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Brian W. Poff Dru Anderson Executive Vice President, Corporate Communications, Inc. Chief Financial Officer (615) 324-7346 Addus HomeCare Corporation dru.anderson@cci-ir.com (469) 535-8200 investorrelations@add

Key Takeaway: Contacts: Brian W. Poff Dru Anderson Executive Vice President, Corporate Communications, Inc. Chief Financial Officer (615) 324-7346 Addus HomeCare Corporation dru.anderson@cci-ir.com (469) 535-8200 investorrelations@addus.com ADDUS HOMECARE ANNOUNCES THI

Full Press Release Details

Contacts:
Brian W. Poff Dru Anderson
Executive Vice President, Corporate Communications, Inc.
Chief Financial Officer (615) 324-7346
Addus HomeCare Corporation dru.anderson@cci-ir.com
(469) 535-8200
investorrelations@addus.com
ADDUS HOMECARE ANNOUNCES THIRD-QUARTER 2018 FINANCIAL RESULTS
Revenues Grow 26.7% to $137.6 Million
Year-over-Year Net Income Increases 4.0% to $3.5 Million and Adjusted EBITDA Increases 20.2% to $11.6 Million
Company Announces New Senior Secured Credit Facility
Signs Definitive Agreement to Acquire VIP Health Care Services in New York
Jean Rush Named to Board of Directors
Frisco, Texas (November 5, 2018) 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, 2018.
Net service revenues increased 26.7% for the third quarter to
$137.6 million from $108.6 million for the third quarter of 2017. Net income increased 4.0% to $3.5 million for the third quarter of 2018 from $3.4 million for the third quarter last year, while net income per diluted share was
$0.28 compared with $0.29. Adjusted net income per diluted share grew 14.3% to $0.48 for the third quarter of 2018 from $0.42 for the third quarter of 2017. Adjusted net income per diluted share for the third quarter of 2018 excludes M&A
expenses of $0.11, restructuring charges of $0.02, and stock-based compensation expense of $0.07. For the third quarter of 2017, adjusted net income per diluted share excludes M&A expenses of $0.04, restructuring charges of $0.04, severance and
other costs of $0.01, and stock-based compensation expense of $0.04. Adjusted EBITDA increased 20.2% to $11.6 million for the third quarter of 2018 from $9.6 million for the third quarter of 2017. (See page 9 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)
For the first nine months of 2018, net service revenues
increased 20.6% to $378.3 million from $313.8 million for the first nine months of 2017. Net income increased 22.5% to $12.7 million for the first nine months of 2018 from $10.4 million for the first nine months of last year,
while net income per diluted share increased 19.1% to $1.06 from $0.89. Adjusted net income per diluted share grew 24.8% to $1.41 for the first nine months of 2018 from $1.13 for the same period in 2017.
Commenting on the results, Dirk Allison, President and Chief Executive Officer, said, I am pleased with our continued growth as reflected in our
financial and operating performance for the third quarter of 2018. Third quarter revenue reflects consistent organic growth, with same-store sales increasing 3.7%, consistent with our target range of 3% to 5%. It also includes the first full quarter
of contribution from the Ambercare acquisition completed on May 1, 2018.
ADUS Announces Third-Quarter 2018 Financial Results
For the third quarter, personal care net service revenues increased 18.0% on growth in billable hours per
business day of 15.8% and an increase of 2.0% in revenue per billable hour compared with the third quarter last year. As previously discussed, the Company s adoption of ASU 2014-09, Accounting for
Contracts with Customers, effective as of January 1, 2018, reduced net service revenues by $2.4 million for the third quarter of 2018. This reduction affects the year over year comparability of net service revenues and expense items as
a percentage of net service revenues, while not affecting net income, earnings per diluted share, adjusted EBITDA or adjusted earnings per diluted share. As a result of the Ambercare transaction, Addus began reporting revenue in the hospice and home
health segments beginning in the second quarter of 2018, in addition to personal care services. As previously announced, the full integration of the acquisitions of Arcadia and Ambercare are expected to be completed by year end.
The Company had cash of $147.5 million and bank debt of $103.2 million at the end of the third quarter of 2018, while availability under its
revolving credit facility was $88.6 million. Net cash provided by operating activities was $4.5 million for the third quarter of 2018.
