Business Wire | May 3, 2021 04:06PM EDT

Addus HomeCare Announces First-Quarter 2021 Financial Results

May 03, 2021

FRISCO, Texas--(BUSINESS WIRE)--May 03, 2021--Addus HomeCare Corporation (NASDAQ: ADUS), a provider of home care services, today announced financial results for the first quarter ended March 31, 2021.

Net service revenues were $205.3 million for the first quarter of 2021, a 7.9% increase compared with $190.2 million for the first quarter of 2020. Net income was $8.9 million for the first quarter of 2021, compared with $8.7 million for the first quarter last year, while net income per diluted share was $0.55 compared with $0.54 for the first quarter of 2020. Adjusted net income per diluted share was $0.74 for the first quarter of 2021 compared with $0.77 for the first quarter of 2020.

Adjusted net income per diluted share for the first quarter of 2021 excludes acquisition and de novo expenses of $0.08, restructuring and other costs of $0.02, and stock-based compensation expense of $0.12, offset by the exclusion of a positive impact of net COVID-19 expenses of $0.03. Adjusted EBITDA increased to $19.3 million for the first quarter of 2021 from $17.7 million in the first quarter of 2020, an 8.9% increase. (See page 8 for a reconciliation of all non-GAAP and GAAP financial measures in this news release.)

As of March 31, 2021, the Company had cash of $125.5 million and bank debt of $196.3 million, while availability under its revolving credit facility was $112.8 million. Net cash used in operating activities was $18.4 million for the first quarter of 2021, inclusive of the return of $10.8 million in CARES Act funding received as part of the Queen City acquisition.

Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare, commented, "We are particularly pleased to report first quarter financial and operating results that compare favorably to the first quarter of 2020, our best ever first quarter and the last quarter not to be significantly affected by the COVID-19 pandemic. First quarter 2021 results reflect an improving public health environment, and we anticipate that the COVID-19 pandemic will continue to steadily decrease in severity over the next several quarters. While we were impacted by both the pandemic and the historic winter storm that interrupted business throughout many of our significant markets, we nevertheless saw overall revenue growth across each of our operating segments, including our acquired businesses, generating solid comparisons to our record 2020 first quarter and providing a strong start to 2021.

"We continue to see improving organic growth trends ahead of pre-pandemic levels in both personal care and home health. With the accelerating growth in vaccinations across the country and increasing facility access, we expect that we will begin to see a return to higher volume trends in our hospice business. Ultimately, we believe Addus is well positioned to meet expected demand in all our operating segments as overall conditions improve and more restrictions are lifted.

"We also expect to benefit from the statewide Illinois rate increase that became effective April 1, 2021 and will help offset the most recent increase in the Chicago minimum wage. Illinois is an important market for Addus, and we were pleased to see the implementation of this rate increase following a previous delay."

Mr. Allison added, "Despite COVID-19 challenges, we were able to complete three acquisitions in the second half of last year, including our acquisition of Queen City Hospice on December 1, 2020. Integration of these transactions is largely complete, and our average daily census at Queen City has seen positive growth since acquisition. We continue to have a solid pipeline of potential acquisitions that we will aggressively pursue, primarily focused on transactions that allow us to operate each of our hospice, home health and personal care segments in strategic markets. We have the financial strength necessary to complete acquisitions that meet our objectives and we are confident that we can continue our record of delivering value from acquired operations."

Non-GAAP Financial Measures

The information provided in this release includes adjusted net income, adjusted EBITDA and adjusted net income per diluted share, which are non-GAAP financial measures. The Company defines adjusted net income as net income before the net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. The Company defines adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. The Company defines adjusted diluted earnings per share as earnings per share, adjusted for net COVID-19 expenses, acquisition and de novo expenses, stock compensation expense, restructure expenses, and other costs. The Company defines adjusted net service revenues as revenue adjusted for the closure of certain sites. The Company has provided, in the financial statement tables included in this press release, a reconciliation of adjusted net income to net income, a reconciliation of adjusted EBITDA to net income, a reconciliation of adjusted diluted earnings per share to earnings per share, and a reconciliation of adjusted net service revenues to net service revenues, in each case, the most directly comparable GAAP measure. Management believes that adjusted net income, adjusted EBITDA, adjusted diluted earnings per share, and adjusted net service revenues are useful to investors, management and others in evaluating the Company's operating performance, to provide investors with insight and consistency in the Company's financial reporting and to present a basis for comparison of the Company's business operations among periods, and to facilitate comparison with the results of the Company's peers. With respect to net COVID-19 expenses, the Company views these expenses as unrelated to the Company's long-term performance, since they are directly related to the sudden onset COVID-19 pandemic.

