Dec 27 2011
National Mentor Holdings, Inc. (the "Company") today announced its financial results for the fourth quarter and fiscal year ended September 30, 2011.
Fourth Quarter Results
Revenue for the quarter ended September 30, 2011 was $271.5 million, an increase of $13.0 million, or 5.0%, over revenue for the quarter ended September 30, 2010. Revenue increased $9.6 million related to acquisitions that closed during and after the three months ended September 30, 2010 and $3.4 million related to organic growth, including growth related to new programs. Modest organic growth was achieved despite the negative impact of rate reductions in some states, including Oregon.
Income from operations for the quarter ended September 30, 2011 was $4.8 million, a decrease of $4.8 million as compared to income from operations for the quarter ended September 30, 2010. The operating margin was 1.8% for the quarter ended September 30, 2011, a decrease from 3.7% for the quarter ended September 30, 2010.
Net loss for the quarter ended September 30, 2011 was $14.5 million compared to net loss of $1.5 million for the quarter ended September 30, 2010. In addition to the factors noted below with respect to Adjusted EBITDA, other factors contributing to net loss included an increase in interest expense, an impairment charge related to indefinite lived trade names, an increase in loss from discontinued operations and an increase in depreciation and amortization expense.
Adjusted EBITDA for the quarter ended September 30, 2011 was $26.4 million, a decrease of $2.2 million, or 7.6%, as compared to Adjusted EBITDA for the quarter ended September 30, 2010. Adjusted EBITDA was negatively impacted by an increase in direct labor costs as the Company increased staffing to prepare for growth opportunities, an increase in occupancy expense and the Company's decision to pay a one-time cash bonus to direct care workers, $1.3 million of which was recorded in the fourth quarter. In addition, Adjusted EBITDA was negatively impacted by increased expense related to higher self-insured retentions and higher premiums for professional and general liability insurance, higher reserves for employment practices liability claims and rate reductions in some states, including Oregon.
Fiscal Year Results
Revenue for the fiscal year ended September 30, 2011 ("fiscal 2011") was $1,070.6 million, an increase of $59.1 million, or 5.8%, over revenue for the fiscal year ended September 30, 2010 ("fiscal 2010"). Revenue increased $43.0 million related to acquisitions that closed during and after fiscal 2010 and $16.1 million related to organic growth, including growth related to new programs. Modest organic growth was achieved despite the negative impact of rate reductions in several states, including Indiana, Oregon and Wisconsin.
Income from operations for fiscal 2011 was $35.2 million, a decrease of $9.5 million as compared to income from operations for fiscal 2010. The operating margin was 3.3% for fiscal 2011, a decrease from 4.4% for fiscal 2010.
Net loss for fiscal 2011 was $34.1 million compared to net loss of $6.9 million for fiscal 2010. In addition to the factors noted below with respect to Adjusted EBITDA, expenses related to the Company's refinancing transactions contributed to net loss, partially offset by a gain recognized upon the repurchase of the Company's investment in the notes issued by its indirect parent company, NMH Holdings, Inc. In addition, other factors contributing to net loss for fiscal 2011 included an increase in interest expense, an increase in depreciation and amortization expense, an impairment charge related to indefinite lived trade names; stock-based compensation expense related to the equity issuance in the third quarter; expense related to the restructuring of certain corporate and field functions, and expense for discretionary recognition bonuses in the second quarter.
Adjusted EBITDA for fiscal 2011 was $113.9 million, an increase of $5.0 million, or 4.6%, as compared to Adjusted EBITDA for fiscal 2010. The increase in Adjusted EBITDA was the result of the increase in revenue noted above, as well as our on-going cost containment efforts. Partially offsetting this increase, Adjusted EBITDA was negatively impacted by increased occupancy expense, increased expense related to higher self-insured retentions and premiums for professional and general liability insurance, the Company's decision to pay a one-time cash bonus to direct care workers totaling $3.8 million, rate reductions in several states, including Indiana, Oregon and Wisconsin and higher reserves for employment practices liability claims.
Source:
National Mentor Holdings, Inc.