ADUS Addus HomeCare Corp

Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced its financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Highlights:

• Revenues Grow 11.6% to $280.7 Million
• Net Income of $15.8 Million, or $0.97 per Diluted Share
• Adjusted Net Income per Diluted Share Increases to $1.21
• Adjusted EBITDA Increases 24.6% to $32.4 Million
• Cash Flow from Operations of $38.7 Million

Overview

Net service revenues were $280.7 million for the first quarter of 2024, an 11.6% increase compared with $251.6 million for the first quarter of 2023. Net income was $15.8 million for the first quarter of 2024, compared with $12.7 million for the first quarter of 2023, while net income per diluted share was $0.97 compared with $0.78 for the same period a year ago. Adjusted EBITDA increased 24.6% to $32.4 million for the first quarter of 2024 from $26.0 million for the first quarter of 2023. Adjusted net income per diluted share was $1.21 for the first quarter of 2024 compared with $0.97 for the first quarter of 2023. Adjusted net income per diluted share for the first quarter of 2024 excludes acquisition expenses of $0.12 and stock-based compensation expense of $0.12 (See the end of press release for a reconciliation of all non-GAAP and GAAP financial measures.)

Commenting on the results, Dirk Allison, Chairman and Chief Executive Officer, said, “We are pleased to report a great start for Addus in 2024, delivering a strong financial and operating performance as we continued to build momentum as a leading provider of home-based care services. With solid execution, we achieved impressive top-line growth with overall revenues up 11.6% and adjusted EBITDA up 24.6% compared with the first quarter of 2023. The heightened awareness of the value and safety of home-based care is helping to drive our growth, and our team has done an exceptional job in meeting the increased demand with a proven operating model across the continuum of home care.

“Our personal care segment, which accounted for 74.1% of our business, was a key driver of our growth with a 9.3% revenue increase over the first quarter of last year on a same-store basis. We continued to benefit from steady volume trends as well as rate increases in certain state markets. We have also experienced a more stable labor environment, and we continue to see an improved ability to hire and retain caregivers from our investments in more efficient and effective hiring and scheduling systems, which support our ability to efficiently manage higher patient volume.

“Our first quarter results included the operations from Tennessee Quality Care, a provider of home health, hospice, and private duty nursing services, which we acquired August 1, 2023. We were pleased to see continued steady improvement in our hospice care business, with organic revenue growth of 5.8% over the same period last year, which included the benefit of a 3.1% rate increase as of October 1, 2023, and the impact of additional Tennessee locations. Our volume trends in hospice care also improved, with higher admissions, patient days, and revenue per patient day compared with the first quarter of last year. Hospice care now accounts for 20.0% of our business, and we will look to continue to drive organic growth and expansion in this critical area of care,” said Allison.

Cash and Liquidity

As of March 31, 2024, the Company had cash of $76.7 million and bank debt of $101.4 million, with capacity and availability under its revolving credit facility of $486.9 million and $377.5 million, respectively. Net cash provided by operating activities was $38.7 million for the first quarter of 2024, and $30.9 million exclusive of a net $7.8 million in ARPA funding.

Looking Ahead

Allison continued, “We have continued to generate strong cash flow from operations, allowing us to further reduce our revolver balance by $25.0 million and strengthen our balance sheet in the first quarter. At the same time, we are focused on making the necessary investments in our business to support continued growth. We have the financial flexibility to remain focused on identifying acquisition opportunities in attractive markets in 2024. Our primary objective is to acquire accretive operations that enhance our current personal care services, either by building scale or adding complementary clinical services. Our size and scale are important competitive advantages for Addus, and we will look for additional opportunities to leverage our strong market presence, particularly in markets where we participate in value-based contracting models or may have the opportunity to do so.

“We are pleased with the favorable trends in our business, reflecting the consistently growing demand for our home-based care services. We are extremely proud of the important work we are doing to allow more patients to receive safe, quality care in their preferred setting of their home. Our success as a provider is due to the dedicated caregivers who represent Addus in the marketplace, and we are grateful for the outstanding care they are providing to patients and families. We look forward to the opportunities ahead for Addus in 2024 as we extend our market reach and deliver greater value for our shareholders,” added Allison.

