ADUS - Earnings call transcript Q3 2024 | Addus HomeCare Corporation

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Operator

Good day, and welcome to the Addus HomeCare's Third Quarter 2024 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 Call. HomeCare welcome XXXX Third and Conference Earnings morning, the Corporation Addus Quarter Good is recorded. call Today's being To the reconciliation release. extent measure the in to today's company's any most calculated non-GAAP financial you the reviewing by also measure according will website to find going comparable and a directly of GAAP measure call, that financial is to discussed news yesterday's

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

purpose, this statements deemed not statements this For may be to any made call that be fact historical during are statements. forward-looking of

to foregoing, estimates, of forecasts, the expectations targets, limiting and discussions forward-looking are identify statements. beliefs, Without intended plans, the like

may third with and the release. XXXX set by these hereby factors, important are its others, Securities filings that cautioned in forth quarter You Addus' and be affected in news Commission statements Exchange among

materially forward-looking actual from update statements, Consequently, may result discussed whether obligation future or as The of any otherwise. undertakes statements. in to forward-looking events a operations no results the information, company new and results differ the

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

R. Allison

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

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

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

earnings increase XX%. our $X.XX, to XXXX. share share million, increase of of per of as for third $XXX.X yesterday, to of XXXX growth adjusted total X%, compared $X.XX per of of for revenue As quarter quarter $XXX.X of an compared earnings the an revenue in quarter the XXXX adjusted million for the resulted as third This was we third announced

adjusted third to compared an million $XX.X the XX.X%. was Our EBITDA XXXX, for of of quarter $XX.X million increase

quarter flows. continued third XXXX, cash the we experience to consistent of During

of As strategic approximately be of cash, Care us $XXX quarter third to operation. Once of in line will credit, acquisition fund acquisition we hand This of a on along our the end had with of Gentiva we of is leverage continue allowing the used will cash our the million. announced opportunities. closed, previously to transaction Personal conservative larger evaluate this position, to remain XXXX,

this With on in June hiring I'd and and be coverage Medicaid access our the acquisition on an may our spread for it of a respect a Care we our and Medicaid scale promoting we strategy, if a segment particularly provide retention we our more believe in to final true This result announced as XX and over is activities, and cost year. like of while in which ongoing base scale allows where Addus the we graphic to opportunity operate operate. rule, with implemented. and managed provides coverage favorable states from the also This Gentiva with broad advocacy meaningful Recapping transaction states update revenue when to the environment. states both us benefits the Personal larger

acquisition us of strategy to This the led pursue Gentiva.

services As a largest in is the of Medicaid we of state market. stated, will have provider previously which be Texas, close Addus the primarily transaction, managed of this upon the care personal

Missouri entry Carolina. businesses state and Veterans and a In Arizona Affair and private Arkansas, will and addition, California Eastern larger our North a in us give strengthen location this in both into operations add will our the pay presence provide existing Tennessee in and to transaction

into acquisition the close once will for Addus. working the Personal I this very Care this We we business that done planning team believe months the of transition members occur have several for with changes closes. have of spent the preparing good Gentiva of a last job and

of been as continuation go process. has to focused provision the planning our services staff the on Our integration quality we minimizing and through impact the on customers the of frontline ensuring

of We are Addus once quality they the closed. Gentiva Care joining will to the appreciative provide customers. Personal of look as services team to members forward who to is transaction the the be continue family efforts team its new We the many

fourth the year. on this stated we believe will this occur last our call, closing As quarter we in of

me areas discuss operations. of certain let Now

During the Personal to hire our caregivers, of the quarter was solid to hires adjusted the York segment. for to ability this second business XXXX, we XX disposition we achieved of continued quarter per When of operation, per our third number XX In hires quarter second Care our in business especially New experience that results year, related day. day.

turnover personal quarter continuing day, third hires rates low levels. at the remained XXXX, trend During the XX numbers hiring care of our per business saw we have our at historically while strong

continues to addition our have business few hiring our focus strong momentum in to we quarters, see a per be our past of In the to which team. continued consistent starts over day numbers, operations

we respect the see the consistent improvements lines, environment, clinical clinical overall our continue few to with quarters. in to last labor With service

we American years, As ARPA. the the have received Plan we to over or we Rescue past utilize continue from funding Act, few the

$X.X and retention million, million third $X.X quarter to be over additional continuing an $XX and approximately enhance in in caregiver received opportunities help leaving utilized used as funding as well to with the These XXXX, funds. accessible During and are recruitment efforts, caregivers' to funds million of other we training. experience remaining our

services operate. we our for in Care states of favorable the support In receive our which segment, many continue reimbursement Personal to

good believe be as continue stable financial seems position this economy that to our the remain We to states in at time.

programs, reduction care deliver overall value are well a services that through We as our of Medicare care. the care personal managed as confident continue to to partners in state cost real

care for remind give services, you will increase Brian will more state enact care XXXX. this X, me positively impact you for how performance January personal information XXXX, on will for personal increase largest Let a our personal Illinois, that X.X% care services. effective our

reimbursement Medicare increased the results. X.X%, we reflected few will effective hospice rate As be quarter consistent X, in for past over approximately our increased what was Clinical seen fourth our years. with have This segments, XXXX, by October largely

support for pleased with end this life the are from of valuable CMS We care.

