ADUS - Earnings call transcript Q4 2017 | Addus HomeCare Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Scott Brittain

Good morning, and welcome to the Addus HomeCare Corporation Fourth Quarter 2017 Earnings Conference Call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the Company's Web site and reviewing yesterday's news release. This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus's expected quarterly and annual financial performance for 2017 or beyond.

For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. discussions like estimates, forward-looking are foregoing, expectations plans, statements. the the and intended limiting of targets, forecasts, beliefs, Without to identify

by news the materially discussed Securities You may Exchange may Commission set that differ cautioned its and actual in important fourth in operations in affected results quarter forth with are results others, Consequently, factors, the from filings these Addus's the and among forward-looking undertakes otherwise. Chief no to release. as obligation hereby be to forward-looking statements, statements statements. Please any information, or whether President Executive result update events turn The Allison. Dirk I'd go new of and Company Mr. the Company's over a sir. to ahead, like Officer, the future and call now

Dirk Allison

Good will you Poff, Thank overall with our yesterday me morning, us for call. thank we that I quarter Brian comments today fourth then is will everyone, issued Officer. joining begin and fourth Financial discuss for conference the With Brian quarter some results and Chief you, our Scott. After quarter to the to period results. any for XXXX in fourth an We ended X%. solid million $XXX operating respond a for led Revenue we'd happy strong afternoon. questions. with financial performance of increase the to $XXX.X which be million compared was that, to XXXX, same

an was per Our XXXX, fourth X%. to of compared $X.XX XXXX for for $X.XX adjusted same of share in increase earnings quarter the period the

Our and from EBITDA adjusted quarter X.X%. adjusted $X.X million XXXX for EBITDA margin the $XX.X million fourth to of XX.X% of increased

XXXX, to for $XX.X compared adjusted one was to per million X.X%.For XXXX, was $X.XX our our XXXX, of was adjusted as an earnings point of -- XXXX, XXX For XX.X%. increase million compared increase was a an $XX.X $X.XX for EBITDA -- share

debt. approximately of million $XX with bank approximately have in million today, of cash the we of As $XX

job increases New closely our and in directed to York cover Parity hourly related forward the has of needed team ensure have at with our the we in XXXX the reimbursed the Illinois work necessary Island to are continued current job relatively to keeping including passing Law nice report happy consumer on been We the in the us leadership the paying to the state fiscal to of market minimum great last call, its wage meet managed team wage to this all these obtaining our months. we for timely of business us they’ve doing past strong for continues to issues Our look budget do to I which state our allow care a cash to cover discussed being should our the Illinois. challenges the that annual of of a to company required changes. collections manner that I'm to from with eight State changes our rate facing payers state in to state. These a do increase in been Wage these Long earnings are On in the partners our continue in summer, which change mandated a enable increases. caregivers. the the

you work our improve dedicated profitability. operations higher While these hourly number over years, two effort team, a systems, to the of offset about to reductions, Most past to New know initiatives, to MCO a operating increases and a of years the leading management couple creations conversion we helped undertaken agency continue level. have state over us wage at initiatives performance with important cost to These software the of have feel ability including next minimum new improve we that and York the our will good partners to adjustments. have of our

acquisition strategy first our these completing initiatives half on XXXX. of Our focus for to to the delay led decision our

we on second execute Care earnings including the begin growth that small half While Options on XXXX our private to strategies, Personal of time to offer to work we during last to initiatives on Care our New closed call, the operations, on various and ability our further acquisition enhance two Since care continue strategy. private closed Provider. pay Home we’ve Mexico pay our strengthening to clients. had we to providers, Prior

continue All our to of expectations. these exceed acquisitions meet or

revenue these of private addition doubled providers, million. pay the With pay approximately has annual private our $XX to two

a which execute will markets. provider to of our purchase a signed for announced our we involving anticipate we look starting we've transaction leading also providers the we occur the services in are services one becoming hospice each XXXX of agreement services that states, $XX of care, we we our evaluating million personal quarter, of acquisitions in their hospice in Mexico. number Mexico. personal in the is comprised past number personal New add revenues strategy $XX a personal revenue New of ability of closing selected in had or more through two to private and While in a care, and hospice, largest Medicaid care acquisition hospice to transaction, of while this care will came Ambercare, example potential week services This fragmented of busy acquire, our industry to largest definitive personal to provider Approximately be the state This million of health. hospice approximately home will continue pay and second Ambercare of care this At providers. in division. home from annual great provider both of health

us New the All team to joining of Mexico. we our build as continue in presence us are at Addus about excited Ambercare

acquisitions. and Ambercare, to to active as continue we potential disciplined be we very look addition for In

process other is Our stages the with various in currently involved of acquisition team companies.

