Addus HomeCare (ADUS) 8-K Addus HomeCare Reports Third Quarter 2011 Results

Exhibit 99.1

Investor Contact:

Amy Glynn / Nick Laudico

The Ruth Group

Phone: (646) 536-7023 / 7030

Email: aglynn@theruthgroup.com

Email: nlaudico@theruthgroup.com

Addus HomeCare Reports Third Quarter 2011 Results

Third Quarter Financial Highlights

• Total net service revenues were $69.4 million

• Home & Community net service revenues were $56.2 million

• Home Health net service revenues were $13.2 million

• Net income was $1.8 million, or $0.17 per diluted share, before a $16.0 million non-cash goodwill and intangible asset impairment charge, up from net income of $1.5 million, or $0.14 per diluted share

Palatine, IL, November 3, 2011—Addus HomeCare Corporation (Nasdaq: ADUS), a comprehensive provider of home-based social and medical services, announced today its financial results for the third quarter ended September 30, 2011.

Mark Heaney, President and Chief Executive Officer of Addus HomeCare, stated, “Our third quarter results, before the goodwill and intangible asset impairment charge, reflect our continued progress in improving our operations.”

Third Quarter Review

Total net service revenues for the third quarter of 2011 were $69.4 million, a 0.7% decrease compared to the prior year quarter. The acquisition of Advantage Heath Systems, Inc., dba CarePro, contributed approximately $3.3 million in net service revenues in the third quarter of 2011.

Net income for the third quarter, before considering the goodwill and intangible asset impairment charge (Impairment Charge) was $1.8 million, or $0.17 per diluted share, compared to $1.5 million or $0.14 per diluted share, in the prior year quarter.

Home & Community segment net service revenues for the third quarter 2011 were $56.2 million, a 2.0% decrease from the prior year quarter. Home & Community segment revenues included approximately $2.4 million from CarePro operations. Excluding locations closed and program eliminations in select states totaling $1.5 million in revenue, same store sales of $53.8 million in revenues were consistent with the prior year quarter. Home & Community operating income, including depreciation and amortization but excluding corporate expenses, increased 14.9% to $6.8 million, or 12.1% of revenue, in the third quarter, compared to $5.9 million, or 10.3% of revenue, in the prior year quarter.

Home Health segment net service revenues for the third quarter of 2011 were $13.2 million, a 5.6% increase over the prior year quarter, despite a reduction in Medicare revenues estimated at $0.4 million as a result of the rate cut enacted in 2011. Home Health segment revenues included approximately $0.9 million from CarePro operations. Home Health operating income, before considering the effect of the Impairment Charge, and including depreciation and amortization but excluding corporate expenses, was $0.2 million, or 1.4% of revenues, compared to $1.1 million, or 8.5% of revenues, in the prior year quarter.

Nine Month Review

Total net service revenues for the nine months ended September 30, 2011 were $204.5 million, a 1.4% increase compared to the prior year period. The acquisition of CarePro contributed approximately $10.0 million in net service revenues in the first nine months of 2011.

Net income, before considering the effect of the Impairment Charge, for the first nine months of 2011 was $4.0 million, or $0.37 per diluted share. This compares to net income of $4.5 million, or $0.43 per diluted share, in the same period of 2010.

Home & Community segment net service revenues for the nine months ended September 30, 2011 were $165.3 million, a 0.7% increase compared to the prior year period. Home & Community segment revenues included approximately $7.2 million from CarePro operations. Excluding locations closed and program eliminations in select states totaling $5.9 million in revenue, same store sales increased by $1.9 million, or approximately 1.2%. Home & Community operating

income, including depreciation and amortization but excluding corporate expenses, increased 7.4% to $18.1 million, or 11.0% of revenue, in the first nine months of 2011, compared to $16.9 million, or 10.3% of revenue, in the prior year period.

