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Almost Family Reports Second Quarter and Year to Date 2017 Results

LOUISVILLE, Ky., Aug. 08, 2017 (GLOBE NEWSWIRE) -- Almost Family, Inc. (NASDAQ:AFAM), a leading national provider of home health and related services, announced today its financial results for the quarter ended June 30, 2017.

Second Quarter Highlights (1):

  • Net service revenues of approximately $200.7 million including the second quarter of operations of the CHS-JV (see below), up 28.7% from the second quarter of 2016
  • GAAP net income of $4.8 million
  • GAAP EPS of $0.34(2) per diluted share on 33% more shares outstanding than in the prior year
  • Adjusted net income of $7.8(1) million
  • Adjusted EPS of $0.56(1, 2); excluding the effect of the January 2017 equity sale, Adjusted EPS would have been $0.75(1, 2)
  • Adjusted EBITDA of $17.8(1) million
  • Year to date operating cash flows of $11.8 million
  • As of August 8, 2017, the Company has converted 71 of 110 home health branches to the new HomeCare-HomeBase information system and expects to convert the remaining branches as planned before the end of 2017
  • In July of 2017, the Company's CHS-JV purchased the assets of a Medicare-certified home health agency and related private duty company from Island Home Care in Key West, Florida marking our first co-investment with CHS since the formation of the JV.
  • CMS has announced a possible delay in ACO shared savings payments for Performance Year 2016 to fourth quarter 2017

/EIN News/ --                                

(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

Management Comments
William Yarmuth, Chairman and CEO, commented:  “We continue to be very pleased with the results of our operations.  Additionally, our transition work with the CHS-JV is proceeding on schedule and we are progressing nicely through our HomeCare HomeBase implementation.  In July, we made the first of what we hope will be many co-investments with CHS with the addition of an affiliated home health agency to a CHS hospital that did not previously have one.  On the regulatory front, we note that the FY2018 preliminary rule from Medicare is relatively close to expectations. We are carefully studying the proposed Home Health Groupings Model for FY2019 and preparing our commentary for submission to CMS within the regulatory window.”

Steve Guenthner, President added:  “With regard to the proposed rule, we feel very strongly CMS has an obligation to implement the HHGM in a budget neutral manner consistent with CMS’ historical practices in rule making and with its statutory grant of authority from Congress.  To do otherwise may put vulnerable patient populations at risk and most certainly will drive unnecessary opposition to what is otherwise directionally a positive policy development.  Having said that, we feel CMS is signaling a new era in provider-industry collaboration, and we in the home health industry have an obligation to work reciprocally with CMS to further refine the model prior to its implementation.  We’re pleased that many of the design principles of this new case mix model are consistent with an increased focus on chronically ill populations which is an approach we have long championed.  We very much appreciate the inclusive process and early announcement of the model by CMS last year and its inclusion in the current rule, some 18 months before possible implementation.”

Yarmuth concluded:  “In the second half of FY2017, we will complete our CHS-JV integration and our HCHB implementation work.  This will allow us to shift our attention to be more fully focused on improving our organic growth and earnings in 2018.  I want to sincerely thank all our employees and managers for their hard work and the fine job they have been doing on both of these very important initiatives.  In addition, we are continuing our development activities to pursue further consolidation in the home health space with a number of good opportunities before us to maintain our growth trajectory.”

Second Quarter Financial Results (See Matters Impacting Comparability and Presentation below)

Home Health (HH) segment net revenues increased by 35% or $38.0 million to $148.4 million from $110.3 million in the prior year and episodic admissions grew by 42.2% to 29,761 from 20,932 primarily due to the CHS-JV acquisition.  Net revenue and episodic admissions in the CHS-JV were $41.9 million and 8,211, respectively.  Excluding the CHS-JV, episodic admissions grew by approximately 3.0%, including growth in Florida of 2.8%.  The Company expects to discontinue separate reporting of Florida admission growth in future periods.

Home Health segment contribution before corporate expenses increased $4.9 million, or 32.4%, to $20.2 million, from $15.3 million in the prior year period.  Home Health contribution margins as a percentage of revenue decreased slightly to 13.6% from 13.8%, primarily due to the combined effect of a 1% Medicare rate cut and an annual cost of living wage rate adjustment of 2% both effective January 1, 2017.

