Q3--12-310001468328錯誤http://fasb.org/us-gaap/2024#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#AccruedLiabilitiesCurrent過去一年月內。2023年和2022年的三個和九個月期權授予均以授予日公司普通股的公允價值相等的行權價格授予,並且是非法定股票期權。00014683282024-07-012024-09-300001468328US-GAAP:普通股成員超額配售選擇權成員2024-06-282024-06-280001468328adus: Capital One會員srt:最小成員adus:信用協議成員adus:基於適用槓桿比率成員2023-04-262023-04-260001468328美國通用會計準則:淨銷售收入會員adus:家庭健康成員NMus-gaap:地理集中度風險成員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus:家庭健康會員adus:管理保健組織會員us-gaap:客戶集中度風險成員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus:商業保險會員adus:個人護理會員2024-07-012024-09-300001468328美元指數: 應付股本會員2024-09-300001468328US-GAAP:延長到期日成員us-gaap:後續事件會員2024-10-222024-10-220001468328美國通用會計準則:淨銷售收入會員廣告:所有其他州會員us-gaap:地理集中度風險成員廣告:個人護理會員2024-01-012024-09-300001468328美國通用會計準則:淨銷售收入會員廣告:管理護理組織會員us-gaap:客戶集中度風險成員美元指數:臨終關懷會員2024-07-012024-09-300001468328美國通用會計準則:淨銷售收入會員美元指數:家庭保健會員us-gaap:地理集中度風險成員伊利諾伊州2024-01-012024-09-300001468328美元指數:R Dirk Allison 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家庭健康會員us-gaap:客戶集中度風險成員2024-07-012024-09-300001468328美元指數: 應付股本會員2024-01-012024-09-300001468328adus : Capital One 會員us-gaap:後續事件會員adus : 信貸協議會員2024-10-222024-10-220001468328美國通用會計準則:淨銷售收入會員adus : 安寧療護會員us-gaap:地理集中度風險成員stpr:IL2024-07-012024-09-300001468328US-GAAP:普通股成員2023-01-012023-09-300001468328us-gaap:留存收益成員2023-12-310001468328us-gaap:運營業務細分會員adus : Hospice Member2024-01-012024-09-300001468328美國通用會計準則:淨銷售收入會員adus : Home Health MemberNMus-gaap:地理集中度風險成員2023-07-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus : Hospice Member2023-07-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:地理集中度風險成員stpr:IL2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員stpr:NMus-gaap:地理集中度風險成員adus : Personal Care Member2024-07-012024-09-300001468328us-gaap:運營業務細分會員adus : Personal Care Member2023-07-012023-09-300001468328adus : State Licenses Member2024-09-300001468328us-gaap: 循環信貸設施成員adus:Capital One會員srt:最小成員adus:信貸協議會員2024-01-012024-09-300001468328us-gaap: 循環信貸設施成員adus:Capital 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安寧療護會員2023-01-012023-09-300001468328us-gaap: 受限股票會員2024-01-012024-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus: 個人護理會員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員stpr:俄亥俄州adus: 臨終關懷會員us-gaap:地理集中度風險成員2024-07-012024-09-300001468328US-GAAP:普通股成員adus: 公開發行會員2024-06-280001468328us-gaap:運營業務細分會員adus: 臨終關懷會員2024-07-012024-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:地理集中度風險成員adus: 個人護理會員2024-01-012024-09-300001468328adus: 醫療保險會員美國通用會計準則:淨銷售收入會員adus: 居家護理會員us-gaap:客戶集中度風險成員2023-07-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus: 居家護理會員us-gaap:地理集中度風險成員2024-07-012024-09-300001468328us-gaap: 受限股票會員2023-01-012023-09-300001468328美元指數:美國拯救計劃法案成員2024-01-012024-09-300001468328US-GAAP:普通股成員2022-12-310001468328us-gaap:運營業務細分會員2023-07-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員美元指數:臨終關懷會員美元指數:其他成員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus: 家庭醫療會員us-gaap:地理集中度風險成員stpr: 伊利諾伊州2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus: 商業保險會員us-gaap:客戶集中度風險成員adus: 臨終關懷會員2024-01-012024-09-300001468328srt:最大成員美元指數:州牌照會員2024-09-300001468328美國通用會計準則:淨銷售收入會員美元指數:所有其他州份會員美元指數:臨終關懷會員us-gaap:地理集中度風險成員2024-01-012024-09-300001468328us-gaap:留存收益成員2023-07-012023-09-300001468328美國通用會計準則:淨銷售收入會員stpr:OHadus : Hospice Memberus-gaap:地理集中度風險成員2024-01-012024-09-300001468328美國通用會計準則:淨銷售收入會員adus : Commercial Insurance Memberus-gaap:客戶集中度風險成員adus : Hospice Member2023-01-012023-09-300001468328adus : Capital One Memberus-gaap:後續事件會員adus:信貸協議成員2024-10-2200014683282023-06-300001468328美國通用會計準則:淨銷售收入會員adus:家庭護理成員us-gaap:地理集中度風險成員2023-01-012023-09-300001468328adus:資產購買協議成員2024-07-012024-09-300001468328us-gaap:運營業務細分會員adus:臨終關懷成員2023-07-012023-09-300001468328adus:安寧療護會員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus:家庭健康會員us-gaap:客戶集中度風險成員adus:其他會員2024-01-012024-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus:安寧療護會員2024-07-012024-09-300001468328美國通用會計準則:淨銷售收入會員adus:家庭健康會員us-gaap:客戶集中度風險成員2023-07-012023-09-300001468328adus:冠狀病毒援助救濟和經濟安全法案會員2022-04-012022-06-3000014683282022-12-310001468328adus:家庭健康會員2023-12-310001468328us-gaap: 循環信貸設施成員adus:Capital One會員adus:信用協議會員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus:州地方和其他政府計劃成員adus:個人護理會員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus:臨終關懷會員us-gaap:地理集中度風險成員stpr:IL2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus:家庭衛生會員us-gaap:地理集中度風險成員2023-07-012023-09-300001468328us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus:伊利諾伊州老齡化部門會員stpr:IL2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus: 臨終關懷會員us-gaap:地理集中度風險成員stpr: 伊利諾伊州2023-07-012023-09-3000014683282023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員us-gaap:客戶集中度風險成員adus: 臨終關懷會員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員adus: 管理護理組織會員us-gaap:客戶集中度風險成員adus:個人護理會員2024-07-012024-09-300001468328stpr:TN美國通用會計準則:淨銷售收入會員adus:家庭健康會員us-gaap:地理集中度風險成員2023-01-012023-09-300001468328美國通用會計準則:淨銷售收入會員stpr:NMadus: 安寧醫療會員us-gaap:地理集中度風險成員2024-01-012024-09-300001468328美元指數: 應付股本會員2024-07-012024-09-300001468328adus: R Dirk Allison 會員2024-07-012024-09-300001468328stpr:TN美國通用會計準則:淨銷售收入會員adus: 家庭衛生會員us-gaap:地理集中度風險成員2023-07-012023-09-30adus:段xbrli:純形xbrli:股份iso4217:USDxbrli:股份adus:患者iso4217:USD

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission file number 001-34504

 

ADDUS HOMECARE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

20-5340172

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

6303 Cowboys Way, Suite 600

Frisco, TX

75034

(Address of principal executive offices)

(Zip Code)

(469) 535-8200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

ADUS

The Nasdaq Stock Market, LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

 

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of October 29, 2024, Addus HomeCare Corporation had 18,133,115 shares of Common Stock outstanding.

 

 

 


Table of Contents

 

ADDUS HOMECARE CORPORATION

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION

3

 

 

Item 1. Financial Statements (Unaudited)

3

 

 

Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023

3

 

 

Condensed Consolidated Statements of Income For the Three and Nine Months Ended September 30, 2024 and 2023

4

 

 

Condensed Consolidated Statement of Stockholders’ Equity For the Three and Nine Months Ended September 30, 2024 and 2023

5

 

 

Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2024 and 2023

7

 

 

Notes to Condensed Consolidated Financial Statements

8

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

37

 

 

Item 4. Controls and Procedures

37

 

 

PART II. OTHER INFORMATION

38

 

 

Item 1. Legal Proceedings

38

 

 

Item 1A. Risk Factors

38

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

38

 

 

Item 3. Defaults Upon Senior Securities

38

 

 

Item 4. Mine Safety Disclosures

39

 

 

Item 5. Other Information

39

 

 

Item 6. Exhibits

40

 

2


Table of Contents

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2024 and December 31, 2023

(Amounts and Shares in Thousands, Except Per Share Data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

222,852

 

 

$

64,791

 

Accounts receivable, net of allowances

 

 

96,600

 

 

 

115,499

 

Prepaid expenses and other current assets

 

 

13,362

 

 

 

19,714

 

Total current assets

 

 

332,814

 

 

 

200,004

 

Property and equipment, net of accumulated depreciation and amortization

 

 

23,716

 

 

 

24,011

 

Other assets

 

 

 

 

 

 

Goodwill

 

 

663,614

 

 

 

662,995

 

Intangibles, net of accumulated amortization

 

 

86,606

 

 

 

91,983

 

Operating lease assets, net

 

 

44,535

 

 

 

45,433

 

Other long-term assets

 

 

1,616

 

 

 

 

Total other assets

 

 

796,371

 

 

 

800,411

 

Total assets

 

$

1,152,901

 

 

$

1,024,426

 

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

27,726

 

 

$

26,183

 

Accrued payroll

 

 

57,982

 

 

 

56,551

 

Accrued expenses

 

 

34,257

 

 

 

33,236

 

Operating lease liabilities, current portion

 

 

11,155

 

 

 

11,339

 

Government stimulus advances

 

 

13,655

 

 

 

5,765

 

Accrued workers' compensation insurance

 

 

13,043

 

 

 

12,043

 

Total current liabilities

 

 

157,818

 

 

 

145,117

 

Long-term liabilities

 

 

 

 

 

 

Long-term debt, net of debt issuance costs

 

 

 

 

 

124,132

 

Long-term operating lease liabilities

 

 

38,608

 

 

 

39,711

 

Other long-term liabilities

 

 

8,841

 

 

 

8,772

 

Total long-term liabilities

 

 

47,449

 

 

 

172,615

 

Total liabilities

 

$

205,267

 

 

$

317,732

 

Stockholders' equity

 

 

 

 

 

 

Common stock—$.001 par value; 40,000 authorized and 18,133 and 16,227 shares
   issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

 

$

18

 

 

$

16

 

Additional paid-in capital

 

 

590,712

 

 

 

403,846

 

Retained earnings

 

 

356,904

 

 

 

302,832

 

Total stockholders' equity

 

 

947,634

 

 

 

706,694

 

Total liabilities and stockholders' equity

 

$

1,152,901

 

 

$

1,024,426

 

 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3


Table of Contents

 

ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three and Nine Months Ended September 30, 2024 and 2023

(Amounts and Shares in Thousands, Except Per Share Data)

(Unaudited)

 

 

 

For the Three Months
Ended September 30,

 

 

For the Nine Months
Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net service revenues

 

$

289,787

 

 

$

270,721

 

 

$

857,455

 

 

$

782,300

 

Cost of service revenues

 

 

197,583

 

 

 

183,991

 

 

 

583,916

 

 

 

534,837

 

Gross profit

 

 

92,204

 

 

 

86,730

 

 

 

273,539

 

 

 

247,463

 

General and administrative expenses

 

 

62,805

 

 

 

60,271

 

 

 

187,444

 

 

 

174,028

 

Depreciation and amortization

 

 

3,446

 

 

 

3,620

 

 

 

10,316

 

 

 

10,449

 

Total operating expenses

 

 

66,251

 

 

 

63,891

 

 

 

197,760

 

 

 

184,477

 

Operating income

 

 

25,953

 

 

 

22,839

 

 

 

75,779

 

 

 

62,986

 

Interest income

 

 

(1,908

)

 

 

(580

)

 

 

(2,805

)

 

 

(977

)

Interest expense

 

 

573

 

 

 

3,199

 

 

 

5,445

 

 

 

7,991

 

Total interest (income) expense, net

 

 

(1,335

)

 

 

2,619

 

 

 

2,640

 

 

 

7,014

 

Income before income taxes

 

 

27,288

 

 

 

20,220

 

 

 

73,139

 

 

 

55,972

 

Income tax expense

 

 

7,125

 

 

 

4,809

 

 

 

19,067

 

 

 

13,034

 

Net income

 

$

20,163

 

 

$

15,411

 

 

$

54,072

 

 

$

42,938

 

Net income per common share

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share

 

$

1.13

 

 

$

0.96

 

 

$

3.24

 

 

$

2.69

 

Diluted income per share

 

$

1.10

 

 

$

0.95

 

 

$

3.17

 

 

$

2.63

 

Weighted average number of common shares and potential common
   shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,868

 

 

 

16,012

 

 

 

16,707

 

 

 

15,988

 

Diluted

 

 

18,255

 

 

 

16,286

 

 

 

17,065

 

 

 

16,307

 

 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

4


Table of Contents

 

ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three and Nine Months Ended September 30, 2024

(Amounts and Shares in Thousands)

(Unaudited)

 

 

For the Three Months Ended September 30, 2024

 

 

 

Common Stock

 

 

Additional
Paid-in
 Capital

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

Balance at July 1, 2024

 

 

18,100

 

 

$

18

 

 

$

584,896

 

 

$

336,741

 

 

$

921,655

 

Issuance of shares of common stock under
   restricted stock award agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of shares of common stock under
   restricted stock award agreements

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,833

 

 

 

 

 

 

2,833

 

Shares issued for exercise of stock options

 

 

35

 

 

 

 

 

 

2,983

 

 

 

 

 

 

2,983

 

Net income

 

 

 

 

 

 

 

 

 

 

 

20,163

 

 

 

20,163

 

Balance at September 30, 2024

 

 

18,133

 

 

$

18

 

 

$

590,712

 

 

$

356,904

 

 

$

947,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2024

 

 

 

Common Stock

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2024

 

 

16,227

 

 

$

16

 

 

$

403,846

 

 

$

302,832

 

 

$

706,694

 

Issuance of shares of common stock under
   restricted stock award agreements

 

 

151

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of shares of common stock under
   restricted stock award agreements

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

8,307

 

 

 

 

 

 

8,307

 

Shares issued for exercise of stock options

 

 

35

 

 

 

 

 

 

2,983

 

