41,869
Interest expense, net		(266	)		(803	)
Income before income taxes		51,391			41,066
Income tax expense		(20,678	)		(16,502	)
Net income	$	30,713		$	24,564


Per share amounts-basic:
Average shares outstanding		9,123			8,372
Net income	$	3.37		$	2.93

Per share amounts-diluted:
Average shares outstanding		9,352			8,589
Net income	$	3.28		$	2.86

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

	As of December 31,
	2010			2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	47,943		$	19,389
Accounts receivable - net		39,772			35,121
Prepaid expenses and other current assets		3,513			2,544
Deferred tax assets		8,521			7,786
TOTAL CURRENT ASSETS		99,749			64,840

PROPERTY AND EQUIPMENT - NET		4,514			4,291

GOODWILL		101,060			99,333

OTHER INTANGIBLE ASSETS		14,285			14,338

OTHER ASSETS		519			587
	$	220,127		$	183,389

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	5,424		$	3,360
Accrued other liabilities		20,529			20,076
Current portion - capital leases and notes payable		1,695			1,836
TOTAL CURRENT LIABILITIES		27,648			25,272

LONG-TERM LIABILITIES:
Revolving credit facility		-			-
Notes payable		1,325			2,800
Deferred tax liabilities		8,763			5,258
Other liabilities		223			1,082
TOTAL LONG-TERM LIABILITIES		10,311			9,140
TOTAL LIABILITIES		37,959			34,412

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; 9,239 and 9,151
issued and outstanding		924			915
Treasury stock, at cost, 4 and zero shares		(139	)		-
Additional paid-in capital		97,073			94,465
Retained earnings		84,310			53,597
TOTAL STOCKHOLDERS' EQUITY		182,168			148,977
	$	220,127		$	183,389

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Year Ended December 31,
	2010			2009
Cash flows from operating activities:
Net income	$	30,713		$	24,564

Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation and amortization		2,913			2,385
Provision for uncollectible accounts		3,675			3,762
Stock-based compensation		1,505			1,371
Deferred income taxes		2,770			695
		41,576			32,777
Change in certain net assets and liabilities, net of the effects of acquisitions:
(Increase) decrease in:
Accounts receivable		(8,239	)		(3,958	)
Prepaid expenses and other current assets		(1,184	)		570
Other assets		68			(69	)
Increase (decrease) in:
Accounts payable and accrued expenses		2,548			(2,220	)
Net cash provided by operating activities		34,769			27,100

Cash flows from investing activities:
Capital expenditures		(2,607	)		(2,134	)
Acquisitions, net of cash acquired		(2,800	)		(6,510	)
Net cash used in investing activities		(5,407	)		(8,644	)

Cash flows from financing activities:
Net revolving credit facility repayments		-			(23,998	)
Proceeds from stock option exercises		380			113
Purchase of common stock in connection with stock options		(640	)		(14	)
Tax benefit from non-qualified stock option exercises		1,233			203
Proceeds from stock offering, net		-			27,957
Principal payments on capital leases and notes payable		(1,781	)		(4,510	)
Net cash used in financing activities		(808	)		(249	)

Net increase in cash and cash equivalents		28,554			18,207
Cash and cash equivalents at beginning of period		19,389			1,182
Cash and cash equivalents at end of period	$	47,943		$	19,389

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(In thousands)

	Three months ended December 31,
	2010					2009					Change
	Amount		% Rev			Amount		% Rev			Amount			%
Net service revenues:
Visiting Nurse	$	74,272		87.7	%	$	67,616		86.7	%	$	6,656			9.8	%
Personal Care		10,371		12.3	%		10,404		13.3	%		(33	)		-0.3	%
		84,643		100.0	%		78,020		100.0	%		6,623			8.5	%
Operating income before corporate expenses:
Visiting Nurse		16,226		21.8	%		14,899		22.0	%		1,327			8.9	%
Personal Care		1,494		14.4	%		1,536		14.8	%		(42	)		-2.7	%
		17,720		20.9	%		16,435		21.1	%		1,285			7.8	%
Corporate expenses		5,904		7.0	%		4,457		5.7	%		1,447			32.5	%
Operating income		11,816		14.0	%		11,978		15.4	%		(162	)		-1.4	%
Interest expense, net		56		0.1	%		129		0.2	%		(73	)		-56.6	%
Income tax expense		4,773		5.6	%		5,041		6.5	%		(268	)		-5.3	%
Net income	$	6,987		8.3	%	$	6,808		8.7	%	$	179			2.6	%

EBITDA	$	12,824		15.2	%	$	12,762		16.4	%	$	62			0.5	%

ALMOST FAMILY, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(In thousands)

	Year ended December 31,
	2010					2009					Change
	Amount		% Rev			Amount		% Rev			Amount			%
Net service revenues:
Visiting Nurse	$	294,915		87.5	%	$	256,060		86.0	%	$	38,855			15.2	%
Personal Care		42,009		12.5	%		41,789		14.0	%		220			0.5	%
		336,924		100.0	%		297,849		100.0	%		39,075			13.1	%
Operating income before corporate expenses:
Visiting Nurse		66,333		22.5	%		53,955		21.1	%		12,378			22.9	%
Personal Care		5,715		13.6	%		5,166		12.4	%		549			10.6	%
		72,048		21.4	%		59,121		19.8	%		12,927			21.9	%
Corporate expenses		20,391		6.1	%		17,252		5.8	%		3,139			18.2	%
Operating income		51,657		15.3	%		41,869		14.1	%		9,788			23.4	%
Interest expense, net		266		0.1	%		803		0.3	%		(537	)		-66.9	%
Income tax expense		20,678		6.1	%		16,502		5.5	%		4,176			25.3	%
Net income	$	30,713		9.1	%	$	24,564		8.2	%	$	6,149			25.0	%