Other Home-Based Services (OHBS) segment net revenues increased $6.5 million or 16.3% to $46.5 million in 2017 from $40.0 million, primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $7.3 million for the quarter.  Personal care revenues were down $0.4 million or 1.1% 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 32.8% to $4.1 million from $3.1 million for the same period last year.

Healthcare Innovations (HCI) segment net revenues increased $0.2 million to $5.8 million from $5.6 million, while operating income before corporate expenses declined to $0.3 million from $0.7 million in 2016, largely due to changes in mix of assessments performed by our assessment business. 

Corporate expenses as a percentage of revenue increased to 4.7% from 4.5%, primarily due to the current period including a management incentive provision.  Deal, transition and other costs were $5.4 million, primarily due to the ongoing conversion of the HH segment to the HomeCare-HomeBase information system and transition costs for the CHS-JV acquisition.  The HomeCare-HomeBase system conversion, implementation, training and related costs are expected to continue through the end of 2017. 

The effective tax rates for the second quarter of 2017 and 2016 were 36.5% and 40.5%, respectively. The Company’s lower effective income tax rate for the second quarter 2017 was due to the favorable impact of excess tax benefits from the exercise of stock options during the period. 

Increased average shares outstanding from the Company’s late January sale of common shares reduced Adjusted EPS of $0.56 for the second quarter of 2017 by $0.19.  The second quarter is fully reflective of the dilutive effect of this offering.

Year to Date Financial Results (See Matters Impacting Comparability and Presentation below)

Home Health segment net revenues increased by $79.8 million or 36% to $299.5 million from $219.8 million in the prior year and episodic admissions grew by 43.5% to 61,051 from 42,544 in 2016, primarily due to the CHS-JV acquisition.  Net revenue and episodic admissions in the CHS-JV were $84.8 million and 16,942, respectively.  Excluding the CHS-JV, episodic admissions grew by approximately 3.7%, including growth in Florida of 2.6%.

Home Health segment contribution before corporate expenses increased $9.8 million, or 32.3%, to $40.1 million, from $30.3 million in the prior year period.  Home Health contribution margins as a percentage of revenue decreased slightly to 13.4% from 13.8%, primarily due to the combined effect of a 1% Medicare rate cut and an annual cost of living wage rate adjustment of 2% both effective January 1, 2017.

Other Home-Based Services (OHBS) segment net revenues increased $12.2 million or 15.3% to a $92.1 million from $79.9 million primarily as a result of the 15 hospice facilities acquired in the CHS-JV transaction.  Hospice revenues were $14.3 million.  Personal care revenues were down $1.6 million or 2.0% 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 $1.1 million as compared to the same period of last year.

Healthcare Innovations (HCI) segment net revenues increased $0.4 million to $10.4 million from $10.0 million, while operating (loss) income before corporate expenses was essentially break even in both periods. 

Corporate expenses as a percentage of revenue decreased to 4.6% from 4.7% in the prior year period primarily due to a larger base of business.  The first half of 2017 includes a provision for management incentives, while the first half of 2016 had no such provision.  Deal, transition and other costs were $12.7 million, due to the CHS-JV acquisition and the conversion of the HH segment to the HomeCare-HomeBase information system.  Borrowings related to acquisitions increased interest expense to $3.5 million from $2.9 million in the prior year period.

Net cash from operating activities of $11.8 million was generated in the first half of 2017.  Accounts receivable days sales outstanding were 57 at the end of the second quarter of 2017, as compared to 56 days last year and 53 days at the end of the fourth quarter of 2016.  Variations in days outstanding are largely attributable to delayed regulatory processing from asset acquisitions.

The effective tax rates for 2017 and 2016 were 29.5% and 40.5%, respectively.  The Company’s lower effective income tax rate in 2017 was due to a change in accounting rules for excess tax benefits from the exercise of stock options and vesting of restricted shares as a result of the prospective adoption of Accounting Standards Update 2016-09 as of the first day of fiscal 2017.  Under previous accounting rules these benefits were recorded in “additional paid-in capital” rather than in the current period tax provision.  Future periods with option exercises or restricted stock vesting could lower or raise the Company’s tax provision in those periods.  Excluding these items, the Company expects its effective tax rate for 2017 to be 39.5%.

