Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home
care services, today announced its financial results for the third
quarter and nine months ended September 30, 2024.
Third Quarter 2024 Highlights:
- Net Service Revenues Increase 7.0% to $289.8 Million
- Net Income of $20.2 Million, or $1.10 per Diluted Share
- Adjusted Net Income per Diluted Share Increases 13.0% to
$1.30
- Adjusted EBITDA Increases 11.1% to $34.3 Million
- Cash Flow from Operations of $48.5 Million
Overview
Net service revenues were $289.8 million for the third quarter
of 2024, a 7.0% increase compared with $270.7 million for the third
quarter of 2023. Net income was $20.2 million for the third quarter
of 2024, compared with $15.4 million for the third quarter of 2023,
while net income per diluted share was $1.10 compared with $0.95
for the same period a year ago. Adjusted EBITDA increased 11.1% to
$34.3 million for the third quarter of 2024 from $30.9 million for
the third quarter of 2023. Adjusted net income was $23.8 million
for the third quarter of 2024 compared with $18.8 million for the
prior-year period, while adjusted net income per diluted share was
$1.30 compared with $1.15 for the third quarter of 2023. Adjusted
net income per diluted share for the third quarter of 2024 excludes
acquisition expenses of $0.08 and stock-based compensation expense
of $0.12. The weighted average number of shares outstanding
increased to approximately 18.3 million from approximately 16.5
million in the second quarter primarily as a result of the
completed public offering of 1,725,000 shares on June 28, 2024 (See
the end of press release for a reconciliation of all non-GAAP and
GAAP financial measures.)
For the first nine months of 2024, net service revenues
increased 9.6% to $857.5 million from $782.3 million for the
prior-year period. Net income was $54.1 million for the first nine
months of 2024 compared with $42.9 million for the same period in
2023, and net income per diluted share was $3.17 compared with
$2.63 per diluted share. Adjusted EBITDA increased 19.4% to $102.0
million for the first nine months of 2024 from $85.4 million for
the first nine months of 2023. Adjusted net income was $65.9
million for the first nine months of 2024 compared with $52.1
million for the first nine months of 2023, while adjusted net
income per diluted share was $3.86 compared with $3.20 for the
prior-year period.
Commenting on the results, Dirk Allison, Chairman and Chief
Executive Officer, said, “Addus delivered another strong financial
and operating performance for the third quarter of 2024,
highlighted by 7.0% top line growth and 11.1% growth in Adjusted
EBITDA compared to the third quarter of 2023. These results reflect
the consistent favorable growth trends we have delivered to date in
2024, driven by solid organic growth and the contribution from
recent acquisitions. Demand for our services continues to fuel our
growth, reflecting a greater awareness of the value of home-based
care as the preferred and most cost-effective option for many
individuals. With our expanding scale and market coverage, Addus is
well positioned to meet this demand with our ability to offer
home-based services across the care continuum.
“Our personal care business continued to perform well,
accounting for 74.3% of our overall revenues for the third quarter
of 2024, with higher patient volumes supported by favorable hiring
trends. Personal care has been the key growth driver for Addus this
year with consistent year-over-year improvement. For the third
quarter of 2024, we delivered 6.8% organic growth in revenue on a
same-store basis over the corresponding period last year,
reflecting robust demand and favorable reimbursement support across
the markets where we operate.
“On the clinical side, our results included the operations of
Tennessee Quality Care, a provider of home health, hospice, and
private duty nursing services, acquired by Addus on August 1, 2023.
We continued to see steady improvement in our hospice business with
revenues up 3.5% on a same-store basis and a modest increase in
average daily census compared with the third quarter last year. Our
home health business, which is our smallest segment, accounted for
5.9% of total revenue for the third quarter of 2024,” said
Allison.
Cash and Liquidity
As of September 30, 2024, the Company had cash of $222.9 million
with capacity and availability under its revolving credit facility
of $511.5 million and $503.5 million, respectively. Net cash
provided by operating activities was $48.5 million for the third
quarter of 2024, inclusive of a one-time working capital benefit of
$9.7 million expected to revert in the fourth quarter. As
previously disclosed, subsequent to the end of the quarter, Addus
entered into an Amended and Restated Credit Agreement to increase
the Company’s revolving credit facility from $600 million to $650
million and extend the maturity date through July 2028.
Looking Ahead
Allison added, “We will continue to maintain a conservative
balance sheet and pursue a capital allocation strategy that brings
additional value to our shareholders. Acquisitions represent a
significant use of capital for Addus, and we will continue to
target operations that are aligned with our overall growth strategy
to add clinical services where we have a strong personal care
presence. We will also seek opportunities to add operations in
select personal care markets where we can enter at scale. In line
with this strategy, during the second quarter, we announced a
definitive agreement to acquire the personal care operations of
Gentiva. These operations deliver personal care services to over
16,000 patients per day in a seven-state service area, including
Texas and Missouri, which are new states for Addus. We are excited
about the opportunity to expand our market reach, especially in
Texas where we will become the largest provider of personal care
services. Having broader market coverage supports our ability to
hire and retain caregivers and also provides Addus with an
advantage in developing value-based contract arrangements. We
expect to close the Gentiva acquisition in the fourth quarter of
2024, and our team has been diligently working on transition
planning to integrate these operations.
