Almost Family Reports Fourth Quarter and Full Year 2017 Results

Louisville, Kentucky, UNITED STATES


LOUISVILLE, Ky., Feb. 26, 2018 (GLOBE NEWSWIRE) -- Almost Family, Inc. (NASDAQ:AFAM), a leading provider of home health and related services, announced today its financial results for the quarter and year ended December 29, 2017. 

Fourth Quarter Highlights (1):

  • Net service revenues of approximately $200 million
  • GAAP net income of $8.8 million and GAAP EPS of $0.63(2) per diluted share includes the favorable impact of the 2017 Tax Cuts and Jobs Act of approximately $9.5 million, offset by increases in LHC merger and other deal, transition and other costs of approximately $12.3 million 
  • Adjusted EPS of $0.58(1,2)
  • Adjusted EBITDA of $18.4 (1) million
  • Operating cash flows of $15.8 million

Full Year Highlights (1):

  • Net service revenues of approximately $800 million
  • GAAP net income of $20.4 million and GAAP EPS of $1.48(2) per diluted share which includes the unfavorable impact of deal, transition and other costs, partially offset by the favorable impact of 2017 Tax Cuts and Jobs Act.
  • Adjusted EPS of $2.10 (1,2)
  • Adjusted EBITDA of $68.0 (1) million, including an estimated $3.3 million unfavorable impact from the hurricanes in the third quarter of 2017
  • Operating cash flows of $30.5 million

(1) See Non-GAAP Financial Measures below
(2) Note that comparability of EPS between years is partially impacted by changes in shares outstanding as explained further below

LHC Group and Almost Family Merger of Equals

On November 15, 2017, Almost Family entered into an agreement with LHC Group ("LHC") providing for a “merger of equals” business combination between our Company and LHC.  Following approval by both companies’ shareholders, the merger will be an all-stock transaction with an exchange ratio of 0.9150 of LHC shares to be exchanged for each outstanding share of Almost Family stock.  The combined company is expected to have an expanded geographic service territory of 36 states, 781 locations and 76 joint venture partnerships including 336 hospitals.  The combined company will be listed under the LHC name with common shares to be traded on the NASDAQ under ticker symbol LHCG.  On February 22, 2018, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to this transaction expired, satisfying one of the important conditions to closing. The transaction is expected to close near the end of the first quarter of 2018 following both companies’ March 29, 2018 special stockholder meetings to approve the proposed transaction.

Management Comments

William Yarmuth, Chairman and CEO, commented:  “We’re very pleased to close out fiscal 2017 with strong operating results and numerous accomplishments culminating with our planned merger with LHC Group.  Successfully integrating our CHS-JV acquisition and completing the transition of the balance of our home health operations, so that we’re now fully on the Homecare Homebase software platform, bode very well for our future.  

“As we leave 2017 and enter into 2018, combining the best of both our long track records of success and patient-focused cultures, as one family, we’ll continue our mission of making lives better through home care.  I am extremely proud of the work we've done, the progress we've made, and the meaningful contribution the Almost Family side of the house will now be able to make to the future success of the combined organization. I look forward to working with the rest of the management team in the continued evolution of these companies -- able to accomplish much more together than either of us could possibly achieve alone.”

Fourth Quarter Financial Results (See Matters Impacting Comparability and Presentation below)
Home Health (HH) segment net revenues increased by 35.5% or $38.0 million to $145.1 million from $107.1 million in the prior year and episodic admissions grew by 39.0% to 29,336 from 21,106.  Net revenue and episodic admissions in the CHS-JV acquisition were $42.5 million and 8,107, respectively.  Excluding the CHS-JV, episodic admissions grew by approximately 1%.

Home Health segment contribution before corporate expenses increased $4.9 million, or 36.0%, to $18.5 million from $13.6 million in the prior year with contribution margins as a percentage of revenue remaining consistent at 12.7%. 

Other Home-Based Services (OHBS) segment net revenues increased $5.6 million or 13.7% to $46.3 million in 2017 from $40.7 million, primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $7.7 million for the quarter.  Personal care revenues were down $1.7 million or 4.3% from prior year on lower volumes.  Additionally, mix changes combined with rate cuts and increases in wages influenced by increases in statutory minimum wage rates in certain states negatively impacted personal care margins.  Overall OHBS segment contribution before corporate expenses decreased $1.2 million, or 27.6% to $3.1 million from $4.3 million for the same period last year, primarily as a result of the prior year including an abnormally low bad debt provision. 

