PR Newswire | Feb 25, 2021 04:06PM EST

02/25 15:05 CST

Addus HomeCare Announces Fourth-Quarter Financial ResultsRevenues of $196.0 MillionNet Income of $8.4 Million, or $0.53 per Diluted ShareAdjusted Earnings per Diluted Share up 12.3% to $0.82Adjusted EBITDA Increases 11.6% to $20.9 Million FRISCO, Texas, Feb. 25, 2021

FRISCO, Texas, Feb. 25, 2021 /PRNewswire/ -- Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced its financial results for the fourth quarter and year ended December 31, 2020.

Net service revenues increased 1.9% for the fourth quarter to $196.0 million from $192.4 million for the fourth quarter of 2019. Net income was $8.4 million for the fourth quarter of 2020, compared with $10.7 million for the fourth quarter last year, while net income per diluted share was $0.53 compared with $0.68 for the same period a year ago. Adjusted EBITDA increased 11.6% to $20.9 million for the fourth quarter of 2020 from $18.8 million for the fourth quarter of 2019. Adjusted net income per diluted share was $0.82 for the fourth quarter of 2020 compared with $0.73 for the fourth quarter of 2019. (See page 8 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)

Adjusted net income per diluted share for the fourth quarter of 2020 excludes COVID-19 expenses of $0.01, M&A expenses of $0.15, restructure and other non-recurring costs of $0.03, and stock-based compensation expense of $0.10. Adjusted net income per diluted share for the fourth quarter of 2019 excluded the favorable impact of the retroactive Illinois rate increase of $0.12, M&A expenses of $0.08, restructure and other non-recurring costs of $0.01 and stock-based compensation expense of $0.08.

For 2020, net service revenues increased 17.9% to $764.8 million from $648.8 million for 2019. Net income from continuing operations increased 28.4% to $33.1 million for 2020 compared with $25.8 million for the prior year, while net income from continuing operations per diluted share increased to $2.08 from $1.81. Adjusted EBITDA was $76.9 million for 2020, an increase of 31.0% compared with $58.7 million for 2019. Adjusted net income from continuing operations per diluted share grew 23.2% to $3.08 for 2020 from $2.50 for 2019.

Adjusted net income per diluted share for the full year 2020 excludes loss on sale of assets of $0.01, COVID-19 expenses of $0.07, M&A expenses of $0.34, restructure and other non-recurring costs of $0.28, and stock-based compensation expense of $0.30. Adjusted net income per diluted share for the full year 2019 excluded interest income from Illinois of $0.03, M&A expenses of $0.26, restructure and other non-recurring costs of $0.14, and stock-based compensation expense of $0.32.

Commenting on the results, Dirk Allison, President and Chief Executive Officer, said, "We are pleased to report solid financial and operating results for the fourth quarter and 2020, capping off another year of impressive growth and progress for Addus. These results were achieved despite some extraordinary challenges, including the substantial surge of COVID-19 cases during November and December. We commend the heroic work and dedication of our team of frontline caregivers and support staff who continue our mission to provide essential home care services and serve the needs of patients who count on Addus for safe and cost-effective care. As conditions surrounding the pandemic begin to improve and vaccinations become more widely distributed across the country, we are confident that Addus is well positioned to meet expected demand in a less restrictive and more favorable environment."

At December 31, 2020, the Company had cash of $145.1 million and bank debt of $196.6 million, with availability under its revolving credit facility of $112.6 million. Net cash provided by operating activities was $36.1 million for the fourth quarter of 2020 and $109.4 million for 2020, the highest annual level in Addus history.

Mr. Allison added, "In addition to organic growth, we continued to pursue strategic acquisition opportunities in 2020. Despite the pandemic, we were able to complete four acquisitions for the year with a total of approximately $84 million in annualized revenue. The integration process has gone well for these transactions, and we are excited to have these new providers and caregivers join the Addus family. We intend to continue pursuing aggressive acquisition objectives in 2021 with a strong pipeline in each of our personal care, hospice, and home health segments. Our capital structure supports this important aspect of our growth strategy and allows us to take advantage of future acquisition opportunities as they occur.

"Looking ahead to 2021, we are confident that we are well-positioned to achieve further profitable growth both organically and from acquisitions. We remain focused on our mission to provide home care services that allow individuals to remain in the safety and comfort of their preferred home setting. We are proud of our ability to execute our strategy this past year, and we believe we have an exceptional team in place that provides a stable foundation for continued success as a leading provider of home care services. Addus offers a strong value proposition, and we look forward to extending our market reach while continuing to deliver value to our shareholders," Mr. Allison concluded.