“As we continue to expand our operations, we are proud of the
leadership role we are playing in meeting the critical need for
home-based care. We commend the work of our dedicated caregivers
across our operations who make this possible for more patients and
their families. We are excited about the opportunities ahead to
build on our momentum, and we look forward to another successful
year for Addus in 2024,” 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 gain or loss on sale of assets,
impact of retroactive New York rate increases, acquisition
expenses, stock-based compensation expenses, and restructure and
other non-recurring costs. The Company defines adjusted EBITDA as
earnings before interest expense, gain or loss on sale of assets,
taxes, depreciation, amortization, impact of retroactive New York
rate increases, 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 the impact of retroactive New York rate
increases, 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, November 5, 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 November
12, 2024, by dialing (877) 344-7529 (international dial-in number
is (412) 317-0088) and entering pass code 4366280.
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 48,500 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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net service revenues
$
289,787
$
270,721
$
857,455
$
782,300
Cost of service revenues
197,583
183,991
583,916
534,837
Gross profit
92,204
86,730
273,539
247,463
31.8
%
32.0
%
31.9
%
31.6
%
General and administrative expenses
62,805
60,271
187,444
174,028
Depreciation and amortization
3,446
3,620
10,316
10,449
Total operating expenses
66,251
63,891
197,760
184,477
Operating income
25,953
22,839
75,779
62,986
Total interest expense, net
(1,335
)
2,619
2,640
7,014
Income before income taxes
27,288
20,220
73,139
55,972
Income tax expense
7,125
4,809
19,067
13,034
Net income
$
20,163
$
15,411
$
54,072
$
42,938
Net income per diluted share:
$
1.10
$
0.95
$
3.17
$
2.63
Weighted average number of common shares outstanding:
Diluted
18,255
16,286
17,065
16,307
Cash Flow Information:
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net cash provided by operating activities
$
48,525
$
21,785
$
106,016
$
82,198
Net cash (used in) investing activities
(1,922
)
(111,223
)
(124
)
(113,934
)
Net cash provided by financing activities
2,944
85,000
52,169
31,525
Net change in cash
49,547
(4,438
)
158,061
(211
)
Cash at the beginning of the period
173,305
84,188
64,791
79,961
Cash at the end of the period
$
222,852
$
79,750
$
222,852
$
79,750
ADDUS HOMECARE CORPORATION AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
(Unaudited)
September 30,
2024
2023
Assets Current assets
Cash
$
222,852
$
79,750
Accounts receivable, net
96,600
121,112
Prepaid expenses and other current assets
13,362
10,387
Total current assets
332,814
211,249
Property and equipment, net
23,716
20,516
Other assets Goodwill
663,614
662,981
Intangible assets, net
86,606
93,799
Operating lease assets
44,535
47,183
Other long-term assets
1,616
-
Total other assets
796,371
803,963
Total assets
$
1,152,901
$
1,035,728
Liabilities and stockholders'
equity Current liabilities Accounts payable
$
27,726
$
21,375
Accrued payroll
57,982
51,774
Accrued expenses
34,257
34,952
Operating lease liabilities - current portion
11,155
11,434
Government stimulus advance
13,655
7,836
Accrued workers compensation
13,043
12,268
Total current liabilities
157,818
139,639
Long-term debt, less current portion, net of debt issuance
costs
-
163,917
Long-term lease liability, less current portion
38,608
41,632
Other long-term liabilities
8,841
6,206
Total long-term liabilities
47,449
211,755
Total liabilities
205,267
351,394
Total stockholders' equity
947,634
684,334
Total liabilities and stockholders' equity
$
1,152,901
$
1,035,728
ADDUS HOMECARE CORPORATION AND
SUBSIDIARIES
Net Service Revenue by
Segment
(Amounts in thousands)
(Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net Service Revenues by Segment Personal Care
$
215,433
$
201,882
$
636,253
$
590,227
Hospice
57,309
53,121
169,202
152,414
Home Health
17,045
15,718
52,000
39,659
Total Revenue
$
289,787
$
270,721
$
857,455
$
782,300
ADDUS HOMECARE CORPORATION AND
SUBSIDIARIES
Key Statistical and Financial
