0001468328 us-gaap:RestrictedStockMember 2017-01-01 2017-03-31 0001468328 us-gaap:EmployeeStockOptionMember 2017-01-01 2017-03-31 0001468328 us-gaap:RestrictedStockMember 2016-01-01 2016-03-31 0001468328 us-gaap:EmployeeStockOptionMember 2016-01-01 2016-03-31 0001468328 us-gaap:CommonStockMember 2017-01-01 2017-03-31 0001468328 us-gaap:RetainedEarningsMember 2017-03-31 0001468328 us-gaap:AdditionalPaidInCapitalMember 2017-03-31 0001468328 us-gaap:RetainedEarningsMember 2016-12-31 0001468328 us-gaap:AdditionalPaidInCapitalMember 2016-12-31 0001468328 us-gaap:CommonStockMember 2017-03-31 0001468328 us-gaap:CommonStockMember 2016-12-31 0001468328 us-gaap:OtherRestructuringMember 2017-03-31 0001468328 us-gaap:OneTimeTerminationBenefitsMember 2017-03-31 0001468328 us-gaap:OtherRestructuringMember 2016-12-31 0001468328 us-gaap:OneTimeTerminationBenefitsMember 2016-12-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2016-05-23 0001468328 us-gaap:FurnitureAndFixturesMember us-gaap:MinimumMember 2017-01-01 2017-03-31 0001468328 us-gaap:FurnitureAndFixturesMember us-gaap:MaximumMember 2017-01-01 2017-03-31 0001468328 us-gaap:ComputerEquipmentMember us-gaap:MinimumMember 2017-01-01 2017-03-31 0001468328 us-gaap:ComputerEquipmentMember us-gaap:MaximumMember 2017-01-01 2017-03-31 0001468328 adus:ComputerSoftwareMember us-gaap:MinimumMember 2017-01-01 2017-03-31 0001468328 adus:ComputerSoftwareMember us-gaap:MaximumMember 2017-01-01 2017-03-31 0001468328 us-gaap:TransportationEquipmentMember 2017-01-01 2017-03-31 0001468328 2016-08-01 2017-03-31 0001468328 us-gaap:OtherRestructuringMember 2017-01-01 2017-03-31 0001468328 us-gaap:OneTimeTerminationBenefitsMember 2017-01-01 2017-03-31 0001468328 us-gaap:RetainedEarningsMember 2017-01-01 2017-03-31 0001468328 adus:NewCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember adus:CreditFacilityApplicableMarginThreeMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MaximumMember adus:CreditFacilityApplicableMarginThreeMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MaximumMember 2017-01-01 2017-03-31 0001468328 adus:NewCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:NewCreditFacilityMember adus:UncommittedIncrementalTermLoanMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:NewCreditFacilityMember adus:TermLoanMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:NewCreditFacilityMember adus:DelayedDrawTermLoanMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:PreviousSeniorSecuredCreditFacilityMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:SubsequentEventMember 2017-05-08 0001468328 adus:AmendedCreditFacilityMember us-gaap:LetterOfCreditMember 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2016-05-24 0001468328 adus:AmendedCreditFacilityMember adus:UncommittedIncrementalTermLoanMember 2016-05-24 0001468328 adus:AmendedCreditFacilityMember adus:DelayedDrawTermLoanMember 2016-05-24 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2015-11-10 0001468328 adus:NewCreditFacilityMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember adus:DelayedDrawTermLoanMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2017-03-31 0001468328 adus:AmendedCreditFacilityMember 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2016-12-31 0001468328 adus:StateLicensesMember 2017-03-31 0001468328 adus:StateLicensesMember 2016-12-31 0001468328 adus:LhcGroupIncMember 2016-01-01 2016-12-31 0001468328 adus:LhcGroupIncMember 2015-01-01 2015-12-31 0001468328 adus:AccountingStandardsUpdate201609Member 2017-01-01 2017-03-31 0001468328 2016-01-01 2016-12-31 0001468328 us-gaap:MinimumMember 2017-01-01 2017-03-31 0001468328 us-gaap:MaximumMember 2017-01-01 2017-03-31 0001468328 us-gaap:TrademarksAndTradeNamesMember 2017-03-31 0001468328 us-gaap:NoncompeteAgreementsMember 2017-03-31 0001468328 us-gaap:CustomerRelationshipsMember 2017-03-31 0001468328 us-gaap:TrademarksAndTradeNamesMember 2016-12-31 0001468328 us-gaap:NoncompeteAgreementsMember 2016-12-31 0001468328 us-gaap:CustomerRelationshipsMember 2016-12-31 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember us-gaap:MinimumMember 2017-03-31 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember us-gaap:MaximumMember 2017-03-31 0001468328 us-gaap:CapitalLeaseObligationsMember 2017-03-31 0001468328 adus:TermLoanMember 2017-03-31 0001468328 us-gaap:CapitalLeaseObligationsMember 2016-12-31 0001468328 adus:TermLoanMember 2016-12-31 0001468328 adus:NewCreditFacilityMember us-gaap:MinimumMember us-gaap:SubsequentEventMember adus:AdjustedLiborMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:MinimumMember adus:CreditFacilityApplicableMarginTwoMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:MinimumMember adus:CreditFacilityApplicableMarginOneMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:MaximumMember adus:CreditFacilityApplicableMarginTwoMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:MaximumMember adus:CreditFacilityApplicableMarginOneMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:SubsequentEventMember adus:FederalFundRateMember 2017-05-08 2017-05-08 0001468328 adus:NewCreditFacilityMember us-gaap:SubsequentEventMember adus:AdjustedLiborMember 2017-05-08 2017-05-08 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember adus:BasisForAvailabilityOfFundsOptionTwoMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember adus:BasisForAvailabilityOfFundsOptionThreeMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember adus:BasisForAvailabilityOfFundsOptionOneMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MaximumMember adus:BasisForAvailabilityOfFundsOptionTwoMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MaximumMember adus:BasisForAvailabilityOfFundsOptionThreeMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MaximumMember adus:BasisForAvailabilityOfFundsOptionOneMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember adus:FederalFundsRateMember 2017-01-01 2017-03-31 0001468328 us-gaap:SalesRevenueServicesNetMember adus:IllinoisDepartmentOnAgingMember 2017-01-01 2017-03-31 0001468328 us-gaap:AccountsReceivableMember adus:IllinoisDepartmentOnAgingMember 2017-01-01 2017-03-31 0001468328 us-gaap:AccountsReceivableMember adus:IllinoisDepartmentOnAgingMember 2016-01-01 2016-12-31 0001468328 us-gaap:SalesRevenueServicesNetMember adus:IllinoisDepartmentOnAgingMember 2016-01-01 2016-03-31 0001468328 2016-03-31 0001468328 2015-12-31 0001468328 adus:MeridianLeasingCorporationMember us-gaap:CapitalLeaseObligationsMember 2016-10-01 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember 2015-04-13 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember 2014-09-11 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember 2014-07-12 0001468328 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2017-03-31 0001468328 us-gaap:LeaseholdImprovementsMember 2017-03-31 0001468328 us-gaap:FurnitureAndFixturesMember 2017-03-31 0001468328 us-gaap:ComputerEquipmentMember 2017-03-31 0001468328 adus:LutheranSocialServicesOfIllinoisMember stpr:IL 2017-01-01 2017-03-31 0001468328 adus:LutheranSocialServicesOfIllinoisMember stpr:IL 2016-01-01 2016-03-31 0001468328 adus:LutheranSocialServicesOfIllinoisMember stpr:IL 2016-02-23 2016-02-23 0001468328 adus:SouthShoreHomeHealthServiceIncAndAcaringHomeCareLlcMember 2016-02-05 2016-02-05 0001468328 us-gaap:AdditionalPaidInCapitalMember 2017-01-01 2017-03-31 0001468328 adus:NonMedicaidMember adus:DelayedPaymentsFromStateOfIllinoisMember 2017-03-31 0001468328 adus:MedicaidMember adus:DelayedPaymentsFromStateOfIllinoisMember 2017-03-31 0001468328 adus:DelayedPaymentsFromStateOfIllinoisMember 2017-03-31 0001468328 2017-04-30 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2016-05-24 2016-05-24 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2016-05-23 2016-05-23 0001468328 adus:NewCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 us-gaap:CapitalLeaseObligationsMember 2017-01-01 2017-03-31 0001468328 us-gaap:EmployeeStockOptionMember 2017-03-31 0001468328 us-gaap:EmployeeStockOptionMember 2016-03-31 0001468328 stpr:IL 2017-01-01 2017-03-31 0001468328 stpr:IL 2016-07-01 2016-09-30 0001468328 2017-03-31 0001468328 2016-12-31 0001468328 adus:LhcGroupIncMember 2017-03-31 0001468328 2016-01-01 2016-03-31 0001468328 adus:NewCreditFacilityMember us-gaap:MaximumMember adus:RestrictionOnAbilityToConsummateAcquisitionsMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember adus:RestrictionOnAbilityToConsummateAcquisitionsMember 2017-01-01 2017-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember 2017-01-01 2017-03-31 0001468328 2017-01-01 2017-03-31 0001468328 