X.X%. On a all Friday versus effective XXXX, a final of X.X% proposed including rule last results CMS rate reduction announced health a which, in care week, January increase X, of previously adjustments,

to While health patient permanent we rate, access we to reimbursement limits reductions are rate believe temporary both than slightly being CMS positive service. which viable final proposed we much adjustment this needed the disappointed that more of appreciative pursue and continues home providers, and from the are

we Medicare continue to believe the challenging patient health remains current access health that in in pressures be few well-documented issues. Although home reimbursement also years Medicare are will home next to response appears to rate likely moderate the and traditional over XXXX,

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

For our X.X% was the Personal XXXX. of same-store Care compared quarter growth when our revenue third segment, to

that by the new this redetermination to the XXXX, growth states our X%. X.X% that our as of to we impacted the personal care process hours have This Medicaid stage, of see we It which growth third personal currently in is the period completion quarter negatively hours. was the have approval slowed in help to During saw of us appears process target completed authorized continue compared operate believe same improvements all same-store of personal care of XXXX. to we to along hours the clients. the in should encouraging our fourth We process, care quarter. return approximately percentage increased the Medicaid by served This with will of end redetermination by improvement, hours the redetermination compared of in rate same-store will

Clinical operation. to our Turning

revenue compared X.X% quarter of to same-store increased hospice when Our third the XXXX.

average the quarter when daily same-store census Our compared X.X% increased year. same last to

length our of XX quarter compared XXXX. third days, second was for the stay as XXXX, days of to of of XX As quarter medium the hospice

Overall, seen pleased we will we While steady admissions are a segment implemented have our the our in the last ongoing this operation, admissions trend. changes have on to we decreased we same-store impact which of by couple positive Hospice year. believe our have our improvement quarters,

complete conversion by revenue the implementation primarily our rate, an to increase the focus scheduling we This care. costs in be of our same-store of and XXXX. and segment their process to Tennessee process expect and decreased improve. when referral lead X.X% quarter to was intake administrative reduce same allow clinical see increase Health markets our to end in standardized Illinois a patient acquired on after outstanding implementation revenue should to the same-store changes growth ultimately these Home which our the quarter, decrease due will Our that fourth our of staff providing compared believe we The

an be to Addus. continue acquisitions our transaction, Care strategy part Gentiva the growth at by demonstrated As important of

goal, of annual Our even size our with the base. our targeted growth larger minimum of revenue remains XX% revenue

or we our criteria. goals, For will that exceed focused to additional us these meet meet continue to using capital targets on our strategic acquisition find to be

While home for we acquisitions both segments, personal we looking skilled potential await of health. care closing Gentiva the for transaction, are the particularly and

acquisition meet general to been couple some due somewhat market past the Over unfavorable limited conditions. strategic opportunities of years, that the our have objectives

approach a we to see future starting all our capital to targets that to maintaining are our in deployment. help operate. committed where segments a more X our growth us could We of making we few However, conservative remain that opportunities while acquisitions to will strengthen currently achieve overall markets

our value care my opportunity and most growth and I understand clients, industry our safest our and who hard one our Before other the at the work incredibly the care and receive for few are continue our want be families. disabled care. both to will thank clients and growth so to dedicated dependent team shown These providing for of patients caregivers years We and and they to want favorable awareness and is appreciate places last have elderly to heightened home-based support employees I patients majority believe which receive their operations outstanding of care a for that on that and care and to to remarks, close and company. cost-effective are providing vast the of home, our patients. our We remains the consumers

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

Brian Poff

morning, Thank you, Dirk, and good everyone.

compared Our year. With with results execution, in top adjusted we solid business year. continued momentum increase throughout third XX% EBITDA quarter an quarter impressive delivered our line and the growth this last the third financial in X% reflect

