Addus HomeCare (ADUS)

Dru Anderson IR
Dirk Allison President and CEO
Brian Poff EVP and CFO
Brad Bickham COO
Scott Fidel Stephens
Matt Larew William Blair
Matthew Borsch BMO Capital Markets
Matthew Gillmor Baird
Brian Tanquilut Jefferies
Mitra Ramgopal Sidoti
Call transcript
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Dru Anderson

Good morning, and welcome to the Addus HomeCare Corporation Third Quarter 2019 Earnings Conference Call. Today’s call is being recorded.

To the extent that any non-GAAP financial measure is discussed in today’s call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the company’s website and reviewing yesterday’s news release.

This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements, among others, regarding Addus' expected quarterly and annual financial performance for 2019 or beyond.

For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements.

discussions like estimates, forward-looking are foregoing, expectations plans, statements. the the and intended limiting of targets, forecasts, beliefs, Without to identify

by news the Securities You may Exchange Commission set that cautioned its and in important third in affected quarter forth with are others, factors, filings these Addus' and among release. hereby be statements

a no results result statements, forward-looking statements. the Consequently, and may results in future forward-looking information, actual new any differ company of discussed obligation undertakes events operations whether update as materially from the otherwise. to The or

to I would Mr. the now ahead, the to company's Please Allison. and like sir. Officer, turn Executive call over Chief go President Dirk

Dirk Allison

Thank us you, you thank XXXX morning, call. for and for Dru. joining third Good everyone our quarter earnings

is Brad Poff, Officer; Brian Operating Officer. Financial Chief Bickham, Chief today and our With our me

some I the discuss yesterday quarter Brian usual, begin As will comments afternoon. and then we will overall results issued that third with

would to Following respond our to we be comments, happy questions. any

clean yesterday, million very acquire acquisition equity This resulting with raising completed X.X of our shares As early quarter. $XXX million over the offering had we busy announced we allowed previously earnings in you of September, while In third to of $XXX to allowing sheet saw million. America, our offering maintaining our partners release hospice acquisition strategy. us a to us a continue balance on hospice focus Addus

transaction, we have of completion debt. funding to offering, the and continue the this HPA strong the With with cash after a minimal position of

in suit to Home which quarter qui in suit previously was Illinois discontinued our to tam This Health we the equity related Addus settled against sold addition offering, the previously segment, XXXX. third In during our brought disclosed XXXX.

the dismissed, to U.S. had lawsuit had lawsuit. the and of declined the previously portion A intervene in government been

forward allowed amount up without claim actual prudent move settlement the to meritless, and decision. business While expenses legal that an suit the This leadership the required at settling Addus would to view as viewed including and continue matter us announced our the we was believes be to that against to this we ongoing trial. a resolve

an the $XXX.X solid in results for for same for to in increased share was of the the the an the quarter million, financial earnings XXXX, As per to period announced performance yesterday, XX.X%. XXXX million XXXX. compared compared of operating XX.X%. Revenue third $X.XX increase in for third period third the $XXX.X continued we increase for quarter $X.XX Adjusted diluted our same of as to of quarter XXXX,

$XX.X as Our million adjusted XX.X%. EBITDA was million for $XX.X in an compared XXXX, for XXXX the to same the of period of third quarter increase

As our we last rate both state and fiscal statutory call, minimum budget, increases discussed offset industry Illinois County. received Cook experienced earnings on XXXX to Chicago the the in wage increases two reimbursement in our

X, increase, to rate which hour. The September first on be would was increase effective to XXXX, our rate expected per $XX.XX

been required department government. has due federal increase approval additional the with shortly. expected need information approval the to This state's file has been delayed appropriate their the federal to filed with This now obtain from to information

set do data increase approved effective, today could become for and believe a will While have we when the we within do not weeks. few occur this next this be

and the results negatively wage affected required the means of financial were third offset County. reimbursement X, Cook This Chicago in by our increase lack delay quarter minimum for XXXX July

January take both will increase cover increased the X, as which our as $XX.XX. The approval federal when the hourly rate to XXXX $XX.XX, well granted will

to forward federal to to to We by process. make needed Illinois the recognize approval the are adjustments statute the complete leadership higher need associated State and that the final with a cost mandated the of minimum cover this of appreciative wages look

care out our services primarily time and to between With services. personal begin clinical service it felt store we clinical increasing break hospice, our presence to was growth in same