Healthcare Innovations (HCI) segment net revenues increased $3.6 million or 62.8% in 2017 to $9.3 million in 2017 as compared to $5.7 million in 2016.  The Company’s ACO enablement operations recorded shared savings incentive revenue of $2.3 million from multiple ACOs participating in the Medicare Shared Savings Program. ACOs managed by the Company saved the Medicare program a total of $25 million in the measurement period.  The Company’s assessment business revenues grew $0.8 million, or 14.8% as assessment volumes grew by 34%.  As a result, operating income for the HCI segment increased $2.7 million to $3.3 million, up from $0.6 million in the prior year.  

Corporate expenses as a percentage of revenue decreased to 4.2% in 2017 from 4.7% in 2016.   Deal, transition and other costs were $12.3 million, primarily due to LHC merger transaction costs including approximately $4.0 million for external transaction services and $2.5 million for performance based management incentive programs.  Other deal, transition and other cost drivers primarily relate to the final full quarter of implementation and training costs for our HH segment conversion to the Homecare Homebase information system. 

We recorded a tax benefit of $7.8 million in the fourth quarter of 2017 due to a favorable $9.5 million impact from the 2017 Tax Cuts and Jobs Act (Tax Act) partially offset by a negative $1.3 million impact from certain non-deductible, LHC merger related costs.  Excluding the impact of these items in 2017, our tax expense and effective tax rate would have been $0.4 million and 39.5% for the quarter. 

The Tax Act was signed into law on December 22, 2017, is effective for our fiscal 2018 and will reduce our U.S. corporate tax rate from 35% to 21% in 2018.  The Tax Act also resulted in the current year revaluation of our Deferred tax liabilities at the lower tax rate causing a one-time benefit of approximately $9.5 million.  We expect our effective tax rate to approximate 26.5% in 2018.

Increased average shares outstanding from the Company’s late January 2017 sale of common shares reduced Adjusted EPS for the fourth quarter of 2017 by $0.18 as compared to 2016.  The fourth quarter is fully reflective of the dilutive effect of this offering.

Full Year Financial Results (See Matters Impacting Comparability and Presentation below)
Home Health segment net revenues increased by $151 million or 34.7% to $586 million from $435 million in the prior year and episodic admissions grew by 40.4% to 118,535 from 84,401 in 2016, primarily due to the CHS-JV acquisition.  Net revenue and episodic admissions in the CHS-JV were $167.7 million and 32,714, respectively.  Excluding the CHS-JV, episodic admissions grew by approximately 2%, which was reduced by the impact of the Hurricanes.  Volume growth was partially offset by a net effective 1% Medicare rate cut and the impact of the Hurricanes.

HH segment contribution before corporate expenses increased $19.0 million, or 33.6%, to $75.6 million from $56.6 million in the prior year period.  Home Health contribution margins as a percentage of revenue decreased slightly to 12.9% from 13.0% in the prior year due to the combined impact of a 1% Medicare rate cut and an annual cost of living wage rate adjustment of 2%, both effective January 1, 2017.

OHBS segment net revenues increased $22.2 million or 13.7% to $184.8 million from $162.6 million, primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $29.8 million.  Personal care revenues were down $6.4 million or 4.0% from prior year on lower volumes.  Additionally, mix changes combined with rate cuts and increases in wages influenced by increases in statutory minimum wage rates in certain states negatively impacted personal care margins.  Overall OHBS segment contribution before corporate expenses increased $1.0 million or 7.7%, as compared to the same period of last year.

HCI segment net revenues increased slightly to $26.1 million in 2017 from $26.0 million in 2016.  Increases in both ACO Management membership fees and Assessment Services revenue largely offset a $1.9 million reduction in ACO shared savings payments revenue in 2017 versus the prior year.  As such, HCI operating income before corporate expenses decreased $1.6 million to $4.0 million in 2017.

Each of our operating segments experienced prolonged disruption during the third quarter of 2017 as a result of Hurricanes Irma and Harvey (the “Hurricanes”), with our Home Health segment operations in Florida the most severely affected.  The Hurricanes reduced operating income by approximately $3.3 million, largely on lost volume. 

