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Addus HomeCare (ADUS)

Participants
Dru Anderson IR
Dirk Allison CEO and President
Brian Poff CFO
Bradley Bickham COO
Scott Fidel Stephens
Brian Tanquilut Jefferies
Matthew Borsch BMO Capital Markets
Matt Larew William Blair
Matthew Dale Gillmor Baird
John Ransom Raymond James
Mitra Ramgopal Sidoti
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Addus HomeCare Corporation's Second Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I will now like to hand the conference over to your speaker, Dru Anderson. you. Thank ma'am. ahead, go Please

Dru Anderson

of call, you. conference comparable website the Good Corporation the call Act the HomeCare to including in welcome to financial any reconciliation find going of quarterly beyond. that measure morning yesterday’s reviewing quarter XXXX or calculated and measure today’s discussed second is by within To Reform most and the Securities and XXXX the statements Private financial to company’s meaning also will Litigation earnings of may statements, release. also non-GAAP regarding GAAP a directly Addus contain the among measure Thank you annual forward-looking financial conference extent This to Addus' for call. news XXXX according performance others, expected

purpose, beliefs, and any to be may are foregoing, discussions estimates, during historical forward-looking identify this of Without the made are deemed of statements statements. statements limiting expectations call forecasts, not the plans, For like that intended fact to be statements. forward-looking this targets,

the go result turn new Dirk Allison. future to events Mr. information, forward-looking statements. I ahead, and hereby cautioned that others, over in The whether its affected the the among quarter now Chief company in sir. undertakes factors, company's no Addus’ Commission release. are forth news President discussed like obligation of actual Officer, statements as operations or to Exchange update may may Consequently, results differ statements XXXX to Please materially in and important any with set a Executive forward-looking would by filings second be and and results the these the otherwise. Securities You from call

Dirk Allison

Financial second With thank Good our Officer; morning and joining our earnings Operating Bickham, Chief Brian Officer. everyone. me call. Thank quarter for Chief Poff, for you our are you, Brad Drew. And us today XXXX

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

XX-Qs respond to we would XX-K be our our comments XXXX with our to XXXX. happy along filed quarter Yesterday any Following we for second questions. and first

With requirements. are back these compliance in SEC filing filings now we with

as XXX XXXX approximate XX-year are past we reflected expected auditors well not timeframe. another have team the team in this which As the you know an non-cash To former as to both disagreement to our our past and are days the that of $XX completed and results That results our Addus were charge over handle our as a auditors, PwC issue material previously our current the XX-K. at I for thank filings our move focused related has financial Big for to and how million these work PwC firm. which continuing engaged completed on delayed stayed their over to their to to a perform the in was between current us aggregate the and months gotten Four past a individuals while with pandemic XXXX result by Even point. work audited dedicated accounting duties. task this normal re-audit were this few XXXX

Addus had yesterday, solid the quarter XXXX. with As second another of announced you performance financial the saw operating we results in

for for increase quarter the diluted from an of an revenue of XXXX, increase XX.X%. $X.XX $XXX.X in earnings XX.X%. Our to quarter second as XXXX, XXXX compared second of $XXX.X per million for of was increased $X.XX share to second the second of Adjusted quarter quarter million the the

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

margin Our adjusted the for increased XX.X% EBITDA quarter. to

virus. effect million This in segments business. our the During the varying all COVID-XX of we due to revenue of second occurred of three to decrease $X quarter the reduction a degrees of our XXXX, in saw approximately

revenue same-store we calls, previous in phase our progressed through we of as the As we on most discussed pandemic. have to have continue recent the improvement see

X% we as While be certain, say quarter estimate quarter revenues approximately impacted negatively cannot will for compared third X% run to rate. to our we our first

the reported, with quarter we fund cash that XXXX balance $XX position our June provider we million strong approximately board, second discussions in month was automatically As million. financial we increasing would announced be received relief the million Medicare to our had operating the at flow and our business. to approximate to relating following our last Due returning we strong $X.X Act cash from XX, Care $XXX.X our

We the for two funds these reasons. made decision primarily have to return

the reporting was these which around these appropriate continuing money. ongoing to let return requirements First And allowing we on others stimulus be access continue for it our to on reasons the board this need second may have who solid funds companies operations to normal federal program. a imposed have debt need funds. and the operations with and comfort these lack little we who in strong to participate mitigating with the and and to funds Based both capital our uncertainty structure to audit management felt chose in future these us