Increased average shares outstanding from the Company’s late January sale of common shares reduced Adjusted EPS of $1.11 for 2017 by $0.32. 

Acquisitions

The Company noted that it will continue to pursue quality acquisitions of in-home health care service providers consistent with its stated strategy and the types of services its segments currently provide.

Medicare Program Developments

On July 25, 2017, the Centers for Medicare and Medicaid Services (CMS) issued its proposed rule for 2018. CMS is proposing a 0.4% rate cut consisting of a 1.0% market basket update, a 0.97% case mix adjustment and sunset of the rural add-on provision. The proposed rule, which also proposes certain refinements to the Home Health Value-based Purchasing Model plus a new Home Health Groupings Model (HHGM Case Mix Model) for 2019, is currently open for comment. The final rule is expected to be released in late October 2017.  With regard to the HHGM Case Mix Model, as proposed it would also be subject to regulatory review through the 2019 preliminary and final rule process and thus can reasonably be expected to change from its current form prior to actual implementation. 

Due to the complexity, early stage of development and announcement and subjectivity to future change of the FY2019 HHGM, the Company is unable to predict at this time the impact such a proposal, if enacted, and in what form enacted, may have on the Company’s future financial performance and condition. A series of responses to various stakeholder requests from the Senate Finance Committee, the House Ways and Means Committee and CMS dating to 2013 and including AFAM executive testimony before the Congress can be found at almostfamily.com.  Many of the concepts and goals the Company has long championed in its position papers can be found in the HHGM design.

CMS Delay in ACO Medicare Shared Savings Program Success Fees

With regard to the timing of PY2016 ACO shared savings payments, if any, which the Company has historically reported in its third quarter earnings report, CMS recently announced: “A delay in availability of 2016 final risk scores will postpone the delivery of Performance Year (PY) 2016 financial reconciliation results and final benchmark reports for PY2017.”  As a result of this CMS delay, the Company is unable to determine whether it will report its annual shared savings revenue for PY2016 in the third quarter of 2017 or whether the delay will result in later reporting of that revenue.  Under the circumstances, and until further information is received from CMS, the Company advises investors and analysts to expect the results of its participation in the shared savings program to be reported in its fourth quarter 2017 results.

Matters Impacting Comparability and Presentation – CHS-JV and Segment 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.

Financing Activities

On January 25, 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.

ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
 
  Quarter ended   Six months ended
  June 30, 2017   July 1, 2016   June 30, 2017   July 1, 2016
Net service revenues $ 200,733   $ 155,996     $ 402,045   $ 309,694  
Cost of service revenues (excluding depreciation & amortization)   104,052     83,692       210,320     165,924  
Gross margin   96,681     72,304       191,725     143,770  
General and administrative expenses:              
Salaries and benefits   56,870     41,502       112,903     83,182  
Other   24,556     18,715       49,272     38,156  
Deal, transition & other costs   5,424     2,589       12,655     5,198  
Total general and administrative expenses   86,850     62,806       174,830     126,536  
Operating income   9,831     9,498       16,895     17,234  
Interest expense, net   1,579     1,604       3,475     2,936  
Income before noncontrolling interests and income taxes   8,252     7,894       13,420     14,298  
Net income (loss) - noncontrolling interests   725     (133 )     1,485     (323 )
Income before income tax expense   7,527     8,027       11,935     14,621  
Income tax expense   2,751     3,250       3,525     5,927  
Net income attributable to Almost Family, Inc. $ 4,776   $ 4,777     $ 8,410   $ 8,694  
               
Per share amounts-basic:              
Average shares outstanding   13,717     10,158       13,212     10,125  
               
Net income attributable to Almost Family, Inc. $ 0.35   $ 0.47     $ 0.64   $ 0.86  
               
Per share amounts-diluted:              
Average shares outstanding   13,954     10,322       13,449     10,311  
               
Net income attributable to Almost Family, Inc. $ 0.34   $ 0.46     $ 0.63   $ 0.84  
               
 


ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
    (Unaudited)      
    June 30, 2017   December 30, 2016
ASSETS            
CURRENT ASSETS:            
Cash and cash equivalents   $ 21,541     $ 10,110  
Accounts receivable - net     125,984       99,212  
Prepaid expenses and other current assets     13,443       11,432  
TOTAL CURRENT ASSETS     160,968       120,754  
PROPERTY AND EQUIPMENT - NET     19,441       10,732  
GOODWILL     389,258       305,476  
OTHER INTANGIBLE ASSETS - NET     146,736       85,063  
TRANSACTION DEPOSIT           128,930  
OTHER ASSETS     8,195       7,757  
TOTAL ASSETS   $ 724,598     $ 658,712  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
CURRENT LIABILITIES:            
Accounts payable   $ 16,453     $ 12,122  
Accrued other liabilities     50,612       39,728  
TOTAL CURRENT LIABILITIES     67,065       51,850  
             
LONG-TERM LIABILITIES:            
Revolving credit facility     122,677       262,456  
Deferred tax liabilities     24,970       21,145  
Seller notes     12,461       12,500  
Other liabilities     7,100       6,581  
TOTAL LONG-TERM LIABILITIES     167,208       302,682  
TOTAL LIABILITIES     234,273       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; 14,133 and 10,504 issued and outstanding     1,413       1,051  
Treasury stock, at cost, 169 and 117 shares     (5,825 )     (3,258 )
Additional paid-in capital     287,649       141,233  
Retained earnings     171,900       163,763  
Almost Family, Inc. stockholders' equity     455,137       302,789  
Noncontrolling interests - nonredeemable     32,932       (865 )
TOTAL STOCKHOLDERS’ EQUITY     488,069       301,924  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 724,598     $ 658,712  



ALMOST FAMILY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
  Six months ended
  June 30, 2017   July 1, 2016
Cash flows from operating activities:      
Net income attributable to Almost Family, Inc. $ 8,410     $ 8,694  
Net income (loss) attributable to noncontrolling interests   1,485       (323 )
Income before non-controlling interests   9,895       8,371  
Adjustments to reconcile net income to net cash provided by
operating activities:
     
Depreciation and amortization   3,193       1,848  
Provision for uncollectible accounts   7,442       7,859  
Stock-based compensation   1,414       1,402  
Loan costs amortization   473       136  
Deferred income taxes   3,825       4,236  
    26,242       23,852  
Change in certain net assets and liabilities, net of the effects of acquisitions:      
Accounts receivable   (13,194 )     (10,081 )
Prepaid expenses and other current assets   (1,363 )     (511 )
Other assets   (900 )     (492 )
Accounts payable and accrued expenses   975       (2,363 )
Net cash provided by operating activities   11,760       10,405  
       
Cash flows of investing activities:      
Capital expenditures   (3,117 )     (2,275 )
Transaction deposit   128,930       -  
Acquisitions, net of cash acquired   (129,164 )     (30,754 )
Net cash used in investing activities   (3,351 )     (33,029 )
       
Cash flows of financing activities:      
Credit facility borrowings   143,917       145,538  
Credit facility repayments, net   (283,697 )     (124,153 )
Debt issuance fees   46       (102 )
Proceeds from stock offering, net   143,907       -  
Proceeds from stock option exercises   1,455       16  
Purchase of common stock in connection with share awards   (2,567 )     (484 )
Tax impact of share awards   -       256  
Principal payments on notes payable and capital leases   (39 )     (55 )
Net cash provided by financing activities   3,022       21,016  
       
Net change in cash and cash equivalents   11,431       (1,608 )
Cash and cash equivalents at beginning of period   10,110       7,522  
Cash and cash equivalents at end of period $ 21,541     $ 5,914  
       

 

                                 
 ALMOST FAMILY, INC. AND SUBSIDIARIES   
 RESULTS OF OPERATIONS   
 (UNAUDITED)   
 (In thousands)   
                                 
