UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition |
On May 3, 2021, Addus HomeCare Corporation (the “Company”) issued a press release (the “Press Release”) announcing, among other matters, the Company’s results of operations for the fiscal quarter ended March 31, 2021. A copy of the Press Release is furnished herewith as Exhibit 99.1 to this report and is incorporated herein by reference.
| Item 7.01. | Regulation FD Disclosure |
On May 3, 2021, the Company issued the Press Release, announcing, among other matters, its results of operations for the fiscal quarter ended March 31, 2021, the text of which is set forth as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| Exhibit No. |
Description | |
| 99.1 | Press Release of Addus HomeCare Corporation dated May 3, 2021. | |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ADDUS HOMECARE CORPORATION | ||||||
| Dated: May 3, 2021 | By: | /s/ Brian Poff | ||||
| Name: | Brian Poff | |||||
| Title: | Chief Financial Officer | |||||
Exhibit 99.1
| 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
FIRST-QUARTER 2021 FINANCIAL RESULTS
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
Frisco, Texas (May 3, 2021) – 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.
Addus Homecare Announces First Quarter 2021 Financial Results
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May 3, 2021
“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
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Addus Homecare Announces First Quarter 2021 Financial Results
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May 3, 2021
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.
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Addus Homecare Reports First Quarter 2021 Financial Results
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May 3, 2021
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 | ||||||
|
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|
|
|||||
| 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 | ||||||
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| Total operating expenses |
49,027 | 45,174 | ||||||
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| Operating income from continuing operations |
12,170 | 10,661 | ||||||
| Total interest expense, net |
1,194 | 574 | ||||||
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| Income before income taxes |
10,976 | 10,087 | ||||||
| Income tax expense |
2,082 | 1,429 | ||||||
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| Net income |
$ | 8,894 | $ | 8,658 | ||||
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| Net income per diluted share: |
$ | 0.55 | $ | 0.54 | ||||
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| 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 | |||||
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|
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| Net change in cash |
(19,531 | ) | 18,749 | |||||
| Cash at the beginning of the period |
145,078 | 111,714 | ||||||
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| Cash at the end of the period |
$ | 125,547 | $ | 130,463 | ||||
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Addus Homecare Reports First Quarter 2021 Financial Results
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May 3, 2021
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 | ||||||
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| Total current assets |
275,140 | 278,051 | ||||||
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| 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 | ||||||
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| Total other assets |
583,115 | 352,977 | ||||||
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| Total assets |
$ | 877,577 | $ | 644,819 | ||||
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| 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 | ||||||
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| Total current liabilities |
118,088 | 84,606 | ||||||
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| 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 | ||||||
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| Total long-term liabilities |
229,579 | 73,405 | ||||||
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| Total liabilities |
347,667 | 158,011 | ||||||
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| Total stockholders’ equity |
529,910 | 486,808 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 877,577 | $ | 644,819 | ||||
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Addus Homecare Reports First Quarter 2021 Financial Results
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May 3, 2021
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 | ||||||
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| Total Revenue |
$ | 205,302 | $ | 190,216 | ||||
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Addus Homecare Reports First Quarter 2021 Financial Results
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May 3, 2021
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. |
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Addus Homecare Reports First Quarter 2021 Financial Results
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May 3, 2021
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 | ||||||
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| Adjusted EBITDA |
$ | 19,296 | $ | 17,725 | ||||
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| 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 | ||||||
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| Adjusted Net Income |
11,907 | 12,280 | ||||||
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| 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 | ||||||
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| Adjusted net income per diluted share |
$ | 0.74 | $ | 0.77 | ||||
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| 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 | ) | |||||
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| Adjusted net service revenues |
$ | 205,304 | $ | 188,138 | ||||
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| (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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