FRISCO, Texas--(BUSINESS WIRE)--Aug. 5, 2024-- Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced its financial results for the second quarter and six months ended June 30, 2024.

Second Quarter 2024 Highlights:

• Net Service Revenues Increased 10.4% to $286.9 Million
• Net Income of $18.1 Million, or $1.10 per Diluted Share
• Adjusted Net Income per Diluted Share Increased to $1.35
• Adjusted EBITDA Increased 24.7% to $35.3 Million
• Cash Flow from Operations of $18.8 Million
• Announced a Definitive Agreement to Acquire the Personal Care Operations of Gentiva
• Announced a Definitive Agreement to Sell the Company’s New York Operations
• Completed a Public Offering of 1,725,000 Shares of Common Stock for net proceeds of approximately $176.1 million

Overview

Net service revenues were $286.9 million for the second quarter of 2024, a 10.4% increase compared with $260.0 million for the second quarter of 2023. Net income was $18.1 million for the second quarter of 2024, compared with $14.9 million for the second quarter of 2023, while net income per diluted share was $1.10 compared with $0.91 for the same period a year ago. Adjusted EBITDA increased 24.7% to $35.3 million for the second quarter of 2024 from $28.3 million for the second quarter of 2023. Adjusted net income per diluted share was $1.35 for the second quarter of 2024 compared with $1.07 for the second quarter of 2023. Adjusted net income per diluted share for the second quarter of 2024 excludes acquisition expenses of $0.13 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.)

For the first six months of 2024, net service revenues increased 11.0% to $567.7 million from $511.6 million for the prior-year period. Net income was $33.9 million for the first six months of 2024 compared with $27.5 million for the same period in 2023, and net income per diluted share was $2.06 compared with $1.69 per diluted share. Adjusted EBITDA increased 24.2% to $67.7 million for the first six months of 2024 from $54.6 million for the first six months of 2023. Adjusted net income was $42.1 million for the first six months of 2024 compared with $33.4 million for the first six months of 2023, while adjusted net income per diluted share was $2.56 compared with $2.05 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 second quarter of 2024, demonstrating consistent execution of our growth strategy. Our results were highlighted by top line revenue growth of 10.4% and adjusted EBITDA growth of 24.7% over the same period last year. The growing recognition of the value and cost-effectiveness of home-based care has supported robust demand for our services. Addus is well positioned to meet this demand as we continue to expand our market coverage and leverage our proven operating model across the continuum of home-based care. Our team has done an exceptional job in providing quality care for a growing number of patients and clients in the home, while allowing us to deliver consistent financial results.

“Our strong organic growth was led by our personal care services, which accounted for 74.2% of our revenues for the second quarter. On a same-store basis, personal care revenues increased 8.8% over the same period last year, reflecting both higher volumes and rate increases in key markets. We also benefitted from a stable labor environment, and we continued to see our investments in hiring and onboarding processes contribute to a higher number of billable hours.

“Our second quarter 2024 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. Our hospice care business, which contributed 19.5% of our revenues for the second quarter, has shown steady improvement with 6.3% organic revenue growth and higher admissions, patient days, and revenue per patient day compared with the second quarter of last year. We are also pleased that our home health business, which is our smallest segment, returned to positive growth trends with higher same-store revenue, admissions and volumes compared with the second quarter of 2023,” added Allison.

Acquisitions Support Continued Growth

“In addition to our strong organic growth opportunities, acquisitions represent a key driver in expanding our market reach. In the second quarter, we announced a definitive agreement to acquire the personal care operations of Gentiva for an anticipated purchase price, after customary purchase price adjustments, of approximately $350.0 million. Based in Atlanta, Georgia, Gentiva provides personal care services to over 16,000 patients per day in a seven-state service area of Texas, Arkansas, Missouri, California, Arizona, Tennessee and North Carolina. We expect to close the transaction in the fourth quarter of 2024, following the completion of regulatory approvals and subject to customary closing conditions.

“The Gentiva acquisition fits squarely into our growth strategy to leverage our strong personal care experience to build scale in existing markets as well as enter select new markets where we can immediately establish a significant presence. We are excited about the opportunity to expand our personal care market coverage in seven states, including Texas and Missouri, which are new markets for Addus, and where we will be the largest provider in Texas. We will also continue to look for accretive operations that provide the opportunity to add complementary clinical services. As we add more coverage density in select markets, we have the ability to participate in additional value-based contracting models, as payors continue to recognize the cost benefits and high quality of our home-based care services.

“Following the recently announced divestiture of our New York operations, where our ability to pursue our strategy to develop multiple levels of care was substantially limited, we look forward to continuing to pursue acquisition growth opportunities in markets that are consistent with our strategic vision,” added Allison.

Cash and Liquidity

As of June 30, 2024, the Company had cash of $173.3 million, with capacity and availability under its revolving credit facility of $504.4 million and $496.4 million, respectively. Net cash provided by operating activities was $18.8 million for the second quarter of 2024.

On June 28, 2024, the Company completed a public offering of 1,725,000 shares of common stock at $108.00 per share. The net proceeds from the offering to Addus, after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $176.1 million. The Company used approximately $81.4 million of the net proceeds for the repayment of all indebtedness outstanding under its credit facility and the remainder will be used for general corporate purposes, including funding the Gentiva acquisition and any future acquisitions or investments.

Looking Ahead

Allison added, “We are pleased with the momentum in our business, supported by the growing demand for our home-based care services as more consumers and families depend on Addus to receive safe, quality care in the preferred setting of their home. We are fortunate to have a great team of dedicated caregivers who support our mission and represent Addus in the marketplace. They are the reason for our success and provide us with confidence in our future growth. Together, we look forward to the opportunities before us to extend our reach to support more clients and patients with the care our services provide.”

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, restructure and other non-recurring costs and retroactive rate increases from New York. The Company defines adjusted EBITDA as earnings before interest expense, other non-operating income, taxes, depreciation, amortization, acquisition expense, stock-based compensation expense, restructure and other non-recurring costs and retroactive rate increases from New York. The Company defines adjusted net income per diluted share as net income per share, adjusted for acquisition expenses, stock-based compensation expense, restructure and other non-recurring costs, and retroactive rate increases from New York. 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, August 6, 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 August 13, 2024, by dialing (877) 344-7529 (international dial-in number is (412) 317-0088) and entering pass code 4781847.

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 approximately 49,500 consumers through 214 locations across 22 states. For more information, please visit www.addus.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805528942/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

Source: Addus HomeCare Corporation