For the exceeded to growth quarters, target stated of our X% care has last X%. store for personal our few range services same

personal of care growth well final third the were state York land network XXXX, X.X% which the stages was quarter New in as the as July same of For narrowing rate growth XX. driven store the market, of the our increase Illinois, in completed, was provider effective by the as MCO our

a As Illinois our represents business this reminder, of MCO approximately business. overall XX%

normal narrow market York the forward the the Going to to provider its same-store New our than network process moderate as conclusion. higher in should comes growth

see to Illinois expected continue increase should the we as rate takes growth solid effect. However, same-store

services, program. growth seen hospice in XX.X%, was driven have solid we clinical same-store our our For growth Ambercare our largely by the

While service a today, quarter we to our growth a once provide have or we HPA two will looking be of with stated history we goal same-store not goal clinical for the of have operation. published segment, as that

York On New Home health August provider completed and acquisitions the on XXXX, personal home provider Care, in Mexico, both Health City. Home hospice care New we X, Alliance and Care, care a a in personal Foremost

in the our in New previously coverage did To serve. broadened we markets acquisition that remind Alliance hospice not you Mexico,

in Foremost Home services and X, our personal the of of June XXXX. of these aligned Both now important metropolitan where operation, York operate. recent City an acquired currently is our strategy our area, acquisitions in most on Care part our VIP states with strengthened care strengthening New which we coverage we

million strong acquisition we This a acquisition services. $XX hospice on already on multi states to we hospice us provider a have our provide XXXX, states, care announced X presence. additional of October partners four six On services where hospice including in state personal allows America, closed previously to

us of It gave which the into also strategic goal company. Texas market a entry an has our been

XXXX Addus seven approximately of completion states. to transaction, provides now the in patients the services hospice With HPA

total services acquisition, approximately revenues. clinical now With of XX% this completion of represent the our

operate on have have company. smooth million of plans XXXX, and of schedule. ensuring the effectively closing while efforts five that am ensuring focused been we acquisitions our our has these four being annualized focused as with $XXX the integration Addus team acquired integration growing of approximately jointly With on are four team our months, companies all acquisitions revenue. During are followed I last of proud in continuing to our we on

about be opportunities under calls, excited As Advantage. our continue we Addus the discussed on last for to few Medicare

with We are personal to National currently services care provide Advantage Medicare to plans their contracted members.

we Medicare several these working of with the the of quality personal more reducing a will with expand integrated of offerings Advantage MA care opportunities We services addition, began benefit goal savings on overall plans improving are care model. that cost and through development delivery future plans the In spend. believe potential as to realize medical

That anticipate are from experiencing still to horizon for expect growth trend our this MA the plan partners While said, increased care later offerings MA and is XXXX with for being personal current and we we referrals XXXX, true additional opportunity additional Addus. feel participants we continue. in we this

review more a me Before I over call performance, think this the employees all let of Brian financial quarter to third turn of thank for detailed Addus.

homes and our and gives values in to hard our Our people all extremely to these proud each works their day. employee each mission, that of cost freedom providing care one team know endeavors efforts serving of patients. while assistance the remain our is that effective to live each I'm live

ongoing of important us I and very families the of and team. efforts We the of their who with thousands to their responsibility am our care, have trust appreciative a very patients

over me With to that, the call turn Brian. let

Brian Poff

morning and Dirk everyone. you, good Thank

in another quarter with quarter in services of the revenue profitable produced personal third strong of care quarter of the third of had growth we XXXX, compared as solid Addus X.X% growth XXXX. same store

of report following comparable we These sort executing also of we this skilled well period growth are sales XX.X% that service last strategy on home same demonstrate Ambercare. the believe year our organic same-store combined first with for and acquisition We for results over as we favorable we our These are care quarter of growth. increase XXXX results had health, and period results hospice to segments, continue the our prior positioned segments full year. the

we we benefit to solid in In our this of four year, of operations, annualized $XXX total forward incremental completed revenue current addition to acquisitions the trends million. with look growth approximately have the

opportunities continue transactions. also potential evaluate of and other pipeline a We robust acquisition from to pursue

