Good day and welcome to the Addus HomeCare's Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Dru Anderson. Please go ahead. Thank you. Good morning and welcome to the Addus HomeCare Corporation third quarter 2024 Earnings Conference Call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the company's website and reviewing yesterday's news release. This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus' expected quarterly and annual financial performance for 2024 or beyond. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, discussions of forecasts, estimates, targets, plans, beliefs, expectations, and the like are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by important factors, among others, set forth in Addus' filings with the Securities and Exchange Commission and in its third quarter 2024 news release. Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. At this time, I would like to turn the call over to the company's Chairman and Chief Executive Officer, Mr. Dirk Allison. Please go ahead, sir. Thank you, Dru. Good morning and welcome to our 2024 third quarter earnings call. With me today are Brian Poff, our Chief Financial Officer, and Brad Bickham, our President and Chief Operating Officer. As we do on each of our quarterly calls, I will begin with a few comments, and then Brian will discuss the third quarter results in more detail. Following our comments, the three of us would be happy to respond to any questions. As we announced yesterday, our total revenue for the third quarter of 2024 was $289.8 million, an increase of 7% as compared to $270.7 million for the third quarter of 2023. This revenue growth resulted in adjusted earnings per share of $1.30 as compared to adjusted earnings per share for the third quarter of 2023 of $1.15, an increase of 13%. Our Adjusted EBITDA was $34.3 million compared to $30.9 million for the third quarter of 2023, an increase of 11.1%. During the third quarter of 2024, we continued to experience consistent cash flows. As of the end of the third quarter of 2024, we had cash on hand of approximately $223 million. This cash, along with our line of credit, will be used to fund our previously announced acquisition of the Gentiva personal care operation. Once this transaction is closed, we will remain in a conservative leverage position, allowing us to continue to evaluate larger strategic acquisition opportunities. With respect to our ongoing acquisition activities, I'd like to provide an update on the Gentiva transaction we announced on June 10th of this year. Recapping our strategy, we believe our personal care segment benefits from both scale and broad geographic coverage in the states where we operate. This is particularly true in managed Medicaid states and as a result of the final Medicaid Access Rule if and when it may be implemented. This scale and coverage allows us to spread our cost over a larger revenue base and provides Addus with the opportunity for meaningful advocacy with the states in which we operate while also promoting a more favorable hiring and retention environment. This strategy led us to pursue the acquisition from Gentiva. As we have previously stated, upon the close of this transaction, Addus will be the largest provider of personal care services in the state of Texas, which is primarily a managed Medicaid market. In addition, this transaction will give us a larger presence in Arkansas, strengthen our California and Arizona private pay and Veterans Affairs businesses, and will add a location in eastern Tennessee to our existing operations in the state and provide entry into both Missouri and North Carolina. We have spent the last several months working with members of the Gentiva personal care team preparing for the close and transition of this business into Addus. I believe we have done a very good job of planning for the changes that will occur once this acquisition closes. Our planning has been focused on minimizing the impact on frontline staff and ensuring the continuation of the provision of quality services to our customers as we go through the integration process. We are appreciative of the efforts of the Gentiva personal care team as they continue to provide quality services to its customers. We look forward to the many new team members who will be joining the Addus family once this transaction is closed. As we stated on our last call, we believe this closing will occur in the fourth quarter of this year. Now, let me discuss certain areas of operations. During the third quarter of 2024, we continued to experience solid results related to our ability to hire caregivers, especially in our personal care segment. In the second quarter of this year, we achieved 86 hires per business day. When adjusted for the disposition of our New York operation, that second quarter number was 79 hires per business day. During the third quarter of 2024, we saw our personal care hiring numbers continuing this strong trend at 79 hires per business day, while our turnover rates have remained at historically low levels. In addition to our strong hiring numbers, we have continued to see consistent momentum in our starts per business day over the past few quarters, which continues to be a focus of our operations team. With respect to our clinical service lines, we continue to see improvements in the overall clinical labor environment consistent with the last few quarters. As we have over the past few years, we continue to utilize the funding we received from the American Rescue Plan Act, or ARPA. During the third quarter of 2024, we received an additional $3.2 million in funding and utilized over $2.5 million, leaving approximately $13 million remaining in accessible funds. These funds are continuing to be used to help with caregiver recruitment and retention efforts, as well as other opportunities to enhance our caregivers' experience and training. In our personal care segment, our services continue to receive favorable reimbursement support from many of the states in which we operate. We continue to believe that our states remain in good financial position as the economy seems to be stable at this time. We are confident that personal care services continue to deliver real value to state Medicare programs, as well as our managed care partners, through a reduction in the overall cost of care. Let me remind you that effective January 1st, 2025, Illinois, our largest state for personal care services, will enact a 5.5% increase for personal care services. Brian will give you more information on how this increase will positively impact our personal care performance for 2025. As for our clinical segments, effective October 1, 2024, Medicare hospice reimbursement was increased by approximately 2.9%, largely consistent with what we have seen over the past few years. This increased rate will be reflected in our fourth quarter results. We are pleased with the support from CMS for this valuable end-of-life care. On Friday of last week, CMS announced a final healthcare rule effective January 1st, 2025, which, including all adjustments, results in a 0.5% rate increase versus a previously proposed reduction of 1.7%. 