HORC Horizon Health Corp (MM)

Horizon Health Corporation (NASDAQ:HORC) today announced financial results for the fourth quarter and year ended August 31, 2006. For the fourth quarter, revenues increased 33.7% to $75.7 million compared with revenues of $56.6 million for the same quarter in the previous year. Income from continuing operations increased to $3.5 million, or $0.23 per diluted share, compared with a loss from continuing operations of $223,000, or $0.01 per diluted share, for the same quarter in the previous year. Net income increased $8.0 million between the periods. For the year ended August 31, 2006, revenues increased 32.6% to $275.0 million compared with revenues of $207.4 million for the previous year. Income from continuing operations increased 38.6% to $12.1 million, or $0.79 per diluted share, compared with income from continuing operations of $8.7 million, or $0.66 per diluted share, for the previous fiscal year. Diluted shares used in computing earnings per share increased 15.8% between the periods, primarily as a result of the secondary stock offering completed in March 2005. Mr. Ken Newman, Chairman and Chief Executive Officer of Horizon Health, said, �The Company accomplished significant growth in fiscal 2006, which occurred through the acquisition of ten behavioral health facilities during the year. These acquisitions increased revenues for our hospital services group to $158.3 million, or 58% of consolidated revenues. For fiscal 2007, we will continue our strategy of expanding the number of licensed beds through acquisition and/or expansion.� A listen-only simulcast and a 30-day replay of Horizon�s fourth quarter and fiscal year results call will be available online on November 10, 2006, beginning at 10:00 a.m. Central Time through the Company�s website at www.horizonhealth.com or at www.earnings.com. Horizon Health is an owner of behavioral healthcare facilities and a leading manager of clinical services for acute care hospitals and employers. The statements contained herein based on future expectations rather than on historical facts are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Numerous factors as outlined in the SEC Report filed by the Company could cause actual results to differ materially from those in any such forward-looking statements. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. HORIZON HEALTH CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) � (Unaudited) Three Months Ended August 31, Fiscal Year Ended August 31, 2006� 2005� 2006� 2005� Revenues $ 75,686� $ 56,589� $ 274,961� $ 207,392� � Cost of services 57,064� 46,661� 211,096� 160,032� Selling, general and administrative 6,173� 6,276� 26,605� 23,220� Provision for doubtful accounts 2,547� 2,294� 6,256� 4,382� Impairment loss on building ---� 1,015� ---� 1,015� Depreciation and amortization 1,617� 1,002� 5,529� 3,387� � Operating income (loss) 8,285� (659) 25,475� 15,356� � Interest expense (net of interest and other income) (2,263) 10� (5,196) (1,298) � Income (loss) before income taxes, minority interest and discontinued operations 6,022� (649) 20,279� 14,058� Income tax provision 2,375� (411) 7,976� 5,332� Minority interest, net 141� (15) 188� (15) � Income (loss) from continuing operations 3,506� (223) 12,115� 8,741� � Income (loss) from discontinued operations, net 42� (4,180) 7� (3,590) � Net income (loss) $ 3,548� $ (4,403) $ 12,122� $ 5,151� � Basic earnings (loss) per common share Continuing operations $ 0.24� $ (0.02) $ 0.81� $ 0.68� Discontinued operations ---� (0.28) ---� (0.28) $ 0.24� $ (0.30) $ 0.81� $ 0.40� � Diluted earnings (loss) per common share Continuing operations $ 0.23� $ (0.01) $ 0.79� $ 0.66� Discontinued operations ---� (0.28) ---� (0.27) $ 0.23� $ (0.29) $ 0.79� $ 0.39� � Weighted