Home Health Index | 2017 SEPTEMBER UPDATE

Home Health Care Stocks Regain Footing in August

The share prices of two of the three biggest public home health care companies are on the rebound after a turbulent July, according to the latest data in the Home Health Index tracked by Stoneridge Partners.

The index, which follows the market values of three of the largest publicly traded home health care companies—Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—gained 7.42% in August compared to the previous month.

The Index beat the S&P 500, which rose a steady 0.05% during the month of August. The 7.42% increase marks a dramatic rebound from July, when the Home Health Index tumbled 19.57% on fears that the Centers for Medicare & Medicaid Services’ (CMS) proposed home health groupings model (HHGM) could shake up the market.

“Home health companies rebounded in August after regulatory concerns marked the previous month,” said Stoneridge President Rich Tinsley. “The sector continues to have an ‘up’ year relative to the stock market.”

Though LHC Group saw a significant drop in its share value in July, the Lafayette, Louisiana-based company’s stock climbed 12.69% in August. Year to date, LHC Group’s stock has jumped 42.78%.

Baton Rouge, Louisiana-based Amedisys also had a good month. The company’s stock prices rose 10.30% in August. Year to date, its shares are up 22.54%, according to the Index. Amedisys CEO Paul Kusserow recently said the home health industry represented “a united front” in opposition to the proposed payment model.

Only one company in the index didn’t share the growth in August. Louisville, Kentucky-based Almost Family’s stock shed 1.52% in August. Despite the drop, the company’s share values are up 10.43%, year-to-date.

Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, edged up 0.29% in August. Year to date, Addus’s share price has fallen 2.85%.

Quote Of The Month 

“This is the first time that any administration has seemed to be so focused on regulatory relief,” said Vinita Ollapally, manager of regulatory affairs for the American College of Surgeons.

Read the Full Article Here: How the Trump administration is reshaping health care — without Congress

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these three publicly traded home health companies, all listed on the NASDAQ:

  • Almost Family (AFAM)
  • LHC Group (LHCG)
  • Amedisys (AMED)

This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index for over 14 years, going back to 2002.


This is a 12 month trailing chart of the HH Index compared to the actual prices of the individual companies that make up the chart.

This graph displays HH Index performance over the past 24 months.


This graph compares the HH Index to the price of Addus stock (non-Medicare).

(Home Health Index September 2017 | Stoneridge Partners)

 

Here are the results of the stock prices for the past two years:

Company 8/31/17 1 mos change YTD change 8/31/16 8/31/15
Almost Family 48.70 -1.52% +12.13% 39.79 44.30
Amedisys 52.24 +10.30% +11.10% 53.55 38.64
LHC Group 65.25 +12.69% +26.70% 45.26 43.30
HH Index* 55.40 +7.42% +16.82% 46.20 42.08
S&P 500 2471.65 +0.05% +10.34% 2170.95 1972.18
Addus 34.05 +0.29% -3.14% 18.86 28.74

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

 

Enterprise Value (EV)

EV (in M) 8/31/17 8/31/16
Almost Family 827 540
Amedisys 1719 1890
LHC Group 1299 911
HH Index Total 3845 3341
Addus 424 232


Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 8/31/17 8/31/16
Almost Family 116% 97%
Amedisys 116% 144%
LHC Group 134% 110%
HH Index Average* 122% 117%
Addus 103% 67%


Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 8/31/17 8/31/16
Almost Family 20.47 12.63
Amedisys 20.30 23.64
LHC Group 14.06 11.08
HH Index Average* 18.28 15.78
Addus 12.799 9.68

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company it’s reporting. (Home Health Index September 2017 | Stoneridge Partners)

SOLD by Stoneridge!

  • CareFinders Total Care, a New Jersey-based home healthcare provider, completed the acquisition of Sovereign Home Healthcare of Connecticut. Partner, Brian Bruenderman, provided sell-side advisory services.

Recent Transactions From Around The Country

  • Seaside Healthcare has acquired the Savannah and Atlanta locations of Access MHA of Georgia, a community based mental health and substance use disorder treatment provider for children, adolescents and adults.
  • All Metro Health Care acquired Massachusetts-based, Independence Healthcare Corp., a provider of non-medical home healthcare services.
  • UNC Health Care and Carolinas Healthcare System, two of the largest healthcare providers in North Carolina have announced their plan to create one of the largest hospital networks in the country.
  • Associated Home Care, a subsidiary of Amedisys, Inc., has entered into an agreement to acquire Intercity Home Care, a Massachusetts-based personal care provider. The transaction is expected to close October 1, 2017.
  • The Ensign Group acquired two Arizona skilled nursing facilities on September 1, 2017: Desert Blossom health and Rehabilitation Center in Mesa, AZ  and Pueblo Springs Rehabilitation Center in Tucson, AZ.
  • AccentCare strikes a joint venture deal with UCLA Health aimed at providing a continuum of care for patients that have been discharged from the hospital.
  • LHC Group has entered into a joint venture with Texas-based Christus Health, a non-profit health system.
  • In Nebraska, Memorial Community Hospital & Health System has selected the Visiting Nurse Association to take over its home health and hospice services.