Corporate expenses as a percentage of revenue decreased 0.1% to 4.5% in 2017.  Deal, transition and other costs were $29.4 million, largely driven by transaction costs of the LHC merger and the CHS-JV acquisition, in addition to the conversion of the HH segment to the Homecare Homebase information system.  Unused fees associated with our larger credit facility and higher loan cost amortization increased interest expense to $7.4 million from $6.3 million in the prior year. 

Net cash from operating activities of $30.5 million was generated in 2017.  Accounts receivable days sales outstanding were 57 at the end of the fourth quarter of 2017, as compared to 64 days in the third quarter of 2017 and 57 at the end of the fourth quarter of 2016.  The decline in days outstanding from prior quarter was driven by the prior quarter including delays related to our conversion to Homecare Homebase and legacy system run-out. 

We recorded a net tax benefit of $2.1 million in our fiscal 2017 period due to a positive $9.5 million impact from the 2017 Tax Cuts and Jobs Act (Tax Act); excluding this Tax Act impact our tax expense and effective tax rate would have been $7.4 million and 40.5%, respectively.  The 2016 full-year effective tax rate was 38.4%.  The increase from 2016 was largely due to an increase in the ratio of permanent items to pre-tax income driven largely by merger related differences.  We currently estimate that our effective tax rate will approximate 26.5% in 2018.

Increased average shares outstanding from the Company’s late January 2017 sale of common shares reduced Adjusted EPS for 2017 by $0.63.

Matters Impacting Comparability and Presentation 
On the first day of fiscal 2017, the Company acquired an 80% controlling interest in the entity holding the home health and hospice assets of Community Health Systems, Inc. (NYSE:CYH) (“CHS-JV”).  Community Health Systems, Inc. ("CHS"), one of the largest publicly-traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country, retained the remaining 20%. 

In the first quarter in 2017, the Company redefined its reporting segments to include a) Home Health (HH) formerly Visiting Nurse, b) Other Home-Based Services (OHBS) which includes all other home care services outside of Home Health services and c) the Healthcare Innovations (HCI) segment.  The OHBS segment consists of the historical personal care (“personal care”) operations plus hospice services.  Prior year segment information has been reclassified to conform to new segment definitions.  In management’s opinion, this approach provides investors clarity for the largest segment, Home Health, and best aligns with the Company’s internal decision-making processes as viewed by the chief operating decision maker.

In the first quarter in 2017, the Company completed a public offering of 3.5 million shares of its common stock for gross proceeds in excess of $150 million.  The net proceeds of $144 million were applied to the Company’s revolving credit facility, which increased credit available under the facility from approximately $78.6 million at December 30, 2016 to approximately $204.1 million after the offering.

Other Developments
Medicare Legislation
The Bipartisan Budget Act of 2018, enacted in February 2018, has the following provisions impacting health care services provided at home:

  • Restores the 3% home health rate add-on for patients who reside in rural geographies, effective January 1, 2018.  The add-on rate will be phased downward over a five year period following a formula specified in the legislation.
  • Mandates the development of a new case mix model for home health services using a 30 day payment period, through a transparent process including the home health industry and Congressional committees of Medicare jurisdiction.  The law requires any new case mix model to be implemented in 2020 in a budget neutral manner.
  • Face-to-face documentation improvements allowing the home health medical record in its entirety to be used to support the physician’s attestation of medical necessity.
  • A study to be conducted by the GAO (Government Accounting Office) on Medicare improvements to address the needs of the chronically ill including the provision of services provided at home, including interdisciplinary care management, tele-health and tele-monitoring for managed care plans, requiring states to better integrate Medicare and Medicaid services for the dually eligible and extension of the Independence at Home Demonstration Program.
  • A specific home health market basket annual inflationary update percentage of 1.5% for FY2020, leaving intact the full market basket update (generally expected to be between 2% and 3%) for FY2019.

Wage Inflation
Effective with the start of FY2018 the Company implemented a 2% cost of living wage increase for eligible employees.