Non-GAAP Financial Measures

The information provided in this release includes adjusted net income per diluted share, adjusted EBITDA, and adjusted net service revenues, which are non-GAAP financial measures. The Company defines adjusted net income as net income before the net-of-tax amounts of interest income from the State of Illinois, COVID-19 adjustments for temporary rate increases and expenses, M&A expenses, stock-based compensation expense, restructure charges, severance and other costs and loss on the sale of assets associated with Hospice Partners of Kansas. The Company defines adjusted EBITDA as net income before interest expense, interest income, other non-operating income, COVID-19 adjustments for temporary rate increases and expenses, taxes, depreciation, amortization, interest income from the State of Illinois, M&A expenses, stock-based compensation expense, restructure charges, severance and other costs and loss on the sale of assets associated with Hospice Partners of Kansas. The Company defines adjusted diluted earnings per share as earnings per share adjusted for interest income from the State of Illinois, COVID-19 expenses, M&A expenses, stock compensation expense and restructure expense, severance and other costs and loss on the sale of assets associated with Hospice Partners of Kansas. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted net income to net income, a reconciliation of adjusted EBITDA to net income and a reconciliation of adjusted diluted earnings per share to earnings per share, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income, adjusted EBITDA and adjusted diluted earnings per share are useful to investors, management, and others in evaluating the Company's operating performance, to provide investors with insight and consistency in the Company's financial reporting and to present a basis for comparison of the Company's business operations among periods, and to facilitate comparison with the results of the Company's peers. With respect to COVID-19 expenses, the Company views these expenses as unrelated to the Company's long-term performance since they are directly related to the sudden onset COVID-19 pandemic. With respect to COVID-19 temporary rate increases, the Company similarly views these as unrelated to the Company's long-term performance and has adjusted for those increases, net of the amount required to be passed through to caregivers as a condition of the increase.

Conference Call

Addus will host a conference call on Friday, February 26, 2021, beginning at 9:00 a.m. Eastern time. The toll-free dial-in number is (877) 930-8289 (international dial-in number is (253) 336-8714), pass code 9398711. A telephonic replay of the conference call will be available through midnight March 5, 2021, by dialing (855) 859-2056 (international dial-in number is (404)-537-3406) and entering pass code 9398711. A live broadcast of Addus HomeCare's conference call will be available under the Investor Relations section of the Company's website: www.addus.com. An online replay will also be available on the Company's website for one month, beginning approximately two hours following the conclusion of the live broadcast.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "preliminary," "continue," "expect," and similar expressions. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare's relationships with referral sources, increased competition for Addus HomeCare's services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize, the anticipated impact to our business operations, reimbursements and patient population due to the recent COVID-19 global pandemic, caused by a novel strain of the coronavirus (COVID-19), and other risks set forth in the Risk Factors section in Addus HomeCare's Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 10, 2020, which is available at www.sec.gov. The financial information described herein and the periods to which they relate are preliminary estimates that are subject to change and finalization. There is no assurance that the final amounts and adjustments will not differ materially from the amounts described above, or that additional adjustments will not be identified, the impact of which may be material. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).

About Addus HomeCare

Addus HomeCare is a provider of home care services that primarily include personal care services that assist with activities of daily living, as well as hospice and home health services. Addus HomeCare's consumers are primarily persons who, without these services, are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus HomeCare's payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers, and private individuals. Addus HomeCare currently provides home care services to approximately 44,000 consumers through 212 locations across 22 states. For more information, please visit www.addus.com.

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(amounts and shares in thousands, except per share data)

(Unaudited)

Income Statement Information: For the Three Months For the Twelve Months Ended December 31, Ended December 31,

2020 2019 2020 2019

Net service revenues $ 195,996 $ 192,376 $ 764,775 $ 648,791

Cost of service revenues 136,892 134,834 538,538 469,553

Gross profit 59,104 57,542 226,237 179,238

30.2% 29.9% 29.6% 27.6%

General and administrative expenses 44,209 39,803 169,679 133,912

Depreciation and amortization 3,179 3,209 12,051 10,574

Total operating expenses 47,388 43,012 181,730 144,486

Operating income from continuing operations 11,716 14,530 44,507 34,752

Total interest expense, net 832 514 2,565 1,582

Income before income taxes 10,884 14,016 41,942 33,170

Income tax expense 2,435 3,279 8,809 7,359

Net income from continuing operations 8,449 10,737 33,133 25,811

Discontinued operations:

Loss from Home Health Business, net of tax - - - (574)

Earnings from discontinued operations - - - (574)

Net income $ 8,449 $ 10,737 $ 33,133 $ 25,237

Net income (loss) per diluted share:

Continuing Operations $ 0.53 $ 0.68 $ 2.08 $ 1.81

Discontinued Operations $ - $ - $ - $ (0.04)

Weighted average number of common shares outstanding:

Diluted 16,013 15,881 15,956 14,248

Cash Flow Information: For the Three Months For the Twelve Months Ended December 31, Ended December,

2020 2019 2020 2019

Net cash provided by operating activities $ 36,112 $ 3,935 $ 109,411 $ 12,019

Net cash (used in) investing activities (196,729) (132,396) (214,236) (188,697)

Net cash provided by financing activities 135,364 566 138,189 217,986

Net change in cash (25,253) (127,895) 33,364 41,308

Cash at the beginning of the period 170,331 239,609 111,714 70,406

Cash at the end of the period $ 145,078 $ 111,714 $ 145,078 $ 111,714

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

December 31,

2020 2019

Assets

Current assets

Cash $ 145,078 $ 111,714

Accounts receivable, net 132,650 149,680

Prepaid expenses and other current assets 9,969 7,993

Total current assets 287,697 269,387

Property and equipment, net 19,749 12,156

Other assets

Goodwill 469,072 275,368

Intangible assets, net 71,549 57,079

Deferred tax assets, net 6,524 1,647

Operating lease assets 37,991 21,111

Total other assets 585,136 355,205

Total assets $ 892,582 $ 636,748

Liabilities and stockholders' equity

Current liabilities

Accounts payable $ 23,705 $ 19,641

Accrued payroll 35,815 30,587

Accrued expenses 37,564 22,429

Government stimulus advances 32,087 -

Accrued workers compensation 13,759 14,143

Current portion of long-term debt, net of debt issuance costs 971 728

Total current liabilities 143,901 87,528

Long-term debt, less current portion, net of debt issuance costs 193,901 59,164

Long-term lease liability, less current portion 35,516 14,301

Other long-term liabilities 588 163

Total long-term liabilities 230,005 73,628

Total liabilities 373,906 161,156

Total stockholders' equity 518,676 475,592

Total liabilities and stockholders' equity $ 892,582 $ 636,748

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Net Service Revenues by Segment

(Amounts in thousands)

(Unaudited)

For the Three Months For the Twelve Months Ended December 31, Ended December 31,

2020 2019 2020 2019

Personal Care $ 164,384 $ 161,604 $ 647,233 $ 580,728

Hospice 27,574 26,373 101,297 53,601

Home Health 4,038 4,399 16,245 14,462

Total Revenue $ 195,996 $ 192,376 $ 764,775 $ 648,791

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Key Statistical and Financial Data (Unaudited)

For the Three Months For the Twelve Months Ended December 31, Ended December 31,

2020 2019 2020 2019

General

Personal Care

States served at period end - - 22 24

Locations at period end - - 170 152

Average billable census - same store 37,665 39,179 37,641 37,892

Average billable census - acquisitions (1) 1,538 - 1,558 1,296

Average billable census total 39,203 39,179 39,199 39,188

Billable hours (in thousands) 7,820 7,814 30,645 29,732

Average billable hours per census per month 66.0 66.0 64.7 62.7

Billable hours per business day 118,490 118,393 116,967 113,915

Revenues per billable hour $ 20.98 $ 20.10 $ 21.07 $ 19.50

Organic growth

- Revenue 2.6 % 13.6 % 5.9 % 8.2 %

Hospice

Locations served at period end - - 34 35

Admissions 1,983 1,547 6,376 3,095

Average daily census 2,492 1,841 2,619 1,783

Average length of stay 108.3 92.6 104.9 106.8

Patient days 174,407 170,336 657,172 349,866

Revenue per patient day $ 158.10 $ 154.83 $ 154.14 $ 153.20

Organic growth

- Revenue (10.6) % 20.4 % (5.3) % - %

- Average daily census (13.5) % 22.7 % 1.2 % - %

Home Health

Locations served at period end - - 10 11

New Admissions 1,088 1,022 4,122 3,347

Recertifications 572 709 2,578 2,658

Total Volume 1,660 1,731 6,700 6,005

Visits 26,890 33,675 118,470 108,863

Organic growth

- Revenue (8.2) % 12.3 % (3.0) % - %

- Total volume (4.1) % 7.0 % 9.1 % - %

Percentage of Revenues by Payor:

Personal Care

State, local and other governmental programs 49.8 % 50.8 % 50.2 % 52.2 %

Managed care organizations 45.0 43.0 44.3 41.3

Private duty 3.0 3.6 3.2 3.7

Commercial 1.5 1.6 1.5 1.6

Other 0.7 % 1.0 % 0.8 % 1.2 %

Hospice

Medicare 93.2 % 92.6 % 92.9 % 92.6 %

Managed care organizations 4.4 5.1 4.9 5.2

Other 2.4 % 2.3 % 2.2 % 2.2 %

Home Health

Medicare 76.8 % 74.4 % 78.6 % 77.6 %

Managed care organizations 21.3 24.3 19.6 20.3

Other 1.9 % 1.3 % 1.8 % 2.1 %

(1) The average billable census in acquisitions of 1,199 for the three monthsended December 31, 2019, was reclassified to average billable census - samestores for comparability purposes. The average billable census for the threeand twelve months ended December 31, 2020, was prorated for the date of theacquisition.

