8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 14, 2013

 

 

ADDUS HOMECARE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-34504   20-5340172

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(IRS Employer

Identification Number)

 

2401 South Plum Grove Road, Palatine, Illinois   60067
(Address of principal executive offices)   (Zip Code)

(847) 303-5300

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01. Regulation FD Disclosure

On May 14, 2013, Mark Heaney, President and Chief Executive Officer, and Dennis Meulemans, Chief Financial Officer, of Addus HomeCare Corporation, are scheduled to make a presentation to investors at the JMP Securities Research Conference. A copy of the slides used in this investor presentation is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits:

 

Exhibit
No.

  

Description

99.1    Investor Presentation of Addus HomeCare Corporation dated May 14, 2013


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 14, 2013     By:   /s/ Dennis Meulemans
    Name:   Dennis B. Meulemans
    Title:   Chief Financial Officer


Exhibit Index

 

Exhibit
No.

  

Description

99.1    Investor Presentation of Addus HomeCare Corporation dated May 14, 2013
EX-99.1
Coordinated Personal Home Care
A pre-acute
solution
to
the
post-acute
problem
SM
JMP Securities Research Conference
May 14, 2013
Exhibit 99.1


Forward-Looking Statements
The following information contains, or may be deemed to contain,
forward-looking statements. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and depend
on circumstances that may or may not occur in the future.  The future
results of Addus may vary from the results expressed in, or implied by,
the following forward-looking statements, possibly to a material degree,
and historical results may not be an indication of future performance. 
For a discussion of some of the important factors that could cause Addus'
results to differ from those expressed in, or implied by, the following
forward-looking
statements,
please
refer
to
Addus’
most
recent
Annual
Report on Form 10-K, and its Quarterly Reports on Form 10-Q, each of
which is available at www.SEC.gov, particularly the Sections entitled “Risk
Factors”.  Addus undertakes no obligation to update or revise any
forward-looking statements, except as may be required by law.
2


It is the primary mission of Addus HealthCare to improve the health and well being of our
consumers through the provision of quality, cost-effective home and community based services.
We will accomplish our goals by fostering an environment in which our employees
enthusiastically support and advance our mission.
Reward for accomplishing our mission includes pride in our organization, contribution to the
community and a reasonable profit.
Mission


Investment Highlights
Large & Growing Market
Broad Range of Services and Payors
Positioned to Excel under Healthcare Reform
History of Growth through Acquisition
Multiple Organic Growth Opportunities
Differentiated, Coordinated Care Model
Experienced Management Team
Significant Operational Scale  Across
National Footprint


Addus
Dual
Advantage
TM
The New Paradigm
Long-term care risk makes it essential that
health plan dual eligible members live safely
and healthfully at home as long as possible…
5


About Addus
Who is Addus?
Comprehensive provider of home and
community based services, which are
primarily social in nature, focused
primarily on the Dual Eligible population:
Personal Care
Private Duty
Adult Day Service
Founded in 1979
14,000+ employees
26,000+ consumers (many dual eligible)
2012 Revenues of $244.3 million
Diversified payor base (200+ payors)
Largest
payor
-
64%
of
2012
total
revenues
6
98 Locations Across 20 States
Key Facts:


Who We Serve
Focusing on the Dual Eligible Population
Addus focuses on the top 5% in terms of resource needs and expenditures!
Source:  Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services,
Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), 2007
7


Companionship
$
Healthy
Living -
Eat
an Apple ¢
Telephone
Reassurance ¢
Personal
Emergency
Response
(PERS) ¢¢
Friendly
Visiting
¢¢
Meals at
Home ¢¢
Transportation ¢¢
Adult Day Services ¢¢
Personal Care $
Case
Management $
Home Health $
Hospice $$
Home
Physicians
$$
Ambulance/
ER $$$
Hospital Stay
$$$$
Hospital
Intensive Care
$$$$
Rehab Facility
$$$$
Psychiatric
Inpatient $$$$$
Nursing Home
$$$$$
Sub-Acute
Facilities $$$$$
Pre-Acute
Acute
Where are we in the Continuum of Care?


