Addus Homecare Corporation · NASDAQ:ADUS
Addus Homecare — JMP 2011 Healthcare Conference
31 slides from Addus Homecare's conference presentation, Sep 27, 2011
Slide 1: JMP 2011 Healthcare Conference
EXHIBIT 99.1 JMP 2011 Healthcare Conference September 2011
Slide 2: Mission Statement
Mission Statement It is the primary mission of Addus HealthCare to improve the health and well being of our consumers through the provision of quality, cost-effective health care services. We will accomplish our goals by fostering an environment in which our employees enthusiastically support and ad
Slide 3: Forward-Looking Statements
Forward-Looking Statements The following information contains, or may be deemed to contain, forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The f
Slide 4: About Addus
About Addus Founded in 1979 Comprehensive provider of social and medical services in the home: — Personal Care — Home Health — Private Duty — Adult Day Service 13,000+ employees 26,000+ consumers (many dual eligible) 125 Locations Across 19 States Two Primary Divisions 2010 Revenue Percentage Divers
Slide 5: Census and Revenue Trends
Census and Revenue Trends Census Revenues (millions) 25,000 $300 20,000 $250 $200 15,000 $150 10,000 $100 5,000 $50 0 $0 2007 2008 2009 2010 2007 2008 2009 2010 5
Slide 6: Our Clients
Our Clients Facts: Nearly 75% of those who live to 85 will eventually need assistance at home. Approximately 50% of US healthcare spending is concentrated in 5% of the population. 97% of healthcare spending is concentrated on 50% of the population. Concentration of Health Care Spending in the U.S. P
Slide 7: Addus Client Profile and Economics
Addus Client Profile and Economics Home & Community Home Health Average Length of Service 20 months 2.7 months Average Reimbursement per Consumer Episode $17,622(1) $3,512(2) Gross Profit per Consumer Episode $4,476 $1,637 Gross Margin(3) 25.4% 46.6% (4) Divisional Earnings per Consumer Episode $1,8
Slide 8: Macro Growth Drivers
Macro Growth Drivers (1) U.S.Population Age65andOver Aging U.S. population projected to more than (in millions) double by 2050 100 72.1 81.2 88.6 75 54.8 — Age65andover–fastest-growing segment 50 35.0 40.2 25 0 2000 2010 2020 2030 2040 2050 Consumer preference / Public policy Consumer Preference for
Slide 9: Current Market Opportunity
Current Market Opportunity Long-Term Care Market Home Care Market Social Funding Medical Funding $200 -$210 billion $70 -$75 billion Source: Company estimates based on: Georgetown University Long-Term Care Financing Project. “Medicare and Long-Term Care,” (February 2007), http://ltc.georgetown.edu/p
Slide 10: Increased Use of Homecare
Increased Use of Homecare Home and Community-Based Services as % of Medicaid Long-Term Care Expenditures (1) 50% 45% 44% 45% 43% 40% 40% 38% 37% 35% 34% 31% 30% 30% 27% 28% 26% 25% 24% 20% 15% 10% 5% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (1) Source: Thomson Reuters (for
Slide 11: Addus Positioned to Excel Under Healthcare Reform
Addus Positioned to Excel Under Healthcare Reform “The Pre-Acute Solution . . . . to the Post-Acute Problem” SM 11
Slide 12: The Healthcare "Dis-continuum"
The Healthcare “Dis-continuum” LOW COSTS HIGH 12
Slide 13: Addus Integrated Services: Early Intervention Lowers Cost
Addus Integrated Services Early – Intervention Lowers Cost Homecare Aid identifies change in condition. Family advised throughout the process for additional support. Home Health nurse conducts home assessment. Coordinates with payor. Physician is consulted Home Health field and Home Health services
Slide 14: The Addus Difference: Integrated Pre-Acute Services
The Addus Difference Integrated – Pre-Acute Services Addus Integrated Pre-Acute Services: • Continuous monitoring of client / member medical condition(s) • Coordination of medical care with healthcare team • Early identification of disease processes • Early intervention / lower costs • Reduced pain
Slide 15: The Addus Difference: Geographic Coverage
The Addus Difference Geographic – Coverage 15
Slide 16: The Addus Difference: Geographic Coverage
The Addus Difference Geographic – Coverage 16
Slide 17: The Addus Difference: Geographic Coverage
The Addus Difference Geographic – Coverage 17
Slide 18: Addus Integrated Services: Changing the Cost Curve
Addus Integrated Services Changing – the Cost Curve Current Cost Curve Projected Cost Curve Time LOW COSTS HIGH 18