as care further the valued. position the our is finding. acquisition are acquisitions, positioned, recent provider the and We the take are to over relationships well already growth are our a Through with past to announcement we to CMS to advantage of in-home A opportunities that markets, beginning added example by and Medicaid our of with lowest-cost plans years for facility in by is teams care personal Medicare develop offering in have managed our continue the existing debt, strong on may cash the majority giving our them this opportunities bank, and we conversations having partners, be to developed Outside additional few minimum care continue credit transition advantage services as their of recognized XXXX. managed opportunity. about

our to market. potential tell it While positive in a for this too be toward of early is step the impact could availability Addus, what expanding service value-based the another is

they instead low by a homes care very of of a that, thank more much me progressing all to to me made is XX,XXX turn the employees. performance, review each and our intimate needed cost. let more the of call This we over less in let be provide us to at of Brian. our I call hard employees turn in this fourth Before quarter Brian enables to over that expensive setting. them to consumers service Addus. much where of want It of for their a possible for important a very work With to realize stay health detailed to important is This the

Brian Poff

morning, note financial fourth good everyone. with Thank quarter you, results. and our Addus XXXX a Dirk, on completed strong

our produce while quarter revenue margin. continue We a sequential positive growth in progression and to leveraging adjusted EPS,

small revenue strategy for Our fourth of fourth our produced our by a revenue solid quarter as completed acquisition contribution, the With in from in October of deal acquisition X.X%. focused growth as meaningful Care we the same-store was driven reflected Options full in nonorganic quarter of the organic for a growth August, Arizona. provider private well quarter benefiting growth revenue Home options pay

of expect second the quarter We the of XXXX. anticipated acquisitions growth the transaction of in Ambercare by our from to strengthened impact be the completion

we to of evaluate announce later opportunities a towards this also transactions and mentioned, year. Dirk expect continue As work additional and acquisition to other number

acquisitions to growth. from growth With same-store positioned X% the well further expectation a to produce profitable XXXX believe an we ongoing for for we anticipated revenue combined are of with revenue range in X%, stream

between $XXX billable X.X% X.X% service day per increase fourth For quarter quarter a of X% billable record hour. in growth revenue increased the net for to This of increase hours an XXXX, was per million. a at balanced in the revenue business

was we our fourth of requirements on minimum With the relatively quarter our certain XXXX. obtain increasing from and efforts for margin quarter we to are wage pleased the maintain mostly XX.X% have increases states, reimbursement successful report have to offset gross Our consistent in with pressure been corresponding historically. margins fourth we to as

delivery restructuring the fourth team to compensation the adjusted and higher of expenses. quarter XXXX. these fourth point expense G&A with This increase for was compensation, our Our XXX ensure the acquisition was for stock from expenses, in the basis was primarily members transaction to XX.X%. continued of future. XX.X%, important expense services G&A stock-based in increase a their work severance due to to quarter continues diligently payers

of since the from for diluted and quarter first deferred M&A in in quarter, on X.X% adjusted the XXXX was highest This debt we've bad X% As of has per Act, XX.X% the tax XXXX. the of fourth anticipated, compensation is increase per The from at of Cuts XXXX, revaluation first we the the quarter a the prior-year time provision for quarter transaction of above results provision in The X.X% $X.XX, $XX.X million $X.XX. of from $X.XX $XX Adjusted the experienced divestiture income Jobs company's assets and this a revenue $X.XX gain for of excluded achieved the XX an share point of fourth improvement noncash net our our the XXXX. and for changes and of a of for XXXX. quarter. income same $X.XX for a margin of stock-based share was X.X% been a adjusted $X.XX following: million to under noncash sale the fourth EBITDA was quarter of due quarter of the for fourth the revenue increase Tax basis to increase management tax began quarter expenses

payment credits charges and impact received Company's costs of from of XXXX $X.XX, of Illinois on of $X.XX, quarter. the Our results expenses Adjusted share for interest lower tax primarily stock-based the impact normalization the $X.XX, noncash for based state reversal of of of Reform, M&A positive rate restructuring effective $X.XX, WOTC reversal the adjusted prompt and of of Tax rate latest $X.XX, quarter fourth transaction of the the the from during for XX.X%, the was of compensation of other $X.XX. severance per excluded quarter tax prior