Amended and Restated Credit Facility
announced today that it has completed a new senior secured credit facility for $269.6 million, which includes a $250.0 million revolver and a $19.6 million delayed draw term loan, replacing the Company s previous facility. The
maturity of the new facility is May 2023, with the delayed draw term loan available for draw through January 31, 2019.
Addus is well positioned for continued growth, both organically and through acquisitions. In conjunction with the completion of our new credit facility, we have extinguished our term debt and have the flexibility to draw on our new expanded
revolver to support our ongoing acquisition strategy.
Definitive Agreement to Acquire VIP Health Care Services Personal Care Operations in New
Following the end of the third quarter, the Company signed a definitive agreement to acquire the assets of VIP Health Care Services, a provider
of home care services, headquartered in Richmond Hill, New York. VIP Health Care Services currently serves approximately 1,250 consumers in all five boroughs of New York City, as well as Long Island, Westchester and Rockland Counties. Addus expects
to complete the transaction in the first or second quarter of 2019, contingent on the timing of regulatory approval, with funding through the Company s new credit facility and available cash.
Mr. Allison continued, We are pleased to announce our definitive agreement to purchase the operations of VIP Health Care Services, which provide
extensive personal care coverage in the New York City area that will complement our South Shore operations on Long Island. VIP Health Care Services has annualized revenues of approximately $50 million. Upon completion, we will have combined
revenues of over $110.0 million in New York, which is already one of our largest markets. With over 1,500 caregivers operating through six locations in the New York metropolitan area, VIP Health Care Services represents a great strategic fit
for Addus, and we are excited about the additional growth opportunities in this important region. As one of the nation s leading home care providers, we remain confident in our ability to identify additional acquisitions that will continue to
enhance our service offering and further extend our market reach.
New Board Director Appointed
Addus also announced today that it has named Jean Rush to its Board of Directors. Ms. Rush previously served as Executive Vice President-Government
Markets for Highmark Inc., one of the nation s largest health insurance companies, where she oversaw Medicare Advantage, Medicaid and other related business lines. Prior to Highmark, she served in various executive roles with Centene
Corporation in operations focused on Medicare, Medicaid and Dual Eligible populations.
ADUS Announces Third-Quarter 2018 Financial Results
Commenting on the announcement, Mr. Allison said, We are pleased to have Jean join the
Company s Board. She has deep operational experience within health plan operations and administration related to payors such as Medicaid and, importantly, Medicare Advantage. With the addition of personal care services as a supplemental benefit
for Medicare Advantage plans beginning in 2019, we view this area as a significant long-term opportunity for Addus, and we will benefit from Jean s tremendous experience and knowledge as we move into this market.
Ms. Rush added, Addus has enjoyed impressive growth as a leader in the home care sector of the healthcare industry with a proven strategy to
capitalize on the growing demand for these services. I look forward to working with the other leaders on the Board as we continue to move Addus forward and meet our dual objectives to deliver improved patient care and build shareholder value.
Non-GAAP Financial Measures
The information provided in this release includes adjusted net income per diluted share, adjusted EBITDA and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income per diluted share as net income per diluted share, adjusted for M&A expenses, stock-based compensation expense, restructure charges, severance
and other costs, write off of debt issuance costs, interest income from the State of Illinois and gain on sale of ADS. The Company defines adjusted EBITDA as net income before interest expense, interest income, other
non-operating income, taxes, depreciation, amortization, M&A expenses, stock-based compensation expense, restructure charges, severance and other costs, interest income from the State of Illinois and gain
on sale of ADS. The Company defines adjusted net service revenues as net service revenues 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 per diluted share to net income per diluted share, a reconciliation of adjusted EBITDA to net income 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 per diluted share, adjusted EBITDA 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.
Addus will host a conference call on
Tuesday, November 6, 2018, beginning at 9:00 a.m. Eastern time. The toll-free dial-in number is (877) 930-8289 (international
dial-in number is (253) 336-8714), pass code 9776808. A telephonic replay of the conference call will be available through midnight on November 20, 2018, by dialing
(855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 9776808.