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

        
 Quarter ended Year ended
 December 29, 2017 December 30, 2016 December 29, 2017 December 30, 2016
Net service revenues$ 200,618  $ 153,427  $ 796,965  $ 623,541
Cost of service revenues (excluding depreciation & amortization)  105,297    83,475    419,394    335,472
Gross margin  95,321    69,952    377,571    288,069
General and administrative expenses:       
Salaries and benefits  55,273    42,222    223,016    168,356
Other  23,680    16,458    95,932    72,430
Deal, transition & other costs  12,283    4,387    29,405    11,842
Total general and administrative expenses  91,236    63,067    348,353    252,628
Operating income  4,085    6,885    29,218    35,441
Interest expense, net  1,597    1,599    7,391    6,285
Income before noncontrolling interests and income taxes  2,488    5,286    21,827    29,156
Net income - noncontrolling interests  1,477    (170)   3,523    519
Income before income tax expense  1,011    5,456    18,304    28,637
Income tax (benefit) expense  (7,823)   1,864    (2,110)   10,984
Net income attributable to Almost Family, Inc.$ 8,834  $ 3,592  $ 20,414  $ 17,653
        
Per share amounts-basic:       
Average shares outstanding  13,809    10,162    13,539    10,153
        
Net income attributable to Almost Family, Inc.$ 0.64  $ 0.35  $ 1.51  $ 1.74
        
Per share amounts-diluted:       
Average shares outstanding  14,014    10,330    13,757    10,346
        
Net income attributable to Almost Family, Inc.$ 0.63  $ 0.35  $ 1.48  $ 1.71
        


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

        
    Unaudited
    
  December 29, 2017 December 30, 2016 
ASSETS       
CURRENT ASSETS:        
Cash and cash equivalents  $11,310  $10,110  
Accounts receivable - net   125,860   99,212  
Prepaid expenses and other current assets   14,514   11,432  
TOTAL CURRENT ASSETS   151,684   120,754  
PROPERTY AND EQUIPMENT - NET   15,246   10,732  
GOODWILL   390,754   305,476  
OTHER INTANGIBLE ASSETS - NET  145,522   85,063  
TRANSACTION DEPOSIT   —   128,930  
ASSETS HELD FOR SALE  3,800    —  
OTHER ASSETS   10,812   7,757  
TOTAL ASSETS  $717,818  $658,712  
        
LIABILITIES AND STOCKHOLDERS’ EQUITY        
CURRENT LIABILITIES:        
Accounts payable  $22,049  $12,122  
Accrued other liabilities   50,182   39,728  
Current portion - Seller Notes  4,961    —  
TOTAL CURRENT LIABILITIES   77,192   51,850  
        
LONG-TERM LIABILITIES:        
Revolving credit facility    100,254    262,456  
Deferred tax liabilities    18,595    21,145  
Seller notes, net of current portion   7,800    12,500  
Other liabilities    7,424    6,581  
TOTAL LONG-TERM LIABILITIES    134,073    302,682  
TOTAL LIABILITIES    211,265    354,532  
        
NONCONTROLLING INTEREST - REDEEMABLE -       
HEALTHCARE INNOVATIONS   2,256    2,256  
        
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; 14,243 and 10,504 issued and outstanding    1,425    1,051  
Treasury stock, at cost, 251 and 117 shares    (10,453)   (3,258) 
Additional paid-in capital    294,448    141,233  
Retained earnings    184,309    163,763  
Almost Family, Inc. stockholders' equity   469,729    302,789  
Noncontrolling interests - nonredeemable    34,568    (865) 
TOTAL STOCKHOLDERS’ EQUITY    504,297    301,924  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $ 717,818  $ 658,712  


ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

    
 Year ended
 December 29, 2017 December 30, 2016
Cash flows from operating activities:   
Net income attributable to Almost Family, Inc.$ 20,414  $ 17,653 
Net income attributable to noncontrolling interests  3,523    519 
Income before noncontrolling interests  23,937    18,172 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization  5,916    4,445 
Provision for uncollectible accounts  14,526    11,708 
Stock-based compensation  5,468    2,760 
Loan costs amortization  954    336 
Deferred income taxes  (2,550)   8,725 
   48,251    46,146 
Change in certain net assets and liabilities, net of the effects of acquisitions:   
Accounts receivable  (19,664)   (18,701)
Prepaid expenses and other current assets  (2,242)   (377)
Other assets  (3,966)   (1,215)
Accounts payable and accrued expenses  8,151    (1,410)
Net cash provided by operating activities  30,530    24,443 
    
Cash flows of investing activities:   
Capital expenditures  (6,112)   (6,206)
Transaction deposit  128,930    (128,930)
Acquisitions, net of cash acquired  (130,808)   (31,486)
Net cash used in investing activities  (7,990)   (166,622)
    