at our XX very over payments compared a in year expect the were quarter the coming rate Reform, with Tax the our yet as place, We to generated $XX.X With for from with net and Following be state our fourth efforts totaling and XXXX. year-end, the pay range Aging vendors. million we of low $XX.X to its had to payments us operations we with see to the XX possible. year-end to XX% million through Illinois are at and through availability as hand, the however, half mid for of of full-year to but our tax quarter. months for We've days from At as received XXXX. fiscal cash for $XX.X debt. XX credit million revolving works third the term the at not processed current interest million were state third of on we’ve first anticipated Department compared end XX end days in DSOs backlog consistent in keep cash $XXX.X of year-end Illinois DSOs other on million continued facility, quarter. the budget prompt days days be their at the in of $XX.X from the pleased

operating As of the of the grow reduction Under Xst be which regulation, as service adopted we accounts XXXX-XX affects treated January, recognition. a bulk before as will our to as go rather ASU an than Addus Q&A, note, a provision doubtful for final of revenues the to revenue now expense.

have to will change your now our a EBITDA versus XXXX, our to for revenue you concludes effect of prior questions. not for being adjusted adjusted line morning. comparisons an year-over-year and of this the with comparisons I operator While percentage open us. as periods, earnings items per on will will the line revenue impact please this and ask prepared This I for want share. diluted comments thank it

Operator

Hambly of [Operator Instructions] And Dana our comes first from Stephens. question

open. line Your is

Dana Hambly

census pockets, little Hey, Dirk weaker expecting. Brian, you on? Was morning. where what than broad-based were the the a that Thanks for we bit for on could could talk taking a good quarter, the any questions. or there it little you bit or speak anything

Dirk Allison

good morning. Dana, Yes.

I think can. we

our the You we company. started census, starting years realize as that culture of two opposed hours ago changing really the attention directing to towards

to the the on making where trying to company. some those have have consumers these the overall for couple to two up and hours years is Virginia two have as of this that our are necessary that, other acquisitions some number market starting had we're a said, you’ve lost in want caused increase the the ADC, happens moving a changes to did of we means over ADC Eastern have be effect that of our all out the sense ADC, we made focus That than in board have Ohio in a lower we've the amount market, didn't it being couple make that which years contracts just last sure we gotten vision few very the we to a to those we of areas. as time. ago, on idea pleased so, seen And areas work performance the One what relates region, we the we of of be. and an census specifically of us in And that

work leave them did some that we had other lot the were we those Island the wage, had some were did related not particular able market addition, we of lose about MCOs. a our We we the also to of providers however. minimum care That only We of -- the other as census meant having, Long decided at to largest the In and one on provider with the on wage the a to keep Island clients lot talk market. but to providers went moving Long challenges living managed last of the we to were in market. call,

In the New throughout there of were How has all that last questions that just for question live-in recently. a York year state we there clarified much you consumers. get pay was caregiver, versus you addition, the during about reimbursed what how that those been call the some about much

we starting of We back months. number taking again. So for are quit a these them type take now consumers to

So you Island Long about really then majority the the area it's market led ADC the that it, think decrease. and on if Ohio, the the changes to of Virginia

Dana Hambly

well me do think rate pretty if rate minimum then which helpful. something thing. a I offset increases I same would then to just Okay. include every do the and is have what good Illinois, to well? if Could That’s the it's increase, that to in with goes I few has year years year, minimum you get the you’ve just And something again said 'XX again next to in for to ability is every strong. rate fight doing think the that’s them imagine you year and the on increases 'XX, wage, your but as in for pretty wage, think process back I Chicago, budget actually their -- to the remind you New you’re go next in up York? raises

Brian Poff

margin year whole. we've not have their more for But It’s in budget process, to plan year you’ve mentioned, working are than done Both future. years increases can would ups minimum wage This reimbursement great have that the of in payers legislature We’ve year. state baked keeping very with but of markets into in to conversations the far, I each you’re something those in that put into been their one. and year a successful are a continued always take step get keep out. is so the our will Dana. historically to we continuing markets. to job corresponding that us right. kind been they to is Those that hold Yes, the Brian. There rather

legislature we’re the working in today Illinois. So with

They’re same payers with contact conversations them. thing with New having the in the all those in in Our guys up York have area. the been

Dana Hambly

getting just tax WOTC And Okay. can or for for XXXX? beyond you rate if for the extend And last this one know me, do still year. on Brian, you tax the those Are credits? credit you

Brian Poff

I process They’ve to a believe, and to 'XX It's XXXX they’re forward. how to still if last of will gone that have look fixture. But we to through is that in continue 'XX, they’re have well it out. at the extend. Yes, through that continue we but place. in XXXX and see years will going and continued that something to -- Yes, for are see into permanent those move as in shapes into not to couple

So that’s expect in we XX% tax to why to the rate see our mid low range.