adus:FirstAmericanCommercialBancorpMember us-gaap:CapitalLeaseObligationsMember 2017-01-01 2017-03-31 0001468328 adus:MeridianLeasingCorporationMember us-gaap:CapitalLeaseObligationsMember 2016-10-01 2016-10-01 0001468328 adus:SouthShoreHomeHealthServiceIncAndAcaringHomeCareLlcMember 2016-02-05 0001468328 adus:OptionsHomeCareMember us-gaap:SubsequentEventMember 2017-04-24 2017-04-24 0001468328 adus:SouthShoreHomeHealthServiceIncAndAcaringHomeCareLlcMember 2017-01-01 2017-03-31 0001468328 adus:SouthShoreHomeHealthServiceIncAndAcaringHomeCareLlcMember 2016-01-01 2016-03-31 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember us-gaap:MinimumMember adus:RestrictionOnDividendsMember 2017-01-01 2017-03-31 0001468328 adus:LhcGroupIncMember 2014-01-01 2014-03-31 0001468328 adus:NewCreditFacilityMember us-gaap:MaximumMember adus:RestrictionOnDividendsMember us-gaap:SubsequentEventMember 2017-05-08 2017-05-08 0001468328 adus:AmendedCreditFacilityMember us-gaap:RevolvingCreditFacilityMember adus:RestrictionOnDividendsMember 2017-01-01 2017-03-31 adus:state adus:segment iso4217:USD xbrli:shares iso4217:USD adus:agreement xbrli:shares adus:agreement adus:item xbrli:pure iso4217:USD 5000000 5000000 1800000 0.40 -145000 6961000 23200000 1593000 P25M P48M <div> 11. Concentration of Cash      Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. The Company maintains cash with financial institutions which, at times, may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk on cash. </div> P5D 3 40000000 80000000 25000000 60000000 400000 <div> 5. Details of Certain Balance Sheet Accounts Prepaid expenses and other current assets consisted of the following: <div> <table cellspacing="0" border="0"> <tr><td width="51%"> </td> <td width="5%"> </td> <td width="18%"> </td> <td width="5%"> </td> <td width="18%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td style="text-indent: 10px;" colspan="3" align="left">(Amounts in Thousands)</td></tr> <tr valign="bottom"><td align="left">Prepaid health insurance (1)</td> <td align="left">$</td> <td align="right">771</td> <td align="center">$</td> <td align="right">2,238</td></tr> <tr valign="bottom"><td align="left">Prepaid workers' compensation and liability</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">insurance</td> <td align="left"> </td> <td align="right">759</td> <td align="left"> </td> <td align="right">1,190</td></tr> <tr valign="bottom"><td align="left">Prepaid rent</td> <td align="left"> </td> <td align="right">527</td> <td align="left"> </td> <td align="right">568</td></tr> <tr valign="bottom"><td align="left">Workers' compensation insurance receivable</td> <td align="left"> </td> <td align="right">609</td> <td align="left"> </td> <td align="right">747</td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,293</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,255</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">3,959</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">5,998</td></tr></table></div>   Accrued expenses consisted of the following: <div> <table cellspacing="0" border="0"> <tr><td width="50%"> </td> <td width="6%"> </td> <td width="18%"> </td> <td width="5%"> </td> <td width="18%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="3" align="center">(Amounts in Thousands)</td></tr> <tr valign="bottom"><td align="left">Accrued payroll</td> <td align="left">$</td> <td align="right">18,731</td> <td align="center">$</td> <td align="right">17,509</td></tr> <tr valign="bottom"><td align="left">Accrued workers' compensation insurance</td> <td align="left"> </td> <td align="right">12,464</td> <td align="left"> </td> <td align="right">12,823</td></tr> <tr valign="bottom"><td align="left">Accrued health insurance (1)</td> <td align="left"> </td> <td align="right">3,058</td> <td align="left"> </td> <td align="right">4,092</td></tr> <tr valign="bottom"><td align="left">Indemnification reserve (2)</td> <td align="left"> </td> <td align="right">419</td> <td align="left"> </td> <td align="right">419</td></tr> <tr valign="bottom"><td align="left">Accrued payroll taxes</td> <td align="left"> </td> <td align="right">1,834</td> <td align="left"> </td> <td align="right">1,747</td></tr> <tr valign="bottom"><td align="left">Accrued professional fees</td> <td align="left"> </td> <td align="right">1,214</td> <td align="left"> </td> <td align="right">1,485</td></tr> <tr valign="bottom"><td align="left">Accrued severance (3)</td> <td align="left"> </td> <td align="right">1,530</td> <td align="left"> </td> <td align="right">1,326</td></tr> <tr valign="bottom"><td align="left">Accrued restructuring (4)</td> <td align="left"> </td> <td align="right">1,712</td> <td align="left"> </td> <td align="right">1,786</td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">3,253</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,416</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">44,215</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">42,603</td></tr></table></div>   (1) The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State. Amounts due of $0.3 million and $2.2 million for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance as of March 31, 2017 and December 31, 2016, respectively. (2) As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1.8 million to the U.S. government in March 2014. As of March 31, 2017, the Company, using its best judgment, has estimated a total of $0.4 million for billing adjustments for 2013, 2012 and 2011 services which may be subject to Medicare audits. For the years ended December 31, 2016 and 2015, the Company reduced the indemnification reserve accrual by the amounts accrued for periods no longer subject to Medicare audits of $0.2 million and $0.4 million, respectively. This amount is reflected as a reduction in general and administrative expense of discontinued operations. (3) Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. (4) Accrued restructuring includes reserves for lease commitments related to the closure of three adult day services centers in Illinois during the third quarter of 2016 and unused contact center office space. </div> -0.250 -0.070 400000 <div> <div class="MetaData"> Going Concern      In connection with the preparation of the financial statements for the three months ended March 31, 2017, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity's ability to continue as a going concern within one year after the date of the issuance, or the date of availability, of the financial statements to be issued. The evaluation concluded that there did not appear to be evidence of substantial doubt of the entity's ability to continue as a going concern.</div> </div> 2200000 300000 419000 419000 <div> <div class="MetaData"> Interest Income      Illinois law entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of income as interest income. For the three months ended March 31, 2017 and 2016, the Company did not receive any prompt payment interest. While the Company may be owed additional prompt payment interest, the amount and timing of receipt of such payments remains uncertain, and the Company has determined that it will continue to recognize prompt payment interest income when received.</div> </div> 3 3 3 34000 111 1 758000 470000 1 <div> <div class="MetaData"> Other Income      Other income consists of income distributions received from the investment in joint venture. The Company accounts for this income in accordance with ASC Topic 325, "Investments—Other." The Company recognizes the net accumulated earnings only to the extent distributed by the joint venture on the date received.</div> </div> 1190000 759000 0.0425 <div> <div class="MetaData" align="left"> <table cellspacing="0" border="0"> <tr><td width="39%"> </td> <td width="60%"> </td></tr> <tr valign="bottom"><td align="left">Computer equipment</td> <td align="right">3 – 5 years</td></tr> <tr valign="bottom"><td align="left">Furniture and equipment</td> <td align="right">5 – 7 years</td></tr> <tr valign="bottom"><td align="left">Transportation equipment</td> <td align="right">5 years</td></tr> <tr valign="bottom"><td align="left">Computer software</td> <td align="right">5 – 10 years</td></tr> <tr valign="bottom"><td align="left">Leasehold improvements</td> <td align="right">Lesser of useful life or lease term, unless</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right">probability of lease renewal is likely</td></tr></table></div> </div> 3.25 3.75 3.75 40000 P4Y 747000 609000 false --12-31 Q1 2017 2017-03-31 10-Q 0001468328 11603488 Accelerated Filer Addus HomeCare Corp

