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ADDUS HOMECARE CORPORATION

(ADUS)
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Addus HomeCare : Announces First-Quarter 2021 Financial Results

05/03/2021 | 04:07pm EDT

Revenue Increases 7.9% to $205.3 million

Net Income Increases to $8.9 Million, or $0.55 per Diluted Share, and Adjusted Earnings per Diluted Share of $0.74

Adjusted EBITDA Increases 8.9% to $19.3 Million

Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced financial results for the first quarter ended March 31, 2021.

Net service revenues were $205.3 million for the first quarter of 2021, a 7.9% increase compared with $190.2 million for the first quarter of 2020. Net income was $8.9 million for the first quarter of 2021, compared with $8.7 million for the first quarter last year, while net income per diluted share was $0.55 compared with $0.54 for the first quarter of 2020. Adjusted net income per diluted share was $0.74 for the first quarter of 2021 compared with $0.77 for the first quarter of 2020.

Adjusted net income per diluted share for the first quarter of 2021 excludes acquisition and de novo expenses of $0.08, restructuring and other costs of $0.02, and stock-based compensation expense of $0.12, offset by the exclusion of a positive impact of net COVID-19 expenses of $0.03. Adjusted EBITDA increased to $19.3 million for the first quarter of 2021 from $17.7 million in the first quarter of 2020, an 8.9% increase. (See page 8 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)

As of March 31, 2021, the Company had cash of $125.5 million and bank debt of $196.3 million, while availability under its revolving credit facility was $112.8 million. Net cash used in operating activities was $18.4 million for the first quarter of 2021, inclusive of the return of $10.8 million in CARES Act funding received as part of the Queen City acquisition.

Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare, commented, “We are particularly pleased to report first quarter financial and operating results that compare favorably to the first quarter of 2020, our best ever first quarter and the last quarter not to be significantly affected by the COVID-19 pandemic. First quarter 2021 results reflect an improving public health environment, and we anticipate that the COVID-19 pandemic will continue to steadily decrease in severity over the next several quarters. While we were impacted by both the pandemic and the historic winter storm that interrupted business throughout many of our significant markets, we nevertheless saw overall revenue growth across each of our operating segments, including our acquired businesses, generating solid comparisons to our record 2020 first quarter and providing a strong start to 2021.

“We continue to see improving organic growth trends ahead of pre-pandemic levels in both personal care and home health. With the accelerating growth in vaccinations across the country and increasing facility access, we expect that we will begin to see a return to higher volume trends in our hospice business. Ultimately, we believe Addus is well positioned to meet expected demand in all our operating segments as overall conditions improve and more restrictions are lifted.

“We also expect to benefit from the statewide Illinois rate increase that became effective April 1, 2021 and will help offset the most recent increase in the Chicago minimum wage. Illinois is an important market for Addus, and we were pleased to see the implementation of this rate increase following a previous delay.”

Mr. Allison added, “Despite COVID-19 challenges, we were able to complete three acquisitions in the second half of last year, including our acquisition of Queen City Hospice on December 1, 2020. Integration of these transactions is largely complete, and our average daily census at Queen City has seen positive growth since acquisition. We continue to have a solid pipeline of potential acquisitions that we will aggressively pursue, primarily focused on transactions that allow us to operate each of our hospice, home health and personal care segments in strategic markets. We have the financial strength necessary to complete acquisitions that meet our objectives and we are confident that we can continue our record of delivering value from acquired operations.”

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 the net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. The Company defines adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. The Company defines adjusted diluted earnings per share as earnings per share, adjusted for net COVID-19 expenses, acquisition and de novo expenses, stock compensation expense, restructure expenses, and other 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 earnings per share to earnings 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 earnings 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. With respect to net COVID-19 expenses, the Company views these expenses as unrelated to the Company’s long-term performance, since they are directly related to the sudden onset COVID-19 pandemic.

