0001104659-12-074478.txt : 20121106 0001104659-12-074478.hdr.sgml : 20121106 20121106084732 ACCESSION NUMBER: 0001104659-12-074478 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20121106 DATE AS OF CHANGE: 20121106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALMOST FAMILY INC CENTRAL INDEX KEY: 0000799231 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SOCIAL SERVICES [8300] IRS NUMBER: 061153720 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09848 FILM NUMBER: 121181806 BUSINESS ADDRESS: STREET 1: 9510 ORMSBY STATION ROAD STREET 2: STE 300 CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 5028911000 MAIL ADDRESS: STREET 1: 9510 ORMSBY STATION ROAD STREET 2: SUITE 300 CITY: LOUISVILLE STATE: KY ZIP: 40223 FORMER COMPANY: FORMER CONFORMED NAME: CARETENDERS HEALTH CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SENIOR SERVICE CORP DATE OF NAME CHANGE: 19920123 10-Q 1 a12-19301_110q.htm 10-Q

Table of Contents

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 


 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2012

 

OR

 

¨         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                       to                       

 

Commission file number  001-09848

 


 

GRAPHIC

 

ALMOST FAMILY, INC.

(Exact name of Registrant as specified in its charter)

 


 

Delaware

 

06-1153720

(State or other jurisdiction of

 

(I.R.S. Employer Identification

incorporation or organization)

 

Number)

 

9510 Ormsby Station Road, Suite 300, Louisville, Kentucky 40223

(Address of principal executive offices)

 

(502) 891-1000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesx No o.

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x No o.

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller Reporting Company o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class of Common Stock    $0.10 par value

Shares outstanding at November 2, 2012  9,331,269

 

 

 



Table of Contents

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

 

FORM 10-Q

 

INDEX

 

PART I.  FINANCIAL INFORMATION

3

 

 

Item 1.    Financial Statements.  Consolidated Financial Statements and Supplementary Data (unaudited except December 31, 2011 Consolidated Balance Sheet)

3

 

 

Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011

3

 

 

Consolidated Statements of Income for the Three and Nine months Ended September 30, 2012 and 2011

4

 

 

Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2012 and 2011

5

 

 

Notes to Consolidated Financial Statements

6

 

 

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

12

 

 

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

22

 

 

Item 4.    Controls and Procedures

22

 

 

PART II.  OTHER INFORMATION

23

 

 

Item 1.     Legal Proceedings

23

 

 

Item 1A.  Risk Factors

23

 

 

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

23

 

 

Item 3.    Defaults Upon Senior Securities

23

 

 

Item 4.    Mine Safety Disclosures

23

 

 

Item 5.    Other Information

24

 

 

Item 6.    Exhibits

24

 

2



Table of Contents

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

(In thousands)

 

 

 

September 30, 2012

 

 

 

 

 

(UNAUDITED)

 

December 31, 2011

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

42,716

 

$

33,693

 

Accounts receivable - net

 

48,135

 

45,166

 

Prepaid expenses and other current assets

 

6,607

 

6,437

 

Deferred tax assets

 

7,373

 

7,470

 

TOTAL CURRENT ASSETS

 

104,831

 

92,766

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT - NET

 

5,043

 

5,229

 

GOODWILL

 

133,416

 

132,653

 

OTHER INTANGIBLE ASSETS

 

19,987

 

19,709

 

OTHER ASSETS

 

419

 

465

 

 

 

$

263,696

 

$

250,822

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

 

$

6,096

 

$

6,489

 

Accrued other liabilities

 

20,686

 

21,129

 

Current portion - capital leases and notes payable

 

500

 

1,200

 

TOTAL CURRENT LIABILITIES

 

27,282

 

28,818

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

Notes payable

 

625

 

1,125

 

Deferred tax liabilities

 

16,096

 

13,631

 

Other liabilities

 

613

 

951

 

TOTAL LONG-TERM LIABILITIES

 

17,334

 

15,707

 

TOTAL LIABILITIES

 

44,616

 

44,525

 

 

 

 

 

 

 

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; 9,420 and 9,381 issued and outstanding

 

942

 

938

 

Treasury stock, at cost, 89 and 13 shares

 

(2,283

)

(431

)

Additional paid-in capital

 

101,730

 

100,678

 

Retained earnings

 

118,691

 

105,112

 

TOTAL STOCKHOLDERS’ EQUITY

 

219,080

 

206,297

 

 

 

$

263,696

 

$

250,822

 

 

See accompanying Notes to Consolidated Financial Statements.

 

3



Table of Contents

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

Nine months Ended September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Net service revenues

 

$

85,128

 

$

86,207

 

$

261,970

 

$

250,521

 

Cost of service revenues (excluding depreciation & amortization)

 

44,518

 

43,345

 

135,573

 

121,940

 

Gross margin

 

40,610

 

42,862

 

126,397

 

128,581

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

23,769

 

24,832

 

73,648

 

72,783

 

Other

 

10,049

 

9,993

 

30,409

 

29,831

 

Total general and administrative expenses

 

33,818

 

34,825

 

104,057

 

102,614

 

Operating income

 

6,792

 

8,037

 

22,340

 

25,967

 

Interest expense, net

 

(17

)

(41

)

(87

)

(140

)

Income before income taxes

 

6,775

 

7,996

 

22,253

 

25,827

 

Income tax expense

 

(2,676

)

(3,154

)

(8,674

)

(10,331

)

Net income

 

$

4,099

 

$

4,842

 

$

13,579

 

$

15,496

 

 

 

 

 

 

 

 

 

 

 

Per share amounts-basic:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

9,256

 

9,296

 

9,262

 

9,271

 

Net income

 

$

0.44

 

$

0.52

 

$

1.47

 

$

1.67

 

 

 

 

 

 

 

 

 

 

 

Per share amounts-diluted:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

9,315

 

9,346

 

9,329

 

9,359

 

Net income

 

$

0.44

 

$

0.52

 

$

1.46

 

$

1.66

 

 

See accompanying Notes to Consolidated Financial Statements.

 

4



Table of Contents

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2012

 

2011

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

13,579

 

$

15,496

 

Adjustments to reconcile income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

1,911

 

2,170

 

Provision for uncollectible accounts

 

2,022

 

1,394

 

Stock-based compensation

 

1,128

 

1,040

 

Deferred income taxes

 

2,817

 

2,464

 

 

 

21,457

 

22,564

 

Change in certain net assets and liabilities, net of the effects of acquisitions:

 

 

 

 

 

Decrease (increase) in:

 

 

 

 

 

Accounts receivable

 

(5,589

)

(810

)

Prepaid expenses and other current assets

 

(457

)

250

 

Other assets

 

45

 

60

 

Decrease in:

 

 

 

 

 

Accounts payable and accrued expenses

 

(1,241

)

(2,718

)

Net cash provided by operating activities

 

14,215

 

19,346

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures

 

(1,530

)

(1,860

)

Acquisitions, net of cash acquired

 

(538

)

(35,689

)

Net cash used in investing activities

 

(2,068

)

(37,549

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from exercise of stock options

 

70

 

292

 

Purchase of common stock in connection with share awards

 

(1,852

)

(440

)

Tax impact of share awards

 

(142

)

1,614

 

Principal payments on capital leases and notes payable

 

(1,200

)

(1,595

)

Net cash used in financing activities

 

(3,124

)

(129

)

 

 

 

 

 

 

Net change in cash and cash equivalents

 

9,023

 

(18,332

)

Cash and cash equivalents at beginning of period

 

33,693

 

47,943

 

Cash and cash equivalents at end of period

 

$

42,716

 

$

29,611

 

 

 

 

 

 

 

Summary of non-cash investing and financing activities:

 

 

 

 

 

Settlement of Directors Deferred Compensation Plan

 

$

 

$

501

 

Acquisitions funded by notes payable

 

$

 

$

1,000

 

 

See accompanying Notes to Consolidated Financial Statements.