Conference Call

Addus will host a conference call on Tuesday, May 4, 2021, beginning at 9:00 a.m. Eastern time. The toll-free dial-in number is (877) 930-8289 (international dial-in number is (253) 336-8714), pass code 6176200. A telephonic replay of the conference call will be available through midnight on May 11, 2021, by dialing (855) 859-2056 (international dial-in number is (404) 537-3406) and entering pass code 6176200. A live broadcast of Addus HomeCare's conference call will be available under the Investor Relations section of the Company's website: www.addus.com. An online replay will also be available on the Company's website for one month, beginning approximately two hours following the conclusion of the live broadcast.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "preliminary," "continue," "expect," and similar expressions. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare's relationships with referral sources, increased competition for Addus HomeCare's services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize, the anticipated impact to our business operations, reimbursements and patient population due to the recent COVID-19 global pandemic, caused by a novel strain of the coronavirus (COVID-19), and other risks set forth in the Risk Factors section in Addus HomeCare's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2021, which is available at www.sec.gov. The financial information described herein and the periods to which they relate are preliminary estimates that are subject to change and finalization. There is no assurance that the final amounts and adjustments will not differ materially from the amounts described above, or that additional adjustments will not be identified, the impact of which may be material. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized. (Unaudited tables and notes follow).

About Addus HomeCare

Addus HomeCare is a provider of home care services that primarily include personal care services that assist with activities of daily living, as well as hospice and home health services. Addus HomeCare's consumers are primarily persons who, without these services, are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus HomeCare's payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. Addus HomeCare currently provides home care services to approximately 44,000 consumers through 208 locations across 22 states. For more information, please visit www.addus.com.

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESCondensed Consolidated Statements of Income(amounts and shares in thousands, except per share data)(Unaudited) For the Three Months Ended MarchIncome Statement Information: 31,

2021 2020

Net service revenues $ 205,302 $ 190,216

Cost of service revenues 144,105 134,381

Gross profit 61,197 55,835

29.8 % 29.4 %

General and administrative expenses 45,426 42,287

Depreciation and amortization 3,601 2,887

Total operating expenses 49,027 45,174

Operating income from continuing operations 12,170 10,661

Total interest expense, net 1,194 574

Income before income taxes 10,976 10,087

Income tax expense 2,082 1,429

Net income $ 8,894 $ 8,658

Net income per diluted share: $ 0.55 $ 0.54

Weighted average number of common sharesoutstanding:Diluted 16,069 15,907

For the Three Months Ended MarchCash Flow Information: 31,

2021 2020

Net cash (used in) provided by operating $ (18,366 ) $ 20,442 activitiesNet cash (used in) investing activities (1,021 ) (2,834 )

Net cash (used in) provided by financing (144 ) 1,141 activities Net change in cash (19,531 ) 18,749

Cash at the beginning of the period 145,078 111,714

Cash at the end of the period $ 125,547 $ 130,463

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESCondensed Consolidated Balance Sheets(Amounts in thousands)(Unaudited)March 31,

2021

2020

AssetsCurrent assetsCash$

125,547

$

130,463

Accounts receivable, net138,806

141,083

Prepaid expenses and other current assets10,787

6,505

Total current assets275,140

278,051

Property and equipment, net19,322

13,791

Other assetsGoodwill469,036

275,364

Intangible assets, net69,395

55,304

Deferred tax assets, net6,359

1,606

Operating lease assets38,325

20,703

Total other assets583,115

352,977

Total assets$

877,577

$

644,819

Liabilities and stockholders' equityCurrent liabilitiesAccounts payable$

23,459

$

17,561

Accrued payroll20,255

29,476

Accrued expenses38,654

22,116

Government stimulus advance20,368

-

Accrued workers compensation14,380

14,497

Current portion of long-term debt972

956

Total current liabilities118,088

84,606

Long-term debt, less current portion, net of debt issuance costs193,839

59,112

Long-term operating lease liabilities, less current portion35,623

13,638

Other long-term liabilities117

655

Total long-term liabilities229,579

73,405

Total liabilities347,667

158,011

Total stockholders' equity529,910

486,808

Total liabilities and stockholders' equity$

877,577

$

644,819

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESCondensed Consolidated Balance Sheets(Amounts in thousands)(Unaudited) March 31,

2021 2020

Assets Current assetsCash $ 125,547 $ 130,463

Accounts receivable, net 138,806 141,083

Prepaid expenses and other current assets 10,787 6,505

Total current assets 275,140 278,051

Property and equipment, net 19,322 13,791

Other assetsGoodwill 469,036 275,364

Intangible assets, net 69,395 55,304

Deferred tax assets, net 6,359 1,606

Operating lease assets 38,325 20,703

Total other assets 583,115 352,977

Total assets $ 877,577 $ 644,819

Liabilities and stockholders' equity Current liabilitiesAccounts payable $ 23,459 $ 17,561