XX.X% for to XXXX. third service accounted care from the of quarter Dirk per the in X.X% mentioned, billable reflected for per in over an increase X.X% net the last a revenue of quarter XX.X% quarter hour. As year. total hours for increased and increase million Personal for XXX.X and revenue increased XXX.X day, by revenue third million billable third business This XX% revenues growth

to segments and up quarter the XXXX of XX.X year, and health The our for hospice hospice of continues revenue home skilled in XX.X Combined attributable sequentially third was the reach million contributed home our $X.X X.X a health Hospice contributed care second XX.X for million million revenue approximately revenue remaining to XX.X% increase million, growth from business home in million year. XX.X% health and this services. quarter grow and from last revenue.

last the at sequentially consistent with relatively remains year. third percentage and for for margin quarter compared XX.X% quarter, gross Our XX.X% the third

first the of months margin primarily skilled profile period, XX% improved nine last gross margin our the to the year, business. year-to-date of due higher For our to XX.X% from for

with G&A higher costs. severance second expense quarter corporate growth. costs to Adjusted by the XX.X% mix G&A XX revenue from Sequentially on of year, revenue expense profile. points and year from was for our the due was basis prior skilled business with compared a XX.X% acquisition with of from G&A quarter, on adjusted the G&A higher expense a higher primarily lower leverage our XX.X% last was primarily consistent

the quarter reimburse third negative compared for the was The of the margin Chicago quarter net the for to partially from company's increase, with wage XXXX. impact XXXX. EBITDA of X.X%, compared of third third million adjusted EBITDA of increased million XX.X% XX.X in to XX.X quarter minimum the XXXX X.X% Adjusted inclusive

our not to negative business Illinois. statewide revenue programs managed experienced Chicago rate X, required we of in per was July Combined Illinois the our expected $X.X the effective Medicaid constitute approximately of Chicago effective during hire new by hour million the with quarter. the and reimbursement While programs Christie Governor profitability Medicaid, during $XX of to quarter, these managed from increase on impact currently were a increase and net minimum non the the one-third in the honor approximately state's increase volume wage wage for

the of budgeted the we impact becomes additional Once the will reimbursement and increase expected positive related first full margin the two effective of from rate revenue increases. statewide, the realize rate

the the cost per quarter interest of expenses Illinois the quarter $X.XX, exclude third The of $X.XX for and for $X.XX from following: stock-based for of quarter income non-recurring XX.X% of from noncash of share of results third income and severance the share $X.XX, XXXX. $X.XX per adjusted net compensation XXXX transaction M&A other Adjusted diluted $X.XX. grew third to

compensation expenses As adjusted previously severance results transaction quarter $X.XX third XXXX and of per M&A and $X.XX. $X.XX, costs stock-based noncash exclude of other of nonrecurring share of reported our the for

rate the our of of for range third within the for tax XX.X% XXXX XXXX. expectation was year the Our quarter of full

XX% mid to expect our to range. to be continue in low We rates tax the

mentioned, as related Dirk the net key our of reflected As into historical of operations as tax the settlement this that business. resolved settlement discontinued to entered tam we agreement legal during amount and quarter and litigation have home a divested health the previously our cost related

XX the end DSOs at days end were with compared of the of third of XXXX, days XXXX. at the quarter quarter XX the of second

the end of of the payments of Illinois we declining XXXX. the the XX of their end the with from days with quarter During DSO saw third as second Department quarter compared quarter, the to increased XX XXXX days Aging at of anticipated, at

continue end and managed transfer We of to complete overall improvement, reduction the which with state as this the its were transition the a ensure plans state both to fourth smoother began to or plans the plans, to has further While manage activity this DSO those possible. further Medicaid shift deluging number Medicaid process. quarter with a we anticipate towards also hindered as in pleased and clients

by quarter XX, the October and totaled Our to completion on provided a million Partners on Hospice September in had prior operations we XX.X third XXXX, cash cash net at hand of acquisition XXX.X X. million

substantial have to in with of end to strategy availability and continue quarter our at XXX.X support only bank acquisition under XX.X capacity We revolver. million million debt our

questions. Want I’ll you the open concludes the now to for being with to thank for us. ask prepared operator our morning. comments line This this your please


Scott comes question Fidel first line Our from the Instructions] [Operator with of Stephens.

is line Your open.