Conference Call

Addus will host a conference call on Tuesday, May 4, 2021, 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 6176200. A telephonic replay of the conference call will be available through midnight on May 11, 2021, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 6176200. 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, 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, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize, the anticipated impact to our business operations, reimbursements and patient population due to the recent COVID-19 global pandemic, caused by a novel strain of the coronavirus (COVID-19), 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 1, 2021, 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 44,000 consumers through 208 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,

 

2021

 

 

 

2020

 

 
Net service revenues

$

205,302

 

$

190,216

 

Cost of service revenues

 

144,105

 

 

134,381

 

 
Gross profit

 

61,197

 

 

55,835

 

 

29.8

%

 

29.4

%

General and administrative expenses

 

45,426

 

 

42,287

 

Depreciation and amortization

 

3,601

 

 

2,887

 

Total operating expenses

 

49,027

 

 

45,174

 

 
Operating income from continuing operations

 

12,170

 

 

10,661

 

 
Total interest expense, net

 

1,194

 

 

574

 

 
Income before income taxes

 

10,976

 

 

10,087

 

Income tax expense

 

2,082

 

 

1,429

 

 
Net income

$

8,894

 

$

8,658

 

 
Net income per diluted share:

$

0.55

 

$

0.54

 

 
 
Weighted average number of common shares outstanding:
Diluted

 

16,069

 

 

15,907

 

 
 
 
 
Cash Flow Information:

For the Three Months Ended March 31,

 

2021

 

 

 

2020

 

 
Net cash (used in) provided by operating activities

$

(18,366

)

$

20,442

 

Net cash (used in) investing activities

 

(1,021

)

 

(2,834

)

Net cash (used in) provided by financing activities

 

(144

)

 

1,141

 

 
Net change in cash

 

(19,531

)

 

18,749

 

Cash at the beginning of the period

 

145,078

 

 

111,714

 

Cash at the end of the period

$

125,547

 

$

130,463

 

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

March 31,

 

2021

 

 

2020

 
Assets
 
Current assets
Cash

$

125,547

$

130,463

Accounts receivable, net

 

138,806

 

141,083

Prepaid expenses and other current assets

 

10,787

 

6,505

Total current assets

 

275,140

 

278,051

 
Property and equipment, net

 

19,322

 

13,791

 
Other assets
Goodwill

 

469,036

 

275,364

Intangible assets, net

 

69,395

 

55,304

Deferred tax assets, net

 

6,359

 

1,606

Operating lease assets

 

38,325

 

20,703

Total other assets

 

583,115

 

352,977

Total assets

$

877,577

$

644,819

 
Liabilities and stockholders' equity
 
Current liabilities
Accounts payable

$

23,459

$

17,561

Accrued payroll

 

20,255

 

29,476

Accrued expenses

 

38,654

 

22,116

Government stimulus advance

 

20,368

 

-

Accrued workers compensation

 

14,380

 

14,497

Current portion of long-term debt

 

972

 

956

Total current liabilities

 

118,088

 

84,606

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

 

193,839

 

59,112

Long-term operating lease liabilities, less current portion

 

35,623

 

13,638

Other long-term liabilities

 

117

 

655

Total long-term liabilities

 

229,579

 

73,405

 
Total liabilities

 

347,667

 

158,011

 
Total stockholders' equity

 

529,910

 

486,808

 
Total liabilities and stockholders' equity

$

877,577

$

644,819

 
 
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Net Service Revenues by Segment
(Amounts in thousands)
(Unaudited)
 

For the Three Months Ended March 31,

 

2021

 

 

2020

 
Personal Care

$

164,868

$

160,665

Hospice

 

36,094

 

25,212

Home Health

 

4,340

 

4,339

Total Revenue

$

205,302

$

190,216

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Key Statistical and Financial Data (Unaudited)
 

For the Three Months

Ended March 31,

 

2021

 

 

2020

Personal Care
States served at period end

 

21

 

 

24

Locations served at period end

 

164

 

 

151

Average billable census - same store

 

36,788

 

 

39,170

Average billable census - acquisitions (1)

 

1,539

 

 

-

Average billable census total (2)

 

38,327

 

 

39,170

Billable hours (in thousands)

 

7,567

 

 

7,674

Average billable hours per census per month

 

65.2

 

 

64.9

Billable hours per business day

 

118,237

 

 

118,054

Revenues per billable hour

$

21.75

 

$

20.97

Organic growth
- Revenue

 

2.4

%

 

14.0

%

 
Hospice
Locations served at period end

 

34

 

 

34

Admissions

 

2,394

 

 

1,655

Average daily census

 

2,400

 

 

1,863

Average discharge length of stay

 

101.3

 

 

99.1

Patient days

 

216,007

 

 

169,512

Revenue per patient day

$

167.09

 

