Addus HomeCare Corp., a provider of home care services, announced its financial results for the third quarter ended September 30, 2022. Despite staffing and Omicron-related headwinds, the company still reported revenue growth of 11% over the third quarter of 2021. Addus had revenue increases in its home health and hospice segments, demonstrating the strength and resilience of both operations. The Frisco, Texas-based company reported:
- 11% increase in net revenue from $216.7 million in Q3:21 to $240.5 million in Q3:22.
- 12% increase in gross profit from $67 million (30.9% of net revenue) in Q3:21 to $75.2 million (31.3% of net revenue) in Q3:22.
- 0.9% decrease in net income from $11.6 million (5.4% of net revenue) in Q3:21 to $11.5 million (4.8% of net revenue) in Q3:22.
- 3.4% increase in adjusted EBITDA from $24.9 million in Q3:21 to $25.7 million in Q3:22
- 4% increase in cash flow from operations from $17.6 million in Q3:21 to $18.3 million in Q3:22.
Here are some notable quotes from Dirk Allison, Chairman and CEO of Addus HomeCare:
- Strong performance, despite headwinds:
- “Addus continues to produce strong financial and operating results, and we were pleased with our ability to execute on our strategy in the current environment. Our overall revenue growth of 11.0% over the third quarter of the prior year reflects favorable trends in each of our operating segments.”
- “… We are proud of the excellent job our team has done to date during 2022 despite various challenges, including the impact of Omicron, which was especially acute during the first quarter, and industry-wide staffing headwinds throughout the year.”
- New acquisitions brought home health and hospice revenues up:
- “Total home health revenues increased 25.1% from the prior year and include the addition of the operations of Armada Home Health and Summit Home Health that were both acquired in 2021.”
- “We also saw steady improvement in our hospice business, which accounted for 21.4% of revenues for the third quarter and included the acquired operations of JourneyCare, which were added as of February 1, 2022, and are now fully integrated. Total hospice revenues were up 31.4% over the third quarter of 2021, and our median length of stay increased from 23 days in the second quarter to 28 days in the third quarter.
- Addus’ response to labor issues:
- “While the clinical recruiting and retention dynamics remain challenging, we are seeing clinical hiring trends start to move in a positive direction. Our overall hiring and turnover trends in personal care have also continued to improve during the third quarter, and we continue to evaluate and invest in enhancing our recruiting and onboarding processes to best position Addus to meet current and expected demand for our services.”
- Optimism following the home health final payment rule:
- “We were excited by the CMS announcement yesterday of a slight 0.7% increase for 2023,” Allison said. “While this increase is smaller than we would like to see, we are appreciative of the change by CMS, moving away from the proposed decrease of 4.2%.”
- Addus’ M&A plans:
- “We expect to be able to take advantage of more home health care acquisition opportunities that should occur now that the final rule has been published, as we remain well capitalized… We are now starting to see a number of larger assets being brought to market and we expect to see more of these scale opportunities in the coming months.”