 

5



Table of Contents

 

ALMOST FAMILY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Unless otherwise indicated, all dollars and share amounts are in thousands)

 

1.                                      Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements for the three and nine months ended September 30, 2012 and 2011 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations.  Accordingly, the reader of this Form 10-Q is referred to Almost Family, Inc.’s (the “Company”) Form 10-K for the year ended December 31, 2011 for further information. In the opinion of management of the Company, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position at September 30, 2012, the results of operations for the three and nine month periods ended September 30, 2012 and cash flows for the nine month periods ended September 30, 2012 and 2011.  The results of operations for the three and nine month periods ended September 30, 2012 are not necessarily indicative of the operating results for the year.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Recently Issued Accounting Pronouncements

 

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. (ASU) 2011-04, Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in US GAAP and IFRS.  The amendments in ASU 2011-04 change the wording used to describe many of the requirements in U.S. Generally Accepted Accounting Principles (GAAP) for measuring fair value and for disclosing information about fair value measurements.  ASU 2011-04 was effective for the Company beginning January 1, 2012.  The adoption of ASU 2011-04 did not impact the consolidated financial statements.

 

In July 2011, the FASB issued ASU 2011-07, Health Care Entities (Topic 954): Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities.  Under ASU 2011-07, only health care organizations (HCOs) that do not assess the collectability of a receivable before recognizing revenue will present their provision for bad debt related to patient service revenue as a deduction from revenue on the face of the statement of operations.  ASU 2011-07 also requires and expands qualitative and quantitative disclosures about changes in the allowance.  For certain HCOs, the guidance may result in the provision for bad debts being presented in two separate lines, a contra-revenue line for bad debts related to patient services and an expense line for bad debts related to all other sources of income.  The amendments to the presentation of the provision for bad debts related to patient service revenue in the statement of operations are applied retrospectively to all prior periods presented, while required disclosures are provided prospectively.  ASU 2011-07 was effective for the Company beginning January 1, 2012.  The adoption of this standard did not impact the consolidated financial statements, as the Company does not recognize significant revenue without assessing a customer’s ability to pay.

 

In September 2011, the FASB issued ASU 2011-08: Intangibles — Goodwill and Other (Topic 350) which amends current guidance to allow companies to first perform a qualitative assessment to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step

 

6



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goodwill impairment test required under current accounting standards. ASU 2011-08 was effective for the Company beginning January 1, 2012.  The adoption of ASU 2011-08 did not impact the consolidated financial statements.

 

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment intended to simplify how an entity tests indefinite-lived assets other than goodwill for impairment by providing entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary.  ASU 2012-02 will be effective for the Company’s calendar year beginning January 1, 2013 and early adoption is permitted.  The Company does not anticipate the adoption will have a material impact on its consolidated financial position or results of operations.

 

Financial Statement Reclassifications

 

Certain amounts have been reclassified in the 2011 consolidated financial statements and related notes in order to conform to the 2012 presentation. Such reclassifications had no effect on previously reported net income.

 

2.                                      Segment Data

 

The Company has two reportable segments, Visiting Nurse (VN) and Personal Care (PC), which provide services in Florida, Ohio, Kentucky, Connecticut, New Jersey, Massachusetts, Missouri, Alabama, Illinois, Pennsylvania and Indiana.  Reportable segments have been identified based upon how management has organized the business by services provided to customers and the criteria in ASC 280, Segment Reporting.  The Company does not allocate certain expenses to the reportable segments.  These expenses are included in corporate expenses below.

 

The VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. VN Medicare revenues are generated on a per episode basis rather than a fee per visit or day of care. Approximately 91% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs.

 

The PC segment services are also provided in patients’ homes. These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis. Approximately 86% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Net service revenues:

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

$

65,880

 

$

69,897

 

$

204,198

 

$

213,794

 

Personal Care

 

19,248

 

16,310

 

57,772

 

36,727

 

 

 

85,128

 

86,207

 

261,970

 

250,521

 

Operating income before corporate expenses:

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

8,906

 

10,192

 

30,698

 

35,004

 

Personal Care

 

2,822

 

2,687

 

7,583

 

5,418

 

 

 

11,728

 

12,879

 

38,281

 

40,422

 

Corporate expenses

 

4,936

 

4,842

 

15,941

 

14,455

 

Operating income

 

$

6,792

 

$

8,037

 

$

22,340

 

$

25,967

 

Interest expense, net

 

(17

)

(41

)

(87

)

(140

)

Income tax expense

 

(2,676

)

(3,154

)

(8,674

)

(10,331

)

Net income

 

$

4,099

 

$

4,842

 

$

13,579

 

$

15,496

 

 

7



Table of Contents

 

3.                                      Capitalized Software Development Costs

 

The Company capitalizes the cost of internally generated computer software developed for the Company’s own use. Software development costs of approximately $188 and $104 were capitalized in the three months ended September 30, 2012 and 2011, respectively and $465 and $401 were capitalized in the nine months ended September 30, 2012 and 2011, respectively. Capitalized software development costs are amortized over a three-year period following the initial implementation of the software.

 

4.                                      Goodwill and Other Intangible Assets

 

Goodwill and other intangible assets acquired are stated at fair value at date of acquisition.  Subsequent to its acquisitions, the Company conducts annual reviews for impairment, or more frequently if circumstances indicate impairment may have occurred.  Other intangible assets consist of certificates of need and licenses, trade names and non-compete agreements.  Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives.  Licenses, provider numbers, certificates of need and trade names have indefinite lives and are reviewed at least annually for possible impairment, or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.  The Company completed its most recent annual impairment test as of December 31, 2011 and determined that no impairment existed.