Scott Fidel

fully what's get increases into just revenue rate expecting rate those you're from the the incremental two question updates incremental and those Illinois you that you're XQ two and on increase expecting rate? in the is as in then XQ. impact run the update - First move that Any

Brian Poff

XX be just what we revenue. received of to the going million will that's total not right Yes, at have today in under Scott be

Scott Fidel

tail to in Then wind of question in the more be second but improvement like, the with the bit a Medicaid a just patients could at continue DSOs, it Brian on that shift least the in sounds Illinois, managed to XQ.

thinking you're to related So for Then on cash also, the that what sort you're maybe DSOs the quarter. in well? operating trend fourth expectations expecting general, of just as XQ to just any where expectations to in flow about

Brian Poff

whenever as they and Yes, keep authorizations this has It we've before through experienced a this the flow cash mind typically on phase. that transition transition impact they negative in move with to plan. Illinois, over those patients during go

catch So that fully see during patients we a then plans. those there's up the into typically are a incorporated transition. lag management And once Medicaid

in as what that's kind we to So presence, increase as impact will but QX, transition that to we continue period. expect as the be positive see would a state they there MCO a in though, that it push. of continues see flow Ultimately do to, cash the

Scott Fidel

level about seem your thinking know high And this XXXX me, just and obviously, sort one tailwinds. and rate fully update some last tailwind in, as mentioned on I point, the a at we're of from interested of increase growth maybe York. you then as headwinds be capture New I the know sort Illinois expected just question just would that. to you in rate normalization

interested the of we modeling you it at as annualization out for or obviously Just other sort what of about some well, just XXXX else general as headwinds and us deal interested, you HPA that that's call Thanks. but then of terms tailwinds to for me? want think in the

Dirk Allison

given of clearly a minimum to as the the the rate for the think care wage know we've you it's increase I deal two for Scott, Yes increases going tailwinds going company, to we're see take us, that is so that as be big Illinois employees now We've end. over as years very of to Illinois consolidation couple to starting that's the come far last seen in the our tailwind the York exciting. an the to marketplace New

is process complete. to going be that So

state going There York. a that It's challenges forward. are challenges budget in has New

state. will to continue We that in work hard

to say, operate through a ups one there, over with have of their So as and we've downs that but last able somewhat all far as effectively I may three been be of understand would bit little to headwind a And budgets. that years. states the

company the think to relates it part just continuing of I headwind to overall relates recruiting. an as the

to market it's difficult it It's tough it's retain. difficult to low recruit, recruit, unemployment still the difficult is. as to with It's as a

continue So think be to going I that's to a challenge.


of Our Matt Larew William with from next comes line question the Blair.

open. is line Your

Matt Larew

is inter full Obviously, ask and first to quarter quarter of with wanted first the some I about VIP. acquisitions. some closed opposite the your

extent then just on relative with those maybe anything out, arrived can what how in those? and conversion update each you terms break the to and integration expectations, be like can persistent contributed So have stand they quarter, you where it of in to them of that the process,

Brian Poff

performance the integration are activities mean, so far, on think the I for all And, financial expectations, we've acquisitions I track. well. as completed

through still that during conversion complete. the on on coming I and as the on foremost base think, VIP but that Alliance transition obviously quarter most is Care, working home is Alliance, scheduled. going in for track, came well that Home very board June, is of is and of

think, that is well into ours. working HPA I then October, with very leadership the one month team through And acquisition initially,

think us. track I that on for is also

I expected. So acquired of no surprises we've those But achieved, are very know there's diligently and this a with teams activities been to-date. year. what we've working all our that of have lot

Brad Bickham

New operations in integration consolidating I actually in York, The and We're well. activities agree going Brian with that. our are on South Shore VIP markets. on working certain

so management kind a couple VIP to of they'll platform also And the small be a mergers Shore go moving on that'll then common purposes. a IT South So for of there. office QX, platform platform,

Matt Larew

sharing, of the in in potentially, add some differ responsibilities, growth additional now. ask evolve growth referrals seeing, experienced to newer of you're opportunity. the the XX-months? to Obviously, How that comments or maybe you Dirk, you're they're services of, of you how respect the Medicare you've potentially additional where past, you of respect be non-skilled opportunities similar next changes some you to expect and the around with then, mixes kind couple But are skilled risk contracts, the capabilities? structured to seeing in Advantage do And changes those do - about wanted way in with to MA years