4486000

5453000

116999000

116174000

58800000

2600000

56200000

1326000

1530000

4092000

3058000

42603000

44215000

1747000

1834000

1485000

1214000

17509000

18731000

92253000

93634000

427000

7363000

8254000

77000

79000

1000000

231030000

238664000

131010000

139289000

-0.03

0.37

-0.03

0.37

<div> <div> <div> <div> </div>  </div></div> <div> <div> <div> <div> <div> <table cellspacing="0" border="0"> <tr valign="bottom"><td align="left"> </td> <td colspan="3" align="center">For the Three Months</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="3" align="center">Ended March 31,</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" colspan="3" align="center">(Amounts in Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 3px;" align="left">2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Net service revenues</td> <td align="left">$</td> <td align="right">101,606</td> <td align="left">$</td> <td align="right">97,438</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Operating income</td> <td align="left"> </td> <td align="right">6,961</td> <td align="left"> </td> <td align="right">(145</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Net income</td> <td align="left"> </td> <td align="right">4,259</td> <td align="left"> </td> <td align="right">(361</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Net income per common share</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Basic income per share</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">0.37</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">(0.03</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">)</td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Diluted income per share</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">0.37</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">(0.03</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">)</td></tr></table></div></div></div></div></div> </div>

-361000

4259000

97438000

101606000

1300000

100000

<div> <div> <div> 3. Acquisitions      Effective February 23, 2016, the Company acquired certain assets of Lutheran Social Services of Illinois ("LSSI") for approximately $0.1 million. The results of operations from the acquisition of LSSI are included in the Company's statement of income from the date of the acquisition. The LSSI acquisition accounted for $0.2 million and $0.1 million of net service revenues and $7.5 thousand and $3.7 thousand of net income for the three months ended March 31, 2017 and 2016, respectively. In order to focus on providing services to consumers in their homes, effective March 1, 2017, Addus ceased providing adult day services and sold substantially all of the assets used in our adult day services centers, including LSSI.      On April 24, 2015, Addus HealthCare entered into a Securities Purchase Agreement with Margaret Coffey and Carol Kolar (the "South Shore Sellers"), South Shore Home Health Service Inc. ("South Shore") and Acaring Home Care, LLC ("Acaring"), pursuant to which Addus HealthCare agreed to acquire all of the issued and outstanding securities of each of South Shore and Acaring. On February 5, 2016, Addus HealthCare completed its acquisition of all the outstanding securities of South Shore and Acaring for a total purchase price of $20.0 million (the "South Shore Purchase Price"). The related acquisition costs, included in general and administrative expenses on the Consolidated Statements of Income, were $1.3 million and were expensed as incurred. The results of operations from South Shore and Acaring are included in the Company's Condensed Consolidated Statements of Income from the date of the acquisition. Acaring was dissolved on March 1, 2016, and its assets were transferred to South Shore.      The Company's acquisition of South Shore and Acaring has been accounted for in accordance with ASC Topic 805, "Business Combinations, " and the resulting goodwill and other intangible assets was accounted for under ASC Topic 350 "Goodwill and Other Intangible Assets." The acquisition was recorded at its fair value as of February 5, 2016. Under business combination accounting, the South Shore Purchase Price was $20.0 million and was allocated to South Shore's net tangible and identifiable intangible assets based on their estimated fair values. Based upon management's valuation, the total purchase price has been allocated as follows: <div> <table cellspacing="0" border="0"> <tr><td width="58%"> </td> <td width="18%"> </td> <td width="18%"> </td> <td width="4%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Total</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td style="text-indent: 1px;" align="left">(Amounts in</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 2px;" align="left">Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Goodwill</td> <td align="left">$</td> <td align="right">5,265</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Identifiable intangible assets</td> <td align="left"> </td> <td align="right">9,957</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accounts receivable</td> <td align="left"> </td> <td align="right">6,807</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Other current assets</td> <td align="left"> </td> <td align="right">858</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accrued liabilities</td> <td align="left"> </td> <td align="right">(1,593</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Accounts payable</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,268</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Total purchase price allocation</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">20,026</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>        Management's assessment of qualitative factors affecting goodwill for South Shore includes: estimates of market share at the date of purchase; ability to grow in the market; synergy with existing Company operations and the presence of managed care payors in the market.      Identifiable intangible assets acquired consist of trade names and trademarks, customer relationships and non-compete agreements. The estimated fair value of identifiable intangible assets was determined by the Company's management. The net intangible and identifiable intangible assets, including goodwill, are deductible for tax purposes.      The South Shore acquisition accounted for $14.3 million and $8.2 million of net service revenues and $1.0 million and $0.3 million of net income for the three months ended March 31, 2017 and 2016, respectively.      <div> The following table contains unaudited pro forma condensed consolidated income statement information assuming the South Shore and Acaring acquisition closed on January 1, 2015. <div> <table cellspacing="0" border="0"> <tr><td width="46%"> </td> <td width="12%"> </td> <td width="16%"> </td> <td width="8%"> </td> <td width="11%"> </td> <td width="4%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="3" align="center">For the Three Months</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="3" align="center">Ended March 31,</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" colspan="3" align="center">(Amounts in Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 3px;" align="left">2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Net service revenues</td> <td align="left">$</td> <td align="right">101,606</td> <td align="left">$</td> <td align="right">97,438</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Operating income</td> <td align="left"> </td> <td align="right">6,961</td> <td align="left"> </td> <td align="right">(145</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Net income</td> <td align="left"> </td> <td align="right">4,259</td> <td align="left"> </td> <td align="right">(361</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Net income per common share</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Basic income per share</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">0.37</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">(0.03</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">)</td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Diluted income per share</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">0.37</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">(0.03</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">)</td></tr></table></div>  </div>      The pro forma disclosures in the table above include adjustments for amortization of intangible assets and tax expense and acquisition costs to reflect results that are more representative of the combined results of the transactions as if South Shore and Acaring had been acquired effective January 1, 2015. This pro forma information is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred. In addition, future results may vary significantly from the results reflected in the pro forma information. The unaudited pro forma financial information does not reflect the impact of future events that may occur after the acquisition, such as anticipated cost savings from operating synergies.</div></div> </div>

858000

6807000

1268000

9957000

20026000

300000

3700

1000000

7500

5010000

635000

1144000

2928000

303000

1500000

600000

2336000

2700000

1400000

400000

600000

2227000

1026000

30000

60000

85000

2167000

2082000

1171000

2674000

4104000

9080000

8013000

19156000

4976000

11143000

<div> 8. Commitments and Contingencies Legal Proceedings      From time to time, the Company is subject to legal and/or administrative proceedings incidental to its business. It is the opinion of management that the outcome of pending legal and/or administrative proceedings will not have a material effect on the Company's financial position and results of operations.      On January 20, 2016, the Company was served with a lawsuit filed in the United States District Court for the Northern District of Illinois against the Company and Cigna Corporation by Stop Illinois Marketing Fraud, LLC, a qui tam relator formed for the purpose of bringing this action. In the action, the plaintiff alleges, inter alia, violations of the federal False Claims Act relating primarily to allegations of violations of the federal Anti-Kickback Statute and allegedly improper referrals of patients from our home care division to our home health business, substantially all of which was sold in 2013. The plaintiff seeks to recover damages, fees and costs under the federal False Claims Act including treble damages, civil penalties and its attorneys' fees. The U.S. government has declined to intervene at this time. Plaintiff amended its complaint on April 4, 2016 to include additional allegations in support of its False Claims Act claims, including alleged violations of the federal Anti-Kickback Statute. The Company and Cigna Corporation filed a motion to dismiss the amended complaint on June 6, 2016. On February 3, 2017, the Court granted Cigna Corporation's motion to dismiss in full, and granted our motion to dismiss in part allowing Plaintiff another chance to amend its complaint. Plaintiff timely filed a second amended complaint on March 10, 2017, withdrawing its conspiracy claim under the Federal False Claims Act and adding an explicit claim under the Illinois False Claims Act for the same underlying kickback allegations. On April 10, 2017, the Company filed a motion to dismiss the Second Amended Complaint, which has not yet been ruled on by the court. The Company intends to defend the litigation vigorously and believes the case will not have a material adverse effect on its business, financial condition or results of operations.      On May 4, 2016, the Company, together with 59 other social service and healthcare providers in the State of Illinois, filed an action in the Circuit Court of Cook County, Illinois against certain individuals in their official capacities as agents of the Illinois Department of Human Services, the Illinois Department on Aging, the Illinois Department of Public Health, the Illinois Department of HealthCare and Family Services, the Illinois Criminal Justice Information Authority, the Illinois Department of Corrections and the Illinois Department of Central Management Services, including the Governor of Illinois. On July 20, 2016, a third amended complaint was filed by the plaintiffs, who now comprise 97 similarly situated providers and provider organizations. In the action, the plaintiffs, including the Company, allege to have entered into contracts with the various defendants based in part on the Governor's proposed budget, which provided for funding for the services to be provided by plaintiffs thereunder. The Governor subsequently vetoed all of the relevant appropriations bills on June 25, 2015 and again vetoed an appropriations bill that included funding for the contracts on June 10, 2016. While the defendant officer and agency heads have continued to enforce such contracts, since August 1, 2016, the Company received an aggregate of approximately $65.4 million in payments from the State of Illinois from the stopgap budget enacted on June 30, 2016. In those actions, plaintiffs alleged the defendant officers and agency heads acted beyond the scope of their legal authority in entering into and enforcing contracts with no intent to perform under such contracts by failing to pay amounts due thereunder when due. The action also alleged that the Governor of Illinois' vetoes of appropriations for such contracts violated the Illinois Constitution. Plaintiffs sought injunctive relief to payment of overdue bills to prevent irreparable harm, including imperiling the State's infrastructure for delivery of human services. On August 31, 2016, the Court denied plaintiffs' petitions for declaratory and injunctive relief and dismissed the actions with prejudice. Plaintiffs timely filed a notice of appeal on September 30, 2016. Employment Agreements      The Company has entered into employment agreements with certain members of senior management. The terms of these agreements are up to four years with auto-renewal provisions thereafter, and include non-compete and nondisclosure provisions, as well as provide for defined severance payments in the event of termination.      A substantial percentage of the Company's workforce is represented by the Service Employees International Union ("SEIU"). The Company has a national agreement with the SEIU which is currently under negotiation, as well as numerous agreements with local SEIU affiliates which are renegotiated from time to time. These negotiations are often initiated when the Company receives increases in hourly rates from various state agencies. Upon expiration of these collective bargaining agreements, the Company may not be able to negotiate labor agreements on satisfactory terms with these labor unions. </div>

0.001

40000000

11527000

11628000

11527000

11628000

12000

<div> 10. Significant Payors      A substantial portion of the Company's net service revenues and accounts receivable are derived from services performed for federal, state and local governmental agencies. The Illinois Department on Aging accounted for 36.5% and 44.8% of the Company's net service revenues for the three months ended March 31, 2017 and 2016, respectively.      The related receivables due from the Illinois Department on Aging represented 52.9% and 55.4% of the Company's accounts receivable at March 31, 2017 and December 31, 2016, respectively.       The State of Illinois' payments have been delayed in the past and may continue to be delayed due to a budget impasse that began in 2015. The State of Illinois did not adopt a comprehensive budget for fiscal year 2016, which ended on June 30, 2016, and it has not yet adopted a comprehensive budget for fiscal year 2017, which began on July 1, 2016. Stopgap budget legislation was enacted on June 30, 2016, which appropriated funds through December 31, 2016. Without a budget, the State is not authorized to pay for the non-Medicaid consumers we serve. During the second half of 2016 and the first three months of 2017, we have been experiencing a delay in payments from the State of Illinois due to the current budget situation. Accounts receivable attributable to delayed payments from the Illinois Department on Aging totaled $58.8 million as of March 31, 2017, approximately $56.2 million thereof related to Non-Medicaid consumers and approximately $2.6 million related to Medicaid consumers. Reimbursements from the State of Illinois could be further delayed due to the lack of a budget for fiscal year 2017 and because current forecasts indicate higher state deficits in the near future. </div>

0.448

0.554

0.529

0.365

<div> <div> Principles of Consolidation      All intercompany balances and transactions have been eliminated in consolidation. The Company's investment in entities with less than 20% ownership or in which the Company does not have the ability to influence the operations of the investee are accounted for using the cost method and are included in investments in joint ventures.</div> </div>

68283000

74289000

0.0050

0.0250

0.0350

0.0200

0.0300

0.0100

0.0050

0.0225

0.0325

0.0150

0.0250

0.0000

24063000

2433000

23750000

2082000

0.111

0.036

0.03

1483000

1404000

3153000

1478000

1516000

2372000

1516000

<div> 2. Sale of Adult Day Services Centers      In order to focus on providing services to consumers in their homes, effective March 1, 2017, the Company ceased the adult day services business and completed its sale of substantially all of the assets used in three adult day services centers in Illinois. The Company received proceeds of approximately $2.4 million and recorded a pre-tax gain of $2.1 million on the sale of the three adult day services centers. </div>