 

 

 

 

 

2,983

 

Shares issued in public offering, net of offering costs

 

 

1,725

 

 

 

2

 

 

 

175,576

 

 

 

 

 

 

175,578

 

Net income

 

 

 

 

 

 

 

 

 

 

 

54,072

 

 

 

54,072

 

Balance at September 30, 2024

 

 

18,133

 

 

$

18

 

 

$

590,712

 

 

$

356,904

 

 

$

947,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

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Table of Contents

 

ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three and Nine Months Ended September 30, 2023

(Amounts and Shares in Thousands)

(Unaudited)

 

 

 

For the Three Months Ended September 30, 2023

 

 

 

Common Stock

 

 

Additional
Paid-in
 Capital

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

Balance at July 1, 2023

 

 

16,214

 

 

$

16

 

 

$

398,492

 

 

$

267,843

 

 

$

666,351

 

Issuance of shares of common stock under
   restricted stock award agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of shares of common stock under
   restricted stock award agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

2,572

 

 

 

 

 

 

2,572

 

Shares issued for exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

15,411

 

 

 

15,411

 

Balance at September 30, 2023

 

 

16,214

 

 

$

16

 

 

$

401,064

 

 

$

283,254

 

 

$

684,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30, 2023

 

 

 

Common Stock

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings

 

 

Total
Stockholders'
Equity

 

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2023

 

 

16,128

 

 

$

16

 

 

$

393,208

 

 

$

240,316

 

 

$

633,540

 

Issuance of shares of common stock under
   restricted stock award agreements

 

 

86

 

 

 

 

 

 

 

 

 

 

 

 

 

Forfeiture of shares of common stock under
   restricted stock award agreements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,831

 

 

 

 

 

 

7,831

 

Shares issued for exercise of stock options

 

 

 

 

 

 

 

 

25

 

 

 

 

 

 

25

 

Net income

 

 

 

 

 

 

 

 

 

 

 

42,938

 

 

 

42,938

 

Balance at September 30, 2023

 

 

16,214

 

 

$

16

 

 

$

401,064

 

 

$

283,254

 

 

$

684,334

 

 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

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Table of Contents

 

ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2024 and 2023

(Amounts in Thousands)

(Unaudited)

 

 

 

For the Nine Months

 

 

 

Ended September 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

54,072

 

 

$

42,938

 

Adjustments to reconcile net income to net cash provided by operating
   activities, net of acquisitions:

 

 

 

 

 

 

Depreciation and amortization

 

 

10,316

 

 

 

10,449

 

Deferred income taxes

 

 

188

 

 

 

246

 

Stock-based compensation

 

 

8,307

 

 

 

7,831

 

Amortization of debt issuance costs under the credit facility

 

 

644

 

 

 

645

 

Provision for credit losses

 

 

812

 

 

 

508

 

Gain on disposal of assets

 

 

(13

)

 

 

 

Loss on termination of operating leases

 

 

9

 

 

 

 

Impairment of operating lease assets

 

 

 

 

 

8

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

17,868

 

 

 

9,929

 

Prepaid expenses and other current assets

 

 

6,187

 

 

 

6,277

 

Government stimulus advances

 

 

7,890

 

 

 

(5,528

)

Accounts payable

 

 

1,003

 

 

 

(2,118

)

Accrued payroll

 

 

1,431

 

 

 

4,464

 

Accrued expenses and other long-term liabilities

 

 

(2,698

)

 

 

6,549

 

Net cash provided by operating activities

 

 

106,016

 

 

 

82,198

 

Cash flows from investing activities:

 

 

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

(400

)

 

 

(109,800

)

Purchases of property and equipment

 

 

(4,353

)

 

 

(4,134

)

Proceeds received from disposal of assets

 

 

29

 

 

 

 

Proceeds received from divestiture of business

 

 

4,600

 

 

 

 

Net cash used in investing activities

 

 

(124

)

 

 

(113,934

)

Cash flows from financing activities:

 

 

 

 

 

 

Payments on revolver loan — credit facility

 

 

(126,353

)

 

 

(78,500

)

Proceeds from borrowings on revolver — credit facility

 

 

 

 

 

110,000

 

Proceeds from public offering

 

 

175,578

 

 

 

 

Payment for debt issuance costs

 

 

(39

)

 

 

 

Cash received from exercise of stock options

 

 

2,983

 

 

 

25

 

Net cash provided by financing activities

 

 

52,169

 

 

 

31,525

 

Net change in cash

 

 

158,061

 

 

 

(211

)

Cash, at beginning of period

 

 

64,791

 

 

 

79,961

 

Cash, at end of period

 

$

222,852

 

 

$

79,750

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

4,801

 

 

$

7,364

 

Cash paid for income taxes

 

 

19,436

 

 

 

10,565

 

 

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

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ADDUS HOMECARE CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Operations, Consolidation and Presentation of Financial Statements

Addus HomeCare Corporation (“Holdings”) and its subsidiaries (together with Holdings, the “Company”, “we”, “us” or “our”) operate as a multi-state provider of three distinct but related business segments providing in-home services. In its personal care services segment, the Company provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. In its hospice segment, the Company provides physical, emotional and spiritual care for people who are terminally ill as well as related services for their families. In its home health segment, the Company provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy. The Company’s payors include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals.

Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. The accompanying balance sheet as of December 31, 2023 has been derived from the Company’s audited financial statements for the year ended December 31, 2023 previously filed with the SEC. Accordingly, these financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements and should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K, which includes information and disclosures not included herein.

In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair statement of our financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.

Principles of Consolidation

These Unaudited Condensed Consolidated Financial Statements include the accounts of Addus HomeCare Corporation, and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

Estimates

The financial statements are prepared by management in conformity with GAAP and include estimated amounts and certain disclosures based on assumptions about future events. The Company’s critical accounting estimates include the following areas: revenue recognition, goodwill and intangibles in business combinations and when required, the quantitative assessment of goodwill. Actual results could differ from those estimates.

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Table of Contents

 

Computation of Weighted Average Shares

The following table sets forth the computation of basic and diluted common shares:

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

(Amounts in thousands)

 

 

(Amounts in thousands)

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Weighted average number of shares outstanding for basic per share
   calculation

 

 

17,868

 

 

 

16,012

 

 

 

16,707

 

 

 

15,988

 

Effect of dilutive potential shares:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

278

 

 

 

227

 

 

 

254

 

 

 

239

 

Restricted stock awards

 

 

109

 

 

 

47

 

 

 

104

 

 

 

80

 

Adjusted weighted average shares outstanding for diluted per share
   calculation

 

 

18,255

 

 

 

16,286

 

 

 

17,065

 

 

 

16,307

 

Anti-dilutive shares:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

111

 

 

 

 

 

 

61

 

Restricted stock awards

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805). This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU was adopted prospectively on January 1, 2023. The additional disclosures required did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity’s chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required, and early adoption is permitted. These requirements will result in expanded disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption. These requirements are not expected to have an impact on the Company’s financial statements and will expand income tax disclosures.

3. Public Offering

On June 28, 2024, the Company completed a public offering of an aggregate 1,725,000 shares of common stock, par value $0.001 per share, including 225,000 shares of common stock sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $108.00 per share (the “Public Offering”). The Company received net proceeds of approximately $175.6 million, after deducting underwriting discounts and estimated offering expenses of approximately $10.7 million. The Company used approximately $81.4 million from the net proceeds of the Public Offering for the repayment of indebtedness outstanding under its credit facility and may use any remaining net proceeds of the Public Offering for general corporate purposes, including the Company’s previously announced planned acquisition of the personal care assets of Gentiva and any future acquisitions or investments. The Public Offering resulted in an increase to additional paid in capital of approximately $175.6 million on the Company’s Unaudited Condensed Consolidated Balance Sheets at June 30, 2024.

 

9


Table of Contents

 

4. Acquisition and Divestiture

Acquisition

On June 8, 2024, the Company entered into a definitive stock and asset purchase agreement (the “Gentiva Purchase Agreement”) to acquire the personal care operations of Curo Health Services, LLC, a Delaware limited liability company which does business as Gentiva (“Gentiva”), consisting of equity interests and certain assets and liabilities, for a purchase price of approximately $350.0 million, payable in full in cash at the closing, subject to typical adjustments for working capital and other customary items (collectively, the “Gentiva Acquisition”). The acquired business operates in Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas, and serves approximately 16,000 patients. The Company expects to close this acquisition following completion of regulatory approvals and subject to customary closing conditions and fund it through the Company’s existing revolving credit facility and a portion of the net proceeds from the Public Offering.


Divestiture

On May 21, 2024, the Company entered into a definitive asset purchase agreement to sell all of the Company’s New York operations for a purchase price of up to $23.0 million in cash, subject to certain adjustments, including adjustments for future operating requirements (the “New York Asset Sale”). The Company entered into a consulting agreement with the purchaser on May 21, 2024, as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place. In connection with this transaction, the Company will cease operations in New York. During the three and nine months ended September 30, 2024, the Company recorded $1.0 million and $1.7 million in consulting fees, respectively, and received a $4.6 million initial payment on the acquisition.

The New York Asset Sale did not qualify as a discontinued operation because it did not represent a strategic shift that has or will have a major effect on the Company’s operation or financial results.

As of May 21, 2024, the Company’s New York personal care operations met the criteria to be classified as held for sale. The carrying value does not exceed the fair market value and will result in a gain on divestiture once the transaction closes. See Note 14 to the Notes to Unaudited Condensed Consolidated Financial Statements, Subsequent Events, for additional details regarding the treatment of the New York Asset Sale.

The carrying amounts of the assets and liabilities associated with our New York personal care operations included in our Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 were as follows (amounts in thousands):

 

 

 

September 30, 2024

 

Assets

 

 

 

Current assets

 

 

 

Accounts receivable, net of allowances

 

$

8,311

 

Prepaid expenses and other current assets

 

 

25

 

Total current assets

 

 

8,336

 

Property and equipment, net of accumulated depreciation and amortization

 

 

29

 

Other assets

 

 

 

Goodwill

 

 

3,801

 

Intangibles, net of accumulated amortization

 

 

4,203

 

Operating lease assets, net

 

 

3,510

 

Total other assets

 

 

11,514

 

Total assets

 

$

19,879

 

Liabilities

 

 

 

Current liabilities

 

 

 

Accounts payable

 

$

6,020

 

Accrued payroll

 

 

3,338

 

Accrued expenses

 

 

680

 

Operating lease liabilities, current portion

 

 

751

 

Total current liabilities

 

 

10,789

 

Long-term liabilities

 

 

 

Other long-term liabilities

 

 

2,661

 

Total liabilities

 

$

13,450

 

 

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Table of Contents

 

5. Leases

Amounts reported on the Company’s Unaudited Condensed Consolidated Balance Sheets for operating leases were as follows:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

(Amounts in Thousands)

 

Operating lease assets, net

 

$

44,535

 

 

$

45,433

 

 

 

 

 

 

 

Short-term operating lease liabilities (in accrued expenses)

 

 

11,155

 

 

 

11,339

 

Long-term operating lease liabilities

 

 

38,608

 

 

 

39,711

 

Total operating lease liabilities

 

$

49,763

 

 

$

51,050

 

 

Lease Costs

Components of lease costs were reported in general and administrative expenses in the Company’s Unaudited Condensed Consolidated Statements of Income as follows:

 

 

 

For the Three Months Ended September 30,
(Amounts in Thousands)

 

 

For the Nine Months Ended September 30,
(Amounts in Thousands)

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating lease costs

 

$

3,393

 

 

$

3,344

 

 

$

10,062

 

 

$

9,678

 

Short-term lease costs

 

 

167

 

 

 

249

 

 

 

547

 

 

 

949

 

Total lease costs

 

 

3,560

 

 

 

3,593

 

 

 

10,609

 

 

 

10,627

 

Less: sublease income

 

 

(596

)

 

 

(704

)

 

 

(1,685

)

 

 

(2,104

)

Total lease costs, net

 

$

2,964

 

 

$

2,889

 

 

$

8,924

 

 

$

8,523

 

 

Lease Term and Discount Rate

Weighted average remaining lease terms and discount rates were as follows:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Operating leases:

 

 

 

 

 

 

Weighted average remaining lease term (years)

 

 

5.81

 

 

 

6.26

 

Weighted average discount rate

 

 

5.99

%

 

 

5.47

%

 

Maturity of Lease Liabilities

Remaining operating lease payments as of September 30, 2024 were as follows:

 

 

 

Operating Leases

 

 

 

(Amounts in Thousands)

 

Due in the 12-month period ended September 30,

 

 

 

2025

 

$

13,786

 

2026

 

 

11,097

 

2027

 

 

8,506

 

2028

 

 

6,322

 

2029

 

 

5,722

 

Thereafter

 

 

14,019

 

Total future minimum rental commitments

 

 

59,452

 

Less: Imputed interest

 

 

(9,689

)

Total lease liabilities

 

$

49,763

 

 

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Table of Contents

 

Supplemental Cash Flows Information

 

 

 

For the Nine Months Ended September 30,

 

 

 

(Amounts in Thousands)

 

 

 

2024

 

 

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

10,925

 

 

$

10,702

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

Operating leases

 

$

7,683

 

 

$

15,903

 

 

6. Goodwill and Intangible Assets

A summary of the goodwill and related adjustments is provided below:

 

 

 

Hospice

 

 

Personal Care

 

 

Home Health

 

 

Total

 

 

 

(Amounts in Thousands)

 

Goodwill as of December 31, 2023

 

$

432,799

 

 

$

153,276

 

 

$

76,920

 

 

$

662,995

 

Additions for acquisitions

 

 

 

 

 

400

 

 

 

 

 

 

400

 

Adjustments to previously recorded goodwill

 

 

41

 

 

 

 

 

 

178

 

 

 

219

 

Goodwill as of September 30, 2024

 

$

432,840

 

 

$

153,676

 

 

$

77,098

 

 

$

663,614

 

 

On March 9, 2024, the Company completed its acquisition of the operations of Upstate Home Care Solutions (“Upstate”) for $0.4 million. With the purchase of Upstate, the Company expanded its personal care services segment in South Carolina. In connection with the Upstate acquisition, the Company recognized goodwill in its personal care segment of $0.4 million during the nine months ended September 30, 2024.