Exclusively Listed For Sale By Stoneridge Partners

State
Agency Profile
Status
Reference Number
California$11 million multi-location addiction treatment center. Located in Southern California. 21% bottom line. Strong growth trends. JCAHO-accredited. Available
SJL-7229
CaliforniaMedicare-certified home health agency established in 2003. $2 million annual revenue in 2018. PDGM revenue-neutral. Located in Southern California. Clean business with no ADRs. Available
SCM-7298
FloridaMedicare-certified home health agency. Approximately $3.8 million in revenue with 17% bottom line. Located in Districts 9 and 10. Revenues split evenly between districts. Accredited. 4.5-star quality of patient care rating.Available
SBA-3029
GeorgiaID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb. Available
SBH-6806
Illinois$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4.5-star rating by CMS.Available
SBA-2734

LouisianaBoutique full-service clinical laboratory specializing in preventative diagnostic testing. Medicare- and Medicaid- certified, with insurance contracts in more than 20 southeastern states. Available
SJD-6825
MassachusettsMedicare- and Medicaid-certified home health agency.
$13+ million in annual revenue with continued growth. Diverse payor mix. Strong management in place. Accredited.
Available
SBA-6010
MichiganMedicare home health and hospice agency. $10 million in annual revenue with numerous referral relationships. Available
SBB-8684
Michigan$2 million ID/DD agency in the Detroit area. Profitable service provider with existing management team in place. Available
SBH-1697
Mid-Atlantic$10+ million non-skilled home care agency. Primarily Medicaid reimbursed with 20% EBITDA margins. Strong management team in place. Available
SBH-9651
NevadaMedicare-certified home health agency in Las Vegas area. Approximately $1 million in annual revenue. Accredited. Available
SBA-8367
New Mexico$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.Available
SBA-5295
North Carolina$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins. Available
SBH-9905
OklahomaMedicare-certified home health agency with $9.6 million in annual revenue. 98% traditional Medicare and other PPS payors. Medicare- and Medicaid-certified with multiple locations. Available
SBA-6607
Oklahoma$5+ million home health, home care, case management, and hospice company. Approximately 15% revenue from hospice, other service line revenues distributed relatively evenly. Multiple locations. Diverse payor sources. Hospice accreditation. Projected PDGM impact of 30%+ for home health. Available
SBA-1668
SouthTreatment center with 28 beds, intensive outpatient program capacity of 40, full continuum of substance use disorder services and dual diagnosis treatment capability. JCAHO accreditation pending. $4+ million in revenue, highly competitive in-network contracts. Average census of 30. Existing relationships with county, parole, local hospitals, churches and universities. Solid business in desirable location with little area competition.Available
SJD-1118
SouthFull continuum, JCAHO-accredited substance use disorder treatment center on 100+ acre horse ranch. Dual diagnosis treatment capability with 16 beds and 22 staff. $1.5 million EBITDA on $3.5 million in revenue. In-network with great contracts/rates and strong census. Available
SJD-3485
SouthPartial hospitalization treatment program/intensive outpatient program seeking strategic partner. Strong census and revenue growth. No direct competition for niche market. Available
SJD-8349
Southwest$5+ million 37-bed outpatient treatment center. Fully accredited and recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of network but transitioning to some in-network.Available
SJD-3448
Southwest64 bed full continuum 64-bed full continuum treatment center in two southwestern US metropolitan cities. JCAHO-accredited and in-network. $4 million pro forma EBITDA run rate based on 30% occupancy with significant growth expected. Strong infrastructure to support growth trajectory.Available
SJD-4008
South-AtlanticHome health agency and adult day care center with $12+ million in annual revenue. Home health represents 85% of revenue while adult day represents 15% of revenue. Home health is primarily a Medicaid business but is Medicare-certified. Accredited. Available
SBA-9973
South TexasHospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues. Available
SBA-8064
South TennesseeVery rare opportunity in a CON state. Located in Davidson County in Nashville, TN. Projected 2019 revenue in excess of $800,000.Available
SCM-8651
Texas$5.3 million Medicaid agency in San Antonio, TX. 16.5% EBITDA. CHAP-accredited. Staff can remain in place for a smooth transition. Available
SJL-5322
TexasHome health and hospice covering 10 counties in west Texas/eastern New Mexico with $5 million in revenue. No clinical issues, under CAP. Very profitable. Easily separated. Available
SJL-4994