Cash flows of financing activities:   
Credit facility borrowings  245,471    389,328 
Credit facility repayments, net  (407,673)   (240,662)
Debt issuance fees  (25)   (3,900)
Distribution of capital  (128)   - 
Proceeds from stock offering, net  143,905    - 
Proceeds from stock option exercises  4,344    230 
Purchase of common stock in connection with share awards  (7,195)   (527)
Tax impact of share awards  -    353 
Principal payments on notes payable and capital leases  (39)   (55)
Net cash (used in) provided by financing activities  (21,340)   144,767 
    
Net change in cash and cash equivalents  1,200    2,588 
Cash and cash equivalents at beginning of period  10,110    7,522 
Cash and cash equivalents at end of period$ 11,310  $ 10,110 
    


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

                 
  Quarter ended      
  December 29, 2017 December 30, 2016 Change 
  Amount % Rev Amount % Rev Amount % 
Net service revenues:                
Home Health $ 145,108  72.3 %  $ 107,068  69.8 %  $ 38,040  35.5 %  
Other Home-Based Services   46,257  23.1 %    40,675  26.5 %    5,582  13.7 %  
Healthcare Innovations   9,253  4.6 %    5,684  3.7 %    3,569  62.8 %  
    200,618  100.0 %    153,427  100.0 %    47,191  30.8 %  
Operating income before corporate expenses:                
Home Health   18,500  12.7 %    13,599  12.7 %    4,901  36.0 %  
Other Home-Based Services   3,111  6.7 %    4,296  10.6 %    (1,185)  (27.6 )%  
Healthcare Innovations   3,250  35.1 %    559  9.8 %    2,691   NM  
    24,861  12.4 %    18,454  12.0 %    6,407  34.7 %  
                 
Corporate expenses   8,493  4.2 %    7,182  4.7 %    1,311  18.3 %  
Deal, transition and other costs   12,283  6.1 %    4,387  2.9 %    7,896  180.0 %  
Operating income   4,085  2.0 %    6,885  4.5 %    (2,800)  (40.7 )%  
Interest expense, net   1,597  0.8 %    1,599  1.0 %    (2)  (0.1 )%  
Net income - noncontrolling interests   1,477  0.7 %    (170)  (0.1)%    1,647  NM  
Net income before income taxes   1,011  0.5 %    5,456  3.6 %     (4,445)  (81.5 )%  
Income tax (benefit) expense  (7,823)  (3.9)%   1,864  1.2 %    (9,687)  NM  
Net income attributable to Almost Family, Inc. $ 8,834  4.4 %  $ 3,592  2.3 %  $  5,242  145.9 %  
                 
                 
Adjusted EBITDA (1) $ 18,361  9.2 %  $ 13,344  8.7 %  $  5,017  37.6 %  
Adjusted net income (1) $ 8,044  4.0 %  $ 6,274  4.1 %  $  1,770  28.2 %  
                 
(1) See Non-GAAP Financial Measures below.                


                 
  Year ended      
  December 29, 2017 December 30, 2016 Change 
  Amount % Rev Amount % Rev Amount % 
Net service revenues:                
Home Health $ 586,070  73.5 %  $ 434,968 69.8% $ 151,102  34.7 %  
Other Home-Based Services   184,752  23.2 %    162,546 26.1%   22,206  13.7 %  
Healthcare Innovations   26,143  3.3 %    26,027 4.2%   116  0.4 %  
    796,965  100.0 %    623,541 100.0%   173,424  27.8 %  
Operating income before corporate expenses:                
Home Health   75,587  12.9 %    56,564 13.0%   19,023  33.6 %  
Other Home-Based Services   14,555  7.9 %    13,519 8.3%   1,036  7.7 %  
Healthcare Innovations   4,046  15.5 %    5,657 21.7%   (1,611)  (28.5 )%  
    94,188  11.8 %    75,740 12.1%   18,448  24.4 %  
                 