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. Although the current Medicare home health rate remains challenging and appears will also be in 2025, we continue to believe that traditional Medicare home health reimbursement pressures are likely to moderate over the next few years in response to well-documented patient access issues. Now, let me discuss our same-store revenue growth for the third quarter of 2024. For our personal care segment, our same-store revenue growth was 6.8% when compared to the third quarter of 2023. During the third quarter of 2024, we saw personal care same-store hours increase by 0.6% as compared to the same period in 2023. This growth was negatively impacted by the Medicaid redetermination process, which appears to have slowed the approval of new personal care clients. We believe that all of the states we currently operate in will have completed this redetermination process by the end of the fourth quarter. It is encouraging that we will continue to see improvements in our percentage of hours served compared to authorized hours. This improvement, along with the completion of the Medicaid redetermination process in our state, should help us return to our target same-store personal care hours growth rate of approximately 2%. Turning to our clinical operation, our hospice same-store revenue increased 3.5% when compared to the third quarter of 2023. Our same-store average daily census increased 2.1% when compared to the same quarter last year. As of the third quarter of 2024, our hospice median length of stay was 31 days as compared to 29 days for the second quarter of 2024. While we have seen our same-store admissions decrease the last couple of quarters, we have implemented changes to our operation, which we believe will have a positive impact on our ongoing admissions trend. Overall, we are pleased by the steady improvement in our hospice segment this year. Our home health segment same-store revenue decreased 1.7% when compared to the same quarter of 2023. This decrease was primarily due to the implementation of a standardized intake and scheduling process in our acquired Illinois and Tennessee markets that we believe will ultimately lead to an increase in our referral conversion rate, reduce our administrative costs, and allow our clinical staff to increase their focus on providing outstanding patient care. The implementation of these process changes should be complete by the end of the fourth quarter, after which we expect to see our same-store revenue growth improve. As demonstrated by the Gentiva transaction, acquisition continued to be an important part of our growth strategy at Addus. Our targeted minimum annual revenue growth of 10% remains our goal, even with the larger size of our revenue base. For us to meet or exceed these goals, we will continue to be focused on using our capital to find additional acquisition targets that meet our strategic criteria. While we await the closing of the Gentiva transaction, we are looking for potential acquisitions for both personal care and skilled segments, particularly home health. Over the past couple of years, the acquisition opportunities that meet our strategic objectives have been somewhat limited due to some favorable and some unfavorable general market conditions. However, we are starting to see a few more opportunities that could strengthen all three of our segments in markets where we currently operate. We remain committed to making future acquisitions will help us to achieve our overall growth targets while maintaining a conservative approach to our capital deployment. Before I close my remarks, I want to thank our team for the care they are providing to our elderly and disabled consumers and patients. These last few years have shown that the vast majority of clients and patients want to receive care at home, which remains one of the safest and most cost-effective places to receive care. We believe the heightened awareness of the value of home-based care is favorable for our industry and will continue to be a growth opportunity for our company. We understand and appreciate that our operations and growth are dependent on both our dedicated caregivers and other employees who work so incredibly hard providing outstanding care and support to our clients, patients, and their families. With that, let me turn the call over to Brian. Thank you, Dirk, and good morning, everyone. Our third quarter financial results reflect the continued momentum in our business throughout this year. With solid execution, we delivered impressive 7% top-line growth and an 11% increase in Adjusted EBITDA compared with the third quarter last year. Driven primarily by favorable reimbursement trends, our personal care segment had another impressive performance with solid 6.8% organic revenue growth over the same period last year. This growth trend has consistently tracked above our normal expected range of 3%-5% this year, as we have continued to see strong hiring trends and rate support. With the upcoming statewide reimbursement increase in Illinois scheduled for January 1st, 2025, we expect our same-store revenues to remain toward the high end of our normal expected range for the next several quarters. As a reminder, we anticipate the Illinois rate increase to generate approximately $23 million in annualized revenue, with a margin in the low 20s consistent with the 77% rule in the state. As we have discussed