Driven rate trends primarily last have support. trend Care growth growth the year X% period Personal organic to performance this tracked year. reimbursement to consistently range as we another impressive see above segment by strong hiring normal X% over with expected and solid favorable has X.X% revenue of our continued same had This trends, our

the for X, Illinois high January range upcoming end revenues we the next expect toward our quarters. remain scheduled With our several the XXXX, statewide increase same-store for normal of reimbursement in to expected

we reminder, in anticipate to with rate a As XX% state. million the margin approximately increase XXs, in consistent annualized revenue, with low $XX a generate rule the Illinois in the the

have we financial been GAAP results of results we X, and that for requirements the New divestiture XXXX, be our will prior included XXXX. of on beginning previously, have for York qualification the our discussed under New operations Effective to longer no the quarter closing. treatment anticipated York may in sale October consolidated fourth As the of in qualify met, operations our

contribution. $XX.X third which the no New our XXXX, our EBITDA and of were same-store York in not numbers, million In included in contributed operations revenues, quarter

top and With line earnings directed counts have [ Buyer past the being we majority few ] seen our months, of with over to no impact. the but degradation some revenues, hours, client new in clients

results On services, be reflected in Quality the which we in of and the Tennessee Tennessee fourth operations included third hospice XXXX. effective quarter our acquired Care our revenues duty provider private same-store quarter. Care, August of health, a will side, nursing Quality Clinical home the X,

stay. X.X%, daily We census and our last third improvement with daily in our growth patient revenue per and quarter, quarter X.X% length grew average Sequentially, from saw quarter, the organic average patient due day primarily days an by to in compared business hospice census, year. a third revenue of second the our steady with in increase higher the

business, XXXX we increase annualized an operations with the ahead, including million. in hospice Tennessee care the quarter, of update for XX.X% reimbursement fourth benefit the accounted Hospice of anticipate of approximately to Looking our our begin Quality of $X.X revenues Care. in

XXXX. X.X% our business, third in accounting admissions, of new For services, segment, for of compared is which our total our volume with and modest recertifications saw Home Health improvement we quarter the smallest

Medicare mix to stable, Our business episodic remain traditional of episodic continues and Medicare both service Advantage volume. including

reimbursement in today, result be the our rule X.X% rule our As will impact limited Due reimbursement referenced, home effective in Dirk in Addus. and published increase exposure this week. we This XXXX last expect final the currently home January for health evaluating nationally, health to net business. a to immaterial on are X, was we to

home service to of and for and hospice valuable expand this ongoing is to believe service and support a care complementary health Outside pressures, personal reimbursement look we that we our opportunities services, is continue line appropriately. to

organic that support our to growth, from focused will operations be our have our operations. ability market reach. We to identifying acquisitions to on recently addition In and acquired benefited expand our we remain accretive

primary services is so in strong of our objective operations levels all we can leverage clinical care Our offer presence find where markets to personal care. we and can add X home-based

markets add for new care look at can personal to also opportunities we scale. We where enter

We to states, $XXX in in acquisition expect annualized squarely Texas. revenues quarter the provides strategy personal and care in to this in the fits acquisition X personal coverage an in close will opportunity Gentiva in fourth million currently majority and pending add the add services. Gentiva market care with The

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

XX% financial of in of as Other results margin compared percentage gross XX.X%, third XXXX the the decline XX.X% for include XXXX, second sequentially Our with for a from third and the quarter was quarter quarter, expected. the following:

from the moderation and price that we in second As of benefit a first indicated, concession in levels. quarters we return previously historical to saw as closer experienced implicit we XXXX lower some the

benefit Additionally, we impact compression an Illinois. the both holiday experienced in additional from margin some quarter caregiver the the third sequentially and in PTO of

we basis York of an fourth result XXX quarter, expand and update a the hospice XX points However, approximately New our from to the gross basis in approximately margin sequentially the points anticipate percentage reimbursement additional divestiture. as by

quarter G&A of primarily sequentially XXXX, due a for lower G&A revenue XX.X% lower expenses were third the were ago. second the compared with also of in XX.X% XX.X% of expenses revenue, to year from expenses. acquisition quarter

expenses a for year XX%, prior the of quarter third decrease XX.X% G&A Adjusted in quarter. were comparable the from XXXX

included increase anticipate York we our of divestiture York expense approximately by our in basis as New will the results. be points With XX G&A longer our operations, financial forward, the to New adjusted going revenues percentage no

Adjusted primarily million was $XX.X sequentially XX.X% adjusted quarter margin from expenses. $XX.X The the XX.X%, XX% and an million lower EBITDA in revenue a leverage with from increased company's second to third lower for legal of growth increase compared of a ago. but result of XXXX, the year ongoing as EBITDA our XXXX, from XX.X% quarter

positive the on We points of our percentage expect of EBITDA to have adjusted XXXX. approximately impact of York quarter divestiture New in a beginning operations XX basis fourth our margin the

XXXX per income share exclude and quarter increase of the and for quarter compensation $X.XX expense exclude XXXX, compensation third net $X.XX $X.XX. third $X.XX. share was results with expenses of an acquisition expense Adjusted for acquisition the noncash diluted of third quarter $X.XX compared stock-based of share The for per per the of adjusted The XX%. adjusted the the of of XXXX stock-based results $X.XX noncash following: expenses of following:

Our our for third expectations. the was of the tax in rate quarter of range XX.X%, XXXX

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

rate tax we tax from XX a effective to New of in approximately of fourth higher impact of With beginning anticipate to our favorable basis quarter the the operations related the points, the our York XX and divestiture state, XXXX. rate

collections XXXX, the have with third experience end quarter the at of as XXXX, at our of of continued days end quarter compared to from XX we the payers. consistent majority days XX.X of of the were cash the second DSOs

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

quarter. in was onetime Our operations flow net the would million, this our quarter $XX.X Exclusive revert cash $XX.X cash a and to million. operations fourth have from onetime capital third of working from for which of million expect been the included we benefit flow benefit, $X.X

ARPA $X.X we million offset utilized. ARPA quarter, received million partially funding, in in third the by funds During $X.X approximately

the funds primarily million end be As we have outstanding to in approximately Mexico. $XX.X quarter, utilized, the of ARPA of in third New still

company As availability our revolving credit cash under XX, respectively. had capacity $XXX.X million, $XXX.X of the million, and September XXXX, of $XXX.X of million with facility and

subsequent the million, disclosed, facility incremental facility previously current into and our expand and transaction from million to million credit quarter, to end to maturity the As through of we One from the appreciate date entered this support agreement on million our July $XXX and leadership restated partners. to $XXX banking $XXX an our credit all $XXX from the increase amended from XXXX. extend Capital We the revolving

closing financial our business strategic expected growth to continue will our flexibility and including the acquisitions. Gentiva to of initiatives, the Following our have we in pursue invest acquisition,

As pursue the with ratio. thank will time, capital and with same align concludes selectively being comments will our to net manage leverage morning, spending we be our to mentioned, This our our continue and we for with continue diligently disciplined us. prepared acquisitions that strategy. you this At

ask open now the operator to your will for please questions. line the I

Operator

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

Brian Tanquilut

should divestiture? right and between comments clarify and how hospice gross Am Brian, margins thinking to be just up points be just overall? should it we going forward, direction margin And about XXX Maybe the about maybe the I then margin your on thinking basis on sequentially. in G&A also

Brian Poff

between line, the update from divestiture, Brian. that gross Yes, accurate. it XX hospice will the margin that that's is correct, of from XXX top two, another the Combined on be the on

ahead, expansion, a to basis moving XX net bottom York. line, New some from margin we're think just see I points going

bottom in the think I give when some our of those the our going to We'll fall in you hospice line well toward as hospice from expansion of But merits. should York positively that increases of rate with impact see we New offset end normal margin being out profile. QX in forward, numbers some our see will see QX. You'll some

Brian Tanquilut

Dirk, And here think it looks like soon. then I expecting it you're Gentiva maybe, it. as close pretty acquisition, to Got about the

further at you've are grow time, maybe drive business and thinking your you forward your you one, at some to or So ability the to do as through acquisitions And integrate process, willingness about looked then terms where that number of that this -- as going Gentiva? margin? you ability the same how or in further to ability stand just appetite asset

R. Allison

Brian. Yes,

One with Care the service work having they've these really learned business what is few Personal team of to how together the by over and we've months last built coming the on that on We're excited focused about Gentiva done does be growth. drive the to able their things will good to truly team, appreciate is they them our that years. has personal fact now with and history a operations care their services operations the with Addus team, that company that along

great a is And Texas state.

know, plus it's business you about the As acquiring. XX% of we're

So to profile about X% in ability to get of we're years. over next X% our all on look at which only same-store can that which and bring growth target ours, the appropriately, which the them not very the markets a continue excited is our operate they growth similar about it also ability in few but to we remains very to

of to one balance clean sure acquisition some going equity following As our of forward. things it relates we we Gentiva sheet appetite, did up were service to make our the and was Personal raise out Care go the to the prepared

$XXX with mentioned, we've a said, we Brian And cash, for credit million line so got of capabilities in million there new deal. today, $XXX expansion the over as

we've be the some gotten opportunities may us. to And And interesting our remains at interesting of continue obviously, larger, as will so us. to And is that strong. at larger looking arise certainly appetite

which positive company at our meet our deals that that looking think be the shareholders. in direction to be key and our also I and we're strategic sure it can making driving will accretive

And that looking. so from standpoint, are we still

excited, as still but We have look deals. at that are criteria we we do

Operator

your with open. is of Gajuk comes line America. Joanna, question Joanna next Bank The from

ask may your question. question. You can your you Joanna, answer Hello,

Joanna Gajuk

here. Gajuk Joanna is This

a follow-up on growth. the So just census organic first

guess, But to to the X.X% headwind New also redetermination talk to, into guess, being guess, call being this was out a there guiding I about heading year else, headwind for You anything growth, there. and I expect what York increase X% there? next I a guess, about census you you growth. reaccelerate process And mentioned said market you I

you give what a So X%? can us you go can you to sense confidence gives the

W. Bickham

Joanna, York, it's the this at same-store is out actually our When growth of look you Brad. numbers. carved New

