HORC Horizon Health Corp (MM)

Horizon Health Corporation (NASDAQ/NM:HORC) today announced financial results for the quarter ended November 30, 2005. Revenues increased 24.6% to $58.9 million compared with revenues of $47.3 million for the same quarter in the previous year. Excluding a $6.5 million decrease in revenue attributable to the cancellation of at-risk managed care contracts during fiscal 2005, revenues grew 44.9% from the prior fiscal year quarter. Income from continuing operations increased 18.0% to $3.2 million, or $0.21 per diluted share, compared with income from continuing operations of $2.7 million, or $0.24 per diluted share, for the same quarter in the previous year. Net income increased 7.1% between the periods. Diluted shares used in computing earnings per share increased 35.2% between the periods, 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 continued its strategic growth program by acquiring Copper Hills Youth Center, a 126-bed adolescent residential treatment center, and by signing definitive agreements to acquire eight freestanding behavioral health facilities from Focus Healthcare, LLC and Lighthouse Care Centers, LLC. Copper Hills Youth Center was acquired January 1, 2006. The Company expects to complete the transaction with Focus Healthcare, LLC and Lighthouse Care Centers, LLC effective January 31, 2006. These transactions demonstrate the strength of our acquisition and development team in locating and bringing to closure quality opportunities within our core competencies." A listen-only simulcast and a 30-day replay of Horizon's first quarter results call will be available online on January 9, 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 a leading contract manager of clinical services for acute hospitals and employers and an owner of behavioral healthcare 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended November 30, ------------------ 2005 2004 -------- -------- Revenues $58,911 $47,286 Cost of Services 45,650 35,014 Selling, general and administrative 7,045 5,546 (Recovery of) provision for doubtful accounts (179) 818 Depreciation and amortization 1,144 857 -------- -------- Operating income 5,251 5,051 Interest expense (net of interest and other income) (18) (565) -------- -------- Income before income taxes, minority interest and discontinued operations 5,233 4,486 Income tax provision 2,041 1,739 Minority interest, net (49) -- -------- -------- Income from continuing operations 3,241 2,747 (Loss) income from discontinued operations, net (47) 235 -------- -------- Net income $3,194 $2,982 ======== ======== Basic earnings per common share (1) Continuing operations $0.21 $0.25 Discontinued operations 0.00 0.02 -------- -------- $0.21 $0.27 Diluted earnings per common share (1) Continuing operations $0.21 $0.24 Discontinued operations 0.00 0.02 -------- -------- $0.21 $0.26 ======== ======== Weighted average shares outstanding (1) Basic 14,913 11,006 ======== ======== Diluted 15,414 11,405 ======== ======== (1) The number of shares and per share amounts have been restated to reflect the impact of the June 15, 2005 stock split. In addition, the number of shares and per share amounts for the three months ended November 30, 2005 include approximately 3.5 million shares issued in a follow-on stock offering completed March 16, 2005. HORIZON HEALTH CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share and statistical data) (Unaudited) Nov. 30, Aug. 31, 2005 2005 -------- -------- Cash $2,463 $8,098 Accounts receivable (net) 33,462 28,876 Other current assets 14,621 15,710 -------- -------- Total current assets 50,546 52,684 Property and equipment (net) 52,368 51,698 Goodwill and other intangible assets (net) 80,988 81,084 Other long-term assets 1,564 1,752 -------- -------- Total assets $185,466 $187,218 ======== ======== Current liabilities $26,854 $33,194 Other liabilities 3,961 4,002 Long-term debt -- -- Deferred taxes 3,470 3,036 -------- -------- Total liabilities 34,285 40,232 Minority interest 3,816 3,865 Stockholders' equity 147,365 143,121 -------- -------- Total liabilities and stockholders' equity $185,466 $187,218 ======== ======== SUMMARY STATISTICAL DATA Quarter Fiscal Years Ended Ended August 31, Nov. 30, ------------------ 2005 2005 (1) 2004 (2) -------- -------- -------- Owned/Leased Freestanding Behavioral Health Hospitals: Total net revenues (000's) $28,039 $60,578 $10,069 Number of facilities at period end 5 5 2 Licensed Beds 833 833 267 Weighted average available beds 688 363 177 Patient days 45,114 100,396 19,639 Admissions 3,437 6,745 1,041 Average length of stay 13.1 14.9 18.9 Revenue per patient day $622 $603 $513 Occupancy based on weighted average 72.0% 75.8% 72.5% available beds EAP Covered lives (000's) 3,991 4,246 3,569 Number of contract locations: Contract locations in operation 119 123 132 Contract locations signed & unopened 11 12 8 -------- - ------- -------- Total contract locations 130 135 140 ======== = ======= ======== Services Covered by Contracts: Inpatient 118 121 129 Partial Hospitalization 10 10 17 Outpatient 22 21 24 Home Health 1 1 2 CQI+ 109 110 105 Types of Treatment Programs: Geropsychiatric 76 79 85 Adult psychiatric 44 43 49 Substance abuse 2 2 4 Physical rehabilitation 28 28 33 Other behavioral health 3 4 4 Fiscal Years Ended August 31, ---------------------------- 2003 2002 2001 -------- -------- -------- Owned/Leased Freestanding Behavioral Health Hospitals: Total net revenues (000's) $ -- $ -- $ -- Number of facilities at period end -- -- -- Licensed Beds -- -- -- Weighted average available beds -- -- -- Patient days -- -- -- Admissions -- -- -- Average length of stay -- -- -- Revenue per patient day $ -- $ -- $ -- Occupancy based on weighted average -- -- -- available beds EAP Covered lives (000's) 3,217 2,350 2,209 Number of contract locations: Contract locations in operation 127 131 124 Contract locations signed & unopened 15 11 14 -------- -------- -------- Total contract locations 142 142 138 ======== ======== ======== Services Covered by Contracts: Inpatient 126 127 123 Partial Hospitalization 25 31 40 Outpatient 21 21 17 Home Health 3 3 3 CQI+ 109 108 120 Types of Treatment Programs: Geropsychiatric 87 106 109 Adult psychiatric 48 44 45 Substance abuse 4 2 1 Physical rehabilitation 32 28 24 Other behavioral health 8 2 4 (1) 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. (2) In fiscal year 2004, the Company operated Michiana Behavioral Health Center for five months and Poplar Springs Hospital for three months. *T