previously, we anticipated that the divestiture of our New York operations may qualify for sale treatment under GAAP prior to closing. Effective on October 1st, 2024, the requirements for qualification have been met, and the results of our New York operations will no longer be included in our consolidated financial results beginning in the fourth quarter of 2024. In the third quarter of 2024, our New York operations contributed $21.2 million in revenues, which were not included in our same-store numbers and no EBITDA contribution. With the majority of new clients being directed to buyer over the past few months, we have seen some degradation in our top-line revenues, client counts, and hours, but with no earnings impact. On the clinical side, our third quarter results included the operations of Tennessee Quality Care, a provider of home health, hospice, and private duty nursing services, which we acquired August 1st, 2023. Tennessee Quality Care will be reflected in our same-store revenues effective in the fourth quarter. We saw steady improvement in our hospice business in the third quarter, with 3.5% organic revenue growth and higher average daily census, patient days, and revenue per patient day compared with the third quarter last year. Sequentially, from the second quarter, our average daily census grew by 1.6%, primarily due to an increase in our length of stay. Looking ahead, we anticipate the benefit of our 2025 hospice reimbursement update to begin in the fourth quarter, with an increase in annualized revenues of approximately $6.8 million. Hospice care accounted for 19.8% of our business, including the operations of Tennessee Quality Care. For our home health services, which is our smallest segment, accounting for 5.9% of our business, we saw modest improvement in new admissions, recertifications, and total volume compared with the third quarter of 2023. Our mix of episodic service business continues to remain stable, including both traditional Medicare and episodic Medicare Advantage volume. As Dirk referenced, the final rule for home health reimbursement effective January 1st, 2025, was published last week. This rule will result in a net 0.5% increase in reimbursement nationally, and we are currently evaluating the impact on our business. Due to our limited exposure in home health today, we expect this to be immaterial to Addus. Outside of ongoing reimbursement pressures, we believe home health is a valuable service that is complementary to our personal care and hospice services, and we continue to look for opportunities to support and expand this service line appropriately. In addition to organic growth, we have benefited from our recently acquired operations. We remain focused on identifying acquisitions that will be accretive to our operations and support our ability to expand our market reach. Our primary objective is to find operations and markets where we can leverage our strong personal care presence and add clinical services so we can offer all three levels of home-based care. We also look for opportunities to add new personal care markets where we can enter at scale. The pending Gentiva acquisition fits squarely in this strategy and provides an opportunity to add personal care market coverage in seven states, with the majority in Texas. We currently expect the Gentiva acquisition to close in the fourth quarter and will add $280 million in annualized revenues in personal care services. As Dirk noted, total net service revenues for the third quarter were $289.8 million. The revenue breakdown is as follows. Personal care revenues were $215.4 million, or 74.3% of revenue. Hospice care revenues were $57.3 million, or 19.8% of revenue. Home health revenues were $17 million, or 5.9% of revenue. Other financial results for the third quarter of 2024 include the following. Our gross margin percentage was 31.8%, compared with 32% for the third quarter of 2023, and a decline sequentially from 32.5% in the second quarter, as expected. As previously indicated, we saw some moderation in the benefit from a lower implicit price concession that we experienced in the first and second quarters of 2024 as we returned closer to historical levels. Additionally, we experienced some margin compression sequentially from both an additional holiday in the third quarter and the impact of the PTO caregiver benefit in Illinois. However, in the fourth quarter, we anticipate our gross margin percentage to expand sequentially by approximately 40 basis points from the hospice reimbursement update and an additional approximately 150 basis points as a result of the New York divestiture. G&A expenses were 21.7% of revenue, compared with 22.3% of revenue for the third quarter a year ago. G&A expenses were also lower sequentially from 22.2% in the second quarter of 2024, primarily due to lower acquisition expenses. Adjusted G&A expenses for the third quarter of 2024 were 20%, a decrease from 20.6% in the comparable prior year quarter. With the divestiture of our New York operations, we anticipate our adjusted G&A expense percentage to increase by approximately 60 basis points going forward, as the New York revenues will no longer be included in our financial results. The company's adjusted EBITDA increased 11% to $34.3 million, compared with $30.9 million a year ago. Adjusted EBITDA margin was 11.8%, an increase from 11.4% for the third quarter of 2023, but lower sequentially from 12.3% in the second quarter of 2024, primarily as a result of ongoing leverage from our revenue growth and lower legal expenses. We expect the divestiture of our New York operations to have a positive impact of approximately 90 basis points on our adjusted EBITDA margin percentage beginning in the fourth quarter of 2024. Adjusted net income per diluted share was $1.30, compared with $1.15 for the third quarter of 2023, an increase of 13%. The adjusted per share results for the third quarter of 2024 exclude the following: acquisition expenses of $0.08 and non-cash stock-based compensation expense of $0.12. The adjusted per share results for the third quarter of 2023 exclude the following: acquisition expenses of $0.08 and non-cash stock-based compensation expense of $0.12. Our tax rate for the third quarter of 2024 was 26.1%, in the range of our expectations. For calendar 