Addus(US:ADUS)2025-11-04 21:31Financial Performance - For the three months ended September 30, 2025, total net service revenue was $362.3 million, a 25.0% increase from $289.8 million in the same period of 2024[90] - Net income for the three months ended September 30, 2025, was $22.8 million, compared to $20.2 million for the same period in 2024, reflecting a 13.3% increase[90] - Net service revenues increased by 25.0% to $362.3 million for the three months ended September 30, 2025, compared to $289.8 million for the same period in 2024[129] - Net service revenues increased by 22.4% to $1,049.5 million for the nine months ended September 30, 2025, compared to $857.5 million for the same period in 2024[135] Segment Performance - The personal care segment generated $275.8 million in net service revenue for the three months ended September 30, 2025, up 28.0% from $215.4 million in 2024[90] - For calendar year 2025, CMS estimates a 0.5% increase in Medicare payments to home health agencies, based on a 2.7% payment update percentage[113] - The hospice segment revenue increased due to organic growth, contributing to overall revenue increases[129] - The personal care segment generated net service revenues of $803.2 million for the nine months ended September 30, 2025, reflecting a 26.2% increase from $636.3 million in 2024[140] Revenue Sources - Managed care organizations accounted for 37.0% of net service revenues in Q3 2025, compared to 34.3% in Q3 2024[88] - Medicare accounted for 93.1% of hospice segment revenues in Q3 2025, up from 91.5% in Q3 2024[101] - Net service revenues from Medicare accounted for 93.1% of total revenues for the three months ended September 30, 2025[153] - Net service revenues from state, local, and other governmental programs accounted for 50.5% of net service revenues for the three months ended September 30, 2025[144] Acquisitions and Goodwill - The company completed the acquisition of Curo Health Services for approximately $350.6 million, expanding its personal care segment into new markets[93] - The company recognized goodwill of $19.0 million from the acquisition of Helping Hands, which expanded its services into hospice and home health markets in Pennsylvania[96] - Revenue growth in the personal care segment was primarily due to the completion of the Gentiva Acquisition and the Helping Hands Acquisition[129] - The company completed the Gentiva Acquisition on December 2, 2024, contributing to revenue growth in the personal care and home health segments[135] Expenses and Profitability - Gross profit margin improved to 32.2% for the three months ended September 30, 2025, up from 31.8% in the same period in 2024, driven by growth in the higher margin hospice segment[130] - General and administrative expenses rose to $79.4 million for the three months ended September 30, 2025, compared to $62.8 million for the same period in 2024, with a notable increase due to acquisitions[131] - Interest expense increased significantly to $3.3 million for the three months ended September 30, 2025, from $0.6 million in the same period in 2024, primarily due to higher borrowings[132] - Gross profit as a percentage of net service revenues increased to 49.4% for the three months ended September 30, 2025, up from 46.8% in 2024[155] Cash Flow and Financing - The company had cash balances of $101.9 million as of September 30, 2025, compared to $98.9 million at December 31, 2024, and a total of $650.0 million available under its revolving credit facility[165] - During the nine months ended September 30, 2025, the company used $3.4 million for acquisitions and drew $11.3 million on its credit facility, while repaying $80.0 million[166] - Net cash provided by operating activities was $92,744,000 for the nine months ended September 30, 2025, down from $106,016,000 in 2024, while net cash used in investing activities increased to $(22,444,000) from $(124,000)[173] - Financing activities included an $80.0 million payment on the revolving credit facility, with borrowings of $11.3 million to partially fund the Helping Hands Acquisition[176] Market Conditions and Challenges - The company faced significant competition for new caregivers due to a tight labor market and ongoing inflationary pressures[98] - The company anticipates that future Medicaid reform initiatives may further reduce expenditures and involve additional administrative changes, impacting reimbursements for services rendered[118] - If variable interest rates on outstanding borrowings of approximately $154.3 million increased by 100 basis points, net income would decrease by $1.1 million, or $0.06 per diluted share[183] Operational Metrics - Average billable census increased by 33.9% to 50,480 for the three months ended September 30, 2025, compared to 37,701 in the same period of 2024[140] - New admissions increased by 3.2% to 4,577 in the three months ended September 30, 2025, compared to 4,437 in 2024, while total volume decreased by 7.5% year-over-year[164] - Days sales outstanding (DSO) improved to 35 days as of September 30, 2025, down from 39 days at December 31, 2024, indicating better collection efficiency[178]