EBITDA	$	56,075		16.6	%	$	45,625		15.3	%	$	10,450			22.9	%

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS

	Three months ended December 31,
	2010			2009			Change
Average number of locations		89			85			4		4.7	%

All payors:
Patients Months		51,928			48,154			3,774		7.8	%
Admissions		14,855			13,518			1,337		9.9	%
Billable Visits		479,118			449,979			29,139		6.5	%

Medicare Statisitics:
Revenue (in thousands)	$	68,521		$	61,284		$	7,237		11.8	%
Percentage of total revenues		92.3	%		90.6	%
Billable visits		403,971			369,791			34,180		9.2	%
Admissions		13,367			12,142			1,225		10.1	%
Episodes		21,762			19,733			2,029		10.3	%

Revenue per completed episode	$	3,161		$	3,077		$	84		2.7	%
Visits per episode		18.0			18.3			(0.3	)	-1.6	%



ALMOST FAMILY, INC. AND SUBSIDIARIES
PERSONAL CARE SEGMENT OPERATING METRICS

	Three months ended December 31,
		2010			2009		Change
Average number of locations		23			23			-		0.0	%

Admissions		658			690			(32	)	-4.6	%
Patient months of care		11,287			11,814			(527	)	-4.5	%
Patient days of care		148,200			152,116			(3,916	)	-2.6	%
Billable hours		576,858			582,582			(5,724	)	-1.0	%
Revenue per billable hour	$	17.98		$	17.86		$	0.12		0.7	%

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

ALMOST FAMILY, INC. AND SUBSIDIARIES
VISITING NURSE SEGMENT OPERATING METRICS

	Year ended December 31,
	2010			2009			Change
Average number of locations		86			78			8		10.3	%

All payors:
Patients Months		205,681			185,959			19,722		10.6	%
Admissions		58,291			52,029			6,262		12.0	%
Billable Visits		1,886,287			1,712,480			173,807		10.1	%

Medicare Statisitics:
Revenue (in thousands)	$	271,248		$	230,383		$	40,865		17.7	%
Percentage of total revenues		92.0	%		90.0	%
Billable visits		1,581,360			1,395,001			186,359		13.4	%
Admissions		52,757			47,110			5,647		12.0	%
Episodes		85,901			76,436			9,465		12.4	%

Revenue per completed episode	$	3,140		$	2,974		$	166		5.6	%
Visits per episode		18.2			17.7			0.5		2.8	%



ALMOST FAMILY, INC. AND SUBSIDIARIES
PERSONAL CARE SEGMENT OPERATING METRICS

	Year ended December 31,
		2010			2009		Change
Average number of locations		23			22			1		4.5	%

Admissions		2,953			3,135			(182	)	-5.8	%
Patient months of care		46,562			47,154			(592	)	-1.3	%
Patient days of care		604,388			600,447			3,941		0.7	%
Billable hours		2,312,444			2,339,080			(26,636	)	-1.1	%
Revenue per billable hour	$	18.17		$	17.87		$	0.30		1.7	%

Non-GAAP Financial Measure

The information provided in some of 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.

EBITDA:

EBITDA is defined as net 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

Almost Family Reports Fourth Quarter and Full Year 2010 Results

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February 28, 2011

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 certain covenants contained in our credit agreement.

The following tables set forth a reconciliation of Net Income to EBITDA:

ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA
(In thousands)

	Three months ended December 31,
	2010		2009
Net income	$	6,987	$	6,808
Add back:
Interest expense		56		129
Income tax expense		4,773		5,041
Depreciation and amortization		811		632
Amortization of stock-based compensation		197		152
Earnings before interest, income taxes, depreciation and amortization (EBITDA)	$	12,824	$	12,762



ALMOST FAMILY, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA
(In thousands)

	Year ended December 31,
		2010		2009
Net income	$	30,713	$	24,564
Add back:
Interest expense		266		803
Income tax expense		20,678		16,502
Depreciation and amortization		2,913		2,385
Amortization of stock-based compensation		1,505		1,371
Earnings before interest, income taxes, depreciation and amortization (EBITDA)	$	56,075	$	45,625

Almost Family Reports Fourth Quarter and Full Year 2010 Results

Page 12

February 28, 2011

About Almost Family

Almost Family, Inc., founded in 1976, is a leading regional provider of home health nursing services, with branch locations in Florida, Kentucky, New Jersey, Connecticut, Ohio, Massachusetts, Missouri, Alabama, Illinois, Pennsylvania, and Indiana (in order of revenue significance). Almost Family, Inc. and its subsidiaries operate a Medicare-certified segment and a personal care segment. Altogether, Almost Family operates over 110 branch locations in 11 U.S. states.

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. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "believe," "estimate," "project," "anticipate," "continue," or similar terms, variations of those terms or the negative of those terms. These forward-looking statements are based on the Company's current plans, expectations and projections about future events.

Because forward-looking statements involve risks and uncertainties, the Company's actual results could differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. The potential risks and uncertainties which could cause actual results to differ materially 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 Medicare reimbursement for home health services and 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; changes in our relationships with referral sources; the ability of the Company to integrate acquired 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 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 various filings with the Securities and Exchange Commission, including its filing on Form 10-K for the year ended December 31, 2010, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and “Risk Factors.” The Company undertakes no obligation to update or revise its forward-looking statements.

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