2024, we expect our tax rate to remain in the mid-20% range. With the divestiture of our New York operations and the related higher tax rate from the state, we anticipate a favorable impact to our effective tax rate of approximately 50 to 60 basis points beginning in the fourth quarter of 2024. DSOs were 31.7 days at the end of the third quarter of 2024, compared with 36 days at the end of the second quarter of 2024, as we have continued to experience consistent cash collections from the majority of our payers. Our DSOs for the Illinois Department of Aging for the third quarter were 32.5 days, compared with 37.3 days at the end of the second quarter. Our net cash flow from operations was $48.5 million for the third quarter and included a one-time working capital benefit of $9.7 million, which we expect to revert in the fourth quarter. Exclusive of this one-time benefit, our cash flow from operations would have been $38.8 million. During the third quarter, we received approximately $3.2 million in ARPA funding, partially offset by $2.6 million in ARPA funds utilized. As of the end of the third quarter, we still have approximately $13.1 million in ARPA funds outstanding to be utilized, primarily in New Mexico. As of September 30th, 2024, the company had cash of $222.9 million, with capacity and availability under our revolving credit facility of $511.5 million and $503.5 million, respectively. As previously disclosed, subsequent to the end of the quarter, we entered into an amended and restated credit agreement to increase our revolving credit facility from $600 million to $650 million, expand our incremental facility from $125 million to $150 million, and extend the maturity date through July 2028. We appreciate the leadership from Capital One in this transaction and the support from all our current banking partners. Following the expected closing of our Gentiva acquisition, we will continue to have the financial flexibility to invest in our business and pursue our strategic growth initiatives, including acquisitions. As mentioned, we will continue to selectively pursue acquisitions that align with our strategy. At the same time, we will continue to be disciplined with our capital spending and diligently manage our net leverage ratio. This concludes our prepared comments this morning, and thank you for being with us. I will now ask the operator to please open the line for your questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your Touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Brian Tanquilut with Jefferies. Please go ahead. Hey, good morning, guys, and congrats on the quarter. Maybe, Brian, just to clarify, you know, your comments on margin direction sequentially, am I right in thinking it should be up about 190 basis points on gross margin between hospice and the divestiture? And then maybe also going forward, how should we be thinking about, you know, G&A and just the margins overall? Yeah, that's correct, Brian. Combined between the two, it'll be 150 from the New York divestiture and another 40 on top of that from the hospice update on the gross margin line. That is accurate. I think moving ahead, you know, we're going to see some margin expansion bottom line, a net, you know, 90 basis points from just New York. You'll see some impact positively from hospice as well fall to the bottom line in Q4. We'll see our normal rate increases in hospice will offset some of that, you know, toward the end of Q1 when we give those merits. But I think with New York being out of our numbers going forward, you should see some expansion in our margin profile. Got it, and then maybe, Dirk, as I think about the Gentiva acquisition, it looks like you're expecting it to close here pretty soon. So number one, how are you thinking about your ability to, as you've looked at that asset further through this process, you know, just the ability to grow that business going forward and maybe drive some margin? And then at the same time, where do you stand in terms of your appetite or willingness or ability to do further acquisitions as you integrate Gentiva? Yeah, Brian, you know, one of the things we've learned by having these months to work together with the Gentiva personal care service team is really get to appreciate what they've done and how they've built their business over the last few years. We're excited about the fact that now them coming on with a company that is truly focused on personal care services and has the history that Addus does, that our operations team, along with their operations team, will be able to drive growth. And Texas is a great state. As you know, it's about 80% plus of the business we're acquiring. So we're very excited about our ability not only to bring it on appropriately, but also about the ability that we can continue to look at all the markets in which they operate and get them in a growth profile, which is very similar to ours, which remains our target of 3%-5% thanks to our growth over the next few years. As it relates to our appetite, you know, one of the things we did following the acquisition of the Gentiva personal care service was go out and raise some equity to clean up our balance sheet, make sure we were prepared going forward. And so today, as we said, Brian mentioned, over $200 million in cash. We've got, you know, the new $650 million line of credit with expansion capabilities there for a deal. And so 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. I think our key will be looking at deals that meet our strategic direction in which we're driving the company and also making sure that it can be accretive and positive to our shareholders. From that standpoint, we are still looking, we are still excited, but we do have that criteria as we look at deals. Awesome. Thank you, Dirk. The next question comes from Joanna Gajuk with Bank of America. Please go ahead. Joanna, your line is open. You may ask your question. Hello, can you hear me now? Hello? Hello, Joanna. You can ask your question. Hi, this is Joanna Gajuk here. Thank you so much for taking the question, so just follow up first on the organic census growth. You talk about 0.6% increase and you mentioned the determination process being a headwind there. But I guess, was there anything else, I guess, to call out? You know, what