Dirk Allison

of mainly visits, certain the to we're with value-based save are to contracted hospitalization, we we process things be a through working at currently from one MA Yes, offerings. is going the plans, or we a now before, room ones with, we're look Can emergency different readmissions. doing It's them dollars discussed program around: things

different diem little working but we're two a opportunity per us they're our have both with get for basically to right. The structure, an

forward. then same time, in going potential cost sharing While at the savings

start excited probably very quarter Those the XXXX. So of about should in we're that. first

So by approach, aspect that And XXXX. XXXX, going And for we which us, of have a those excited we're we're risk-based eventually moving results. be to probably towards a we're we'll sharing, for believe end XXXX, at cost about. the long-term do looking being

Matt Larew

just had aggressive And be, kind more any time year then whether New last of two? network any at the next discussions the here one narrowing with beyond about other York states you've would in or

Brad Bickham

At had does any of know this states haven't we not that any through a go similar or conversations point, process.

I obviously, think, become we're strong of it's well strategy at indicated a York. similar states and no process. that and But and presence aware of, other played trying New well I for have it solid states have our that in this in think that plays time, preparation that, to


the next Borsch Our Markets. line of with comes BMO Capital from Matthew question

Your line is open.

Matthew Borsch

narrow going meet plans? be that's to with the requirements networks. I Maybe this the, you might just complex of Is you the reimbursement? your do to these that lower ability given significantly if question advantage, mean, play your involved whatever demanded something there? that's for look finding to think that that is addressed comes a that ahead, demand there Are I trade-off ask on a you could you regarding something just is

Dirk Allison

the of our networks of our the to York were size, think our really not come to-date I New marketplace, with and as a negotiate think narrowing. with rates to strong that's fee yet. the due strong We've in narrowing coverage partially have in the networks MCOs. while able been And reduction I even relationships

However, in rate. times, to little increase they're do we get at ability, in situations control believe states into be And to our costs. where the at looking be budget where going future, they a there take are and how to going always size maybe issues, lower the

more While at on new sense. makes lot time, taking of the same a patients

focus so that part size these So partner can with on market we our the in our that's of a MCOs. getting strategic across table

Matthew Borsch

touched one And possibly you headwinds year, that there? on you had Is the constraints in of New there to would anything being the next budget specific point York.

Brian Poff

has budget The tight. itself gotten

Now, an were both CDPAP. or way whether looking the of whatever now, the the was they with called as the sides. comes it looking that at try sure make state reduce to network it. good industry, redoing state a they to one through, narrowing working And way it's was to programs the at We're priced for

So think, and them those, service that one to provide. so that continue can we work we so New cost we'll of us help like hopefully I what's the with that help is can strong relationships forward, have this of way the control best and we all York moving states, determine


of Matthew Baird. Our the next question comes line Gillmor from with

open. Your line is

Matthew Gillmor

about wanted metric, geography. of to how by store that sort shook growth the ask out I and same

sort that I'd look of overly or you be you major growth helpful if certainly - I'm, specific, markets terms if indications you at least be terms would trend any in that that. into may the of, would But And want So you don't as how to had can views well? rate? as XXXX, your in rank, you of be could appreciate and

Brad Bickham

well there. numbers. basis, markets increase, was four York, Illinois, with comp at that think, at area contributed the really in provide I we an also we're to to stronger this our a New previously, done negotiations about; had that helpful. continues meaningful a our top that Mexico we've rate obviously, is store But quarter, we that talked talked and And probably, same rate impact to that we've couple about on New the partial -

other So volume really some and good larger states, contributed. also I Washington rate those some has alternatively of that think, in impact State, three, our positive one growth

So of between those, to drove I ended high end quarter. we the really where think that for what the was

Matthew Gillmor

us on know $XXX And the still pipeline, to the busy $XX annual integrating recent had a right revenue. million an hospice with $XXX now? of the million being Should you've of some you then into And on terms in or could what's of about personal And target you in of related deals. pipeline, XXXX? million, also as acquisition that's care think give if also year I moving acquired mentioned the to mix to the we we're then just focus update

