Home Health Index | 2018 JANUARY UPDATE

Home Health Care Stocks Finish 2017 Strong

Home health care stocks posted double-digit growth in 2017, though they dipped slightly in the last month of the year.

The Home Health 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) —rose 18.68%, year-over-year, between December 2016 and 2017. Still the index shed 5.82% in December compared to the previous month, and was bested by the S&P 500 Index, which rose 1.36% in December.

“This was another strong year for home health care investors and providers,” said Stoneridge President Rich Tinsley. “2018 will bring many new challenges and opportunities in the industry, especially as home health care giants Almost Family and LHC Group execute on their planned merger.”

The deal between LHC Group and Almost Family is expected to close in the first quarter of 2018 and results in a company with a combined revenue of $1.8 billion. The implied transaction value is roughly $2.4 billion, according to LHC Group.

The combined organization would trade on the NASDAQ exchange under the symbol “LHCG,” and will operate out of Lafayette, Louisiana, where LHC is currently based. When completed, the organization is projected to have 781 locations total in 36 states and more than 31,000 employees. The merger will also prompt the addition of Kindred Healthcare (NYSE: KND) to the Stoneridge Home Health Index.

Despite the buzz surrounding the merger, Lafayette, Louisiana-based LHC Group’s stock dropped 7.38% in December. Year to date, LHC Group’s share prices rose 23.14%, which clocked in as the largest yearly gain on the HHI.

Louisville, Kentucky-based Almost Family also stumbled in its December stock performance. The company’s share prices fell 7.32%, erasing some of the increases it saw this year. Still, the provider came out on top: Almost Family’s stocks gained 16.65% in 2017.

Amedisys, on the other hand, fared best in December. The Baton Rouge, Louisiana-based company’s stock value fell just 2.45% in the month. Year to date, its share prices rose 15.92%, according to the Index.

Share prices for Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, bucked the trend and gained 4.31% in December. For the entire year, Addus’s stock price rose 2.65%.

Quote Of The Month 

“Aging is not a disease, If we support people as they get frail, they can safely do that in their own homes.” said France Gelinas

Read the Full Article Here: Improving home care will help hospital overcrowding

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  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 since 2002.


This graph compares the HH Index to the price of Addus stock (non-Medicare).
(Home Health Index January 2018 | Stoneridge Partners)

 

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

Company 12/31/17 1 mos change YTD change 12/31/16 12/31/15
Almost Family 55.35 -7.32% +16.65% 44.1 38.23
Amedisys 52.71 -2.45% +15.92% 42.63 39.32
LHC Group 61.25 -7.38% +23.14% 45.7 45.29
HH Index* 56.44 -5.82% +18.68% 44.14 40.95
S&P 500 2673.61 +1.36% +17.25% 2238.83 2043.94
Addus 34.8 4.31% +2.65% 35.05 23.28

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) 12/31/17 12/31/16 12/31/15
Almost Family 878 588 453
Amedisys 1810 1520 1370
LHC Group 1200 907 845
HH Index Total 3888 3015 2668
Addus 398 384 245


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

Company 12/31/17 12/31/16 12/31/15
Almost Family 117% 96% 89%
Amedisys 123% 109% 111%
LHC Group 120% 103% 110%
HH Index Average* 120% 103% 103%
Addus 96% 101% 73%


Multiples of EV/EBITDA

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

Company 12/31/17 12/31/16 12/31/15
Almost Family 20.63 12.66 12.34
Amedisys 15.68 19.10 15.35
LHC Group 12.84 11.01 10.90
HH Index Average* 16.38 14.26 12.86
Addus 11.67 14.50 10.22

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 January 2018 | Stoneridge Partners)

Recent Transactions From Around The Country

  • New Directions Behavioral Health, headquarted in Kansas City, Missouri acquired E4 Health of Irving, Texas.
  • Stratum Health System, the Sarasota company that owns Tidwell Hospice, has acquired a Naples-based home health care company, Avidity Home Health.
  • Nurses Unlimited, a personal care services, home health and private duty nursing company was acquired by Texas Home Health, an AccentCare, Inc. company.
  • Noor Inc., based in New York City, acquired San Antonio, Texas-based home health care provider Restorative Health Care.
  • Humana announced it will acquire 40% stake in Kindred Healthcare’s home care business.
  • provider in the U.S., acquired A Place to Call Home, an Arizona based company providing foster care, respite, host home and related supports to children and individuals with intellectual and developmental disabilities.

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 revenue southern California home health and hospice showing double digit revenue growth the last two years. Very well established, highly profitable and JCAHO accredited.Available
SJL-6004
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
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
CaliforniaGrowing $1.9 million revenue. Private pay. Independently owned. Full staff in place. Available
SJL-4483
California$1.6 million Hospice located in Los Angeles County. Consistent census of 25 patients over the last 3 years. Joint commission accredited. Strong bottom line with staff in place. Available
SCM-9679
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 certified home health agency. $1.4 million annual revenue. 4.5-star & Home Care Elite 2 years running. Accredited. District 3. Motivated Seller. Available
SCJ-1730
FloridaMedicare certified home health agency. District 10. Census: Minimal. Accredited.Available
SBA-1233
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
IllinoisHospice. Census in mid-70's. Accredited. Chicago area.Available
SBA-5325
KentuckyMedication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid. Available
STS-1093
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/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
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
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
OhioSoutheastern Ohio. $3.5 million annual revenue. Diverse referral source mix.Available
SBB-4298
OklahomaID/DD business with long history. $2 million run rate revenue. Long-term clients. Recent rate increase.Available
SBB-8891
OklahomaHome Care Agency. Approximately $1.5 million in annual revenue. Predominantly private pay with some LTC, VA, and WC. Outstanding clinical. Great reputation. Available
SBA-2761
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.
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
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
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 TexasHospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues. Available
SBA-8064
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$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. Available
SJL-2228
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 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
TexasPediatric therapy company in Houston, TX. Census if 165.
75% Medicaid reimbursed. 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
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
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

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
FloridaPrivate pay home care agency. Approximately $1,000,000. in annual revenue. Medicare/Medicaid certification. Accredited. W-2 employees. District 8. Under Contract
SBA-3041
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
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
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 January 2018 | 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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