X, by already per previously This accelerates the hour. state discussed to raised City the to move $X of ahead passed. what the on of hour July Illinois of $XX wage city's $XX XXXX, Chicago As minimum a the we had minimum per wage

working to increase. with been offset has to state funding leadership this secure accelerated wage team Our

with statewide in cover in which each This this until the for cost affected approval. year. this $X.X offset is increase Chicago fiscal rate increased to in quarter next York deal X, also approximately experience X.X% January lower increase you changes will to in developments the minimum needed budget Medicaid funding as additional be for of a effective million update the the levels an a affected. January After state two I XXXX state White XXXX certain and increase of has X Medicaid the progresses. passed rate is to budget. additional want all recently to make rate gave Chicago COVID pertaining quarters reduction unreimbursed Lee of New on implementing subject the was adjustment included federal did reduction X% this due reimbursement of city this minimum Governor, to XXXX wage include to to the of year on the passed May of wage Addus state budget will the continued providers to rate April our XXXX, to year budget virus. Our The an fiscal the

patients any and leaders today's We services. to facility significantly to the environment. a York continue be cost into forced care reductions to and mitigate educate is and challenging the Associations having New effective setting community-based work state value of We and our of State safer with home believe in home-based our try help future to than

quarters requested the segment the Illinois, Personal continue For from over as number were of patient-driven the well same-store in same-store in who of the driven our few should affected as had due a XXXX was X.X% rate the virus. decrease X XX,XXX July to the X Care COVID-XX census revenue in XXXX, this driven in our to our the our second We of primary Care reduction service. primarily increase, impact by XX,XXX did the call-offs quarter expected Illinois COVID We in by by solid increases of see their year next hold patients by virus. caused growth personal same-store in largely to rate July care offset see which growth Personal

patients XX the census If on a those for have Our census placed patient included their within a period, days. more XX our who hold are no has includes received calculation. than longer day past calculation service care they in

to more they the with As should become continue these comfortable of return personal when in provided we patients seek our recover. their homes, care census services

For our approximately of and the XXXX, some due temporary admissions second access Hospice hospice of steadily offices. our admission of saw as same-store XX% higher as facility well restrictions since program currently in our volume recurring closures are than have April numbers. improved our growth was our April quarter X.X% lows hospice as slowdowns running physician to

However, fully their impose facilities. outside front recovered admission the restrictions on parties significant continue we some accessing as to haven't facilities on

see increases of our quarter. We in and part third in trends current continue admission the the to early census

decreased revenue hospitals saw as X.X% effects surgeries facilities of by we their for Our health quarter. the home elective during the same-store closing

volumes basis in of institutional patient were PDGM. increase reduction actual our up, revenue our an adversely XXX a by health in and under mix referrals non-Medicare impacted While early our approximately points home was

pre-COVID Medicare recovered in volume numbers. admissions our and Our admissions June of is running slightly ahead currently

addition, resumption our the institutional recovered admissions of also mix elective of many to locations. Medicare In in to early has primarily due procedures pre-COVID surgical levels

[technical Plus This personal acquisition As the of operate. care Health we makes us Care, creating of of providers geographic the in state members we all closed states new with we the that strong the services where welcome largest I Addus. acquisition in the state Montana. us strategy is coverage have care line difficulty] want of A the joined one which team from and a of provider services of in personal of July announced maintaining to on in X, on our at

know, As most part of strategy still an remain our Addus. and been have at of acquisitions important growth you

structure acquisition strategically occur. opportunities to of capital a as maintained We advantage strong have us allows which they take

reengaged pandemic, a short of are we fully during opportunities business. all additional closing in acquisitions segments now our the the of early While of the phase growth process took and from identifying in we COVID pause pursuing three new

can acquisitions to believe strong. during being additional we we while continue Our XXXX. pipeline are remains And cautious, we appropriately that close

caregivers and staying have virus. financial past support months our of indicate, job the to of As both done five staff mission committed our team wonderful our during the results a

their their our risk is the I the so have Our thank have their how front-line caregivers the company's you. other have way been heroic in workers serving am There share potentially contracting patients to healthcare virus. to needs shown than for of spite continue our many the willingness homes no in professionalism me of of that say, COVID-XX for grateful demonstrated. to dedication of They in

