Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home
care services, today announced its financial results for the first
quarter ended March 31, 2023.
First Quarter 2023 Highlights:
- Revenues Grow 11.0% to $251.6 Million
- Net Income of $12.7 Million, or $0.78 per Diluted Share
- Adjusted Net Income per Diluted Share Increases to $0.97
- Adjusted EBITDA Increases 16.2% to $26.0 Million
- Cash Flow from Operations of $18.8 Million
Overview
Net service revenues were $251.6 million for the first quarter
of 2023, an 11.0% increase compared with $226.6 million for the
first quarter of 2022. Net income was $12.7 million for the first
quarter of 2023, compared with $8.5 million for the first quarter
of 2022, while net income per diluted share was $0.78 compared with
$0.53 for the same period a year ago. Adjusted EBITDA increased
16.2% to $26.0 million for the first quarter of 2023 from $22.4
million for the first quarter of 2022. Adjusted net income per
diluted share was $0.97 for the first quarter of 2023 compared with
$0.77 for the first quarter of 2022. Adjusted net income per
diluted share for the first quarter of 2023 excludes acquisition
and de novo expenses of $0.06 and stock-based compensation expense
of $0.13 (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 to
2023 operating results for Addus. With solid execution, we
delivered strong financial results and operating metrics for the
first quarter of this year, including impressive top-line growth
with overall revenues up 11.0% and adjusted EBITDA up 16.2%
compared with the first quarter of 2022. We have continued to see
growing awareness of the value and safety of home-based care. As an
example of this recognition, our largest personal care market of
Illinois recently received CMS approval for its most recent rate
increase to be effective on April 1, 2023. This rate increase is in
addition to the previously announced rate increase in Illinois that
was effective January 1, 2023. There is sustained demand for our
services, and Addus remains well-positioned to help serve this
demand with a proven operating model across the continuum of home
care.
“Our personal care segment delivered an 11.4% revenue increase
over the first quarter last year on a same-store basis. We
experienced improved volume trends compared with the prior-year
quarter, which was affected by challenges related to the Omicron
surge in early 2022. These results also reflect the statewide rate
increase in our largest market of Illinois, which went into effect
on January 1, 2023. We are very pleased with the momentum in our
personal care business and our increased ability to meet the demand
for our services. Our home health revenues were up 13.8% on a
same-store basis over the first quarter last year, enhanced by the
acquisition of Apple Home Healthcare, which we completed on October
1, 2022. We are excited about the opportunities to expand our home
health operation as it complements our personal care services,
particularly in select markets where we participate in value-based
contracting models. As expected, we saw a modest recovery in our
hospice business, which accounted for 19.5% of our revenues. On a
same-store basis, hospice revenues improved 2.6%, including the
impact of the October 1, 2022, annual hospice rate adjustment, but
offset by the resumption of Medicare sequestration. We expect to
see gradual improvement in our hospice care business, especially as
we move into the second half of 2023.”
Cash and Liquidity
As of March 31, 2023, the Company had cash of $73.5 million and
bank debt of $111.4 million, with capacity and availability under
its revolving credit facility of $395.1 million and $275.7 million,
respectively. Net cash provided by operating activities was $18.8
million for the first quarter of 2023, inclusive of a net $2.3
million in ARPA funds utilization.
Looking Ahead
Allison continued, “We have continued to strengthen our balance
sheet and use our strong cash flow to repay debt. At the same time,
we are focused on making the necessary investments in our business
to support continued growth, including technology investments that
will help drive greater efficiency in the delivery of care. We have
also implemented new systems to help achieve our hiring and
retention goals to support current and expected demand.
“In addition to organic growth, we will continue to assess
acquisition opportunities in 2023 that align with our overall
growth strategy. Importantly, we are well-capitalized to continue
delivering value to our shareholders. We are pleased with the
operating trends in our business and remain optimistic about our
prospects for continued growth in the year ahead. We appreciate the
hard work of the dedicated caregivers who represent Addus and
continue to provide outstanding care to more patients and families.
We look forward to the opportunities ahead for Addus in 2023 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 and de novo 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 and de novo 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 and
de novo 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 2, 2023, 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 9,
2023, by dialing (877) 344-7529 (international dial-in number is
(412) 317-0088) and entering pass code 1731197.