about the New York market being a headwind there? And you also said you expect this to, I guess, re-accelerate to 2% growth, I guess, heading into next year for organic census growth, so can you give us a sense, you know, what gives you the confidence you can grow 2%? Thank you. Hey, Joanna, this is Brad. When you look at the New York, it's actually carved out of our same store growth numbers. So we've already kind of cleaned that up. When you look at that number, you know, if you think through the redetermination process, there's certainly been a lot of noise about that this year. I think CMS came out with some guidance probably in the last 30-45 days to try to help states with, you know, how they're handling redeterminations. It probably would have been better if they would have given that out about six months ago. I think it might have helped the process a little bit. But what we're seeing is, I think the states that we operate in are largely done, and I think will be wrapped up by the end of Q4. And what we've seen there is, you know, one, we've lost a few clients, nothing material. It's really been more impactful, honestly, on getting new clients through the system. If you think about on the state side going through this process, that was a lot of added work. They didn't have additional staff. So the staff is doing new admissions into the program, same staff that was doing redeterminations. And so you can still see a little more bump, you know, a little bumpiness in the referrals week to week. I think that's going to steadily get better. So I think, you know, optimistic that we kind of get back to more regular cadence going into 2025, where I think that, as Dirk alluded to, you know, that kind of 2% target on same store hours is certainly achievable. Thank you. And I guess a similar question on hospice. So you mentioned that admissions were down, but I guess census still grew because the length of stay keeps improving. But I guess the admission number was disappointing in the quarter, and it sounds like you're making some changes in that segment. So can you talk about how we should think about the progression into next year when it comes to hospice census growth? Thank you. Yeah, we did. We've made some leadership changes on the hospice side, primarily in, you know, a little bit in some of the ops positions, but also in the sales leadership positions. We've made some pretty significant changes there. I'm really optimistic about the team that we have on board. You know, really the sales leader changed out middle of September, so he's just now kind of getting his feet wet. He's been out and met with all the teams, realized that there's a lot of potential out there for us. We're going through sales training over the next couple of months to just kind of re-educate and work with our on-the-ground sales team. So optimistic that we'll be back into, you know, I think that, you know, kind of mid- to high-single digits on a growth rate with admission volume increasing. Great. Thank you so much. The next question comes from Tao Qiu with Macquarie. Please go ahead. Thank you. Good morning. Appreciate the comment, Gentiva. Any comment you can provide regarding the reimbursement environment in Missouri and North Carolina, the two new states you're getting into? Are these managed Medicaid states as well? Any initial thought on the potential EPS accretion from the transaction for 2025? Thank you. Yeah, so if you look at the new states that we're entering into North Carolina and Missouri, reimbursement environment in Missouri, I think, is solid, kind of consistent with what we see in other markets. Now, the North Carolina book of business is actually a little different. It's actually case management, very small, good margin business, but it actually gives us an entree into North Carolina and a little bit of different kind of business other than traditional kind of personal care. But again, very small piece of the total pie, but certainly interesting and has good margin business with it. Yeah. Any comment on the EPS accretion? I know you're not providing guidance for 2025, just any high-level insight you can provide there would be appreciated. Yeah, this is Brian. I think we definitely expect it to be accretive to our numbers. I think we've talked about, you know, opportunities, you know, probably 12 to 18 months out for some additional synergies as well that I think is going to be helpful, primarily most of those coming from the system conversion. Currently, the system they're on today will convert to Homecare Homebase once we get that set up, but that's probably going to be, you know, sometime a little bit down the road. So probably not as high level out of the gate, but definitely will be accretive on EPS initially. Gotcha. My follow-up is about some of the policy proposals in the spirit of the election day here. Could you talk about the potential impact of the proposed federal minimum wage increase, particularly as it pertains to the Texas market, which follows the federal rate? And also, there's been a lot of discussion about the Medicare, potential Medicare expansion to cover personal care services. If that were to become the reality, what changes you will make to your long-term strategy? I think I heard you mention the interesting additional investment in home health. Does Harris' proposal make you more likely to accelerate investment in clinical businesses? Yeah, I think when you look at kind of the election, minimum wage is certainly something that we're always monitoring. Texas does follow the federal rate, but keep in mind, I mean, we're paying way above the federal rate in Texas, or we'll be paying way above the federal rate in Texas as well as in the other states that we operate. So I don't see that as being material at this time, but, you know, there's a lot to flesh out in what those proposals might be. And certainly, the election, you know, it seems to be trending towards more of a split government. So I'm not sure how much of some of the proposals for either candidate will get through. With respect to VP Harris's comments about expanding the benefit to Medicare, very positive. I mean, it's great that there's not a lot of detail around it, but certainly great to see discussions along those lines. I think we think that