HORC Horizon Health Corp (MM)

Horizon Health Corporation (NASDAQ/NM: HORC) today announced earnings of $0.24 per diluted share for the third fiscal quarter ended May 31, 2005, which included the dilutive effect of additional shares issued in the follow-on offering completed March 16, 2005, and was identical to the same period in the prior year. Revenues increased 29.4% to $57.9 million compared with revenues of $44.8 million for the same quarter in the previous year, and net income increased 27.9% to $3.5 million compared with net income of $2.7 million for the same quarter in the previous year. For the nine months ended May 31, 2005, the Company had earnings of $0.76 per diluted share, an increase of 8.6%, as compared with earnings of $0.70 per diluted share for the same period in the previous fiscal year. Revenues increased 27.5% to $164.4 million compared with revenues of $128.9 million for the same period in the previous fiscal year, and net income increased 19.7% to $9.6 million compared with net income of $8.0 million for the prior year period. During the quarter, the Company issued 1.725 million shares of common stock in a follow-on offering effective March 16, 2005, and, effective June 15, 2005, the Company issued approximately 7.39 million shares of common stock in a two-for-one stock split effected as a 100% stock dividend. Earnings per share amounts for the third quarter and year-to-date are inclusive of the common stock shares issued in the follow-on offering and stock split. Mr. Ken Newman, chairman and chief executive officer of Horizon Health, said, "During the third quarter we successfully positioned the Company to continue its acquisition strategy by completing a follow-on common stock offering which generated proceeds after expenses of $58.4 million. In addition, the Company increased its revolving credit facility to a $125 million facility that, at the request of the Company, can be increased to $175 million subject to the satisfaction of certain conditions. As of May 31, 2005, the Company was "debt free" with available cash of $30.8 million which is sufficient to fund the fourth quarter acquisitions of Friends Hospital and River Park Hospital." The Company is revising its fiscal 2005 guidance to $1.00 to $1.02 per share, exclusive of approximately $7.0 to $9.0 million in one-time charges expected to be incurred in the fourth fiscal quarter primarily associated with the restructuring of its EAP Services Group and the potential divestiture of ProCare One Nurses. The one-time charges associated with the restructuring of the EAP Services Group relate to real estate lease obligations at affected locations, relocation expenses for certain employees, employee training and redundant staffing. The Company is also issuing initial earnings guidance for its fiscal 2006 of $1.14 to $1.18 per share, inclusive of $0.05 per share in compensation expense related to the expensing of stock options under FAS 123R that is applicable to the Company for its 2006 fiscal year commencing September 1, 2005. Included in both the revised fiscal 2005 guidance and the initial 2006 guidance is the acquisition of Friends Hospital effective June 30, 2005, and the anticipated acquisition of River Park Hospital on July 31, 2005. Both the fiscal 2005 and 2006 guidance do not include the effects of any potential acquisitions, other than River Park Hospital, or potential divestitures. A listen-only simulcast and a 30-day replay of Horizon's third quarter conference call will be available online on July 12, 2005, 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 a leading contract manager of clinical services for acute care hospitals and employers and an owner of behavioral health care facilities. 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 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share and statistical data) For the Three Months For the Nine Months Ended May 31, Ended May 31, --------------------- --------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenue $ 57,905 $ 44,757 $ 164,416 $ 128,942 Cost of Services (exclusive of depreciation shown separately below) 44,520 34,477 125,736 99,417 ---------- ---------- ---------- ---------- Gross Profit 13,385 10,280 38,680 29,525 Selling, general and administrative 6,001 5,031 17,091 14,111 Provision for (recovery of) doubtful accounts 724 (135) 2,141 (250) Depreciation and amortization 794 680 2,479 1,988 ---------- ---------- ---------- ---------- Income from operations 5,866 4,702 16,969 13,676 Interest expense (net of interest and other income) 140 270 1,308 735 ---------- ---------- ---------- ---------- Income before income taxes 5,726 4,432 15,661 12,941 Income tax provision 2,233 1,702 6,108 4,961 ---------- ---------- ---------- ---------- Net income $ 3,493 $ 2,730 $ 9,553 $ 7,980 ========== ========== ========== ========== Net income per common and common equivalent share(1) Basic $ 0.25 $ 0.25 $ 0.79 $ 0.74 ========== ========== ========== ========== Diluted $ 0.24 $ 0.24 $ 0.76 $ 0.70 ========== ========== ========== ========== Weighted average shares outstanding(1) Basic 14,195 10,924 12,158 10,820 Diluted 14,744 11,366 12,601 11,338 (1) The number of shares and per share amounts have been restated to reflect the impact of the June 15, 2005 stock split CONSOLIDATED BALANCE SHEETS May 31, August 31, 2005 2004 -------------- -------------- Cash $ 30,801 $ 1,908 Accounts receivable (net) 26,631 22,059 Other current assets 7,002 4,823 -------------- -------------- Total current assets 64,434 28,790 Property and equipment (net) 29,215 28,801 Goodwill and other intangible assets (net) 86,859 87,244 Other long-term assets 65 430 -------------- -------------- Total assets $ 180,573 $ 145,265 ============== ============== Current liabilities $ 26,075 $ 23,230 Other liabilities 2,229 1,570 Long-term debt - 40,000 Deferred taxes 5,756 4,641 -------------- -------------- Total liabilities 34,060 69,441 Stockholders' equity 146,513 75,824 -------------- -------------- Total liabilities and stockholders' equity $ 180,573 $ 145,265 ============== ============== HORIZON HEALTH CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In Thousands, except per share and statistical data) SUMMARY STATISTICAL DATA Quarter Quarter Quarter Ended Ended Ended May 31, Feb. 28, Nov. 30, 2005 2005 2004 ---------- ---------- ----------- Number of contract locations: Contract locations in operation 126 127 128 Contract locations signed & unopened 13 14 11 ---------- ---------- ----------- Total contract locations 139 141 139 ========== ========== =========== Managed Care and EAP Lives 4,000,486 3,815,827 3,706,982 Managed Care and EAP Contracts 1,119 1,158 1,156 Owned/Leased Freestanding Behavioral Health Hospitals: Total net revenues (000's) $16,110 $12,175 $9,114 Number of facilities at period end 3 3 2 Licensed Beds 427 427 267 Weighted average available beds 357 316 241 Patient days 25,026 21,196 17,756 Admissions 1,777 1,314 847 Average length of stay 14.1 16.1 21.0 Revenue per patient day $644 $574 $513 Occupancy based on weighted average available beds 76.2 % 74.5 % 81.0 % As of August 31, ------------------------------------------------- 2004 2003 2002 2001 2000 --------- --------- --------- --------- --------- Number of contract locations: Contract locations in operation 132 127 131 124 128 Contract locations signed & unopened 8 15 11 14 10 --------- --------- --------- --------- --------- Total contract locations 140 142 142 138 138 ========= ========= ========= ========= ========= Managed Care and EAP Lives 3,565,084 3,217,406 2,349,197 2,208,938 1,736,078 Managed Care and EAP Contracts 1,175 1,175 687 641 258 Owned/Leased Freestanding Behavioral Health Hospitals: Total net revenues (000's) $ 10,069 - - - - Number of facilities at period end 2 - - - - Licensed Beds 267 - - - - Weighted average available beds 177 - - - - Patient days 19,639 - - - - Admissions 1,041 - - - - Average length of stay 18.9 - - - - Revenue per patient day $ 513 - - - - Occupancy based on weighted average available beds 72.5 % - - - - *T