Corporate expenses   35,565  4.5 %    28,457 4.6%   7,108  25.0 %  
Deal, transition and other costs   29,405  3.7 %    11,842 1.9%   17,563  148.3 %  
Operating income   29,218  3.7 %    35,441 5.7%   (6,223)  (17.6 )%  
Interest expense, net   7,391  0.9 %    6,285 1.0%   1,106  17.6 %  
Net income - noncontrolling interests   3,523  0.4 %    519 0.1%   3,004  NM  
Net income before income taxes   18,304  2.3 %    28,637 4.6%    (10,333)  (36.1 )%  
Income tax (benefit) expense  (2,110)  (0.3 )%   10,984 1.8%   (13,094)  NM  
Net income attributable to Almost Family, Inc. $ 20,414  2.6 %  $ 17,653 2.8% $  2,761  15.6 %  
                 
                 
Adjusted EBITDA (1) $ 67,965  8.5 %  $ 54,552 8.7% $  13,413  24.6 %  
Adjusted net income (1) $ 28,864  3.6 %  $ 24,640 4.0% $  4,224  17.1 %  
                 
(1) See Non-GAAP Financial Measures below.                


HOME HEALTH OPERATING METRICS

                 
  Quarter ended      
  December 29, 2017 December 30, 2016 Change 
  Amount % Rev Amount % Rev Amount % 
Locations   242     168    74   44.0 %  
                 
All payors:                
Admissions   39,580     25,946     13,634   52.5 %  
Census   31,166     22,210     8,956   40.3 %  
Visits   916,968     686,982     229,986   33.5 %  
Cost per visit $ 78   $ 77   $ 2   2.0 %  
G&A expense per census $ 1,761   $ 1,836   $ (75)   (4.1 )%  
                 
Episodic:                
Admissions    29,336     21,106     8,230   39.0 %  
Census   23,617     17,827     5,790   32.5 %  
Episodes    44,567     32,428     12,139   37.4 %  
Visits     716,603     566,227     150,376   26.6 %  
Revenue  (in thousands) $ 121,420  83.7%  $ 94,255  88.0%  $ 27,165   28.8 %  
Revenue per episode $ 2,724     2,907   $ (182)   (6.3 )%  
Visits per episode   16.1     17.5     (1.4)   (7.9 )%  
                 
Non-episodic:                
Admissions   10,244     4,840     5,404   111.7 %  
Census    7,549     4,383     3,166   72.2 %  
Visits    200,365     120,755     79,610   65.9 %  
Revenue  (in thousands) $ 23,688  16.3%  $ 12,813  12.0%  $ 10,875   84.9 %  
Revenue per visit $ 118   $ 106   $ 12   11.4 %  
Visits per admission   19.6     24.9     (5.4)   (21.6 )%  
                 


HOME HEALTH OPERATING METRICS

                 
  Year ended      
  December 29, 2017 December 30, 2016 Change 
  Amount % Rev Amount % Rev Amount % 
Locations   242     168    74   44.0 %  
                 
All payors:                
Admissions   159,079     107,576     51,503   47.9 %  
Census   31,224     22,980     8,244   35.9 %  
Visits   3,729,562     2,870,277     859,285   29.9 %  
Cost per visit $ 77   $ 74   $ 3   3.9 %  
G&A expense per census $ 7,149   $ 7,209   $ (60)   (0.8 )%  
                 
Episodic:                
Admissions    118,535     84,401     34,134   40.4 %  
Census   23,874     17,894     5,980   33.4 %  
Episodes    178,540     130,003     48,537   37.3 %  
Visits     2,933,044     2,317,540     615,504   26.6 %  
Revenue  (in thousands) $ 498,075  85.0%  $ 379,701  87.3%  $ 118,374   31.2 %  
Revenue per episode $ 2,790     2,921   $ (131)   (4.5 )%  
Visits per episode   16.4     17.8     (1.4)   (7.8 )%  
                 
Non-episodic:                
Admissions   40,544     23,175     17,369   74.9 %  
Census    7,350     5,086     2,264   44.5 %  
Visits    796,518     552,737     243,781   44.1 %  
Revenue  (in thousands) $ 87,995  15.0%  $ 55,267  12.7%  $ 32,728   59.2 %  
Revenue per visit $ 110   $ 100   $ 10   10.5 %  
Visits per admission   19.6     23.9     (4.2)   (17.6 )%  