 

The following table summarizes the activity related to goodwill and other intangible assets for 2012:

 

 

 

 

 

Other Intangible Assets

 

 

 

Goodwill

 

Certificates
of Need and
licenses

 

Trade
Names

 

Non-compete
Agreements

 

Total

 

Balances at 12-31-11

 

$

132,653

 

$

9,091

 

$

10,421

 

$

197

 

$

19,709

 

Additions

 

208

 

300

 

 

30

 

330

 

Adjustments

 

555

 

 

 

 

 

Amortization

 

 

 

 

(52

)

(52

)

Balances at 9-30-12

 

$

133,416

 

$

9,391

 

$

10,421

 

$

175

 

$

19,987

 

 

Of total goodwill, $102,497 and $30,919 relates to the VN segment and the PC segment, respectively.  Current period adjustments relate to finalization of purchase price for the Company’s August 2011 acquisition of Cambridge Home Health Care Holdings, Inc. (Cambridge Acquisition), while additions pertain to two acquisitions completed during the third quarter of 2012.  Amortization expense recognized on finite-lived intangible assets for the third quarter of 2012 and 2011 was $19 and $26, respectively, and for the nine months ended September 30, 2012 and 2011 was $52 and $70, respectively.

 

5.                                      Revolving Credit Facility

 

At September 30, 2012, the Company had a $125 million senior secured revolving credit facility with JP Morgan Chase Bank, NA, as Administrative Agent, Bank of America, as Syndication Agent and certain other lenders (the “Facility”).  The Facility consists of a $125 million credit line with a maturity date of December 2, 2015 and an “accordion” feature providing for potential future expansion of the Facility to $175 million.  Borrowings (other than letters of credit) under the credit facility are at either the bank’s prime rate plus a margin (ranging from 1.25% to 2.25%, currently 1.25%) or LIBOR plus a margin (ranging from 2.25% to 3.25%, currently 2.25%).  The margin for prime rate or LIBOR borrowings is determined by the Company’s leverage.  Borrowings under the Facility are secured by a first priority perfected security interest in all tangible and intangible assets of the Company, and all existing and future direct and indirect subsidiaries of the Company, as guarantors.

 

The weighted average prime rate-based interest rate was 4.50% for both the three and nine months ended September 30, 2012 and 2011.  The weighted average LIBOR rates were 2.72% and 2.59% for the three months ended September 30, 2012 and 2011, respectively.  The Company pays a quarterly commitment fee of 0.30% to 0.50% on the average daily unused facility balance based on leverage. Borrowings are subject to

 

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various covenants including a multiple of 3.0 times earnings before interest, income tax, depreciation and amortization (“EBITDA”).  “EBITDA” may include “Acquired EBITDA” from pro-forma acquisitions pursuant to a calculation rider, up to 50% of “Adjusted EBITDA”, as defined.  Borrowings under the Facility may be used for general corporate purposes, including acquisitions. As of September 30, 2012, the formula permitted $105 million to be used, of which no amounts were outstanding.  The Company had irrevocable letters of credit totaling $6.4 million outstanding in connection with the Company’s self-insurance programs, which resulted in a total of $98.6 million being available for use at September 30, 2012. As of September 30, 2012, the Company was in compliance with the Facility’s various financial covenants. Under the most restrictive of its covenants, the Company was required to maintain minimum net worth of at least $154.7 million at September 30, 2012.  At such date, the Company’s net worth was approximately $219.0 million.

 

6.                                      Fair Value Measurements

 

The Company’s financial instruments consist of cash, accounts receivable, payables and debt instruments.  The carrying values of cash, accounts receivable and payables are considered representative of their respective fair values due to the short-term nature of these instruments.  The fair value of the Company’s debt instruments approximates their carrying values as substantially all of such debt instruments have rates which fluctuate with changes in market rates.  The Company does not have any assets or liabilities carried at fair value that are measured on a recurring basis.

 

7.                                      Stock-Based Compensation

 

The Company issues both restricted share and option awards to employees and non-employee directors.  Restricted share awards cliff vest on the third anniversary, while option share awards vest annually in 25% increments over four years.  Stock option grant date fair values are determined at the date of grant using a Monte Carlo option valuation model with suboptimal exercise behavior.  Changes in awards outstanding are summarized as follows:

 

 

 

Restricted shares

 

Options

 

 

 

Shares

 

Wtd Avg. Grant
Price

 

Shares

 

Wtd Avg. Ex.
Price

 

December 31, 2011

 

71

 

$

37.85

 

292

 

$

25.15

 

Granted

 

29

 

24.16

 

63

 

24.16

 

Vested or Exercised

 

(25

)

$

21.44

 

(11

)

$

6.49

 

Forfeited

 

 

 

(3

)

(20.19

)

September 30, 2012

 

75

 

$

33.27

 

341

 

$

25.62

 

 

8.                                      Earnings per Common Share

 

A reconciliation of the weighted average shares outstanding used in the calculation of basic and diluted earnings per common share is as follows:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Basic weighted average outstanding shares

 

9,256

 

9,296

 

9,262

 

9,271

 

Add common equivalent shares representing shares issuable upon exercise of dilutive awards

 

59

 

50

 

67

 

88

 

Diluted weighted average number of shares

 

9,315

 

9,346

 

9,329

 

9,359

 

 

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Table of Contents

 

9.                                      Commitments and Contingencies

 

Insurance Programs

 

The Company bears significant insurance risk under its large-deductible workers’ compensation insurance program and its self-insured employee health program.  Under the workers’ compensation insurance program, the Company bears risk up to $400 per incident, after which stop-loss coverage is maintained.  The Company purchases stop-loss insurance for the employee health plan that places a specific limit, generally $100, on its exposure for any individual covered life.

 

Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against the Company by various claimants.  The claims are in various stages of processing and some may ultimately be brought to trial.  The Company is aware of incidents that have occurred through September 30, 2012 that may result in the assertion of additional claims.  The Company currently carries professional and general liability insurance coverage (on a claims made basis) for this exposure with no deductible.  The Company also carries D&O coverage (also on a claims made basis) for potential claims against the Company’s directors and officers, including certain securities actions, with deductibles ranging from $100 to $250 per claim.

 

The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims.  The Company monitors its estimated insurance-related liabilities and recoveries, if any, on a monthly basis and as required by ASU 2010-24, has recorded amounts due under insurance policies in other current assets, while recording the estimated carrier liability in other current liabilities.  As facts change, it may become necessary to make adjustments that could be material to the Company’s results of operations and financial condition.

 

Legal Proceedings & Investigations

 

The Company is currently, and from time to time, subject to claims and suits arising in the ordinary course of its business, including claims for damages for personal injuries.  In the opinion of management, after discussions with legal counsel, the ultimate resolution of any of these ordinary course pending claims and legal proceedings will not have a material effect on the Company’s financial position or results of operations.

 

As previously disclosed, the Company received a notice of investigation and a civil subpoena for documents from the Securities and Exchange Commission in June 2010.  The Company and its officers and directors responded to additional document requests from the SEC Staff in the fall of 2011.  In January 2012, the Staff took testimony of certain officers and directors primarily with respect to their sales of common stock of the Company during May 2010.  On November 2, 2012, the Company and those affected executive officers and members of its Board of Directors were notified by the SEC Staff that it has concluded its investigation and does not intend to recommend enforcement action to the Commission.