So we've already up you when look that at kind cleaned of that number.

redetermination noise the lot a If certainly this that you about through process, year. been think there's of

I to ago. they that would the redeterminations. XX with came probably CMS with X XX, Probably how have better they're out handling been help to given states about months last days, some think try have out if in guidance, would

I process think it little might have a helped the bit.

seeing we there one, the in I operate And system. of nothing be we're up the more we've It's think clients end by the material. we've is, wrapped done, largely is clients, really what been are that But and impactful, QX. seen I through what new will think few honestly, states on getting a lost

state the this didn't staff. work. on lot about added think you of process, that was a side additional going They If have through

admissions So is doing program, that was staff doing into the redeterminations. staff same the new

a bumpiness And little see you can so referrals more in the -- a still little week-to-week.

going to that's steadily better. think I get

back on more to, where into a same-store XXXX, -- Dirk to we certainly of hours achievable. cadence get as target X% that think alluded I going I is regular kind kind optimistic So of that, think

Joanna Gajuk

similar guess hospice. I on question And a

stay So quarter. like but improving, the that segment. in were guess grew admissions making of you some number the in mentioned And length sounds still were keeps census you're I admission because but changes guess I down, disappointing it

about about hospice talk when growth? comes we how should you year can progression think the to it into census next So

W. Bickham

have sales leadership significant -- in also -- positions, positions, some optimistic the really of leadership I'm pretty hospice that some the little the the changes bit some made board. made there. hospice did side, on in about on a in primarily we we've We Yes. changes -- team we've but

Really, change out the middle leader of September. sales

We're work out and months of teams. the met on lot the He's just through a getting potential of and realize with kind sales now going our over that couple just I for there reeducate with his team. sales to next been training out feet he's ground us. the of of all there's wet. So kind

So of high on increasing. kind be into, back with a optimistic rate single mid- that though that I volume digits we'll to growth think, admission

Operator

with comes question Qiu Tao next from Macquarie. The

Tao Qiu

Gentiva. the can you're initial comments Missouri you environment Any comment new the on as appreciate thoughts regarding and provide the Medicaid Any EPS I accretion to? managed getting for reimbursement the in on Are XXXX? states Carolina, potential X states well? North these from the transaction

W. Bickham

Yes.

at if Missouri, other solid. Carolina you think North So that of in we're what in look our and the into, reimbursement see new Missouri, It entering we environment consistent is kind markets. I states was with

is margin North and it but the book an interesting of of than business, and bit actually us with very case a but a piece business little small has certainly traditional kind it. of It's personal actually good different. of a small total other different into entry gives business the kind care. good Now Carolina management, Carolina actually again, North little very pie, of business margin But

Tao Qiu

providing Any on EPS know I would guidance be any for insight high you not just accretion? provide comment appreciated. Yes. 'XX, you're the can there level

Brian Poff

Yes. Brian. Tao, is this

accretive definitely we it to numbers. to think our expect be I

to going I those I primarily bit sometime Homebase about to most we well from months road. that little coming talked but up, Homecare as opportunities. once XX system get be of they're the down some the is think think out we've the going convert a will additional helpful, probably set conversion. Currently, XX that today be system to synergies that's Probably on to for

of probably So high initially. at EPS will not level but the gate, be out a accretive definitely on

Tao Qiu

you of the the follow-up proposals of some My there's the spirit lot about federal day in pertains increase, of proposed potential impact the the particularly wage discussion election And market, it here. the a federal follows which Could been long-term the I in about of Does -- about you Texas accelerate also, care the to to rate? to you. minimum more policy will strategy? the is Got talk as mention changes that Medicare become what make potential think proposal businesses? cover If the home I make Medicare heard clinical investment health. your likely investment were interesting to reality, personal you additional services. expansion in Harris' to you

W. Bickham

Yes.

I -- we're does paying think election, at by or way when rate of the the mind, as Texas we'll as certainly about federal be always rate. follow look monitoring. wage the the the we're keep states Texas other that we paying operate. in something that rate But kind is minimum way in I in you federal federal well mean, the

but So that see be. don't flesh I lot a proposals at material as what those out this might being time, to on there's

towards seems it election, the certainly, a of to And government. trending be more split

to I'm great So the see With along not benefit discussions it, very lines. of for expanding much around positive. those sure to a how of but Harris' mean, Medicare, certainly get lot through. great either will proposals about candidate not the VP comments some I of to detail respect it's that there's

real expanding think and opportunity I to the that their we to think services population. benefit Medicare there's

think setting. of shown also that is taken care to where certainly it's be people we've cost I want lower the

certainly So proposal. an interesting

R. Allison

Yes.