Long-Term Care Expenditures
.
SOURCE: KCMU and Urban Institute analysis of HCFA/CMS-64 data. June 2011
Growth in Medicaid Long Term Care Expenditures
Medicaid Spending Per Beneficiary
Source: Kassner, Reinhard, Fox-Grage, Houser, Accius,
Coleman and Milne.  AARP Public Policy Institute: “A
Balancing Act: State Long-Term Care Reform,”July 2008
9
THE LANDSCAPE IS SHIFTING
States are shifting responsibility for care to health plans and managed care
Focus on managing and coordinating care for the costly dual eligible population
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
1990
1995
2000
2002
2004
2006
2008
2009
Insitutional Care Expenditures(Billions)
Home & Community Based Services Expenditures (Billions)
$24,500
$9,200
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Nursing Home
Home Care


Total $300 Billion in annual spending for dual eligible enrollees in 2007
Funding for both programs administered through the States 
26 States have indicated they will participate over the next 3 years
Each State will decide on the size, nature and timing of the pilots
Approximately 9 million are “Duals”
Bids are being solicited from multiple “Managed Care Companies”
Stated Objectives:
Dual Eligible
What is the Opportunity?
Medicare Program
Populations 65+ years
Hospital Services (Part A)
Post  Acute Care SNF / Rehab
Professional Services (Part B)
Post acute Home Care Services
Prescription Services (Part D)
Duals Represent 36% of Total Medicare Spending
Medicaid Programs
Generally populations 65+ years w Income limits
Home Based Personal Care
Long term Nursing Home Care
Duals Represent 39% of Total Medicaid Spending
69% of Medicaid Spending is for Long Term Care
10
Eliminate service duplication / streamline administration
Keep member functioning in the home environment
Avoid / lower the cost for Acute Care services
Pilot Program Features / Objectives
Sources:  Kaiser Commission on Medicaid and the Uninsured, April 2011


MCO Plans/Programs
already implemented
2013 Implementation
Plans
2014 Implementation
Plans
No Implementation
Plans
Addus location(s)
Source:  Kaiser Commission on Medicaid and the Uninsured, May 2012
States Pursuing a Dual Program


Health Plan’s Worst Nightmare
12
Home Personal Care
$9,200/year
Emergency Room
$1,700/visit
Acute Care Hospital
$12,320/stay
Rehab Facility
$18,600/stay
Nursing Home
$42,000/year
Vs.
Ambulance
$1,000/ride
Total Episodic Cost &
one-year of Nursing
Home
$75,620
Sources:  Consumer Health Ratings.com
CMS.gov
The Choice is Obvious!


Addus Dual Advantage
TM
A Powerful Resource
No one knows more about the member…
No one is in a better position to positively           
effect health outcomes…
…Than the Addus Home Care Aide
13


Home Care
Integrated Clinical Strategy Begins In The Home
Addus
Home Care
Aide
Client Primary
Care Health
Providers
Addus
Call Center
Health Plan
Case
Manager
14
Community-
Based
Providers &
Pharmacies
Interdisciplinary
Care Team
Community-Based
Resources &
Advocacy Groups
Family


Addus
Dual
Advantage
TM
A Model for Extending the Reach of Health Plan Case Managers
15
Serving the dual eligible population at home:
Complicated
Logistics intense
Highly transactional
Requires disciplined processes
Provides tremendous opportunity for
case management extension!


Source:  CCP Cost Effectiveness: Comparison of CCP growth with Nursing Facility Prevalence Reductions
HCBS Strategies  Inc.  February 10, 2010
Illinois Residents Age 75+
Total Population vs. Nursing Home Residents
Source:  Coming of Age: Tracking the Progress and Challenges of Delivering Long-Term Services and
Supports in Ohio
Scripps Gerontology Center, Miami University of Ohio, June 2011
Ohio Residents Age 60+
Total Population vs. Nursing Home Residents
Scripps Gerontology Center Study
HCBS Strategies Study
Nursing home admissions fell, in spite of rising populations; substantial savings
The home is the lowest cost setting in which to provide care, and is preferred
by consumers and families
Home Care Programs Improve Outcomes


Census
-
Revenue
-
EBITDA
Trends
17
We define Adjusted EBITDA as earnings before
discontinued operations, preferred stock dividends,
reevaluation of contingent consideration, interest
expense, taxes, depreciation, amortization, and stock-
based compensation expense. 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.
($ in thousands)