am has administrative that continued hard both task means the modify the proper office information to continued In addition, back needed or patience and allows sourcing through to both policies do as PPE and to thankful of their acquiring has administrative difficult create procedures as for as as emerges. team staff. whether caregivers for leadership to providing support them the of front-line our continuing remote new in job the team and office much caregivers safer our our and well keep our I work

call-offs on we concerns particularly someone and family care our having a driven experience where their a personal improvements York services home, normal due even to and Chicago. to we markets certain seeing in a service While in than hold in a decides normal visit to patient or caregiver patient skip New continued that's their of are their higher

earnings not something that we the segment, in non-clinical on call our have As we began past. first we our in discussed quarter PPE acquire to needed

necessary other patients and families help and believe we care vaccine and additional to and to developed supplying in our layer PPE next need forward, treatment comfort We this or Going while into allowing we gloves several teams our order to expense spread and will of protect teams the our from provide for to clinical added effective until their our an widely an continue the available. home necessary them personal masks, will quarters virus and be this of for believe the their is service. or patients

to As to able we've COVID have to we of positive patients. provide this PPE presumed started and higher services our level been positive providing team

volume service in our personal few segment. equally positive home and health care with case patients our only split COVID is current hospice between a Our lines

deal and patients they committed take these are of continuing We help them this as to to with care virus.

been past and optimistic Addus remain the the future in have industry I of homecare months particular. the about For five challenging,

close With industry. live dedicated keep continue way patients important more much families is our from this virus we that our goals to will patients. to employees can past values our as of and responsibility months I to the all virus help to have continued to It fight continue and care. while for important many this you serving thank continue for call coming our our of while you has missions their I our that turn to have to Through it ever a this pandemic. our I demonstrated mission country Addus. that months us for be and meet say as to is for than homes and safe them to and provide the a patients their few in providing of you time now will our both we The believe needed very to to know over we opportunities efforts leaders Addus. continue have me strategic all their been want a Brian. call your This the let achieve this where part my difficult members team have team have operated. historically We ability disrupted and even the

Brian Poff

as everyone. Yesterday to for XXXX company's and the you, filings filings XX-Quarters XX-K Dirk the related XXXX the and full and our and have delayed both for first filed back good the XX-Q financial market completion yesterday's first quarters closed Thank the of and morning SEC we after the quarter the statements are that well XXXX PricewaterhouseCoopers second auditors process our XX-K result of of with as in XXXX we completed a the now of for SECTOR. of reaudit compliance with our as the

we were revenues XX.X%, demonstrate care first quarter originally as to of revenue the results. Addus services a and revenues net our the with $X.X heavily breakdown $XXX.X XX.X% the as second were on ongoing revenue, Moving sustained volume revenues impact home COVID-XX of demand the million. a by solid possible million revenues the ongoing for for revenues. total million Hospice in XXXX or had is were home COVID-XX trend of service the and financial $XXX.X very quarter of $XX.X impacted the midst performance that second environment Personal noted challenging were health thought not quarter million These follows. levels for as results pandemic. a of care environment with or care X% or The

a to of believe well place growth to business are strong the continue we We favorable in have model second-half expected and demand XXXX. in meeting and see positioned

revenue. benefits incremental we additional completed XXXX acquisitions X, with the on an the in four Plus Montana addition in A with $X.X closing completed the annual July to of we in of XXXX, In Care acquisition Health million

to being accretive margin acquisition Other the financial higher We our evaluate immediately following; operational second margin our the percentage the results are compared business. results will to include in cautious our of XX.X% and environments. approach deliberate for of opportunities, and while XXXX XXXX primarily XX.X% year we acquisition financial gross to to current last and expect for of the the second other due with that quarter profile was pursue we and quarter skilled our economic due be continue

our the gross period, year-to-date XX.X% the for last improved months For six margin year. XX.X% first of from

cost EBITDA XX.X% on increasing increase of reimbursement increase margin not mentioned, we January Adjusted as Dirk COVID. from X.X% the X, to profile pressure for Adjusted mix expenses. revenue second-half XXXX for XXXX. of higher of an from wage the until acquisition in second was leverage the do [technical July to quarter difficulty] year the an an of increase second re-audit in quarter, primarily a the year some X, was G&A million affected on XX.X%, increase revenues As XXXX. anticipate related minimum XX.X% for $XX.X margin and G&A quarter last quarter, without will was second expense the be lower the XX.X% XX% the of of million compared offsetting prior of Chicago due XXXX for from to business expense for company’s skilled increased and a adjusted the XXXX in EBITDA the second to higher G&A quarter quarter a $XX.X with of from result reduced The an which