Non-GAAP Financial Measures

The information provided in this release includes adjusted net income, adjusted EBITDA, and adjusted net income per diluted share, which are non-GAAP financial measures. The Company defines adjusted net income as net income before acquisition expenses, stock-based compensation expenses, and restructure and other non-recurring costs. The Company defines adjusted EBITDA as earnings before interest expense, other non-operating income, taxes, depreciation, amortization, acquisition expense, stock-based compensation expense, and restructure and other non-recurring costs. The Company defines adjusted net income per diluted share as net income per share, adjusted for acquisition expenses, stock-based compensation expense, and restructure and other non-recurring costs. The Company defines adjusted net service revenues as revenue adjusted for the closure of certain sites. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted net income to net income, a reconciliation of adjusted EBITDA to net income, a reconciliation of adjusted diluted net income per share to net income per share, and a reconciliation of adjusted net service revenues to net service revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income, adjusted EBITDA, adjusted diluted net income per share, and adjusted net service revenues are useful to investors, management and others in evaluating the Company’s operating performance, to provide investors with insight and consistency in the Company’s financial reporting and to present a basis for comparison of the Company’s business operations among periods, and to facilitate comparison with the results of the Company’s peers.

Conference Call

Addus will host a conference call on Tuesday, May 7, 2024, at 9:00 a.m. Eastern time. To access the live call, dial (833) 629-0620 (international dial-in number is (412) 317-1805) and ask to join the Addus HomeCare earnings call. A telephonic replay of the conference call will be available through midnight on May 14, 2024, by dialing (877) 344-7529 (international dial-in number is (412) 317-0088) and entering pass code 2638095.

A live broadcast of Addus HomeCare’s conference call will be available under the Investor Relations section of the Company’s website: www.addus.com. An online replay will also be available on the Company’s website for one month, beginning approximately two hours following the conclusion of the live broadcast.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as “preliminary,” “continue,” “expect,” and similar expressions. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including discretionary determinations by government officials, the consummation and integration of acquisitions, transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare’s relationships with referral sources, increased competition for Addus HomeCare’s services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize, any security breaches, cyber-attacks, loss of data or cybersecurity threats or incidents, and other risks set forth in the Risk Factors section in Addus HomeCare’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2024, which is available at www.sec.gov. The financial information described herein and the periods to which they relate are preliminary estimates that are subject to change and finalization. There is no assurance that the final amounts and adjustments will not differ materially from the amounts described above, or that additional adjustments will not be identified, the impact of which may be material. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).

About Addus HomeCare

Addus HomeCare is a provider of home care services that primarily include personal care services that assist with activities of daily living, as well as hospice and home health services. Addus HomeCare’s consumers are primarily persons who, without these services, are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus HomeCare’s payor clients include federal, state, and local governmental agencies, managed care organizations, commercial insurers, and private individuals. Addus HomeCare currently provides home care services to over 49,000 consumers through 214 locations across 22 states. For more information, please visit www.addus.com.

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (amounts and shares in thousands, except per share data) (Unaudited)   Income Statement Information: For the Three Months Ended March 31,

2024

2023

  Net service revenues

$

280,746

 

$

251,599

 

Cost of service revenues

 

192,569

 

 

173,184

 

  Gross profit

 

88,177

 

 

78,415

 

 

31.4

%

 

31.2

%

General and administrative expenses

 

61,063

 

 

56,360

 

Depreciation and amortization

 

3,469

 

 

3,447

 

Total operating expenses

 

64,532

 

 

59,807

 

  Operating income from continuing operations

 

23,645

 

 

18,608

 

  Total interest expense, net

 

2,335

 

 

2,355

 

  Income before income taxes

 

21,310

 

 

16,253

 

Income tax expense

 

5,480

 

 

3,578

 

  Net income

$

15,830

 

