Thank you for being with us today. My name is Ben Hendrix, healthcare services managed care analyst here at RBC. I'm very pleased to be joined here on stage with Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare Corporation, as well as Brian Poff, EVP and Chief Financial Officer. Thanks, guys, for being with us. Thank you. Maybe we can start off with a pretty significant development that, you know, we heard since the earnings, the moratorium on new Home Health licensure, for, you know, for new agencies. We get a lot of questions on the impact that it has on development activity, on your ability to acquire, and kind of how you're thinking that is forming your development plans going forward. Maybe you can kinda touch on your thoughts there. Yeah, you know, if you look at the moratorium that came out, first off, understand it has no effect on PCS. Mm-hmm. Right. PCS is not included in that moratorium. From our standpoint, if you look over our last probably 15 months, everything we've acquired has been PCS. There's a lot of activity out there. The valuations are pretty reasonable for us. From that aspect, it has no impact on our ability to grow revenue. Now, if you go over to the clinical side and you're thinking, well, could it affect it there? If we do go out and look at a clinical operation, really the thing that's still in effect is the 36-month rule. That was in those that you were looking to acquire qualified under the 36-month rule. For us, even as we think about our clinical side, which today is probably running 20%- As we want to maybe grow that some, right now it should not have any issue as far as us being able to acquire. As long as that person on the other side or that company on the other side has met the 36-month rule, the moratorium shouldn't be affected. We are not. One of the things the moratorium really went after on the clinical side is the de novo growth. We are not a de novo company. It's been easier on the PCS side to buy the small operations out there. On the clinical side, we've not really participated in the de novo growth. It's always been M&A and pure organic growth. I think from that standpoint, the moratorium has no effect on us. Sounds like a consistent message we've heard from other providers. Any thoughts on the potential for an impact on valuation in the Home Health space in your mind? I think there's two arguments that people are making about that. One is, well, now there's a scarcity of clinical services that might qualify, so maybe they want a little more valuation. I think there's also a scarcity of buyers, so that might not be quite something that will work. The other side is, if I'm a small provider, and you look back at the last two or three years, I think the question becomes: What else is the federal government gonna do to try to stop some of the growth in our industry? Not really the growth, but more the fraudulent growth in the industry. It may also have the counter effect that said, Okay, I've been through a lot, probably can get through this one now because I qualified to sell, and maybe decide to get out of the business at this point. Remember, the larger providers, whether it's clinical services or non-clinical services, we have the ability to work through these changes. We have the compliance department that is already deeply involved with fraud and other aspects of the business that we're trying to make sure we're taking care of. Realistically, I don't know that it's gonna have a whole lot of effect on valuations, plus or minus. You know, obviously, the Home Care space has been storied with regulation, Home Health in particular. You know, you, you all have managed the 20%, you know, or the 80% pass-through issue, which seems to kind of be a little bit in the rearview mirror now. Just given the regulatory environment, what we've seen with this moratorium and the administration's crackdown on waste, fraud, and abuse, any thoughts on the horizon on what could be coming down the pike? Anything you're kind of bracing for? You know, realistically, what it seems that CMS is trying to do, and we think appropriately and with the support of the large providers, is to go after the bad actors. Those are the ones that give the industry a bad name and affects rate increases and other things as you look at the overall data in the industry. We have been, through the Alliance, we have been working with the administration to look at fraud and abuse and do something about it. From that standpoint, what came out and their drive towards fraud and abuse, we think is very beneficial to ourselves as well as other large providers, because we spend millions of dollars a year on a compliance program. I think it's very important for Addus, if you look at the last 10 years, we've been growing our compliance department every year as we have grown. We already are doing a lot of the things that I think the government wants to be done. As people come in and do our audits, we come out in good shape because, you know, let's be honest, in some cases, we do our own claim review, depending on where we are in the industry and what we may be looking at long-stay patients. Making sure that those long-stay patients in hospice are appropriate. If we find that we don't have some of the paperwork that we believe meets the criteria, we will, if it's not something you can remedy, we will pay that money back. We've been doing that for years. I don't think for ourselves and a lot of the large providers, the current crackdown on fraud should change your way you do business at all. You know, you guys have talked a lot about that, your compliance, mechanisms and the infrastructure you've set up. Can you maybe kinda talk about how that's resonating? Should we see, expect that to be more important to, for contracting, I guess, advantage when you're negotiating with the payers? I think it is an advantage because we spend so much money on compliance because one of the things the big payers want, they don't wanna get involved in something that is, you know, has issues around fraud and abuse. They wanna make sure that it's clean. They want their partners to do what they wanna do, which is to be above board, make sure we're doing everything possible we can do from a fraud and