     Quarter ended             
    June 30, 2017   July 1, 2016   Change  
     Amount      % Rev     Amount      % Rev     Amount     %   
Net service revenues:                                
Home Health   $ 148,373     73.9   % $ 110,340     70.7   % $
38,033     34.5   %
Other Home-Based Services     46,519     23.2   %   40,012     25.6   %     6,507     16.3   %
Healthcare Innovations     5,841     2.9   %   5,644     3.6   %     197     3.5   %
      200,733     100.0   %   155,996     100.0   %     44,737     28.7   %
Operating income before corporate expenses:                                
Home Health     20,213     13.6   %   15,267     13.8   %     4,946     32.4   %
Other Home-Based Services     4,051     8.7   %   3,051     7.6   %     1,000     32.8   %
Healthcare Innovations     327     5.6   %   720     12.8   %     (393 )   (54.6 ) %
      24,591     12.3   %   19,038     12.2   %     5,553     29.2   %
                                 
Corporate expenses     9,336     4.7   %   6,951     4.5   %     2,385     34.3   %
Deal, transition and other costs     5,424     2.7   %   2,589     1.7   %     2,835     109.5   %
Operating income     9,831     4.9   %   9,498     6.1   %     333     3.5   %
Interest expense, net     1,579     0.8   %   1,604     1.0   %     (25 )   (1.6 ) %
Net income (loss) - noncontrolling interests     725     0.4   %   (133 )   (0.1 ) %     858     NM  
Net income before income taxes     7,527     3.7   %   8,027     5.1   % $ (500 )   (6.2 ) %
Income tax expense     2,751     1.4   %   3,250     2.1   %     (499 )   (15.4 ) %
Net income attributable to Almost Family, Inc.   $ 4,776     2.4   % $ 4,777     3.1   % $
(1 )   (0.0 ) %
                                 
                                 
Adjusted EBITDA (1)   $ 17,816     8.9   % $ 13,757     8.8   % $
4,059     29.5   %
Adjusted net income (1)   $ 7,834     3.9   % $ 6,317     4.0   % $
1,517     24.0   %
                                 
(1) See Non-GAAP Financial Measures below.                                
 
     Six months ended             
    June 30, 2017   July 1, 2016   Change  
     Amount      % Rev     Amount      % Rev     Amount     %   
Net service revenues:                                
Home Health   $ 299,528     74.5   % $ 219,762     71.0   % $
79,766     36.3   %
Other Home-Based Services     92,117     22.9   %   79,896     25.8   %     12,221     15.3   %
Healthcare Innovations     10,400     2.6   %   10,036     3.2   %     364     3.6   %
      402,045     100.0   %   309,694     100.0   %     92,351     29.8   %
Operating (loss) income before corporate expenses:                                
Home Health     40,095     13.4   %   30,308     13.8   %     9,787     32.3   %
Other Home-Based Services     7,865     8.5   %   6,722     8.4   %     1,143     17.0   %
Healthcare Innovations     (16 )   (0.2 ) %   47     0.5   %     (63 )   NM  
      47,944     11.9   %   37,077     12.0   %     10,867     29.3   %
                                 
Corporate expenses     18,394     4.6   %   14,645     4.7   %     3,749     25.6   %
Deal, transition and other costs     12,655     3.1   %   5,198     1.7   %     7,457     143.5   %
Operating income     16,895     4.2   %   17,234     5.6   %     (339 )   (2.0 ) %
Interest expense, net     3,475     0.9   %   2,936     0.9   %     539     18.4   %
Net income (loss) - noncontrolling interests     1,485     0.4   %   (323 )   (0.1 ) %     1,808     NM  
Net income before income taxes     11,935     3.0   %   14,621     4.7   % $ (2,686 )   (18.4 ) %
Income tax expense     3,525     0.9   %   5,927     1.9   %     (2,402 )   (40.5 ) %
Net income attributable to Almost Family, Inc.   $ 8,410     2.1   % $ 8,694     2.8   % $
(284 )   (3.3 ) %
                                 
                                 
Adjusted EBITDA (1)   $ 34,624     8.6   % $ 25,954     8.4   % $
8,670     33.4   %
Adjusted net income (1)   $ 14,926     3.7   % $ 11,787     3.8   % $
3,139     26.6   %
                                 
(1) See Non-GAAP Financial Measures below.                                
                                 



HOME HEALTH OPERATING METRICS
 
    Quarter ended            
    June 30, 2017   July 1, 2016   Change  
    Amount   % Rev   Amount   % Rev   Amount   %  
Locations      239          162         77      47.5   %
                                 
