Good morning, and welcome to the Addus HomeCare Corporation Third Quarter 2017 Earnings Conference Call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the Company's website and reviewing yesterday's news release. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus' expected quarterly and annual financial performance for 2017 or beyond. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, discussions of forecasts, estimates, targets, plans, beliefs, expectations and the like are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by important factors, among others, set forth in Addus's filings with the Securities and Exchange Commission and in its third quarter news release. Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. I would now like to turn the call over to the Company's President and Chief Executive Officer, Mr. Dirk Allison. Please go ahead, sir.

Thank you, Scott. Good morning, everyone, and thank you for joining us for our third quarter conference call. With me today is Brian Poff, our Chief Financial Officer. Let me begin with some overall comments and then Brian will discuss the third quarter results that we issued yesterday afternoon. After that, we would be happy to respond to any questions. I am excited to share with you another quarter of strong operating performance and solid financial results. Revenues for the third quarter were $108.6 million, compared to $103.5 million for the same period in 2016. Adjusting for closed locations, our revenue grew by 6.5%, which is up from $101.9 million in 2016. Our adjusted earnings per share for the third quarter of 2017 was $0.42 as compared to $0.39 in the same period in 2016, an increase of 7.7%. Our adjusted EBITDA for the third quarter of 2017 increased 11.1% to $9.6 million or 8.9% of revenue. An important part of these improved results is due to our ongoing process improvements, which are enabling us to increase our operating leverage. In addition, we continue to build our infrastructure to support both continued organic growth as well as acquisition growth. Those of you who have followed Addus for some time know that we have been dealing with the financial status of the State of Illinois, which has negatively impacted our cash flow for a number of years. As we shared with you last quarter, Illinois has now passed a budget, which has enabled the state to both pay providers on a past due non-Medicaid receivables as well as to keep more current with provider payments of Medicaid and non-Medicaid. The state has done a nice job of trying to catch up with past due amounts sending us over $90 million since…

Thank you, Dirk, and good morning, everyone. I'm pleased to report that Addus had another solid financial performance for the third quarter of 2017. We continue to meet expectations with regard to our same-store revenue growth, and our margins continue to expand. As Dirk discussed, we completed an integrated acquisition of Options on August 1, as scheduled, and Options results for the quarter were consistent with our expectations. We also remain engaged in evaluating additional acquisition opportunities in an active pipeline and believe we are well positioned to fund any transactions we might pursue. As a result, we are confident of our potential for further growth. Net service revenues increased 4.9% to $108.6 million for the third quarter of 2017. This growth was driven by 4.9% increase in same-store revenues adjusted for the sale or closing of the adult day services locations since the end of the third quarter last year, which is on the high-end of our expected range of annual growth of between 3% and 5%. The strength in same-store revenues was primarily due to solid growth in our Northwest region and in Tennessee, as well as continued expansion in Arizona and Michigan, two markets that continue to perform extremely well. Same-store and total net service revenues were also aided by the rate increase from Illinois and the contribution from Options Home Care. The combination of our organic growth and acquisition resulted in a 2.8% increase in billable hours per business day and a 3.6% increase in revenue per billable hour. Our gross margin for the third quarter improved 30 basis points to 26.8% from 26.5% for the third quarter of 2016. We have continued to benefit from improved efficiencies in mileage and travel expenses, and we continue to focus on improving our cost controls related to direct…

Thank you. [Operator Instructions] Our first question is from Mitra Ramgopal of Sidoti. Your line is open.

Yes, good morning. First just a few questions. Starting with acquisitions, if you can give us a sense in terms of the Options Home Care anything you've learned there over the past few months that might help you in terms of future acquisitions going forward? And, Dirk, I know you mentioned, I think I believe you completed a small private pay deal in Arizona with the second one likely to be closed, I guess, by year-end? Is that true?

Mitra, we expect it will probably be closed – we were hoping early January of next year as our target.

Okay, thanks. And regarding Long Island or New York, you mentioned about the wage parity. Is that an issue in some of the other states you are potentially looking to do or expand into?

Wage parity is not an issue in other states. What we face in other states is just a straight minimum wage issue. And as we've said, over the last seven quarters is one of the things we're looking to do with our growth is to grow in areas where there is either little or no minimum wage pressure such as Arizona. There’s a little bit in New Mexico, but not a lot. And so looking in more of those states where minimum wage has not been on the minds or – raising state minimum wage above federal minimum wage has not been on the minds of the state legislators. Now that doesn't mean in the states such as Illinois and New York and Washington, Oregon, that we – we still don’t want to grow in those areas. The good thing about those markets is the state leadership have been very open and accommodating to realizing that when they raise things such as minimum wage or in New York, minimum wage plus wage parity that they have to raise the reimbursement rates for a company like ourselves to make sure that we maintain our ability to perform those services. And we've seen great results of that. So strategy going forward is to try to grow more in states without that pressure, but certainly have the ability to operate in markets where there is minimum wage.

Okay, thanks. And if you can give us an update on the infrastructure IT side, if the ADP installation is completely behind you now? And do you have to do any more spending on the infrastructure side to drive efficiencies or as you expand?

Okay. ADP was a huge project for this company, as you're aware, Mitra. We've been working on that for now about 15 months. And as of this past quarter, we were able to finalize that project. Most of the project was done on July 1. We had a couple of acquisitions that came in board on August 1. And then obviously, Options on October 1 bringing them on board. So as we say now, we're converted over – completely over to ADP. It has gone extremely well. Now that is not to say, it has gone without any issues. When you're moving such a major system over to a new system, and you're dealing with over 24 – at the time 24,000 paychecks on a weekly or biweekly basis, there are going to be some things you discover during the process. But I will tell you, we are largely through with that project. The team has done a fantastic job on it. And I think it's going to position us for growth going forward. Now in addition to ADP, it's not as material project, but Brian and his team are going to be moving our financial system early next year to a more material financial management system that will allow us to not only have greater access into our current operations, but is importantly allow us to continue to pace of acquisition growth that we would like to achieve. And so his team has already started that with the budget process that we're using now and that went very well. And then second part of that project is to bring it on a – bring on the financial reporting in the first to second quarter of next year.

Thanks. And finally, how much are you prepared or you feeling comfortable with in terms of leverage on the balance sheet as you look at acquisitions?

Mitra, as a management team we like to think that we're fairly conservative. I think this industry, in general, with solid cash flow could run 2%, 2.5% leverage and not be over levered on a long-term basis. If you had a very strategic acquisition that was appropriate for the company and the risk were appropriate, you could probably lever up a bit higher than that knowing you could delever very quickly. But I would say, with our exposure to Illinois today and where we are, we’d like the 2 times leverage to kind of be our upward target.

Okay. Thanks for taking the questions.

You bet, Mitra. Thank you.

Thank you. [Operator Instructions] I see no other questions in queue. I'll turn it to Mr. Allison for closing remarks.

Thank you, operator. I just want to thank everybody for your interest in Addus and for your participation on our earnings call today. And I hope you have a great week.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes your call. You may now disconnect.