there's, you know, real opportunity and benefit to expanding their services to the Medicare population. I think we've shown that it's certainly where people want to be taken care of. It's also the lower-cost setting. So certainly an interesting proposal. Yeah, I think also, let me add to Brad's comments. You know, one of the great things about where we sit with our company is that regardless of which party wins the presidential election, I think we have benefits on both sides. You know, the Republican Democrats have come out and Harris has said that she supports expanding elderly care, which is very exciting, although not a lot of specifics at this point. At the same time, then, you know, President Trump came out and also mentioned supporting elderly care through tax means, and so for us, we're just excited that both sides have looked at what we do, we being Addus and the industry in which we operate, taking care of the elderly and disabled population in their home, and both feel supportive of that, so we believe we're in good shape regardless of how the election ends up tonight. Great. Thank you, guys. The next question comes from Scott Fidel with Stephens. Please go ahead. Hi. Thanks, Todd. Good morning. First question, just wanted to make sure we've got all the moving pieces for modeling operating cash flow sequentially in the fourth quarter. Brian, maybe if you could just sort of walk us through those. So we've got, I know, the $9.7 million, you know, sort of benefit to get in the 3Q that reverses, but maybe if you could walk us through as well any other, you know, moving pieces to operating cash flow in the fourth quarter. Yeah, Scott, outside of that, that's going to be the big piece sequentially Q3 into Q4. I think even without that benefit in Q3, it was still a very strong cash flow quarter for us, which we expected, I think, largely kind of just benefiting from working cap changes. So we were down a little bit in Q2. I think if you look at our DSOs for IDOA specifically, just their payment cycle, you know, they were a very strong payer for us in Q3. And there's always a little bit of timing difference between, you know, when we get their payments kind of quarter to quarter. So nothing I would kind of call out or say, hey, should be definite material, you know, impacts into Q4 outside of the 9.7 reversing. So you are going to see a little bit lower as a result of that in Q4, but nothing else that I would flag out that would be unusual. Okay. Got it. And then just my follow-up question, just curious on looking out to 2025, any additional, you know, contracts that you're implementing in terms of your, you know, preferred payer strategy on home health and, you know, sort of maximizing the margin opportunity on the MA business? Then also curious, there's, you know, been quite a bit of discussion that I would say has probably increased over the last several quarters just around, you know, payer sort of friction with providers and sort of gumming up the works, I guess, a little bit around approvals and prior authorizations. And, you know, clearly that's been a lot, I would say, sort of heavily focused on the acute care hospitals. But I'm just curious, you know, as you look at your three lines of business in terms of the posture of payers, managed care payers, whether you've seen any changes from them around, you know, approvals and sort of denials and just sort of level of friction? Thanks. Yeah. I think if you look at it on the payer side, I mean, let's start with PCS, our largest business. We really haven't seen any noticeable changes in our relationships with payers other than, frankly, with the Gentiva acquisition, certainly a lot more interest in talking to us about looking at some creative, you know, value-based type of arrangements. So I think there's certainly opportunities to work with those payers, but good relationships on the personal care side. They've also offered to kind of help us on the skilled side to make contacts. So when you switch over to the hospice, there's not a lot of payer activity there. It's pretty minimal. Home health, we have had and are continuing to have ongoing discussions. You know, we've had some wins on the payer front. Typically, it's just really increasing the per-visit rates. Haven't had as much success moving to full episodic payments with some of the larger kind of payers or on a national basis. But certainly, we'll continue to pursue that in 2025. And certainly, if we can get some quick wins, just a base increase in rates, per-visit rates, we'll start there, but we'll certainly be continuing to push for episodic or some sort of case rates with those payers. Really haven't seen a lot on the prior authorizations with the MA players as far as any changes in the posturing there. So I think it really has not been that big of a factor for us. Okay. Great. Thanks. The next question comes from Jared Haase with William Blair. Please go ahead. Yeah. Good morning. And thanks for taking the questions. Appreciate the commentary and the prepared remarks on the overall state budgets. Maybe I'll just follow up to that. And, you know, there's been a lot of noise recently from the larger, I guess, managed Medicaid payers on the unfavorable rates that they're currently getting from states relative to sort of risk pools after redeterminations. I'm curious, as kind of states update the rates that they're paying for managed Medicaid, does that factor in at all to your outlook for state budgets? And I'm wondering if that has any impact on, I guess, the availability for funding for clinical services like personal care. You know, I think most of the states in which we operate in the personal care environment understand the value of personal care. It's something that is very important to them. We've seen great support through that. And so as far as their status today, their budgets, we think most of them are in pretty good shape. The ones, you know, the biggest state we had concern about was New York, which we're no longer in. As far as some of the pressures that the Medicare Advantage or managed Medicaid providers are seeing from the states, we have not seen that affect us. From the standpoint of the state, you know, almost all of our states, but one, dictate the price that we get. So it's a stated