Almost Family, Inc. (Nasdaq:AFAM), a leading provider of home
health nursing services, today updated investors on the following
recent events:
- Hurricanes Irma and Harvey which impacted third quarter 2017
business primarily in the states of Florida, Georgia and
Texas. These three states provided nearly one-fourth of our
revenues in the first half of 2017
- Nearing completion of the new HomeCare HomeBase system
implementation in home health operations
- The Company’s estimated share of success fees from
participation in upside-risk with Medicare Shared Savings Program
Accountable Care Organizations (ACO’s) for 2016 contract year
- Commitment of financial assistance of $100,000 to the American
Red Cross Disaster Relief fund for affected areas
Impact of Hurricanes on Results of
OperationsDue to the large breadth and scope Hurricane
Irma, all of the Company’s 66 Florida operating locations,
including 2 in Key West, experienced a substantial period of
disruption. This included the home health, personal care,
hospice and assessment business units. In addition to
Florida, the Company also experienced interruptions from Hurricane
Irma in Georgia and Hurricane Harvey in Texas. Due to the
early warnings regarding these storms, disruption to normal
business levels started well in advance of each storm actually
striking affected areas. However, as community and healthcare
delivery system recovery efforts continued, many of our affected
business units operated below pre-storm levels for elongated
periods of time.
The Company currently expects these
extraordinary weather events and the related disruptions to
management focus, on top of seasonal business lows, to reduce
income before income taxes and earnings before interest, income and
franchise taxes, depreciation and amortization, amortization of
stock-based compensation, deal, transition and other between $3.0
million and $3.5 million in the third quarter of 2017. (See
discussion of Non-GAAP Financial Measure below.)
Additionally, due to the proximity of these events to the end of
the third quarter, it is possible that they will have some residual
effect on fourth quarter results. This guidance is subject to
the completion and finalization of quarter end finance and
accounting procedures and reflects management’s estimate based
solely on information available as of the date of the release.
Company CommentsWilliam
B. Yarmuth, CEO of Almost Family, commented on the recovery
efforts: “I am extremely proud of the incredible focus and
commitment of our professional staff in Florida and the other
affected areas in responding rapidly and putting patients’
interests first. While our organization has endured
hurricanes in the past, these two storms were somewhat
unprecedented in the scope of geography and the extent of the
disruption they caused. Our management team and staff
responded exceptionally well, doing everything humanly possible to
ensure that patients’ needs were appropriately triaged
and their needs were met as promptly as the situation
would allow. In conjunction with our unique partnership with the
American Red Cross supporting its Fire Safety Program, the company
along with its employees have committed $100,000 to the American
Red Cross Disaster Relief Fund.”
Other UpdatesHome
Health Software Implementation Nearing Final StagesAt the
start of 2017, the Company began implementing the HomeCare HomeBase
(HCHB) software system in the 110 of its home health branches not
already on that system. As of today, 93 branches have
completed their transition and all active patients served by those
branches are now fully in the HCHB system. On September 18,
2017, the Company began implementation of the final wave of 17
branches and all home health admissions across the entire Company
are now being processed in HCHB. There will be no active
patients remaining in the predecessor systems by the end of
November 2017. The Company has begun to experience meaningful
operational efficiency gains, generally about 120 days after the
end of each wave, and expects these gains to be partially reflected
in its fourth quarter 2017 results and fully reflected in its
results in its 2018 reporting year.
Share of Accountable Care Organization
“MSSP” Expectations The Company currently expects to
report its share of the Medicare Shared Savings Program success
fees under ACO contracts for the 2016 performance year in its
fourth quarter 2017 results, at between $2.0 million and $2.4
million. Additionally, the Company's ACO enablement subsidiary
partnered to submit applications for 18 new ACO's for the 2018
program year, a number that exceeds the total ACO's currently under
management.
Non-GAAP Financial
MeasureEarnings before interest, income and franchise
taxes, depreciation and amortization, amortization of stock-based
compensation (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. Management routinely calculates and communicates
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. EBITDA is also used in certain covenants contained in
the Company’s credit agreement.
The Company’s estimate of the extraordinary
hurricane impact in this release refers to a non-GAAP financial
measure, EBITDA. The Company is unable to provide preliminary
results for comparable GAAP measures such as operating income, net
income or net cash provided by operating income for the third
quarter without unreasonable efforts because the Company’s closing
procedures for the quarter are incomplete. Accordingly, the
Company is unable to provide a reconciliation from a GAAP measure
to the non-GAAP measure without unreasonable effort.
About Almost Family, Inc.Almost
Family, Inc., founded in 1976, is a leading national provider of
home healthcare services, with 332 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.
Forward-Looking StatementsAll
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: we may learn new
information during our quarter end finance and accounting
procedures regarding the impact of the hurricanes; 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 administration of the Medicare
Shared Savings Program; 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 implement,
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.”
Almost Family, Inc.Steve Guenthner(502) 891-1000
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