results the COVID-XX loss The included following, of $X.XX, other and of $X.XX sale July short-term quarter some grew from second minimum of XXXX. stock-based do Our skilled re-audit $X.XX and M&A XXXX diluted of the not Adjusted from second periods, net be $X.XX, per EBITDA increase of prior X, XX.X% the net non-cash XXXX. for with assets increase by concentration share exclude $X.XX, adjusted margins primarily reimbursement second to of associated quarter wage to costs the for of expenses on XXXX the transaction cost will pressure for business anticipate with compared but the $X.XX $X.XX. Chicago the income expenses until benefit offset we quarter increasing share compensation the per continue that the of from effective of which restructuring

costs second Our and adjusted $X.XX stock-based exclude quarter transaction $X.XX. for per compensation of of and restructuring other results share expenses the M&A of $X.XX, XXXX of non-cash

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

tax compared we the days to a of XXXX. XX.X For of expect the days at continue XX% of quarter the DSOs at end XX.X with full-year the of of end second to were rate XXXX, quarter XX%. XXXX the first

XX.X Department During the see including payers with from quarter, at Illinois a their we on strong DSO continue to of payment majority trends days. Aging

and of state to state with in continue that pandemic, to potential put payments Medicaid to the normal for is With pressure possible. closely plans budgets related tax ongoing COVID will our as an managed declining work effort cadence on by we as the maintain revenues

Our by totaled cash the of at on provided cash XXXX, $XXX.X hand million. $XX.X second quarter million operations had XX, net company June and

In from benefited the the the Cares from during flows of payroll $X.X Act deferral taxes quarter, cash addition the million. employer of to under strong approximately allowed our payers we also

business with continued liquidity for forward. a pursuit and please capacity you morning. and million quarter unenrolled of operations, us. open support at our prepared opportunities. like acquisition I $XXX.X ask This continue to result debt comments the I’ll going now only our we have would bank strategy attractive we have questions. look this operator concludes of to forward strong acquisition our the this all to million your of and As ongoing line the to for thank revolver, to program our availability end in position from being substantial $XX under With

Operator

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

Your now line open. is

Scott Fidel

out. called of relatively in in what margins and XQ about First question just gross thinking you to terms and XQ

there $X.X impact margins that and are think the be worth when XQ just gross taking into gross impacting Are you the year? thinking taking as out the it half other quarterly factors we should falling million from the Chicago back or margins simple that XQ. that in modeling about any be would of So as

Brian Poff

is This Brian. Scott. Yes,

that's We’ll primary the take way additional into will right driver that to be mentioned. QX without costs think I I Dirk $X.X additional million gross is the it, a look of above line reimbursement. changed that at went the margin and

margin percentage. impact as as well So will EBITDA the that gross percent

Scott Fidel

just maybe interested that the around second just the also caregiver of know I given market higher if recruit us an the been give then question, labor unemployment. caregivers home from the it update Providing just opportunity opportunity, new And at to pacing can dynamics. recruitments in XQ. was in an has on and there some family loosening you home-based

And terms so and and in seeing half you influence how the in organic XXXX? you then of what just were XQ could of guys out year think on those interested looking in that growth trends the fronts the to back

Bradley Bickham

caregivers Thanks, Scott. and as markets. caregiver Bickham. bring the on to front, is we've ability far Brad What additional This seen seen family have on as the family we

bit due However, our primarily been has unemployment struggle additional out there. to recruiting benefits of a think the are little I a that

an seeing course the of up pick numbers or reduce lot $XXX the training up not down whether lot frankly a for from those won't funding. But states we or for but interviews. Now, wanted of we're a getting to a the also to how folks the depending of big on $XXX had. has or to see that of $XXX we're impact recently that inbounds, chance had show I

from $XXX expect the is filed down. to little applications, to lower, the honestly down reduction recruiting lower it a number. a but they with improve So I the those