Brian Poff

our $XX I the say can Obviously, years, to to you Yes, would for years the million couple been overachieve we that pipeline able continue continuing couple would we've last expect expect target. that to next and to with to for $XXX as our of well. do

As probably in we the what's today, would what we're the of majority I vast say looking look at at. pipeline

we're looking services personal Our hospice Alliance, we today, the are the are, low. nice business the smaller assets HPA, now well Ambercare that grow as assets and Mainly, from. as to care some at. have, There

into reduced, bit, though we'll PDGM the properly what reduction so. well Going I one the even at - as want RAP effect the will out a the point make affect too sure payments. is to was industry be It is, year, things looking of the of we still next

the in good Company, Brad line. Mexico adding New done have his of service team done us interested So our and somewhat job in with and well working very It of as very back a of the very and forth we levels all seeing - the has for three care. become a among market having synergies has health. home

addition at we assets them home look looking say in also of if personal most So seeing will I bring and at our be can We'll in on. health care. XXXX to would start


of question Brian next line with the comes Jefferies. from Our Tanquilut

Your line is open.

Brian Tanquilut

or effective? in still my - mechanics, us I you mind could walking they through just the will we as Is first does get Congrats CMS. I us increases question on the for they're September increase walk retroactive that good When rate how about Illinois pending to approved? the know it Brian the that's increases, X? if is, very rate I guess just how through with think progress Can quarter. so think you about

Dirk Allison


let me talk planning from mechanics. it Let be point takes be, standpoint, more you in going I’ll then it the a The time, this that - but increase about are time. with through When But our a we takes don't retroactive. Brian start and at little that rate we have we won't mean will that. not expect to normal little process. on is the process more greater XX% increase a or Doesn't paperwork,

We the an are we that estimated getting should close have time answer. to

no Let will believe seen. do emphasize estimated, close. we we by getting yet late the be approved, but to be it it'll knowledge November that's feel We is have timeframe. me it's mid-November, it firm comfortable that But be

to effective it whether approved is seen. be November and approved December So X, still it and Xst effective will November in will be be

to want the process. You talk about

Brian Poff

clarity. Yes, some just for

in quarter, the of the the as in we the mind costs rate wage the up. did Chicago in wage increase. step there's benefit the in well. QX get So MCO in And impact We that of related keep quarter minimum also absorbed the

step CIU and we'll a schedule it similar in wages with rate reimbursement corresponding. So, once in X, Jan with remainder approves increase we'll a up was have this conversations of for increase the rate see that the then CMS effect the year, the

Dirk Allison

I marketplace. but you is else wages the has but to of in I - and the it the minimum anywhere increased not increased Cook know, things Illinois in clarify one Because want that County, Chicago think,

process union. the those that not so we wage rate And fall increase. for minimum with the state, did of under negotiate of our rate the receive the appropriate increases at from as increases What is Chicago employees our partners part

Chicago the So at part the market. when of first the the to this, be the process Cook the and when increase flow parts other employees South January increase outside those determining through state point same those through then that with of we comes at proper get and will obviously

Brian Tanquilut

I mentioned increases then then XXXX rate like my think just same tailwind as probably for but carry should don't think Dirk, the parts potential store in as know - the to And for up guess. parts, greater about employees I proportion the I should wage and hospice? New follow without York guess your mix or guidance, How margins you moving a I going, give of shift thinking be benefits as about till increases in about Illinois, my a your over year HPA and we the terms in. is should next September How of comes expectation moving you

Brian Poff

Yes, start This is add in well. Dirk comments some can as can I think I and Brian.

of know, of as a we over impacted that I this through care think, had comps in kind still personal higher you things next obviously of range. move we in same-store of couple we the that couple to have in be particularly positively us and last kind quarters, couple would expect

a than dividends. last those of as have think them potentially for expect a really able the of operational to in coming kind helpful our long mix paid is start for it, X% personal to in see higher lot together the we've hospice, aggregate us. being that definitely home changes HPA onboard, made overall term. year to we've from sense, a would platforms to from health still given obviously growth perspective, and X% expect we we organic that Ambercare little dive believe but just what We long-term care on think information We would to still with an you I that it's But more basis, that that profile we providing on tried growth put