$

150.49

Organic growth
- Revenue

 

(8.4

)%

 

12.1

%

- Average daily census

 

(20.2

)%

 

14.1

%

 
Home Health
Locations served at period end

 

10

 

 

10

New Admissions

 

1,168

 

 

1,022

Recertifications

 

657

 

 

710

Total Volume

 

1,825

 

 

1,732

Visits

 

27,665

 

 

33,710

Organic growth
- Revenue

 

0.0

%

 

19.5

%

- Total volume

 

5.4

%

 

6.6

%

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

 

49.0

%

 

49.4

%

Managed care organizations

 

45.8

 

 

44.9

Private duty

 

3.0

 

 

3.3

Commercial

 

1.4

 

 

1.6

Other

 

0.8

%

 

0.8

%

 
Hospice
Medicare

 

94.2

%

 

92.1

%

Managed care organizations

 

4.1

 

 

5.5

Other

 

1.7

%

 

2.4

%

 
Home Health
Medicare

 

80.7

%

 

80.0

%

Managed care organizations

 

18.4

 

 

18.6

Other

 

0.9

%

 

1.4

%

 
(1) The average billable census in acquisitions of 993 for the three ended March 31, 2020, was reclassified to average billable census - same stores for comparability purposes. The average billable census for the three months ended March 31, 2021 was prorated for the date of the acquisition.
 
(2) Exited sites would have reduced same store census for the three months ended March 31, 2020 by 696.
ADDUS HOMECARE CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(Unaudited)
 

For the Three Months

Ended March 31,

 

2021

 

 

 

2020

 

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

$

8,894

 

$

8,658

 

 
Interest expense, net

 

1,194

 

 

574

 

Income tax expense

 

2,082

 

 

1,429

 

Depreciation and amortization

 

3,601

 

 

2,887

 

COVID-19 expense, net

 

(591

)

 

263

 

Acquisition and de novo expenses

 

1,475

 

 

1,634

 

Stock-based compensation expense

 

2,239

 

 

1,407

 

Restructuring and other costs

 

402

 

 

873

 

 
Adjusted EBITDA

$

19,296

 

$

17,725

 

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

$

8,894

 

$

8,658

 

 
COVID-19 expense, net of tax

 

(479

)

 

227

 

Acquisition and de novo expenses, net of tax

 

1,352

 

 

1,417

 

Stock-based compensation expense, net of tax

 

1,814

 

 

1,220

 

Restructuring and other costs, net of tax

 

326

 

 

758

 

 
Adjusted Net Income

 

11,907

 

 

12,280

 

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

$

0.55

 

$

0.54

 

 
COVID-19 expense, net per diluted share

 

(0.03

)

 

0.01

 

Acquisition and de novo expenses, per diluted share

 

0.08

 

 

0.09

 

Restructuring and other costs per diluted share

 

0.02

 

 

0.05

 

Stock-based compensation expense per diluted share

 

0.12

 

 

0.08

 

 
Adjusted net income per diluted share

$

0.74

 

$

0.77

 

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

$

205,302

 

$

190,216

 

 
Revenue associated with the closure of certain sites

 

2

 

 

(2,078

)

 
Adjusted net service revenues

$

205,304

 

$

188,138

 

 
 
(1) We define Adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other 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 net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other 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 net COVID-19 expenses, acquisition and de novo expenses, stock compensation expense and restructure expenses, and other 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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Financials (USD)
Sales 2021 872 M - -
Net income 2021 48,2 M - -
Net Debt 2021 - - -
P/E ratio 2021 28,6x
Yield 2021 -
Capitalization 1 325 M 1 325 M -
Capi. / Sales 2021 1,52x
Capi. / Sales 2022 1,41x
Nbr of Employees 20 583
Free-Float 98,3%
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Mean consensus BUY
Number of Analysts 8
Average target price 130,57 $
Last Close Price 84,16 $
Spread / Highest target 64,0%
Spread / Average Target 55,1%
Spread / Lowest Target 42,6%
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Managers and Directors
NameTitle
R. Dirk Allison Chairman & Chief Executive Officer
W. Bradley Bickham President & Chief Operating Officer
Brian W. Poff CFO, Secretary, Treasurer & Executive VP
Michael Wattenbarger Chief Information Officer & Executive VP
Nick Duthie Vice President-Information Technology
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