abuse standpoint. Again, if you think of our business, we've been over the last seven or eight years as we've gotten bigger, we've been partnering with these large payers. We've already had some of those discussions before the government started coming out with it, talking about how do you make sure that the billing you're gonna give to us as a payer is appropriate, that people are showing up and doing the plan of care appropriately. That's been something we've been doing for, you know, I would say 10 years, but we built it up over time. Probably the last five, six years has been a very strong component of what we do. I think the payers are very appropriate, and it helps us because, you know, a lot of the payers need providers that can help them meet some of the criteria of the state's requirements going in. If it's a value-based care, if the state's demanding a value-based care approach, they need a company they can depend on that has the ability to provide value-based care, and we certainly do. We have good relationships with the payers, and we think it should continue with no real compliance issues. Great. Moving on to some of the PCS trends that we saw, you guys talked a lot about starts of care exceeding discharges the entire first quarter in Illinois, and that was a good, strong inflection for you. That the positive trajectory has continued into the second quarter. I think you had mentioned last time we heard from you that it was a little bit early to talk about May yet, but another weekend. Just wanted to see if you could give us an update on what you're seeing in Illinois specifically and then broadly there. Yeah. You know, one of the things we've been working on for a while, as you know, and we've been talking about, is to get our census growing, lower our discharges, increase our starts of care. Prior to this quarter, we had that occur in Texas and New Mexico. It was really good to see Illinois in the first quarter do that. Illinois has continued, as have all of them. Texas, which had a little bit of a downturn at the end of the first quarter, has picked back up. If you look at just focusing on census number, because it seems to be one people wanna talk about a lot, we were better in census in February than January. We continued that trend of growth in March and in April. We've come in at April higher than we did in March. While it is still early in May, because you have to understand, while we do about 80%- 85% of our business electronically, where you get that data very quickly, there's still about 15% runs through paper. It takes a bit of time to know, but it appears based on what we're seeing in May that that trend is continuing. Great. You indicated that same-store billable hours for business day growth, the target remains in the low to mid single digit range, and you came in at the lower end of that target, in the first quarter. With Illinois inflecting and Texas normalizing by quarter end, do you see a path to that higher end of that range through the balance of the year? Yep. Yeah, Ben, I think if you look back, we've been saying in PCS specifically, kind of our target range for kinda hours per business day on a same-store basis is, you know, in that 2%-2.5% kinda band. We feel pretty comfortable as long as we're in that range. You know, you add some rate to that kinda gives us the ability to be in that 3%-5% overall same-store number. If we get good rate support, you know, we should be at the higher end, maybe even above that, where we've seen the last few years with some of our large markets. If you look back, you know, Q3, Q4, we were at 2.4%, so high end of that. I think with some of the weather impact we saw, particularly early in Q1, it was a little bit softer, but we still came in at 2.2%. Still, you know, right there in that 2%- 2.5% range. I think your point is exactly right on, and we continue to see kinda census build. The weather's behind us. You know, our expectation is we'll stay in that range and hopefully kinda float back up to the higher end where we kinda saw ourselves in Q3 and Q4. You guys have talked a lot about your caregiver app and this being a nice boost for you, and it's now deployed across all three of your largest states. You've noted early adoption and momentum in Texas in the first week of its launch. As Texas ramps through the remainder of the year, can you help us think about the magnitude of the service improvement you'd expect in that state specifically? I think just using kind of Illinois as a proxy, that was the first market that we rolled out the app and kind of the impact we saw there. I think, you know, before the app, we were running probably, you know, our fill rate, which is kind of what we talk about as far as our number of hours served to the authorized hours. We were running Illinois kind of low 80% before the app. After we got kind of high rate of adoption, which we consider, I think we got over 90% of our caregivers had downloaded and were using the app. Takes a few months to get there. Over a period of time after, you know, that floated up to about, you know, 88%, kinda high 80% range. It's kinda been pretty stable in that range since. I think what we're hoping to see is a similar impact in Texas. Texas historically has been probably upper 70%s or around 80%, so we can see a similar impact. You know, does that mean that we can get Texas up into at least the mid-80%s? I think that's, you know, would be a nice positive for us, just using, you know, more of our existing staff to fill more of our, you know, authorized hours. We think it'll take, you know, a period of time. As Dirk kinda mentioned on the call, we got about 10% of our caregivers downloaded the app fairly quickly, which we were very happy with. Probably will take a few months to get up to that 90% kinda range where most of our caregivers are using it. As they get used to using the app, all the features that we have in there, but particularly You know, the flex hours, which is where we kind of see them pick up extra shifts. You know, we would hope by the time we get to, I mean, let's just say kind of end of Q3 or later this year, maybe we could really start to see some real movement in that fill rate in Texas. Moving to the rate side, you noted the New