Home Health Index | 2017 NOVEMBER UPDATE

Home Health Care Stocks Slipped Before HHGM Decision

Home health care stocks fell sharply in October, perhaps on jitters related to the then-forthcoming home health groupings model (HHGM) decision, according to the latest data in the Home Health Index tracked by Stoneridge Partners. But the decision ultimately fell in the industry’s favor: The Centers for Medicare & Medicaid Services (CMS) on Nov. 1 released its final rule for the home health care prospective payment system (PPS) 2018 update without finalizing HHGM.

In the weeks leading up to the decision, however, the index reflected nervous anticipation among home health companies. The index, which tracks market values of three of the largest publicly traded home health care companies in the U.S.—Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG)—dropped 11.73% in October compared to the previous month.

The Index lagged behind the S&P 500, which ticked up 2.23% in October. And October’s drop is another sharp contrast to the Index’s rebound seen in September.

Investors were likely on edge over HHGM, which threatened to upend the home health payment system, cutting hundreds of millions in payments within its proposed changes.

“The big news here is what happened with HHGM,” said Stoneridge President Rich Tinsley. “That should overshadow many of the month’s losses. Investors can be confident HHGM is off the table for the immediate future.”

Lafayette, Louisiana-based LHC Group’s stock shed 6.16% in October. Year to date, LHC Group’s stock has climbed 45.62%, which is the largest yearly gain on the Index.

Amedisys, meanwhile, lost the most value in October. The Baton Rouge, Louisiana-based company’s stock value tumbled 16.99% in the month. Year to date, its share prices are still up 8.96%, according to the Index.

Louisville, Kentucky-based Almost Family also saw its stock value sag in October. The company lost 13.59% that month, erasing some of its 2017 gains. The company’s year-to-date share value was up just 5.22% in October.

Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, saw no change in its share value in October. Year to date, Addus’s stock price has risen 0.71%.

 

Quote Of The Month 

“There’s an inaccurate perception among the American public that hospice means you’ve given up.  Those of us who have worked in the field have seen firsthand how hospice and palliative care can improve the quality of life. There’s a growing body of research showing that hospice and palliative care may prolong the lives of some people who receive care.  However, all too often, families sign on with hospice very late in the process. We often hear: I wish we had known about you sooner!” – J. Donald Schumacher, president and CEO of the National Hospice and Palliative Care Organization.

Read the Full Article Here: November is National Home Health, Hospice and Palliative Care Month

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 November 2017 | Stoneridge Partners)

 

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

Company 10/31/17 1 mos change YTD change 10/31/16 10/31/15
Almost Family 46.40 -13.59% +5.22% 36.63 41.50
Amedisys 46.45 -16.99% +8.96% 49.49 39.58
LHC Group 66.55 -6.16% +45.62% 35.93 45.06
HH Index* 53.13 -11.73% +20.37% 40.68 42.05
S&P 500 2575.5 +2.23% +15.04% 2179.98 2079.36
Addus 35.30 0% +0.71% 24.87 24.98

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) 10/31/17 10/31/16
Almost Family 752 515
Amedisys 1660 1730
LHC Group 1300 735
HH Index Total 3712 2980
Addus 444 313


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

Company 10/31/17 10/31/16
Almost Family 105% 92%
Amedisys 114% 113%
LHC Group 135% 86%
HH Index Average* 118% 97%
Addus 108% 87%


Multiples of EV/EBITDA

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

Company 10/31/17 10/31/16
Almost Family 18.63 12.93
Amedisys 15.8 18.45
LHC Group 14.13 9.14
HH Index Average* 16.19 13.51
Addus 13.3 12.94

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 November 2017 | Stoneridge Partners)

SOLD by Stoneridge!

  • Stoneridge represented a private pay home care company in Florida in a transaction that closed in October, 2017. Partner, Ben Bogan, provided sell-side advisory services for this transaction.

