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
Arizona$2+ million home care agency in Southern Arizona. Diverse payor sources (Medicaid/Private Pay/ W/C. Diverse referral sources. Great reputation. Available
SBA-6228
California$11 million multi-location addiction treatment center. Located in Southern California. 21% bottom line. Strong growth trends. JCAHO accredited. Available
SJL-7229
California$4.8 million neuroscience-driving recovery treatment center for traumatic brain injury and SUD. Has helped over 180 professional athletes from the NFL, NHL, NBA and MLB. $1.2 million AEBITDA. Great campus offering full continuum of care. Zero competition in this space.
Available
STS-1907
CaliforniaMedicare certified Home Health agency that was established in 2003. $2 million annual revenue in 2018. PDGM revenue neutral. Located in Southern California. Clean business with no ADR's. Available
SCM-7298
ColoradoOpportunity to establish Medicare home health agency. Denver market. ACHC accreditation until 2022.Available
SJL-7771
Connecticut$6 million Medicaid/Medicare agency. Nice growth trend. Stable margins, great surveys.Available
SBB-3697
EastHealthcare testing laboratory. $7 million revenue, $4 million EBITDA. 16 employees, multiple state licenses. Available
SJD-1067
EastOpportunity to buy a leading franchisor in the assisted living referral space. 10+ existing franchisees. Perfect business for the entrepreneur who can scale a predictable, simple and low expense business. 3 year average income of $134,000. Owner near retirement. Available
STS-7094
Florida$9.5 million Home Health Agency. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. Available
SCM-6925
Florida$1.6 million revenue. Pediatric Medicaid agency. Available
SCJ-8520
FloridaMedicare certified home health agency. District 10. Census: Minimal. Accredited.Available
SBA-6994
GeorgiaID/DD Services. $1 million revenue. Residential and Day Services. Atlanta Suburb. Available
SBH-6806
Illinois$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS.Available
SBA-2734

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 expand and grow, minimal marketing. In-network contracts. Clients come in twice a month and pay $150 per visit for counseling. Owners are near retirement and will help with the transition. Available
STS-2658
LouisianaBoutique full service clinical laboratory specializing in preventative diagnostic testing.
Medicare & Medicaid certified, and insurance contracts in over 20 Southeast States. Several unique programs and innovative technologies.
Available
SJD-6825
Maryland/DC/VirginiaOpportunity to establish a Medicare home health agency. N. Virginia with large service area. Low census, motivated seller. Available
SBB-7499
MassachusettsMedicare and Medicaid certified Home Health agency.
$13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited.
Available
SBA-6010
MichiganMedicare home health and hospice agency. $10 million annual revenue. Attractive referral relationships. Available
SBB-8684
Michigan$2 million ID/DD. Profitable. Existing management team in place. Greater Detroit area. Available
SBH-1697
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. Available
SCM-6034
New YorkLHCSA in five boroughs. Approx. $20 million revenue. Long history in the community. Available
SBB-9207
New Mexico$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community. Staff in place.Available
SBA-5295
North Carolina$5 million Medicaid agency. CAP/PCS services. Long history, quality services. Available
SBB-4927
North Carolina$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins. Available
SBH-9905
South28 bed, IOP capacity of 40, full continuum SUD treatment center, dual diagnosis, pending JCAHO. $4+ million revenue, highly competitive in network contracts, average census of 30. Existing marketing relationships with county, parole, local hospitals, churches and universities. Solid business in desirable location, little competition, good opportunity. Available
SJD-1118
SouthFull continuum, JCAHO accredited, co-occurring, SUD treatment center on 100+ acre horse ranch. 16 beds, 22 staff. $1.5 million EBITDA on $3.5 million revenue. In-network. Good reputation, great contracts/rates, solid opportunity. Census is great. Available
SJD-3485
SouthNational growth opportunity. No direct competition for niche market. Unique program and strong branding. PHP/IOP with census and revenue growth. Seeking strategic partnerAvailable
SJD-8349
Southwest$5+ million outpatient treatment center. Fully accredited. 37 beds. Recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of network and transitioning some in network.Available
SJD-3448
Southwest64 bed full continuum treatment center in 2 Southwest US metropolitan cities.