Mexico legislature has included some incremental funding for home and community-based services in its budget, and you're still awaiting some communication from the Medicaid department. Any update there that you can provide? There's none yet. We have our team continuing to talk through our lobbyists there to see how they're gonna apply it. It's already been approved by the governor. It's already been signed. It's in the budget. It's just understanding exactly how it's gonna be fed through, whether it's, you know, how are they gonna work with the payers out in that market to make sure it gets passed through to the provider. I think the important thing is we'll know that probably in the next few weeks. It indicates still a strong support system from the states, for our type services, which I think is one of the things we can take from that $10 million rate increase that's out there. I believe the, Illinois is still in its legislative session. kind of any thoughts or updates on how you're thinking about, where that goes, and any, conversations you're having there would be helpful. Nothing yet. We checked last night with our team. Interesting, you know, when the governor's budget came out, it didn't have any rate increase, so we took the approach as we're taking now not to expect a rate increase this year. They've been very consistent with supporting this business. However, you know, the union has asked for a rate increase, and they're in there talking to the leaders of the state right now, kinda like they did last year, where we ended up getting a rate increase that we weren't expecting. We'll wait and see. We should know by June 1st, because I believe they have to have their budgets completed by that time or around that time. Generally, even if we did get a rate increase, I think it will be consistent with what we've seen the last two rate increases, which is their fiscal year starts, you know, July 1st or so, and they don't really increase our rates till January 1 like they did this year. We're hopeful, but I would say right now I would lean toward not expecting anything this year from Illinois. Moving on to the new state, to Indiana, would like to get, like, some color on the acquisitions you have there and also just your thoughts on the managed care contracting environment and kinda how you see the rate backdrop developing in that state. I think the last going in, I think one of the reasons why we saw Indiana kind of as attractive market outside of just obviously being kinda right in the middle contiguously for where we already have kinda large operations in Illinois and Michigan, Ohio. I think the state over the last few years has been very supportive on giving rate increases. I think it's made it a little more attractive for us. I think, as soon as we made the announcement about the two deals that we're doing in Indiana, we got calls fairly quickly from some of the large Managed Medicaid plans in the state wanting to sit down and start having some conversations about ways that we can work together, which was all part of our thesis as well, having those relationships. I think we feel pretty good about our ability to go in there with two acquisitions that are gonna be complementary. It's gonna give us probably just under $20 million in revenue in the state, which is a nice foothold. I think we see, you know, maybe potential further opportunity to expand in PCS in the state. We still have, I think, some room to grow, maybe some more acquisition opportunities. It provides another place on the map, where there's clinical opportunities that could be helpful as well. We'll continue to look for those if those come up. Maybe you can give us a little bit of a color on the M&A backdrop. It seems like there might be some larger deals, maybe are they Gentiva size or getting close to that coming down the pike? What your thoughts are on how you may approach the M&A market going forward. Yeah, there's a couple out right now and maybe one or two others that have said they're coming out later in the year that are mainly PCS-driven businesses. They would be very comparable to the size of Gentiva. I think the important thing for us as a company, you know, people have questioned, I won't say negatively because it's not a negative not to have debt all the time if you're planning on using that debt appropriately. What we've been doing is really keeping our balance sheet clean. If another type of Gentiva acquisition came up, we can do it very quickly and easily on an all-cash basis through our line of credit. We think there are opportunities. We think we will be discussing with people the potential of Addus being an acquirer. If you think about it, there's other acquirers, there's PE firms and such, but there's just not a lot of large PCS companies out there that have the capacity with their debt coverage today or their debt load today. Not a lot of them can go out and do these bigger deals at this point in time. For us, we think we're in a pretty good position to talk to people and potentially maybe get one or two of these deals done. What's the valuation backdrop look for these types of deals? You know, when we did Gentiva, it was probably 11- 11.5 before some of the benefits. Today it's probably going to be sub double digits. You know, one of the things you have to see is because our stock has come down and we're probably the, from a PCS standpoint, we're the largest public company probably out there that does the type of business we do, which is agency business. People kinda have to look at our multiple and, you know, we're trading at under the double digits today. I think that kinda leads to the valuation coming down a bit, and we're seeing that as we're thinking about maybe doing something. Gotcha. I wanna step outside of PCS just a little bit and just talk about volumes broadly. You know that new admissions, total volumes, and business all improved sequentially through the first quarter versus fourth quarter last year, and now that you have these Bridge Programs generating meaningful share about hospice admissions from Home Health in New Mexico and Tennessee, and you've recently launched it in Illinois. Maybe you can kinda talk a little bit about those Bridge Programs and how you're seeing