Recent Transactions From Around The Country

  • Odyssey Behavioral Healthcare, a portfolio company of Nautic Partners, acquired Selah House, an eating disorder treatment center for women in Anderson, Indiana.
  • Invo Healthcare, a portfolio company of The Wicks Group, The Jordan Company and Post Capital Partners announced the acquisition of Autism Home Support Services, a leading provider of home and center-based Applied Behavioral Analysis (“ABA”) therapy to children diagnosed with autism spectrum disorder.
  • Magellan Health, Inc. announced the acquisition of Senior Whole Health, a company focused on serving complex, high-risk populations.

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
ArizonaMedicare/Medicaid certified Home Health Agency. $1.8 million in annual revenue. 90% Medicaid/10% Medicare. Phoenix metropolitan area. Accredited. 5 star rating.Available
SBA-9188
California$6 million revenue. Hyrbid payor mix - 70% in network, 20% out of network, 10% private cash pay. Destination oriented treatment facility. 48 residential beds and 6 detox beds. JCAHO accredited. Beautiful property with more adjacent available for purchase. Tons of amenities.Available
SJD-2579
California$2+ million revenue. $550,000 net profit. 28 bed, 4 facilities. Full continuum of care treatment center in California. Growing quickly with a large wait list. 10 bed detox license. Gorgeous real estate for sale or lease. Great reputation and referrals. Available
SJD-8481
CaliforniaGrowing $1.9 million revenue. Private pay. Independently owned. Full staff in place. Available
SJL-4483
California32 bed detox and residential treatment center. Great location and setup. In network. Large growth with a waiting list. Seeking loan/debt investment. Attractive income option for investor. Available
SJD-2449
CaliforniaTrauma treatment facility. Searching for real estate partner to buy property and lease back, as well as further expansion. Great business plan and current growth and new contracts. Great results and outcomes. Available
SJD-6424
FloridaMedicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.Available
SBA-8305
Florida$2.5 million Medicare agency in Port St. Lucie. Great reputation and clinicals.Available
SCM-6191

FloridaPrivate pay home care agency. Approximately $1,000,000. in annual revenue. Medicare/Medicaid certification. Accredited. W-2 employees. District 8. Available
SBA-3041
FloridaMedicare certified home health agency. Approximately $400,000 in annual revenue. Accredited. District 7.Available
SBA-9008
FloridaMedicare certified home health agency. District 10. Census: Minimal. Accredited.Available
SBA-1233
FloridaMedicare certified home health agency. Accredited. Minimal census. District 3.Available
SBA-7932
Georgia$5 million annual revenue private duty agency. Metro Atlanta service area. Well-positioned for additional growth. Available
SBB-5907
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