 

As previously disclosed, four derivative complaints were filed in Jefferson Circuit Court, Kentucky, against the members of the Company’s board of directors and chief financial officer. All four lawsuits named the Company as a nominal defendant and were consolidated into a single action.  All of the complaints and the resulting consolidated complaint refer to an April 27, 2010 The Wall Street Journal article and the subsequent governmental investigations.  On February 13, 2012, the independent directors filed a motion to dismiss the complaint.  On October 2, 2012, the Court entered an order granting the motion to dismiss and dismissing the complaint with prejudice. On November 1, 2012, the plaintiffs filed an appeal of the Court’s ruling with the Kentucky Court of Appeals.

 

As previously disclosed, a fifth derivative complaint involving Richard W. Carey was filed in U.S. District Court for the Western District of Kentucky.  The lawsuit names the Company as a nominal defendant and is substantially duplicative of the derivative complaint pending in the Jefferson Circuit Court.  The Court granted the defendants’ motion to stay the lawsuit pending further order of the Court.

 

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Table of Contents

 

The Company is unable to assess the probable outcome or potential liability, if any, arising from these unresolved matters.

 

10.                               Acquisitions

 

During the three months ended September 30, 2012, the Company finalized the purchase accounting for the Cambridge Acquisition, which was completed in August, 2011.  Changes to the allocation of the purchase price since December 31, 2011 include a decrease in the fair value of receivables acquired of $555 with a corresponding increase to goodwill.  During the quarter ended September 30, 2012, the Company completed two small acquisitions to expand existing VN and PC segment operations.

 

11.                               Income Taxes

 

The Company accounts for income taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes.  The Company’s effective income tax rates for the three and nine month periods ended September 30, 2012 and 2011 were approximately 39.5% and 39.4%, respectively, and 39.0% and 39.4%, respectively.  The change in rate for the nine month period for 2012 was primarily due to a one-time benefit resulting from the release of a valuation allowance in conjunction with tax planning strategies completed during the first quarter of 2012.

 

Certain tax authorities may periodically audit the Company.  Based on the Company’s evaluation, the Company concluded that no significant uncertain tax positions require recognition in the financial statements. Additionally, the Company may from time to time be assessed interest and penalties by tax jurisdictions.  Any such assessments historically have been immaterial to the Company’s financial results and are classified as other general and administrative expenses in the consolidated statements of income.

 

12.                               Subsequent Events

 

Management has evaluated all events and transactions that occurred after September 30, 2012.  The Company had no material subsequent events requiring recognition in the consolidated financial statements.

 

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Table of Contents

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The Company

 

Almost Family, Inc. TM and subsidiaries (collectively “Almost Family”) is a leading regional provider of home health nursing services. In this report, the terms “Company,” “we,” “us” or “our” mean Almost Family, Inc. and all subsidiaries included in our consolidated financial statements.

 

Cautionary Statements - Forward Outlook and Risks

 

Certain statements contained in this quarterly report on Form 10-Q, including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects,” “assumes,” “trends” and similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are based upon the Company’s current plans, expectations and projections about future events.  However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These factors include, among others, the following:

 

·                  general economic and business conditions;

·                  demographic changes;

·                  changes in, or failure to comply with, existing governmental regulations;

·                  legislative proposals for healthcare reform;

·                  changes in Medicare and Medicaid reimbursement levels;

·                  effects of competition in the markets in which the Company operates;

·                  liability and other claims asserted against the Company;

·                  potential audits and investigations by government and regulatory agencies, including the impact of any negative publicity or litigation;

·                  ability to attract and retain qualified personnel;

·                  availability and terms of capital;

·                  loss of significant contracts or reduction in revenues associated with major payor sources;

·                  ability of customers to pay for services;

·                  business disruption due to natural disasters or terrorist acts;

·                  ability to successfully integrate the operations of acquired businesses and achieve expected synergies and operating efficiencies from the acquisition, in each case within expected time-frames or at all;

·                  significant deterioration in economic conditions and significant market volatility;

·                  effect on liquidity of the Company’s financing arrangements; and,

·                  changes in estimates and judgments associated with critical accounting policies and estimates.

 

For a detailed discussion of these and other factors that could cause the Company’s actual results to differ materially from the results contemplated by the forward-looking statements, please refer to Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for year ended December 31, 2011 and this Form 10-Q.  The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report.  Except as required by law, the Company assumes no responsibility for updating forward-looking statements to reflect unforeseen or other events after the date of this report. The Company has provided a detailed discussion of risk factors in its Form 10-K and various filings with the Securities and Exchange Commission (SEC).  The reader is encouraged to review these risk factors and filings.

 

Critical Accounting Policies

 

Refer to the “Critical Accounting Policies” section of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K for the year ended December 31, 2011 for a detailed discussion of our critical accounting policies.

 

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Table of Contents

 

Operating Segments

 

We have two reportable segments, Visiting Nurse (VN) and Personal Care (PC), which provide services in Florida, Ohio, Kentucky, Connecticut, New Jersey, Massachusetts, Missouri, Alabama, Illinois, Pennsylvania and Indiana (in order of revenue significance).  Reportable segments have been identified based upon how management has organized the business by services provided to customers and the criteria in ASC 280, Segment Reporting.

 

Our VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care.  VN Medicare revenues are generated on a per episode basis rather than a fee per visit or day of care. Approximately 91% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs.

 

Our PC segment services are also provided in patients’ homes.  These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis.  Approximately 86% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

 

Certain general and administrative expenses incurred at the corporate level have not been allocated to the segments.

 

Health Care Reform Legislation and Medicare Regulations

 

The reader is encouraged to review our detailed discussion of Health Care Reform and Medicare Regulations in the similarly titled section in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for year ended December 31, 2011 and quarterly report on Form 10-Q for the quarter ended June 30, 2012 on file with the SEC.

 

On November 2, 2012, CMS issued the final rule for 2013 home health payment rates (2013 Final Rule). Among other changes, the 2013 Final Rule includes:

 

·                  A 2.3% Market Basket Index (MBI) update,

·                  A 1% reduction required under the Affordable Care Act, and

·                  A 1.32% case mix creep reduction.

 

Absent further changes, based on current law, which includes a 2% cut specified in the Budget Control Act of 2011 commonly referred to as “sequestration”, and the 2013 Final Rule, we expect our 2013 Medicare episodic rate reduction to range from 2.0% to 2.5%.

 

Governmental Inquiries and Shareholder Litigation

 

See Note 9 to the consolidated financial statements and Part II Item 1 “Legal Proceedings” of this Form 10-Q for a discussion of certain governmental inquiries and subsequent related litigation.  The Company is unable to predict the outcome of these matters. However, the Company may incur on-going expenses, net of insurance recoveries, if any, related to responding to these inquiries and complaints.

 

Seasonality

 

Our VN segment operations located in Florida normally experience higher admissions during the first quarter and lower admissions during the third quarter than in the other quarters due to seasonal population fluctuations.

 

Possible Impact of Hurricane Sandy

 

Approximately 25% of our VN segment operations are located in the northeastern U.S. (New Jersey, Connecticut and Massachusetts), areas impacted by Hurricane Sandy which struck in late October 2012. While we are currently unable to predict to the extent, if any, it is reasonable to expect that this significant weather event may have a detrimental impact on our operating results for the quarter and thus the year ending December 31, 2012.

