ADUS - Addus HomeCare Announces First Quarter 2024 Financial Results
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 Months Ended 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 Months Ended 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 Months Ended 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