Home Health segment net service revenues for the nine months ended September 30, 2011 were $39.2 million, a 4.6% increase compared to the prior year period. Home Health segment revenues included approximately $2.8 million from CarePro operations. After adjusting for the Medicare rate reduction in 2011 of approximately $1.1 million, same store sales increased by $0.4 million, or 1.2%. Home Health operating income, before considering the effect of the Impairment Charge, and including depreciation and amortization but excluding corporate expenses, was $1.7 million, or 4.4% of revenues, for the first nine months of 2011, compared to $3.8 million, or 10.0% of revenues, in the prior year period.

Cash flow from operations was $11.8 million for the first nine months of 2011, compared to $5.1 million in the same period in 2010 due largely to the improved payments received from the State of Illinois, combined with an overall improvement in collections from all other payors.

Goodwill and Intangible Asset Impairment Charge

The Company performed an interim and preliminary assessment of the fair value of its two reporting units and determined the fair value of the Home & Community reporting unit was greater than its book value indicating no initial impairment. However, the preliminary assessment of its Home Health reporting unit indicated that the estimated fair value was less than the net book value of the business. This conclusion was based on the current Federal and state reimbursement environments and continued pressure on reimbursement in the Home Health reporting unit, combined with ongoing declines in the market capitalization of the Company and updates to the Company’s business projections and forecasts. Accordingly, the Company recorded an estimated non-cash goodwill and intangible asset impairment charge of $16.0 million for the three months ended September 30, 2011. This determination represents an estimate, was based on a preliminary evaluation as of June 30, 2011 and is subject to the completion of the Company’s annual impairment test as of October 1, 2011 which may result in an adjustment, which may be material, to the loss recorded in the third quarter of 2011.

Subsequent Event

In October 2011, the Company received $2.3 million from the State of Illinois as payment for prompt payment interest for delays in payment of invoices for the State’s fiscal year ending June 30, 2011.

Non-GAAP Financial Measures

The information provided in this release includes Adjusted EBITDA, a non-GAAP financial measure, which the Company defines as earnings before goodwill and intangible asset impairment charge, interest, taxes, depreciation, amortization, and stock-based compensation expense. The Company has provided, in the financial statement tables included in this press release, a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure. Management believes that Adjusted EBITDA is useful to investors, management and others in evaluating the Company’s operating performance to provide investors with insight and consistency in the Company’s financial reporting and present a basis for comparison of the Company’s business operations among periods, and to facilitate comparison with the results of the Company’s peers.

Conference Call

Addus will report its 2011 third quarter results after the market close on Thursday, November 3, 2011. Management will conduct a conference call to discuss its results at 5 p.m. Eastern time on November 3, 2011. The toll-free number is (866) 783-2145 (international callers should call 857-350-1604), with the passcode: 95464103. A telephonic replay of the conference call will be available through midnight on November 17, 2011 by dialing (888) 286-8010 (international callers should call 617-801-6888) and entering the passcode 89880081.

A live broadcast of Addus HomeCare’s conference call will be available under the Investor Relations section of the Company’s website,www.addus.com. An online replay of the conference call will also be available on the Company’s website for one month, beginning approximately three hours following the conclusion of the live broadcast.

About Addus

Addus is a comprehensive provider of a broad range of social and medical services in the home. Addus’ services include personal care and assistance with activities of daily living, skilled nursing and rehabilitative therapies, and adult day care. Addus’ consumers are individuals with special needs who are at risk of hospitalization or

institutionalization, such as the elderly, chronically ill and disabled. Addus’ payor clients include federal, state and local governmental agencies, commercial insurers and private individuals.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as “continue,” “expect,” and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including the expected benefits and costs of acquisitions, management plans related to acquisitions, the possibility that expected benefits may not materialize as expected, the failure of a target company’s business to perform as expected, Addus HomeCare’s inability to successfully implement integration strategies, changes in reimbursement, changes in government regulations, changes in Addus HomeCare’s relationships with referral sources, increased competition for Addus HomeCare’s services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in the Risk Factors section in Addus HomeCare’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 28, 2010, and in Addus HomeCare’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2011, each of which is available at http://www.sec.gov. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

(Unaudited tables and notes follow)