The Company’s identifiable intangible assets consist of customer and referral relationships, trade names and trademarks, non-competition agreements and state licenses. Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from one to twenty years. Customer and referral relationships are amortized systematically over the periods of expected economic benefit, which range from five to ten years.

The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following:

 

 

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

 

 

(Amounts in Thousands)

 

 

(Amounts in Thousands)

 

 

 

Estimated Useful Life

 

Gross carrying value

 

 

Accumulated amortization

 

 

Net carrying value

 

 

Gross carrying value

 

 

Accumulated amortization

 

 

Net carrying value

 

Customer and referral relationships

 

5-10 years

 

$

44,672

 

 

$

(40,588

)

 

$

4,084

 

 

$

44,672

 

 

$

(39,566

)

 

$

5,106

 

Trade names and trademarks

 

1-20 years

 

 

59,566

 

 

 

(26,112

)

 

 

33,454

 

 

 

59,566

 

 

 

(23,857

)

 

 

35,709

 

Non-competition agreement

 

3-5 years

 

 

6,785

 

 

 

(6,213

)

 

 

572

 

 

 

6,785

 

 

 

(5,601

)

 

 

1,184

 

State Licenses

 

6-10 years

 

 

12,671

 

 

 

(10,503

)

 

 

2,168

 

 

 

12,671

 

 

 

(9,015

)

 

 

3,656

 

State Licenses

 

Indefinite

 

 

46,328

 

 

 

 

 

46,328

 

 

 

46,328

 

 

 

 

 

46,328

 

Total intangible assets

 

 

 

$

170,022

 

 

$

(83,416

)

 

$

86,606

 

 

$

170,022

 

 

$

(78,039

)

 

$

91,983

 

Amortization expense related to the intangible assets was $1.8 million and $5.4 million for the three and nine months ended September 30, 2024, respectively, and $1.8 million and $5.3 million for the three and nine months ended September 30, 2023, respectively. The weighted average remaining useful lives of identifiable intangible assets as of September 30, 2024 was 10.0 years.

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7. Details of Certain Balance Sheet Accounts

Prepaid expenses and other current assets consisted of the following:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

(Amounts in Thousands)

 

Prepaid payroll

 

$

2,585

 

 

$

8,735

 

Prepaid workers' compensation and liability insurance

 

 

3,112

 

 

 

3,696

 

Prepaid licensing fees

 

 

4,361

 

 

 

4,481

 

Workers' compensation insurance receivable

 

 

837

 

 

 

577

 

Other

 

 

2,467

 

 

 

2,225

 

Total prepaid expenses and other current assets

 

$

13,362

 

 

$

19,714

 

 

Accrued expenses consisted of the following:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

(Amounts in Thousands)

 

 

 

 

 

 

 

 

Accrued health benefits

 

$

6,032

 

 

$

7,400

 

Payor advances (1)

 

 

 

 

 

1,218

 

Accrued professional fees

 

 

7,038

 

 

 

7,304

 

Accrued payroll and other taxes

 

 

7,213

 

 

 

8,572

 

Other (2)

 

 

13,974

 

 

 

8,742

 

Total accrued expenses

 

$

34,257

 

 

$

33,236

 

(1)
Represents the deferred portion of payments received from payors for COVID-19 reimbursements which was recognized as we incurred specific COVID-19 related expenses (including expenses related to securing and maintaining adequate personnel).
(2)
Includes a $4.6 million initial payment received for the New York Asset Sale as of September 30, 2024.

8. Government Actions to Mitigate COVID-19’s Impact

While the acute phase of the COVID-19 pandemic has faded, we will continue to closely monitor the impact of COVID-19 on all aspects of our business, including the impacts to our employees, patients and suppliers.

In recognition of the significant threat to the liquidity of financial markets posed by the COVID-19 pandemic, the Federal Reserve and Congress took dramatic actions to provide liquidity to businesses and the banking system in the United States, including relief for healthcare providers in the Coronavirus Aid, Relief, and Economic Stability Act (“CARES Act”), which was expanded by the Paycheck Protection Program and Health Care Enhancement Act, and the Consolidated Appropriations Act, 2021 (“CAA”), as well as the American Rescue Plan Act of 2021 (“ARPA”).

ARPA Spending Plans

The ARPA provides for $350 billion in relief funding for eligible state, local, territorial, and Tribal governments to mitigate the fiscal effects of the COVID-19 public health emergency. Additionally, the law provided for a 10 percentage point increase in federal matching funds for Medicaid home and community-based services (“HCBS”) from April 1, 2021, through March 31, 2022, provided the state satisfied certain conditions. States are permitted to use the state funds equivalent to the additional federal funds through March 31, 2025. States must use the monies attributable to this matching fund increase to supplement, not supplant, their level of state spending for the implementation of activities enhanced under the Medicaid HCBS in effect as of April 1, 2021.

HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company is participating include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers). The Company is required to properly and fully document the use of such funds in reports to the state in which the funds originated. Funds may be subject to recoupment if not expended or if they are expended on non-approved uses.

 

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During the three and nine months ended September 30, 2024, the Company received additional state funding provided by the ARPA in an aggregate amount of $3.2 million and $15.4 million, respectively. Of the total state funding received by the Company pursuant to the ARPA through September 30, 2024, the Company utilized $2.6 million and $7.5 million during the three and nine months ended September 30, 2024, respectively, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of September 30, 2024, the deferred portion of ARPA funding of $13.7 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.

Medicare Sequester

The CARES Act and related legislation also include other provisions offering financial relief, including, for example, temporarily suspending the Medicare sequester, which would have otherwise reduced payments to Medicare providers by 2% as required by the Budget Control Act of 2011. The sequestration adjustment resumed with a 1% reduction beginning April 1, 2022, and a 2% reduction beginning July 1, 2022. These sequestration cuts have been extended through April 2032.

 

The ARPA increased the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the PAYGO Act. As a result, an additional Medicare payment reduction of up to 4% was required to take effect in January 2022. However, Congress has delayed implementation of this payment reduction until 2025.

 

9. Long-Term Debt

Long-term debt consisted of the following:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

(Amounts in Thousands)

 

Revolving loan under the credit facility

 

$

 

 

$

126,353

 

Less unamortized issuance costs (1)

 

 

 

 

 

(2,221

)

Long-term debt

 

$

 

 

$

124,132

 

(1)
As of September 30, 2024, unamortized issuance costs of $1.6 million are recorded in Other long-term assets on the Companys Unaudited Condensed Consolidated Balance Sheets.

Amended and Restated Senior Secured Credit Facility

On October 31, 2018, the Company entered into the Amended and Restated Credit Agreement, with certain lenders and Capital One, National Association, as a lender and as agent for all lenders, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of September 12, 2019, as further amended by the Second Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2021, and as further amended by the Third Amendment to Amended and Restated Credit Agreement, dated as of April 26, 2023 (as described below, the “Third Amendment”) (as amended, the “Credit Agreement”, as used throughout this Quarterly Report on Form 10-Q, “credit facility” shall mean the credit facility evidenced by the Credit Agreement). As discussed further in Note 14, the credit facility consists of a $650.0 million revolving credit facility and a $150.0 million incremental loan facility, which incremental loan facility may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility is July 30, 2028.

On April 26, 2023, the Company entered into the Third Amendment to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”) as the benchmark reference rate for loans under its credit facility. The Third Amendment did not amend any other terms of the Credit Agreement. The transition to SOFR did not and is not expected to have a material impact on the Company’s results of operations or liquidity.

Interest on the credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 0.75% to 1.50% based on the applicable senior net 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 Term SOFR (as published by the CME Group Benchmark Administrative Limited) for an interest period of one month for such applicable day plus 0.10% (not to be less than 0.00%), plus a margin of 1.00% or (y) the sum of (i) an applicable margin ranging from 1.75% to 2.50% based on the applicable senior net leverage ratio plus (ii) the rate per annum equal to the sum of Term SOFR (as published by the CME Group Benchmark Administrative Limited) for the applicable interest period plus 0.10% (not to be less than zero). Swing loans may not be SOFR loans.

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Addus HealthCare, Inc. (“Addus HealthCare”) is the borrower, and its parent, Holdings, and substantially all of Holdings’ subsidiaries are guarantors under this credit facility, and it is collateralized 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 Credit Agreement contains affirmative and negative covenants customary for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The availability of additional draws under this credit facility is conditioned, among other things, upon (after giving effect to such draws) the Total Net Leverage Ratio (as defined in the Credit Agreement) not exceeding 3.75:1.00. In certain circumstances, in connection with a Material Acquisition (as defined in the Credit Agreement), the Company can elect to increase its Total Net Leverage Ratio compliance covenant to 4.25:1.00 for the then current fiscal quarter and the three succeeding fiscal quarters.

The Company pays a fee ranging from 0.20% to 0.35% based on the applicable senior net leverage ratio times the unused portion of the revolving loan portion of the credit facility.

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 Interest Coverage Ratio (as defined in the Credit Agreement), a requirement to stay below a maximum Total Net Leverage Ratio (as defined in the Credit Agreement) and a requirement to stay below a maximum permitted amount of capital expenditures. The Credit Agreement also contains 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 $7.5 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 (without the consent of the lenders) under its credit facility subject to compliance with the Total Net Leverage Ratio (as defined in the Credit Agreement) thresholds, restrictions on mergers, dispositions of assets, and affiliate transactions, and restrictions on fundamental changes and lines of business.

During the nine months ended September 30, 2024, the Company did not draw on its credit facility and repaid all amounts owed under the revolving credit facility. During the nine months ended September 30, 2023, the Company (i) drew $110.0 million under its credit facility to fund, in part, the Tennessee Quality Care acquisition and (ii) repaid $78.5 million under the revolving credit facility.

As of September 30, 2024, the Company had no revolving loans outstanding on its credit facility. After giving effect to the amount drawn on its credit facility, approximately $8.0 million of outstanding letters of credit and borrowing limits based on an advance multiple of adjusted EBITDA (as defined in the Credit Agreement), the Company had $511.5 million of capacity and $503.5 million available for borrowing under its credit facility. As of December 31, 2023, the Company had a total of $126.4 million of revolving loans, with an interest rate of 7.21%, outstanding on its credit facility.

As of September 30, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.

10. Income Taxes

The effective income tax rates were 26.1% and 23.8% for the three months ended September 30, 2024 and 2023, respectively. The effective income tax rates were 26.1% and 23.3% for the nine months ended September 30, 2024 and 2023, respectively. The difference between our federal statutory rate of 21% and our effective income tax rates is principally due to the inclusion of state taxes and non-deductible compensation, partially offset by the use of federal employment tax credits.

11. 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 Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Income.

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12. Segment Information

Operating segments are defined as components of a company that engage in business activities from which it may earn revenues and incur expenses, and for which separate financial information is available and is regularly reviewed by the Company’s CODM, to assess the performance of the individual segments and make decisions about resources to be allocated to the segments. The Company operates as a multi-state provider of three distinct but related business segments providing in-home services.

In its personal care segment, the Company provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. In its hospice segment, the Company provides physical, emotional and spiritual care for people who are terminally ill as well as related services for their families. In its home health segment, the Company provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy.

The tables below set forth information about the Company’s reportable segments, along with the items necessary to reconcile the segment information to the totals reported in the accompanying Unaudited Condensed Consolidated Financial Statements. Segment assets are not reviewed by the Company’s CODM function and therefore are not disclosed below.

Segment operating income consists of revenue generated by a segment, less the direct costs of service revenues and general and administrative expenses that are incurred directly by the segment. Unallocated general and administrative costs are those costs for functions performed in a centralized manner and therefore not attributable to a particular segment. These costs include accounting, finance, human resources, legal, information technology, corporate office support and facility costs and overall corporate management.

 

 

 

For the Three Months Ended September 30, 2024

 

 

 

(Amounts in Thousands)

 

 

 

Personal Care

 

 

Hospice

 

 

Home Health

 

 

Total

 

Net service revenues

 

$

215,433

 

 

$

57,309

 

 

$

17,045

 

 

$

289,787

 

Cost of services revenues

 

 

156,273

 

 

 

30,469

 

 

 

10,841

 

 

 

197,583

 

Gross profit

 

 

59,160

 

 

 

26,840

 

 

 

6,204

 

 

 

92,204

 

General and administrative expenses

 

 

17,489

 

 

 

14,070

 

 

 

4,338

 

 

 

35,897

 

Segment operating income

 

$

41,671

 

 

$

12,770

 

 

$

1,866

 

 

$

56,307

 

 

 

 

For the Three Months Ended September 30, 2023

 

 

 

(Amounts in Thousands)

 

 

 

Personal Care

 

 

Hospice

 

 

Home Health

 

 

Total

 

Net service revenues

 

$

201,882

 

 

$

53,121

 

 

$

15,718

 

 

$

270,721

 

Cost of services revenues

 

 

145,808

 

 

 

28,155

 

 

 

10,028

 

 

 

183,991

 

Gross profit

 

 

56,074

 

 

 

24,966

 

 

 

5,690

 

 

 

86,730

 

General and administrative expenses

 

 

16,096

 

 

 

13,246

 

 

 

4,131

 

 

 

33,473

 

Segment operating income

 

$

39,978

 

 

$

11,720

 

 

$

1,559

 

 

$

53,257

 

 

 

 

For the Three Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

(Amounts in Thousands)

 

Segment reconciliation:

 

 

 

 

 

 

Total segment operating income

 

$

56,307

 

 

$

53,257

 

 

 

 

 

 

 

Items not allocated at segment level:

 

 

 

 

 

 

Other general and administrative expenses

 

 

26,908

 

 

 

26,798

 

Depreciation and amortization

 

 

3,446

 

 

 

3,620

 

Interest income

 

 

(1,908

)

 

 

(580

)

Interest expense

 

 

573

 

 

 

3,199

 

Income before income taxes

 

$

27,288

 

 

$

20,220

 

 

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Table of Contents

 

 

 

 

For the Nine Months Ended September 30, 2024

 

 

 

(Amounts in Thousands)

 

 

 

Personal Care

 

 

Hospice

 

 

Home Health

 

 

Total

 

Net service revenues

 

$

636,253

 

 

$

169,202

 

 

$

52,000

 

 

$

857,455

 

Cost of services revenues

 

 

461,564

 

 

 

89,166

 

 

 

33,186

 

 

 

583,916

 

Gross profit

 

 

174,689

 

 

 

80,036

 

 

 

18,814

 

 

 

273,539

 

General and administrative expenses

 

 

49,907

 

 

 

40,975

 