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Table of Contents

 

RESULTS OF OPERATIONS

THREE MONTHS

 

Consolidated

 

(In thousands)

 

 

 

Three Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

 

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

$

65,880

 

77.4

%

$

69,897

 

81.1

%

$

(4,017

)

-5.7

%

Personal Care

 

19,248

 

22.6

%

16,310

 

18.9

%

2,938

 

18.0

%

 

 

85,128

 

100.0

%

86,207

 

100.0

%

(1,079

)

-1.3

%

Operating income before corporate expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

8,906

 

13.5

%

10,192

 

14.6

%

(1,286

)

-12.6

%

Personal Care

 

2,822

 

14.7

%

2,687

 

16.5

%

135

 

5.0

%

 

 

11,728

 

13.8

%

12,879

 

14.9

%

(1,151

)

-8.9

%

Corporate expenses

 

4,936

 

5.8

%

4,842

 

5.6

%

94

 

1.9

%

Operating income

 

6,792

 

8.0

%

8,037

 

9.3

%

(1,245

)

-15.5

%

Interest expense, net

 

(17

)

0.0

%

(41

)

0.0

%

24

 

-58.5

%

Income tax expense

 

(2,676

)

-3.1

%

(3,154

)

-3.7

%

478

 

-15.2

%

Net income

 

$

4,099

 

4.8

%

$

4,842

 

5.6

%

$

(743

)

-15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

7,825

 

9.2

%

$

9,042

 

10.5

%

$

(1,217

)

-13.5

%

 

Results for the third quarter of 2012 included both the impact of a Medicare reimbursement rate cut for 2012 which reduced consolidated and VN segment revenue and pre-tax operating income by $2.7 million and a full quarter of results for our acquisition of Cambridge Home Health Care Holdings, Inc. (Cambridge Acquisition), which closed on August 5, 2011.  The Cambridge Acquisition increased third quarter 2012 consolidated net service revenue by $1.9 million, primarily in our PC segment.

 

Operating income before corporate expenses during the third quarter of 2012 decreased from the prior year quarter primarily as a result of the VN segment’s Medicare rate cut and lower Medicare volume.  Refer to VN segment results for further discussion.

 

Corporate expenses as a percent of revenue increased slightly to 5.8% from 5.6% in the prior year primarily due to the impact on revenue of the VN segment’s rate cut.  Corporate expenses in 2012 and 2011 included $0.3 million and $0.5 million, respectively, for transition and acquisition-related costs.  The third quarter of 2012 and 2011 included zero and $0.3 million, respectively, for costs to respond to governmental inquiries and resulting litigation, net of anticipated insurance coverage.

 

The effective tax rate was approximately 39.5% in the third quarter of 2012, which was substantially consistent with the 39.4% for the third quarter of 2011.

 

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Table of Contents

 

Visiting Nurse Segment

 

 

 

Three Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

(In thousands, except for statistics) 

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues

 

$

65,880

 

100.0

%

$

69,897

 

100.0

%

$

(4,017

)

-5.7

%

Cost of service revenues

 

31,505

 

47.8

%

32,608

 

46.7

%

(1,103

)

-3.4

%

Gross margin

 

34,375

 

52.2

%

37,289

 

53.3

%

(2,914

)

-7.8

%

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

18,838

 

28.6

%

20,658

 

29.6

%

(1,820

)

-8.8

%

Other

 

6,631

 

10.1

%

6,439

 

9.2

%

192

 

3.0

%

Total general and administrative expenses

 

25,469

 

38.7

%

27,097

 

38.8

%

(1,628

)

-6.0

%

Operating income before corporate expenses

 

$

8,906

 

13.5

%

$

10,192

 

14.6

%

$

(1,286

)

-12.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of locations

 

107

 

 

 

100

 

 

 

7

 

7.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All payors:

 

 

 

 

 

 

 

 

 

 

 

 

 

Patients months

 

53,215

 

 

 

52,927

 

 

 

288

 

0.5

%

Admissions

 

15,285

 

 

 

15,047

 

 

 

238

 

1.6

%

Billable visits

 

432,110

 

 

 

448,377

 

 

 

(16,267

)

-3.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicare Statistics (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue (in thousands)

 

$

59,713

 

90.6

%

$

64,508

 

92.3

%

$

(4,795

)

-7.4

%

Billable visits

 

375,412

 

 

 

400,111

 

 

 

(24,699

)

-6.2

%

Admissions

 

13,316

 

 

 

13,662

 

 

 

(346

)

-2.5

%

Recertifications

 

7,952

 

 

 

8,143

 

 

 

(191

)

-2.3

%

Episodes completed

 

20,677

 

 

 

21,176

 

 

 

(499

)

-2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per completed episode

 

$

2,865

 

 

 

$

3,008

 

 

 

$

(143

)

-4.8

%

Visits per episode

 

17.7

 

 

 

18.3

 

 

 

(0.6

)

-3.3

%

 


(1)  Episodic data which includes Medicare Advantage plans that pay episodically

 

VN segment net service revenues decreased $4.0 million or about 5.7% to $65.9 million in 2012 down from $69.9 million in 2011, primarily due to a $2.7 million Medicare rate cut with the remainder due to a decline in both Medicare admissions, which was primarily driven by a shift of certain Medicare Advantage payors from episodic to per visit payment.  This shift, which represented about half of the Company’s Medicare Advantage episodic business, reduced revenue and operating income by $0.8 million and $0.5 million, respectively.  Traditional Medicare admissions increased approximately 1% in 2012 over 2011.

 

Cost of service revenues declined $1.1 million, as a result of focused efforts to drive operational efficiencies in addition to lower Medicare volumes.  General and administrative salaries and benefits decreased by about $1.8 million, or 8.8%, primarily as a result of a focused effort to reduce labor and other costs relative to patients served.

 

As a result, VN segment operating income before corporate expenses declined $1.3 million to $8.9 million from $10.2 million in 2011, while operating income before corporate expenses as a percent of revenues decreased to 13.5% in 2012 from 14.6% in 2011.

 

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Personal Care Segment

 

 

 

Three Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

(In thousands, except for statistics)

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues

 

$

19,248

 

100.0

%

$

16,310

 

100.0

%

$

2,938

 

18.0

%

Cost of service revenues

 

13,005

 

67.6

%

10,727

 

65.8

%

2,278

 

21.2

%

Gross margin

 

6,243

 

32.4

%

5,583

 

34.2

%

660

 

11.8

%

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

2,468

 

12.8

%

1,970

 

12.1

%

498

 

25.3

%

Other

 

953

 

5.0

%

926

 

5.7

%

27

 

2.9

%

Total general and administrative expenses

 

3,421

 

17.8

%

2,896

 

17.8

%

525

 

18.1

%

Operating income before corporate expenses

 

$

2,822

 

14.7

%

$

2,687

 

16.5

%

$

135

 

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of locations

 

60

 

 

 

48

 

 

 

12

 

25.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

1,055

 

 

 

904

 

 

 

151

 

16.7

%

Patient months of care

 

17,684

 

 

 

14,917

 

 

 

2,767

 

18.5

%

Patient days of care

 

263,703

 

 

 

215,359

 

 

 

48,344

 

22.4

%

Billable hours

 

1,053,652

 

 

 

904,213

 

 

 

149,439

 

16.5

%

Revenue per billable hour

 

$

18.27

 

 

 

$

18.04

 

 

 

$

0.23

 

1.3

%

 

Our PC segment’s third quarter of 2012 results include a full quarter of operations for our Cambridge Acquisition, which was effective August 5, 2011 and drove increases in net service revenues and gross margin of $2.1 million and $0.4 million, respectively.  The third quarter of 2011 included only 2 months of Cambridge results.