I to me add Brad's think also, comments. let

is said we that and at great things then And this time, Republican of The our exciting, election, Harris supporting she presidential President expanding supports is party care, means. tax care a same lot with which we of although both elderly not that the think came Trump But mentioned at company also the very elderly point. through which specifics I regardless wins out sit have have where One has on of Democrats the sides. come about out. benefits

and care both operate, the at their in taking of we're excited do, us, of elderly that we the that. have both for what in and home, so which looked And just we we sides being feel disabled supportive population industry Addus and

shape tonight. So regardless how of ends the we good election believe we're in up

Operator

with next question comes Stephens. from Scott The Fidel

Scott Fidel

operating sure sort flow modeling just make quarter. Brian, all could to cash sequentially question, fourth got maybe for the us moving if just you First those. pieces in wanted walk we've the of through

moving got through walk know to in pieces maybe any But you that in $X.X -- flow reverses. I of other benefit million again we've us as if sort fourth So cash the could the operating quarter? XQ, well,

Brian Poff

Scott. into to be Outside QX. going of sequentially, piece that, QX big the Yes, that's

QX, I us. Which think, kind without in benefit cap think even expected, quarter a cash very that I we still strong largely changes. it flow was for benefiting just from working of

were we in a down QX. bit So little

cycle, at think for their a timing a just DSOs, I when their our were you quarter-to-quarter. look payments difference very always payer kind they in QX. between IDOA bit payment us specifically, we strong if of get little There's of our

say, X.X would hey, I nothing should definite of QX or out reversing. outside the call kind So of into impacts be material

So going you else out that bit would nothing to result that little flag unusual. be as in are that a should which lower but see I a QX, of

Scott Fidel

quite probably the there's friction last curious, providers around up payer just gumming has it. approvals increased follow-up looking business? just in the payer been MA bit guess, works, question, you're with prior opportunity on health strategy over of sort terms several that sort home I bit also And and Got and of margin curious maximizing that contracts XXXX. of say implementing then discussion of I around and preferred sort a would a Any of on And Okay. just on the then quarters, authorizations. my additional to little your out the

just changes you've would from sort payers, of And curious, I payers of just around X in -- on clearly, your them the sort look any that's managed of business whether approvals say, lines seen denials focused acute terms and heavily of I'm been care you level and of But sort care of the hospitals. a posture of as lot, friction? at

W. Bickham

Yes.

really relationships us value-based noticeable look with the at Gentiva you talking at interest side, some the PCS, frankly, more Other payers. I start acquisition, certainly than, think business. with our to I lot We about any a changes of mean, haven't our looking largest let's on payer seen with arrangement. type in in if creative

So help I certainly to those also opportunities think They've there's But skills with making to relationships the the kind side. to personal offered good us care payers. contact. side on on work of

it's continuing payer hospice, activity there's on increasing a pretty over you have just health, have really and It's not We've to visit rates. payer wins Typically, the are when we So Home had per switch some the there. minimal. had to ongoing discussions. front. of lot

or to larger certainly, to as moving had of XXXX. with But that payments some much the episodic of continue national kind in basis. haven't We full success pursue a we'll on payers

if rates, we'll players start to episodic a on rates visit as get as in with base be any lot certainly, the there, far some seen prior or can certainly the sort in some And wins, but changes quick rates continuing with for Really MA increase there. posturing haven't payers. authorizations or push a we'll those case we just of

us. big I has really think been for factor it a So not that of

Scott Fidel

Great. Okay.

Operator

Jared from Blair. William comes question with Haase Next

Jared Haase

from guess, wondering state I'll redeterminations. commentary as if rates paying curious remarks they're the managed impact that getting currently guess, I on, Medicaid all outlook funding to for like states that larger, appreciate that clinical outlook your just risk for they're I noise in state budget, for the the budgets? prepared the follow-up payers I'm the after services unfavorable There's of for does that Medicaid, personal And a from on managed sort I'm recently pools to kind I states to for on availability maybe in any relative been the care? lot rates has factor that. at of update the of

R. Allison

seen states them. we I of We've in care. is that. environment think in care It's which of something support through understand the very great personal the important value the personal that operate most to

concerned good New which had as about and -- them was today, longer -- the their their so status budgets, ones of we York, as The in. most And we're shape. we biggest are in no think far pretty state

Advantage that price we some standpoint almost of the the -- the have As but as from not one our managed affect or pressures states, far dictate of seeing are all that from seen Medicare the state, the get. that Medicaid states, providers of us the we

So a subject it's us the providers, managed stated rate. that paying and they are when sign price, they on, to Medicare

business point about as So we financial kind stability. at today usual, we're and our as it's states far in time, really this of where as excited really see