 

 

13,447

 

 

 

104,329

 

Segment operating income

 

$

124,782

 

 

$

39,061

 

 

$

5,367

 

 

$

169,210

 

 

 

 

For the Nine Months Ended September 30, 2023

 

 

 

(Amounts in Thousands)

 

 

 

Personal Care

 

 

Hospice

 

 

Home Health

 

 

Total

 

Net service revenues

 

$

590,227

 

 

$

152,414

 

 

$

39,659

 

 

$

782,300

 

Cost of services revenues

 

 

428,163

 

 

 

82,028

 

 

 

24,646

 

 

 

534,837

 

Gross profit

 

 

162,064

 

 

 

70,386

 

 

 

15,013

 

 

 

247,463

 

General and administrative expenses

 

 

48,299

 

 

 

39,028

 

 

 

9,653

 

 

 

96,980

 

Segment operating income

 

$

113,765

 

 

$

31,358

 

 

$

5,360

 

 

$

150,483

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

(Amounts in Thousands)

 

Segment reconciliation:

 

 

 

 

 

 

Total segment operating income

 

$

169,210

 

 

$

150,483

 

 

 

 

 

 

 

Items not allocated at segment level:

 

 

 

 

 

 

Other general and administrative expenses

 

 

83,115

 

 

 

77,048

 

Depreciation and amortization

 

 

10,316

 

 

 

10,449

 

Interest income

 

 

(2,805

)

 

 

(977

)

Interest expense

 

 

5,445

 

 

 

7,991

 

Income before income taxes

 

$

73,139

 

 

$

55,972

 

 

13. Significant Payors

The Company’s revenue by payor type was as follows:

 

Personal Care Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
 Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

State, local and other governmental programs

$

116,702

 

54.2

%

$

101,821

 

50.4

%

$

337,458

 

53.0

%

$

297,541

 

50.4

%

Managed care organizations

 

93,321

 

43.3

 

 

93,584

 

46.4

 

 

281,732

 

44.3

 

 

272,758

 

46.2

 

Private pay

 

3,599

 

1.7

 

 

3,990

 

2.0

 

 

11,194

 

1.8

 

 

12,354

 

2.1

 

Commercial insurance

 

1,415

 

0.7

 

 

1,631

 

0.8

 

 

4,368

 

0.7

 

 

4,937

 

0.8

 

Other

 

396

 

0.1

 

 

856

 

0.4

 

 

1,501

 

0.2

 

 

2,637

 

0.5

 

Total personal care segment net service revenues

$

215,433

 

100.0

%

$

201,882

 

100.0

%

$

636,253

 

100.0

%

$

590,227

 

100.0

%

 

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Table of Contents

 

Hospice Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Medicare

$

52,413

 

91.5

%

$

47,313

 

89.1

%

$

154,187

 

91.1

%

$

137,432

 

90.2

%

Commercial insurance

 

2,892

 

5.0

 

 

3,640

 

6.8

 

 

8,870

 

5.2

 

 

8,916

 

5.8

 

Managed care organizations

 

1,821

 

3.2

 

 

1,808

 

3.4

 

 

5,518

 

3.3

 

 

5,022

 

3.3

 

Other

 

183

 

0.3

 

 

360

 

0.7

 

 

627

 

0.4

 

 

1,044

 

0.7

 

Total hospice segment net service revenues

$

57,309

 

100.0

%

$

53,121

 

100.0

%

$

169,202

 

100.0

%

$

152,414

 

100.0

%

 

Home Health Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Medicare

$

12,036

 

70.6

%

$

11,325

 

72.1

%

$

36,216

 

69.6

%

$

29,306

 

73.9

%

Managed care organizations

 

4,215

 

24.7

 

 

3,445

 

21.9

 

 

13,291

 

25.6

 

 

8,239

 

20.8

 

Other

 

794

 

4.7

 

 

948

 

6.0

 

 

2,493

 

4.8

 

 

2,114

 

5.3

 

Total home health segment net service revenues

$

17,045

 

100.0

%

$

15,718

 

100.0

%

$

52,000

 

100.0

%

$

39,659

 

100.0

%

 

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Table of Contents

 

During the three and nine months ended September 30, 2024 and 2023, the Company derived a significant amount of its revenue from its operations in Illinois, New Mexico, New York, Ohio and Tennessee. The percentages of segment revenue for each of these significant states were as follows:

 

Personal Care Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Illinois

$

111,916

 

51.9

%

$

105,206

 

52.1

%

$

330,265

 

51.9

%

$

306,711

 

52.0

%

New Mexico

 

28,962

 

13.4

 

 

28,347

 

14.0

 

 

86,573

 

13.6

 

 

84,969

 

14.3

 

New York (1)

 

21,406

 

9.9

 

 

22,989

 

11.4

 

 

68,239

 

10.7

 

 

68,910

 

11.7

 

All other states

 

53,149

 

24.8

 

 

45,340

 

22.5

 

 

151,176

 

23.8

 

 

129,637

 

22.0

 

Total personal care segment net service revenues

$

215,433

 

100.0

%

$

201,882

 

100.0

%

$

636,253

 

100.0

%

$

590,227

 

100.0

%

 

(1)
The selection process for CDPAP fiscal intermediaries has changed significantly in recent years and the program continues to be an area of focus for New York governmental authorities. As a result of the changes and uncertainty in the state, the Company determined that its New York personal care operations no longer fit its growth strategy and reached an agreement to divest these operations. See Note 4 to the Notes to Unaudited Condensed Consolidated Financial Statements, Acquisition and Divestiture, for additional details regarding our divestiture.

 

Hospice Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Ohio

$

21,531

 

37.6

%

$

18,916

 

35.6

%

$

62,400

 

36.9

%

$

55,363

 

36.3

%

Illinois

 

13,289

 

23.2

 

 

12,477

 

23.5

 

 

38,544

 

22.8

 

 

34,750

 

22.8

 

New Mexico

 

6,951

 

12.1

 

 

7,619

 

14.3

 

 

21,361

 

12.6

 

 

23,688

 

15.5

 

All other states

 

15,538

 

27.1

 

 

14,109

 

26.6

 

 

46,897

 

27.7

 

 

38,613

 

25.4

 

Total hospice segment net service revenues

$

57,309

 

100.0

%

$

53,121

 

100.0

%

$

169,202

 

100.0

%

$

152,414

 

100.0

%

 

 

Home Health Segment

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

New Mexico

$

8,090

 

47.4

%

$

8,040

 

51.2

%

$

24,166

 

46.5

%

$

25,277

 

63.7

%

Illinois

 

2,413

 

14.2

 

 

2,909

 

18.5

 

 

8,397

 

16.1

 

 

9,539

 

24.1

 

Tennessee

 

6,542

 

38.4

 

 

4,769

 

30.3

 

 

19,437

 

37.4

 

 

4,843

 

12.2

 

Total home health segment net service revenues

$

17,045

 

100.0

%

$

15,718

 

100.0

%

$

52,000

 

100.0

%

$

39,659

 

100.0

%

 

 

A substantial portion of the Company’s revenue and accounts receivable are derived from services performed for federal, state and local governmental agencies. The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 38.6%, and 38.9% of our net service revenues for the three months ended September 30, 2024, and 2023, respectively, and accounted for 38.5% and 39.2% of our net service revenues for the nine months ended September 30, 2024 and 2023, respectively. The Illinois Department on Aging, the largest payor program for the Company’s Illinois personal care operations, accounted for 21.4% and 20.5% of the Company’s net service revenues for the three months ended September 30, 2024 and 2023, respectively, and accounted for 21.1% and 21.2% of the Company’s net service revenues for the nine months ended September 30, 2024 and 2023, respectively.

The related receivables due from the Illinois Department on Aging represented 21.7% and 25.8% of the Company’s net accounts receivable at September 30, 2024 and December 31, 2023, respectively.

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14. Subsequent Events

Fourth Amendment to Credit Agreement

On October 22, 2024, the Company entered into a Fourth Amendment to Amended and Restated Credit Agreement (the “Fourth Amendment”) with certain lenders and Capital One, National Association, as a lender and as agent for all lenders, which further amended the Credit Agreement. The Fourth Amendment, among other things, (i) increased the Company’s revolving credit facility to an aggregate amount of $650,000,000, (ii) increased the Company’s incremental loan facility to an aggregate amount of $150,000,000, and (iii) extended the maturity date of the credit facility from July 30, 2026 to July 30, 2028.

New York Disposition Treatment

In October 2024, the Company qualified for sale consideration of the New York Asset Sale. As a result, the Company will deconsolidate the results of its New York operations and record a gain on divestiture. The New York Asset Sale purchase price of up to $23 million includes 50% cash consideration, paid out as an initial payment of $4.6 million and $6.9 million paid pro rata as a deferred payment as caregivers are transferred and 50% in the form of contingent consideration for the Company’s CDPAP business.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of macroeconomic conditions, including inflation and elevated interest rates, legislative and political developments, trade disruptions and the potential adverse effects of current geopolitical conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, pandemics, riots, civil insurrection or social unrest, looting, protests, strikes or street demonstrations; changes in operational and reimbursement processes and payment structures at the state or federal levels; changes in Medicaid, Medicare, other government programs and managed care organizations policies and payment rates, and the timeliness of reimbursements received under government programs; changes in, or our failure to comply with, existing, federal and state laws or regulations, or our failure to comply with new government laws or regulations on a timely basis; competition in the healthcare industry; the geographical concentration of our operations; changes in the case mix of consumers and payment methodologies; operational changes resulting from the assumption by managed care organizations of responsibility for managing and paying for our services to consumers; the nature and success of future financial and/or delivery system reforms; changes in estimates and judgments associated with critical accounting policies; our ability to maintain or establish new referral sources; our ability to renew significant agreements or groups of agreements; our ability to attract and retain qualified personnel; federal, state and city minimum wage pressure, including any failure of any governmental entity to enact a minimum wage offset and/or the timing of any such enactment; changes in payments and covered services due to the overall economic conditions and deficit reduction measures by federal and state governments, and our expectations regarding these changes; cost containment initiatives undertaken by federal and state governmental and other third-party payors; our ability to access financing through the capital and credit markets; our ability to meet debt service requirements and comply with covenants in debt agreements; our ability to integrate and manage our information systems; any security breaches, cyber-attacks, loss of data, or cybersecurity threats or incidents, and any actual or perceived failures to comply with legal requirements related to the privacy of confidential consumer data and other sensitive information; the size and growth of the markets for our services, including our expectations regarding the markets for our services; eligibility standards and limits on services imposed by state governmental agencies; the potential for litigation, audits and investigations; discretionary determinations by government officials; our ability to successfully implement our business model to grow our business; our ability to continue identifying, pursuing, consummating and integrating acquisition opportunities, including our ability to complete the Gentiva Acquisition and to realize the anticipated benefits from such acquisition, and expanding into new geographic markets; our ability to complete the New York Asset Sale; the impact of acquisitions and dispositions on our business, including the potential inability to realize the benefits of potential acquisitions; the effectiveness, quality and cost of our services; our ability to successfully execute our growth strategy; changes in tax rates; and various other matters, many of which are beyond our control. In addition, these forward-looking statements are subject to the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2023, filed with the SEC on February 27, 2024, as updated by the risk factors set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q. You should carefully review all of these factors. Moreover, our business may be materially adversely affected by factors that are not currently known to us, by factors that we currently consider immaterial or by factors that are not specific to us, such as general economic conditions. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as may be required by law.

Overview

We are a home care services provider operating three segments: personal care, hospice and home health. Our services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. Managed care organizations accounted for 34.3% and 36.5% of our net service revenues during the three months ended September 30, 2024 and 2023, respectively, and 35.1% and 36.6% of our net service revenues during the nine months ended September 30, 2024 and 2023, respectively.

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A summary of certain consolidated financial results is provided in the table below.

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net service revenues by segment:

 

(Amounts in Thousands)

 

 

(Amounts in Thousands)

 

Personal care

 

$

215,433

 

 

$

201,882

 

 

$

636,253

 

 

$

590,227

 

Hospice

 

 

57,309

 

 

 

53,121

 

 

 

169,202

 

 

 

152,414

 

Home health

 

 

17,045

 

 

 

15,718

 

 

 

52,000

 

 

 

39,659

 

Total net service revenues

 

$

289,787

 

 

$

270,721

 

 

$

857,455

 

 

$

782,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

20,163

 

 

$

15,411

 

 

$

54,072

 

 

$

42,938

 

 

As of September 30, 2024, we provided our services in 22 states through 214 offices. We served approximately 80,000 and 62,000 discrete individuals, respectively, during the nine months ended September 30, 2024 and 2023. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes and hospice facilities.

Acquisitions

In addition to our organic growth, we have grown through acquisitions that have expanded our presence in current markets, with the goal of having all three levels of in-home care in our markets or facilitating our entry into new markets where in-home care has been moving to managed care organizations.

On January 1, 2023, we completed the acquisition of CareStaff for approximately $1.0 million, with funding provided by available cash. With the purchase of CareStaff, the Company expanded its personal care services in Florida.

On August 1, 2023, we completed the acquisition of Tennessee Quality Care for approximately $111.2 million, with funding primarily provided by drawing on the Company’s revolving credit facility. With the purchase of Tennessee Quality Care, the Company expanded its services within its hospice and home health segments to Tennessee.

On March 9, 2024, we completed our acquisition of the operations of Upstate for $0.4 million, with funding provided by available cash. With the purchase of Upstate, the Company expanded its personal care services segment in South Carolina.

On June 8, 2024, we entered into the Gentiva Purchase Agreement to acquire the personal care operations of Gentiva, consisting of equity interests and certain assets and liabilities, for a purchase price of approximately $350.0 million, payable in full in cash at the closing, subject to typical adjustments for working capital and other customary items. The acquired business operates in Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas, and serves approximately 16,000 patients. The Company expects to close this acquisition following completion of regulatory approvals and subject to customary closing conditions and will fund this acquisition through the Company’s existing revolving credit facility and a portion of the net proceeds from the Public Offering.

New York Asset Sale

On May 21, 2024, we entered into the New York Asset Sale. The Company entered into a consulting agreement as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place. In connection with this transaction, the Company will cease operations in New York. See Note 14 to the Notes to Unaudited Condensed Consolidated Financial Statements, Subsequent Events, for additional details regarding the New York Asset Sale.

