Addus HomeCare seeks more acquisitions

Addus HomeCare is on the lookout for more companies to buy following a profitable third quarter.

The company primarily seeks acquisitions of personal and skilled care organizations. In June, Addus signed a definitive agreement to acquire hospice and palliative care provider Gentiva's home care business for $350 million. The deal is expected to close by the end of the year. 

Related:Addus HomeCare’s $162M stock sale to help fund Gentiva deal

"We've got [a] new $650 million line of credit with expansion capabilities there for a deal," CEO Dirk Allison said during an earnings call with financial analysts Tuesday. "Our appetite remains strong. Obviously as we've gotten larger, certainly looking at some of the larger opportunities that may arise is interesting to us and will continue to be interesting to us."

In May, the company signed a definitive agreement to sell its New York home health facilities to HCS-Girling, a home healthcare services company.

The Frisco, Texas-based company also said the recent Centers for Medicare and Medicaid Services reimbursement rate bump, part of a new set of final rules that will increase payments for home health and dialysis providers, would not affect them.

Allison said while the company is pleased CMS chose to raise reimbursement rates as opposed to cutting them, Addus is disappointed in how the agency has handled home health reimbursement adjustments.

"While we are appreciative of the final rate adjustment being slightly more positive than the proposed rate, we are disappointed that CMS continues to pursue both temporary and permanent reimbursement reductions from home health providers, which we believe limits patient access to this valuable and much needed service," he said.

In response to an analyst's question on how the outcome of the presidential election and each candidate's proposals for home health would affect the company, Allison said Addus could benefit from either Vice President Kamala Harris or President Donald Trump in the White House.

"Regardless of which party wins the presidential election, I think we have benefits on both sides," Allison said. "[Vice President] Harris has said that she supports expanding elderly care, which is very exciting, although not a lot of specifics at this point, but at the same time President Trump came out and also mentioned supporting elderly care through tax means. So for us we're just excited that both sides have looked at what we do."

Addus reported quarterly net income of  $20.2 million, or $1.10 per share, compared with $15.4 million, or 95 cents per share, in the year-ago period. Quarterly net service revenues rose 7% year-over-year.