Usually, when executives talk about companies that “need to survive the storm,” they talk figuratively. Tuesday’s Addus HomeCare Corporation (Nasdaq: ADUS) wasn’t.
Addus CEO and Chairman Dirk Allison talked about the negative impact of the February winter storm on the home care provider’s business during the company’s first-quarter 2021 earnings announcement.
“We were affected by the February winter storm that spreads across several states that offer personal care services,” Alison said. “We estimate [this] The result was a negative impact on personal care revenue of approximately $ 1 million in the first quarter. ”
Headquartered in Frisco, Texas, Addus is a provider of home healthcare, hospice and personal care services, the latter of which makes up the majority of the business. The company currently provides home care services to approximately 44,000 people in 208 locations in approximately 20 states.
Of course, a public health emergency is another storm navigating by Addus and its industry peers. The surge in COVID-19 in the company’s fourth quarter resulted in an increase in the number of quarantined employees and the inability to serve clients.
According to Allison, Addas went from 187 quarantined employees per week in the third quarter of 2020 to 448 quarantined employees per week in the fourth quarter.
“”[This] It affected the care time until January, “he said. “In April, this number dropped to 149 per week, which should bring growth back to more normal levels in the second quarter of 2021. Personal care.”
Public health emergencies continue to pose challenges for Addus, but the company began to show positive momentum in many markets in mid-February.
“We expect the environment to remain difficult in the coming months, but the deployment of COVID vaccines is progressing, encouraging a steady decline in COVID cases since the peak in late December,” Alison said. Stated. “We look forward to a time in the near future when this pandemic will not disrupt both the country and our business.”
Over the years, Addus has faced a significant portion of Illinois’ budget problems. The company has a particularly strong market presence in Illinois and relies on redemption rates to operate.
The Adas leadership team noted the Illinois rate hike that took place to cover the Chicago minimum wage increase that occurred on July 1, 2020. The rate hike came into effect on April 1, 2021.
The company also looks forward to the potential positive changes brought about by the Biden administration.
“The COVID Relief Act, signed by the President, provides general financial relief to states suffering from a pandemic loss of income and helps strengthen the budgets of these states and their Medicaid reimbursement. Allison said. “We expect funding from the $ 350 billion state profits of the bill to be diversified from May.”
Many providers still have questions about 10% raise The ratio of federal consensus to Medicaid’s home and community-based service spending, Alison believes the law is promising.
“The federal government will soon clarify the rules for this match and believe that the state will be able to use these additional money to support home and community-based services,” he said.
During the call, Addus also mentioned plans to stay active in terms of M & A. The company will focus specifically on home health care in the future.
“The focus on acquisitions continues to be opportunities. [that] We will add clinical services to the existing personal care market with the goal of having an additional market with all three levels of care we offer, “says Allison.
While clinical service purchase multiples remain high, Alison said Adams’ strong liquidity position allows the company to complete additional acquisitions in the coming months.
Addus reported net service revenue of $ 205.3 million in the first quarter of 2021, up 7.9% from $ 190.2 million in the same period in 2020. The company’s personal care segment was approximately $ 164 million in the first quarter of 2021 and $ 160 million in the first quarter. 2020.
“The profits of our same store are affected by the COVID-19 virus,” Alison said. “But all three segments that do business in the first quarter of 2021 are beginning to show positive trends. The same store of personal care revenue growth is compared to the first quarter of 2020. It was 2.4%. “
Addus’ home healthcare segment reported $ 4.34 million in the first quarter of 2021, compared to $ 4.33 million in the first quarter of 2020.
“We are pleased to return the revenues of the same home healthcare store to the levels we experienced in the first quarter of 2020 before the pandemic affected,” said Allison.
The company’s hospice segment reported $ 36 million in the first quarter of 2021, compared to $ 25 million in the same period last year.
Addus, boosted by vaccine advances, new HCBS policy
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