Illinois$2.8 million Home Health agency. 100% Medicare. Loyal caregiver and patient base. Available
SCM-3291
Indiana$6 million annual revenue. Medicare/Medicaid home health agency. Serves Valparaiso and surrounding areas. CHAP accreditedAvailable
SBB-9361
Maryland/DC/VirginiaLarge Medicare & Medicaid home care agency. Poised for continued growth.Available
SBB-7499
Massachusetts$10+ million Medicare and Medicaid certified Home Health agency. Diverse payor sources. Strong Management in place.Available
SBA-6010
Minnesota$8 million Medicaid agency. Well-established in metropolitan service area with staff in place.Available
SBB-7085
New YorkLHCSA in New York metro area. $10 million annual revenue. Consistent growth year over year. Available
SBB-8249
New YorkAnnualizing at $1.3 million revenue. 40% Non-Medicare/Private Insurance skilled nursing. 45% Managed LTC. Southern New York. Joint Commission Accreditation.Available
SBA-6824
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$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins. Available
SBH-9905
OhioMedicare/Medicaid agency in Columbus area. $4.5 million annual revenue. Long-standing reputation in the community. Profitable.Available
SBB-9067
OhioSoutheastern Ohio. $3.5 million annual revenue. Diverse referral source mix.Available
SBB-4298
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-occuring, 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.
Available
SJD-4921
PennsylvaniaPrivate duty, non-medical home care company. $9.9 million current annual run rate. Eastern Pennsylvania. Highly profitable. Strong management team in place.Available
SBA-1009
Pennsylvania$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line. Available
SJL-7605
Southeastern US$9+ million revenue with 16% bottom line. Home health with multiple locations. Regional presence with high star ratings. Nationally recognized for excellent patient outcomes. Lots of opportunity for growth. Available
SJL-5558
Southeast/Midwest8 locations, 6 cities with over 100 employees. Mental health/Psych/Therapy/Counseling/School based/SUD IOP pilot. $4.5 million revenue. $750,000 EBITDA. Huge growth opportunity and great business, reputation, and numbers. Available
SJD-7830
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
SouthwestFull continuum campus setting treatment center in Southwest US. 200+ beds. In network. Census growing every month. Great reputation and valuable contracts. Numbers are very impressive and improving every day. Solid turnkey business.Available
SJD-1953
Texas$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. Available
SJL-6009
Texas$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$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$1 million revenue. Very clean and well established home health agency in the heart of West Texas. Fully staffed and ready for a new owner to step right in.Available
SJL-8770
Texas$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare. Available
SBA-1542
Texas$450,000+ Medicare certified Dallas area home care company. Fully staffed & clean clinically.Available
SJL-3334
Texas165 patient pediatric home care company in Houston, TX. Diverse referral network. Systems and staff in place. Available
SJL-4615
TexasHome Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue. Available
SCM_4098
TexasClean hospice provider number. Located in West Texas.Available
SJL-2984
Upper Midwest$7.6 million revenue. Profitable home health and hospice. JCAHO accredited. 4-star rating. Ranked as a top performer in agency outcomesAvailable
SJL-2770
Virginia$6 million Medicare certified agency in Northern Virginia. Available
SBA-7366
Virginia$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. Available
SCM-7368
Virginia$1.2 million private duty/private pay home health business in Northern Virginia. Located in one of the most affluent counties in the country where the elderly population growth is outpacing the nations.Available
SCM-1483
Washington DCOpportunity to establish a Medicare/Medicaid home health agency. Certificate of Need subject to regulatory approval. Rare offering. Available
SBB-6706
California$5 million revenue with $1.25 million EBITDA. Full continuum treatment center. 3 residential houses, 2 sober living and 1 outpatient. JCAHO certified. Private pay and out of network. Under Contract
SJD-4380
Colorado65 bed full continuum treatment center in Mountain West. #1 million EBITDA. Motivated seller seeking timely close. Great census and solid numbers.Under Contract
SJD-1453
Florida$9.5 million Home Health Agency located on Florida's East Coast. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. Under Contract
SCM-6925

FloridaMedicare certified home health agency. $4.7 million in revenue. Accredited. 4.5 stars. District 7. Great management team in place.Under Contract
SBA-8426
Florida$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.Under Contract
SCM-1148
FloridaNon-skilled home care agency. $600,000 in annual revenue. Outstanding reputation and quality service. Key staff in place. District 5.Under Contract
SBA-3885
South Central US$24 million annual revenue. Home health/Home care agency with small hospice operation. Well diversified payor mix. Medicare certified Multi State agency. Accredited. Strong management team in place.Under Contract
SCJ-5009
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
TexasAlmost 100% Medicare. Texas based home health agency. $6+ million revenue. Extremely profitable. Perfect surveys with a 4-star rating and consistently ranked as a top agency in the country.Under Contract
SJL-5800
Texas$3.6 million Hospice, home health and palliative care agency. 90% Traditional Medicare. Service area in 13 counties around Harris County. CHAP accredited. Staff in place. Under Contract
SBA-7440
Texas$2.3 million Medicare revenue. 85% Traditional Medicare. Service area in 5 counties around Taylor County, as well as Region 2 & 9.Under Contract
SBA-3650

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 November 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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