Good morning, and welcome to the Addus HomeCare Corporation Fourth 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 Web site and reviewing yesterday's news release. This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus's 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 fourth 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'd 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 fourth quarter conference call. With me today is Brian Poff, our Chief Financial Officer. I will begin with some overall comments and then Brian will discuss the fourth quarter results that we issued yesterday afternoon. After that, we'd be happy to respond to any questions. We ended 2017 with a strong operating performance which led to solid financial results. Revenue for the fourth quarter was $112 million compared to $103.7 million for the same period in 2016, an increase of 8%. Our adjusted earnings per share for the fourth quarter of 2017 was $0.46 compared to $0.43 for the same period in 2016, an increase of 7%. Our adjusted EBITDA for the fourth quarter of 2017 increased 14.5% from $9.3 million to $10.6 million and adjusted EBITDA margin of 9.5%. For 2017, our adjusted earnings per share was 100 -- was one point -- was $1.60 compared to a $1.46 for 2016, an increase of 9.6%.For 2017, our adjusted EBITDA was $36.8 million as compared to $32.1 million for 2016, an increase of 14.6%. As of today, we have approximately $65 million of cash in the bank with approximately $44 million of debt. Our cash collections have been strong from all of our payers including the state of Illinois. Illinois continues to do a nice job of keeping our company relatively current on our business with the state. We look forward to the state leadership passing its annual budget for fiscal 2019 this summer, which should enable the state to continue paying us in a timely manner in which they’ve been doing for the past eight months. On our last earnings call, I discussed the issues we are facing in the State of New York related…

Thank you, Dirk, and good morning, everyone. Addus completed 2017 on a strong note with our fourth quarter financial results. We continue to produce a positive sequential quarter growth progression in revenue and adjusted EPS, while leveraging our margin. Our organic growth for the fourth quarter was driven by solid same-store revenue growth of 4.1%. With our focused acquisition strategy reflected in the Options Home Care deal completed in August, we produced meaningful nonorganic revenue growth for the fourth quarter benefiting from a full quarter of options revenue contribution, as well as our October acquisition of a small private pay provider in Arizona. We expect the impact of our growth from acquisitions to be strengthened by the anticipated completion of the Ambercare transaction in the second quarter of 2018. As Dirk mentioned, we also continue to evaluate and work towards a number of other acquisition opportunities and expect to announce additional transactions later this year. With the anticipated revenue stream from acquisitions combined with an ongoing expectation for same-store revenue growth for 2018 in a range of 3% to 5%, we believe we are well positioned to produce further profitable growth. For the fourth quarter of 2017, net service revenue increased 8% to a record $112 million. This increase was balanced between a 3.6% growth in billable hours per business day for the quarter at an increase of 4.2% in revenue per billable hour. Our gross margin for the fourth quarter was 27.4% relatively consistent with the fourth quarter of 2016. With increasing pressure from minimum wage requirements in certain states, we are pleased to report we have been mostly successful on our efforts to obtain corresponding reimbursement increases to offset and maintain our margins as we have historically. Our team continues to work diligently with our payers to ensure…

[Operator Instructions] And our first question comes from Dana Hambly of Stephens. Your line is open.

Hey, good morning. Thanks for taking the questions. Dirk or Brian, could you talk a little bit on the census for the quarter, a little bit weaker than what we were expecting. Was it broad-based or where there any pockets, anything that you could speak on?

Yes. Dana, good morning. I think we can. You realize that starting two years ago we really started directing our attention towards hours as opposed to census, changing the culture of the company. And so, as we did that, some of what you’ve seen is a focus on making sure that the census we have on board have the amount of hours necessary for those consumers to work in our company. That being said, other than just the overall vision we've had over the last couple years as it relates to ADC, we have a couple of areas that specifically caused the lower ADC this time. One happens to be in our two acquisitions we made a number of years ago, up in the Eastern region, the Ohio market and the Virginia market, we have gotten out of a few contracts that didn't make sense which means we lost some ADC, all in the idea of trying to increase the performance of those two areas. And we're very pleased that these changes are starting to have an effect and moving us where we want to be. In addition, we did talk about at the last call, some of the challenges on the Long Island market we were having, not only related to work -- the minimum wage and the living wage, but also we had one of our largest managed care providers on Long Island decided to leave the market. That meant a lot of the census we had with that particular provider went to other providers in the market. We were able to keep a lot of those clients as we were moving them to other MCOs. We did lose some however. In addition, there was a question during the last year about what we call live-in consumers. How much that you get reimbursed for those versus how much you pay the caregiver, there were some questions all throughout the state of New York about that that has just been clarified recently. So we quit taking these type consumers for a number of months. We now are starting to take them back again. So really if you think about it, it's the Ohio, Virginia area and then the changes on the Long Island market that led to the majority of the ADC decrease.

Okay. That’s helpful. And then on the rate increase, it's actually pretty strong. I imagine that has something to do with your ability to get rate increases to offset minimum wage, which is a good thing. Could you just remind me in Illinois, I think Chicago, for the next few years raises their minimum wage, if the budget would include increases every year, if that’s something you’ve to fight every year and then the same in New York? I think you said you’re doing pretty well in '18, but I think the rate goes up again in '19 and just what the process is for -- do you have to go back to them again next year as well?