ADDUS HOMECARE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Cash Flow Information

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

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
Income Statement Information:
Net service revenues	$	69,384		$	69,842		$	204,478		$	201,612
Cost of service revenues		48,373			49,710			144,303			142,924
Gross profit		21,011			20,132			60,175			58,688
General and administrative expenses		16,955			16,277			49,567			46,972
Goodwill and intangible asset impairment charge		15,989			—			15,989			—
Depreciation and amortization		927			1,058			2,783			2,955
Total operating expenses		33,871			17,335			68,339			49,927
Operating income (loss)		(12,860	)		2,797			(8,164	)		8,761
Interest expense, net		548			855			1,929			2,323
Income (loss) from operations before taxes		(13,408	)		1,942			(10,093	)		6,438
Income tax expense (benefit)		(4,359	)		463			(3,230	)		1,947
Net income (loss)	$	(9,049	)	$	1,479		$	(6,863	)	$	4,491
Income (loss) per common share:
Basic	$	(0.84	)	$	0.14		$	(0.64	)	$	0.43
Diluted	$	(0.84	)	$	0.14		$	(0.64	)	$	0.43
Weighted average number of common shares outstanding:
Basic		10,746			10,681			10,746			10,561
Diluted		10,746			10,681			10,746			10,561
	For the Nine Months Ended September 30,
	2011			2010
Cash Flow Information:
Net cash provided by operating activities	$	11,815		$	5,074
Net cash used in investing activities		(777	)		(6,111	)
Net cash provided by (used in) financing activities		(10,557	)		1,131
Net change in cash		481			94
Cash at the beginning of the period		816			518
Cash at the end of the period	$	1,297		$	612

Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

	September 30, 2011		December 31, 2010
Assets
Current assets
Cash	$	1,297	$	816
Accounts receivable, net		69,918		70,954
Prepaid expenses and other current assets		10,753		7,704
Deferred tax assets		6,338		6,324
Total current assets		88,306		85,798
Property and equipment, net		2,482		2,923
Other assets
Goodwill		50,735		63,930
Intangible assets, net		8,592		13,570
Deferred tax assets		5,666		—
Other assets		560		703
Total other assets		65,553		78,203
Total assets	$	156,341	$	166,924
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	4,661	$	3,304
Accrued expenses		33,241		26,529
Current maturities of long-term debt		6,250		5,158
Deferred revenue		2,318		2,141
Total current liabilities		46,470		37,132
Long-term debt, less current maturities		28,402		40,027
Deferred tax liabilities		—		562
Other long-term liabilities		—		1,112
Total stockholders’ equity		81,469		88,091
Total liabilities and stockholders’ equity	$	156,341	$	166,924

Segment Information (Unaudited)