$

12,675

 

  Net income per diluted share:

$

0.97

 

$

0.78

 

    Weighted average number of common shares outstanding: Diluted

 

16,373

 

 

16,297

 

    Cash Flow Information: For the Three Months Ended March 31,

2024

2023

  Net cash provided by operating activities

$

38,678

 

$

18,799

 

Net cash used in investing activities

 

(1,750

)

 

(1,742

)

Net cash used in financing activities

 

(25,000

)

 

(23,475

)

  Net change in cash

 

11,928

 

 

(6,418

)

Cash at the beginning of the period

 

64,791

 

 

79,961

 

Cash at the end of the period

$

76,719

 

$

73,543

 

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited)   March 31,

2024

2023

  Assets   Current assets Cash

$

76,719

$

73,543

Accounts receivable, net

 

104,727

 

125,441

Prepaid expenses and other current assets

 

10,401

 

10,226

Total current assets

 

191,847

 

209,210

  Property and equipment, net

 

23,872

 

20,248

  Other assets Goodwill

 

663,391

 

583,972

Intangible assets, net

 

90,191

 

70,604

Operating lease assets

 

44,699

 

47,049

Total other assets

 

798,281

 

701,625

Total assets

$

1,014,000

$

931,083

  Liabilities and stockholders' equity   Current liabilities Accounts payable

$

22,022

$

21,758

Accrued payroll

 

44,022

 

34,105

Accrued expenses

 

38,772

 

34,018

Operating lease liabilities, current portion

 

11,307

 

11,099

Government stimulus advance

 

13,548

 

10,996

Accrued workers compensation

 

11,920

 

12,683

Total current liabilities

 

141,591

 

124,659

  Long-term debt, less current portion, net of debt issuance costs

 

99,347

 

108,487

Long-term operating lease liabilities, less current portion

 

39,044

 

42,994

Other long-term liabilities

 

8,875

 

6,057

Total long-term liabilities

 

147,266

 

157,538

  Total liabilities

 

288,857

 

282,197

  Total stockholders' equity

 

725,143

 

648,886

  Total liabilities and stockholders' equity

$

1,014,000

$

931,083

  ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Net Service Revenue by Segment (Amounts in thousands) (Unaudited)   For the Three MonthsEnded March 31,

2024

2023

Net Service Revenues by Segment   Personal Care

$

208,003

$

190,032

Hospice

 

55,863

 

49,082

Home Health

 

16,880

 

12,485

Total Revenue

$

280,746

$

251,599

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Key Statistical and Financial Data (Unaudited)   Key Statistical and Financial Data (Unaudited)   For the Three MonthsEnded March 31,

2024

2023

Personal Care   States served at period end

 

21

 

 

21

 

Locations served at period end

 

153

 

 

157

 

Average billable census total (1)

 

37,715

 

 

38,363

 

Billable hours (in thousands)

 

7,590

 

 

7,592

 

Average billable hours per census per month

 

67.0

 

 

65.8

 

Billable hours per business day

 

116,769

 

 

116,805

 

Revenues per billable hour

$

27.35

 

$

24.98

 

Organic growth - Revenue

 

9.3

 

%

 

11.4

 

%

  Hospice   Locations served at period end

 

38

 

 

33

 

Admissions

 

3,472

 

 

3,324

 

Average daily census (2)

 

3,359

 

 

3,195

 

Average discharge length of stay

 

89.6

 

 

87.7

 

Patient days

 

305,630

 

 

287,551

 

Revenue per patient day

$

182.78

 

$

176.22

 

Organic growth - Revenue

 

5.8

 

%

 

2.6

 

%

- Average daily census

 

(1.1

)

%

 

1.5

 

%

  Home Health   Locations served at period end

 

23

 

 

13

 

New Admissions

 

4,887

 

 

3,893

 

Recertifications

 

3,168

 

 

1,549

 

Total Volume

 

8,055

 

 

5,442

 

Visits

 

106,931

 

 

77,828

 

Organic growth - Revenue

 

