Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Addus HomeCare Fourth Quarter and Year-End 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Dru Anderson. Please go ahead.

Dru Anderson

Thank you. to Earnings HomeCare Conference welcome and Fourth and XXXX Year-End Call. morning, the Corporation Addus Quarter Good Today’s call is being recorded.

reconciliation will To financial the financial news to find measure you by to directly reviewing yesterday’s the measure non-GAAP measure a also going is discussed calculated release. the extent in today’s comparable that most of that any company’s GAAP and to according call, website

statements XXXX, within Litigation This statements, the of beyond. conference contain call Addus’ Securities of may the annual for regarding Reform others, forward-looking Act and financial including also among Private quarterly XXXX meaning expected performance or

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

hereby You its Consequently, factors, forth others, or set cautioned statements of operations information, materially by statements, and actual affected Commission these results forward-looking the filings Securities whether in important are news may release. among quarter any undertakes the from a to XXXX Exchange The Addus’ that differ in company be with as result and fourth discussed statements. no events forward-looking the future obligation results otherwise. may update new and

Executive now would Dirk Mr. Officer, Allison. Chief the like Please and I to ahead, Chairman turn to the over company’s go sir. call

Dirk Allison

Operating Chief XXXX Officer; Officer. welcome Chief our are and Good fourth and our our you, Thank me morning, Bickham, President and call. Financial to today year-end quarter Dru. Brian Poff, Brad and earnings With

and quarter Brian a calls, more earnings results few will of discuss As overall we on each fourth I will do begin detail. in the with then comments, our

would comments, be our happy your to to of questions. us respond X Following the

to employees past you the I Addus their for this thank all at year. efforts HomeCare to say first want

to team’s meet Meeting hard work XX,XXX continue clients able we very of our know needs care our know are I XXXX. provide these and to for to approximately am people. day exciting lead growth that important to patients home year all proud had the each we will is care it great mission more in in to making it’s sure a to ongoing of Addus. we While financially, deserving

Yesterday, for we announced our I’m fourth financial and our and year proud XXXX, operating the quarter of results full extremely performance.

an XXXX. share team grew XXXX $X.XX quarter the earnings as XXXX of for for for to per to in share to an adjusted million XX% million fourth $XXX.X of of earnings $XXX.X of quarter $X.XX, the Our This revenue per compared adjusted the fourth fourth XX.X%. of resulted compared as quarter increase of

exceeded adjusted also $XX million EBITDA. We in

of full our XXXX, revenue. year was million an or with of $XXX.X $XXX.X For of adjusted million the revenue EBITDA XX.X%

X negatively Our despite first team achieve results months to impacted the year full Omicron of the able XXXX being wave. by these was

During flow states flexibility financial leverage flow as have a EBITDA, operations XXXX, of the in payers a strategy as cost Addus allowed implement even manner. position us increased. cash continue we the Xx to of has than giving worked continue to maintain adjusted our net less from has us pay to and see like -- strong strong timely providers This cash other to our debt

few quarters, case environment improve. has the As been us for over to the last continues the labor

hires improved as XXXX. During fourth quarter in compared Care per XX% quarter day the hiring our experienced to we XXXX, approximately Personal the with increasing of business fourth segment of

per this of fourth improved seeing in running also are quarter with of February and our ahead hires day this business XXXX performance. year We January trend continue hiring of

between recent which as application as a we potential the investment to hiring shortening candidate employees due A well have part of system, in tracking with better our been improved us time the results allows engage and made higher. to

system this all out be We a to completed our continuing that to sites, in of roll should XXXX. process are

and has in hiring to started through clinical the been but to This, in clinical and of Clinical and hospice the in of areas this segment, staffing continue in continue, There challenging along fourth clinical our in XXXX than the XXXX, began with pressures are in However, segment. wage we third to incremental we some the Personal Care our Hiring in quarter more both segment. quarter some overall improvement first environment hiring challenges segment trend certainly relieve hiring of clinical geographic continue has turnover half faced we the pick particularly our our see XXXX. our has improved, up in expect where the our

will the has announced, XXXX. As XX, May been end COVID-XX emergency public on health

year With the This match have will been then federal enhanced with state a government receiving quarter X.X% Even full XX, the states and gradually XXXX. second that Medicaid the fourth X.X% the we reduced in extra states will which plans, March third believe are of federal quarter, phase this federal of ending stronger operate than financial funding the position pandemic. the funding the for to last the out. of XXXX. match we the for in for in from X.X% The through much the emergency X% to will declaration, Medicaid quarter before decrease