All payors:                                
Admissions      39,728          27,410          12,318      44.9   %
Census      31,588          23,441          8,147      34.8   %
Visits      944,454          735,138          209,316      28.5   %
Cost per visit   $  76       $  73       $  3      3.7   %
G&A expense per census   $  1,796       $  1,768       $  28      1.6   %
                                 
Episodic:                                
Admissions      29,761          20,932          8,829      42.2   %
Census      24,263          18,010          6,253      34.7   %
Episodes      45,309          32,775          12,534      38.2   %
Visits       745,039          589,116          155,923      26.5   %
Revenue    $  126,984    85.6 $  95,305    86.4 $  31,679      33.2   %
Revenue per episode   $  2,803          2,908       $  (105 )    (3.6 ) %
Visits per episode      16.4          18.0          (1.5 )    (8.5 ) %
                                 
Non-episodic:                                
Admissions      9,967          6,478          3,489      53.9   %
Census      7,325          5,431          1,894      34.9   %
Visits      199,415          146,022          53,393      36.6   %
Revenue    $  21,389    14.4 $  15,035    13.6 $  6,354      42.3   %
Revenue per visit   $  107       $  103       $  4      4.2   %
Visits per admission      20.0          22.5          (2.5 )    (11.2 ) %
                                 


HOME HEALTH OPERATING METRICS
 
    Six months ended            
    June 30, 2017   July 1, 2016   Change  
    Amount   % Rev   Amount   % Rev   Amount   %  
Locations     239         162         77     47.5   %
                                 
All payors:                                
Admissions     81,185         55,842         25,343     45.4   %
Census     31,461         23,267         8,195     35.2   %
Visits     1,913,808         1,471,297         442,511     30.1   %
Cost per visit   $ 76       $ 72       $ 4     5.0   %
G&A expense per census   $ 3,639       $ 3,583       $ 56     1.6   %
                                 
Episodic:                                
Admissions     61,051         42,544         18,507     43.5   %
Census     24,206         17,853         6,354     35.6   %
Episodes     91,200         65,315         25,885     39.6   %
Visits     1,513,051         1,176,808         336,243     28.6   %
Revenue   $ 257,053   85.8 % $ 190,737   86.8 % $ 66,316     34.8   %
Revenue per episode   $ 2,819         2,920       $ (102 )   (3.5 ) %
Visits per episode     16.6         18.0         (1.4 )   (7.9 ) %
                                 
Non-episodic:                                
Admissions     20,134         13,298         6,836     51.4   %
Census     7,255         5,414         1,841     34.0   %
Visits     400,757         294,489         106,268     36.1   %
Revenue   $ 42,475   14.2 % $ 29,025   13.2 % $ 13,450     46.3   %
Revenue per visit   $ 106       $ 99       $ 7     7.5   %
Visits per admission     19.9         22.1         (2.2 )   (10.1 ) %


                                     
OTHER HOME-BASED SERVICES OPERATING METRICS
                                     
     Quarter ended               
    June 30, 2017     July 1, 2016     Change  
    Amount    % Rev     Amount    % Rev     Amount   %  
Personal Care:                                    
Locations     74           71             3     4.2   %
Admissions     2,537           2,591             (54 )   (2.1 ) %
Census     12,706           12,894             (188 )   (1.5 ) %
Hours of service     1,813,207           1,857,937             (44,730 )   (2.4 ) %
Hours per patient per week     11.0           11.1             (0.1 )   (1.0 ) %
Revenue   $ 39,248   84.4 %   $ 39,694     99.2 %   $ (446 )   (1.1 ) %
Operating income   $ 2,913         $ 3,008           $ (95 )   (3.2 ) %
Revenue per hour   $ 21.65         $ 21.36           $ 0.28     1.3   %
Cost per hour   $ 13.23         $ 13.08           $ 0.15     1.1   %
                                     
Hospice:                                    
Locations     16           1             15     NM  
Admissions     750           26             724     NM  
Census     481           25             456     NM  
Length of stay     58           45             13     28.9   %
Revenue   $ 7,271   15.6 %   $ 318     0.8 %   $ 6,953     NM  
Operating income   $ 1,138         $ 43           $ 1,095     NM  
Revenue per day   $   166         $   142           $   24     16.9   %
 