Recruiting

As the labor market continues to be tight and unemployment remains at low levels, the competition for new caregivers, including skilled healthcare staff, and support staff continues to be significant. In recent periods, the United States economy has experienced, and may continue to experience, significant inflationary pressures. To the extent that we continue to experience a shortage of caregivers, it may hinder our ability to fully meet the continuing demand for both our non-clinical and clinical services.

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Table of Contents

 

Revenue by Payor and Significant States

Our payors are principally federal, state and local governmental agencies and managed care organizations. The federal, state and local programs under which the agencies operate are subject to legislative and budgetary changes and other risks that can influence reimbursement rates. We are experiencing a transition of business from government payors to managed care organizations, which we believe aligns with our emphasis on coordinated care and the reduction of the need for acute care.

Our revenue by payor and significant states by segment were as follows:

 

Personal Care Segment

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

2024

 

2023

 

2024

 

2023

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

State, local and other governmental programs

$

116,702

 

54.2

%

$

101,821

 

50.4

%

$

337,458

 

53.0

%

$

297,541

 

50.4

%

Managed care organizations

 

93,321

 

43.3

 

 

93,584

 

46.4

 

 

281,732

 

44.3

 

 

272,758

 

46.2

 

Private pay

 

3,599

 

1.7

 

 

3,990

 

2.0

 

 

11,194

 

1.8

 

 

12,354

 

2.1

 

Commercial insurance

 

1,415

 

0.7

 

 

1,631

 

0.8

 

 

4,368

 

0.7

 

 

4,937

 

0.8

 

Other

 

396

 

0.1

 

 

856

 

0.4

 

 

1,501

 

0.2

 

 

2,637

 

0.5

 

Total personal care segment net service revenues

$

215,433

 

100.0

%

$

201,882

 

100.0

%

$

636,253

 

100.0

%

$

590,227

 

100.0

%

Illinois

$

111,916

 

51.9

%

$

105,206

 

52.1

%

$

330,265

 

51.9

%

$

306,711

 

52.0

%

New Mexico

 

28,962

 

13.4

 

 

28,347

 

14.0

 

 

86,573

 

13.6

 

 

84,969

 

14.3

 

New York (1)

 

21,406

 

9.9

 

 

22,989

 

11.4

 

 

68,239

 

10.7

 

 

68,910

 

11.7

 

All other states

 

53,149

 

24.8

 

 

45,340

 

22.5

 

 

151,176

 

23.8

 

 

129,637

 

22.0

 

Total personal care segment net service revenues

$

215,433

 

100.0

%

$

201,882

 

100.0

%

$

636,253

 

100.0

%

$

590,227

 

100.0

%

 

(1)
The selection process for CDPAP fiscal intermediaries has changed significantly in recent years and the program continues to be an area of focus for New York governmental authorities. As a result of the changes and uncertainty in the state, the Company determined that its New York personal care operations no longer fit its growth strategy and reached an agreement to divest these operations. See Note 4 to the Notes to Unaudited Condensed Consolidated Financial Statements, Acquisition and Divestiture, for additional details regarding our divestiture.

 

Hospice Segment

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Medicare

$

52,413

 

91.5

%

$

47,313

 

89.1

%

$

154,187

 

91.1

%

$

137,432

 

90.2

%

Commercial insurance

 

2,892

 

5.0

 

 

3,640

 

6.8

 

 

8,870

 

5.2

 

 

8,916

 

5.8

 

Managed care organizations

 

1,821

 

3.2

 

 

1,808

 

3.4

 

 

5,518

 

3.3

 

 

5,022

 

3.3

 

Other

 

183

 

0.3

 

 

360

 

0.7

 

 

627

 

0.4

 

 

1,044

 

0.7

 

Total hospice segment net service revenues

$

57,309

 

100.0

%

$

53,121

 

100.0

%

$

169,202

 

100.0

%

$

152,414

 

100.0

%

Ohio

$

21,531

 

37.6

%

$

18,916

 

35.6

%

$

62,400

 

36.9

%

$

55,363

 

36.3

%

Illinois

 

13,289

 

23.2

 

 

12,477

 

23.5

 

 

38,544

 

22.8

 

 

34,750

 

22.8

 

New Mexico

 

6,951

 

12.1

 

 

7,619

 

14.3

 

 

21,361

 

12.6

 

 

23,688

 

15.5

 

All other states

 

15,538

 

27.1

 

 

14,109

 

26.6

 

 

46,897

 

27.7

 

 

38,613

 

25.4

 

Total hospice segment net service revenues

$

57,309

 

100.0

%

$

53,121

 

100.0

%

$

169,202

 

100.0

%

$

152,414

 

100.0

%

 

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Table of Contents

 

 

Home Health Segment

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Amount
(in Thousands)

 

% of
Segment
Net Service
Revenues

 

Medicare

$

12,036

 

70.6

%

$

11,325

 

72.1

%

$

36,216

 

69.6

%

$

29,306

 

73.9

%

Managed care organizations

 

4,215

 

24.7

 

 

3,445

 

21.9

 

 

13,291

 

25.6

 

 

8,239

 

20.8

 

Other

 

794

 

4.7

 

 

948

 

6.0

 

 

2,493

 

4.8

 

 

2,114

 

5.3

 

Total home health segment net service revenues

$

17,045

 

100.0

%

$

15,718

 

100.0

%

$

52,000

 

100.0

%

$

39,659

 

100.0

%

New Mexico

$

8,090

 

47.4

%

$

8,040

 

51.2

%

$

24,166

 

46.5

%

$

25,277

 

63.7

%

Illinois

 

2,413

 

14.2

 

 

2,909

 

18.5

 

 

8,397

 

16.1

 

 

9,539

 

24.1

 

Tennessee

 

6,542

 

38.4

 

 

4,769

 

30.3

 

 

19,437

 

37.4

 

 

4,843

 

12.2

 

Total home health segment net service revenues

$

17,045

 

100.0

%

$

15,718

 

100.0

%

$

52,000

 

100.0

%

$

39,659

 

100.0

%

The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 38.6% and 38.9% of our net service revenues for the three months ended September 30, 2024 and 2023, respectively, and accounted for 38.5% and 39.2% of our net service revenues for the nine months ended September 30, 2024 and 2023, respectively.

A significant amount of our net service revenues are derived from one payor, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 21.4% and 20.5% of our net service revenues for the three months ended September 30, 2024 and 2023, respectively, and accounted for 21.1% and 21.2% of the Company’s net service revenues for the nine months ended September 30, 2024 and 2023, respectively.

Changes in Reimbursement Rates

Illinois

The City of Chicago requires the Chicago minimum wage to be adjusted annually based on increases in the Consumer Price Index (“CPI”), subject to a cap and other requirements. On July 1, 2024, the rate was adjusted to $16.20 based on the increase in the CPI.

The Illinois fiscal year 2023 budget included an increase of hourly rates for in-home care services to $25.66, to be effective January 1, 2023. This increase offsets the $0.40 increase in Chicago minimum wage that occurred on July 1, 2022. In addition, CMS approved a waiver amendment proposal submitted by the Illinois Department of Healthcare and Family Services with regard to its Persons who are Elderly program, further increasing in-home care rates to $26.92, effective March 1, 2023.

The Illinois Medicaid omnibus legislation passed in June 2023 included an increase in hourly rates for in-home care services to $28.07, which took effect on January 1, 2024 and required a minimum wage rate of $17.00 per hour. CMS approved an amendment to the Illinois HCBS Waiver for Persons Who are Elderly, which included the rate increase for in-home care services to $28.07, effective January 1, 2024.

The Illinois fiscal year 2025 budget includes an increase in hourly rates for in-home care services to $29.63, to take effect January 1, 2025, subject to federal approval. This rate supports the required minimum wage of $18.00 per hour for direct service workers.

Our business will benefit from the rate increases noted above as planned for 2025, but there is no assurance that there will be additional rate increases in Illinois for fiscal years beyond fiscal year 2025 to offset increases to minimum wage, and our financial performance will be adversely impacted for any periods in which an additional offsetting reimbursement rate increase is not in effect.

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Table of Contents

 

Impact of Changes in Medicare and Medicaid Reimbursement

Hospice

Hospice services provided to Medicare beneficiaries are paid under the Medicare Hospice Prospective Payment System, under which CMS sets a daily rate for each day a patient is enrolled in the hospice benefit. CMS updates these rates each federal fiscal year. Effective October 1, 2024, CMS increased hospice payment rates by 2.9%. This reflects a 3.4% market basket increase and a negative 0.5 percentage point productivity adjustment. Hospices that do not satisfy quality reporting requirements are subject to a 4-percentage point reduction to the market basket update.

Overall payments made by Medicare to each hospice provider number are subject to an inpatient cap and an aggregate cap, which is set each federal fiscal year. The inpatient cap limits the number of days of inpatient care to no more than 20% of total patient care days. The aggregate cap, which limits the total Medicare reimbursement that a hospice may receive based on an annual per-beneficiary cap amount and the number of Medicare patients served, was updated to $34,465.34 for federal fiscal year 2025. If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay Medicare the excess amount.

Home Health

Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System (“HHPPS”), which uses national, standardized 30-day period payment rates for periods of care that meet a certain threshold of home health visits (periods of care that do not meet the visit threshold are paid a per-visit payment rate for providing care). Although payment is made for each 30-day period, the HHPPS permits continuous 60-day certification periods through which beneficiaries are verified as eligible for the home health benefit. The daily home health payment rate is adjusted for case-mix and area wage levels. CMS uses the Patient-Driven Groupings Model (“PDGM”) as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics and their resource needs. An outlier adjustment may be paid for periods of care where costs exceed a specific threshold amount.

CMS updates the HHPPS payment rates each calendar year. For calendar year 2024, CMS estimates that Medicare payments to home health agencies will increase by 0.8%. This is based on a home health payment update percentage of 3.0, which reflects a 3.3% market basket update reduced by a productivity adjustment of negative 0.3 percentage points, and an estimated 2.6% decrease associated with the transition to the PDGM, among other changes. Home health providers that do not comply with quality data reporting requirements are subject to a 2-percentage point reduction to their market basket update. In addition, Medicare requires home health agencies to submit a one-time Notice of Admission (“NOA”) for each patient that establishes that the beneficiary is under a Medicare home health period of care. Failure to submit the NOA within five calendar days from the start of care will result in a reduction to the 30-day period payment amount for each day from the start of care date until the date the NOA is submitted.

CMS began implementing a nationwide expansion of the Home Health Value-Based Purchasing (“HHVBP”) Model in 2022. Under the HHVBP Model, home health agencies receive increases or decreases to their Medicare fee-for-service payments of up to 5% based on performance against specific quality measures relative to the performance of other home health providers. Data collected in each performance year will impact Medicare payments two years later. Calendar year 2023 was the first performance year under the expanded HHVBP Model, which will affect payments in calendar year 2025.

In certain states, payment of claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals and improve provider compliance with Medicare program requirements. The program currently applies to home health agencies in certain states, including Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas. Providers in states subject to the Review Choice Demonstration for Home Health Services may initially select either pre-claim review or post-payment review. Previously, providers could also opt for minimal post-payment review with a 25% payment reduction, but CMS has removed this option. Providers that had selected the minimal post-payment review option transitioned to pre-claim or post-payment review in mid-July. Home health agencies that maintain high compliance levels are eligible for additional options that may be less burdensome. This program has not had a material impact on our results of operations or financial position.

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The IMPACT Act required the Department of Health and Human Services (“HHS”), together with the Medicare Payment Advisory Commission (“MedPAC”), to consider and propose a unified payment system for post-acute care services provided by home health agencies, inpatient rehabilitation facilities, skilled nursing facilities and long-term care hospitals. A unified post-acute care payment system would pay post-acute care providers under a single framework according to a patient’s characteristics, rather than based on the post-acute care setting where the patient receives treatment. As required under the statute, CMS and the HHS Office of the Assistant Secretary for Planning and Evaluation issued a report in July 2022 presenting a prototype for a unified post-acute care payment model, and MedPAC submitted a report to Congress in June 2023 evaluating a prototype design. Although both CMS and MedPAC concluded that designing a unified payment system is feasible, CMS noted that universal implementation of a unified payment system would require congressional action and MedPAC cautioned that implementation would be complex. Due to the agency resources required to implement a unified model, MedPAC noted that CMS may consider smaller-scale site-neutral policies to address some of the overlap in patients treated in different settings and highlighted that recent changes to various post-acute care payment systems address some of the concerns underlying the push for a unified model.

New York Consumer Directed Personal Assistance Program (CDPAP)

The CDPAP is a self-directed care alternative program that allows eligible individuals who need help with activities of daily living or skilled nursing services to choose their caregivers. We provide support services as a CDPAP fiscal intermediary. The Company recognized approximately $9.3 million and $30.3 million in revenue from the program for the three and nine months ended September 30, 2024, respectively and $10.2 million and $30.6 million in revenue from the program for the three and nine months ended September 30, 2023, respectively.

The selection process for CDPAP fiscal intermediaries has changed significantly in recent years and the program continues to be an area of focus for New York governmental authorities. As a result of the changes and uncertainty in the state, the Company determined that its New York personal care operations no longer fit its growth strategy and reached an agreement to divest these operations. See Note 4 to the Notes to Unaudited Condensed Consolidated Financial Statements, Acquisition and Divestiture, for additional details regarding our divestiture.

CMS Final Rule: “Ensuring Access to Medicaid Services”

On April 22, 2024, CMS announced a final rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems. The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions. States are required to ensure compliance with the 80/20 requirement by mid-2030. The final rule made a number of technical changes to the definitions used in calculating compliance that clarified or narrowed the revenue covered by the calculation and clarified or expanded the payments to workers that are counted in satisfying the requirement, which combined to make compliance less onerous to providers.

The final rule includes several other measures intended to promote transparency and enhance quality and access to services, including a variety of reporting requirements for states. Given the very long implementation period and the likelihood of further changes as a result of litigation, administration changes, further rule-making and state changes in response to the final rule, it is premature to predict the ultimate impact of the final rule on our business.

Components of our Statements of Income

Net Service Revenues

We generate net service revenues by providing our services directly to consumers and primarily on an hourly basis in our personal care segment, on a daily basis in our hospice segment and on an episodic basis in our home health segment. We receive payment for providing such services from our private consumers and payors, including federal, state and local governmental agencies, managed care organizations and commercial insurers.