Plan realized to our retention remaining XX hiring the received sign-on to has current should have in funds which as we have bonuses or the next caregiver efforts help increasing $XX.X care and deploy funds. the helpful Rescue of to ARPA to our retention been we quarter, depending These us the program. funding bonuses approximately the state million future During have begin onetime million, utilize $XX over or provide still allowed with our Today, and we and Act from to efforts caregivers pay wages, fourth American we our on patient recruitment months. continue support

saw to elsewhere operation, hour Illinois. July rate received for we we wages as per rate increase last Chicago X January allows $X.XX on the minimum As wage our us increase of increase this expected. of in Illinois, state a largest statewide and year, This covers raise

the State believe approval approved, wage increase employees. to Once $X.XX announced our in Illinois increase upcoming on July increases of our Illinois for we us XXXX, in should cover XXXX, to help effective hiring Illinois wages these have additional $XX.XX. an state December hour, We CMS. Chicago and all the to of On allow segment. the increase our rate to This continue increase trends been will from will reimbursement X minimum which per subject will be seeing favorable raise Personal March X, XX, Care us to continue

year, occurred in New a I or York program. of Governor Consumer also give New CDPAP Directed February budget, procurement the this who for X the proposes CDPAP the repeal the which which her brief fiscal issued to of providers, update eliminating York want intermediaries would recent to have participation our program, process of this developments process. participate the under regarding on reduction On in

is reimbursement number York. will refine changes We X, clients budget MLTC that payers minimizing is with XXXX. proposals budget program to rates our continue an goal for our providing able we growing the Addus the proposes financial provide the state. make a April final This whose now providers believe while these current for services to growth with budget of of in to Once adequate return. to on will New York for allow plan published, due to New be The

As partners the to MLTC market York a in with CDPAP the normal respect New reminder, we continue our to program. operate with as

state we on our CDPAP evaluate admissions receive As the we clarification rates, whether further will as CDPAP increase appropriate. to

me the same-store let for XXXX. discuss of Now growth our revenue quarter fourth

X.X% growth ARPA For was our CDPAP Care York when compared of exclusive quarter fourth and segment, our same-store funds, XXXX. Personal of revenue New to the the

same-store growth rate Over from the past increases our in of X PCS majority our states. years, from a came

a same New and grew is With in caused the to in quarter volume same-store quarterly This have a CDPAP, period of growth to of hours. more to mix on the the growth we and same-store prior X.X% rate disruption consistent excluding sequential has we resumption basis. our started of In the York hourly the pandemic. difficult. historical pandemic, XXXX, more by saw see XXXX averages been over hours growth Recently, fourth X.X%

Turning to care operations. our clinical

due X.X% grew same in home cases the over of non-episodic episodic XXXX, rates. referrals quarter prioritizing the reimbursement Our primarily same-store our and to declining a as segment health result revenue lower

non-episodic team increase, accept rates virtual to to allow with been us a have going has volume contract working our which more nonepisodic appropriate our to Advantage we forward. to referral payers care our continue opportunities managed more seen, adjust growth will our Medicare As level,

we rates Recently, as episodic we have these longer-term started to see continue success in to to movement solution. for a efforts discuss case

look couple a We our are those and to of negotiations of with discussions. the payers completion forward in large still

personal care the about in provide. operation hard to we and particularly Our work value-based we We health where both of ensure health models. on operations excited home complements value staffing to as it our and team contracting home maximize services we the mix remain participate services, continues

of decreased revenue in our fourth as when resumption fourth X.X% quarter sequestration. quarter to a in Our well the Medicare daily compared XXXX the decrease as the X.X% same-store to census compared XXXX hospice of as of average with

the of Our but to fourth third XX down our in as the days quarter XXXX. was compared did medium in days days period XX XX length stay for same of improve slightly to quarter for XXXX, from

pandemic admissions to sequential While expected, at which see increase is hospice encouraging. rate an basis, we from than did continues the a a recover hospice slower on we in

inclusive X,XXX an XXXX Our ADC the of fourth XX.X% of attributable on our quarter acquisition ADC increased XXXX, of to for fourth JourneyCare hospice to for which XXXX. of the X, the February as closed quarter compared to ADC

to development our our strategic acquisitions efforts, that criteria. continue ongoing look for we meet potential As at