Scott Fidel

budgets XXXX you're me out Understood, right just out to there rates should anything question then Chicago represented for terms and call that in and we of yes a thinking consciousness makes insights the of been now Medicaid anything that’s else [indiscernible] seeing that FY that and outside into sense. on about? be early last specific And just

Brian Poff

Yes, Scott.

think budgets. just to we're with anything watch obviously I happening - continuing the state

process. watching we’re New that mentioned, of see kind closely Dirk to As York happens what with

anything as thought the in those budget do Dirk rate we We'll Really, increases see quarter about during COVID you been states temporary with rate the add to has but well, and their we’ve helpful. want kind Your of obviously continue, handful future XXXX? has referenced. how increase long in from of which a seen

Dirk Allison

Yes. budgets going keeping our is I of in this virus over one how is isolated the I one to Medicaid alternative homes them population. to know, service business thing problem going they state know our during particular nursing to which with we we're a the of for all those home their one the certainly being or challenges remember potentially also folks the folks think to two this through to and has been side is the in item that be this said, protect is pandemic. are next issue our try particular somewhat a from this recover ways from It being elderly setting of That virus. our year an

So situation by consumers that and home states three only not which home our nursing safer, in of more service is believe people times but families two paying we patients most the your or care, to the themselves. home, expensive which for either is much the understand preferred by care or keeping

So, that of what have tell know that elderly. continue to their work and the are in even they to do we to a care we the able strongly taking we with that need budgets we of to hope story state to way have great feel

Operator

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

now is line open. Your

Brian Tanquilut

just Dirk quick question Chicago guess I a stuff. the on

what $XX is know target I the So is.

What’s scheduled you January $XX for a to Is is that cover offsets that $XX from the cover path there? I there to number? about the in do the progression a $XX, guys legislation need get to then they've are offset. and talked X at or So put what again know level that what the state second we offset to $XX wait to place.

Brian Poff

back as that next Chicago will there it July $XX will that Currently year reimbursement way year's offset part nothing increase get cycle. is budget to legislation say to that considered will to let’s budget offset of as XXXX. July. of structured currently in this January go the be, next The so, This moved in is X $XX to Brian. Yes is Brian. increase

Dirk Allison

the we've good a have, state cover of been distinguished need reception. we we and year's have too company, have the leaders about next to as we $X Brian, received increase cost And

get on see we'll So it and XXXX budget. to continue fiscal into to that try to work

Brian Tanquilut

then Dirk, value can Advantage and Medicare I you, I us updates And provide base. have any guess, since you on

of right are terms In initiatives now? where those

Dirk Allison

to As those with value-based the Medicare along far companies as lines. work continue we and Advantage

late been somewhat a that little have bit the have continue with work pandemic, with number we we of the start of We a some programs to delayed, but been them. earlier to wanted

will approach seeing We're from it's in few a the We’re a with approach. as people we have will - believe the working that well and number the to of the seeing do that those we're are the the companies bit value care. markets probably we're that. operate. while providing that opportunities will XXXX with for ourselves Medicare talking along how be see about based Advantage reduction benefit as We marketing more in which personal both we can folks care more still work at a they and still with we and that we benefit a than care hard we do seems med see a to cost It continue

that And with Medicare change this XXXX. of a Advantage so, instead particular is timeframe next probably level XXXX probably we that aspect in of still believe

Bradley Bickham

agree Brad. you, with Yes. This is I Dirk.

care available material the some benefit, We under hours increase have personal that’s numbers. but plans not the seen again at the

those put starting to of QX. with based are the that programs we're to But with. work I think those our working some with certainly on working back that burner late COVID the value payers again are early QX into on, of kind it respect we're those

Operator

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

Your line is now open.

Matthew Borsch

reaffirm right now What the press deal see given economic to the the PGGM well comment you but ability in disruptions the engage was as know I I COVID on perhaps both just hoping the from you generally? in acquisitions. do pressure interest - your and as the discussions, in did release do you to so willingness

Brian Poff

Brain. is This

plus get I I several think we nice It M&A eight to in are July. as the was other are. stared heat to think acquisition market closed definitely seeing up

I talking environment and think cetera. COVID diligence difficult a you're conversations make in the little et obviously things early more when about

a think calls think to I it have has setting, begun some most I as virtual alleviated the adapt Zoom people of issues. like, those to at