Data (Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Personal Care States served at period
end
-
-
21
21
Locations at period end
-
-
153
156
Average billable census total
37,701
38,590
37,803
38,668
Billable hours (in thousands)
7,776
7,690
23,098
22,964
Average billable hours per census per month
68.7
66.3
67.8
65.8
Billable hours per business day
117,822
118,314
117,849
117,765
Revenues per billable hour
$
27.66
$
26.18
$
27.49
$
25.58
Organic growth - Revenue
6.8
%
13.9
%
8.4
%
12.5
Hospice Locations served at period end
-
-
38
40
Admissions
3,105
3,176
9,771
9,576
Average daily census
3,534
3,453
3,457
3,426
Average discharge length of stay
96.3
97.5
92.8
93.2
Patient days
325,160
311,454
947,241
892,507
Revenue per patient day
$
176.25
$
175.19
$
179.43
$
175.23
Organic growth - Revenue
3.5
%
3.1
%
5.2
%
1.5
- Average daily census
2.1
%
(0.9
)%
0.8
%
0.8
Home Health Locations served at period end
-
-
23
24
New Admissions
4,437
4,265
14,257
11,597
Recertifications
3,353
2,672
9,798
5,816
Total Volume
7,790
6,937
24,055
17,413
Visits
104,730
94,637
322,713
240,758
Organic growth - Revenue
(1.7
)%
(8.8
)%
(5.4
)%
(2.5
)
- New admissions
(5.7
)%
(18.9
)%
(0.3
)%
(13.5
)
- Volume
(3.7
)%
(14.3
)%
(0.4
)%
(9.3
)
Percentage of Revenues by Payor: Personal
Care State, local and other governmental programs
54.2
%
50.4
%
53.0
%
50.4
Managed care organizations
43.3
46.4
44.3
46.2
Private duty
1.7
2.0
1.8
2.1
Commercial
0.7
0.8
0.7
0.8
Other
0.1
%
0.4
%
0.2
%
0.5
Hospice Medicare
91.5
%
89.1
%
91.1
%
90.2
Commercial
5.0
6.8
5.2
5.8
Managed care organizations
3.2
3.4
3.3
3.3
Other
0.3
%
0.7
%
0.4
%
0.7
Home Health Medicare
70.6
%
72.1
%
69.6
%
73.9
Managed care organizations
24.7
21.9
25.6
20.8
Commercial
4.5
4.2
4.2
4.3
Other
0.2
%
1.8
%
0.6
%
1.0
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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Reconciliation of Adjusted EBITDA to Net Income: (1)
Net income
$
20,163
$
15,411
$
54,072
$
42,938
Interest expense, net
(1,335
)
2,619
2,640
7,014
(Gain) Loss on sale of assets
(8
)
(1
)
(13
)
(5
)
Income tax expense
7,125
4,809
19,067
13,034
Depreciation and amortization
3,446
3,620
10,316
10,449
Impact of retroactive New York rate increase
-
-
-
(868
)
Acquisition expenses
2,072
1,763
7,647
4,792
Stock-based compensation expense
2,833
2,572
8,307
7,831
Restructure and other non-recurring costs
-
72
-
242
Adjusted EBITDA
$
34,296
$
30,865
$
102,036
$
85,427
Reconciliation of Adjusted Net Income to Net
Income: (2) Net income
$
20,163
$
15,411
$
54,072
$
42,938
(Gain) Loss on sale of assets
(8
)
(1
)
(13
)
(5
)
Impact of retroactive New York rate increase
-
-
-
(868
)
Acquisition expenses
2,072
1,763
7,647
4,792
Stock-based compensation expense
2,833
2,572
8,307
7,831
Restructure and other non-recurring costs
-
72
-
242
Tax Effect
(1,280
)
(1,048
)
(4,156
)
(2,793
)
Adjusted Net Income
$
23,780
$
18,769
$
65,857
$
52,137
Reconciliation of Net Income per Diluted Share to
Adjusted Net Income per Diluted Share: (3) Net income
per diluted share
$
1.10
$
0.95
$
3.17
$
2.63
Impact of retroactive New York rate increase per diluted
share
-
-
-
(0.04
)
Acquisition expenses per diluted share
0.08
0.08
0.33
0.23
Restructure and other non-recurring costs per diluted share
-
-
-
0.01
Stock-based compensation expense per diluted share
0.12
0.12
0.36
0.37
Adjusted net income per diluted share
$
1.30
$
1.15
$
3.86
$
3.20
Reconciliation of Net Service Revenues to Adjusted Net
Service Revenues: (4) Net service revenues
$
289,787
$
270,721
$
857,455
$
782,300
Revenues associated with the closure of certain sites
-
(259
)
-
(1,833
)
Adjusted net service revenues
$
289,787
$
270,462
$
857,455
$
780,467
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, gain on the sale of assets, and retroactive rate increases
from New York. 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, gain on the sale of assets, and retroactive
rate increases from New York. 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, gain on the sale of
assets, and retroactive rate increases from New York. 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/20241104677875/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
Addus HomeCare (NASDAQ:ADUS)
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