of a home and our care continues Our in to of personal opportunities consist deal smaller health mainly acquisition flow primarily segments. number

health. slower to with look have a rate home deals have come for market, of we size challenges While reimbursement near-term been larger the especially at desire to assets, to

reducing opportunities to with coming expect months market CMS. the the flow. We rates the strong from home meantime, larger we debt see have the our as reimbursement been cash health understands our coming In in

larger allow our disciplined balance to forward, themselves. of the advantage would sheet any take flexibility strategic financial us that opportunity may present Going

positive value-based our care continuing As value-based efforts, results various for see contracts. we our from are care to

clients. unnecessary states, value-based are admissions entered a discharge. room emergency focused well We readmissions visits as clients into have These on now and as frames X hospital covering in contracts avoid various contracts following our hospital time helping X at X,XXX

on also addition, benchmarks. are improving Addus In we working

improving our ability shown date, to benchmarks. help quality while has data reduce To outcomes costs our

for the care revenue a XXXX. value-based working next on opportunity, grow to Value-based We meaningful opportunities amount continues few currently expect a growth more be to which to additional we years. are over

the for are be families the proud our will prefer outstanding our and most the disabled and and team awareness elderly to our our also is they and of growth growth so to care incredibly to so for and of and a is elderly favorable of who patients. value one The our for care be. industry are most appreciate of dedicated safest care caregivers consumers, care their operations understand support the our heightened receive place We providing on to hard and I’m and the remains home that We providing and places individuals cost-effective consumers opportunity home-based family. patients their and for our worked company. believe dependent

let over me Brian. that, to call turn With the

Brian Poff

Dirk, record you, another off morning, for profitable performance and financial good capping Thank and had the operating Addus a growth. year strong of everyone. fourth quarter,

results services, personal in organic X%, for range above home same-store to segment. led solid in Our strong well reflect services, expected demand growth care our along of with our health our X% growth normal by

in and we which Summit to addition the quarter home our closed acquired of the and organic Home in Apple XXXX operations Armada Home Health benefited Healthcare, at we from beginning fourth health, XXXX. of In our added Home Health growth,

has business upper hospice median continued our the pre-COVID to of Our the recover XXs. a with from pandemic length to stay slowly range in return

include acquisition Our also of XXXX. the which hospice February in results closed JourneyCare,

were revenue, The of total or $XX.X As Personal Care were net Hospice revenues XX.X% million Dirk revenues fourth is $XX.X quarter for noted, were and revenue. health $XXX.X as were care the home X.X% revenue breakdown of million service or $XXX.X or revenues follows: revenues million. revenue, of XX.X% million

of million the to our Healthcare. criteria actively growth. pursue Apple our revenue Home We acquisition acquisitions meet complement we organic that added XXXX, approximately have In annualized and and $XX with JourneyCare of opportunities continued

to due particularly see acquisition more through a other significant favorable for evaluate health market. services. In continue have as brokered expected we We uncertainty sellers, and October opportunities processes, and coming been year to market pursue part environment home slower believe later to Medicare last in will year in of reimbursement than this

importantly, changes we changes skilled future pursue reimbursement and reimbursement developments The more Most final has impacts. announcement to health arise. should of continue on to XXXX provided lead late as opportunities are acquisition to opportunities related and for home although future for regarding to we acquisitions home strategy well health, continue clarity our monitor in capitalized

was fourth gross quarter with for margin results include the our XX.X% of the fourth following: compared financial percentage for XXXX. of XXXX quarter the Other XX.X%

XXXX, from hospice for benefited XXXX, one reflect our our of markets impact on rate minimum adjustment we Chicago, not care a annual our the negative While July corresponding largest wage receive did increase of October results the X, X, increase. we which reimbursement in personal

our first merit from to points reset our which the annual effective XXX basis did quarter impacted payroll X, in receive be minimum XXXX, annual increases, With anticipate Illinois, March which a announced reimbursement be margin will to increase the March sequentially offset the gross increase. by and XXXX, in on we Effective We are taxes increase January wage another X. on on approval. X, statewide recently statewide effective pending CMS Chicago negatively approximately

by the we increase. see impact expect from from offset These decreases in X compression X will Illinois, positive some although to the our Illinois be increase January slightly March minor rate

where to our As the normal contribution increases of is after fourth margin our XX% be the by XXXX. increase margin Care wage the of to negotiations first we range Personal decline Overall, sequentially XXX low margin to Illinois our in anticipate gross from XXXX gross and to rate time in expect to from the and rates quarter gross mid-XX% mileage basis range. this quarter off points we approximately typically XXX paid