	For the Three Months Ended September 30, 2011
	Home & Community			Home Health			Corporate			Total
Net service revenues	$	56,157		$	13,227		$	—		$	69,384
Cost of service revenues		41,368			7,005			—			48,373
Gross profit		14,789			6,222			—			21,011
Gross profit percentage		26.3	%		47.0	%					30.3	%
General and administrative expenses		7,382			5,914			3,659			16,955
Goodwill and intangible asset impairment charge		—			15,989			—			15,989
Depreciation and amortization		609			128			190			927
Total operating expenses		7,991			22,031			3,849			33,871
Operating income (loss)	$	6,798		$	(15,809	)	$	(3,849	)	$	(12,860	)
Operating income, excluding impairment charge	$	6,798		$	180		$	(3,849	)	$	3,129
Operating income percentage, excluding impairment charge		12.1	%		1.4	%		-5.5	%		4.5	%
	For the Three Months Ended September 30, 2010
	Home & Community			Home Health			Corporate			Total
Net service revenues	$	57,311		$	12,531		$	—		$	69,842
Cost of service revenues		42,812			6,898			—			49,710
Gross profit		14,499			5,633			—			20,132
Gross profit percentage		25.3	%		45.0	%					28.8	%
General and administrative expenses		7,871			4,415			3,991			16,277
Depreciation and amortization		712			158			188			1,058
Total operating expenses		8,583			4,573			4,179			17,335
Operating income	$	5,916		$	1,060		$	(4,179	)	$	2,797
Operating income percentage		10.3	%		8.5	%		-6.0	%		4.0	%
	For the Nine Months Ended September 30, 2011
	Home & Community			Home Health			Corporate			Total
Net service revenues	$	165,309		$	39,169		$	—		$	204,478
Cost of service revenues		123,221			21,082			—			144,303
Gross profit		42,088			18,087			—			60,175
Gross profit percentage		25.5	%		46.2	%					29.4	%
General and administrative expenses		22,117			15,984			11,466			49,567
Goodwill and intangible asset impairment charge		—			15,989			—			15,989
Depreciation and amortization		1,828			385			570			2,783
Total operating expenses		23,945			32,358			12,036			68,339
Operating income (loss)	$	18,143		$	(14,271	)	$	(12,036	)	$	(8,164	)
Operating income, excluding impairment charge	$	18,143		$	1,718		$	(12,036	)	$	7,825
Operating income percentage, excluding impairment charge		11.0	%		4.4	%		-5.9	%		3.8	%
	For the Nine Months Ended September 30, 2010
	Home & Community			Home Health			Corporate			Total
Net service revenues	$	164,156		$	37,456		$	—		$	201,612
Cost of service revenues		122,536			20,388			—			142,924
Gross profit		41,620			17,068			—			58,688
Gross profit percentage		25.4	%		45.6	%					29.1	%
General and administrative expenses		22,774			12,835			11,363			46,972
Depreciation and amortization		1,947			479			529			2,955
Total operating expenses		24,721			13,314			11,892			49,927
Operating income	$	16,899		$	3,754		$	(11,892	)	$	8,761
Operating income percentage		10.3	%		10.0	%		-5.9	%		4.3	%

Key Statistical and Financial Data (Unaudited) (3) 

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
General:
Adjusted EBITDA (in thousands) (1)	$	4,152		$	3,924		$	10,849		$	11,913
States served at period end								19			19
Locations at period end								120			134
Employees at period end								13,601			13,861
Home & Community
Average census		23,026			23,333			22,761			22,471
Billable hours (in thousands)		3,323			3,371			9,736			9,795
Billable hours per business day		51,127			51,867			50,716			51,017
Revenues per billable hour	$	16.90		$	17.00		$	16.98		$	16.76
Home Health
Average census:
Medicare		1,634			1,410			1,519			1,482
Non-Medicare		1,706			1,511			1,621			1,509
Medicare admissions (2)		2,210			2,027			6,773			6,342
Medicare revenues per episode completed	$	2,426		$	2,646		$	2,494		$	2,587
Percentage of Revenues by Payor:
State, local or other governmental		80	%		81	%		80	%		80	%
Medicare		12	%		11	%		13	%		12	%
Other		8	%		8	%		7	%		8	%

(1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, interest, taxes, depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.

(2) Medicare admissions represents the aggregate number of new cases approved for Medicare services during a specified period.

(3) Key statistical and financial data for the three and nine months ended September 30, 2011 includes the acquisition of Advantage Health Systems, Inc.

Adjusted EBITDA (1) (Unaudited)

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2011			2010		2011			2010
Reconciliation of Adjusted EBITDA to Net Income (loss):
Net income (loss)	$	(9,049	)	$	1,479	$	(6,863	)	$	4,491
Goodwill and intangible asset impairment charge		15,989			—		15,989			—
Net interest expense		548			855		1,929			2,323
Income tax expense (benefit)		(4,359	)		463		(3,230	)		1,947
Depreciation and amortization		927			1,058		2,783			2,955
Stock-based compensation expense		96			69		241			197
Adjusted EBITDA	$	4,152		$	3,924	$	10,849		$	11,913

(1) We define Adjusted EBITDA as earnings before goodwill and intangible asset impairment charge, interest, taxes, depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.