(15.1

)

%

 

13.8

 

%

- New Admissions

 

(4.0

)

%

 

(3.6

)

%

- Volume

 

(3.1

)

%

 

(1.2

)

%

  Percentage of Revenues by Payor:   Personal Care   State, local and other governmental programs

 

51.8

 

%

 

50.1

 

%

Managed care organizations

 

45.3

 

 

46.3

 

Private duty

 

1.9

 

 

2.2

 

Commercial

 

0.7

 

 

0.9

 

Other

 

0.3

 

%

 

0.5

 

%

  Hospice   Medicare

 

90.7

 

%

 

90.7

 

%

Commercial

 

5.6

 

 

5.2

 

Managed care organizations

 

3.3

 

 

3.4

 

Other

 

0.4

 

%

 

0.7

 

%

  Home Health   Medicare

 

69.1

 

%

 

74.2

 

%

Managed care organizations

 

26.1

 

 

20.3

 

Commercial

 

4.1

 

 

5.2

 

Other

 

0.7

 

%

 

0.3

 

%

  (1) The average billable census in acquisitions of 145 for the three months ended March 31, 2023, was reclassified to average billable census - same stores for comparability purposes.

 

(2) Exited sites would have reduced average daily census for the three months ended March 31, 2023 by 5. ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (Amounts in thousands, except per share data) (Unaudited) (1)   For the Three MonthsEnded March 31,

2024

2023

Reconciliation of Adjusted EBITDA to Net Income: (1)   Net income

$

15,830

 

$

12,675

 

  Interest expense, net

 

2,335

 

 

2,355

 

Income tax expense

 

5,480

 

 

3,578

 

Depreciation and amortization

 

3,469

 

 

3,447

 

Acquisition expenses

 

2,711

 

 

1,247

 

Stock-based compensation expense

 

2,618

 

 

2,646

 

Restructuring and other non-recurring costs

 

-

 

 

95

 

Adjusted EBITDA

$

32,443

 

$

26,043

 

    Reconciliation of Adjusted Net Income to Net Income: (2)   Net income

$

15,830

 

$

12,675

 

  Acquisition expenses

 

2,711

 

 

1,247

 

Stock-based compensation expense

 

2,618

 

 

2,646

 

Restructuring and other non-recurring costs

 

-

 

 

95

 

Tax effect

 

(1,370

)

 

(878

)

Adjusted Net Income

 

19,789

 

 

15,785

 

    Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share: (3)   Diluted earnings per share

$

0.97

 

$

0.78

 

  Acquisition expenses, per diluted share

 

0.12

 

 

0.06

 

Restructuring and other non-recurring costs per diluted share

 

-

 

 

-

 

Stock-based compensation expense per diluted share

 

0.12

 

 

0.13

 

  Adjusted net income per diluted share

$

1.21

 

$

0.97

 

  Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (4)   Net service revenues

$

280,746

 

$

251,599

 

  Revenue associated with the closure of certain sites

 

-

 

 

(524

)

  Adjusted net service revenues

$

280,746

 

$

251,075

 

Footnotes: (1) We define Adjusted EBITDA as earnings before net interest expense, income tax expense, depreciation and amortization, acquisition expenses, stock-based compensation expense, restructure expenses and other non-recurring costs. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.

 

(2) We define Adjusted Net Income as net income before acquisition expenses, stock-based compensation expense, restructure and other non-recurring costs. Adjusted Net Income is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.

 

(3) We define Adjusted diluted earnings per share as earnings per share, adjusted for acquisition expenses, stock-based compensation expense and restructure and other non-recurring costs. Adjusted diluted earnings per share is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.

 

(4) We define Adjusted net service revenues as revenue adjusted for the closure of certain sites. Adjusted net service revenues is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.

 

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Brian W. Poff Executive Vice President, Chief Financial Officer Addus HomeCare Corporation (469) 535-8200 investorrelations@addus.com

Dru Anderson FINN Partners (615) 324-7346 dru.anderson@finnpartners.com