in quarter over in the revenue, G&A XX.X% XXXX. from but year XX.X%, of a third expense fourth the was XX.X% of of XX.X% quarter G&A sequentially Adjusted but XX.X% the lower expense increase quarter prior the in from with was same third XXXX, for quarter. the ago, an lower year consistent fourth sequentially percentage of the

same company’s quarter ago. $XX.X fourth million year Adjusted $XX.X last the adjusted The EBITDA with increased compared EBITDA the year. million XX.X% XX.X% margin to period in a compared was to for

to to in pressures, for we XX% wage While see were compression have XXXX, in we expected year. margin this adjusted EBITDA time margin first pleased some to due primarily exceeded the

a Looking environment, in margin dynamic our to EBITDA we ahead, adjusted while we XXXX. continue expect operate stabilization in to in see

XXXX the of quarter results per share of nonrecurring acquisition and and share $X.XX; fourth the retroactive expense costs of for $X.XX. The restructure income per the adjusted exclude and following: stock-based expenses for compared of net acquisition of the XXXX. and XXXX net expense of per $X.XX of the share The $X.XX, diluted increase costs was Illinois nonrecurring quarter and adjusted of for favorable of and fourth with rate fourth Adjusted noncash stock-based $X.XX; compensation impact other noncash quarter the of exclude de $X.XX; results novo compensation the of $X.XX. restructure following: $X.XX; novo $X.XX; other expenses

continued and effective credits quarter credits. rate benefited the discrete fourth tax Our well was of several tax XX.X% from quarter during for XXXX the as work as opportunity strong

tax our expect we to XXXX, mid-XX% year calendar rate range. in be For the

compared with quarter end the quarter of DSOs of XXXX. XXXX third days XX.X fourth the end of of the days XX.X the at were at

most collections and payers experienced see continue. of consistent to this We our cash expect trend for have

for the the this Illinois were for the fourth year. XX.X end DSOs XX.X with days quarter Aging days the Our quarter of third compared at of Department

Our fourth quarter $XX.X operations provided net was million. by cash

of During tax the Cares and also deferral a ARPA from our fourth fee operations made final payments, in $X.X quarter. have million. net $XX.X of quarter, utilization these the during flow of Act million roll under the had installment XXXX of we on would repayment Exclusive million been $X.X the cash our funds

million. of was cash year flow For the million, net government operations from of inclusive a stimulus positive our $X.X XXXX, impact full $XXX.X advances from

in benefited changes of accounts impact receivable XXXX, capital a due strong $XX primarily approximately million our of working collections. also to positive We from

debt XXXX, As million million, million and cash of $XXX.X December $XX capacity had XX, and company our availability of under $XXX.X the bank of and of respectively. with million $XXX.X revolver

we’re our We balance net debt cash strong date, the continued further reduce XXXX. revolver reduced of To of focus have in this another our on and million a revolver And have to balance a to our repayment $XX rates. continued result million. flow, we XXXX, as by have by in focus interest $XX.X in face rising able

our active net acquisition time, expect the to a manage to well continue At net We growth that on and will this same we Xx cash of as leverage supports in ratio, have year. structure our previously strategy be M&A the initiatives we diligently capital market which currently is noted, under hand.

ask thank prepared you for the now This comments questions. concludes our to us. with for to like open operator we please the I’ll and your morning, line would being this

Operator

Fidel today [Operator Instructions] first Stephens. question with from Scott The comes

Scott Fidel

then aggregate, margins. Illinois you commentary what of if the annualized X question, us gross impacts give Illinois out helpful quarter. rate your for And and the an second Illinois guess, rate X to markets annualize as Care those in I look appreciate blended view could that across the of impact of you increases -- just First would, just the obviously, sort you other overall revenue then increases want rates if around how the in be update sort of just the Personal just Might on would on well just more XXXX? outside in

Brian Poff

I’ll X about January first. the increase Scott. Yes, talk

of approximately So that’s kind based volumes result in right Illinois, around million in on to in revenue. annualized going $XX current

but X, probably full rolls $XX is Illinois, going that coming obviously, increase, of see million based that X that of on QX. of impact in which of million little obviously, in a rate impact you’ll that in as full The $XX of volumes you’ll QX. per quarter in the to larger QX, impact through and getting kind month current see So is between March January a be X hour,

smaller markets going Carolina, rate rate a this think the early is the of still think increases some of South to I as year. which our seen level We’ve increase with seeing Probably support seen rate I not I has we’re well. the overall, But a come to that think other see one increases of last through for other going couple same we’ve across I’m markets see years. areas that, of Outside couple some in of board. in

