Addus HomeCare is joining the growing league of providers on the search for home healthcare agencies. During a call with analysts on Tuesday, the Frisco, TX-based company said it hoped to score a handful of deals by the end of the year.
“Based on current market conditions, we remain confident that we will have opportunities to achieve or exceed our goal of a minimum of $100 million in annualized revenue through acquisitions this year,” Addus HomeCare Chairman and CEO Dirk Allison said.
Home healthcare only comprised about 2% of Addus’s business in the first quarter. The lion’s share of its business (80%) is in personal care. Hospice comprises the remainder of Addus’s operations. Chief Operating Officer Brad Bickham told analysts the addition of more home health would round out Addus’s revenue stream. And, he added, there are more opportunities out there.
“We’re just seeing a little more home health in our pipeline today than the other two segments currently,” Bickham said.
In the first quarter of 2021, home healthcare led mergers and acquisitions activity, followed by hospice and home healthcare, according to research firm Mertz Taggart.
After a tough first quarter battling the ongoing pandemic, Addus HomeCare’s executive team said the glide path for the remainder of the year looks much smoother. On Monday, the company reported first quarter per share earnings of $.74 compared to $.77 in the same period last year.
The company said declines in hospice in the final quarter of 2020 spilled into the early months of this year, cutting revenues by 8.4%. But Addus HomeCare executives said the segment is improving. The median length of stay has increased from 15 days in January to 17 days in March. Allison credited the rollout out of the COVID-19 vaccine in part for the improvement.
“We hope to see census in nursing homes that return to a more normal level and families that we believe delayed the discussion around hospice during the pandemic return to something that is more normal,” Allison said.
Allison was also optimistic that President Joseph Biden’s plan to extend $350 billion in financial relief to states could bolster Medicaid reimbursements by early summer.