Accrued payroll 20,255 29,476

Accrued expenses 38,654 22,116

Government stimulus advance 20,368 -

Accrued workers compensation 14,380 14,497

Current portion of long-term debt 972 956

Total current liabilities 118,088 84,606

Long-term debt, less current portion, net of debt 193,839 59,112issuance costsLong-term operating lease liabilities, less current 35,623 13,638portionOther long-term liabilities 117 655

Total long-term liabilities 229,579 73,405

Total liabilities 347,667 158,011

Total stockholders' equity 529,910 486,808

Total liabilities and stockholders' equity $ 877,577 $ 644,819

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESNet Service Revenues by Segment(Amounts in thousands)(Unaudited)For the Three Months Ended March 31,

2021

2020

Personal Care$

164,868

$

160,665

Hospice36,094

25,212

Home Health4,340

4,339

Total Revenue$

205,302

$

190,216

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESNet Service Revenues by Segment(Amounts in thousands)(Unaudited) For the Three Months Ended March 31,

2021 2020

Personal Care $ 164,868 $ 160,665

Hospice 36,094 25,212

Home Health 4,340 4,339

Total Revenue $ 205,302 $ 190,216

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESKey Statistical and Financial Data (Unaudited)For the Three Months

Ended March 31,

2021

2020

Personal CareStates served at period end21

24

Locations served at period end164

151

Average billable census - same store36,788

39,170

Average billable census - acquisitions (1)1,539

-

Average billable census total (2)38,327

39,170

Billable hours (in thousands)7,567

7,674

Average billable hours per census per month65.2

64.9

Billable hours per business day118,237

118,054

Revenues per billable hour$

21.75

$

20.97

Organic growth- Revenue2.4

%

14.0

%

HospiceLocations served at period end34

34

Admissions2,394

1,655

Average daily census2,400

1,863

Average discharge length of stay101.3

99.1

Patient days216,007

169,512

Revenue per patient day$

167.09

$

150.49

Organic growth- Revenue(8.4

)%

12.1

%

- Average daily census(20.2

)%

14.1

%

Home HealthLocations served at period end10

10

New Admissions1,168

1,022

Recertifications657

710

Total Volume1,825

1,732

Visits27,665

33,710

Organic growth- Revenue0.0

%

19.5

%

- Total volume5.4

%

6.6

%

Percentage of Revenues by Payor:Personal CareState, local and other governmental programs49.0

%

49.4

%

Managed care organizations45.8

44.9

Private duty3.0

3.3

Commercial1.4

1.6

Other0.8

%

0.8

%

HospiceMedicare94.2

%

92.1

%

Managed care organizations4.1

5.5

Other1.7

%

2.4

%

Home HealthMedicare80.7

%

80.0

%

Managed care organizations18.4

18.6

Other0.9

%

1.4

%

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESKey Statistical and Financial Data (Unaudited) For the Three Months

Ended March 31,

2021 2020

Personal CareStates served at period end 21 24

Locations served at period end 164 151

Average billable census - same store 36,788 39,170

Average billable census - acquisitions (1) 1,539 -

Average billable census total (2) 38,327 39,170

Billable hours (in thousands) 7,567 7,674

Average billable hours per census per month 65.2 64.9

Billable hours per business day 118,237 118,054

Revenues per billable hour $ 21.75 $ 20.97

Organic growth- Revenue 2.4 % 14.0 %

HospiceLocations served at period end 34 34

Admissions 2,394 1,655

Average daily census 2,400 1,863

Average discharge length of stay 101.3 99.1

Patient days 216,007 169,512

Revenue per patient day $ 167.09 $ 150.49

Organic growth- Revenue (8.4 )% 12.1 %

- Average daily census (20.2 )% 14.1 %

Home HealthLocations served at period end 10 10

New Admissions 1,168 1,022

Recertifications 657 710

Total Volume 1,825 1,732

Visits 27,665 33,710

Organic growth- Revenue 0.0 % 19.5 %

- Total volume 5.4 % 6.6 %

Percentage of Revenues by Payor:Personal CareState, local and other governmental programs 49.0 % 49.4 %