Scott Fidel

Got And it. question. Okay. then follow-up a

Just sort I’m And of wanting wanted least also the mentioned CMS maybe given up year. at this in -- around well picking of M&A on that Brian, around to talked of next home the be follow up wanting the sort guess, framing the some know I to of Medicare, just updated as would the XXXX commentary uncertainty proposals as sort on that of some for later you And is into visibility pipeline? the middle assuming I implying market well. health the get rates for just about had Dirk’s proposed that first part. year

part, if to wanted pipeline you’re us here? health, the then guess, you And of M&A hospice your home personal the second sort I care, terms list prioritization on of update in between how in prioritizing just

Dirk Allison

of home Yes, based a as to Scott, had time been a a announced on the through. by have last think forward, CMS answered. to We the of rule be. do what the it year, know what going be whole that there as period exactly going came out to term to to little you rates what know, long the bit we to I going be are trying time figure was is actual where health I is what’s obviously, the lot mean, with of rates didn’t somewhat question happen going still by still

don’t are might think the rate they question I what limitations there thinking. that sellers in where today sellers increase. factored I the the that know place all future to lies have purchasers on the be And and have come real in

a be so high. for may price their expectations And still little

pay understand very to and in careful until truly we’re to we think we I strategic deals as others ruling. the trying for from the industry, what purchasers and as be us

of that affected deals has that said, market. the see, around -- some we larger of health may think I particularly the the as home So Brian some broker in

you quarters. Going the what be consistent continues last few for to been forward, really the telling quite we’ve from prioritization

really where will as as be care health. prioritization acquisition personal around our far home as well will Our we use as dollars

we as around have the At as not the have focused we’re our we this operation hospice market. been personal point in around a past. nice hospice in on We time, care think probably coverage

currently would those we’re personal home into grow to So like opportunities continuing trying to also which care, states to new states to And look really health. where really go. we in either entering operate are the grow strengthening strategic potentially for we we’re

that the next So see that be in few you’ll XXXX. our will focus quarters over

Operator

question comes from Tao The with next Qiu Stifel.

Tao Qiu

have your the And any played impacted Could million should about Should or to in which side? any the the And relatively you in first the ADC the contributed referral And performance the we X.X% it trend, positive quarter-on-quarter $XX we growth has there. this may part shift know there? of discharge up quarter JourneyCare, additionally, on in admissions annual you year? compared in rate I last continued expect sequential talk mentioned quarter since sources hospice hiring expect terms in a strong major this gain year. upside ramping a when revenue expectation, to of that

Dirk Allison

Yes, take questions. happy those to

from when an kind of what certainly mix is the you our just length of rates, we discharge median haven’t improvement have -- year-over-year. some First, seen in stay and at admission we look

back a were We’re kind we pre-pandemic. did see We to sequentially. X-day slide upper of XXs where that

you haven’t of of an where look at for stay, discharge length improvement recovered. is nursing still still I think we’re stay area when those the seeing median home, length opportunity one and

to that the some skilling later patients you that may tending have of some resolve SNFs ending hospitalization did we’re pre-pandemic. emergency I rules with and in the prior and patients related not those public itself the So was X-day the think previous to health cycle. get to of around special of And have the that

what of like. certainly a QX some So at the staff. have We think I look of lot you added certainly When there. from look does standpoint there’s opportunities

it you’re I going more the a helpful bumpiness year the under hospice probably I half the part in But help of of the of to is expiration of with that’s -- to little said, and what still very growth So bit a through to see related come allowances of the half to just in in is aspects. the related some first of growth the year. the the of PHE. to think And second going

challenging fully With kind And think of still some integrated they’re into But the going you have issues of see growth. JourneyCare, our poised for just I respect we’ve think processes, systems, that again, same to JourneyCare I they it’s to our for some of couple home the of to more a on get first that we nursing facilities. out come we in -- quarters related of be can some little particularly, can business. earlier those the patients get service

Tao Qiu

Got to it improved trend you’re in sounds you. strong this growth as rate services also, with And and like care a normalized going personal when get to growth well. hiring return pretty year, more the volume you

organic that So end growth? of we than the X% you foresee should top that expect sustain higher you growth should at kind do to -- yourself of we we profile, doing can even when look X% the Or that?

