Addus HomeCare Corporation (NASDAQ:ADUS) Q4 2022 Earnings Call Transcript

Brad Bickham: Yes. So if you look on the clinical side, we actually had a nice net hire. We added probably about 80 net hires on the clinical side, primarily on the hospice front, our hiring on PCS. Certainly, if you look year-over-year, it was, I think, about 10% greater than it was prior year, sequentially down a little bit. That’s mainly because of the holiday season. You see some less slowness in Q4. Good to see our January and February numbers look solid. So more in line kind of with the Q3 type number. So good hiring momentum on the personal care front. And again, as we said, the clinical hiring has certainly improved really since kind of midyear last year.

Joanna Gajuk: Okay. That’s helpful. And I guess I’ll say on the personal care, so you mentioned some positive trends there on rates, but also on the volumes, the hours per business to improve sequentially. As we think going forward about the following quarters. Is it fair to assume volumes in the normal situation should be growing sequentially over the quarter? Or is there some seasonality in the business?

Brad Bickham: No. I mean I think there tends to be a little less seasonality related to personal care. I mean where you have seasonality primarily is if you have a depending kind of winter storms can affect it. A little slowness and it tends to be, frankly, in Q4 around December and the holidays. But we saw, in spite of that, some nice growth. So Q1, I think when we look at Q1, Q2, Q3 should be nice, steady growth with the hiring numbers that we’re seeing.

Brian Poff: Yes. Keep in mind, Joanna, just to piggyback on that a little bit. So in Personal Care, a lot of our markets, if we have missed visit things, we have the ability to make those up and reschedule those on different days. Again, that’s market to market. So it’s not always a guarantee, but we do have a little bit of flexibility if we run into some of those things. There’s a little bit of ability to work around those in certain spots.

Joanna Gajuk: And I had a follow-up on the cash flow, which you mentioned it was very strong. You’ve included some of the maybe, call it, onetime type funding your receivable, it’s not repeatable. But how should we think about operating cash flow for this year versus this $105 million? How much should we exclude kind of as a onetime not repeatable? And where would you think you could land for this year for cash flow?

Brian Poff: Yes. If you look at 2022, so it was $105 million, but if you kind of back out the net positive impact from the ARPA funds and then you back out kind of those working cap changes that I mentioned in my comments was around $19 million. So you back those out, that’s $27 million, you probably would have been more in the $75 million-ish, $80 million range off of our EBITDA of over $100 million. So that’s a pretty strong conversion rate still. So I think to expect something more in that range would be more probably opportunity for 2023. I think €˜22, we’re not going to continue to see $20 million in net working cap improvement even as we grow. That’s probably more of a onetime thing. But that 75% conversion rate is probably something you should expect on a consistent basis.

Joanna Gajuk: This is great. That’s helpful. And the last one, a follow-up. So you were talking about working with the other home health — sorry, on the rates, working with the Medicare Advantage plans. I don’t remember, did you disclose, can you tell us what is your mix of Medicare fee-for-service versus the Medical Advantage previsit versus Medicare Advantage episodic type of contracts volumes like percent of visits.