In our personal care segment, net service revenues are principally provided based on authorized hours, determined by the relevant agency, at an hourly rate, which is either contractual or fixed by legislation, and are recognized at the time services are rendered. In our hospice segment, net service revenues are provided based on daily rates for each of the levels of care and are recognized as services are provided. In our home health segment, net service revenues are based on an episodic basis at a stated rate and recognized based on the number of days elapsed during a period of care within the reporting period. We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record revenues.

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Cost of Service Revenues

We incur direct care wages, payroll taxes and benefit-related costs in connection with providing our services. We also provide workers’ compensation and general liability coverage for our employees. Employees are also reimbursed for their travel time and related travel costs in certain instances.

General and Administrative Expenses

Our general and administrative expenses include our costs for operating our network of local agencies and our administrative offices. Our agency expenses consist of costs for supervisory personnel, our community care supervisors and office administrative costs. Personnel costs include wages, payroll taxes and employee benefits. Facility costs include rents, utilities, and postage, telephone and office expenses. Our corporate and support center expenses include costs for accounting, information systems, human resources, billing and collections, contracting, marketing and executive leadership. These expenses consist of compensation, including stock-based compensation, payroll taxes, employee benefits, legal, accounting and other professional fees, travel, general insurance, rents, provision for doubtful accounts and related facility costs. Expenses related to streamlining our operations such as costs related to terminated employees, termination of professional services relationships, other contract termination costs and asset write-offs are also included in general and administrative expenses.

Depreciation and Amortization Expenses

Depreciable assets consist principally of furniture and equipment, network administration and telephone equipment and operating system software. Depreciable and leasehold assets are depreciated or amortized on a straight-line method over their useful lives or, if less and if applicable, their lease terms. We amortize our intangible assets with finite lives, consisting of customer and referral relationships, trade names, trademarks and non-competition agreements, using straight line or accelerated methods based upon their estimated useful lives.

Interest Expense

Interest expense is reported when incurred and principally consists of interest and unused credit line fees on the credit facility.

Income Tax Expense

All of our income is from domestic sources. We incur state and local taxes in the states in which we operate. The effective income tax rates were 26.1% and 23.8% for the three months ended September 30, 2024 and 2023, respectively. The effective income tax rates were 26.1% and 23.3% for the nine months ended September 30, 2024 and 2023, respectively. The difference between our federal statutory rate of 21% and our effective income tax rates is principally due to the inclusion of state taxes and non-deductible compensation, partially offset by the use of federal employment tax credits.

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Results of Operations — Consolidated

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

The following table sets forth, for the periods indicated, our unaudited condensed consolidated results of operations.

 

 

 

For the Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

 

2023

 

 

 

Change

 

 

 

 

 

 

 

% Of

 

 

 

 

 

 

% Of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Service

 

 

 

 

 

 

Net Service

 

 

 

 

 

 

 

 

 

 

 

Amount

 

 

Revenues

 

 

 

Amount

 

 

Revenues

 

 

 

Amount

 

 

%

 

 

 

 

(Amounts in Thousands, Except Percentages)

 

 

Net service revenues

 

$

289,787

 

 

 

100.0

 

%

 

$

270,721

 

 

 

100.0

 

%

 

$

19,066

 

 

 

7.0

 

%

Cost of service revenues

 

 

197,583

 

 

 

68.2

 

 

 

 

183,991

 

 

 

68.0

 

 

 

 

13,592

 

 

 

7.4

 

 

Gross profit

 

 

92,204

 

 

 

31.8

 

 

 

 

86,730

 

 

 

32.0

 

 

 

 

5,474

 

 

 

6.3

 

 

General and administrative expenses

 

 

62,805

 

 

 

21.7

 

 

 

 

60,271

 

 

 

22.3

 

 

 

 

2,534

 

 

 

4.2

 

 

Depreciation and amortization

 

 

3,446

 

 

 

1.2

 

 

 

 

3,620

 

 

 

1.3

 

 

 

 

(174

)

 

 

(4.8

)

 

Total operating expenses

 

 

66,251

 

 

 

22.9

 

 

 

 

63,891

 

 

 

23.6

 

 

 

 

2,360

 

 

 

3.7

 

 

Operating income

 

 

25,953

 

 

 

8.9

 

 

 

 

22,839

 

 

 

8.4

 

 

 

 

3,114

 

 

 

13.6

 

 

Interest income

 

 

(1,908

)

 

 

(0.7

)

 

 

 

(580

)

 

 

(0.2

)

 

 

 

(1,328

)

 

 

228.8

 

 

Interest expense

 

 

573

 

 

 

0.2

 

 

 

 

3,199

 

 

 

1.2

 

 

 

 

(2,626

)

 

 

(82.1

)

 

Total interest expense, net

 

 

(1,335

)

 

 

(0.5

)

 

 

 

2,619

 

 

 

1.0

 

 

 

 

(3,954

)

 

 

(151.0

)

 

Income before income taxes

 

 

27,288

 

 

 

9.4

 

 

 

 

20,220

 

 

 

7.4

 

 

 

 

7,068

 

 

 

35.0

 

 

Income tax expense

 

 

7,125

 

 

 

2.5

 

 

 

 

4,809

 

 

 

1.8

 

 

 

 

2,316

 

 

 

48.2

 

 

Net income

 

$

20,163

 

 

 

6.9

 

%

 

$

15,411

 

 

 

5.7

 

%

 

$

4,752

 

 

 

30.8

 

%

 

Net service revenues increased by 7.0% to $289.8 million for the three months ended September 30, 2024 compared to $270.7 million for the three months ended September 30, 2023. Revenue increased by $13.6 million in our personal care segment, $4.2 million in our hospice segment and $1.3 million in our home health segment during the three months ended September 30, 2024, compared to the same period in 2023. The increase in our personal care segment was mainly due to an increase in revenues per billable hour for the three months ended September 30, 2024. The increase in our hospice and home health segments was primarily due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.

Gross profit, expressed as a percentage of net service revenues, decreased to 31.8% for the three months ended September 30, 2024, compared to 32.0% for the same period in 2023, due to slightly lower margins in our personal care and hospice segments as the result of increases to direct care wages.

General and administrative expenses increased to $62.8 million for the three months ended September 30, 2024, as compared to $60.3 million for the three months ended September 30, 2023. The increase in general and administrative expenses was primarily due to the Tennessee Quality Care acquisition that resulted in an increase in administrative employee wages, bonus, taxes and benefit costs of $2.5 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 21.7% for the three months ended September 30, 2024, from 22.3% for the three months ended September 30, 2023.

Interest expense decreased to $0.6 million for the three months ended September 30, 2024 from $3.2 million for the three months ended September 30, 2023. The decrease in interest expense was primarily due to decreased amounts held under our credit facility for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Interest income increased $1.3 million due to an increase in cash investment into interest bearing accounts from the Public Offering.

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 26.1% and 23.8% for the three months ended September 30, 2024 and 2023, respectively. Our higher effective income tax rate for the three months ended September 30, 2024 was principally due to a lower excess tax benefit as well as a lower benefit from the use of federal employment tax credits. For the three months ended September 30, 2024 and 2023, the excess tax benefit and federal employment tax credits were 3.1% and 5.0%, respectively.

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Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

The following table sets forth, for the periods indicated, our unaudited condensed consolidated results of operations.

 

 

 

For the Nine Months
Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

 

2023

 

 

 

Change

 

 

 

 

 

 

 

% Of

 

 

 

 

 

 

% Of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Service

 

 

 

 

 

 

Net Service

 

 

 

 

 

 

 

 

 

 

 

Amount

 

 

Revenues

 

 

 

Amount

 

 

Revenues

 

 

 

Amount

 

 

%

 

 

 

(Amounts in Thousands, Except Percentages)

 

 

Net service revenues

 

$

857,455

 

 

 

100.0

 

%

 

$

782,300

 

 

 

100.0

 

%

 

$

75,155

 

 

 

9.6

 

%

Cost of service revenues

 

 

583,916

 

 

 

68.1

 

 

 

 

534,837

 

 

 

68.4

 

 

 

 

49,079

 

 

 

9.2

 

 

Gross profit

 

 

273,539

 

 

 

31.9

 

 

 

 

247,463

 

 

 

31.6

 

 

 

 

26,076

 

 

 

10.5

 

 

General and administrative expenses

 

 

187,444

 

 

 

21.9

 

 

 

 

174,028

 

 

 

22.2

 

 

 

 

13,416

 

 

 

7.7

 

 

Depreciation and amortization

 

 

10,316

 

 

 

1.2

 

 

 

 

10,449

 

 

 

1.3

 

 

 

 

(133

)

 

 

(1.3

)

 

Total operating expenses

 

 

197,760

 

 

 

23.1

 

 

 

 

184,477

 

 

 

23.5

 

 

 

 

13,283

 

 

 

7.2

 

 

Operating income

 

 

75,779

 

 

 

8.8

 

 

 

 

62,986

 

 

 

8.0

 

 

 

 

12,793

 

 

 

20.3

 

 

Interest income

 

 

(2,805

)

 

 

(0.3

)

 

 

 

(977

)

 

 

(0.1

)

 

 

 

(1,828

)

 

 

187.1

 

 

Interest expense

 

 

5,445

 

 

 

0.6

 

 

 

 

7,991

 

 

 

1.0

 

 

 

 

(2,546

)

 

 

(31.9

)

 

Total interest expense, net

 

 

2,640

 

 

 

0.3

 

 

 

 

7,014

 

 

 

0.9

 

 

 

 

(4,374

)

 

 

(62.4

)

 

Income before income taxes

 

 

73,139

 

 

 

8.5

 

 

 

 

55,972

 

 

 

7.1

 

 

 

 

17,167

 

 

 

30.7

 

 

Income tax expense

 

 

19,067

 

 

 

2.2

 

 

 

 

13,034

 

 

 

1.7

 

 

 

 

6,033

 

 

 

46.3

 

 

Net income

 

$

54,072

 

 

 

6.3

 

%

 

$

42,938

 

 

 

5.4

 

%

 

$

11,134

 

 

 

25.9

 

%

 

Net service revenues increased by 9.6% to $857.5 million for the nine months ended September 30, 2024 compared to $782.3 million for the nine months ended September 30, 2023. Net service revenue increased by $46.0 million in our personal care segment, by $16.8 million in our hospice segment and by $12.3 million in our home health segment during the nine months ended September 30, 2024, compared to the same period in 2023. During the nine months ended September 30, 2024, the increase in our personal care segment net service revenues was primarily due to an increase in revenues per billable hour, attributable to the rate increases discussed above, compared to the same period in 2023. The increase in net service revenues in our hospice and home health segments is primarily attributable to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.

Gross profit, expressed as a percentage of net service revenues, increased to 31.9% for the nine months ended September 30, 2024 compared to 31.6% for the nine months ended September 30, 2023 due to an increase in net service revenues and gross profit in our personal care segment and higher margin in our hospice segment due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.

General and administrative expenses increased to $187.4 million for the nine months ended September 30, 2024 as compared to $174.0 million for the nine months ended September 30, 2023. The increase in general and administrative expenses was primarily due to the Tennessee Quality Care acquisitions that resulted in an increase in administrative employee wages, bonus, taxes and benefit costs of $8.4 million and an increase in acquisition-related expense of $2.8 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 21.9% for the nine months ended September 30, 2024, from 22.2% for the nine months ended September 30, 2023.

Interest expense decreased to $5.4 million for the nine months ended September 30, 2024, as compared to $8.0 million for the nine months ended September 30, 2023. The decrease in interest expense was primarily due to decreased amounts held under our credit facility for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Interest income increased $1.8 million due to an increase in cash investment into interest bearing accounts from the Public Offering.

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 26.1% and 23.3% for the nine months ended September 30, 2024 and 2023, respectively. Our higher effective income tax rate for the nine months ended September 30, 2024 was principally due to a lower excess tax benefit as well as a lower benefit from the use of federal employment tax credits. For the nine months ended September 30, 2024 and 2023, the excess tax benefit and federal employment tax credits were 3.1% and 5.8%, respectively.

 

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Results of Operations – Segments

The following tables and related analysis summarize our operating results and business metrics by segment:

Personal Care Segment

 

 

For the Three Months
Ended September 30,

 

For the Nine Months
Ended September 30,

 

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

 

 

(Amounts in Thousands, Except Percentages)

 

 

(Amounts in Thousands, Except Percentages)

 

Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net service revenues

$

215,433

 

100.0

%

$

201,882

 

100.0

%

$

13,551

 

6.7

%

$

636,253

 

100.0

%

$

590,227

 

100.0

%

$

46,026

 

7.8

%

Cost of services revenues

 

156,273

 

72.5

 

 

145,808

 

72.2

 

 

10,465

 

7.2

 

 

461,564

 

72.5

 

 

428,163

 

72.5

 

 

33,401

 

7.8

 

Gross profit

 

59,160

 

27.5

 

 

56,074

 

27.8

 

 

3,086

 

5.5

 

 

174,689

 

27.5

 

 

162,064

 

27.5

 

 

12,625

 

7.8

 

General and administrative expenses

 

17,489

 

8.1

 

 

16,096

 

8.0

 

 

1,393

 

8.7

 

 

49,907

 

7.8

 

 

48,299

 

8.2

 

 

1,608

 

3.3

 

Segment operating income

$

41,671

 

19.3

%

$

39,978

 

19.8

%

$

1,693

 

4.2

%

$

124,782

 

19.7

%

$

113,765

 

19.3

%

$

11,017

 

9.7

%

Business Metrics (Actual Numbers, Except Billable Hours in Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Locations at period end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

153

 

 

 

 

156

 

 

 

 

 

 

 

 

Average billable census * (1)

 

37,701

 

 

 

 

38,590

 

 

 

 

(889)

 

(2.3)

%

 

37,803

 

 

 

 

38,668

 

 

 

 

(865)

 

(2.2)

%

Billable hours * (2)

 

7,776

 

 

 

 

7,690

 

 

 

 

86

 

1.1

 

 

23,098

 

 

 

 

22,964

 

 

 

 

134

 

0.6

 

Average billable hours per census per month * (2)

 

68.7

 

 

 

 

66.3

 

 

 

 

2.4

 

3.6

 

 

67.8

 

 

 

 

65.8

 

 

 

 

2.0

 

3.0

 

Billable hours per business day * (2)

 

117,822

 

 

 

 

118,314

 

 

 

 

(492)

 

(0.4)

 

 

117,849

 

 

 

 

117,765

 

 

 

 

84

 

0.1

 

Revenues per billable hour * (2)

$

27.66

 

 

 

$

26.18

 

 

 

$

1.48

 

5.7

%

$

27.49

 

 

 

$

25.58

 

 

 

$

1.91

 

7.5

%

Same store growth revenue % * (3)

 

6.8

%

 

 

 

13.9

%

 

 

 

 

 

 

 

 

8.4

%

 

 

 

12.5

%

 

 

 

 

 

 

 

 

(1)
Average billable census is the number of unique clients receiving a billable service during the year and is the total census divided by months in operation during the period.
(2)
Billable hours is the total number of hours served to clients during the period. Average billable hours per census per month is billable hours divided by average billable census. Billable hours per day is total billable hours divided by the number of business days in the period. Revenues per billable hour is revenue, attributed to billable bonus hours, divided by billable hours.
(3)
Same store growth reflects the change in year-over-year revenue for the same store base. We define the same store base to include those stores open for at least 52 full weeks. This measure highlights the performance of existing stores, while excluding the impact of acquisitions, new store openings and closures and ARPA associated revenue from this calculation.