 

Organic growth increased net service revenues by $0.8 million, while cost of service revenues as a percentage of net service revenues increased to 67.6% in the third quarter of 2012 from 65.8% in 2011 primarily due to changes in business mix related to the Cambridge Acquisition.

 

Salary and benefits in general and administrative expenses as a percent of net service revenue increased 0.7% to 12.8% in 2012 from 12.1% in 2011 primarily due to the Cambridge Acquisition.  Other general and administrative expenses as a percentage of net service revenue declined to 5.0% in 2012 from 5.7% in 2011 primarily due to lower bad debt expense.

 

As a result, PC segment operating income before corporate expenses increased to $2.8 million from $2.7 million in 2011, while operating income before corporate expenses as a percent of revenues decreased to 14.7% in 2012 from 16.5% in 2011.

 

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Table of Contents

 

RESULTS OF OPERATIONS

NINE MONTHS

 

Consolidated

 

(In thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

 

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

$

204,198

 

77.9

%

$

213,794

 

85.3

%

$

(9,596

)

-4.5

%

Personal Care

 

57,772

 

22.1

%

36,727

 

14.7

%

21,045

 

57.3

%

 

 

261,970

 

100.0

%

250,521

 

100.0

%

11,449

 

4.6

%

Operating income before corporate expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Visiting Nurse

 

30,698

 

15.0

%

35,004

 

16.4

%

(4,306

)

-12.3

%

Personal Care

 

7,583

 

13.1

%

5,418

 

14.8

%

2,165

 

40.0

%

 

 

38,281

 

14.6

%

40,422

 

16.1

%

(2,141

)

-5.3

%

Corporate expenses

 

15,941

 

6.1

%

14,455

 

5.8

%

1,486

 

10.3

%

Operating income

 

22,340

 

8.5

%

25,967

 

10.4

%

(3,627

)

-14.0

%

Interest expense, net

 

(87

)

0.0

%

(140

)

-0.1

%

53

 

-37.9

%

Income tax expense

 

(8,674

)

-3.3

%

(10,331

)

-4.1

%

1,657

 

-16.0

%

Net income

 

$

13,579

 

5.2

%

$

15,496

 

6.2

%

$

(1,917

)

-12.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

25,379

 

9.7

%

$

29,177

 

11.6

%

$

(3,798

)

-13.0

%

 

Results for 2012 included both the impact of a Medicare reimbursement rate cut for 2012 which reduced consolidated and VN segment revenue and pre-tax operating income by $8.4 million and a full nine months of results from our Cambridge Acquisition, which closed on August 5, 2011.  The Cambridge Acquisition increased 2012 consolidated net service revenue by $19.0 million, primarily in our PC segment.  Volume increases in the PC segment drove the remaining increase in consolidated net service revenue.

 

Operating income before corporate expenses during 2012 declined $2.1 million from the prior year primarily as a result of the VN segment’s Medicare rate cut, which was partially offset by the Cambridge Acquisition and productivity improvements in our VN segment.  Refer to segment results for further discussion.

 

Corporate expenses as a percent of revenue increased slightly to 6.1% in 2012 from 5.8% in 2011, primarily due to the impact on revenue of the VN segment’s rate cut.  Corporate expenses in 2012 and 2011 included $0.7 million and $0.4 million, respectively, for incentives.  Corporate expenses in both 2012 and 2011 also included $0.9 million of transition and acquisition-related costs, while including zero and $1.1 million, respectively, for costs to respond to governmental inquiries and resulting litigation, net of anticipated insurance coverage.

 

The effective tax rate was approximately 39.0% in 2012, down from 39.4% in 2011, primarily due to the one-time benefit resulting from the release of a valuation allowance in conjunction with tax planning strategies completed during the first quarter of 2012.

 

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Table of Contents

 

Visiting Nurse Segment

 

 

 

Nine Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

(In thousands, except for statistics)

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues

 

$

204,198

 

100.0

%

$

213,794

 

100.0

%

$

(9,596

)

-4.5

%

Cost of service revenues

 

96,133

 

47.1

%

97,977

 

45.8

%

(1,844

)

-1.9

%

Gross margin

 

108,065

 

52.9

%

115,817

 

54.2

%

(7,752

)

-6.7

%

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

58,037

 

28.4

%

61,765

 

28.9

%

(3,728

)

-6.0

%

Other

 

19,330

 

9.5

%

19,048

 

8.9

%

282

 

1.5

%

Total general and administrative expenses

 

77,367

 

37.9

%

80,813

 

37.8

%

(3,446

)

-4.3

%

Operating income before corporate expenses

 

$

30,698

 

15.0

%

$

35,004

 

16.4

%

$

(4,306

)

-12.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of locations

 

109

 

 

 

95

 

 

 

14

 

14.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All payors:

 

 

 

 

 

 

 

 

 

 

 

 

 

Patients months

 

163,313

 

 

 

161,017

 

 

 

2,296

 

1.4

%

Admissions

 

47,381

 

 

 

46,187

 

 

 

1,194

 

2.6

%

Billable visits

 

1,325,488

 

 

 

1,361,384

 

 

 

(35,896

)

-2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicare Statistics (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue (in thousands)

 

$

185,933

 

91.1

%

$

197,567

 

92.4

%

$

(11,634

)

-5.9

%

Billable visits

 

1,160,603

 

 

 

1,215,570

 

 

 

(54,967

)

-4.5

%

Admissions

 

41,715

 

 

 

42,037

 

 

 

(322

)

-0.8

%

Recertifications

 

23,875

 

 

 

24,328

 

 

 

(453

)

-1.9

%

Episodes completed

 

65,136

 

 

 

65,630

 

 

 

(494

)

-0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per completed episode

 

$

2,841

 

 

 

$

3,000

 

 

 

$

(159

)

-5.3

%

Visits per episode

 

17.5

 

 

 

18.1

 

 

 

(0.6

)

-3.3

%

 


(1) Episodic data which includes Medicare Advantage that pay episodically

 

VN segment net service revenues decreased $9.6 million or about 4.5% to $204.2 million in 2012 down from $213.8 million in 2011, due to an $8.4 million Medicare rate cut, with the remainder due to lower Medicare admissions, which were partially driven by a shift of certain Medicare Advantage payors.  Total admissions grew 2.6%, of which 1.7% was organic.