Yes, Dana. This is Brian. I can take that one. Both the markets you’ve mentioned, you’re right. There are continued step ups in minimum wage in those markets. We’ve done a great job working with the legislature in each state and the payers to get corresponding reimbursement increases to keep us hold so far, but that is not baked into their plan for the future. Those are continuing conversations that we will have to have year to year. But we've historically always been very successful in keeping our margin whole. It’s been more of a year to year process, rather than something that they would kind of put into their budget years out. So we’re working today with the legislature in Illinois. Our guys have been in contact with them. They’re having those conversations in the same thing with all the payers up in the New York area.

Okay. And just last one for me, Brian, on the tax rate for this year. Are you still getting credit for the WOTC tax credits? And can you or do you know if those extend beyond 2018?

Yes, they’re through '18 and into -- I believe, into '19, but it is not a permanent fixture. It's something that we will have to continue to look at to see if they’re going to continue to extend. They’ve gone through that process in the last couple of years as well and have continued to move that forward. But we will see how that shapes out. Yes, for 2018 and in 2019 those are still in place. So that’s why we expect to see our tax rate in the low to mid 20% range.

Great. Thanks very much.

Thank you. [Operator Instructions] The next question is from the line of Mitra Ramgopal of Sidoti. Your line is open.

Yes. Hi, good morning. First on the Ambercare acquisition. I know its included obviously an entry into hospice market and some home health. I was wondering if you could can give us a sense in terms of the opportunities you see on the hospice side of the business and also any potential expansion into Home Health?

Yes, Mitra. We were very excited when we were able to work out a deal with Ambercare because it not only strengthened our personal care market in the state of New Mexico, but it also allow us to enter into hospice and home health in a market in which we had strong personal care presence. And if you remember, we've been saying for the last 18 months that we wanted to enter into clinical care in the home that we wanted to do it in a way that work strategically with our personal care presence. So either moving into hospice home health, and predominantly hospice in markets in which we operate or if we win into hospice end markets where we didn’t operate, we saw the way to open up or acquire personal companies around the hospice company to give us a complete offering in those particular markets. And Ambercare was the first one that we have found that is allowing us to do this. So going forward, I mean, we certainly have an interest in hospice. Home Health would be interesting. We have that now in New Mexico once we close the Ambercare transaction and we will be able to see how that works with our personal care and hospice markets there and whether or not that is something that can be transferred into other markets where we operate. But we will continue to look at the clinical side, preferably in those acquisitions that come with personal care, but not absolutely exclusively.

Okay, thanks. And if you can give us a little flavor in terms of the hospice market itself in terms of the growth etcetera on that side of the business relative to say maybe personal care?

Yes. The team here has lot of experience in hospice. Most of us have been out of it for a few years now, but it's a market that was growing similar to personal care, 3% to 5%. My last year in hospice, probably 2% to 3% was more appropriate as far as organic growth, but I would say similar growth profile to what we have in the personal care side. Now margins are different. Gross margins are higher and EBITDA margins are higher, where we operate right now in the 8%, 9% EBITDA range with the target of 10% if we can -- once we get up a little bigger. Hospice companies tend to operate in the mid teens as far as EBITDA. So as we enter into that particular market, as -- if we continue to do a good job in operating those businesses, we should see the hospice side help our margins a bit.

Okay, thanks. That’s very helpful. And I was wondering if you have any thoughts from a competitive standpoint. I know LHC had acquired AFAM, or they’re merging and if you in terms of the acquisition pipeline you have are you seeing any other interests, third parties maybe driving up prices or potentially doing that for you?

Well, I think hospice is an area that we all are aware has had expanded purchase multiples for a period of time. There seems to be a lot of people interested in that. Folks that typically would not be considered a hospice provider seem to be looking as do a lot of PE firms. So those multiples tend to be higher. No question, if you buy a standalone hospice provider. We typically are looking towards really personal care service that might have a division of hospice and we tend to -- the multiples tend to be slightly lower than what you would see on a pure-play hospice. So for us in the personal care market, we believe we are still very comfortable in the 5 to 7 multiple range. Hospice is going to be somewhat higher than that. But again, we're not really looking to go out there and just compete on pure-play hospice in most instances. So we will continue to focus mostly on what we see as these multiples that we can acquire and be very accretive to our company.

Okay, thanks. And Brian, I don’t know if you can give me a sense as -- and 2017 what percentage of the business was coming from the State of Illinois?

With the rate increase, that actually still is just, I think over 50% of our overall business. Obviously, that profile will change when we bring Ambercare into the full -- in the second quarter. But, yes, just over 50% something that revoltingly Bremer. The old on the second quarter but gets over 50% at year-end.

Okay. Thanks again for taking the questions.

Thank you. And I’m showing no further questions at this time. I’d like to turn the conference back over to Mr. Dirk Allison for the closing remarks.

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

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone have a great day.