it feed your other segments. You know, one of the aspects of our strategy to have all three levels of care in the home is the ability to move patients through that dynamic in each of those segments as they need that different kind of care. What we've found to date, because we're on an EMR, we're on Homecare Homebase for the clinical services versus someone else for non-clinical, it's been easier to work the Bridge Program right now between Home Health and hospice. It's worked very well. The New Mexico and Tennessee are two largest markets with the Bridge Program. We're getting anywhere from 20%- 30% of our admissions into hospice from our own Home Health. That Bridge Program's working very well. You know, now we're trying to move it up stronger in Illinois. That's our whole key around that. Now, the next aspect of the Bridge Program we'd like to see, we're in the process right now of converting our non-clinical services, our PCS services, to Homecare Homebase. Okay. It's a program we've helped Homecare Homebase write for the last four years. It's now the point, I think about eight states rolled out. We'll probably be through with that rollout mid-next year or so. As we get them, everybody on one EMR, then it'll be easier to use technology to say, are there patients on the PCS side that have now come to a point in their lifespan that they could use? Probably gonna be most hospice. Going directly from PCS to hospice will be the biggest part of that Bridge Program. That's one we're excited about getting kind of spun up as we get these sites, all of our sites moved over to the new system. Do you generally not see opportunities to go from PCS into Medicare reimbursed Home Health as much, or is it just what would kind of bridge those two settings of care? I think there's some opportunity. Remember, when you do Home Health, that usually something precipitates that. You gotta come out with Home Health. Tracking that will be very important for us to make sure that if we can bring that patient out into our Home Health will be a big benefit. Hospice is more of a time spanned aspect. A patient gets to a certain age, they're in no longer where curative care works for them. That's why that Bridge Program has been so effective. We will look for opportunities for that bridge also into Home Health. Maybe if we can, we can stay actually on hospice a little bit. You noted that the average daily census was a little softer coming out of the holidays before recovering, and you expressed confidence in the trajectory exiting the quarter. Can you just give us a little bit of thoughts on kind of where ADC trends are heading, you know, where the same-store growth is running? Yeah, I think, you know, Ben, I think last year, you know, we had a lot of improvement through our sales teams into our ADC, and we were seeing, combined with the rate support, you know, 10%+ kinda same-store numbers all of last year. I think at that time, we had told people at some point that's probably gonna moderate back to our kinda longer term expectation, which is kinda upper single digits. Combined, again, that's a little bit of rate and then also volume. Just under 8%, I think in Q1 is where we came in. I think we were a little bit soft, to your point, kinda coming out of the holiday and early in the quarter with some of the weather. Otherwise, I think we probably would've been a little bit higher and probably closer to kind of that 10% mark. I think we've seen really good trend in ADC growth coming out of kinda similar to PCS coming out of February into March and April has been pretty strong. I think that sets us up pretty well to be kinda squarely at least in kinda that upper single-digit range, if not maybe a tick above that, for the next few quarters. I know you guys have managed a hospice cap very well, and we've talked a lot about it, but I know it's on a lot of investors' minds. Maybe you can kind of talk about how you have been able to navigate the cap environment. I know one of your peers saw some pretty significant headwinds in Florida last year. Just if you can kinda give us your thoughts on how you're thinking about cap and what you're doing to kind of mitigate any kind of mixed pressure. Yeah, I mean, I think the key always in cap is just the right mix of patients. Making sure your sales teams are focused on making sure they're getting your patients from a variety of referral sources, making sure they're not focusing on, you know, one over the other, not getting yourself in a position of having kind of just a bolus of those long length of stay patients that's gonna drive that cap issue. I think our teams are very well educated on that. I think we monitor that very closely program to program. I think, as you know, a lot of us here have a pretty deep experience in hospice going back 20+ years. Cap's something we're very familiar with. Not to say we don't have programs. I mean, over the last couple of years, we have had programs that have slipped, you know, slightly into Cap, but I think it's been pretty minimal for us. I think that's something that our teams are focused on day-to-day. We have a lot of tools in place to make sure we see where our clients are coming from and what our mix is and kinda how we estimate, you know, that to be impacting Cap and make sure we're in the appropriate zone. Just one, just to end on a, on a cost note here with G&A. It seems like it's improved year-over-year, but you do have some M&A coming in. Just wanted to get your thoughts on kind of how we can expect G&A modeling through the balance of the year. Yeah, I think, you know, on M&A, I think really it doesn't really impact us a lot. A lot of our guys, you know, that's part of their day-to-day jobs. It's not like we have extra cost when we have M&A for integration work. I think as we continue to grow top line, you know, we would expect to kind of continue to see some leverage as a percentage on G&A. Nothing big, material plan for, like, influx of G&A cost this year. It should be, you know, pretty status quo. With that, we should see a little bit of leverage as we move forward and grow that top line. Great. Thanks, guys. That brings us right to time. I really appreciate you being here with us today. Thanks, Ben. Appreciate it.