Slide 19: Homecare Utilization Dramatically Lowers Costs
Homecare Utilization Dramatically Lowers Costs Illinois Population > 75 years 900000 800000 700000 Conclusion: 600000 500000 Over a 28 year period, which 400000 corresponds to the growth 300000 of the Community Care Program 200000 in Illinois and Addus, the 100000 75 + years old population grew 54%,
Slide 20: Second Quarter 2011 Summary
Second Quarter 2011 Summary Total net service revenues up 1.6% to $68.3M Home & Community increased 1.6% to $55.0M Home Health increased 1.7% to $13.2M Adjusted EBITDA of $3.7M, compared to $4.3M in Q2 ’2010 Net income of $1.3M, or $0.12 per diluted share, compared to $1.7M, or $0.16 per diluted sha
Slide 21: Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Income ($ in millions Except per share amounts) (1) For the Year Ended December 31, For the Six Months Ended 2007 2008 2009 2010 6/30/2010 6/30/2011 Net service revenues $194.6 $236.3 $259.3 $271.7 $ 131.8 $ 135.1 Gross profit 55.3 69.1 76.6 79.9 38.6 39.2 Total
Slide 22: Organic Growth Augmented by Acquisitions
Organic Growth Augmented by Acquisitions Historic Growth Through M & A Fragmented industry 12,000+ homecare agencies in $300,000 U.S. Numerous acquisition $250,000 opportunities Smaller players struggling; $200,000 expect consolidation to increase $150,000 Acquired 12 homecare $100,000 agencies sinc
Slide 23: Home & Community Segment
Home & Community Segment ($ in millions) (1) Revenue Divisional EBITDA Margin $225.0 20.0% $200.0 18.0% $175.0 16.0% $150.0 14.0% 11.1% 11.6% 11.3% 11.5% 12.0% $125.0 10.0% $100.0 $220.8 $189.0 $210.1 8.0% $75.0 6.0% $149.6 $50.0 4.0% $25.0 2.0% $0.0 0.0% CY 2007 CY 2008 CY 2009(2) CY 2010 Home & Co
Slide 24: Home Health Segment
Home Health Segment ($ in millions) Revenue (1) Divisional EBITDA Margin $50.0 20.0% 15.3% 18.0% $40.0 14.3% 16.0% 11.7% 14.0% 10.5% $30.0 12.0% 10.0% $51.0 $20.0 $49.2 8.0% $47.3 6.0% $10.0 $44.9 4.0% 2.0% $0.0 0.0% CY 2007 CY 2008 $49.2 CY 2009 CY 2010 $47.3 $44.9 Home Health 12/31/2007 12/31/2008
Slide 25: Divisional EBITDA by Reporting Segment
Divisional EBITDA by Reporting Segment ($ in millions) Home & Community Year Ended Six Months Ended 12/31/2007 12/31/2008 12/31/2009 12/31/2010 6/30/2010 6/30/2011 Net Service Revenues $149.6 $189.0 $210.1 $220.8 $106.8 $109.2 Cost of Service Revenues (113.8) (141.8) (156.6) (164.6) (79.7) (81.9) Ge
Slide 26: Summary Balance Sheet
Summary Balance Sheet ($ in millions) Key Balances 12/31/2009 12/31/2010 6/30/2011 Cash $0.5 $0.8 $ 24.1 * Accounts receivable, net 70.5 71.0 51.3 Total assets 161.3 166.9 170.1 Debt, including current maturities 49.2 45.2 40.0 Stockholders’ equity 80.6 88.1 90.4 Debt to capital ratio 37.9% 33.9% 30
Slide 27: Improving Days Sales Outstanding
Improving Days Sales Outstanding # of Days Accounts Receivable Days Sales Outstanding 180 160 140 120 100 80 60 40 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Total Company - DSO Largest Payor in Illinois DSO 27
Slide 28: Key Management Initiatives: Positioning for Growth
Key Management Initiatives Positioning – for Growth Improve Operating Margins and Outcomes People: • New leadership in Finance, Operations and Sales Technology: • Agency staff focused on growth • Telephony solution • Professional Call Center staff People • Enhanced VOIP • Sales team expansion teleph
Slide 29: Investment Highlights
Investment Highlights Large & Growing Market Broad Range of Services and Payors Differentiated, Integrated Care Model Positioned to Excel under Healthcare Reform SignificantOperational Scale Across National Footprint History of Growth through Acquisition MultipleOrganicGrowthOpportunities Experience
Slide 30: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) Year Ended Sis Months Ended 12/31/2007 12/31/2008 12/31/2009 12/31/2010 6/30/2010 6/30/2011 (3) Net Income $0.2 $4.0 $3.6 $6.0 $3.0 $2.2 Net Interest Expense 4.8 5.8 6.8 3.0 1.5 1.4 Income Tax Expense 0.1 1.1 1.4 3.0 1.5 1.4 Depreciation & Amortization
Slide 31: Divisional EBITDA Reconciliation
Divisional EBITDA Reconciliation ($ in millions) Home & Community Year Ended Six Months Ended 12/31/2007 12/31/2008 12/31/2009 12/31/2010 6/30/2010 6/30/2011 Operating Income $12.7 $17.6 $20.4 $22.7 $11.0 $11.3 Depreciation & 3.9 4.4 3.4 2.8 1.2 1.3 Amortization (1) Divisional EBITDA $16.6 $22.0 $23