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 of the conference call will also be available on the Company s website for one month, beginning approximately three 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 continue, expect,
will, 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
ADUS Announces Third-Quarter 2018 Financial 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, anticipated 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, any failure of Illinois to enact a minimum wage offset and/or the timing of any such enactment, estimation
inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize 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 March 14, 2018, its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on
August 7, 2018, and its Prospectus Supplement filed with the Securities and Exchange Commission on August 16, 2018, which are all available at www.sec.gov. 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).
Addus is a provider of home care services
that include, primarily, personal care services that assist with activities of daily living, as well as hospice and home health services. Addus consumers are primarily persons who, without these services, are at risk of hospitalization or
institutionalization, such as the elderly, chronically ill and disabled. Addus payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. Addus currently
provides home care services to approximately 39,000 consumers through 156 locations across 24 states. For more information, please visit www.addus.com.
ADUS Announces Third-Quarter 2018 Financial Results
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,
2018 2017 2018 2017
Net service revenues $ 137,631 $ 108,592 $ 378,315 $ 313,758
Cost of service revenues 100,926 79,539 277,985 228,877
Gross profit 36,705 29,053 100,330 84,881
26.7 % 26.8 % 26.5 % 27.1 %
General and administrative expenses 28,218 19,359 76,084 57,239
Gain on sale of adult day service centers (2,065 )
Depreciation and amortization 2,535 1,781 6,676 4,811
Provision for doubtful accounts 49 2,106 214 6,208
Total operating expenses 30,802 23,246 82,974 66,193
Operating income from continuing operations 5,903 5,807 17,356 18,688
Total interest expense, net 1,430 840 1,368 3,579
Other non-operating income (64 ) (165 )
Income before income taxes 4,473 5,031 15,988 15,274
Income tax expense 927 1,623 3,287 4,908
Net income $ 3,546 $ 3,408 $ 12,701 $ 10,366
Net income per diluted share $ 0.28 $ 0.29 $ 1.06 $ 0.89
Weighted average number of common shares outstanding diluted 12,569 11,631 12,037 11,616
Cash Flow Information: For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Net cash provided by operating activities $ 4,515 $ 53,953 $ 24,679 $ 42,578
Net cash (used in) investing activities (2,260 ) (23,737 ) (65,731 ) (23,108 )
Net cash (used in) provided by financing activities 76,005 (401 ) 134,775 18,205
Net change in cash 78,260 29,815 93,723 37,675
Cash at the beginning of the period 69,217 15,873 53,754 8,013
Cash at the end of the period $ 147,477 $ 45,688 $ 147,477 $ 45,688
ADUS Announces Third-Quarter 2018 Financial Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited)
September 30,
2018 2017
Assets
Current assets
Cash $ 147,477 $ 45,688
Accounts receivable, net 106,653 96,335
Prepaid expenses and other current assets 6,935 6,267
Total current assets 261,065 148,290
Property and equipment, net 9,453 7,494
Other assets
Goodwill 134,063 90,603
Intangible assets, net 26,197 16,093
Deferred tax assets 3,355
Investment in joint venture 900
Total other assets 160,260 110,951
Total assets $ 430,778 $ 266,735
Liabilities and Stockholders Equity
Current liabilities
Accounts payable $ 6,737 $ 4,910
Accrued expenses 52,436 46,942
Current portion of long-term debt, net of debt issuance costs 2,318 3,407
Current portion of contingent earn-out obligation 847
Total current liabilities 62,338 55,259
Long-term debt, less current portion, net of debt issuance costs 98,891 40,372
Deferred tax liabilities, net 1,098
Other long-term liabilities 641
Total long-term liabilities 100,630 40,372
Total liabilities 162,968 95,631
Total stockholders equity 267,810 171,104