* Management deems these metrics to be key performance indicators. Management uses these metrics to monitor our performance, both in our existing operations and acquisitions. Many of these metrics serve as the basis of reported revenues and assessment of these provide direct correlation to the results of operations from period to period and facilitate comparison with the results of our peers. Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings. We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly titled performance indicators used by other companies.

The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 38.6% and 38.9% of our net service revenues for the three months ended September 30, 2024 and 2023, respectively, and accounted for 38.5% and 39.2% of our net service revenues for the nine months ended September 30, 2024 and 2023, respectively. One payor, the Illinois Department on Aging, accounted for 21.4% and 20.5% of net service revenues for the three months ended September 30, 2024 and 2023, respectively, and accounted for 21.1% and 21.2% of net service revenues for the nine months ended September 30, 2024 and 2023, respectively.

Net service revenues from state, local and other governmental programs accounted for 54.2% and 50.4% of personal care segment net service revenues for the three months ended September 30, 2024 and 2023, respectively. Managed care organizations accounted for 43.3% and 46.4% of personal care segment net service revenues for the three months ended September 30, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of personal care segment net service revenues. Net service revenues from state, local and other governmental programs accounted for 53.0% and 50.4% of net service revenues for the nine months ended September 30, 2024 and 2023, respectively. Managed care organizations accounted for 44.3% and 46.2% of personal care segment net service revenues for the nine months ended September 30, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of net service revenues.

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Personal care segment net service revenues increased by 6.7% and 7.8% for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023. Net service revenues included a 5.7% and 7.5% increase in revenues per billable hour for the three and nine months ended September 30, 2024, respectively, mainly attributed to rate increases discussed above, as compared to the three and nine months ended September 30, 2023.

Gross profit, expressed as a percentage of net service revenues, decreased to 27.5% for the three months ended September 30, 2024 from 27.8% for the three months ended September 30, 2023. The decrease was mainly attributed to increases in direct care wages, taxes and benefit costs for the three months ended September 30, 2024. Gross profit, expressed as a percentage of net service revenues, was 27.5% for both the nine months ended September 30, 2024 and the nine months ended September 30, 2023.

The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 8.1% and 8.0% for the three months ended September 30, 2024 and 2023, respectively, and 7.8% and 8.2% for the nine months ended September 30, 2024 and 2023, respectively.

Hospice Segment

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

 

 

(Amounts in Thousands, Except Percentages)

 

 

(Amounts in Thousands, Except Percentages)

 

Operating Results

 

 

 

 

 

 

Net service revenues

$

57,309

 

100.0

%

$

53,121

 

100.0

%

$

4,188

 

7.9

%

$

169,202

 

100.0

%

$

152,414

 

100.0

%

$

16,788

 

11.0

%

Cost of services revenues

 

30,469

 

53.2

 

 

28,155

 

53.0

 

 

2,314

 

8.2

 

 

89,166

 

52.7

 

 

82,028

 

53.8

 

 

7,138

 

8.7

 

Gross profit

 

26,840

 

46.8

 

 

24,966

 

47.0

 

 

1,874

 

7.5

 

 

80,036

 

47.3

 

 

70,386

 

46.2

 

 

9,650

 

13.7

 

General and administrative expenses

 

14,070

 

24.6

 

 

13,246

 

24.9

 

 

824

 

6.2

 

 

40,975

 

24.2

 

 

39,028

 

25.6

 

 

1,947

 

5.0

 

Segment operating income

$

12,770

 

22.2

%

$

11,720

 

22.1

%

$

1,050

 

9.0

%

$

39,061

 

23.1

%

$

31,358

 

20.6

%

$

7,703

 

24.6

%

Business Metrics (Actual Numbers)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Locations at period end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

40

 

 

 

 

 

 

 

 

Admissions * (1)

 

3,105

 

 

 

 

3,176

 

 

 

 

(71)

 

-2.2

%

 

9,771

 

 

 

 

9,576

 

 

 

 

195

 

2.0

%

Average daily census * (2)

 

3,534

 

 

 

 

3,453

 

 

 

 

81

 

2.3

 

 

3,457

 

 

 

 

3,426

 

 

 

 

31

 

0.9

 

Average discharge length of stay * (3)

 

96

 

 

 

 

97

 

 

 

 

(1)

 

(0.8)

 

 

93

 

 

 

 

93

 

 

 

 

(0)

 

(0.3)

 

Patient days * (4)

 

325,160

 

 

 

 

311,454

 

 

 

 

13,706

 

4.4

 

 

947,241

 

 

 

 

892,507

 

 

 

 

54,734

 

6.1

 

Revenue per patient day * (5)

$

176.25

 

 

 

$

175.19

 

 

 

$

1.06

 

0.6

%

$

179.43

 

 

 

$

175.23

 

 

 

$

4.20

 

2.4

%

Organic growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 - Revenue * (6)

 

3.5

%

 

 

 

3.1

%

 

 

 

 

 

 

 

 

5.2

%

 

 

 

1.5

%

 

 

 

 

 

 

 

 - Average daily census * (6)

 

2.1

%

 

 

 

(0.9)

%

 

 

 

 

 

 

 

 

0.8

%

 

 

 

0.8

%

 

 

 

 

 

 

 

 

(1)
Represents referral process and new patients on service during the period.
(2)
Average daily census is total patient days divided by the number of days in the period.
(3)
Average length of stay is the average number of days a patient is on service, calculated upon discharge, and is total patient days divided by total discharges in the period.
(4)
Patient days is days of service for all patients in the period.
(5)
Revenue per patient day is hospice revenue divided by the number of patient days in the period.
(6)
Revenue organic growth and average daily census organic growth reflect the change in year-over-year revenue and average daily census for the same store base. We define the same store base to include those stores open for at least 52 full weeks. These measures highlight the performance of existing stores, while excluding the impact of acquisitions, new store openings and closures.

* Management deems these metrics to be key performance indicators. Management uses these metrics to monitor our performance, both in our existing operations and acquisitions. Many of these metrics serve as the basis of reported revenues and assessment of these provide direct correlation to the results of operations from period to period and facilitate comparison with the results of our peers. Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings. We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly titled performance indicators used by other companies.

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The hospice segment generates net service revenues by providing care to patients with a life expectancy of six months or less, as well as related services for their families. Hospice offers four levels of care, as defined by Medicare, to meet the varying needs of patients and their families. The four levels of hospice include routine home care, continuous home care, general inpatient care and respite care. Our hospice segment principally provides routine home care and continuous home care services, and with the JourneyCare acquisition, expanded into providing general inpatient care services. In our hospice segment, net service revenues from Medicare accounted for 91.5% and 89.1% of total hospice segment net service revenues for the three months ended September 30, 2024 and 2023, respectively, and 91.1% and 90.2% for the nine months ended September 30, 2024 and 2023, respectively. Net service revenues from managed care organizations accounted for 3.2% and 3.4% of total hospice segment net service revenues for each the three months ended September 30, 2024 and 2023, respectively, and 3.3% and 3.3% for the nine months ended September 30, 2024 and 2023, respectively.

Hospice net service revenues increased by $4.2 million and $16.8 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023, primarily attributed to organic growth and the acquisitions of the operations of Tennessee Quality Care on August 1, 2023.

Gross profit, expressed as a percentage of net service revenues, was 46.8% and 47.0% for the three months ended September 30, 2024 and 2023, respectively, and 47.3% and 46.2% for the nine months ended September 30, 2024 and 2023, respectively. For the three months ended September 30, 2024, gross profit was relatively consistent with the prior period, and for the nine months ended September 30, 2024, the increase was mainly attributed to a decrease in direct care wages, taxes and benefit costs as a percentage of net service revenues.

The hospice segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 24.6% and 24.9% for the three months ended September 30, 2024 and 2023, respectively, and 24.2% and 25.6% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in general and administrative expenses as a percentage of net service revenues was primarily due to more efficient operations for administrative employees for the three and nine months ended September 30, 2024.

Home Health Segment

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

2024

 

2023

 

Change

 

2024

 

2023

 

Change

 

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

% of
Segment
Net Service
Revenues

 

Amount

 

%

 

 

 

(Amounts in Thousands, Except Percentages)

 

 

(Amounts in Thousands, Except Percentages)

 

Operating Results

 

 

 

 

 

 

Net service revenues

$

17,045

 

100.0

%

$

15,718

 

100.0

%

$

1,327

 

8.4

%

$

52,000

 

100.0

%

$

39,659

 

100.0

%

$

12,341

 

31.1

%

Cost of services revenues

 

10,841

 

63.6

 

 

10,028

 

63.8

 

 

813

 

8.1

 

 

33,186

 

63.8

 

 

24,646

 

62.1

 

 

8,540

 

34.6

 

Gross profit

 

6,204

 

36.4

 

 

5,690

 

36.2

 

 

514

 

9.0

 

 

18,814

 

36.2

 

 

15,013

 

37.9

 

 

3,801

 

25.3

 

General and administrative expenses

 

4,338

 

25.5

 

 

4,131

 

26.3

 

 

207

 

5.0

 

 

13,447

 

25.9

 

 

9,653

 

24.3

 

 

3,794

 

39.3

 

Segment operating income

$

1,866

 

10.9

%

$

1,559

 

9.9

%

$

307

 

19.7

%

$

5,367

 

10.3

%

$

5,360

 

13.6

%

$

6.5

 

0.1

%

Business Metrics (Actual Numbers)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Locations at period end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

 

24

 

 

 

 

 

 

 

 

New admissions * (1)

 

4,437

 

 

 

 

4,265

 

 

 

 

172

 

4.0

%

 

14,257

 

 

 

 

11,597

 

 

 

 

2,660

 

22.9

%

Recertifications * (2)

 

3,353

 

 

 

 

2,672

 

 

 

 

681

 

25.5

 

 

9,798

 

 

 

 

5,816

 

 

 

 

3,982

 

68.5

 

Total volume * (3)

 

7,790

 

 

 

 

6,937

 

 

 

 

853

 

12.3

 

 

24,055

 

 

 

 

17,413

 

 

 

 

6,642

 

38.1

 

Visits * (4)

 

104,730

 

 

 

 

94,637

 

 

 

 

10,093

 

10.7

%

 

322,713

 

 

 

 

240,758

 

 

 

 

81,955

 

34.0

%

Organic growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 - Revenue * (5)

 

(1.7)

%

 

 

 

(8.8)

%

 

 

 

 

 

 

 

 

(5.4)

%

 

 

 

(2.5)

%

 

 

 

 

 

 

 

 - Admissions * (5)

 

(5.7)

%

 

 

 

(18.9)

%

 

 

 

 

 

 

 

 

(0.3)

%

 

 

 

(13.5)

%

 

 

 

 

 

 

 

 

(1)
Represents new patients during the period.
(2)
A home health certification period is an episode of care that begins with a start of care visit and continues for 60 days. If at the end of the initial episode of care, the patient continues to require home health services, a recertification is required. This represents the number of recertifications during the period.
(3)
Total volume is total admissions and total recertifications in the period.
(4)
Represents number of services to patients in the period.
(5)
Revenue organic growth and admissions organic growth reflect the change in year-over-year revenue and admissions for the same store base. We define the same store base to include those stores open for at least 52 full weeks. These measures highlight the performance of existing stores, while excluding the impact of acquisitions, new store openings and closures.

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* Management deems these metrics to be key performance indicators. Management uses these metrics to monitor our performance, both in our existing operations and acquisitions. Many of these metrics serve as the basis of reported revenues and assessment of these provide direct correlation to the results of operations from period to period and facilitate comparison with the results of our peers. Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings. We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly titled performance indicators used by other companies.

The home health segment generates net service revenues by providing home health services on a short-term, intermittent or episodic basis to individuals, generally to treat an illness or injury. Net service revenues from Medicare accounted for 70.6% and 72.1%, managed care organizations accounted for 24.7% and 21.9% and other accounted for 4.7% and 6.0% of total home health segment net service revenues for the three months ended September 30, 2024 and 2023, respectively. Net service revenues from Medicare accounted for 69.6% and 73.9%, managed care organizations accounted for 25.6% and 20.8% and other accounted for 4.8% and 5.3% of total home health segment net service revenues for the nine months ended September 30, 2024 and 2023, respectively. Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System, which uses national, standardized 30-day period payment rates for periods of care. CMS uses the PDGM as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics. An outlier adjustment may be paid for periods of care in which costs exceed a specific threshold amount.

Home health net service revenues increased by $1.3 million and $12.3 million for the three and nine months ended September 30, 2024, respectively, compared to the three and nine months ended September 30, 2023. Total visits increased for the three months and nine months ended September 30, 2024, mainly attributed to the acquisition of Tennessee Quality Care on August 1, 2023.

Gross profit, expressed as a percentage of net service revenues, was 36.4% and 36.2% for the three months ended September 30, 2024 and 2023, respectively, and 36.2% and 37.9% for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024, the decrease was primarily due to an increase in direct care wages compared to net service revenues.

The home health segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 25.5% and 26.3% for the three months ended September 30, 2024 and 2023, respectively, and 25.9% and 24.3% for the nine months ended September 30, 2024 and 2023, respectively. The increase in general and administrative expenses as a percentage of net service revenues was primarily due to increases in administrative employee wages, taxes and benefit costs for the nine months ended September 30, 2024.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At September 30, 2024 and December 31, 2023, we had cash balances of $222.9 million and $64.8 million, respectively. At September 30, 2024, we had a $600.0 million revolving credit facility and a $125.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility, as of September 30, 2024, was July 30, 2026. It was subsequently extended to July 30, 2028.