0.01

0.37

0.01

0.37

0.329

0.332

0.350

0.170

0.004

0.007

-0.004

0.052

34825000

26766000

1763000

6296000

35871000

27342000

1790000

6739000

P25Y

P2Y

2100000

2065000

22188000

20905000

5265000

73906000

<div> <div> 4. Goodwill and Intangible Assets A summary of the goodwill activity for the three months ended March 31, 2017 is provided below: <div> </div> <div> <table cellspacing="0" border="0"> <tr><td width="65%"> </td> <td width="9%"> </td> <td width="25%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Goodwill</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">(Amounts in</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">Thousands)</td></tr> <tr valign="bottom"><td align="left">Goodwill, at December 31, 2016</td> <td align="left">$</td> <td align="left">73,906</td></tr> <tr valign="bottom"><td align="left">Additions for acquisitions</td> <td align="left"> </td> <td style="text-indent: 3px;" align="left">—</td></tr> <tr valign="bottom"><td align="left">Adjustments to previously recorded goodwill</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 3px;" align="left">—</td></tr> <tr valign="bottom"><td align="left">Goodwill, at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">73,906</td></tr></table></div>        The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following as of March 31, 2017 and December 31, 2016: <div> <table cellspacing="0" border="0"> <tr><td width="27%"> </td> <td width="2%"> </td> <td width="13%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="8%"> </td> <td width="1%"> </td> <td width="2%"> </td> <td width="8%"> </td> <td width="2%"> </td> <td width="2%"> </td> <td width="6%"> </td> <td width="2%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="center">Customer and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right">Non-</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="center">referral</td> <td align="left"> </td> <td align="left"> </td> <td align="center">Trade names and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="center">competition</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">relationships</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">trademarks</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">State licenses</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">agreements</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">Total</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Gross balance at December 31, 2016</td> <td align="right">$</td> <td align="right">34,672</td> <td align="left"> </td> <td align="left">$</td> <td align="right">13,261</td> <td align="left"> </td> <td align="left">$</td> <td style="text-indent: 9px;" align="left">150</td> <td align="left">$</td> <td align="right"> </td> <td align="right">2,155</td> <td align="left"> </td> <td align="left">$</td> <td align="right">50,238</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accumulated amortization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(26,766</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(6,296</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 9px;" align="left">—</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,763</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(34,825</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net Balance at December 31, 2016</td> <td align="right"> </td> <td align="right">7,906</td> <td align="left"> </td> <td align="left"> </td> <td align="right">6,965</td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 9px;" align="left">150</td> <td align="left"> </td> <td align="right"> </td> <td align="right">392</td> <td align="left"> </td> <td align="left"> </td> <td align="right">15,413</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Gross balance at January 1, 2017</td> <td align="right"> </td> <td align="right">34,672</td> <td align="left"> </td> <td align="left"> </td> <td align="right">13,261</td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 9px;" align="left">150</td> <td align="left"> </td> <td align="right"> </td> <td align="right">2,155</td> <td align="left"> </td> <td align="left"> </td> <td align="right">50,238</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accumulated amortization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(27,342</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(6,739</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 9px;" align="left">—</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,790</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(35,871</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net Balance at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">7,330</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">6,522</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double; text-indent: 9px;" align="left">150</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">365</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">14,367</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>        Amortization expense related to the identifiable intangible assets amounted to $1.0 million for the three months ended March 31, 2017 and 2016. Goodwill and state licenses are not amortized pursuant to ASC Topic 350.</div> </div>

24319000

27317000

234000

6374000

<div> 7. Income Taxes      A reconciliation of the statutory federal tax rate of 35.0% for the three months ended March 31, 2017 and 2016 is summarized as follows: <div> <table cellspacing="0" border="0"> <tr><td width="52%"> </td> <td width="25%"> </td> <td width="3%"> </td> <td width="14%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" colspan="3" align="right">Three Months Ended March 31,</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Federal income tax at statutory rate</td> <td align="right">35.0</td> <td align="left">%</td> <td align="right">35.0</td> <td align="left">%</td></tr> <tr valign="bottom"><td align="left">State and local taxes, net of federal benefit</td> <td align="right">5.2</td> <td align="left"> </td> <td align="right">5.2</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Jobs tax credits, net</td> <td align="right">(7.0</td> <td align="left">)</td> <td align="right">(25.0</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Nondeductible permanent items</td> <td align="right">0.4</td> <td align="left"> </td> <td align="right">17.0</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(0.4</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">0.7</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Effective income tax rate</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">33.2</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">%</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">32.9</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">%</td></tr></table></div>   </div>

283000

82000

77000

2115000

26300

<div> <div class="MetaData"> <div> Income Tax Expense</div>      The Company accounts for income taxes under the provisions of ASC Topic 740, "Income Taxes." The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Company's assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740, also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions.      In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. The Company adopted this standard on January 1, 2017 on a prospective basis. As a result, for the three months ended March 31, 2017, the Company recorded an excess tax benefit of $26.3 thousand within income tax expense on its Condensed Consolidated Statements of Income.</div> </div>

-570000

967000

16056000

1207000

4668000

1602000

400000

200000

-1688000

-2005000

50238000

150000

34672000

2155000

13261000

50238000

150000

34672000

2155000

13261000

15413000

150000

7906000

392000

6965000

14367000

150000

7330000

365000

6522000

426000

651000

-419000

-644000

358000

656000

7000

900000

72102000

74096000

231030000

238664000

49620000

52219000

24100000

23800000

2020-11-10

2018-11-08

P5Y

100000000

25000000

50000000

100000000

79700000

35000000

82800000

250000000

125000000

80000000

45000000

100000000

125000000

0.0050

0.0025

0.0050

0.0025

25013000

24428000

2531000

2551000

22482000

21877000

<div> 6. Long-Term Debt Long-term debt consisted of the following: <div> <table cellspacing="0" border="0"> <tr><td width="41%"> </td> <td width="11%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="17%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Revolving credit loan</td> <td align="left">$</td> <td align="right">—</td> <td align="left"> </td> <td align="center">$</td> <td align="right">—</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Term loan</td> <td align="left"> </td> <td align="right">23,750</td> <td align="left"> </td> <td align="left"> </td> <td align="right">24,063</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Capital leases</td> <td align="left"> </td> <td align="right">2,082</td> <td align="left"> </td> <td align="left"> </td> <td align="right">2,433</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less unamortized issuance costs</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,404</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,483</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Total</td> <td align="left">$</td> <td align="right">24,428</td> <td align="left"> </td> <td align="center">$</td> <td align="right">25,013</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less current maturities</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(2,551</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(2,531</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Long-term debt</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">21,877</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">22,482</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>        In accordance with ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs," the Company has classified the debt issuance costs as current portion of long-term debt or long term debt, less current portion as of March 31, 2017 and December 31, 2016. Capital Leases      On July 12, 2014, September 11, 2014 and April 13, 2015, the Company executed three 48-month capital lease agreements for $2.7 million, $1.4 million and $0.4 million, respectively, with First American Commercial Bancorp, Inc. The capital leases were entered into to finance property and equipment at the Company's support center. The underlying assets are included in "Property and equipment, net of accumulated depreciation and amortization" in the accompanying Unaudited Condensed Consolidated Balance Sheets. These capital lease obligations require monthly payments through September 2019 and have implicit interest rates that range from 3.0% to 3.6%. At the end of the term of each lease agreement, the Company has the option to purchase the assets covered by such lease agreement for $1.      Effective October 1, 2016, the Company entered into a 25-month capital lease agreement for $0.6 million with Meridian Leasing Corporation. The capital leases were entered into to finance property and equipment for the Company's telephone systems. The underlying assets are included in "Property and equipment, net of accumulated depreciation and amortization" in the accompanying Consolidated Balance Sheets. These capital lease obligations require monthly payments through October 2018 and have an implicit interest rate of 11.1%. At the end of the term, the Company has the option to purchase the assets for $1 per the lease agreement. <div> The following is an analysis of the leased property under capital leases by major classes. <div> <table cellspacing="0" border="0"> <tr><td width="70%"> </td> <td width="2%"> </td> <td width="20%"> </td> <td width="2%"> </td></tr> <tr valign="bottom"><td width="70%" align="left"> </td> <td width="2%" align="left"> </td> <td width="20%" align="center">Asset Balances at March 31,</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left"> </td> <td width="2%" align="left"> </td> <td width="20%" align="center">2017</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td style="border-bottom: rgb(0,0,0) 1px solid;" width="70%" align="left">Classes of Property</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="center">(Amounts in Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Leasehold Improvements</td> <td width="2%" align="left">$</td> <td width="20%" align="right">2,928</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Furniture & Equipment</td> <td width="2%" align="left"> </td> <td width="20%" align="right">1,144</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Computer Equipment</td> <td width="2%" align="left"> </td> <td width="20%" align="right">635</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Computer Software</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">303</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Total</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">5,010</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Less: Accumulated Depreciation</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">(2,674</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left">)</td></tr> <tr valign="bottom"><td width="70%" align="left">Net Leased Property Under Capital Leases</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="2%" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="20%" align="right">2,336</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="2%" align="left"> </td></tr></table></div>  </div> The future minimum payments for capital leases as of March 31, 2017 are as follows: <div> <table cellspacing="0" border="0"> <tr><td width="61%"> </td> <td width="6%"> </td> <td width="27%"> </td> <td width="4%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Capital Lease</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">(Amounts In Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">2017</td> <td align="left"> </td> <td align="right">1,171</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">2018</td> <td align="left"> </td> <td align="right">1,026</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">2019</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">30</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Total minimum lease payments</td> <td align="left"> </td> <td align="right">2,227</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less: amount representing estimated executory</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">costs (such as taxes, maintenance and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">insurance), including profit thereon, included</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">in total minimum lease payments</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(60</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net minimum lease payments</td> <td align="left"> </td> <td align="right">2,167</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less: amount representing interest (1)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(85</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Present value of net minimum lease payments (2)</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">2,082</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>   (1) Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception. (2) Included in the balance sheet as $1.5 million of the current portion of long-term debt, net of debt issuance costs and $0.6 million of the long-term debt, less current portion, net of debt issuance costs. Senior Secured Credit Facility      On May 24, 2016, the Company entered into an amendment to its credit facility with certain lenders and Fifth Third Bank, as agent and letters of credit issuer. The Company's amended credit facility provides a $100.0 million revolving line of credit, a delayed draw term loan facility of up to $25.0 million and an uncommitted incremental term loan facility of up to $50.0 million, expiring November 10, 2020 and includes a $35.0 million sublimit for the issuance of letters of credit. The amended credit facility increased the specified advance multiple from 3.25 to 3.75 to 1.00 and the maximum permitted senior leverage ratio from 3.50 to 4.00 to 1.00. Except as modified by the May 24, 2016 amendment, the amended credit facility contains the same material terms as the previous agreement dated November 10, 2015. Substantially all of the subsidiaries of Holdings are co-borrowers, and Holdings has guaranteed the borrowers' obligations under the credit facility. The credit facility is secured by a first priority security interest in all of Holdings' and the borrowers' current and future tangible and intangible assets, including the shares of stock of the borrowers.      The availability of funds under the revolving credit portion of the Company's credit facility, is based on the lesser of (i) the product of adjusted EBITDA, as defined in the credit agreement, for the most recent 12-month period for which financial statements have been delivered under the credit agreement multiplied by the specified advance multiple, up to 3.75, less the outstanding senior indebtedness and letters of credit, and (ii) $100.0 million less the outstanding revolving loans and letters of credit. Interest on our credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 2.00% to 2.50% based on the applicable leverage ratio plus (ii) a base rate equal to the greatest of (a) the rate of interest last quoted by The Wall Street Journal as the "prime rate," (b) the sum of the federal funds rate plus a margin of 0.50% and (c) the sum of the adjusted LIBOR that would be applicable to a loan with an interest period of one month advanced on the applicable day plus a margin of 3.00% or (y) the sum of (i) an applicable margin ranging from 3.00% to 3.50% based on the applicable leverage ratio plus (ii) the adjusted LIBOR that would be applicable to a loan with an interest period of one, two or three months advanced on the applicable day or (z) the sum of (i) an applicable margin ranging from 3.00% to 3.50% based on the applicable leverage ratio plus (ii) the daily floating LIBOR that would be applicable to a loan with an interest period of one month advanced on the applicable day. The Company pays a fee ranging from 0.25% to 0.50% per annum based on the applicable leverage ratio times the unused portion of the revolving portion of the credit facility. Issued stand-by letters of credit are charged at a rate equal to the applicable margin for LIBOR loans payable quarterly. During the first quarter of 2017, the Company drew and subsequently repaid $20.0 million of its revolving credit line to fund on-going operations. As of March 31, 2017 and December 31, 2016, the Company had a total of $23.8 million and $24.1 million outstanding on the credit facility and the total availability under the revolving credit loan facility was $82.8 million and $79.7 million, respectively.      The credit facility contains customary affirmative covenants regarding, among other things, the maintenance of records, compliance with laws, maintenance of permits, maintenance of insurance and property and payment of taxes. The credit facility also contains certain customary financial covenants and negative covenants that, among other things, include a requirement to maintain a minimum fixed charge coverage ratio, a requirement to stay below a maximum senior leverage ratio and a requirement to stay below a maximum permitted amount of capital expenditures, as well as restrictions on guarantees, indebtedness, liens, distributions, investments and loans, subject to customary carve outs, a restriction on dividends (unless no default then exists or would occur as a result thereof, the Company is in pro forma compliance with the financial covenants contained in the credit facility after giving effect thereto, the Company has an excess availability of at least 40% of the revolving credit commitment under the credit facility and the aggregate amount of dividends and distributions paid in any fiscal year does not exceed $5.0 million), restrictions on the Company's ability to enter into transactions other than in the ordinary course of business, a restriction on the ability to consummate more than three acquisitions in any calendar year, consummate any individual acquisition with a purchase price in excess of $25.0 million and consummate acquisitions with total purchase price in excess of $40.0 million in the aggregate over the term of the credit facility, in each case without the consent of the lenders, restrictions on mergers, transfers of assets, acquisitions, equipment, subsidiaries and affiliate transactions, subject to customary carve outs, and restrictions on fundamental changes and lines of business. </div>