Texas$3.5 million all-Medicaid home care company located in Houston, TX. 20%+ year-over-year revenue growth since 2016. Available
SJL-3670
TexasHome health agency located in Arlington, TX with $2.3 million in revenue. Growing and profitable company. Managed staff in place. No compliance issues. Available
SJL-6308
Texas$1.7 million Medicare home health agency located in Southwest Houston. Well-established with predictable referral sources and revenues. Available
SJL-6080
Texas$1 million Medicare-certified agency licensed in seven counties in the Houston area. 80% traditional Medicare. Available
SBA-1542
USANew software application helping build social connections among patients in recovery and giving them increased access to therapists. Potential investment opportunity. Facilitates total successful recovery and gathers important helpful data.Available
SJD-1777
Virginia$6 million Medicare-certified agency in Northern Virginia. Available
SBA-7366
VirginiaPhysical therapy and wellness operation with $2.3 million in revenue. 95% cash payors. Potential to franchise nationwide. 2018 EBITDA was $257,000. Available
SCM-7368
WestPremier provider of primary mental health services for adolescents aged 13-18 with two locations. Currently growing in-network contracts. Available
SJD-7984
ColoradoOpportunity to establish Medicare home health agency. Denver market. ACHC accreditation until 2022.Under Contract
SJL-7771
Florida$9.5 million home health agency with strong management, clinical and financial operations. 99% of revenue comes from traditional Medicare. Under Contract
SCM-6925
FloridaSouth Florida staffing agency. $2 million + revenue. Approximately 30% gross margin. Licensed to service entire state of Florida. Systems and staff in place. Under Contract
SBA-6942
KentuckyMedication-assisted treatment center. Suboxone only. Strategic location between Louisville and Lexington, Kentucky. Great reputation with strong clinical team in place. 110 clients with room to grow. In-network contracts. Clients pay $150 per visit for counseling twice per month. Owners are near retirement and will help with the transition. Under Contract
STS-2658
Michigan$1.5 million private duty home health agency in eastern Michigan. Profitable and well-positioned for additional growth. Self-sufficient staff in place. 82 long-term clients. Under Contract
SCM-6034
Mid-west$5 million Midwest-based ABA provider. Day supports and counseling. Highly profitable and respected. CARF accredited. Contracted with state and insurance companies. Under Contract
SBH-9071
Multi-StateWell-established pediatric provider. Revenue more than $40 million. Medicaid and insurance accepted. Under Contract
SBB-2138
New MexicoHome health and hospice with $15 million in annual revenue. Revenue split is 2/3 home health and 1/3 hospice. Medicare- and Medicaid-certified. Accredited. Under Contract
SBA-5334
New YorkLicensed home care services agency with services in five boroughs. Approximately $20 million in revenue and a long-standing history in the community. Under Contract
SBB-9207
North Carolina$5 million Medicaid agency. $5 million Medicaid agency. CAP/PCS services. Long history of providing quality services. Under Contract
SBB-4927
Pacific NorthwestFull continuum substance use disorder, mental health and gambling addiction treatment center in Washington state with $3,625,000 in revenue and $1,100,000 EBITDA. 40 bed facility with 40 employees. Strong census, full outpatient program and Medicaid payors. Under Contract
SJD-4921
SouthwestProvider of waiver and intermediate care facility ID/DD services with $25 million in annual revenue. Statewide platform with a strong management team and excellent reputation for quality services. Under Contract
SBH-2042
TexasThree Hospice companies with Three hospice companies with affiliated home health and $6 million in total revenue. Locations in south, southcentral, and southeast Texas. Under Contract
SJL-9650
Texas$4.2 million home health agency. 17.5% bottom line. Located in Houston, TX. Large coverage area. Diverse referral network. Fully staffed with no clinical issues. Under Contract
SJL-5691
Texas$3.5 million Medicare certified $3.5 million Medicare certified home health agency located in San Antonio, TX. Fully staffed and CHAP-accredited. Branch office is included in sale.Under Contract
SJL-4824

Do you know of any acquisitions that have taken place?  We are interested in your comments.  At the top of this column is a “Contact Tab” with a section for comments.  These can be sent anonymously and the return email address can be left blank.

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Home Health Index September 2017 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at rich@stoneridgepartners.com or (239) 561-0826 and toll-free 800-218-3944

Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Almost Family | Amedisys | LHC Group

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