Dana Hambly

Great. Thanks much. very

Operator

of [Operator is you. Sidoti. Mitra Thank Ramgopal question from The Instructions] the line next of

open. is line Your

Mitra Ramgopal

morning. Yes. Hi, good

acquisition. I was you the see its of into and side in included could obviously of sense any a the opportunities home hospice the business an market also Health? expansion on can Ambercare entry on some First I terms if the Home into give know hospice wondering health. you us and potential

Dirk Allison

Yes, in allow had Mitra. personal And we've deal excited Ambercare wanted strong months do with been we New personal We were to it into health personal the we our wanted only care saying we enter the enter strategically strengthened that home we in way care in to to you to also Mexico, were work clinical in of with because us the a in work a into XX it not out able market our presence. home that which presence. care hospice remember, it if but very and a last market when care for that state

to operate So operate, to win markets way we in we and saw into do personal in a those companies into if that hospice either the where markets. home give hospice moving we allowing offering which didn’t health, this. up that markets have company open hospice or predominantly end us one we first acquire or particular complete the And was we Ambercare in to around the us is hospice found

be we interesting. in I would forward, an hospice. Home mean, have certainly going Health interest So

Ambercare hospice we the in able we our or Mexico We care and once transaction and there New to that that not how now markets and have with whether works will see close be can personal other preferably not transferred will continue markets to absolutely come those exclusively. into look the at care, we with acquisitions that is that be but where in side, something clinical But we operate. personal that

Mitra Ramgopal

Okay, little hospice on the to in the the say of thanks. growth relative of maybe business etcetera market can And flavor itself side terms a terms you if care? in give that personal us of

Dirk Allison

for year of but of growing now, team X% My X% but care, a last has I as experience have X% far in to appropriate been was say years hospice, a Most have X%. to of to to growth lot here more organic side. The it we probably market personal few in growth, Yes. that us profile similar what similar hospice. was personal as care out it's the in would

up Now margins as range X% we EBITDA with companies now X%, are margins we right target a in the EBITDA. higher and XX% the -- can in mid the we margins are as get little operate are operate Gross bigger. once different. EBITDA teens higher, where of tend to Hospice if far

So we help side we should -- do to see a we particular continue if margins hospice enter in as bit. good our as the those businesses, operating job into market, that a

Mitra Ramgopal

driving doing in was had AFAM, potentially Okay, thoughts acquisition thanks. you you that for are a from And third know or any and parties I very seeing terms you? you acquired LHC up pipeline merging have or they’re That’s I standpoint. if you interests, helpful. prices maybe other any of have the if wondering competitive

Dirk Allison

has be be expanded a Well, lot period would for to PE of hospice multiples had to I a that. seem interested an we not do are purchase as lot Folks is considered firms. provider hospice of people in think a There a all seems aware looking time. typically be that that of area

pure-play to lower really to might of be what provider. the No slightly So you standalone higher. buy are a towards hospice multiples that We be -- service hospice those tend you tend tend hospice. and division have a see would personal looking care question, if on typically multiples a we to than

But care we compete out X we're again, somewhat believe than to the So on not is looking to that. in and there we instances. comfortable in pure-play range. most very X the higher going personal market, Hospice just for go are really us to multiple in still hospice be

continue accretive will our we we be what on company. we very can So focus and as to mostly to acquire multiples see that these

Mitra Ramgopal

State -- Okay, business thanks. can XXXX from and of don’t if And sense you Brian, Illinois? the what me a as give was I of percentage know coming the

Brian Poff

in the gets old but that our XX% revoltingly the think of that over Obviously, we But, second over quarter. profile The that still just XX% XX% something Bremer. Ambercare change year-end. will on the I increase, With overall just, bring the is into rate actually when -- over at yes, quarter second business. full

Mitra Ramgopal

Thanks for Okay. questions. again taking the

Operator

to this Thank at closing showing Mr. turn I’m questions you. And I’d remarks. conference Allison back over for the to time. no like further Dirk the

Dirk Allison

your earnings your you in thank Thank great I you today. our Addus on you, operator. for have and Hope want to participation call week. interest for a

Operator

participation and in thank Ladies gentlemen, conference. This does today’s you your for program. conclude the

You Everyone disconnect. have may great now day. a

Addus HomeCare (ADUS) 6 Mar 182017 Q4 Earnings call transcript