Dirk Allison

to in Well, we upper could we’re year X%. to personal tend for about could would care, the growth potential we the end I believe of this think X% certainly that excited be to you are say that it that

We’re not At want to adjust that continues ready to over this to we what year. time, this see in point level. next happen

XXXX very I see of impact, volume the back we’re our was to normalized for And X, the that of that year think the seeing comments And the that then provided. as struggle rate nice was think hire able because since for over industry that in for individuals growth the the mentioned has a starting on to that’s last exciting are couple that, pandemic last believe and are occurred, in hourly service, the X.X to I in be we’re for just years. a put part on time now care the this then had we work, top more fact personal quarters able I that to them growth us, coming first exciting us. we hours put will all

Brian Poff

piggyback Yes. little bit I’ll And Tao just a real on that. quick,

rate we across mind, with expect Just part to rate of impacted impact some perspective. year helpful, think, is market the personal year with keep in of definitely big side to is robust last increases particularly board, again, increases same-store think, that the that I to I But the is our to got, But this Omicron going year probably care just comps be last pretty back Illinois, from by numbers. wave, on care X some a QX compared year, which largest the a personal going difference. we obviously, be from this rate

Operator

next from Instructions] Tanquilut comes question The with [Operator Brian Jefferies.

Taji Phillips

Taji on It’s for Brian.

Just a questions for of morning. couple this me

like So just negotiation employing back payers, discussion Advantage from around to to you with as contract the look So points successfully like those what leverage health, you curious terms your I’m mentioned right? contracts to going does payers contract get negotiate secure Medicare rates. what you’re also, case appetite home the value-based for rate And the had previously?

Brad Bickham

the side. well. payers They payers of home care as from I standpoint, are largest our personal where on mean, that health Yes. tend significant to be We’ve in at also presence are a actually -- have when we markets these kind leverage look you the the

of so them arrangements value-based certain have arrangements. a And primary we’re I about payers in or also where existing think with talking These kind are value-based is leverage instances adding we that point.

we kind can that’s in place. when of So really case get looking episodic point an our rates at leverage or

I think to of there’s from explore still a lot appetite arrangements. value-based payers

I build record track we’re what around we’ve a to starting accomplished. good think

interest shortage in of types so of really there’s arrangements. those no And

I have we of think projects. sure making with those it’s do really the wherewithal to a good that matter

So you to want too far. don’t stretch definitely

it little going we has make road, but to the infrastructure building in to it’s think Dirk based, sure should on that that that relate help as making revenue something able tremendous is And value meaningful opportunity us this to it just out we’re a comments, from there, some So take down more us to be we’re his while take alluded of standpoint. get cases. those a for to a

Taji Phillips

Great. And then follow-up. just one more

for more Dirk. this so think is I

with enhanced had PHE, elimination the federal the You mentioned of the match. just Medicaid

So that had Medicaid are commentary? match Dirk, even what May, programs the that the offsets I will in enhanced stability, create in mentioned think, ending you though that federal your

Brad Bickham

actually. Brad, is Yes. This

you think put at when any, on the we if we roles. reduction on the don’t redeterminations hold, those Medicaid from impact also will again, in look think much, match, that -- which, I about were feel I redeterminations have like the

Just probably the roles at of the patient being we chances them elderly when you bumped negligible. look fixed population serve, that is out income

However, may to is out see large that’s now. being not added phased why Medicaid place. in and there were And think are lives case, individuals those match eliminated that redeterminations I that as being the you take qualify

Operator

James. comes question next Raymond with Ransom from The John

John Ransom

be know on but the Or do it’s this I interested currents temporary is we’re marketplace? in hospice, think a something differed cross piece perspective Dirk, your has that in a you think Do some thing? small I’d your of of structural seeing. business, you

Dirk Allison

Thanks, John. in little been bit change the It a of seems there’s industry.

can elderly far see of the in that couple whether quarters had time. last over there that was you providers some of all with the deaths of through question have struggles pandemic, hospice There’s as as that think I period increased the of a lot growth. a came that

some data, bit has at the indications if question that the time the little government look is gone so you down over -- of the hospice And are, a frame.