And are of receptive I be more there willing lot individuals are there point. so think think out that to I at a this

several segments this at year the has three pipeline opportunities kind to the of QX point, we’re across into So be all honest. QX, and of in our still end

we think in our opportunities But fairly not acquisition confident as have I quite move normal. in continue ability I feel what today So very abilities to still we on maybe think wise. technology to of forward the close

Matthew Borsch

what where cases August how also separate I have emerged? missed in you just around this can July volumes evolution a - I if geographically And out COVID but - have parsed did sorry note, into you the if have you’re seeing of terms for that and and granularity any given that

Bradley Bickham

seeing honestly in three in segments. hit point and our was was April it the we’re actually rebounded health first really Home actually This Brad. low all What volumes, the hardest. is although

actually home steadily our Medicare health side increasing seen on they're we’ve referrals levels. pre-COVID running the So comparable where to to

admission there activity as we On in increase a hospice front, well. seen the steady also have

low to have Personal So look some there. April the upside see at interesting, you point our and to it's good we're was continuing different care, markets.

far recovering. still in been markets. to the early is rebound kind that somewhat of we're They as larger Chicago, York fact New as of the market, geographic, Illinois the the were hit but well, been of kind kind we've mean in hardest I as in has fortunate Chicago hit. our slower

sort of smaller holds and is kind seeing our typically in that thing we're where markets and so, upticks And of right now.

Operator

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

now is open. Your line

Matt Larew

then Again, same-store geographies elimination if adequate just Is wondering understand up at home need you had you the remaining family unemployment final to have trying on sort widespread perhaps maybe sense hang-ups homes situation quantify in the you what of benefits available understand dissipating that a patient is as the of was could hold? to in not the to I is us be a COVID now what there? where impact just so, are and is a trends maybe help hold the it patient the going. get or of census and and member terms PPE unemployment that in there is where

Bradley Bickham

What They level cases. programs and permit lower This where acuity we're out have that you member really with you care seeing, kind the I the you’re dad, that family mean can again. is a I is pointed mom is have dealing one or low family care givers that them not of and Brad step seeing or think now of of pretty issues unemployed. of you out have up kind do hour who is take particularly with - you're there

seeing on you're or those hold have but, services hold. on to them So continuing individuals

as, of the I both still to think remaining our caregiver kind PPE adequate and keep client the far some safe, even concerns barriers again As there. out with there’s what’s and it’s

those they see hold they want from an We some that. rates continue a which clients improvement have of, inquire Those April you I to and to and June May, steadily good will to continue pretty have into in to And through seen, some they not we services. restart out to success reach or doubled And on mean are our point. literally August. have normal move as idea give actually whether with I insist low from in improved July.

Matt Larew

of perhaps COVID some or heard by was providers who ones we've goodwill gains about we, then created patients. skilled take talk on And the that share some

in seen unskilled increase COVID an if with on either PPE who secured of in of because quickly ones referral to new terms on interactions referral ability your sources PCA sources on or you’ve and the, take to respond side and curious business the the Just skilled patients? the

Bradley Bickham

on us again. in referral of significant COVID think I patients. because Brad is don't activity we've seen a taking This increase

do had in of side, on in positive. from the probably goodwill on actually PCA the back just take I have the markets because is bringing it lack existing we uncomfortable won't that we COVID-XX more some Now PPE, think client because with firm care of have being so of lack received certain care a of where plan personal referrals taking

or to services in into referral only but have ability our on So our may the as from because and the willingness clients to on after gone positive the of relationships we with hospital other testing or COVID-XX couple clients into our service sources of not take deepened also on taking our on of market our actually coming PCF and a the out patient. taking providers who gone have facility continuing willingness side a

Operator

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

open. Your line now is

Matthew Dale Gillmor

I of wanted or referral curious admission there and if to I from ask any about the that’s kind and PC was resolved. COVID-XX what an perspective interruption was been from you're if volume new seeing metrics. a about

admissions but had could then standpoint. I think the think may billable metric, perhaps an just but talked you maybe it. I about you And mention from curious be it Could I hours - of it you you just seem just with types what so what give us off? that like a much impacted in happened the that sense the didn't patients rolling hours sense were decline for your very missed

Bradley Bickham

Hi, Matthew, it’s Brad.

