LAKE FOREST, Calif., May 1, 2007 (PRIME NEWSWIRE) -- Apria Healthcare Group Inc. (NYSE:AHG), one of the nation's leading home healthcare companies, today announced its financial results for the quarter ended March 31, 2007.
For the quarter ended March 31, 2007, revenues were $389.3 million, which represents a 5.8% increase compared to revenues of $368.1 million in the first quarter of 2006. First quarter 2007 net income was $19.1 million, an increase of 18.7% from $16.1 million in the first quarter of 2006. Current quarter diluted earnings per share were $0.44 compared to $0.38 diluted earnings per share, a 15.8% increase over the comparable prior year period.
Gross margins were 65.4% in the first quarter of 2007, compared to 65.5% reported in the first quarter of last year.
The provision for doubtful accounts as a percentage of net revenue was 2.5%, compared to 2.8% in the comparable period last year. Days sales outstanding (DSO) were 49 days at March 31, 2007, down from 56 days at March 31, 2006. This improvement is a direct result of increased cash collections resulting from initiatives to optimize billing processes and to increase patient co-payments.
Selling, distribution and administrative expenses were 53.1% of net revenues in the first quarter of 2007 compared to 53.7% of net revenues in the first quarter last year.
"We are pleased with our overall performance in the first quarter," said Lawrence M. Higby, Chief Executive Officer. "Growth over the prior year is encouraging and our operational programs continue to yield additional improvements. We still have work to do in 2007 in both operations and sales, but the quarter gives us a good foundation on which to build."
"The incremental improvements in bad debt expense and DSO are particularly notable because these metrics are traditionally higher in the first quarter due to a significant industry-wide volume of payor changes and deductibles."
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $71.2 million in the first quarter of 2007, representing a 5.9% increase over EBITDA of $67.2 million in the first quarter of 2006. EBITDA is presented as a supplemental performance measure and is not intended as an alternative to net income or any other measure calculated in accordance with generally accepted accounting principles. Further, EBITDA may not be comparable to similarly titled measures used by other companies. A table reconciling EBITDA to net income is presented at the end of the condensed consolidated financial statements included in this release.
Liquidity and Capital
Free cash flow was $12.3 million in the first quarter of 2007, up from a negative $0.7 million in the first quarter of 2006. Contributing to the increase in free cash flow was a reduction in capital expenditures and strong cash collections of receivables. Total net capital expenditures in the first quarter of 2007 were 8.4% of net revenue versus 10.6% in the first quarter of 2006. The reduction in capital expenditures is primarily attributable to our initiatives to improve asset utilization.
During the quarter, the Company reduced its revolving credit line balance by $25 million. As of March 31, 2007, the outstanding balance on the revolver was $210 million.
Free cash flow is defined as operating cash flow minus capital expenditures and does not include acquisitions or financing activities. It is presented as a supplemental performance measure and is not intended as an alternative to any other cash flow measure calculated in accordance with generally accepted accounting principles. Further, free cash flow may not be comparable to similarly titled measures used by other companies. A table reconciling free cash flow to cash provided by operating activities is presented at the end of the condensed consolidated financial statements included in this release.
Apria provides home respiratory therapy, home infusion therapy and home medical equipment through approximately 500 branches serving patients in all 50 states. With over $1.5 billion in annual revenues, it is one of the nation's leading home healthcare companies.
This release may contain statements regarding anticipated future developments that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Results may differ materially as a result of the risk factors included in the Company's filings with the Securities and Exchange Commission and other factors over which the Company has no control.
APRIA HEALTHCARE GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
(dollars in thousands) 2007 2006
---------------------------------------------------------------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,543 $ 14,657
Accounts receivable, net of allowance
for doubtful accounts 212,325 211,097
Inventories, net 42,760 40,681
Other current assets 77,632 78,502
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TOTAL CURRENT ASSETS 349,260 344,937
PATIENT SERVICE EQUIPMENT, NET 207,165 212,068
PROPERTY, EQUIPMENT & IMPROVEMENTS, NET 54,291 52,975
OTHER ASSETS, NET 557,039 558,516
---------- ----------
TOTAL ASSETS $1,167,755 $1,168,496
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LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 173,370 $ 201,378
Current portion of long-term debt 540 2,145
---------- ----------
TOTAL CURRENT LIABILITIES 173,910 203,523
LONG-TERM DEBT, net of current portion 460,000 485,000
OTHER NON-CURRENT LIABILITIES 91,324 69,542
---------- ----------
TOTAL LIABILITIES 725,234 758,065
STOCKHOLDERS' EQUITY 442,521 410,431
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,167,755 $1,168,496
========== ==========
APRIA HEALTHCARE GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
March 31,
(dollars in thousands, -------------------------
except per share data) 2007 2006
---------------------------------------------------------------------
Respiratory therapy $ 268,272 $ 253,148
Infusion therapy 68,968 64,772
Home medical equipment/other 52,050 50,136
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NET REVENUES 389,290 368,056
GROSS PROFIT 254,494 241,082
Provision for doubtful accounts 9,698 10,168
Selling, distribution and
administrative expenses 206,579 197,693
Amortization of intangible assets 992 1,277
---------- ----------
OPERATING INCOME 37,225 31,944
Interest expense, net 5,826 7,287
---------- ----------
INCOME BEFORE TAXES 31,399 24,657
Income tax expense 12,255 8,534
---------- ----------
NET INCOME $ 19,144 $ 16,123
========== ==========
Income per common share - assuming
dilution $ 0.44 $ 0.38
========== ==========
Weighted average number of common
shares outstanding 43,988 42,954
APRIA HEALTHCARE GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
-------------------------
(dollars in thousands) 2007 2006
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $ 19,144 $ 16,123
Items included in net income not
requiring cash:
Provision for doubtful accounts 9,698 10,168
Depreciation and amortization 33,955 35,241
Deferred income taxes, share-based
compensation and other 6,480 3,647
Changes in operating assets and
liabilities, exclusive of effects of
acquisitions (24,327) (27,016)
---------- ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 44,950 38,163
---------- ----------
INVESTING ACTIVITIES
Purchases of patient service equipment
and property, equipment and
improvements, exclusive of effects of
acquisitions (32,672) (38,834)
Proceeds from disposition of assets 26 555
Cash paid for acquisitions, including
payments of deferred consideration -- (4,063)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (32,646) (42,342)
---------- ----------
FINANCING ACTIVITIES
Net payments on debt (26,605) (7,169)
Issuances of common stock 13,297 2,802
Other 2,890 (858)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES (10,418) (5,225)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,886 (9,404)
Cash and cash equivalents at beginning
of period 14,657 23,304
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 16,543 $ 13,900
========== ==========
APRIA HEALTHCARE GROUP INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
RECONCILIATIONS
(unaudited)
Three Months Ended
March 31,
-------------------------
(dollars in thousands) 2007 2006
---------------------------------------------------------------------
Reconciliation - EBITDA:
Net income $ 19,144 $ 16,123
Add back: Interest expense, net 5,826 7,287
Add back: Income tax expense 12,255 8,534
Add back: Depreciation 32,963 33,964
Add back: Amortization of intangible
assets 992 1,277
---------- ----------
EBITDA $ 71,180 $ 67,185
========== ==========
Reconciliation - Free Cash Flow:
Net cash provided by operating activities $ 44,950 $ 38,163
Less: Purchases of patient service
equipment and property, equipment and
improvements, exclusive of effects of
acquisitions (32,672) (38,834)
---------- ----------
Free cash flow $ 12,278 $ (671)
========== ==========