Jared Haase

that's view? the board as maybe environment impact seems one trends labor feel is your could the have the going in you across quarters a then on you're been just And follow-up, now. Do fairly in or that. appreciate hiring for sustainable of things anything environment. industry stable there XXXX? broader terms like either like It that into the guess, I economic several I Okay. monitoring

W. Bickham

No. on been some the I mean, numbers. X.X solid, I care hiring, solid very personal year, for our think with when hiring now you particularly X we've side look years probably at good

think good So we're a that to X seen services, in I X we've certainly place the there. Clinical improve over months. last

continued on but don't some think nothing depending just of to trend challenges think skilled So continued I on that side kind that kind on anything There be markets, side. I improvement, clinical is future solid that see side would the the that's continues unusual. I always the on favorable. will and be that impact the care personal materially in hiring numbers of improvement the

Jared Haase

the Appreciate Okay. color. all

Operator

from comes Matthew question Gillmor with next KeyBanc. The

Matthew Gillmor

wanted to metrics. the on personal follow-up care I growth

caregivers rate, driving just had hours I in that. in percentage think favorability what that the the the scenes more the operational referenced improvement and was Dirk going which helping also Is that terms on metric, of I that rate? fill in around sort of labor fill favorable that? sustainability what's curious was hours? we behind And see an the filling is dynamic thing the Or just is there overall,

W. Bickham

Yes.

the also it's think fill we'll things. has schedulers rate. has environment from to hiring think the at enhanced X And the that our on to helped better. an I I process opportunities additional provided standpoint, certainly, that. But we've operational scheduling look to tools make continue One,

improvement has for how but opportunities number incremental pleased in there's think I that rebounded. certainly number, very that So

the who One, identify of caregivers again, availability some but strong then of things where have we twofold. think I with to operational that front doing we're And hiring it's the on kind is more fill want real during availability certainly rate. -- they more that to what what in that helped And work the time hour their increase week. hours, when us -- getting has their also

Matthew Gillmor

move And then market. to particularly a of the was Gentiva, Anything I close? value-based is value-based you're I curious close Texas, the with as given value-based care wanted with on care terms which forward, care a thinking stronger about of catalyst to exposure things their the was that to how Gentiva serving ask topic. in you report

R. Allison

No, work the excited with moving of of size about in to market. and into payers Texas type with be contracts. we're additional able some the We'll those the

allows But some to what that reduce payers overall we help somewhat revenue, ability value-based of a is high-cost or their about size. from that The as take it's our it of. really value our of standpoint, us do about relationships think the realize we've immaterial is base said our it. company if before, to Just a prove patients care to clients itself, cost to the you

will continue we it those solidify but It's along payers. us really us, these So exciting, lines. our really, to helps with relationships

Operator

The Andrew next Mok question comes from with Barclays.

Andrew Mok

hiring there's comments. and on looks I cost trends in But in segment. broader your home elevated inflation still inflation understand running to Personal so. Wanted X% the follow-up wage like some nice sector a the X% the been care range Care and to or bit it's unit in labor

we'd So inflation wage what hear XX and so cost to more months going drive your to on to over inflation or unit love next to down the levels. outlook it's historical take

W. Bickham

And seen side, at it personal that haven't wage fortunate markets. care type look the you the we've we on really of when inflation. Well, in been

our side. the and been of markets gotten that Our kind gross personal we've on rate that profile to offset able care maintain have increases margin larger that

look skilled there. When you So gotten it's that's think the business our at X/X again, better. of side, I

X% in or markets. actually be outlier that There market might more on I depending care kind X%, -- again, the personal that I But there. maybe X fortunate we've running to But have the has inflation been get we're think in improved an rate pressures. been offset of that think wage that's increases X% those able to overall, on the side. side, to on clinical a

Andrew Mok

you're reimbursement still that, Understood. offset correct? so that the cost underlying Right. mid-single higher just But to digit inflation is in running getting the

Brian Poff

markets depends -- have where it personal Andrew, side, union a care have either where we the really we contracts. It on

rates those of over So we've raises have that markets. wage, those. And reimbursement those X%, the on seen from years, seen X%, we've pressures, be could those minimum from that are offsets few which kind wage minimum depending corresponding for there wage last in X%, but are largely set anywhere the what

Andrew Mok

years. provide you And could in normalized of to stay the a color some of basis? M&A recent skewed you Okay. stabilize to length more length line? hospice the in those trends of a hoping bit underlying then a Great. bit but be on on stay. know side, quite around where I bouncing some in And What's that expect on variability that seems would of metrics, driving

W. Bickham

length health to stay those ended, drove were I to left that stabilize. skilled it stay, we certainly, were starting Well, Once facilities. really stay. I more length think you're There much length saw public those the of years, during see of on actually the the normalized certainly emergency numbers of things of you've kind mean the that That back which COVID started if shorter place that. -- us hospice, down comparing in basis. influenced revert particularly to numbers of a we're kind in actually a seeing

from where So an honestly, and of a stay right, about length is currently think both we even I sit from stay. median average length of

Andrew Mok

Great. Thank you.