Condensed Consolidated Statements of Income
18
($ in millions)
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
3/31/2012
3/31/2013
Unaudited
Unaudited
Net Service Revenues
197.9
$          
219.9
$        
230.1
$     
230.1
$     
244.3
$     
58.9
$       
63.0
$       
Cost of Service Revenues
(147.3)
(162.7)
(170.4)
(168.6)
(180.2)
(43.9)
(47.2)
General Administrative
(38.6)
(45.1)
(47.0)
(45.4)
(45.9)
(11.6)
(11.5)
Adjusted EBITDA
12.3
$            
12.3
$          
12.9
$       
15.9
$       
18.4
$       
4.0
$         
4.4
$         
Gross Margin Percentage
25.6%
26.0%
25.9%
26.7%
26.2%
25.5%
25.1%
Adjusted EBITDA Percentage
6.2%
5.6%
5.6%
6.9%
7.5%
6.8%
7.0%
Year Ended
Three Months Ended
Continuing Operations
Notes:  We define Adjusted EBITDA as earnings before discontinued operations, preferred stock dividends, revaluation of contingent consideration, interest expense, taxes, depreciation, amortization, 
and stock-based compensation expense. 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. 
Gross Margin percentage is defined as Net Service Revenues less Cost of Service Revenues divided by Net Service Revenues.
Adjusted EBITDA Percentage is defined as Adjusted EBITDA divided by Net Service Revenues


Select Balance Sheet Information
19
Balances for 3/31/2013 are unaudited.
($ in millions)
Key Balances
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
3/31/2013
Cash
6.1
$              
0.5
$            
0.8
$         
2.0
$         
1.7
$         
17.8
$      
Accounts receivable, net
49.2
70.5
71.0
72.4
71.3
60.6
Total Assets
135.7
161.3
166.9
154.7
149.9
151.4
Debt, including current maturities
63.2
49.2
45.2
31.5
16.5
-
Stock holders' equity
34.6
$            
80.6
$          
88.1
$       
86.4
$       
94.4
$       
107.8
$    
Debt to capital ratio
64.6%
37.9%
33.9%
26.7%
14.8%
0.0%


Investment Highlights
Large & Growing Market
Broad Range of Services and Payors
Positioned to Excel under Healthcare Reform
History of Growth through Acquisition
Multiple Organic Growth Opportunities
Differentiated, Coordinated Care Model
Experienced Management Team
Significant Operational Scale  Across
National Footprint


EBITDA Reconciliation
21
($ in millions)
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
3/31/2012
3/31/2013
(2)
Net Income
(0.2)
$            
(1.8)
$          
6.0
$         
(2.0)
$        
7.6
$         
0.6
$        
13.3
$     
Less: (Earnings) loss from discontinued operations
(2.5)
(2.4)
(1.7)
10.4
1.7
1.1
(10.6)
Net Income from continuing operations
(2.7)
(4.2)
4.3
8.4
9.3
1.7
2.7
Preferred stock dividends
4.3
5.4
-
-
-
-
Revaluation of contingent consideration
-
-
-
(0.5)
-
-
-
Interest Income
(0.2)
(2.3)
(0.2)
-
-
Interest Expense
5.7
6.8
3.2
2.5
1.7
0.4
0.2
Income Tax Expense
(0.5)
(0.1)
1.9
4.3
4.8
1.2
0.8
Depreciation and amortization
5.2
4.1
3.4
3.2
2.5
0.6
0.6
Stock based compensation expense
0.3
0.3
0.3
0.3
0.3
0.1
0.1
Adjusted EBITDA (1)
12.3
$            
12.3
$          
12.9
$       
15.9
$       
18.4
$       
4.0
$        
4.4
$       
(1)
(2)
3/31/13 and 3/31/12 amounts are unaudited
Year Ended
Three Months Ended
We define Adjusted EBITDA as earnings before discontinued operations, preferred stock dividends, revaluation of contingent consideration, interest expense, taxes,
depreciation, amortization, severance costs related to former chairman and stock-based compensation expense. 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
Continuing Operations
substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.