would moves as hospice consistently the that of patients to there’s hospice going seen get that’s change on think and more -- a environment. don’t elderly believe don’t have be those short-term to when kind We [early] believe a as of deaths think So some back we those been in impacts while level environment. hospice operation we team early have I in as we do that probably as a through the long-term I

in get that our because want excited about our of to about So we largely just sure that balance the have time, M&A a is of believe personal set hospice. for and revenue XX% of because care really forward we’re next network really make still way it’s year this the understand you we at point clinical move home our already services and to focus hospice, on not health top in in that’s I or strategic the X. to

John Ransom

your of of on do with also issue, think anything mean, of demand on you future [indiscernible] like shorter be maybe referral demand I mortality? government changing? be? are have somethings notwithstanding that the networks, temporary with structural length scrutiny to had you bottleneck referrals? any more Do so different with [COVID] and thing peers to think length of kind Do and going Is you that’s just stay that? issue Or follow-up see stay stay, And you Do than some struggles the length the there they the that. again, a in think of getting this used

Dirk Allison

couple Well, receiving That that seem saw was coming challenged. the of the we of to been patients mentioned in -- pandemic we in that of earlier, is I stage was over length years think due that industry what Brad their were during last the to hospice the were probably stage. later have stay board on and hospice our the

So their we than on shorter we seen length of had what historically. be came service stay, to tended once

home, straight for nursing be, will question the The declared stay the stay back homes, from of of SNFs approach when more the the those longer. is to clients of emergency tended nursing get we as to the clients will we it a get receive back length to start that after longer length see be over. to that Will normal

hospital length stay lot their If the years, referrals still you length tend changed of and shorter stay look to we’ve those a of deal, of be last a hospice of the patients. has received at great couple not but

over So as a X. normalized what back to level, our reverts see more will a us. still to year we belief it start really next the for that is change to that’s But question or point

Operator

William question [Operator next Instructions] The from Matt Blair. comes with Larew

Matt Larew

and the a the the health adequate terms of I in Advantage number follow of Medicare theme on a companies up home side, the getting wanted been about reimbursement. in to it’s space for really been comment years on rates for

what you’re today, feel You payers Care. feel different approaching maybe or you side, your of you about curious X or than on of the and book leverage X around business that MA the percentage Personal referenced like might you’re situation getting ago? what’s today point just be how X reimbursement, But your adequate years unique

Brad Bickham

of volume Well, out the some I to the of we’ve in attention really saw there. referral that we of payers down of the some had look think get MA purposely you when at business, and QX slow the kind

having once We that though, while. have rates conversations of found haven’t understand really revisited in the we them we these won, a we some start challenges with they

their they wages some beneficiaries, And need that do for certainly want be if addressed. something to need had inflation adequate We’ve to around coverage have rates. they the to about

success. So we’ve had some

us. let’s let’s think they non-episodic some on right a and if referrals, to the to try a approaching get in let’s where way for rates near-term non-episodic we’re taking start wins, is on position at we’re focus adjusted, those become I those we on get profitable we’re can where

is to more same that longer-term move need the let’s episodic is solution, to an we honestly, type And which fee-for-service. at Medicare time, towards rate look at comparable the

on with rates. think plans, isn’t they that some want to coverage reaching this they have we’ve kind then realized to they’re So near-term of need, had point where the solution, in and solution to looking but MA both they also I at I episodic we’re going if -- on the a think because investigating longer-term have good traction adjust the that

I look value-based for with Also, types potential can to like at that we’d partner they’re looking think people we arrangements. of

have that particularly we that care able creative for rate be the something So to on side. complements personal health footprint to the well I us, footprint the think do bodes home where

Matt Larew

then on to in you how than can your candidate us track all out you improved the And for and on then the maybe side? the up terms engage of potential there terms quantify And anything made to that’s metrics Is tracking hiring time rolling investments ‘XX. in sites to decreased it the of Okay. referenced in of higher you both hire. following some

to that the that improve course of where And roll we So think rollout out of might over today? continue about ‘XX, maybe throughout year. the just kind what’s could how so

Brad Bickham

Yes.

in initiated earlier we piloted volume system, it issues successful on this then in sure the at at make look side, And to was volume on several the some with That to of of just you personal lower get we is personal midyear. tracking actually because first kind our year a our if of spend or sites system. couple significant. candidate just do out about of split address any So bugs by care there side clinical past We region. care I time wanted each it locations the kind of we hiring that

make that was system sure planned. the working wanted So as to we

so And those successful. rollouts been have we’ve had

an the X pretty increase it to of which tracking start take We’re bit do training quarters the a rest one, over candidate to of But the locations, seen takes now to candidate regions little in to savings side, to we’ve the is, seen that X straightforward. but from system. to days that also it’s flow or whether or get seen reduction actual we’ll new It hiring. what personal really all ready PCS, the where versus It’s on services anywhere next probably probably care of pretty process. days intuitive. on X to we’ve time but And -- X with, submits of application PCS clinical someone we’ve the been their on the acceleration that depending it’s we’ve a from X seen