price. And the managed Medicaid providers, when they sign on, they are subject to paying us that rate. So at this point in time, it's really business as usual. And we're really kind of excited about where we see our states today as far as financial stability. Okay. I appreciate that. And then maybe as a follow-up, just one on the labor environment. It seems like things have been fairly stable across the board for several quarters now. Do you feel like that's sustainable going into 2025? I guess, is there anything you're monitoring in terms of either the broader economic environment or the industry that could impact hiring trends in your view? No. I mean, I think, you know, when you look at our hiring, we've been very solid, particularly on the personal care side for, you know, probably a year, year and a half now with some good solid hiring numbers. So I think we're in a good place there. Clinical services, we've certainly seen that improve over the last six to nine months. So I think that trend continues to be favorable. You know, there will always be some challenges on the clinical side depending on markets, but that's nothing that I think is unusual. I don't see anything kind of in the future that would materially impact that kind of continued improvement, just, you know, the solid hiring numbers on the personal care side and continued improvement on the skilled side. Okay. Great. Appreciate it. I'll call it. The next question comes from Matthew Gillmor with KeyBanc. Please go ahead. Hey, thanks for the question. I wanted to follow up on the personal care growth metrics. I think Dirk had referenced the improvement in the fill rate, which we see in the hours percentage metric. I was curious what was driving that. Is that more favorability in terms of just the labor dynamic and caregivers filling hours, or is there an operational thing going on behind the scenes that is also helping that? And just overall, what's sort of the sustainability around that favorable fill rate? Yeah. I think it's two things. One, certainly the hiring environment has helped on the fill rate, but also from an operational standpoint, we've provided additional tools to our schedulers that I think has enhanced that. And I, you know, will continue to look at opportunities to make the scheduling process better. So I think there's opportunities for incremental improvement in that number, but certainly very pleased how that number has rebounded. And again, I think it's kind of twofold. One, strong hiring, but then also some of the things that we're doing on the operational front to identify where we have availability with caregivers who want to work more hours, what their hour, what their availability is during the week. And getting that more in real time has certainly helped us increase that fill rate. And then I wanted to ask on the value-based care topic. I was curious with the close of Gentiva that was, you know, serving as a catalyst to move things forward, particularly, you know, given their exposure to Texas, which is a stronger value-based care market. I mean, anything new to report in terms of how you're thinking about value-based care with the Gentiva close? No, we're excited about the additional size and moving into the Texas market. We'll be able to work with some of the payers in those type contracts. Just realize that from a value-based standpoint, you know, it's really about relationships if you think about it. The value-based itself, the revenue, as we said before, is somewhat immaterial to a company our size. But what it allows us to do is to prove our ability to help our payers reduce their overall cost of some of the high-cost clients or patients that we take care of. So we will continue along those lines. It's exciting, but it really, to us, really helps us solidify our relationships with these payers. Got it. Thank you. The next question comes from Andrew Mok with Barclays. Please go ahead. Hi. Good morning. I wanted to follow up on the labor comments. I understand there's been some nice hiring trends in the broader home care sector and in your personal care segment, but wage inflation and unit cost inflation still looks like it's running a bit elevated in the 5%-6% range or so. So we'd love to hear your outlook on wage inflation over the next 15 months or so and what it's going to take to drive unit cost inflation down to more historical levels. Thanks. When you look at it on the personal care side, we really haven't seen that type of wage inflation. We've been fortunate in the markets, our larger markets that we've gotten rate increases that have offset that and been able to kind of maintain our gross margin profile on the personal care side. That's, you know, three-fourths of our business there. When you look at the skilled side, you know, again, I think it's gotten better. I think we're actually kind of running more in that, you know, 3%, depending on, you know, maybe 3%-4% wage inflation in markets. There might be a market or two that's an outlier there, but I think overall that has improved on the clinical side. But again, on the personal care side, you know, we've been fortunate to get the rate increases that have been able to offset those pressures. Right. Understood. But the underlying cost inflation is still running in that mid-single digits. You're just getting the higher reimbursement to offset that. Correct? It really depends on the personal care side, you know, where we have markets where we either have a union contract, so those wage raises are largely set in those markets, and those that have minimum wage pressures, which we've seen over the last few years, you know, that could be, you know, anywhere, you know, from 2%, 3%, 4%, depending on kind of what the raises are there for minimum wage, but we've seen corresponding reimbursement offsets for those. Okay. Great. And then on the hospice side, length of stay seems to be bouncing around quite a bit in recent years. I know M&A skews some of those metrics, but hoping you could provide a bit more color on underlying trends in length of stay. What's driving some of the variability in that line, and where would you expect that to stabilize on a normalized basis? Thanks. I think on the hospice, you're actually starting to see those numbers stabilize. I mean, certainly if