Managed care organizations 45.8 44.9

Private duty 3.0 3.3

Commercial 1.4 1.6

Other 0.8 % 0.8 %

HospiceMedicare 94.2 % 92.1 %

Managed care organizations 4.1 5.5

Other 1.7 % 2.4 %

Home HealthMedicare 80.7 % 80.0 %

Managed care organizations 18.4 18.6

Other 0.9 % 1.4 %

(1) The average billable census in acquisitions of 993 for the three ended March 31, 2020, was reclassified to average billable census - same stores for comparability purposes. The average billable census for the three months ended March 31, 2021 was prorated for the date of the acquisition.(2) Exited sites would have reduced same store census for the three months ended March 31, 2020 by 696. (1) The average billable census in acquisitions of 993 for the three endedMarch 31, 2020, was reclassified to average billable census - same stores forcomparability purposes. The average billable census for the three months endedMarch 31, 2021 was prorated for the date of the acquisition. (2) Exited sites would have reduced same store census for the three monthsended March 31, 2020 by 696.ADDUS HOMECARE CORPORATION AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Amounts in thousands, except per share data)(Unaudited)For the Three Months

Ended March 31,

2021

2020

Reconciliation of Adjusted EBITDA to Net Income: (1)Net income$

8,894

$

8,658

Interest expense, net1,194

574

Income tax expense2,082

1,429

Depreciation and amortization3,601

2,887

COVID-19 expense, net(591

)

263

Acquisition and de novo expenses1,475

1,634

Stock-based compensation expense2,239

1,407

Restructuring and other costs402

873

Adjusted EBITDA$

19,296

$

17,725

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

8,894

$

8,658

COVID-19 expense, net of tax(479

)

227

Acquisition and de novo expenses, net of tax1,352

1,417

Stock-based compensation expense, net of tax1,814

1,220

Restructuring and other costs, net of tax326

758

Adjusted Net Income11,907

12,280

Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings per Share: (3)Diluted earnings per share$

0.55

$

0.54

COVID-19 expense, net per diluted share(0.03

)

0.01

Acquisition and de novo expenses, per diluted share0.08

0.09

Restructuring and other costs per diluted share0.02

0.05

Stock-based compensation expense per diluted share0.12

0.08

Adjusted net income per diluted share$

0.74

$

0.77

Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (4)Net service revenues$

205,302

$

190,216

Revenue associated with the closure of certain sites2

(2,078

)

Adjusted net service revenues$

205,304

$

188,138

ADDUS HOMECARE CORPORATION AND SUBSIDIARIESReconciliation of Non-GAAP Financial Measures(Amounts in thousands, except per share data)(Unaudited) For the Three Months

Ended March 31,

2021 2020

Reconciliation of Adjusted EBITDA to Net Income: (1) Net income $ 8,894 $ 8,658

Interest expense, net 1,194 574

Income tax expense 2,082 1,429

Depreciation and amortization 3,601 2,887

COVID-19 expense, net (591 ) 263

Acquisition and de novo expenses 1,475 1,634

Stock-based compensation expense 2,239 1,407

Restructuring and other costs 402 873

Adjusted EBITDA $ 19,296 $ 17,725

Reconciliation of Adjusted Net Income to Net Income:(2) Net income $ 8,894 $ 8,658

COVID-19 expense, net of tax (479 ) 227

Acquisition and de novo expenses, net of tax 1,352 1,417

Stock-based compensation expense, net of tax 1,814 1,220

Restructuring and other costs, net of tax 326 758

Adjusted Net Income 11,907 12,280

Reconciliation of Diluted Earnings per Share to Adjusted Diluted Earnings perShare: (3) Diluted earnings per share $ 0.55 $ 0.54

COVID-19 expense, net per diluted share (0.03 ) 0.01

Acquisition and de novo expenses, per diluted share 0.08 0.09

Restructuring and other costs per diluted share 0.02 0.05

Stock-based compensation expense per diluted share 0.12 0.08

Adjusted net income per diluted share $ 0.74 $ 0.77

Reconciliation of Net Service Revenues to Adjusted Net Service Revenues: (4) Net service revenues $ 205,302 $ 190,216

Revenue associated with the closure of certain sites 2 (2,078 )

Adjusted net service revenues $ 205,304 $ 188,138

(1) We define Adjusted EBITDA as earnings before interest expense, taxes, depreciation, amortization, net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.(2) We define Adjusted Net Income as net income before net COVID-19 expenses, acquisition and de novo expenses, stock-based compensation expense, restructure expenses, and other costs. Adjusted Net Income is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.(3) We define Adjusted diluted earnings per share as earnings per share, adjusted for net COVID-19 expenses, acquisition and de novo expenses, stock compensation expense and restructure expenses, and other costs. Adjusted diluted earnings per share is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.(4) We define Adjusted net service revenues as revenue adjusted for the closure of certain sites. Adjusted net service revenues is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP. View source version on businesswire.com: https://www.businesswire.com/news/home/20210503005673/en/

CONTACT: Brian W. Poff Executive Vice President, Chief Financial Officer Addus HomeCare Corporation (469) 535-8200 investorrelations@addus.com Dru Anderson Corporate Communications, Inc. (615) 324-7346 dru.anderson@cci-ir.com