31726000

290000

-20791000

1238000

-5959000

9615000

157000

4259000

<div> <div class="MetaData"> New Accounting Pronouncements      In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP and will be effective for the Company as of January 1, 2018. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method and we have not yet selected which transition method we will apply. The Company's evaluation of ASU 2014-09 is not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause the Company's evaluation to change. The Company has completed an initial review to determine the impact ASU 2014-09 and its subsequent updates through December 31, 2016 will have on its Consolidated Financial Statements or financial statement disclosures upon adoption. Based on the Company's preliminary review, it believes that the timing and measurement of revenue for its customers will be similar to its current revenue recognition. However, this view is preliminary and could change based on the detailed analysis associated with the conversion and implementation phases of the Company's ASU 2014-09 project. The Company will complete its assessment during 2017.      In February 2016, the FASB issued ASU No. 2016-02, "Leases" which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding "right- of-use" assets and is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. For income statement recognition purposes, leases will be classified as either a finance or an operating lease. The Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Upon initial evaluation, the Company believes that the new standard will have a material impact on our Consolidated Balance Sheets but it will not affect our liquidity. The Company is continuing to evaluate other potential impacts to its financial statements and accounting systems including whether the Company will need to secure new software to account for the change in accounting for leases.      In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments (Topic 326) Credit Losses." ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13.      In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and will require adoption on a retrospective basis unless impracticable. If impracticable the Company would be required to apply the amendments prospectively as of the earliest date possible. The Company is currently evaluating the impact that ASU 2016-15 will have on its statement of financial position or financial statement disclosures.      In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current Step 1). ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU 2017-04 to determine how its goodwill impairment testing will be impacted and whether it may elect to adopt ASU 2017-04 prior to the stated effective date.</div> </div>

23666000

20356000

653000

6961000

1416000

3253000

93372000

92326000

1255000

1293000

57000

684000

74000

168000

20449000

20000000

342000

1162000

<div> <div> Allowance for Doubtful Accounts      The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company establishes its provision for doubtful accounts primarily by analyzing historical trends and the aging of receivables. In its evaluation, the Company considers other factors including: delays in payment trends in individual states due to budget or funding issues; billing conversions related to acquisitions or internal systems; resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level that the Company's management believes is sufficient to cover potential losses. However, actual collections could differ from the Company's estimates.</div> </div>

5998000

3959000

2238000

771000

568000

527000

2400000

22000000

65400000

10000000

20000000

170000

954000

6648000

7049000

<div> <div class="MetaData"> <div> Property and Equipment      Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: <div class="MetaData" align="left"> <table cellspacing="0" border="0"> <tr><td width="39%"> </td> <td width="60%"> </td></tr> <tr valign="bottom"><td align="left">Computer equipment</td> <td align="right">3 – 5 years</td></tr> <tr valign="bottom"><td align="left">Furniture and equipment</td> <td align="right">5 – 7 years</td></tr> <tr valign="bottom"><td align="left">Transportation equipment</td> <td align="right">5 years</td></tr> <tr valign="bottom"><td align="left">Computer software</td> <td align="right">5 – 10 years</td></tr> <tr valign="bottom"><td align="left">Leasehold improvements</td> <td align="right">Lesser of useful life or lease term, unless</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right">probability of lease renewal is likely</td></tr></table></div></div></div> </div>

P5Y

P10Y

P5Y

P3Y

P7Y

P5Y

1368000

2032000

3.50

4.00

20000000

276000

351000

313000

<div> 9. Severance and Restructuring      In 2016, the Company initiated steps to streamline its operations. The Company incurred total expenses related to these initiatives of approximately $0.9 million and $3.5 million for the three months ended March 31, 2017 and 2016, respectively, which is included in general and administrative expenses on the Condensed Consolidated Statements of Income. The Company expects some additional restructuring and other costs to occur, however, the amount and timing cannot be determined at this time. The expenses recorded for the three months ended March 31, 2017 included costs related to terminated employees. The expenses recorded for the three months ended March 31, 2016 included costs related to terminated employees and other direct costs associated with implementing these initiatives. Other direct costs included contract termination costs, accelerated depreciation and asset write-offs. The following provides the components of and changes in our severance and restructuring accruals: <div> <table cellspacing="0" border="0"> <tr><td width="43%"> </td> <td width="18%"> </td> <td width="13%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="12%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Employee</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right">Termination</td> <td align="left"> </td> <td align="left"> </td> <td align="right">Restructuring</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">Costs</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">and Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Balance at December 31, 2016</td> <td align="left">$</td> <td align="right">1,326</td> <td align="left"> </td> <td align="center">$</td> <td align="right">1,786</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Provision</td> <td align="left"> </td> <td align="right">888</td> <td align="left"> </td> <td align="left"> </td> <td align="right">—</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Utilization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(684</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(74</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Balance at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">1,530</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">1,712</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>   <div> </div>      Employee termination costs represent accrued severance payable to terminated employees with employment and/or separation agreements with the Company. The terminations resulted mainly from changes made to the executive leadership team made during the three months ended March 31, 2017 and 2016.      No restructuring and other costs were recorded for the three months ended March 31, 2017. Restructuring and other costs comprised of fees for the termination of an employee incentive program and various contracts with outside vendors for the three months ended March 31, 2016.      The aforementioned accruals are included in Accrued Expenses on the Condensed Consolidated Balance Sheets and the aforementioned expenses are included in General and Administrative Expenses on the Condensed Consolidated Statements of Income. </div>

888000

1326000

1786000

1530000

1712000

1786000

1712000

3500000

900000

66663000

70922000

92602000

8200000

100000

101606000

14300000

200000

<div>   <div> <table cellspacing="0" border="0"> <tr><td width="50%"> </td> <td width="6%"> </td> <td width="18%"> </td> <td width="5%"> </td> <td width="18%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="3" align="center">(Amounts in Thousands)</td></tr> <tr valign="bottom"><td align="left">Accrued payroll</td> <td align="left">$</td> <td align="right">18,731</td> <td align="center">$</td> <td align="right">17,509</td></tr> <tr valign="bottom"><td align="left">Accrued workers' compensation insurance</td> <td align="left"> </td> <td align="right">12,464</td> <td align="left"> </td> <td align="right">12,823</td></tr> <tr valign="bottom"><td align="left">Accrued health insurance (1)</td> <td align="left"> </td> <td align="right">3,058</td> <td align="left"> </td> <td align="right">4,092</td></tr> <tr valign="bottom"><td align="left">Indemnification reserve (2)</td> <td align="left"> </td> <td align="right">419</td> <td align="left"> </td> <td align="right">419</td></tr> <tr valign="bottom"><td align="left">Accrued payroll taxes</td> <td align="left"> </td> <td align="right">1,834</td> <td align="left"> </td> <td align="right">1,747</td></tr> <tr valign="bottom"><td align="left">Accrued professional fees</td> <td align="left"> </td> <td align="right">1,214</td> <td align="left"> </td> <td align="right">1,485</td></tr> <tr valign="bottom"><td align="left">Accrued severance (3)</td> <td align="left"> </td> <td align="right">1,530</td> <td align="left"> </td> <td align="right">1,326</td></tr> <tr valign="bottom"><td align="left">Accrued restructuring (4)</td> <td align="left"> </td> <td align="right">1,712</td> <td align="left"> </td> <td align="right">1,786</td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">3,253</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,416</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">44,215</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">42,603</td></tr></table></div>   (1) The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State. Amounts due of $0.3 million and $2.2 million for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance as of March 31, 2017 and December 31, 2016, respectively. (2) As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1.8 million to the U.S. government in March 2014. As of March 31, 2017, the Company, using its best judgment, has estimated a total of $0.4 million for billing adjustments for 2013, 2012 and 2011 services which may be subject to Medicare audits. For the years ended December 31, 2016 and 2015, the Company reduced the indemnification reserve accrual by the amounts accrued for periods no longer subject to Medicare audits of $0.2 million and $0.4 million, respectively. This amount is reflected as a reduction in general and administrative expense of discontinued operations. (3) Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. (4) Accrued restructuring includes reserves for lease commitments related to the closure of three adult day services centers in Illinois during the third quarter of 2016 and unused contact center office space. </div>