Dirk Allison


still is personal we're be, has and above do. that add able in of to I We part what of that been accurate we've we think, where a learning number We a care X% early grown a Let the now ability markets set Brian's grow reflection me our to to proven market. and goal of personal X%. hopefully And States. industry maybe becoming do know to what the to with were comments bigger it's and as care to it this in XXXX the relates industry fairly goal comes

year Right be we'll X% the rate continue to look to for if are now five end quarters, so So to we four probably the that over next next the sure such coming been with with and the to there growth, above at that the as want needs see or going good growth we're comfortable been unit adjusted. range to X% or or knowing just high that. but be at it Brad growth we just before increase his want make unit has the rate that now Right can we we because seeing. to wait of Illinois team things had we through

Brad Bickham

And that Brad, the distraction a hospice little after With just closing to and closing. health you this a have is and shortly the before quick maybe on Yes. tend real acquisition any before then side. home

were as say the easier side I'll hospice quarter. get going this a that the a health They're and little to we into little tougher, on So home comps go XXXX.


from next line Sidoti. comes Mitra Ramgopal with Our Instructions] question of the [Operator

Your line is open.

Mitra Ramgopal

First they're a it just reimbursement. more obviously from States. I just relates nice expect wondering I'm was tailwind if you favorable of wondering, Illinois out as to

also out could terms you benefiting think from if to in XXXX you reimbursement? of look be beyond You and

Dirk Allison

Yes Mitra.

next sets through markets year we've a us of one had way done of with up largest our the think couple very I years. we've very good for the coming positively well. Obviously little

rate negotiations York. I teams, have like we where New have think New the very been successful markets to and opportunities our Mexico in had

budgets. is mind, tied that state and in other rate their by set our into of the are Keep is States most typically

others. would we've any stuff this I have from know, minimum increases seeing point. XXXX in similar the increase incremental wage on we're we've gotten size But, expect don't at you horizon we where and ups had, a that see to that Illinois So,

Brian Poff

our Yes in certain sure the that stage, industry unionized, a with the most line as relationship minimum and that, comment And are narrow let Northwest have of with make New the York we worked partners a they strong in the these - in as rates in state we wage. to us unions the and would know, in great markets, has and markets. been stage those increase company our particular have make industry that an Midwest as of become have a you classify me also around the and I with

employees jobs appreciate those. the increases, we these wage we partnership fund at can and continue deserve sure minimum so and to have states, but the unions them we those the and with Our looking make

rate last so wage increase, very we've making of as these sure larger and in effective three had got going And increases years the rates we've forward. rates history that

most minimum in the once towards rate about, $XX or moderates some historical talking to hour will more be targets that return to long-term, look Now X% of that which year-over-year, X% States we to at. $XX the wage of we probably these increase will

last far with well we've partners years. three done or So our the two

Mitra Ramgopal

Dirk Obviously front. any to acquisition on of a the on the seen just last mentioned it you'd competition back if the as valuations you space coming continue really nice at that pace you couple pipeline. have into still as just you're I like changing you've now, potentially I the deals? players the you to look seeing relates in And was assume wondering, years. other coming the

Dirk Allison

as won't know, hospice to much You change know, people we as and more the on on as to as market, be in for smaller the are it as activity for probably the looking reimbursement. Hospice, assets. the much is maybe certainly, the going have with competition some as settle we acquisitions of well avoided in the future, side there there's not to probably larger faced health, hospice been industry to they're home you targeted competition in relates yes, out services, the clinical our

across of seen When to is hard side really it a fortunate tried you competitors have care, we that to network we're that we giving into because our them area. their go us good operations to a in that in XX strong fold operate, We're that smaller the personal do. to a acquire particular operators that base some interesting which have in such in ours of that's industry business, able you've of and the grow States

hospice So on as I sized a of at building maybe the various times as because don't have personal competition presence States, think personal side. in on care difficulty we the the of in side we've large care seen much

forward will continue. going that anticipate we So


Dirk Thank closing I over remarks. not like am I call to now you. questions. would Allison any turn to further the showing for

Dirk Allison

thank Have I Operator. for you. to great you of and a your call you, week. all earnings want interest part our for Thank Thank Addus you being in today.


conference. this you Thank gentlemen, participating. for and concludes Ladies today's

disconnect. now You a have great day. Everyone may