Addus HomeCare (NasdaqGS:ADUS) FY Conference Transcript

Addus HomeCare FY Conference Summary Company Overview - Company: Addus HomeCare (NasdaqGS:ADUS) - Industry: Home-based care and support services, focusing on personal care, hospice, and home health Key Points and Arguments Operational Opportunities and Priorities - Caregiver App: High utilization rates observed in Illinois, with plans to roll out in New Mexico and Texas, aiming to increase service utilization percentage [3][4] - Census Growth: Illinois has seen an increase in admissions while discharges decrease, setting up for growth in 2026 [4][6] - Integration of Services: Long-term strategy to connect personal care services (PCS) with skilled home health and hospice for seamless care [5] Financial Metrics and Growth Projections - Revenue Growth: Targeting 3%-5% revenue growth, split evenly between volume and rate [6] - Census Metrics: Consistent growth in census expected, with New Mexico showing over 3% growth post-redetermination [9][10] - Fill Rate: Current fill rate at approximately 83%-83.5%, with a goal to reach mid-80s [12][16] Reimbursement Environment - Medicaid Landscape: Ongoing uncertainty in Medicaid reimbursement, particularly in New Mexico and Pennsylvania, with expectations for potential rate updates in early 2026 [19][20] - Advocacy for Rate Increases: Emphasis on the importance of reimbursement increases to support caregiver wages and attract more caregivers [21][30] Market Dynamics and Competitive Positioning - Low-Cost Provider Advantage: Addus positions itself as a low-cost provider, emphasizing the cost savings of home care versus skilled nursing facilities [24] - Minimum Wage Increases: Minimal impact from recent minimum wage increases in certain states, with Illinois rates outpacing CPI increases [26] M&A Strategy and Market Position - M&A Focus: Targeting $100 million in annualized revenue through M&A, with a preference for blended asset acquisitions [46][48] - De Novo Opportunities: Open to de novo expansions but historically focused on acquisitions due to quicker profitability [43] Clinical and Hospice Business Performance - Hospice Growth: Year-to-date organic growth in hospice is in the low teens, outperforming the targeted 5%-7% growth [35] - Bridge Program Success: A quarter of hospice referrals are coming from the Bridge program, which connects home health to hospice [37] Future Outlook and Challenges - 2026 Projections: Anticipation of continued growth in personal care and hospice, with a focus on maintaining margins and managing costs [39][55] - Technological Integration: Plans to leverage technology and AI for operational efficiency and cost management [65] Conclusion - Addus HomeCare is strategically positioned to capitalize on growth opportunities in the home care sector, with a focus on operational efficiency, caregiver support, and integration of services. The company is navigating a complex reimbursement landscape while maintaining a commitment to growth through both organic and acquisition strategies.