<div> <table cellspacing="0" border="0"> <tr><td width="70%"> </td> <td width="2%"> </td> <td width="20%"> </td> <td width="2%"> </td></tr> <tr valign="bottom"><td width="70%" align="left"> </td> <td width="2%" align="left"> </td> <td width="20%" align="center">Asset Balances at March 31,</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left"> </td> <td width="2%" align="left"> </td> <td width="20%" align="center">2017</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td style="border-bottom: rgb(0,0,0) 1px solid;" width="70%" align="left">Classes of Property</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="center">(Amounts in Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Leasehold Improvements</td> <td width="2%" align="left">$</td> <td width="20%" align="right">2,928</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Furniture & Equipment</td> <td width="2%" align="left"> </td> <td width="20%" align="right">1,144</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Computer Equipment</td> <td width="2%" align="left"> </td> <td width="20%" align="right">635</td> <td width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Computer Software</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">303</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Total</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">5,010</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td></tr> <tr valign="bottom"><td width="70%" align="left">Less: Accumulated Depreciation</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="20%" align="right">(2,674</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" width="2%" align="left">)</td></tr> <tr valign="bottom"><td width="70%" align="left">Net Leased Property Under Capital Leases</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="2%" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="20%" align="right">2,336</td> <td style="border-bottom: rgb(0,0,0) 3px double;" width="2%" align="left"> </td></tr></table> </div>

<div> <div> <table cellspacing="0" border="0"> <tr><td width="41%"> </td> <td width="11%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="17%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Revolving credit loan</td> <td align="left">$</td> <td align="right">—</td> <td align="left"> </td> <td align="center">$</td> <td align="right">—</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Term loan</td> <td align="left"> </td> <td align="right">23,750</td> <td align="left"> </td> <td align="left"> </td> <td align="right">24,063</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Capital leases</td> <td align="left"> </td> <td align="right">2,082</td> <td align="left"> </td> <td align="left"> </td> <td align="right">2,433</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less unamortized issuance costs</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,404</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,483</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Total</td> <td align="left">$</td> <td align="right">24,428</td> <td align="left"> </td> <td align="center">$</td> <td align="right">25,013</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less current maturities</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(2,551</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(2,531</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Long-term debt</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">21,877</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">22,482</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>   </div>

<div> <table cellspacing="0" border="0"> <tr><td width="52%"> </td> <td width="25%"> </td> <td width="3%"> </td> <td width="14%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" colspan="3" align="right">Three Months Ended March 31,</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">2016</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Federal income tax at statutory rate</td> <td align="right">35.0</td> <td align="left">%</td> <td align="right">35.0</td> <td align="left">%</td></tr> <tr valign="bottom"><td align="left">State and local taxes, net of federal benefit</td> <td align="right">5.2</td> <td align="left"> </td> <td align="right">5.2</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Jobs tax credits, net</td> <td align="right">(7.0</td> <td align="left">)</td> <td align="right">(25.0</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Nondeductible permanent items</td> <td align="right">0.4</td> <td align="left"> </td> <td align="right">17.0</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(0.4</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">0.7</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Effective income tax rate</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">33.2</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">%</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">32.9</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">%</td></tr></table> </div>

<div> <div> <table cellspacing="0" border="0"> <tr><td width="61%"> </td> <td width="6%"> </td> <td width="27%"> </td> <td width="4%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Capital Lease</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">(Amounts In Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">2017</td> <td align="left"> </td> <td align="right">1,171</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">2018</td> <td align="left"> </td> <td align="right">1,026</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">2019</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">30</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Total minimum lease payments</td> <td align="left"> </td> <td align="right">2,227</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less: amount representing estimated executory</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">costs (such as taxes, maintenance and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">insurance), including profit thereon, included</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">in total minimum lease payments</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(60</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net minimum lease payments</td> <td align="left"> </td> <td align="right">2,167</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Less: amount representing interest (1)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(85</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Present value of net minimum lease payments (2)</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">2,082</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>   (1) Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception. (2) Included in the balance sheet as $1.5 million of the current portion of long-term debt, net of debt issuance costs and $0.6 million of the long-term debt, less current portion, net of debt issuance costs. </div>

<div> <table cellspacing="0" border="0"> <tr><td width="65%"> </td> <td width="9%"> </td> <td width="25%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Goodwill</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">(Amounts in</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">Thousands)</td></tr> <tr valign="bottom"><td align="left">Goodwill, at December 31, 2016</td> <td align="left">$</td> <td align="left">73,906</td></tr> <tr valign="bottom"><td align="left">Additions for acquisitions</td> <td align="left"> </td> <td style="text-indent: 3px;" align="left">—</td></tr> <tr valign="bottom"><td align="left">Adjustments to previously recorded goodwill</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 3px;" align="left">—</td></tr> <tr valign="bottom"><td align="left">Goodwill, at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">73,906</td></tr></table> </div>

<div> <table cellspacing="0" border="0"> <tr><td width="27%"> </td> <td width="2%"> </td> <td width="13%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="11%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="8%"> </td> <td width="1%"> </td> <td width="2%"> </td> <td width="8%"> </td> <td width="2%"> </td> <td width="2%"> </td> <td width="6%"> </td> <td width="2%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="center">Customer and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="right">Non-</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="center">referral</td> <td align="left"> </td> <td align="left"> </td> <td align="center">Trade names and</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="right"> </td> <td align="center">competition</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">relationships</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">trademarks</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">State licenses</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">agreements</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">Total</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td> <td align="right"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Gross balance at December 31, 2016</td> <td align="right">$</td> <td align="right">34,672</td> <td align="left"> </td> <td align="left">$</td> <td align="right">13,261</td> <td align="left"> </td> <td align="left">$</td> <td style="text-indent: 9px;" align="left">150</td> <td align="left">$</td> <td align="right"> </td> <td align="right">2,155</td> <td align="left"> </td> <td align="left">$</td> <td align="right">50,238</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accumulated amortization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(26,766</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(6,296</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 9px;" align="left">—</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,763</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(34,825</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net Balance at December 31, 2016</td> <td align="right"> </td> <td align="right">7,906</td> <td align="left"> </td> <td align="left"> </td> <td align="right">6,965</td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 9px;" align="left">150</td> <td align="left"> </td> <td align="right"> </td> <td align="right">392</td> <td align="left"> </td> <td align="left"> </td> <td align="right">15,413</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Gross balance at January 1, 2017</td> <td align="right"> </td> <td align="right">34,672</td> <td align="left"> </td> <td align="left"> </td> <td align="right">13,261</td> <td align="left"> </td> <td align="left"> </td> <td style="text-indent: 9px;" align="left">150</td> <td align="left"> </td> <td align="right"> </td> <td align="right">2,155</td> <td align="left"> </td> <td align="left"> </td> <td align="right">50,238</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accumulated amortization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(27,342</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(6,739</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 9px;" align="left">—</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,790</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(35,871</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Net Balance at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">7,330</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">6,522</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double; text-indent: 9px;" align="left">150</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">365</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">14,367</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table> </div>

<div> <table cellspacing="0" border="0"> <tr><td width="51%"> </td> <td width="5%"> </td> <td width="18%"> </td> <td width="5%"> </td> <td width="18%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">December 31, 2016</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td style="text-indent: 10px;" colspan="3" align="left">(Amounts in Thousands)</td></tr> <tr valign="bottom"><td align="left">Prepaid health insurance (1)</td> <td align="left">$</td> <td align="right">771</td> <td align="center">$</td> <td align="right">2,238</td></tr> <tr valign="bottom"><td align="left">Prepaid workers' compensation and liability</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td style="text-indent: 3px;" align="left">insurance</td> <td align="left"> </td> <td align="right">759</td> <td align="left"> </td> <td align="right">1,190</td></tr> <tr valign="bottom"><td align="left">Prepaid rent</td> <td align="left"> </td> <td align="right">527</td> <td align="left"> </td> <td align="right">568</td></tr> <tr valign="bottom"><td align="left">Workers' compensation insurance receivable</td> <td align="left"> </td> <td align="right">609</td> <td align="left"> </td> <td align="right">747</td></tr> <tr valign="bottom"><td align="left">Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,293</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">1,255</td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">3,959</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">5,998</td></tr></table> </div>

<div> <table cellspacing="0" border="0"> <tr><td width="58%"> </td> <td width="18%"> </td> <td width="18%"> </td> <td width="4%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Total</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td style="text-indent: 1px;" align="left">(Amounts in</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid; text-indent: 2px;" align="left">Thousands)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left">Goodwill</td> <td align="left">$</td> <td align="right">5,265</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Identifiable intangible assets</td> <td align="left"> </td> <td align="right">9,957</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accounts receivable</td> <td align="left"> </td> <td align="right">6,807</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Other current assets</td> <td align="left"> </td> <td align="right">858</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Accrued liabilities</td> <td align="left"> </td> <td align="right">(1,593</td> <td align="left">)</td></tr> <tr valign="bottom"><td align="left">Accounts payable</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(1,268</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td style="text-indent: 6px;" align="left">Total purchase price allocation</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">20,026</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table> </div>

