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Addus HomeCare Corp. (ADUS) posted a strong close to fiscal 2023. In Q4, revenues grew 11.9% to $276.4 million, while EPS increased 31.9% to $1.20. Commenting on the results, Dirk Allison, Chairman and CEO, said, “We continued to benefit from robust demand for home-based care, especially for our personal care services, which accounted for 74% of our revenues,” notes Doug Gerlach, editor of SmallCap Informer.

Allison went on to add: “We were pleased with our 11.2% organic revenue growth on a same-store basis for the quarter, and our annual growth rate of 12.1% was a record for our personal care services. This impressive revenue growth reflects higher volumes, as well as continued rate support for our services.”

Addus HomeCare Corp. (ADUS)

Hospice services accounted for 19.8% of revenue for the fourth quarter and included the benefit of a 3.1% rate increase that was effective on Oct. 1, 2023. Hospice revenues were up 3.5% over Q4 2022 on a same-store basis, while average daily usage and length of stay also improved over Q4 last year. For the full year, Addus revenues increased 11.3% to $1.06 billion while EPS increased 34.9% to $3.83.

As of Dec. 31, 2023, the company had cash of $64.8 million and bank debt of $126.4 million, with capacity and availability under its revolving credit facility of $470 million and $335.6 million, respectively. Net cash provided by operating activities was $30 million for the fourth quarter of 2023, and $112.2 million for the full year 2023, inclusive of a net $7.6 million in ARPA funds utilization.

The company lowered its revolver balance in the year by $8.3 million, and funded all of its acquisitions in 2023 as a result of its strong cash flow. Management expects a final ruling on the Medicaid Access Proposed Rules by the end of April.

My recommended action would be to consider buying shares of ADUS.

About the Author

Doug Gerlach is the senior equity analyst with Equity Research Service, a division of the National Association of Investors (NAIC), and editor-in-chief of its stock newsletters including the award-winning Investor Advisory Service, the market-beating SmallCap Informer, and a dividend-focused newsletter.

NAIC is also the home of the BetterInvesting Stock Selection Guide and other tools for stock analysis including StockCentral and MyStockProspector. Mr. Gerlach is the author of six books, including Investment Clubs for Dummies and The Armchair Millionaire.

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