the in the I board seen home front, the in - in larger an admission like side in in have pretty across On health Hospice the much mission mean, markets. increase activity big we've our we seen just what

have have that admission rebounded. to frames the pre-COVID we fully Not quite just COVID-XX or hospice not impact some are levels. to back have in health, up from smaller that think continuing markets month-over-month. But just tick like more I that’s home in still recent - of like

preventing a - we think the that to recruitment increase second lot that hours referrals we'd is from you is of out feeling I of in clients, services on put hour the question the speaking that dynamic of certain effects. and like hold for ill an the in are they clients, the I a the lot in can that more what and think service need seeing decline still typical it's are of need look generally higher ones don't morning. markets your when taking Those what to yes are in that saw caregiver without problematic clients is bed of at relating us again to cases get that experiencing some census, service - we’re on really

putting services on not those hold. are they So

we're So, clients. what hold seeing dynamic are the ones those I that think lower impact the on the greater - buy hour versus higher a you're is that clients hour

Matthew Dale Gillmor

And up. then, follow one other

little revenues because first of to on I in with impacted expecting trend September? and in consistent of below kind seeing July that I think quarter about guess, some points a be rate. COVID that was curious saw X quarter X mentioned you’re had the third - improvement or by you August bit maybe July or Dirk negatively run versus was would I through maybe

Bradley Bickham

Yes.

think this Brian. is I -

September. of September. July, think, I in increase, we in we I sharp kind of definitely expect would probably say and not continue an that have it's a July August June, see continued to and mentioned - September to Brad kind August, uptick as

I flattening think is definitely curve that that out.

to to account. think the think I overall X% I X% take So time

Operator

John [Operator next comes Our from line the Instructions] of Raymond from James. question Ransom

line now open. Your is

John Ransom

couple Let's minute. just for questions. delve A labor a of into

family of has So rate as your the during caregivers and of pandemic? meaningfully percent changed now that members what's

Brian Poff

Yes.

I I dramatically. XX%, looked materially XX% don't think moved number have changed. it, it family would probably has I wide. haven't don't think think I the we've about company needle at run but caregivers that

John Ransom

$XXX. ask unemployment what’s from bringing you a work? who check may And for people go frontlines take to not all to let's for - and have - I’ll your the be a some $XXX the at just but prognosticator, assume Does more potential willing that off are benefits economic

Bradley Bickham

unemployment impacted some that think But that is and gating I the this looking certainly we Brad. in. benefit. a that market so at see it should at markets think has really Yes, is what certain help on more don't we're depending item. Again as much overall, in it, I not And the

markets. a help. people some But going off to some provide to try definitely looking it's to sidelines. with are to couple the of And incentives we We would say I are get in to experiment going

I $XXX. little of still think to challenge it's a the going bit a be

John Ransom

extensive to have onboarding? training. and guys that's is Zoom I now you know going, all do any How on I in creating And issues but some that Right. assume that remote fairly upfront what is not,

Bradley Bickham

it are some do taking orientation and and of that basic requirements. There states, did some online Yes, we where the can. either changes advantage change defer do not certain it could states where made they mean or we that are training has. I in training you Because to we have

So, the those training the to cases, within order reduce class in we socially in had distance facility. have to size

to those look of frequency classes. kind trying the at of also We’re increasing

show biggest our have of one invited up. is say to challenges you've got that think a been XX I training, six people

So, more fairly had. training, understanding invite will we're higher typically a have I no to taking show think steps that to we rate we have than

John Ransom

that home is this the have staff before home might the that just had at and savings of pandemic is think of that you you out working come then, otherwise? - your and to structural you're some as working And now - percent corporate do versus maybe you people have are what from going cost not

Bradley Bickham

John. Yes,

as office centered side, corporate our in in up and quickly Chicago up support but we they full then Texas, obviously and the here our Frisco have moved remote. came in March On well at in to

So virtually. working nearly our of personnel XXX%

actually that close worked us. we're midst well We've the the doing remote like people will for the in side. normal a handful that, going continuing been at mail able months, several to on that tasks, environment but come next think that least I has corporate we're of that largely think Obviously, in got forward very we've be very checking things the and but to productive. acquisition I for of see

want far express as mitigations, to as think cost future potential that? you Dirk do I

Dirk Allison

Yes.

quickly There some take going all it have so future. frankly there's has obviously from little benefits we into remote - the that we we the us, bit For maybe can can do do that being been learned quite a surprising been remote has that well. and something we've that it so