<div> <div> <table cellspacing="0" border="0"> <tr><td width="43%"> </td> <td width="18%"> </td> <td width="13%"> </td> <td width="3%"> </td> <td width="4%"> </td> <td width="12%"> </td> <td width="3%"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="center">Employee</td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td align="right">Termination</td> <td align="left"> </td> <td align="left"> </td> <td align="right">Restructuring</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="center">Costs</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">and Other</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td></tr> <tr valign="bottom"><td align="left"> </td> <td align="left"> </td> <td colspan="4" align="right">(Amounts in Thousands)</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Balance at December 31, 2016</td> <td align="left">$</td> <td align="right">1,326</td> <td align="left"> </td> <td align="center">$</td> <td align="right">1,786</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Provision</td> <td align="left"> </td> <td align="right">888</td> <td align="left"> </td> <td align="left"> </td> <td align="right">—</td> <td align="left"> </td></tr> <tr valign="bottom"><td align="left">Utilization</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(684</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="right">(74</td> <td style="border-bottom: rgb(0,0,0) 1px solid;" align="left">)</td></tr> <tr valign="bottom"><td align="left">Balance at March 31, 2017</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">1,530</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="center">$</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="right">1,712</td> <td style="border-bottom: rgb(0,0,0) 3px double;" align="left"> </td></tr></table></div>   </div>

337000

427000

11527000

11628000

<div> <div> 1. Summary of Significant Accounting Policies <div class="MetaData"> Basis of Presentation and Description of Business      The condensed consolidated financial statements include the accounts of Addus HomeCare Corporation ("Holdings") and its subsidiaries (together with Holdings, the "Company" or "we"). The Company operates as one reportable business segment and is a provider of comprehensive personal care services, which are provided principally in the home. The Company's personal care services provide assistance with activities of daily living. The Company's consumers are primarily persons who are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. The Company's payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. As of March 31, 2017, the Company provided personal care services to over 34,000 consumers through 111 locations across 24 states.</div> <div> Principles of Consolidation      All intercompany balances and transactions have been eliminated in consolidation. The Company's investment in entities with less than 20% ownership or in which the Company does not have the ability to influence the operations of the investee are accounted for using the cost method and are included in investments in joint ventures.</div>   <div class="MetaData"> Revenue Recognition      The Company generates net service revenues by providing services directly to consumers. The Company receives payments for providing services from federal, state and local governmental agencies, managed care organizations, commercial insurers and private consumers. The Company's operations are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate specified in agreements or fixed by legislation and recognized as revenues at the time services are rendered. Personal care service revenues are reimbursed by state, local and other governmental programs which are partially funded by Medicaid or Medicaid waiver programs, with the remainder reimbursed through insurance programs and private pay.</div> <div> Allowance for Doubtful Accounts      The Company establishes its allowance for doubtful accounts to the extent it is probable that a portion or all of a particular account will not be collected. The Company establishes its provision for doubtful accounts primarily by analyzing historical trends and the aging of receivables. In its evaluation, the Company considers other factors including: delays in payment trends in individual states due to budget or funding issues; billing conversions related to acquisitions or internal systems; resubmission of bills with required documentation and disputes with specific payors. An allowance for doubtful accounts is maintained at a level that the Company's management believes is sufficient to cover potential losses. However, actual collections could differ from the Company's estimates.</div> <div class="MetaData"> <div> Property and Equipment      Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets by use of the straight-line method. Maintenance and repairs are charged to expense as incurred. The estimated useful lives of the property and equipment are as follows: <div class="MetaData" align="left"> <table cellspacing="0" border="0"> <tr><td width="39%"> </td> <td width="60%"> </td></tr> <tr valign="bottom"><td align="left">Computer equipment</td> <td align="right">3 – 5 years</td></tr> <tr valign="bottom"><td align="left">Furniture and equipment</td> <td align="right">5 – 7 years</td></tr> <tr valign="bottom"><td align="left">Transportation equipment</td> <td align="right">5 years</td></tr> <tr valign="bottom"><td align="left">Computer software</td> <td align="right">5 – 10 years</td></tr> <tr valign="bottom"><td align="left">Leasehold improvements</td> <td align="right">Lesser of useful life or lease term, unless</td></tr> <tr valign="bottom"><td align="left"> </td> <td align="right">probability of lease renewal is likely</td></tr></table></div></div></div> <div> </div>   <div class="MetaData">    Goodwill      The Company's carrying value of goodwill is the excess of the purchase price over the fair value of the net assets acquired from various acquisitions including the acquisition of Addus HealthCare, Inc. ("Addus HealthCare"). In accordance with Accounting Standards Codification ("ASC") Topic 350, "Goodwill and Other Intangible Assets," goodwill and intangible assets with indefinite useful lives are not amortized. The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred. The Company may use a qualitative test, known as "Step 0," or a two-step quantitative method to determine whether impairment has occurred. In Step 0, the Company can elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In 2016, 2015 and 2014, the Company elected to implement Step 0 and was not required to conduct the remaining two step analysis. The results of the Company's Step 0 assessments indicated that it was more likely than not that the fair value of its reporting unit exceeded its carrying value and therefore the Company concluded that there were no impairments for the year ended December 31, 2016. No impairment charges were recorded for the three months ended March 31, 2017 or 2016.</div> <div class="MetaData"> Intangible Assets      The Company's identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-compete agreements. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from two to twenty-five years.      Intangible assets with finite lives are amortized using the estimated economic benefit method over the useful life and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset is less than the carrying value. An impairment charge would then be recorded for the excess of the carrying value over the fair value. The Company estimates the fair value of these intangible assets using the income approach. No impairment charge was recorded for the three months ended March 31, 2017 or 2016.      The income approach, which the Company uses to estimate the fair value of its intangible assets (other than goodwill), is dependent on a number of factors including estimates of future market growth and trends, forecasted revenue and costs, expected periods the assets will be utilized, appropriate discount rates and other variables. The Company bases its fair value estimates on assumptions the Company believes to be reasonable but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates.      The Company also has indefinite-lived intangible assets that are not subject to amortization expense such as certificates of need and licenses to conduct specific operations within geographic markets. The Company's management has concluded that certificates of need and licenses have indefinite lives, as management has determined that there are no legal, regulatory, contractual, economic or other factors that would limit the useful life of these intangible assets, and the Company intends to renew and operate the certificates of need and licenses indefinitely. The certificates of need and licenses are tested annually for impairment. No impairment was recorded for the three months ended March 31, 2017 or 2016.</div> <div class="MetaData"> Debt Issuance Costs      The Company amortizes debt issuance costs on a straight-line method over the term of the related debt. This method approximates the effective interest method. The Company has classified the debt issuance costs as current portion of long-term debt or long term debt, less current portion as of March 31, 2017 and December 31, 2016.</div> <div class="MetaData"> Workers' Compensation Program      The Company's workers' compensation program has a $0.4 million deductible component. The Company recognizes its obligations associated with this program in the period the claim is incurred. The cost of both the claims reported and claims incurred but not reported, up to the deductible, have been accrued based on historical claims experience, industry statistics and an actuarial analysis performed by an independent third party. The future claims payments related to the workers' compensation program are secured by letters of credit.</div> <div class="MetaData"> Interest Income      Illinois law entitles designated service program providers to receive a prompt payment interest penalty based on qualifying services approved for payment that remain unpaid after a designated period of time. As the amount and timing of the receipt of these payments are not certain, the interest income is recognized when received and reported in the statement of income as interest income. For the three months ended March 31, 2017 and 2016, the Company did not receive any prompt payment interest. While the Company may be owed additional prompt payment interest, the amount and timing of receipt of such payments remains uncertain, and the Company has determined that it will continue to recognize prompt payment interest income when received.</div> <div class="MetaData"> Interest Expense      The Company's interest expense consists of interest and unused credit line fees on its credit facility, capital lease obligations and amortization of debt issuance costs and is reported in the statement of income when incurred.</div> <div class="MetaData"> <div class="MetaData"> Other Income      Other income consists of income distributions received from the investment in joint venture. The Company accounts for this income in accordance with ASC Topic 325, "Investments—Other." The Company recognizes the net accumulated earnings only to the extent distributed by the joint venture on the date received.</div> <div class="MetaData"> <div> Income Tax Expense</div>      The Company accounts for income taxes under the provisions of ASC Topic 740, "Income Taxes." The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in its financial statements or tax returns. Deferred taxes, resulting from differences between the financial and tax basis of the Company's assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted. ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. ASC Topic 740, also prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. In addition, ASC Topic 740 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions.      In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 allows for simplification of several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under ASU 2016-09, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. ASU 2016-09 also requires recognition of excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. ASU 2016-09 further permits the withholding of an amount up to employees' maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification. ASU 2016-09 also requires any excess tax benefits be classified along with other income tax cash flows as an operating activity and cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. The Company adopted this standard on January 1, 2017 on a prospective basis. As a result, for the three months ended March 31, 2017, the Company recorded an excess tax benefit of $26.3 thousand within income tax expense on its Condensed Consolidated Statements of Income.</div></div> <div class="MetaData"> Stock-based Compensation      The Company currently has one active stock incentive plan, the 2009 Stock Incentive Plan, as amended and restated (the "2009 Plan"), that provides for stock-based employee compensation. The Company accounts for stock-based compensation in accordance with ASC Topic 718, "Stock Compensation." Compensation expense is recognized on a straight-line basis under the 2009 Plan over the vesting period of the equity awards based on the grant date fair value of the options and restricted stock awards. From October 28, 2009 to December 31, 2016, the Company utilized the Enhanced Hull-White Trinomial Model to value the Company's options. Beginning January 1, 2017, the Company began utilizing the Black-Scholes Option Pricing Model to value the Company's options, as the Company believes it is a more widely accepted and understood valuation model. The determination of the fair value of stock-based payments utilizing the Black-Scholes Model and the Enhanced Hull-White Trinomial Model is affected by the Company's stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividends yield, expected forfeiture rate, expected turn-over rate and the expected exercise multiple.</div> <div class="MetaData"> Diluted Net Income Per Common Share      Diluted net income per common share, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The Company's outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards. <div>     Included in the Company's calculation of diluted earnings per share for the three months ended March 31, 2017 were approximately 470,000 stock options outstanding, of which approximately 96,000 were dilutive. In addition, there were approximately 143,000 restricted stock awards outstanding, 50,000 of which were dilutive for the three months ended March 31, 2017.</div>      Included in the Company's calculation of diluted earnings per share for the three months ended March 31, 2016 were approximately 758,000 stock options outstanding, of which approximately 131,000 were dilutive. In addition, there were approximately 102,000 restricted stock awards outstanding, 24,000 of which were dilutive for the three months ended March 31, 2016.</div> <div class="MetaData"> Estimates      The financial statements are prepared by management in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") and include estimated amounts and certain disclosures based on assumptions about future events. Accordingly, actual results could differ from those estimates.</div> <div class="MetaData"> Fair Value of Financial Instruments      The Company's financial instruments consist of cash, accounts receivable, payables and debt. The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The carrying value of the Company's long-term debt with variable interest rates approximates fair value based on instruments with similar terms.      The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill and indefinite-lived intangible assets and also when determining the fair value of contingent considerations. To determine the fair value in these situations, the Company uses Level 3 inputs, defined as unobservable inputs in which little or no market data exists; therefore requiring an entity to develop its own assumptions, such as discounted cash flows, or if available, what a market participant would pay on the measurement date.      The Company utilizes the income approach to estimate the fair value of its intangible assets derived from acquisitions. At the date of acquisition, a contingent earn-out obligation is recorded at its fair value, which is calculated as the present value of the Company's maximum obligation based on probability-weighted estimates of achievement of performance targets defined in the earn-out agreements. The Company reviews the fair valuation periodically and adjusts the fair value for any changes in the maximum earn-out obligation based on probability-weighted estimates of achievement of certain performance targets defined in the earn-out agreements. In addition, discounted cash flows were used to estimate the fair value of the Company's investment in joint ventures.</div> <div class="MetaData"> Going Concern      In connection with the preparation of the financial statements for the three months ended March 31, 2017, the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity's ability to continue as a going concern within one year after the date of the issuance, or the date of availability, of the financial statements to be issued. The evaluation concluded that there did not appear to be evidence of substantial doubt of the entity's ability to continue as a going concern.</div> <div class="MetaData"> New Accounting Pronouncements      In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP and will be effective for the Company as of January 1, 2018. The standard permits the use of either the retrospective or modified retrospective (cumulative effect) transition method and we have not yet selected which transition method we will apply. The Company's evaluation of ASU 2014-09 is not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause the Company's evaluation to change. The Company has completed an initial review to determine the impact ASU 2014-09 and its subsequent updates through December 31, 2016 will have on its Consolidated Financial Statements or financial statement disclosures upon adoption. Based on the Company's preliminary review, it believes that the timing and measurement of revenue for its customers will be similar to its current revenue recognition. However, this view is preliminary and could change based on the detailed analysis associated with the conversion and implementation phases of the Company's ASU 2014-09 project. The Company will complete its assessment during 2017.      In February 2016, the FASB issued ASU No. 2016-02, "Leases" which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding "right- of-use" assets and is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. For income statement recognition purposes, leases will be classified as either a finance or an operating lease. The Company will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Upon initial evaluation, the Company believes that the new standard will have a material impact on our Consolidated Balance Sheets but it will not affect our liquidity. The Company is continuing to evaluate other potential impacts to its financial statements and accounting systems including whether the Company will need to secure new software to account for the change in accounting for leases.      In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments (Topic 326) Credit Losses." ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective as of January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13.      In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard amends and adjusts how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and will require adoption on a retrospective basis unless impracticable. If impracticable the Company would be required to apply the amendments prospectively as of the earliest date possible. The Company is currently evaluating the impact that ASU 2016-15 will have on its statement of financial position or financial statement disclosures.      In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." The new guidance eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current Step 1). ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company is currently evaluating the provisions of ASU 2017-04 to determine how its goodwill impairment testing will be impacted and whether it may elect to adopt ASU 2017-04 prior to the stated effective date.</div></div>   </div>

