Addus Homecare Corporation · NASDAQ:ADUS
Addus Homecare — Q3 2024 Earnings Presentation
29 slides from Addus Homecare's earnings presentation, Nov 5, 2024
Slide 1: Investor Presentation
Investor Presentation November 2024 Improving health and well-being at home
Slide 2: Forward looking statements
Forward looking statements Certain matters discussed in this Presentation constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 Such forward looking statements may be identified by words such as “ preliminary,”“ “ and similar expressions. Th
Slide 3: Company Overview
Company Overview HOMECARE
Slide 4: Addus is a Leading Provider in Home-Based Care
Addus is a Leading Provider in Home-Based Care 1 National, scaled provider of home-based care 2 Cost effective position and preferred setting in the continuum of care 3 Continued diversification of payor mix 4 Consistent margin profile driven by stable/growing reimbursement rates 5 Industry tailwind
Slide 5: Scaled, National Provider of Home-Based Care
Scaled, National Provider of Home-Based Care A home care services provider primarily focused on personal care, hospice and home Geographic Footprint health services Operates 214 locations providing services in 22 states with over 30,000 employees Hospice and home health services are complement
Slide 6: Scaled, National Provider of Home-Based Care (Cont'd)
Scaled, National Provider of Home-Based Care (Cont’d) Addus provides cost-effective care across three segments Personal Care Hospice Home Health Skilled nursing or rehabilitative Non-skilled attendant care for daily Description End-of-life care for patients services provided to homebound activ
Slide 7: Cost Effective, Preferred Setting in Continuum of Care
Cost Effective, Preferred Setting in Continuum of Care Addus’s care model is designed to improve consumer outcomes and satisfaction in a preferred setting, as well as mitigate the need for high-cost acute care treatment. We believe the Company’s overall model is valuable to managed care organizati
Slide 8: Diversified Payor Mix
Diversified Payor Mix The Company’s net service revenues are continuing to shift to managed care plans, as states look to move to a managed Medicaid model for personal care, and Medicare Advantage continues to penetrate the home health market. Continued payor base diversification and reduced reven
Slide 9: Stable Reimbursement Environment
Stable Reimbursement Environment The Company’s reimbursement rates have been relatively stable Incremental reimbursement rate adjustments are provided through state budget processes This has been evidenced by stable gross margins and stable-to-increasing adjusted EBITDA margins Historical Marg
Slide 10: Industry Tailwinds Driving Favorable Sector Trends
Industry Tailwinds Driving Favorable Sector Trends Highly Fragmented Market with Few Platforms of Scale Addus is a Leading Provider of Scale, in a Market Consisting of ~18,000 Licensed Home Care Services Agencies Key Growth Drivers 65+ U.S. Population 85+ U.S. Population Rising Costs Benefit Home He
Slide 11: Highly Experienced Management Team
Highly Experienced Management Team Name Dirk Allison Brad Bickham Brian Poff Sean Gaffney Darby Anderson Chairman and Chief President and Chief Chief Financial Chief Legal Chief Government Title Executive Officer Operating Officer Officer Officer Relations Officer Joined 20161 2017 2016 2019 1996 Ad
Slide 12: Highly Experienced Management Team
Highly Experienced Management Team Name David Tucker Mike Wattenbarger Robby Stevenson Monica Raines Cliff Blessing Chief Human Chief Compliance and Chief Development Title Chief Strategy Officer Chief Information Officer Resource Officer Quality Officer Officer Joined 2016 2018 2020 2016 2022 Addus
Slide 13: Growth Strategies
Growth Strategies 12 ADDUS. HOMECARE
Slide 14: Multiple Avenues to Drive Strong Growth
Multiple Avenues to Drive Strong Growth Organic Growth Selected Acquisitions Growth Existing Markets / Adjacent Markets / Organic Volumes Investments Services Services Strong industry and Build and enhance sales Pursue accretive Pursue accretive demographic trends force capabilities acquisit
Slide 15: Acquisition Growth Strategy