- office been get an all costs because like back only once of field But offices of and together in get have Frisco as do our both not back in our a to a Grove largely Downers coming Some we still or which want people corporate Long-term, we folks effective that. our to few a lower get treatment. company to vaccine in those. we’d sports center have

get So we not hopefully in of this that We’ll be ways we have our still at learned some see we together want will in to through remote look doing future. But learning’s past people all soon in the operate through the that that going early operation to on back we how and had that being forward. said, we've we've the important travel planning had that as XXXX. But may as this as maybe largely possible. the

John Ransom

one… Dirk as that’s airplanes least, I better still to probably at you Well, on not hope. as And much back

Dirk Allison

Are about talking my age John, you be careful.

John Ransom

back. about I’m your taking

Dirk Allison

you there go. There you go,

John Ransom

[indiscernible] there. That’s I be going would probably thought on helpful.

Dirk Allison

go. you There

John Ransom

output take important material labor kind a to very the measure pandemic lastly or inputs Has just all one this a onboarding effect turnover quality. way and So of we of terms had other? as just for you and topic we in and me, if the

Brian Poff

Well.

to look side, of think you when impacted has think it I the labor bring on the I caregivers on. our unemployment unemployment and ability at - primarily because certainly just benefits

the past the unemployment we past. front see I with a some will there going a than should have we some enter lower economy. and with are forward struggle likely am in honestly, caregiver on it that improvement the So optimistic benefit little hiring even in folks workforce more the that hadn't robust considered we very that

that people. to of thing from slower some workers able you think to really we at I and good be of quite going should industry sort pool hospitality So, and it’s look rebound when I think the to find that be

Dirk Allison

do forward that economy eventually you comes to able end. if good. hire unemployment tightened two as typically, the to for the as occur better. We that economy will efforts unemployment, that's over somewhat we as the a help return John, bring as is folks been Addus, not And more time and has look the up Historically, next hopefully be better been unemployment a us temporary a gotten recruitment has level the the will to and for historically move year continues on. as the and an believe, economy is which believe and We to historical to to higher, obviously or measure,

Operator

question comes of line Sidoti. from next Our the from Mitra Ramgopal

open. Your now is line

Mitra Ramgopal

that your front? a on early too if the to environment just up wondering in any anything if front. transaction having competitors more Just any the reaching on it’s or potential in was follow a I had out you've - generally acquisition see to maybe of some you difficulty terms seen of

Dirk Allison

Yes, Mitra.

I are see we the I mentioned up. market earlier to as starting think think definitely open I back M&A

has definitely I this earlier saw volume last we So, the increased over [indiscernible] from year. months think few the

else I to are see out. folks how they think there, of kind waiting plays out - what there for are opportunities a lot potential of that PDGM

I wait revenues impacted wasn't environment. with to the rebounds but as obviously more maybe they sell, are transaction comfortable to the moving the Maybe great for forward a think targets have COVID by we getting have of maybe have that a a time planned sort potentially some that it months. with the few

So think, of the of through lot from this opportunity I see year. a end our we perspective,

even a for on a our always our have year I close this like around we’re target we we would and more to million or talk last Obviously $XXX call million little per the delayed we opportunities of revenue. think $XXX as half this are of sure acquisition. year, ahead back the I’m decent year. about think there in still for But I some It’s this And potentials. Montana year.

Mitra Ramgopal

budgets weighing you How just the in said uncertainties then follow-up acquisitions? of on that, et hand you the your are state maybe on cash as And priority itself given pursuing as versus cetera. keeping on a terms

Dirk Allison

Yes.

a higher in of that not leverages looks at situation we be this like to today very conservative COVID. management really obviously been team. as that group especially with we're think a place in I a we've We're

our in us peers and feel pretty and to available front makes cash balance the of I our we’ve volumes think use M&A on really I on our the have credit more last what and cash from flow large rebounded think opportunistic the obviously we've months the seen some way facility. and several a

the on, point feel that can where more we at keep I probably I be M&A. aggressive things point to to mean in we but were close we So stabilized think I this wanted early things the have think we to bet,

Operator

I further At to you. questions. back turn over would to closing like remarks. call showing for Thank time Allison no the this I'm Dirk

Dirk Allison

for interest our of for Addus their Thank you. everyone in you being part to Operator and a I have I hope week. want call. great thank today

Operator

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

now may disconnect. You