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 28, 2023, 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 approximately 47,500
consumers through 203 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,
2023
2022
Net service revenues
$
251,599
$
226,634
Cost of service revenues
173,184
156,448
Gross profit
78,415
70,186
31.2
%
31.0
%
General and administrative expenses
56,360
53,152
Depreciation and amortization
3,447
3,521
Total operating expenses
59,807
56,673
Operating income from continuing operations
18,608
13,513
Total interest expense, net
2,355
1,762
Income before income taxes
16,253
11,751
Income tax expense
3,578
3,281
Net income
$
12,675
$
8,470
Net income per diluted share:
$
0.78
$
0.53
Weighted average number of common shares outstanding:
Diluted
16,297
16,079
Cash Flow Information:
For the Three Months Ended
March 31,
2023
2022
Net cash provided by operating activities
$
18,799
$
5,983
Net cash used in investing activities
(1,742
)
(85,594
)
Net cash (used in) provided by financing activities
(23,475
)
35,479
Net change in cash
(6,418
)
(44,132
)
Cash at the beginning of the period
79,961
168,895
Cash at the end of the period
$
73,543
$
124,763
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
(Unaudited)
March 31,
2023
2022
Assets Current assets
Cash
$
73,543
$
124,763
Accounts receivable, net
125,441
136,808
Prepaid expenses and other current assets
10,226
14,658
Total current assets
209,210
276,229
Property and equipment, net
20,248
19,073
Other assets Goodwill
583,972
574,086
Intangible assets, net
70,604
76,300
Operating lease assets
47,049
41,523
Total other assets
701,625
691,909
Total assets
$
931,083
$
987,211
Liabilities and stockholders'
equity Current liabilities Accounts payable
$
21,758
$
21,004
Accrued payroll
34,105
27,720
Accrued expenses
34,018
28,054
Operating lease liabilities, current portion
11,099
10,766
Government stimulus advance
10,996
4,173
Accrued workers compensation
12,683
12,640
Total current liabilities
124,659
104,357
Long-term debt, less current portion, net of debt issuance
costs
108,487
256,127
Long-term operating lease liabilities, less current portion
42,994
39,049
Other long-term liabilities
6,057
1,900
Total long-term liabilities
157,538
297,076
Total liabilities
282,197
401,433
Total stockholders' equity
648,886
585,778
Total liabilities and stockholders' equity
$
931,083
$
987,211
ADDUS HOMECARE CORPORATION AND
SUBSIDIARIES
Net Service Revenue by
Segment
(Amounts in thousands)
(Unaudited)
For the Three Months
Ended March 31,
2023
2022
Net Service Revenues by Segment Personal Care
$
190,032
$
169,632
Hospice
49,082
47,727
Home Health
12,485
9,275
Total Revenue
$
251,599
$
226,634
ADDUS HOMECARE CORPORATION AND
SUBSIDIARIES
Key Statistical and Financial
Data (Unaudited)
For the Three Months
Ended March 31,
2023
2022
Personal Care States served at period end
21
21
Locations served at period end
157
162
Average billable census - same store
38,218
36,582
Average billable census - acquisitions
145
-
Average billable census total
38,363
36,582
Billable hours (in thousands)
7,592
7,101
Average billable hours per census per month
65.8
64.4
Billable hours per business day
116,805
110,951
Revenues per billable hour
$
24.98
$
23.64
Organic growth - Revenue (1)
11.4
%
0.9
%
Hospice Locations served at period end
33
33
Admissions
3,324
3,315
Average daily census
3,195
3,320
Average discharge length of stay
87.7
84.1
Patient days
287,551
275,488
Revenue per patient day
$
176.22
$
173.24
Organic growth - Revenue
2.6
%
4.4
%
- Average daily census
1.5
%
7.0
%
Home Health Locations served at period end
13
12
New Admissions
3,893
3,336
Recertifications
1,549
1,316
Total Volume
5,442
4,652
Visits
77,828
65,213
Organic growth - Revenue
13.8
%
(0.5
)
%
- New Admissions
(3.6
)
%
2.4
%
- Volume
(1.2
)
%
12.2
%
Percentage of Revenues by Payor: Personal
Care State, local and other governmental programs
50.1
%
49.5
%
Managed care organizations
46.3
45.6
Private duty
2.2
2.7
Commercial
0.9
1.2
Other
0.5
%
1.0
%
Hospice Medicare
90.8
%
91.1
%
Commercial
5.2
4.7
Managed care organizations
3.4
3.6
Other
0.6
%
0.6
%
Home Health Medicare
74.3
%
73.4
%
Managed care organizations
20.3
20.5
Commercial
5.2
5.9
Other
0.2
%
0.1
%
(1) Management has suspended
materially all of its new patient admissions under the New York
consumer self-directed program and therefore excludes associated
revenues from the calculation. America Rescue Plan Act of 2021
("ARPA") funds received have also been excluded from the
calculation.
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,
2023
2022
Reconciliation of Adjusted EBITDA to Net Income: (1)
Net income
$
12,675
$
8,470
Interest expense, net
2,355
1,762
Income tax expense
3,578
3,281
Depreciation and amortization
3,447
3,521
Acquisition and de novo expenses
1,247
2,793
Stock-based compensation expense
2,646
2,485
Restructuring and other non-recurring costs
95
97
Adjusted EBITDA
$
26,043
$
22,409
Reconciliation of Adjusted Net Income to Net
Income: (2) Net income
$
12,675
$
8,470
Acquisition and de novo expenses, net of tax
972
2,013
Stock-based compensation expense, net of tax
2,064
1,791
Restructuring and other non-recurring costs, net of tax
74
70
Adjusted Net Income
$
15,785
$
12,344
Reconciliation of Diluted Net Income per Share to
Adjusted Diluted Net Income per Share: (3) Diluted net
income per share
$
0.78
$
0.53
Acquisition and de novo expenses, per diluted share
0.06
0.13
Restructuring and other non-recurring costs per diluted share
-
-
Stock-based compensation expense per diluted share
0.13
0.11
Adjusted net income per diluted share
$
0.97
$
0.77
Reconciliation of Net Service Revenues to Adjusted Net
Service Revenues: (4) Net service revenues
$
251,599
$
226,634
Revenue associated with the closure of certain sites
-
(453
)
Adjusted net service revenues
$
251,599
$
226,181
Footnotes: (1) We define Adjusted EBITDA as earnings before
interest expense, other non-operating income, taxes, depreciation,
amortization, acquisition and de novo expenses, stock-based
compensation expense, restructure expenses and other non-recurring
costs and loss on the sale of assets and retroactive rate increases
from Illinois. 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 and de novo
expenses, stock-based compensation expense, restructure and other
non-recurring costs and gain or loss on the sale of assets and
retroactive rate increases from Illinois. 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 and de novo expenses,
stock-based compensation expense and restructure and other
non-recurring costs and loss on the sale of asset and retroactive
rate increases from Illinois. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230501005488/en/
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
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