Acquisition Growth Strategy Announced agreement to acquire Gentiva’s personal care operations on June 10, 2024, for ~$350mm, representing unaudited 2023 revenue preliminarily estimated to be between $275mm and $280mm 2023 Acquisitions Acquired Coastal Nursecare of Florida, Inc. on January 1, 2
Slide 16: Successful and Accretive Acquisition Strategy
Successful and Accretive Acquisition Strategy Addus has completed 16 acquisitions since 2017, demonstrating efficient capital deployment 2020-2023 acquisitions to date Acquisition Target Transaction Summary Service Lines Commentary Date Broadens personal care exposure and further cements Addus as
Slide 17: Successful and Accretive Acquisition Strategy
Successful and Accretive Acquisition Strategy Completed acquisitions 2017 to 2019 Acquisition Transaction Target Service Lines Commentary Date Summary Enhanced ability to establish national platform for hospice care October 1, 2019 Purchase Price $130MM Hospice Care Provided entry into key T
Slide 18: Gentiva PCS Acquisition
Gentiva PCS Acquisition Addus to acquire the personal care operations of Gentiva for an anticipated purchase price of ~$350 million in cash, after customary purchase price adjustments Transaction anticipated to be accretive and expands Addus’ personal care market coverage in seven states, adding
Slide 19: Gentiva Personal Care Services Overview
Gentiva Personal Care Services Overview Gentiva PCS is a multi-state personal care business with density in the Texas market, founded by the Girling family in 1967 The business has a presence in seven states: Arkansas, California, Missouri, Tennessee, Arizona, and North Carolina, in addition to Texa
Slide 20: New York Divestiture
New York Divestiture On May 20, 2024, Addus signed a definitive agreement to sell its New York Personal Care operations to Brooklyn- based HCS-Girling, a leading provider of home health and home care services. The operations being sold consist of all the Company’s personal care operations in the
Slide 21: Financial Overview
Financial Overview 20 ADDUS. HOMECARE
Slide 22: Robust Financial Profile
Robust Financial Profile Net Service Revenues ($ millions) Adjusted EBITDA(1) ($ millions) 20% $1,200 70% $140 Q3 2024 Q3 2024 $1,059 vs. vs. $121 18% Q3 2023 Q3 2023 60% $120 $1,000 $951 $102 $865 16% 50% $98 $100 $800 14% 40% $80 $600 31.2% 31.5% 32.1% 32.0% 31.8% 11.8% 11.3% 11.4% 11.4% 12% 30% $
Slide 23: Continued Strong Net Income Growth
Continued Strong Net Income Growth Net Income per Diluted Share Adjusted Net Income per Diluted Share(1) Q3 24 Q3 24 vs. vs. Q3 23 $4.58 Q3 23 $3.83 $3.73 $3.63 $2.81 $2.84 $1.10 $1.30 $0.95 $1.15 2021 2022 2023 Q3 23 Q3 24 2021 2022 2023 Q3 23 Q3 24 22 (1) Non-GAAP measure, for a reconciliation to
Slide 24: Advantageous and Stable Cash Flow Profile
Advantageous and Stable Cash Flow Profile Predictable capital needs and favorable DSO trend Minimal Capex Requirements(1) Days Sales Outstanding (Capex as % of revenue) (# of days) Consistent and predictable capital needs allows for high free cash flow conversion 0.9% 0.9% 54 45 39 0.6% 32 0.5% 20
Slide 25: Well-Positioned Balance Sheet
Well-Positioned Balance Sheet ($ millions) September 30, 2024 Cash $222.9 Working capital $175.0 Total assets $1,153 Total bank debt, net of debt issuance costs - Total stockholders' equity $947.6 Availability on revolving credit facility $503.5 Borrowing capacity on revolving credit facility $511.5
Slide 26: Appendix
Appendix 25 ADDUS. HOMECARE
Slide 27: Reconciliation of Non-GAAP to GAAP Items
Reconciliation of Non-GAAP to GAAP Items Adjusted EBITDA to Net Income ($ in thousands) Year Ended December 31, 2021 2022 2023 Q3 23 Q3 24 Net income $45,126 $46,025 $62,516 $15,411 $20,163 Interest expense, net 5,538 8,566 9,630 2,619 (1,335) Loss (gain) on sale of assets 25 (60) (2) (1) (8) Income
Slide 28: Reconciliation of Non-GAAP to GAAP Items
Reconciliation of Non-GAAP to GAAP Items Adjusted net income per diluted share to net income per diluted share Year Ended December 31, 2021 2022 2023 Q3 23 Q3 24 Net income per diluted share $2.81 $2.84 $3.83 0.95 1.10 COVID-19 adjustment (0.03) - - - Impact of retroactive New York rate increase - -
Slide 29: www.addus.com
AK ADDUS. HOMECARE Wwww.addus.com