OTHER HOME-BASED SERVICES OPERATING METRICS

                   
  Quarter ended       
  December 29, 2017  December 30, 2016  Change 
  Amount % Rev  Amount % Rev  Amount % 
Personal Care:                  
Locations   75      76     (1)  (1.3 )%  
Admissions   2,283      1,996      287  14.4 %  
Census   12,406      13,333      (927)  (7.0 )%  
Hours of service   1,771,444      1,878,853      (107,409)  (5.7 )%  
Hours per patient per week   11.0      10.8      0.1  1.3 %  
Revenue  (in thousands) $ 38,563  83.4%  $ 40,292  99.1%  $ (1,729)  (4.3 )%  
Operating income (in thousands) $ 2,613    $ 4,224    $ (1,611)  (38.1 )%  
Revenue per hour $ 21.77    $ 21.44    $ 0.32  1.5 %  
Cost per hour $ 13.33    $ 13.15    $ 0.18  1.4 %  
                   
Hospice:                  
Locations   16      1     15  NM  
Admissions    691      15      676  NM  
Census   491      30      461  NM  
Length of stay   65      54      11  19.7 %  
Revenue  (in thousands) $ 7,693  16.6%  $ 383  0.9%  $ 7,310  NM  
Operating income (in thousands) $ 498    $ 72    $ 426  NM  
Revenue per day $ 172    $ 141    $ 31  22.1 %  


                   
  Year ended       
  December 29, 2017  December 30, 2016  Change 
  Amount % Rev  Amount % Rev  Amount % 
Personal Care:                  
Locations   75      76     (1)  (1.3 )%  
Admissions   9,420      9,671      (251)  (2.6 )%  
Census   12,603      13,216      (613)  (4.6 )%  
Hours of service   7,197,211      7,538,223      (341,012)  (4.5 )%  
Hours per patient per week   11.0      11.0      0.0  0.1 %  
Revenue  (in thousands) $ 154,937 83.9%  $ 161,367 99.3%  $ (6,430)  (4.0 )%  
Operating income (in thousands) $ 10,102    $ 13,509    $ (3,407)  (25.2 )%  
Revenue per hour $ 21.53    $ 21.41    $ 0.12  0.6 %  
Cost per hour $ 13.19    $ 13.15    $ 0.04  0.3 %  
                   
Hospice:                  
Locations   16      1     15  NM  
Admissions    2,879      97      2,782  NM  
Census   482      23      459  NM  
Length of stay   61      42      19  NM  
Revenue  (in thousands) $ 29,815 16.1%  $ 1,179 0.7%  $ 28,636  NM  
Operating income (in thousands) $ 4,453    $ 10    $ 4,443  NM  
Revenue per day $ 170    $ 141    $ 29  20.3 %  


HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA

             
  Quarter ended      
  December 29, 2017 December 30, 2016  Change 
  Amount Amount  Amount % 
             
ACO Management:            
Medicare ACO enrollees under management   141,556   121,881    19,675  16.1%
ACOs under contract   15   14    1  7.1%
Revenue (in thousands) $ 3,119 $ 339  $ 2,780 NM 
Operating (loss) income (in thousands) $ 1,834 $ (247) $ 2,081  NM 
             
Assessment Services            
Assessments    26,000   19,400    6,600  34.0%
Revenue (in thousands) $ 6,134 $ 5,345  $ 789  14.8%
Operating income (in thousands) $ 1,416 $ 806  $ 610  75.7%
             


             
  Year ended      
  December 29, 2017 December 30, 2016  Change 
  Amount Amount  Amount % 
             
ACO Management:            
Medicare ACO enrollees under management   141,556   121,881   19,675   16.1 %  
ACOs under contract   15   14   1   7.1 %  
Revenue (in thousands) $ 5,076 $ 5,294 $ (218)   (4.1 )%  
Operating (loss) income (in thousands) $ 479 $ 2,714 $ (2,235)   NM  
             
Assessment Services            
Assessments    87,948   75,814   12,134   16.0 %  
Revenue (in thousands) $ 21,067 $ 20,733 $ 334   1.6 %  
Operating income (in thousands) $ 3,567 $ 2,943 $ 624   21.2 %  


Non-GAAP Financial Measures
The information provided in some of the tables in this release includes certain non-GAAP financial measures as defined under SEC rules.  In accordance with SEC rules, the Company has provided, in the supplemental information, a reconciliation of those measures to the most directly comparable GAAP measures.