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Reconciliation of Non-GAAP Financial Measures

(Amounts in thousands, except per share data)

(Unaudited)

For the Three Months For the Twelve Months Ended December 31, Ended December 31,

2020 2019 2020 2019

Reconciliation of Adjusted EBITDA to Net Income: (1)

Net income $ 8,449 $ 10,737 $ 33,133 $ 25,237

Less: Loss from discontinued operations, net of tax - - - 574

Net income from continuing operations 8,449 10,737 33,133 25,811

Interest expense, net 832 591 2,565 2,233

Interest income from Illinois - (77) - (651)

Impact of retroactive Illinois rate increase - (2,485) - -

Loss on sale of assets 13 - 294 -

Secondary offering costs - - - 127

Income tax expense 2,435 3,279 8,809 7,359

Depreciation and amortization 3,179 3,209 12,051 10,574

COVID-19 expense, net 252 - 1,480 -

M&A expenses 3,074 1,593 6,956 4,775

Stock-based compensation expense 2,017 1,581 6,005 5,766

Restructure and other non-recurring costs 694 339 5,614 2,703

Adjusted EBITDA $ 20,945 $ 18,767 $ 76,907 $ 58,697

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

Net income $ 8,449 $ 10,737 $ 33,133 $ 25,237

Loss from discontinued operations, net of tax - - - 574

Interest income from Illinois, net of tax - (59) - (507)

Impact of retroactive Illinois rate increase, net of tax - (1,903) - -

Loss on sale of assets, net of tax 10 - 232 -

COVID-19 expense, net of tax 196 - 1,169 -

M&A expenses, net of tax 2,365 1,220 5,456 3,715

Stock-based compensation expense, net of tax 1,551 1,210 4,728 4,489

Restructuring and other non-recurring costs, net of tax 540 260 4,421 2,202

Adjusted Net Income $ 13,111 $ 11,465 $ 49,139 $ 35,710

Reconciliation of Net Income per Diluted Share to Adjusted Net Income perDiluted Share: (3)

Net income per diluted share $ 0.53 $ 0.68 $ 2.08 $ 1.81

Interest income from Illinois per diluted share - - - (0.03)

Impact of retroactive Illinois rate increase per diluted share - (0.12) - -

Loss on sale of assets per diluted share - - 0.01 -

COVID-19 expense per diluted share 0.01 - 0.07 -

M&A expenses per diluted share 0.15 0.08 0.34 0.26

Restructure and other non-recurring costs per diluted share 0.03 0.01 0.28 0.14

Stock-based compensation expense per diluted share 0.10 0.08 0.30 0.32

Adjusted net income per diluted share $ 0.82 $ 0.73 $ 3.08 $ 2.50

(1) We define Adjusted EBITDA as earnings before interest expense, interestincome from the state of Illinois, other non-operating income, taxes,depreciation, amortization, COVID expenses, M&A expenses, stock-basedcompensation expense, restructure expenses, other non-recurring costs and losson the sale of assets associated with Hospice Partners of Kansas. AdjustedEBITDA is a performance measure used by management that is not calculated inaccordance with generally accepted accounting principles in the United States(GAAP). It should not be considered in isolation or as a substitute for netincome, operating income or any other measure of financial performancecalculated in accordance with GAAP.

(2) We define Adjusted Net Income as net income before interest income from thestate of Illinois, COVID expenses, M&A expenses, stock-based compensationexpense, restructure expenses, other non-recurring costs and loss on the saleof assets associated with Hospice Partners of Kansas. Adjusted Net Income is aperformance measure used by management that is not calculated in accordancewith generally accepted accounting principles in the United States (GAAP). Itshould not be considered in isolation or as a substitute for net income,operating income or any other measure of financial performance calculated inaccordance with GAAP.

(3) We define Adjusted diluted earnings per share as earnings per share,adjusted for interest income from the State of Illinois, COVID expenses, M&Aexpenses, stock compensation expense and restructure expense, othernon-recurring costs and loss on the sale of assets associated with HospicePartners of Kansas. Adjusted diluted earnings per share is a performancemeasure used by management that is not calculated in accordance with generallyaccepted accounting principles in the United States (GAAP). It should not beconsidered in isolation or as a substitute for net income, operating income orany other measure of financial performance calculated in accordance with GAAP.

View original content: http://www.prnewswire.com/news-releases/addus-homecare-announces-fourth-quarter-financial-results-301236033.html

SOURCE Addus HomeCare Corporation