JCAHO accredited.
In-network.
$4 million pro forma EBITDA run rate. 3rd location set to open May 2019. Run rate based on 30% occupancy with significant growth expected. Strong infrastructure to support growth trajectory.
Available
SJD-4008
South-Atlantic$12+ million in annual revenue. Home Health Agency (HHA) and Adult Day Care Center (ADC). HHA (represents 85% of revenue). ADC (represents 15% of revenue). HHA is primarily Medicaid business but is Medicare-certified. Accredited. Available
SBA-9973
South TexasHospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues. Available
SBA-8064
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 in place for a smooth transition. Available
SJL-5322
Texas$5.3 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line.Available
SJL-3670
Texas$4 million home health agency. Dallas/Ft. Worth based. Full staff in place. Medicare and managed care with great contacts.Available
SJL-8406
Texas$3.5 million Medicare certified home health agency. Located in San Antonio, TX. Fully staffed & CHAP accredited. Branch office included in saleAvailable
SJL-4824
TexasMedicare home health agency and hospice. San Antonio, Dallas, Austin. $3 million revenue, multiple provider numbers. Great opportunity for existing Texas providers. Available
SBB-5337
Texas$2.6 million revenue Home Health agency in East Texas. Great local reputation, with strong financials. 2018 adjusted EBITDA $606,000. Has second license with minimal census available.Available
SCM-9753
Texas$2 million Medicare home health agency in Austin, TX. Offers outstanding reputation and strong management & clinical teams. CHAP accredited & consistently Top 100 or Top 500 Home Care Elite for past 8 years. Available
SJL-5971
Texas$1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable. Available
SJL-6080
Texas$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare. Available
SBA-1542
TexasHome Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue. Available
SCM-4098
USANew software application. Potential investment opportunity. Great test results.
Helps connect those in recovery socially. Helps connect therapists to patients. Facilitates total successful recovery and gathers important helpful data.
Available
SJD-1777
Virginia$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. Available
SCM-7368
WestPremier provider of primary mental health services for adolescents aged 13-18. 2 locations. In process of growing in-network contracts. Available
SJD-7984
Florida$3.5 million private duty home health agency on Florida's east coast. CHAP accredited. 26 years of outstanding service. Diversified pay mix; Private duty, Workers comp, Private pay, and Long-term care insurance. Strong management and support staff. Under Contract
SCM-8429
FloridaMedicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.Under Contract
SBA-8305
Florida$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.Under Contract
SCM-1148
IllinoisHospice. Census in mid-70's. Accredited. Chicago area.Under Contract
SBA-5325
KentuckyMedication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid. Under Contract
STS-1093
Minnesota$9 million Medicaid agency. Consistent growth & profitability. Recent rate increase. Attractive Medicaid margin. Under Contract
SBB-7085
New York$13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs.Under Contract
SBB-8249
Pacific NorthwestFull continuum in Washington State. $3,625,000. revenue with $1,100,000 EBITDA. States has moved from BHO to MCO for Medicaid. Co-occurring, Medicaid paid, 40 bed facility, 40 employees, census is very strong.
Outpatient is full. Opportunity for marketing. SUD mental health gambling. Equine therapy and other perks.
Under Contract
SJD-4921
Southwest$25 million in annual revenue. Provider of Waiver and ICF ID/DD Services. Statewide Platform. Strong management team. Excellent reputation for quality services. Under Contract
SBH-2042
Texas$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. Under Contract
SJL-6009
Texas$2.2 million Dallas-area Medicare home health agency. 22% bottom line. Well-established with a very clean compliance record. Full management team in place. Under Contract
SJL-2228
Texas$1.4 million revenue pediatric therapy business. Company provides Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST) to disadvantaged and disabled children in near a major metropolitan city in Texas and the surrounding counties. Positive reputation for providing quality help in an environment comfortable to the child. Founded in January 2008 as an investment for the owner. Average census is 190 patients with a goal of 225 for calendar year 2019.
Under Contract
SCM-3034
Virginia$6 million Medicare certified agency in Northern Virginia. Under Contract
SBA-7366

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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