average shares outstanding Basic 15,033� 14,843� 14,974� 12,829� � Diluted 15,359� 15,424� 15,408� 13,306� HORIZON HEALTH CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) � August 31, 2006 August 31, 2005 Cash $ 3,043� $ 8,098� Accounts receivable (net) 40,856� 28,876� Other current assets 20,524� 15,710� Total current assets 64,423� 52,684� Property and equipment (net) 100,189� 51,698� Goodwill and other intangible assets (net) 150,600� 81,084� Other long-term assets 2,428� 1,752� Total assets $ 317,640� $ 187,218� � Current liabilities $ 35,982� $ 33,194� Other liabilities 4,106� 4,002� Long-term debt 105,935� ---� Deferred taxes 8,108� 3,036� Total liabilities 154,131� 40,232� Minority interest 4,053� 3,865� Stockholders� equity 159,456� 143,121� Total liabilities and stockholders� equity $ 317,640� $ 187,218� During the quarter and year ended August 31, 2005, the Company incurred approximately $3.1 and $4.0 million in after tax non-recurring restructuring charges for the EAP Services group. The following schedule removes the after tax non-recurring charges from the quarter and year ended August 31, 2005 results. Fourth Quarter and Fiscal 2005 Adjusted for Non-recurring Charges (In millions, except per share data) Three Months Ended August 31, Twelve Months Ended August 31, 2006 Actual 2005 Adjusted 2006 Actual 2005 Adjusted Revenues $ 75.7� $ 56.6� $ 275.0� $ 207.4� Operating Income 8.3� 4.5� 25.5� 22.0� Income from continuing operations 3.5� 2.9� 12.1� 12.8� Net Income $ 3.5� $ 3.1� $ 12.1� $ 13.6� � Diluted EPS � Continuing Operations $ 0.23� $ 0.19� $ 0.79� $ 0.96� Diluted EPS � Discontinued Operations ---� 0.01� ---� 0.06� Diluted EPS $ 0.23� $ 0.20� $ 0.79� $ 1.02� HORIZON HEALTH RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS TO EBITDA AND EBITDAR (Unaudited) (In thousands) � Three Months Ended August 31, Fiscal Year Ended August 31, 2006� 2005� 2006� 2005� Income (loss) from continuing operations $ 3,506� $ (223) $ 12,115� $ 8,741� Minority interest (net) 141� (15) 188� (15) Provision for income taxes 2,375� (411) 7,976� 5,332� Interest expense (net of interest and other income) 2,263� (10) 5,196� 1,298� Impairment loss on building ---� 1,015� ---� 1,015� Depreciation and amortization 1,617� 1,002� 5,529� 3,387� EBITDA 9,902� 1,358� 31,004� 19,758� Rent 1,257� 2,313� 3,585� 4,695� EBITDAR $ 11,159� $ 3,671� $ 34,589� $ 24,453� HORIZON HEALTH SUMMARY STATISTICAL DATA � Three Months Ended August 31, Fiscal Year Ended August 31, 2006� 2005� 2006 (1) 2005 (2) Owned/Leased Freestanding Behavioral Health Hospitals: Net revenues (in thousands) $ 47,517� $ 23,179� $ 158,333� $ 60,578� Number of facilities in operation at period end 14� 5� 14� 5� Licensed beds 1,546� 833� 1,546� 833� Weighted average available beds 1,391� 534� 1,108� 363� Patient days 94,026� 36,418� 299,797� 100,396� Admissions 5,604� 2,807� 18,984� 6,745� Average length of stay 16.8� 13.0� 15.8� 14.9� Revenue per patient day $ 505� $ 636� $ 528� $ 603� Occupancy based on weighted average available beds 73.5% 74.1% 74.1% 75.8% EBITDA margin (3) 14.7% 8.9% 13.1% 14.5% EBITDAR margin (3) 16.0% 10.7% 14.5% 16.2% � Same Facility Results: Net revenues (in thousands) $ 14,397� $ 8,360� $ 36,162� $ 35,347� Number of facilities at period end 3� 2� 2� 2� Licensed beds 424� 264� 264� 264� Weighted average available beds 357� 241� 241� 241� Patient days 22,950� 16,793� 70,509� 70,282� Admissions 1,436� 732� 3,288� 3,231� Average length of stay 16.0� 22.9� 21.4� 21.8� Revenue per patient day $ 627� $ 498� $ 513� $ 503� Occupancy based on weighted average available beds 69.9% 75.7% 80.2% 79.9% EBITDA margin (3) 20.0% 16.5% 26.1% 19.7% EBITDAR margin (3) 22.1% 17.7% 26.6% 20.6% � EAP Covered lives (in thousands) 4,464� 4,244� � Number of