you're comparing it to the COVID years, we certainly saw a much shorter length of stay. There were things that were in place during the public health emergency that influenced that, that really drove down length of stay, particularly in skilled facilities. Once those left kind of ended, you've actually started seeing length of stay numbers which are back to a kind of more normalized basis. I think where we currently sit is about right, both from an average length of stay and honestly even from a median length of stay. Great. Thank you. As a reminder, if you would like to ask a question, please press star, then one to be joined into the queue. The next question comes from Ryan Langston with TD Cowen. Please go ahead. Hi. Maybe back to the PCS rate environment. I mean, you keep getting pretty good rates, I think 5.5% and 25% in Illinois. I guess at some point, should we maybe beyond 2025 sort of think about reverting back to more lower single-digit rates? Or maybe now are we structurally thinking slightly higher than historical rates, and might those assumptions kind of change depending on the outcome of today's election? Yeah, Ryan, I think, you know, with Illinois, 5.5%, I think is a good example of some of the markets that we've seen recently that have decided to start giving rate increases for our services, not in, you know, necessarily relation to rising minimum wages that we've seen the last several years, but actually in an effort to expand and increase access to the service. So, you know, we've already nicely ahead of even where Chicago minimum wage, for instance, was in Illinois. The rate increase we're getting in January of 2025 actually continues to put us even further ahead of the minimum wage scale there in order to try to get, you know, more access, and we are starting to see that in a few of our markets that have given us rate increases, which is a little bit of a new dynamic. I think the last, you know, two, three, four years with minimum wage coming up, that's really been the impetus for a lot of the reimbursement increases. So, you know, I think our comments, you know, at a high level have been, yes, over the next couple of years, we expect probably the frequency of rate increases to probably go back to more of a historical norm, keeping us kind of in that 3%-5% overall kind of growth rate. So we kind of talked earlier on our call about, you know, targeting a 2-ish%, you know, increase in hours growth. So the rest of that would be from rate. But we expect to see that moderate, but again, still promising to see certain markets that are doing, you know, things in order to increase access and actually giving us, you know, good support in that effort. Okay. And then just last one for me on the Gentiva acquisition. Can you remind us if there's any unusual seasonality, the cadence of revenues or EBITDA maybe different from your current PCS book? And I know you're not planning to bring them onto your EMR for a little bit, but are you able to overlay any sort of internal technology or planned initiatives in the next maybe year or 18 months until you get them onto a Homecare Homebase? Thanks. Yeah. Nothing else from a seasonality standpoint that would be any different than our kind of normal business. I think the big drivers there, obviously, in PCS particularly, you know, we see Q1 usually being the lowest margin quarter for us just from the reset of payroll taxes, things like that. We usually see some step up into Q2 and Q3, and Q4 is usually our best quarter in PCS, but more along those economic lines and payroll taxes. Nothing else to note really that's any different in the Gentiva business. I think from a perspective of technology, you know, they're going to come onto our payroll system very quickly. So anything that we have and we've implemented in our businesses to kind of support, you know, the hiring efforts, onboarding efforts, the caregiver app, things like that, those are all things I think we'll be able to deploy into, you know, that population even before going into an EMR or a patient billing system down the road. The next question comes from Ben Hendrix with RBC Capital Markets. Please go ahead. Hi. This is Mike Murray for Ben. Hospice same-store ADC growth is pretty good, but admissions were a little bit softer. Could you touch on the competitive dynamics in this segment, and do you expect same-store ADC growth to continue to improve moving forward? Yeah. I think when you look at the same-store numbers, I am optimistic that those numbers will continue to improve on a sequential basis. I also think that there's opportunity to move more into that kind of the mid to upper single digits on the same-store growth there. So I think we're in a good place. I think with the new sales leadership, it's going to certainly be helpful there. It kind of brings some new energy, some new thoughts, new ideas around it. But certainly, I think there's continued improvement. All right. Thank you. And then just anoroother question. So same-store home health stats, you know, seem to be trending in the right direction the last few quarters. Obviously, they took a meaningful step back during the quarter. I appreciate the commentary on the operational investment in certain markets. Excluding these markets, could you give us a sense of what same-store growth would have been? Thanks. Yeah. I think we would continue to see, actually, if you look at one of our larger markets that has went through the process, the operational changes earlier, we actually saw a nice growth there, not quite to the mid to upper digits that we'd like to see it, but certainly more in the 2% to 3% range there. So there are certainly opportunities to improve on home health. And certainly optimistic that once we get through these operational changes there, as far as it's kind of around centralization of admissions and intake and scheduling, I think there's going to be some real opportunities to improve the numbers on the home health side. All right. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Dirk Allison for any closing remarks. Thank you very much, operator. I want to thank everyone for their interest in Addus today and for being part of our call. We hope everyone has a good day and a good week. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.