 

Cost of service revenues decreased 1.9% as a result of lower Medicare volumes which was partially offset by focused efforts to drive operational efficiencies.  General and administrative salaries and benefits decreased by about $3.7 million primarily as a result of a focused effort to reduce labor costs relative to patients served.  General and administrative other expenses increased slightly in 2012, as the bad debt provision increased $0.9 million on increased accounts receivable which more than offset focused efforts to reduce other costs relative to patients served.

 

As a result, VN segment operating income before corporate expenses declined $4.3 million to $30.7 million from $35.0 million in 2011, while operating income before corporate expenses as a percent of revenues decreased to 15.0% in 2012 from 16.4% in 2011.

 

18



Table of Contents

 

Personal Care Segment

 

 

 

Nine Months Ended September 30,

 

 

 

2012

 

2011

 

Change

 

(In thousands, except for statistics)

 

Amount

 

% Rev

 

Amount

 

% Rev

 

Amount

 

%

 

Net service revenues

 

$

57,772

 

100.0

%

$

36,727

 

100.0

%

$

21,045

 

57.3

%

Cost of service revenues

 

39,431

 

68.3

%

23,938

 

65.2

%

15,493

 

64.7

%

Gross margin

 

18,341

 

31.7

%

12,789

 

34.8

%

5,552

 

43.4

%

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

7,444

 

12.9

%

4,823

 

13.1

%

2,621

 

54.3

%

Other

 

3,314

 

5.7

%

2,548

 

6.9

%

766

 

30.1

%

Total general and administrative expenses

 

10,758

 

18.6

%

7,371

 

20.1

%

3,387

 

46.0

%

Operating income before corporate expenses

 

$

7,583

 

13.1

%

$

5,418

 

14.8

%

$

2,165

 

40.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of locations

 

60

 

 

 

31

 

 

 

29

 

93.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

3,256

 

 

 

2,243

 

 

 

1,013

 

45.2

%

Patient months of care

 

52,020

 

 

 

36,711

 

 

 

15,309

 

41.7

%

Patient days of care

 

748,675

 

 

 

499,270

 

 

 

249,405

 

50.0

%

Billable hours

 

3,193,973

 

 

 

2,027,307

 

 

 

1,166,666

 

57.5

%

Revenue per billable hour

 

$

18.09

 

 

 

$

18.12

 

 

 

$

(0.03

)

-0.2

%

 

Our PC segment’s 2012 results include a full nine months of operations from our Cambridge Acquisition, which was effective August 5, 2011 and drove increases in net service revenues, gross margin and operating income before corporate expenses of $18.4 million, $5.3 million and $2.1 million, respectively.

 

Organic growth increased net service revenues by $2.3 million, while cost of service revenues as a percentage of net service revenues increased to 68.3% in 2012 from 65.2% in 2011 due to increased workers compensation provision of $0.8 million in 2012 compared to 2011 as a result of unusually high claims experience during the period, excluding which cost of service revenue as a percent of net service revenue would have been 66.9%.  The remaining increase in cost of service revenues from 2011 was Cambridge Acquisition mix of business related.

 

Salary and benefits in general and administrative expenses as a percent of net service revenue decreased 0.2% to 12.9% in 2012 from 13.1% in 2011 primarily due to the Cambridge Acquisition.  Other general and administrative expenses as a percent of revenue decreased 1.2% to 5.7% from 6.9%, due to the Cambridge Acquisition and a $0.3 million decline in bad debt provision.

 

As a result, PC segment operating income before corporate expenses increased to $7.6 million from $5.4 million in 2011,while operating income before corporate expenses as a percent of revenues decreased to 13.1% in 2012 from 14.8% in 2011.

 

19



Table of Contents

 

Liquidity and Capital Resources

 

Revolving Credit Facility

 

We have a $125 million senior secured revolving credit facility with JP Morgan Chase Bank, NA, as Administrative Agent, Bank of America, as Syndication Agent and certain other lenders (the “Facility”).  The Facility consists of a $125 million credit line with a maturity date of December 2, 2015 and an “accordion” feature providing for potential future expansion of the Facility to $175 million.  Borrowings (other than letters of credit) under the credit facility are made at either: a) the bank’s prime rate plus a margin (ranging from 1.25% to 2.25%, currently 1.25%) or b) LIBOR plus a margin (ranging from 2.25% to 3.25%, currently 2.25%).  The margin for prime rate or LIBOR borrowings is determined by our leverage.  Borrowings under the Facility are secured by a first priority perfected security interest in all our tangible and intangible assets, and all our existing and future direct and indirect subsidiaries, as guarantors.

 

The weighted average prime rate-based interest rate was 4.50% for both the three and nine months ended September 30, 2012 and 2011.  The weighted average LIBOR rates were 2.72% and 2.59% for the three months ended September 30, 2012 and 2011, respectively.  We pay a quarterly commitment fee of 0.30% to 0.50% on the average daily unused facility balance based on leverage. Borrowings are subject to various covenants including a multiple of 3.0 times earnings before interest, taxes, depreciation and amortization (EBITDA). EBITDA may include “Acquired EBITDA” from pro-forma acquisitions pursuant to a calculation rider, up to 50% of “Adjusted EBITDA”, as defined. Borrowings under the Facility may be used for general corporate purposes, including acquisitions. As of September 30, 2012, the formula permitted $105 million to be used against which we had irrevocable letters of credit totaling $6.4 million outstanding in connection with our self-insurance programs. As a result a total of $98.6 million was available for borrowing at September 30, 2012. As of September 30, 2012, we were in compliance with the Facility’s various financial covenants. Under the most restrictive of its covenants, we were required to maintain minimum net worth of at least $154.7 million at September 30, 2012.  At such date, our net worth was approximately $219.0 million.

 

We believe that this facility plus cash on hand will be sufficient to fund our operating needs for at least the next year.  We will continue to evaluate additional capital, including possible debt and equity investments in the Company, to support a more rapid development of the business than would be possible with internal funds.

 

Cash Flows

 

Key elements to the Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 were:

 

Net Change in Cash and Cash Equivalents

 

2012

 

2011

 

Provided by (used in):

 

 

 

 

 

Operating activities

 

$

14,215

 

$

19,346

 

Investing activities

 

(2,068

)

(37,549

)

Financing activities

 

(3,124

)

(129

)

Net change in cash and cash equivalents

 

$

9,023

 

$

(18,332

)

 

2012

 

Net cash provided by operating activities resulted primarily from current period net income of $13.6 million plus certain non-cash items, net of changes in accounts receivable, accounts payable and accrued expenses.  The decrease from 2011 is primarily due to a $3.0 million increase in accounts receivable and decreased net income of $1.9 million.  Accounts receivable days revenues outstanding was 52 at September 30, 2012 and 46 at December 31, 2011 due to processing delays in the VN segment.

 

The cash used in investing activities for 2012 was primarily due to capital expenditures and two small acquisitions, while 2011 includes $35.7 million for acquisitions completed in April and August 2011.

 

20



Table of Contents

 

Net cash used in financing activities for the nine months ended September 30, 2012 increased over the prior year period primarily due to cash used for a $1.7 million stock redemption of 72,000 shares related to the previous distribution of shares to non-employee directors pursuant to the termination of the Company’s Non-Employee Directors Deferred Compensation Plan and repayment of a $1.2 million acquisition related seller note.