Total liabilities and stockholders equity $ 430,778 $ 266,735
ADUS Announces Third-Quarter 2018 Financial Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Net Service Revenues by Segment (Amounts in thousands) (Unaudited)
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Personal Care $ 128,094 $ 108,592 $ 362,606 $ 313,758
Hospice 7,116 11,765
Home Health 2,421 3,944
Total Revenue $ 137,631 $ 108,592 $ 378,315 $ 313,758
ADUS Announces Third-Quarter 2018 Financial Results
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,
2018 2017 2018 2017
General
Adjusted EBITDA (in thousands) (1) $ 11,551 $ 9,612 $ 31,606 $ 26,137
States served at period end 24 24
Locations at period end 156 114
Employees at period end 33,214 26,407
Personal Care
Average billable census same store (2) 32,734 33,592 32,721 33,833
Average billable census acquisitions 4,936 1,343 4,983 1,343
Average billable census total (2) 37,670 34,935 37,704 35,176
Billable hours (in thousands) 7,007 6,049 19,865 17,685
Average billable hours per census per month 61.5 57.7 58.2 55.9
Billable hours per business day 107,793 93,054 101,351 90,692
Revenues per billable hour $ 18.31 $ 17.95 $ 18.27 $ 17.74
Hospice
Admissions 393 643
Average daily census 520 528
Average length of stay 145.4 146.1
Patient days 47,679 80,279
Revenue per patient day $ 149.25 $ $ 146.55 $
Home Health
New Admissions 653 1,041
Recertifications 616 985
Total Volume 1,269 2,026
Visits 21,774 34,631
Percentage of Revenues by Payor:
Personal Care
State, local and other governmental programs 57.5 % 63.6 % 58.7 % 64.8 %
Managed care organizations 35.3 34.0 35.0 32.5
Private duty 4.3 1.8 4.1 2.0
Commercial 1.5 0.6 1.2 0.7
Other 1.4 1.0
Hospice
Medicare 93.8 % % 93.8 % %
Managed care organizations 6.0 6.1
Other 0.2 0.1
Home Health
Medicare 90.2 % % 91.0 % %
Managed care organizations 9.1 8.3
Other 0.7 0.7
ADUS Announces Third-Quarter 2018 Financial Results
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (amounts in thousands, except per share data) (Unaudited)
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2018 2017 2018 2017
Reconciliation of Adjusted EBITDA to Net Income: (1)
Net income $ 3,546 $ 3,408 $ 12,701 $ 10,366
Interest expense, net 1,430 840 3,621 2,255
Interest income from Illinois (2,253 )
Secondary offering costs 65 65
Write off debt issuance costs 1,323
Gain on sale of adult day service centers (2,065 )
Other non-operating income (64 ) (165 )
Income tax expense 927 1,623 3,287 4,908
Depreciation and amortization 2,535 1,781 6,676 4,811
M&A expenses 1,666 692 3,198 1,343
Stock-based compensation expense 1,105 727 2,961 1,818
Restructure charges 246 507 740 551
Severance and other costs 31 98 610 992
Adjusted EBITDA $ 11,551 $ 9,612 $ 31,606 $ 26,137
Reconciliation of Adjusted Net Income to Net Income: (2)
Net income $ 3,546 $ 3,408 $ 12,701 $ 10,366
Interest income from Illinois, net of tax (1,790 )
Gain on sale of adult day service centers, net of tax (1,320 )
Write off debt issuance costs, net of tax 909
M&A expenses, net of tax 1,350 457 2,566 923
Stock-based compensation expense, net of tax 895 480 2,368 1,250
Restructuring charges, net of tax 199 335 591 372
Severance and other costs, net of tax 25 65 488 669
Adjusted Net Income $ 6,015 $ 4,745 $ 16,924 $ 13,169
Reconciliation of Net Income per Diluted Share to Adjusted Net Income per Diluted Share: (3)
Net income per diluted share $ 0.28 $ 0.29 $ 1.06 $ 0.89
Interest income from Illinois per diluted share (0.15 )
Write off debt issuance costs per diluted share 0.09
Gain on sale of adult day service centers per diluted share (0.12 )
M&A expenses per diluted share 0.11 0.04 0.21 0.08
Restructure charges per diluted share 0.02 0.04 0.05 0.03
Severance and other costs per diluted share 0.01 0.04 0.06
Stock-based compensation expense per diluted share 0.07 0.04 0.20 0.10
Adjusted net income per diluted share $ 0.48 $ 0.42 $ 1.41 $ 1.13
Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (4)
Net service revenues $ 137,631 $ 108,592 $ 378,315 $ 313,758
Revenues associated with the closure of certain sites (0 ) (87 ) 2 (1,340 )
Adjusted net service revenues $ 137,631 $ 108,505 $ 378,317 $ 312,418
Last updated: Nov 5, 2018