Operator

Langston [Operator Ryan Instructions] TD comes with question Cowen. from next The

Ryan Langston

keep rates? on think in of good the we point, sort guess the depending maybe slightly should in to rate reverting digit Or lower structurally X.X% I pretty getting about be And at higher outcome more today's back 'XX single maybe XXXX I are might mean I thinking historical on of rates, Illinois. you back PCS assumptions than Maybe rates? we environment. think, election? kind change to those now, some of

Brian Poff

Ryan. Yes,

the that X.X%, seen and I giving necessarily our recently in a not services, relation for to good the effort rate I in we've actually access but last service. several the to years, some an increases think with example minimum we've start increase think, decided Illinois, of seen in markets have that in rising is of expand wage that to to

to see little in to a we there in increases, have rate are that new And which us of more try markets order access. rate get that few we're of minimum scale even increase for instance, even actually we put to Chicago getting in continues 'XX ahead already of given further is ahead wage of bit wage, Jan minimum a where nicely dynamic. of The the us a were So Illinois. was our starting to

increases. I wage that's last of the really with X, a the think lot up, years coming X, the minimum impetus X for reimbursement been

think to in to increases next kind of go X% probably overall expect rate. we over of yes, probably that comments kind been, at the I more high our So of have of keeping growth back level historical rate a norm, X% couple us to the a frequency of years,

So kind increase targeting we on about percent of in hours our X-ish call talked a growth. earlier

But certain from So rate. again, us in see increase in the access But to given and support that that still that markets see rest we be expect are effort. that to would promising actually of things moderate. to good doing order

Ryan Langston

you planning to able are get your year me just revenues from you the last I acquisition. us for not unusual of seasonality, Gentiva different And EBITDA on know any remind or or if the or onto any bring but onto you bit, in a there's them technology of cadence maybe them sort current be planned one Can to little then you're And your PCS book? until Okay. next for XX internal months the Homecare EMR overlay Homebase? initiatives may

Brian Poff

Nothing kind that Yes. of standpoint normal than be business. would a else different our any from seasonality

more we see taxes, margin quarter usually QX is the note from like the along reset things and really business. Gentiva to nothing payroll some payroll big QX there, up the different lowest into of economic taxes, that's our QX, and for those in But obviously, the I that. of Usually PCS. step but being else any usually think and drivers quarter see in just QX us, particularly, PCS lines best

think perspective of quickly. our to going come to payroll from But very I they're system a technology, on

going deploy is before caregiver a the we've all patient we'll able efforts, the So Those the are hiring even like anything onboarding an of EMR population things or that efforts, things think to road. business that to implemented be into we have system I that. in into our kind and app, down billing support

Operator

RBC Hendrix Ben with Markets. The comes next question Capital from

Unknown Analyst

is ] same-store expect little Hospice do a Mike -- to ADC dynamics the were moving do this softer. segment? continue Ben. to for touch [ Murray admissions And on to is same-store forward? growth but in you good, you ADC This competitive on bit growth pretty improve Can

W. Bickham

Yes.

am opportunity kind numbers, the move same-store the growth at look think you into when improve there. I continue a upper of that there's think more the to to same-store on single to on mid- will optimistic I I that digits that sequential also basis. numbers those

So good I think we're in place. a

It going thoughts, the a new be to ideas is continued sales of energies improvement. think there. I certainly, brings leadership around certainly new there's But new it. new helpful kind and I with think

Unknown Analyst

just then another And right. question. All

during health certain direction So they to seem took in same-store trending be operational home investments on few a the stats the markets. the Obviously, last quarters. back right meaningful step commentary in I the in quarter. appreciate the

you us of Excluding give same-store a these could markets, been? sense what have growth would

W. Bickham

think mid I look you actually, more digits but to our the through that certainly to Not to that we X% if like see see, would range to one markets continue it, in growth larger we'd at Yes, quite process nice there. upper a saw changes has X% there. of the to we went operational the earlier, actually

opportunities certainly and are real as numbers side. admissions on centralization improve this optimistic scheduling, to far that once to get going kind health and I be there to of and we opportunities changes the there's think health on of through as the home these intake home certainly there around improve some operational So

Operator

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

R. Allison

hope our week. of want for everyone and I operator. for thank to much, good very Thank call. day today you. Addus you Thank part in a good and has a everyone their being interest We

Operator

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

now may You disconnect.

Addus HomeCare (ADUS) 5 Nov 242024 Q3 Earnings call transcript