Addus Posts $13 Million Q1 Profit, Home Health Sale Lifts Earnings
Addus HomeCare Corporation (Nasdaq: ADUS) reported a net income of $13.3 million, or $1.23 per diluted share, for the quarter ended March 31, 2013.
This included the gain on the sale of the company’s home health business to LHC Group, and a loss from discontinued operations of $500,00, or $0.05 per diluted share.
“We feel good about our first quarter performance,” said Mark Heaney, president and CEO of Addus HomeCare. “Our Home & Community business has continued to demonstrate positive growth and we are pleased with the sale and transition of our Home Health business.”
Net income from continuing operations was $2.7 million, or $0.25 per diluted share, for the first quarter, up 56.3% from what it was a year ago.
Total net service revenues from continuing operations for the first quarter of 2013 were $63 million, a 7% increase compared to $58.9 million in the prior year quarter.
Performance in this area was fueled by a 5.3% increase in average census combined with a 7% increase in billable hours, said Addus Chief Financial Officer Dennis Meulemans during the earnings call.
Addus expects this trend will decline as the Illinois Department of Aging (IDoA) implements technical changes to their payment processes, which the company estimates will reduce revenues and operating income by approximately $600,000 per quarter.
“The net effect of this change will be to compress our gross margin percentage by approximately 75 basis points,” said Meulemans during an earnings call last week.
Although the IDoA had exhausted this year’s budget for its Community Care Program, a supplemental appropriations bill had been passed in both the state’s House and Senate on a 159-2 vote, allocating $173 million for home health services.
Moving forward, Addus will remain focused several key issues, according to Heaney, including the transition of its home health business to LHC Group as well as shifting away from state-funded care to managed care.
“There are headwinds out there,” said Heaney. “Change is upon our segment and we think for the good overall, the choice is to run ahead of it or get run over by it.”
Written by Jason Oliva