Operator

The from of Bank next question Joanna with America. comes Gajuk

Joanna Gajuk

your I’m this in things earlier, did of want in sorry trending just the terms personal stats some hires give care, QX? if last in mentioned how on actually, I QX into your you but and to commentary are follow-up you net

Brad Bickham

Yes.

I greater year, down net had hiring our look about the XX sequentially look think, because the on mainly if side, you holiday on hires of clinical PCS. a it bit. year-over-year, if prior XX% net on you the was, front, That’s it little was Certainly, than clinical season. So hospice primarily on We hire. a added we probably about side, nice actually the

You some see slowness less in QX.

numbers and January our see to solid. February look Good

number. in line of the more kind type with QX So

the clinical the care midyear we So has And improved certainly good momentum personal since front. hiring really year. last again, said, hiring kind as on of

Joanna Gajuk

improve on helpful. some That’s hours care, mentioned so the positive there Okay. the also I trends on And personal volumes, I’ll on the but to say sequentially. guess you rates, per business

the situation growing sequentially volumes Or going business? quarters. the there it Is should fair quarter? about to in the normal in some following seasonality be the assume think forward we over As is

Brad Bickham

No. of be, December seasonality saw, kind a tends you care. the QX primarily it. of in related little to where I there nice in you A and to But to holidays. and a have personal have frankly, can spite some mean I growth. if slowness that, I affect is storms seasonality we it be think winter little tends less depending around mean

QX So at the should that with QX, be think numbers steady I we’re when seeing. nice, growth QX, we look QX, hiring

Brian Poff

Keep mind, Yes. on a that Joanna, little just piggyback to in bit.

and a missed we those Care, reschedule up if those lot have on different Again, market Personal visit in things, of days. the we have that’s market. markets, ability our So to make to

around but guarantee, little those work things. run of some do a have of if of a spots. into ability a in always we not bit to bit certain flexibility little we There’s it’s those So

Joanna Gajuk

on cash you was the a which mentioned I had it follow-up And strong. flow, very

this land maybe, onetime kind of operating we million? funding How You’ve not think it’s would the your for you it, should not flow? this type onetime $XXX cash you included repeatable. some cash much year repeatable? exclude for flow how could where But call year a for think about receivable, this of should as versus we And

Brian Poff

Yes.

net positive mentioned that it those at cap look impact you around kind out back was I of if kind million, was my working If out so changes $XXX million. comments in funds then but the back of you from $XX you XXXX, the and ARPA

in $XX you you million, would those EBITDA million back So million-ish, of $XX our of have off out, been that’s $XXX probably the million. over $XX range more

conversion still. pretty So rate that’s a strong

I for in expect something opportunity range would So think XXXX. more to be that more probably

continue ‘XX, $XX we’re not consistent XX% grow. But should probably conversion improvement see in even thing. more a I going we working as million probably cap onetime is of to rate expect a on think something That’s to net basis. you that

Joanna Gajuk

the That’s last a This And follow-up. is helpful. one, great.

volumes the episodic don’t Advantage Advantage other type us So working visits. of Advantage disclose, like -- of is I the with percent previsit [indiscernible] can sorry, Medicare Medicare plans. tell Medical you versus the talking you mix you what rates, health with on contracts fee-for-service the home remember, Medicare did about were of versus your working

Brad Bickham

Yes.

half that half over We QX haven’t in probably little episodic non-episodic. a certainly I and Medicare progress businesses on we’re that made And again, in that. related disclosed in to the little working and we’re less some mix good of is mean our a past, than but are

Operator

to over remarks. conference like session. Dirk for would back turn our Allison any I the question-and-answer This to closing concludes

Dirk Allison

I Thank our Thank have want we to you. being hope each for for interest your call of of earnings week. today, you Addus and you great you, thank in operator. and a part today

Operator

attending for concluded. The presentation. Thank today’s conference has now you

now disconnect. You may

Addus HomeCare (ADUS) 28 Feb 232022 Q4 Earnings call transcript