Addus HomeCare (ADUS) investor relations material

Business overview and growth strategy

• Operates in 22 states, focusing on personal care (75% of business), hospice (20%), and home health (5%).

• Pursues a full continuum of home-based care, building long-term client relationships starting with personal care.

• Targets 10% annual growth, with half from acquisitions; recent Gentiva deal expanded presence, especially in Texas and Arkansas.

• Texas is a major growth focus, now the largest provider but only 5% market share, indicating significant expansion potential.

• Organic growth driven by rate increases and volume, with supportive state policies in key markets like Texas and Illinois.

Financial performance and market dynamics

• Personal care segment aims for 3%-5% long-term growth, with recent years exceeding this due to strong rate support.

• Hospice segment growing near 10%, expected to normalize to mid-to-upper single digits; home health faces rate pressures.

• Volume growth targeted at 2%-2.5% per year, with the remainder of growth from rate increases.

• Managed Medicaid and state fiscal health are key factors in evaluating new markets and acquisitions.

• Value-based contracts with managed care organizations have reduced ER visits and readmissions, differentiating from smaller providers.

Regulatory and reimbursement environment

• State support for Medicaid rates is critical; Illinois highlighted for its dual Medicaid and state-funded programs.

• Company emphasizes cost savings to states by keeping clients at home versus nursing facilities.

• Managed Medicaid seen as positive, offering opportunities for direct rate negotiations and network participation.

• Redeterminations caused temporary admission slowdowns, but normalization expected by 2026.

• Work requirements and Medicaid budget scrutiny viewed as neutral to positive, with home care positioned as a cost-saving solution.