During the nine months ended September 30, 2024, we used $0.4 million in cash to fund the Upstate acquisition and repaid $126.4 million under our revolving credit facility. As of September 30, 2024, we had no revolving loans outstanding on our credit facility and after giving effect to the amount drawn on our credit facility, approximately $8.0 million of outstanding letters of credit and borrowing limits based on an advance multiple of adjusted EBITDA (as defined in the Credit Agreement), we had $511.5 million of capacity and $503.5 million available for borrowing under our credit facility. At December 31, 2023, we had a total of $126.4 million revolving credit loans, with an interest rate of 7.21%, outstanding on our credit facility.

Our credit facility requires us to maintain a total net leverage ratio not exceeding 3.75:1.00. At September 30, 2024, we were in compliance with our financial covenants under the Credit Agreement. Although we believe our liquidity position remains strong, we can provide no assurance that we will remain in compliance with the covenants in our Credit Agreement, and in the future, it may prove necessary to seek an amendment with the bank lending group under our credit facility. Additionally, there can be no assurance that we will be able to raise additional funds on terms acceptable to us, if at all.

See Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements, Long-Term Debt, and Note 14 to the Notes to Unaudited Condensed Consolidated Financial Statements, Subsequent Events, for additional details of our long-term debt.

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Table of Contents

 

Public Offering

On June 28, 2024, the Company completed a public offering of an aggregate 1,725,000 shares of common stock, par value $0.001 per share, including 225,000 shares of common stock sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $108.00 per share (the “Public Offering”). The Company received net proceeds of approximately $175.6 million, after deducting underwriting discounts and estimated offering expenses of approximately $10.7 million. The Company used approximately $81.4 million from the net proceeds of the Public Offering for the repayment of indebtedness outstanding under its credit facility and may use any remaining net proceeds of the Public Offering for general corporate purposes, including the Company’s previously announced planned acquisition of the personal care assets of Gentiva and any future acquisitions or investments. The Public Offering resulted in an increase to additional paid in capital of approximately $175.6 million on the Company’s Unaudited Condensed Consolidated Balance Sheet at June 30, 2024.

Current Macroeconomic Conditions and COVID-19 Relief Funding

Economic conditions in the United States continue to be challenging in various respects. For example, the United States economy continues to experience inflationary pressures, elevated interest rates and challenging labor market conditions. Any resulting economic downturn would pose a risk to states’ revenues, which in turn could affect our reimbursements and collections received for services rendered. Depending on the severity and length of any potential economic downturn as well as the extent of any federal support, states could face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax withholdings could be depressed.

ARPA Spending Plans

The ARPA provides for $350 billion in relief funding for eligible state, local, territorial, and Tribal governments to mitigate the fiscal effects of the COVID-19 public health emergency. Additionally, the law provided for a 10 percentage point increase in federal matching funds for Medicaid HCBS from April 1, 2021, through March 31, 2022, provided the state satisfied certain conditions. States are permitted to use the state funds equivalent to the additional federal funds through March 31, 2025. States must use the monies attributable to this matching fund increase to supplement, not supplant, their level of state spending for the implementation of activities enhanced under the Medicaid HCBS in effect as of April 1, 2021.

HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company is participating

include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers). The Company is required to properly and fully document the use of such funds in reports to the state in which the funds originated. Funds may be subject to recoupment if not expended or if they are expended on non-approved uses.

 

During the three and nine months ended September 30, 2024, the Company received additional state funding provided by the ARPA in an aggregate amount of $3.2 million and $15.4 million, respectively. Of the total state funding received by the Company pursuant to the ARPA through September 30, 2024, the Company utilized $2.6 million and $7.5 million during the three and nine months ended September 30, 2024, respectively, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of September 30, 2024, the deferred portion of ARPA funding of $13.7 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.

Medicare sequester

The CARES Act and related laws temporarily lifted the Medicare sequester, which would have otherwise reduced payments to Medicare providers by 2% as required by the Budget Control Act of 2011, from May 1, 2020, through March 31, 2022. The sequestration payment adjustment was phased back in with a 1% reduction beginning April 1, 2022, and returned to 2% on July 1, 2022. These sequestration cuts have been extended through April 2032.

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Table of Contents

 

However, the ARPA increased the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the PAYGO Act. As a result, an additional Medicare payment reduction of up to 4% was required to take effect in January 2022. However, Congress has delayed implementation of this payment reduction until 2025. We cannot currently determine if, or to what extent, our business, results of operations, financial condition or liquidity will ultimately be impacted by mandated sequestration triggers under the PAYGO Act, or if or when the mandated sequestration will occur. Further, we anticipate that the federal deficit will continue to place pressure on government healthcare programs, and it is possible that future deficit reduction legislation will impose additional Medicare spending reductions.

Cash Flows

The following table summarizes changes in our cash flows:

 

 

 

For the Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

(Amounts in Thousands)

 

Net cash provided by operating activities

 

$

106,016

 

 

$

82,198

 

Net cash used in investing activities

 

 

(124

)

 

 

(113,934

)

Net cash provided by financing activities

 

 

52,169

 

 

 

31,525

 

 

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Cash flows from operating activities represent the inflow of cash from our payors and the outflow of cash for payroll and payroll taxes, operating expenses, interest and taxes. Net cash provided by operating activities was $106.0 million for the nine months ended September 30, 2024, compared to net cash provided by operating activities of $82.2 million for the same period in 2023. The increase in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of government stimulus funds. The changes in accounts receivable were primarily related to the growth in revenue and a decrease in days sales outstanding (“DSO”) during the nine months ended September 30, 2024 compared to 2023, as described below. The related receivables due from the Illinois Department on Aging represented 21.7% and 20.5% of the Company’s net accounts receivable at September 30, 2024 and September 30, 2023, respectively, as discussed below.

Net cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $0.4 million of net cash used for the Upstate acquisition and $4.4 million for property and equipment purchases, which were primarily related to our ongoing investments in our technology infrastructure, offset by $4.6 million in proceeds received as a deposit on the sale of our New York business. Net cash used in investing activities for the nine months ended September 30, 2023 primarily consisted of $112.2 million of net cash used for the Tennessee Quality Care acquisition. For the nine months ended September 30, 2023, property and equipment purchases, primarily related to our ongoing investments in our technology infrastructure, were $1.7 million.

Net cash provided by financing activities for the nine months ended September 30, 2024 primarily related to a $126.4 million payment on the revolver portion of our credit facility, offset by $175.6 million in net proceeds received from the Public Offering, and also included cash received from the exercise of stock options of $3.0 million. Net cash provided by financing activities for the nine months ended September 30, 2023 primarily related to borrowings of $110.0 million on the revolver portion of our credit facility to fund, in part, the Tennessee Quality Care acquisition, partially offset by a $78.5 million payment on the revolver portion of our credit facility.

Outstanding Accounts Receivable

Gross accounts receivable as of September 30, 2024 and December 31, 2023 were approximately $100.0 million and $117.8 million, respectively. Outstanding accounts receivable, net of allowance for credit losses, decreased by $18.9 million as of September 30, 2024 as compared to December 31, 2023. Accounts receivable for the Illinois Department on Aging decreased approximately $8.0 million during the nine months ended September 30, 2024. Our collection procedures include review of account aging and direct contact with our payors. We have historically not used collection agencies. An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.

We calculate our DSO by taking the trade accounts receivable outstanding, net of allowance for credit losses for doubtful accounts, divided by the net service revenues for the last quarter, multiplied by the number of days in that quarter. Our DSOs were 32 days and 39 days at September 30, 2024 and December 31, 2023, respectively. The DSOs for our largest payor, the Illinois Department on Aging, were 33 days and 50 days at September 30, 2024 and December 31, 2023, respectively.

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Off-Balance Sheet Arrangements

As of September 30, 2024, we did not have any off-balance sheet guarantees or arrangements with unconsolidated entities.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates previously disclosed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” set forth in Part II, Item 7 of our Annual Report on Form 10-K for the period ended December 31, 2023, filed on February 27, 2024.

Recently Issued Accounting Pronouncements

Refer to Note 2 to the Notes to Unaudited Condensed Consolidated Financial Statements for further discussion.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk associated with changes in interest rates on our variable rate long-term debt. As of September 30, 2024, however, we had no outstanding borrowings on our credit facility. We do not currently have any derivative or hedging arrangements, or other known exposures, to changes in interest rates.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fiscal quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Legal Proceedings

As disclosed in Note 11 to the Condensed Consolidated Financial Statements in Part I, Item 1—“Financial Statements (Unaudited),” which is incorporated herein by reference, from time to time, we are subject to legal and/or administrative proceedings incidental to our business. It is the opinion of management that the outcome of pending legal and/or administrative proceedings will not have a material effect on our financial position and results of operations.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risk factors discussed under the caption “Risk Factors” set forth in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 27, 2024. Except as set forth below, there have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

We may fail to complete the acquisition of Gentiva on a timely basis or at all and may not realize the benefits that are anticipated from the Gentiva Acquisition.

We have entered into the Gentiva Purchase Agreement to acquire the personal care business of Gentiva, for a purchase price of approximately $350.0 million, payable in full in cash at the closing, subject to customary adjustments for working capital and other items. The Gentiva Acquisition is expected to close upon the completion of regulatory approvals and subject to the satisfaction of other closing conditions.

We cannot provide any assurance that we will be able to successfully consummate the Gentiva Acquisition as provided for under the Gentiva Purchase Agreement, or, if such acquisition is completed, we cannot predict the timing of such closing. In addition, we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Gentiva Acquisition, and these fees and costs are payable by us regardless of whether the Gentiva Acquisition is consummated. If we fail to consummate the Gentiva Acquisition or should the completion be significantly delayed, we could fail to realize all or a portion of the intended economic benefits of such acquisition. Any failure to complete the Gentiva Acquisition could have a negative impact on our business, financial condition and the market price of our common stock.

The benefits that are expected to result from the Gentiva Acquisition will depend, in part, on our ability to realize the growth opportunities we anticipate from the Gentiva Acquisition, which is contingent, in part, on successful integration and Gentiva performing in accordance with our expectations. Even a successful integration and meeting performance expectations may not result in the realization of the full benefits we currently expect, nor can we give assurances that these benefits will be achieved when expected or at all. Moreover, we expect to incur expenses in connection with the integration of Gentiva, and as such, the benefits may be offset by costs incurred or delays in integrating the businesses. Further, our due diligence review of Gentiva may not have successfully identified all potential issues. In addition, the integration of Gentiva may result in material unanticipated problems, expenses, liabilities, regulatory risks, and diversion of management’s attention.

The pendency of the Gentiva Acquisition could cause disruptions and create uncertainty surrounding our business and affect our relationships with our customers and employees. We have diverted, and will continue to divert, significant management resources to complete the Gentiva Acquisition, which could have a negative impact on our ability to manage existing operations or pursue alternative strategic transactions, which could adversely affect our business, financial condition and results of operations. Until the completion of the Gentiva Acquisition, holders of shares of our common stock will be exposed to the risks faced by our existing business without any of the potential benefits from the Gentiva Acquisition. As a result of investor perceptions about the terms, conditions, risks or benefits of the Gentiva Acquisition, the market price of shares of our common stock may decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

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Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the quarter ending September 30, 2024, each of the following directors and Section 16 officers adopted a Rule 10b5-1 Trading Arrangement (as defined in Item 408(a) of Regulation S-K) to sell common shares:

 

Name

Title

Adoption Date

Expiration Date (1)

Shares Vesting and Subject to Sell-To-Cover (2)

Other Shares Being Sold (Subject to Certain Conditions)

R. Dirk Allison

Chief Executive Officer and Chairman of the Board

August 26, 2024

August 26, 2025

n/a

87,500(3)

 

(1) Each plan will expire on the date represented in the table or upon the earlier completion of all transactions contemplated by the arrangement.

(2) This column indicates the total number of shares vesting in connection with equity awards, not the number of shares to be sold. The actual number of shares to be sold will be a smaller number based on whatever is required to satisfy payment of applicable withholding taxes under sell-to-cover arrangements.

(3) Mr. Allison became CEO of the Company in early 2016 and, in connection with that appointment, received a grant of options with respect to 150,000 shares on January 21, 2016, of which 87,500 remain outstanding and unexercised. Those options have a ten-year term and are thus forfeited if not exercised by early 2026. Mr. Allison has established this plan in order to effectuate an orderly process for exercising and selling before the date of forfeiture.

Each trading arrangement noted above is intended to satisfy the affirmative defense in Rule 10b5-1(c). No other director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements, as such terms are defined in Item 408(a) of Regulation S-K, during the quarter ending September 30, 2024.

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Item 6. Exhibits

 

EXHIBIT INDEX

 

 

 

 

 

Incorporated by Reference

Exhibit

Number

 

Description of Document

 

Form

 

File No.

 

Date Filing

 

Exhibit

Number

 

 

 

 

 

 

 

 

 

 

 

3.1

 

Amended and Restated Certificate of Incorporation of the Company dated as of October 27, 2009.

 

10-Q

 

001-34504

 

11/20/2009

 

3.1

 

 

 

 

 

 

 

 

 

 

 

3.2

 

Amended and Restated Bylaws of the Company, as amended by the First Amendment to the Amended and Restated Bylaws.

 

10-Q

 

001-34504

 

5/9/2013

 

3.2

 

 

 

 

 

 

 

 

 

 

 

4.1

 

Form of Common Stock Certificate.

 

S-1

 

333-160634

 

10/2/2009

 

4.1

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1

 

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

32.2

 

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.CAL

Inline XBRL Taxonomy Calculation Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.LAB

Inline XBRL Taxonomy Label Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.PRE

Inline XBRL Presentation Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101).

 

 

 

 

 

 

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

 

ADDUS HOMECARE CORPORATION

 

 

 

Date: November 5, 2024

 

By:

 

/s/ R. DIRK ALLISON

 

 

 

 

 

 

R. Dirk Allison

Chairman and Chief Executive Officer

(As Principal Executive Officer)

 

 

 

Date: November 5, 2024

 

By:

 

/s/ BRIAN POFF

 

 

 

 

 

 

 

Brian Poff

Chief Financial Officer

(As Principal Financial Officer)

 

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