Addus HomeCare (ADUS) Stephens 26th Annual Investment Conference | NASH2024 summary

Election and regulatory environment

• Confident in business resilience regardless of election outcome; both parties present unique opportunities and challenges.

• Anticipates Medicaid Access Rule may be repealed under a Trump administration, seen as a tailwind.

• Medicare Advantage growth could pressure home health margins, but impact is limited due to small business share.

• No significant direct labor impact expected from immigration policy changes; some potential for wage inflation.

Strategic focus and capital allocation

• Personal care remains the core business, expected to reach 80% of mix post-Gentiva acquisition.

• Texas is a key growth market, with plans to expand personal care, home health, and hospice services.

• M&A strategy prioritizes personal care and home health, with hospice as a secondary focus.

• Conservative M&A approach, focusing on strategic fit and price, with flexibility for creative deals.

Growth outlook and M&A pipeline

• Long-term target of 10%+ revenue growth, with 3-5% organic growth in personal care and mid-single digits in clinical services.

• M&A expected to contribute about half of total growth; pipeline includes opportunities across all segments.

• Multiples for personal care and home health remain stable; hospice assets command higher valuations.

• Strategic alignment with personal care network is key for evaluating larger deals.