 

2011

 

Net cash provided by operating activities resulted primarily from current period net income of $15.5 million, net of changes in accounts receivable, accounts payable and accrued expenses.  Accounts receivable days revenues outstanding was 46 at September 30, 2011 and 43 at December 31, 2010.

 

The cash used in investing activities was primarily due to the acquisitions completed in April and August 2011 for total cash of approximately $35.7 million, with the remainder due to capital expenditures.

 

Net cash used in financing activities includes $1.6 million for payments under capital leases and acquisition notes payable, which was offset by a $1.6 million tax benefit from share-based awards.  The Company receives a current tax deduction, subject to IRS limits, at exercise for option awards or when the restriction lapses for restricted awards.

 

Impact of Inflation

 

Management does not believe that inflation has had a material effect on income during the past several years.

 

Non-GAAP Financial Measure

 

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

 

EBITDA

 

EBITDA is not a measure of financial performance under U.S generally accepted accounting principles. 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 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 table sets forth a reconciliation of Net Income to EBITDA:

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

Net income

 

$

4,099

 

$

4,842

 

$

13,579

 

$

15,496

 

Add back:

 

 

 

 

 

 

 

 

 

Interest expense

 

17

 

41

 

87

 

140

 

Income tax expense

 

2,676

 

3,154

 

8,674

 

10,331

 

Depreciation and amortization

 

651

 

695

 

1,911

 

2,170

 

Amortization of stock-based compensation

 

382

 

310

 

1,128

 

1,040

 

Earnings before interest, income taxes, depreciation and amortization (EBITDA)

 

$

7,825

 

$

9,042

 

$

25,379

 

$

29,177

 

 

21



Table of Contents

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Derivative Instruments

 

The Company does not use derivative instruments.

 

Market Risk of Financial Instruments

 

Our primary market risk exposure with regard to financial instruments is to changes in interest rates on long-term obligations.

 

At September 30, 2012, the Company had no outstanding amounts on its revolving credit facility and, therefore, a hypothetical 100 basis point increase in short-term interest rates would have no impact on annual pre-tax earnings due to higher interest expense.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Disclosure Controls and Procedures — As of September 30, 2012, the Company’s management, with participation of the Company’s Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e).  Based on that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2012.

 

Changes in Internal Control Over Financial Reporting - There were no changes in the Company’s internal control over financial reporting during the third quarter of 2012, that have materially affected, or are reasonably likely to materially affect, Almost Family, Inc.’s internal control over financial reporting.

 

22



Table of Contents

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time, we are subject to various legal actions arising in the ordinary course of our business, including claims for damages for personal injuries.  In our opinion, after discussion with legal counsel, the ultimate resolution of any of these pending ordinary course claims and legal proceedings will not have a material effect on our financial position or results of operations.

 

As previously disclosed, we received a notice of investigation and a civil subpoena for documents from the Securities and Exchange Commission in June 2010.  The Company and its officers and directors responded to additional document requests from the SEC Staff in the fall of 2011.  In January 2012, the Staff took testimony of certain officers and directors primarily with respect to their sales of common stock of the Company during May 2010.  On November 2, 2012, the Company and those affected executive officers and members of its Board of Directors were notified by the SEC Staff that it has concluded its investigation and does not intend to recommend enforcement action to the Commission.

 

As previously disclosed, four derivative complaints were filed in Jefferson Circuit Court, Kentucky, against the members of the Company’s board of directors and chief financial officer. All four lawsuits named the Company as a nominal defendant and were consolidated into a single action.  All of the complaints and the resulting consolidated complaint refer to an April 27, 2010 The Wall Street Journal article and the subsequent governmental investigations.  On February 13, 2012, the independent directors filed a motion to dismiss the complaint.  On October 2, 2012, the Court entered an order granting the motion to dismiss and dismissing the complaint with prejudice.  On November 1, 2012, the plaintiffs filed an appeal of the Court’s ruling with the Kentucky Court of Appeals.

 

As previously disclosed, a fifth derivative complaint involving Richard W. Carey was filed in U.S. District Court for the Western District of Kentucky.  The lawsuit names the Company as a nominal defendant and is substantially duplicative of the derivative complaint pending in the Jefferson Circuit Court.  The Court granted the defendants’ motion to stay the lawsuit pending further order of the Court.

 

We are unable to assess the probable outcome or potential liability, if any, arising from these unresolved matters.

 

ITEM 1A. RISK FACTORS

 

Information regarding risk factors appears in our Form 10-K for the year ending December 31, 2011, under the heading “Special Caution Regarding Forward — Looking Statements” and in the Form 10-K Part I, Item 1A. Risk Factors.  There have been no material changes from the risk factors disclosed in our Form 10-K.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable

 

23



Table of Contents

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS

 

31.1

Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

Certifications of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32.1

Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

32.2

Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101

Financial statements from the quarterly report on Form 10-Q of Almost Family, Inc. for the quarter ended September 30, 2012, filed on November 6, 2012, formatted in XBRL:  (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Cash Flows, and (iv) the Notes to Condensed Consolidated Financial Statements.

 

24



Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

ALMOST FAMILY, INC.

 

 

Date November 6, 2012

By:

/s/ William B. Yarmuth

 

 

William B. Yarmuth

 

 

Chairman of the Board and
Chief Executive Officer

 

 

 

 

 

By:

/s/ C. Steven Guenthner

 

 

C. Steven Guenthner

 

 

President and

 

 

Principal Financial Officer

 

25


EX-31.1 2 a12-19301_1ex31d1.htm EX-31.1

Exhibit 31.1

 

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT

 

I, William B. Yarmuth, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Almost Family, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)              Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)             Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)              Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)             Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)            Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  November 6, 2012

By  

/s/ William B. Yarmuth

 

 

William B. Yarmuth

 

 

Chairman of the Board and Chief Executive Officer

 

1


EX-31.2 3 a12-19301_1ex31d2.htm EX-31.2

Exhibit 31.2

 

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT

 

I, C. Steven Guenthner, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Almost Family, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)              Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)             Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)              Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)             Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)            Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 6, 2012

By  

/s/ C. Steven Guenthner

 

 

C. Steven Guenthner

 

 

President and Principal Financial Officer

 

1


EX-32.1 4 a12-19301_1ex32d1.htm EX-32.1

Exhibit 32.1

 

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

(AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

 

I, William B. Yarmuth, Chief Executive Officer of Almost Family, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1)                                  The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

 

(2)                                  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 6, 2012

By

/s/ William B. Yarmuth

 

 

William B. Yarmuth

 

 

Chairman of the Board and Chief Executive Officer

 

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

1


EX-32.2 5 a12-19301_1ex32d2.htm EX-32.2

Exhibit 32.2

 

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

(AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

 

I, C. Steven Guenthner,  Principal Financial Officer of Almost Family, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1)                                  The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

 

(2)                                  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Date: November 6, 2012

By  

/s/ C. Steven Guenthner

 

 

C. Steven Guenthner

 

 

President and Principal Financial Officer

 

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

1


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