contract locations (4): Contract locations in operation 107� 123� Contract locations signed & unopened 9� 12� Total contract locations 116� 135� (1) During fiscal year 2006, the Company operated the Copper Hills Youth Center for eight months, Kingwood Pines Hospital for seven and a half months, six Focus/Lighthouse facilities for seven months, and the Focus Healthcare of Delaware facility for five months. All other facilities were operated for the full year. (2) In fiscal year 2005, the Company operated Michiana Behavioral Health Center and Poplar Springs Hospital for the full year, Laurelwood Hospital for eight months, Friends Hospital for two months, and River Park Hospital for one month. (3) The calculation of EBITDA and EBITDAR for the Hospital Services Division presented above does not include an allocation for corporate overhead expenses. For the three months ended August 31, 2006 and 2005 and the fiscal years ended August 31, 2006 and 2005, EBITDA and EBITDAR are calculated as follows: Three Months Ended August 31, Fiscal Year Ended August 31, 2006� 2005� 2006� 2005� EBITDA $ 5,996� $ 1,662� $ 18,131� $ 7,928� Hospital division overhead 971� 411� 2,617� 883� Adjusted EBITDA 6,967� 2,073� 20,748� 8,811� Rent 621� 404� 2,150� 1,023� EBITDAR $ 7,588� $ 2,477� $ 22,898� $ 9,834� (4) Includes only the Company's behavioral health and physical rehabilitation management contracts. Horizon Health Corporation (NASDAQ:HORC) today announced financial results for the fourth quarter and year ended August 31, 2006. For the fourth quarter, revenues increased 33.7% to $75.7 million compared with revenues of $56.6 million for the same quarter in the previous year. Income from continuing operations increased to $3.5 million, or $0.23 per diluted share, compared with a loss from continuing operations of $223,000, or $0.01 per diluted share, for the same quarter in the previous year. Net income increased $8.0 million between the periods. For the year ended August 31, 2006, revenues increased 32.6% to $275.0 million compared with revenues of $207.4 million for the previous year. Income from continuing operations increased 38.6% to $12.1 million, or $0.79 per diluted share, compared with income from continuing operations of $8.7 million, or $0.66 per diluted share, for the previous fiscal year. Diluted shares used in computing earnings per share increased 15.8% between the periods, primarily as a result of the secondary stock offering completed in March 2005. Mr. Ken Newman, Chairman and Chief Executive Officer of Horizon Health, said, "The Company accomplished significant growth in fiscal 2006, which occurred through the acquisition of ten behavioral health facilities during the year. These acquisitions increased revenues for our hospital services group to $158.3 million, or 58% of consolidated revenues. For fiscal 2007, we will continue our strategy of expanding the number of licensed beds through acquisition and/or expansion." A listen-only simulcast and a 30-day replay of Horizon's fourth quarter and fiscal year results call will be available online on November 10, 2006, beginning at 10:00 a.m. Central Time through the Company's website at www.horizonhealth.com or at www.earnings.com. Horizon Health is an owner of behavioral healthcare facilities and a leading manager of clinical services for acute care hospitals and employers. The statements contained herein based on future expectations rather than on historical facts are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Numerous factors as outlined in the SEC Report filed by the Company could cause actual results to differ materially from those in any such forward-looking statements. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. -0- *T HORIZON HEALTH CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Fiscal Year Ended August 31, August 31, ------------------ ------------------- 2006 2005 2006 2005 --------- -------- --------- --------- Revenues $75,686 $56,589 $274,961 $207,392 Cost of services 57,064 46,661 211,096 160,032 Selling, general and administrative 6,173 6,276 26,605 23,220 Provision for doubtful accounts 2,547 2,294 6,256 4,382 Impairment loss on building --- 1,015 --- 1,015 Depreciation and amortization 1,617 1,002 5,529 3,387 --------- -------- --------- --------- Operating income (loss) 8,285 (659) 25,475 15,356 Interest expense (net of interest and other income) (2,263) 10 (5,196) (1,298) --------- -------- --------- --------- Income (loss) before income taxes, minority interest and discontinued operations 6,022 (649) 20,279 14,058 Income tax provision 2,375 (411) 7,976 5,332 Minority interest, net 141 (15) 188 (15) --------- -------- --------- --------- Income (loss) from continuing operations 3,506 (223) 12,115 8,741 Income (loss) from discontinued operations, net 42 (4,180) 7 (3,590) --------- -------- --------- --------- Net income (loss) $3,548 $(4,403) $12,122 $5,151 ========= ======== ========= ========= Basic earnings (loss) per common share Continuing operations $0.24 $(0.02) $0.81 $0.68 Discontinued operations --- (0.28) --- (0.28) --------- -------- --------- --------- $0.24 $(0.30) $0.81 $0.40 ========= ======== ========= ========= Diluted earnings (loss) per common share Continuing operations $0.23 $(0.01) $0.79 $0.66 Discontinued operations --- (0.28) --- (0.27) --------- -------- --------- --------- $0.23 $(0.29) $0.79 $0.39 ========= ======== ========= ========= Weighted average shares outstanding Basic 15,033 14,843 14,974 12,829 ========= ======== ========= ========= Diluted 15,359 15,424 15,408 13,306 ========= ======== ========= ========= *T -0- *T HORIZON HEALTH CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) August 31, August 31, 2006 2005 ---------- ---------- Cash $3,043 $8,098 Accounts receivable (net) 40,856 28,876 Other current assets 20,524 15,710 ---------- ---------- Total current assets 64,423 52,684 Property and equipment (net) 100,189 51,698 Goodwill and other intangible assets (net) 150,600 81,084 Other long-term assets 2,428 1,752 ---------- ---------- Total assets $317,640 $187,218 ========== ========== Current liabilities $35,982 $33,194 Other liabilities 4,106 4,002 Long-term debt 105,935 --- Deferred taxes 8,108 3,036 ---------- ---------- Total liabilities 154,131 40,232 Minority interest 4,053 3,865 Stockholders' equity 159,456 143,121 ---------- ---------- Total liabilities and stockholders' equity $317,640 $187,218 ========== ========== *T During the quarter and year ended August 31, 2005, the Company incurred approximately $3.1 and $4.0 million in after tax non-recurring restructuring charges for the EAP Services group. The following schedule removes the after tax non-recurring charges from the quarter and year ended August 31, 2005 results. -0- *T Fourth Quarter and Fiscal 2005 Adjusted for Non-recurring Charges (In millions, except per share data) Three Months Ended Twelve Months Ended August 31, August 31, ------------------- -------------------- 2006 2005 2006 2005 Actual Adjusted Actual Adjusted --------- --------- ---------- --------- Revenues $75.7 $56.6 $275.0 $207.4 Operating Income 8.3 4.5 25.5 22.0 Income from continuing operations 3.5 2.9 12.1 12.8 Net Income $3.5 $3.1 $12.1 $13.6 ========= ========= ========== ========= Diluted EPS - Continuing Operations $0.23 $0.19 $0.79 $0.96 Diluted EPS - Discontinued Operations --- 0.01 --- 0.06 --------- --------- ---------- --------- Diluted EPS $0.23 $0.20 $0.79 $1.02 ========= ========= ========== ========= *T -0- *T HORIZON HEALTH RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS TO EBITDA AND EBITDAR (Unaudited) (In thousands) Three Months Ended Fiscal Year Ended August 31, August 31, ------------------ ------------------ 2006 2005 2006 2005 ---------- ------- --------- -------- Income (loss) from continuing operations $3,506 $(223) $12,115 $8,741 Minority interest (net) 141 (15) 188 (15) Provision for income taxes 2,375 (411) 7,976 5,332 Interest expense (net of interest and other income) 2,263 (10) 5,196 1,298 Impairment loss on building --- 1,015 --- 1,015 Depreciation and amortization 1,617 1,002 5,529 3,387 ---------- ------- --------- -------- EBITDA 9,902 1,358 31,004 19,758 Rent 1,257 2,313 3,585 4,695 ---------- ------- --------- -------- EBITDAR $11,159 $3,671 $34,589 $24,453 ========== ======= ========= ======== *T -0- *T HORIZON HEALTH SUMMARY STATISTICAL DATA Three Months Ended Fiscal Year Ended August 31, August 31, ------------------ ------------------ 2006 2005 2006 (1) 2005 (2) --------- -------- --------- -------- Owned/Leased Freestanding Behavioral Health Hospitals: Net revenues (in thousands) $47,517 $23,179 $158,333 $60,578 Number of facilities in operation at period end 14 5 14 5 Licensed beds 1,546 833 1,546 833 Weighted average available beds 1,391 534 1,108 363 Patient days 94,026 36,418 299,797 100,396 Admissions 5,604 2,807 18,984 6,745 Average length of stay 16.8 13.0 15.8 14.9 Revenue per patient day $505 $636 $528 $603 Occupancy based on weighted average available beds 73.5% 74.1% 74.1% 75.8% EBITDA margin (3) 14.7% 8.9% 13.1% 14.5% EBITDAR margin (3) 16.0% 10.7% 14.5% 16.2% Same Facility Results: Net revenues (in thousands) $14,397 $8,360 $36,162 $35,347 Number of facilities at period end 3 2 2 2 Licensed beds 424 264 264 264 Weighted average available beds 357 241 241 241 Patient days 22,950 16,793 70,509 70,282 Admissions 1,436 732 3,288 3,231 Average length of stay 16.0 22.9 21.4 21.8 Revenue per patient day $627 $498 $513 $503 Occupancy based on weighted average available beds 69.9% 75.7% 80.2% 79.9% EBITDA margin (3) 20.0% 16.5% 26.1% 19.7% EBITDAR margin (3) 22.1% 17.7% 26.6% 20.6% EAP Covered lives (in thousands) 4,464 4,244 Number of contract locations (4): Contract locations in operation 107 123 Contract locations signed & unopened 9 12 --------- -------- Total contract locations 116 135 ========= ======== *T -0- *T (1) During fiscal year 2006, the Company operated the Copper Hills Youth Center for eight months, Kingwood Pines Hospital for seven and a half months, six Focus/Lighthouse facilities for seven months, and the Focus Healthcare of Delaware facility for five months. All other facilities were operated for the full year. (2) In fiscal year 2005, the Company operated Michiana Behavioral Health Center and Poplar Springs Hospital for the full year, Laurelwood Hospital for eight months, Friends Hospital for two months, and River Park Hospital for one month. (3) The calculation of EBITDA and EBITDAR for the Hospital Services Division presented above does not include an allocation for corporate overhead expenses. For the three months ended August 31, 2006 and 2005 and the fiscal years ended August 31, 2006 and 2005, EBITDA and EBITDAR are calculated as follows: *T -0- *T Three Months Ended Fiscal Year Ended August 31, August 31, ------------------ ----------------- 2006 2005 2006 2005 ---------- ------- --------- ------- EBITDA $5,996 $1,662 $18,131 $7,928 Hospital division overhead 971 411 2,617 883 ---------- ------- --------- ------- Adjusted EBITDA 6,967 2,073 20,748 8,811 Rent 621 404 2,150 1,023 ---------- ------- --------- ------- EBITDAR $7,588 $2,477 $22,898 $9,834 ========== ======= ========= ======= *T -0- *T (4) Includes only the Company's behavioral health and physical rehabilitation management contracts. *T