158928000

92253000

12000

66663000

164568000

93634000

12000

70922000

42000

68000

9000

954000

<div> 12. Subsequent Events      On April 24, 2017, the Company entered into a definitive securities purchase agreement to acquire Options Services, Inc. d/b/a Options Home Care ("Options Home Care"), a wholly-owned subsidiary of HB Management Group, Inc., for approximately $23.2 million. Options Home Care is a provider of personal care services in more than 20 counties in New Mexico and the acquisition will expand the footprint of the Company's existing operations in the state. The Company is expected to close on the acquisition in the third quarter, pending customary closing conditions.      On May 8, 2017, the Company entered into a new credit facility and credit agreement (the "Credit Agreement") with certain lenders and Capital One, National Association, as a lender and swing lender and as agent for all lenders. This credit facility totals $250.0 million, replaces our previous senior secured credit facility totaling $125.0 million, and terminates our Second Amended and Restated Credit and Guaranty Agreement, dated as of August 11, 2014 with certain lenders and Fifth Third Bank as agent. The new credit facility includes a $125.0 million revolving loan, a $45.0 million term loan and an $80.0 million delayed draw term loan. The maturity of the new credit facility is five years, although the delayed draw term loan is only available until November 8, 2018. Under the terms of an accordion feature of the Credit Agreement, $100.0 million is also available for incremental term loans. Fundings under the delayed draw term loans and the incremental term loans are limited to financing or refinancing Permitted Acquisitions (as defined in the Credit Agreement).      Addus HealthCare is the borrower, with the Company and substantially all of the subsidiaries of the Company as guarantors under the credit facility. The credit facility is secured by a first priority security interest in all of the Company's and the other credit parties' current and future tangible and intangible assets, including the shares of stock of the borrower and subsidiaries.      The availability of additional draws under the revolving credit portion of the Company's credit facility is conditioned, among other things, upon (after giving effect to such draws), the ratio of Consolidated Total Indebtedness (as defined in the Credit Agreement), less subordinated indebtedness, to Consolidated Adjusted EBITDA (as defined in the Credit Agreement) not exceeding 4.25:1.00.      Interest on the Company's credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 1.50% to 2.25% based on the applicable senior leverage ratio (provided that the applicable margin will be 1.50% through approximately October 31, 2017) plus (ii) a base rate equal to the greatest of (a) the rate of interest last quoted by The Wall Street Journal as the "prime rate," (b) the sum of the federal funds rate plus a margin of 0.50% and (c) the sum of the adjusted LIBOR that would be applicable to a loan with an interest period of one month advanced on the applicable day (not to be less than 0.00%) plus a margin of 1.00% or (y) the sum of (i) an applicable margin ranging from 2.50% to 3.25% based on the applicable leverage ratio (provided that the applicable margin will be 2.50% through approximately October 31, 2017) plus (ii) the offered rate per annum for the applicable interest period that appears on Reuters Screen LIBOR01 Page. Swing loans may not be LIBOR loans.      We pay a fee ranging from 0.25% to 0.50% based on the applicable leverage ratio times the unused portion of the revolving portion of the credit facility. (provided that the fee will be 0.25% through approximately October 31, 2017).      The Credit Agreement contains customary affirmative covenants regarding, among other things, the maintenance of records, compliance with laws, maintenance of permits, maintenance of insurance and property and payment of taxes.      The Credit Agreement also contains certain customary financial covenants and negative covenants that, among other things, include a requirement to maintain a minimum fixed charge coverage ratio, a requirement to stay below a maximum senior leverage ratio and a requirement to stay below a maximum permitted amount of capital expenditures, as well as restrictions on guarantees, indebtedness, liens, investments and loans, subject to customary carve outs, a restriction on dividends (provided that Addus Healthcare may make distributions to the Company in an amount that does not exceed $5.0 million in any year absent of an event of default, plus limited exceptions for tax and administrative distributions), a restriction on the ability to consummate acquisitions in amounts exceeding $60.0 million individually and $80.0 million in the aggregate each year (in each case, without the consent of the lenders), restrictions on mergers, dispositions of assets, and affiliate transactions, and restrictions on fundamental changes and lines of business.      The Credit Agreement is attached hereto as Exhibit 10.3 and is incorporated herein by reference. The foregoing summary of the Credit Agreement does not purport to be a complete statement of the parties' rights and obligations under the Credit Agreement, and is qualified in its entirety by reference to Exhibit 10.3. </div>

131000

24000

96000

50000

11178000

11581000

11022000

11434000

102000

143000

12823000

12464000

As a condition of the sale of substantially all of the assets used in the Company's home health business to subsidiaries of LHC Group, Inc. ("LHCG") in February 2013, the Company is responsible for any adjustments to Medicare and Medicaid billings prior to the closing. In connection with an internal evaluation of the Company's billing processes, the Company discovered documentation errors in a number of claims that it had submitted to Medicare. Consistent with applicable law, the Company voluntarily remitted $1.8 million to the U.S. government in March 2014. As of March 31, 2017, the Company, using its best judgment, has estimated a total of $0.4 million for billing adjustments for 2013, 2012 and 2011 services which may be subject to Medicare audits. For the years ended December 31, 2016 and 2015, the Company reduced the indemnification reserve accrual by the amounts accrued for periods no longer subject to Medicare audits of $0.2 million and $0.4 million, respectively. This amount is reflected as a reduction in general and administrative expense of discontinued operations. Accrued severance represents amounts payable to terminated employees with employment and/or separation agreements with the Company. The Company provides health insurance coverage to qualified union employees providing personal care services in Illinois through a Taft-Hartley multi-employer health and welfare plan under Section 302(c)(5) of the Labor Management Relations Act of 1947. The Company's insurance contributions equal the amount reimbursed by the State of Illinois. Contributions are due within five business days from the date the funds are received from the State. Amounts due of $0.3 million and $2.2 million for health insurance reimbursements and contributions were reflected in prepaid insurance and accrued insurance as of March 31, 2017 and December 31, 2016, respectively. Amount necessary to reduce net minimum lease payments to present value calculated at the Company's incremental borrowing rate at lease inception. Included in the balance sheet as $1.5 million of the current portion of long-term debt, net of debt issuance costs and $0.6 million of the long-term debt, less current portion, net of debt issuance costs. Accrued restructuring includes reserves for lease commitments related to the closure of three adult day services centers in Illinois during the third quarter of 2016 and unused contact center office space.