Almost Family’s Net Income Declines 8.1% in Q2, Loses $2.8 Million from Medicare Cuts
Home health care provider Almost Family (NASDAQ:AFAM) saw its net income decline 8.1% to $4.55 million, or $0.49 per diluted share, in the second quarter ended June 30, 2012, compared to the previous year’s $4.95 million, or $0.53 per diluted share, attributed in part to decreases in Medicare reimbursement rates.
“We’re pleased with our results for the quarter as we continue to adjust our operations to meaningful Medicare rate cuts and an apparent slowing in the Medicare home health market,” said William Yarmuth, CEO of Almost Family. “During the first half of 2012, our staff and management have been intensely focused on improving our operational performance. I’m pleased with the extent to which we’ve improved our results. Our charge for the second half of 2012 is to leverage the progress achieved in both segments, while turning a more substantial part of our focus toward improving the organic growth of our business.”
Net service revenues increased 6.3% to $86.9 million in the second quarter, but operating income declined 9.3% to $7.6 million, compared to $8.3 million in the same period of 2011.
Almost Family’s second quarter results were unfavorably impacted by workers compensation costs that were higher than normal, which served to lower earnings per share by $0.04. Additionally, the 2012 Medicare reimbursement cuts to the Visiting Nurse segment also negatively impacted earnings, as the Medicare rate changes reduced revenue and operating income by $2.8 million and earnings per diluted share by $0.18.
However, the home health care provider’s personal care segment’s revenues grew to $19 million, from a combination of acquiring Cambridge Home Health Care Holdings, Inc. and from 5% organic volume growth.
Diluted earnings per share was increased by $0.07 compared to the second quarter of 2011 on strength of the Cambridge acquisition.
View Almost Family’s second quarter earnings report.
Written by Alyssa Gerace