AFAM Almost Family (delisted)

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

Fourth Quarter Highlights (1):

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

Full Year Highlights (1):

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

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

LHC Group and Almost Family Merger of Equals

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

Management Comments

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

		Unaudited
		December 29, 2017				December 30, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	11,310			$	10,110
Accounts receivable - net			125,860				99,212
Prepaid expenses and other current assets			14,514				11,432
TOTAL CURRENT ASSETS			151,684				120,754
PROPERTY AND EQUIPMENT - NET			15,246				10,732
GOODWILL			390,754				305,476
OTHER INTANGIBLE ASSETS - NET			145,522				85,063
TRANSACTION DEPOSIT			—				128,930
ASSETS HELD FOR SALE			3,800				—
OTHER ASSETS			10,812				7,757
TOTAL ASSETS		$	717,818			$	658,712
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	22,049			$	12,122
Accrued other liabilities			50,182				39,728
Current portion - Seller Notes			4,961				—
TOTAL CURRENT LIABILITIES			77,192				51,850
LONG-TERM LIABILITIES:
Revolving credit facility			100,254				262,456
Deferred tax liabilities			18,595				21,145
Seller notes, net of current portion			7,800				12,500
Other liabilities			7,424				6,581
TOTAL LONG-TERM LIABILITIES			134,073				302,682
TOTAL LIABILITIES			211,265				354,532
NONCONTROLLING INTEREST - REDEEMABLE -
HEALTHCARE INNOVATIONS			2,256				2,256
STOCKHOLDERS’ EQUITY:
Preferred stock, par value $0.05; authorized 2,000 shares; none issued or outstanding			—				—
Common stock, par value $0.10; authorized 25,000; 14,243 and 10,504 issued and outstanding			1,425				1,051
Treasury stock, at cost, 251 and 117 shares			(10,453	)			(3,258	)
Additional paid-in capital			294,448				141,233
Retained earnings			184,309				163,763
Almost Family, Inc. stockholders' equity			469,729				302,789
Noncontrolling interests - nonredeemable			34,568				(865	)
TOTAL STOCKHOLDERS’ EQUITY			504,297				301,924
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	717,818			$	658,712

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

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

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

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

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

HOME HEALTH OPERATING METRICS

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

HOME HEALTH OPERATING METRICS

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

OTHER HOME-BASED SERVICES OPERATING METRICS

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

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

HEALTHCARE INNOVATIONS SUPPLEMENTAL DATA

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

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

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

Adjusted Net Income and Adjusted Earnings Per Share Adjusted net income and adjusted earnings per share is not a measure of financial performance under accounting principles generally accepted in the United States of America.  It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles. The presentation of adjusted net income and adjusted earnings per share provides investors with pertinent information to enable comparison of financial performance between periods by excluding certain items that the Company believes are not representative of its ongoing operations due to the nature of the items. 

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

ALMOST FAMILY, INC. AND SUBSIDIARIES

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

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

Adjusted EBITDA Adjusted earnings before interest, income and franchise taxes, depreciation and amortization, amortization of stock-based compensation, deal, transition and other (Adjusted EBITDA) is not a measure of financial performance under accounting principles generally accepted in the United States of America.  It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles.  The items excluded from Adjusted EBITDA are significant components in understanding and evaluating financial performance and liquidity.  Management routinely calculates and communicates Adjusted EBITDA and believes that it is useful to investors because it provides a common analytical indicator within its industry to evaluate performance, measure leverage capacity and debt service ability, and to estimate current or prospective enterprise value.  Adjusted EBITDA is also used in certain covenants contained in the Company’s credit agreement.

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

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

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

Forward Looking Statements

All statements, other than statements of historical facts, included in this news release are forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current plans, expectations, projections, forecasts and assumptions about future events that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “could,” “would,” “estimate,” “project,” “forecast,” “intend,” “expect,” “plan,” “anticipate,” “believe,” “target,” or similar terms, variations of those terms or the negative of those terms. While forward-looking statements reflect good faith beliefs, assumptions and expectations, they are not guarantees of future performance, and the Company undertakes no obligation to update or revise its forward-looking statements. The forward-looking statements in this news release are based on a variety of assumptions that may not be realized and that are subject to significant risks and uncertainties, including the impact of further changes in healthcare reimbursement systems, including the ultimate outcome of potential changes to Medicare reimbursement for home health services and to Medicaid reimbursement due to state budget shortfalls; changes to the Medicare Shared Savings Programs; the ability of the Company to maintain its level of operating performance and achieve its cost control objectives; changes in our relationships with referral sources; unanticipated difficulties or expenditures relating to acquisition transactions, including, without limitation, difficulties that result in the failure to achieve expected synergies, efficiencies and cost savings from a transaction within the expected time period (if at all); government regulation; health care reform; pricing pressures from Medicare, Medicaid and other third-party payers; changes in laws and interpretations of laws relating to the healthcare industry; the ability of the Company to integrate, manage and keep secure our information systems; changes in the marketplace and regulatory environment for Health Risk Assessments and the Company’s self-insurance risks.  For a more complete discussion regarding other factors which could affect the Company's financial performance, refer to the Company's various filings with the Securities and Exchange Commission, including its filing on Form 10-K for the year ended December 30, 2016, in particular information under the headings "Special Caution Regarding Forward-Looking Statements" and “Risk Factors.”  This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy and securities or a solicitation of any vote or approval.

About Almost Family, Inc.

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

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