     Six months ended               
    June 30, 2017     July 1, 2016     Change  
    Amount    % Rev     Amount    % Rev     Amount   %  
Personal Care:                                    
Locations       74             71             3     4.2   %
Admissions       4,878             5,037               (159 )   (3.2 ) %
Census       12,766             12,720               46     0.4   %
Hours of service       3,642,749             3,706,146               (63,397 )   (1.7 ) %
Hours per patient per week       11.0             11.2               (0.2 )   (2.1 ) %
Revenue    $   77,802   84.5 %   $   79,387     99.4 %   $   (1,585 )   (2.0 ) %
Operating income   $   5,261         $   6,745           $   (1,484 )   (22.0 ) %
Revenue per hour   $   21.36         $   21.42           $   (0.06 )   (0.3 ) %
Cost per hour   $   13.08         $   13.03           $   0.05     0.4   %
                                     
Hospice:                                    
Locations       16             1             15     NM  
Admissions        1,508             49               1,459     NM  
Census       474             20               454     NM  
Length of stay       57             38               20     52.0   %
Revenue    $   14,315   15.5 %   $   509     0.6 %   $   13,806     NM  
Operating income (loss)   $   2,604         $   (23 )         $   2,627     NM  
Revenue per day   $   166         $   142           $   24     16.9   %
                                           


                         
HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA
                         
     Quarter ended             
    June 30, 2017   July 1, 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   $ 647     $ 165     $ 482     292.1   %
Operating (loss)   $ (580 )   $ (479 )   $ (101 )   (21.1 ) %
                         
                         
Assessment Services                        
Assessments     22,284       19,820       2,464     12.4   %
Revenue   $ 5,194     $ 5,479     $ (285 )   (5.2 ) %
Operating income   $ 907     $ 1,199     $ (292 )   (24.4 ) %
                         
                         
     Six months ended             
    June 30, 2017   July 1, 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   $ 1,190     $ 336     $ 854     254.2   %
Operating (loss)   $ (969 )   $ (871 )   $ (98 )   (11.3 ) %
                         
                         
Assessment Services                        
Assessments     37,496       35,395       2,101     5.9   %
Revenue   $ 9,210     $ 9,700     $ (490 )   (5.1 ) %
Operating income   $ 953     $ 918     $ 35     3.8   %
                                 


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   Six months ended  
(in thousands)   June 30, 2017   July 1, 2016   June 30, 2017   July 1, 2016  
Net income attributable to Almost Family, Inc.   $ 4,776   $ 4,777   $ 8,410   $ 8,694  
                           
Addbacks:                          
Deal, transition and other, net of tax     3,058     1,540     6,516     3,093  
Adjusted net income attributable to Almost Family, Inc.   $ 7,834   $ 6,317 $   14,926   $ 11,787  
                           
Per share amounts-diluted:                          
Average shares outstanding     13,954     10,322     13,449     10,311  
                           
Net income attributable to Almost Family, Inc.   $ 0.34   $ 0.46   $ 0.63   $ 0.84  
                           
Addbacks:                          
Deal, transition and other, net of tax     0.22     0.15     0.48     0.30  
Adjusted net income attributable to Almost Family, Inc.   $ 0.56   $ 0.61   $ 1.11   $ 1.14  
                           

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 Operations are significant components in understanding and evaluating financial performance and liquidity.  Management routinely calculates and communicates Adjusted EBITDA Operations 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   Six months ended  
(in thousands)   June 30, 2017   July 1, 2016   June 30, 2017     July 1, 2016  
Net income   $ 4,776   $ 4,777     $ 8,410     $ 8,694    
Add back:                            
Net (loss) income - noncontrolling interests     725     (133 )     1,485       (323 )  
Interest expense     1,579     1,604       3,475       2,936    
Income tax expense     2,751     3,250       3,525       5,927    
Franchise taxes     253     122       467       272    
Depreciation and amortization     1,660     864       3,193       1,848    
Stock-based compensation     648     684       1,414       1,402    
Deal, transition and other costs     5,424     2,589       12,655       5,198    
Adjusted EBITDA   $ 17,816   $ 13,757     $ 34,624     $ 25,954    
                             

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; 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.”

About Almost Family, Inc.

Almost Family, Inc., founded in 1976, is a leading national provider of home healthcare services, with 329 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

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