Adjusted Net Income and Adjusted Earnings Per Share
Adjusted net income and adjusted earnings per share 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 presentation of adjusted net income and adjusted earnings per share provides investors with pertinent information to enable comparison of financial performance between periods by excluding certain items that the Company believes are not representative of its ongoing operations due to the nature of the items. 

The following table sets forth a reconciliation of net income attributable to Almost Family, Inc. to adjusted net income:

ALMOST FAMILY, INC. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
 (In thousands)

              
  Quarter ended Year ended 
  December 29, 2017 December 30, 2016 December 29, 2017 December 30, 2016 
Net income attributable to Almost Family, Inc. $ 8,834  $ 3,592  $ 20,414  $ 17,653  
              
Addbacks:             
Deal, transition and other costs   12,283    4,387    29,405    11,842  
Taxes   (13,073)   (1,705)   (20,955)   (4,855) 
Deal, transition and other costs, net of tax   (790)   2,682    8,450    6,987  
              
Adjusted net income attributable to Almost Family, Inc. $ 8,044  $ 6,274   $ 28,864  $ 24,640  
              
Per share amounts-diluted:             
Average shares outstanding   14,014    10,330    13,757    10,346  
Merger transaction related   38    -    38    -  
Adjusted average shares outstanding   13,976    10,330    13,719    10,346  
              
Net income attributable to Almost Family, Inc. $ 0.63  $ 0.35  $ 1.49  $ 1.71  
              
Addbacks:             
Deal, transition and other costs, net of tax   (0.06)   0.26    0.62    0.68  
Adjusted net income attributable to Almost Family, Inc. $ 0.58  $ 0.61  $ 2.10  $ 2.38  
              

Adjusted EBITDA
Adjusted earnings before interest, income and franchise taxes, depreciation and amortization, amortization of stock-based compensation, deal, transition and other (Adjusted 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 Adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity.  Management routinely calculates and communicates Adjusted EBITDA and believes that it is useful to investors because it provides a common analytical indicator within its industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value.  Adjusted EBITDA is also used in certain covenants contained in the Company’s credit agreement.

The following table sets forth a reconciliation of net income to Adjusted EBITDA:

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

               
  Quarter ended Year ended 
  December 29, 2017 December 30, 2016 December 29, 2017  December 30, 2016 
Net income $ 8,834  $ 3,592  $ 20,414   $ 17,653 
Add back:              
Net (loss) income - noncontrolling interests   1,477    (170)   3,523     519 
Interest expense   1,597    1,599    7,391     6,285 
Income tax (benefit) expense   (7,823)   1,864    (2,110)    10,984 
Franchise taxes   257    171    954     625 
Depreciation and amortization   879    1,154    5,438     3,909 
Stock-based compensation   857    747    2,950     2,735 
Deal, transition and other costs   12,283    4,387    29,405     11,842 
Adjusted EBITDA $ 18,361  $ 13,344  $ 67,965   $ 54,552 
               

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. These forward-looking statements are based on current plans, expectations, projections, forecasts and assumptions about future events that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “could,” “would,” “estimate,” “project,” “forecast,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “target,” or similar terms, variations of those terms or the negative of those terms. While forward-looking statements reflect good faith beliefs, assumptions and expectations, they are not guarantees of future performance, and the Company undertakes no obligation to update or revise its forward-looking statements. The forward-looking statements in this news release are based on a variety of assumptions that may not be realized and that are subject to significant risks and uncertainties, including 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; changes to the Medicare Shared Savings Programs; 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; unanticipated difficulties or expenditures relating to acquisition transactions, including, without limitation, difficulties that result in the failure to achieve expected synergies, efficiencies and cost savings from a transaction within the expected time period (if at all); 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; the ability of the Company to integrate, manage and keep secure our information systems; changes in the marketplace and regulatory environment for Health Risk Assessments and the Company’s self-insurance risks.  For a more complete discussion regarding 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 30, 2016, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and “Risk Factors.”  This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy and securities or a solicitation of any vote or approval.

About Almost Family, Inc.

Almost Family, Inc., founded in 1976, is a leading provider of home healthcare services, with over 330 branch locations in 26 states, including its joint venture with Community Health Systems, Inc. (CHS) (NYSE:CYH). Almost Family, Inc. and its subsidiaries operate Home Health, Other Home-Based Services and HealthCare Innovations segments.

Almost Family, Inc.
Steve Guenthner
(502) 891-1000