Addus HomeCare Corporation (ADUS) Q4 2020 Earnings Report, Transcript and Summary

Hello, ladies and gentlemen, and welcome to the Addus HomeCare Corporation Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Dru Anderson. Please, go ahead.

Good morning and welcome to the Addus HomeCare Corporation fourth quarter and 2020 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 also 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 2021 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' filings with the Securities and Exchange Commission and its fourth quarter and 2020 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. At this time I would like to turn the call over to the company's President and Chief Executive Officer, Mr. Dirk Allison. Please, go ahead, sir.

Thank you, Dru. Good morning and thank you for joining us for our 2020 fourth quarter earnings call. With me today are Brian Poff, our Chief Financial Officer; and Brad Bickham, our Chief Operating Officer. As usual, I will begin with some overall comments and then Brian will discuss the fourth quarter results in more detail. Following our comments we would be happy to respond to any questions. As we've been saying for the past 11 months, a pandemic continues to create many challenges, as we experienced a substantial new surge of COVID cases beginning midway through the fourth quarter of 2020. While I expect the environment to remain operationally challenging over the next several months, we are encouraged by the progress being made with the COVID vaccine rollout and the steady reduction in COVID cases since the peak in late December. We look forward to the time when this pandemic is no longer a significant disruption to our operations. In spite of the ongoing pandemic-related challenges, my optimism about the future of both the home care industry and Addus remains strong. I'm especially proud of our dedicated team of leaders and team members that have demonstrated their ability to meet our mission and execute upon our strategy. This past year has been a unique challenge for our country and I believe all of our Addus team has been a vital part of keeping our elderly citizens safe. As you saw with the financial results we announced yesterday, we continued our solid operating performance in the fourth quarter of 2020. Our revenue for the fourth quarter was $196 million as compared to $192.4 million for the fourth quarter of 2019. Adjusted earnings per diluted share for the fourth quarter of 2020 was $0.82, up from $0.73 for the fourth quarter of 2019, despite the impact of COVID-19 on revenues during our latest quarter. Our adjusted EBITDA for the fourth quarter of 2020 was $20.9 million as compared to $18.8 million for the fourth quarter of 2019, an increase of 11.6%. Our adjusted EBITDA margin increased to 10.7% for the quarter, up from 10.1% sequentially. During the fourth quarter of 2020, our revenues continued to be adversely impacted by the COVID-19 pandemic, with a decline of 2% to 3% from our pre-COVID 2020 run rate. As was the case in our third quarter of this year, this reduction occurred to varying degrees in all three segments of our business, but particularly in the New York personal care market and in our New Mexico hospice operation where we still see a number of facilities limiting access which hinders our ability to work with new patients. As a result of the recent increase in COVID cases during the last couple of months of 2020 and the ongoing COVID precautions in place, we estimate our first quarter 2021 revenues will continue to be negatively affected by approximately 2% to 3% as compared to our pre-pandemic run rate. For the full year 2020, our revenue was $768.4 million, as compared to $648.8 million for 2019, an increase of 17.9%. Adjusted earnings per diluted share for 2020 was $3.08, up from $2.50 for 2019, an increase of 23.2% despite the 10-month impact of COVID-19 on revenues. Our adjusted EBITDA for 2020 was $76.9 million, as compared to $58.7 million for 2019, an increase of 31%. Our adjusted EBITDA margin increased to 10% for all of 2020, up from 9% for 2019 as we continue to see leverage from our increasing size along with the growth in our higher-margin clinical services. Our fourth quarter 2020 operating cash flow exclusive of a government stimulus advance was solid at approximately $24 million. During the fourth quarter of 2020, many of the states where we operate have continued to prioritize timely payment to home care providers. We continue to be grateful to these states and to our MCO partners who have remained committed to making prompt payments to providers even with the challenges of the virus. On December 1 2020 we closed on two additional acquisitions: Queen City Hospice, a large provider of hospice services in Ohio; and SunLife HomeCare, a personal care provider in Tucson, Arizona. The integration of these operations into Addus has been proceeding consistent with our expectations and on schedule. Both of these acquisitions will help us expand our services into existing markets with Queen City hospice adding hospice services to our Ohio personal care presence. I want to again welcome all the team members from Queen City and SunLife to the Addus family. We continually monitor legislative activity in both Washington D.C. and our various states relative to each of our service lines. Obviously, the COVID relief legislation expected in budget reconciliation is projected to be significant in providing general financial relief to states suffering revenue losses from the pandemic. We are encouraged by the provision included in the proposal that will provide an additional 7.35% in federal matching funds specifically for Medicaid home and community-based services. Increasing the federal minimum wage is another proposal we are watching closely that may or may not become law. Regardless through our various trade associations, we are developing proposals focused on making sure that states have the necessary resources to raise reimbursement rates commensurate with any rise in the federal minimum wage. To that end we were extremely pleased to see the Congressional Budget Office to our knowledge for the first time score the cost impact of minimum wage increases on Medicaid and Medicare programs. On the state level, we were disappointed that Illinois delayed the scheduled January 1, 2021 rate increase until April 1st of this year. However, the Illinois governor introduced his fiscal 2022 budget on February 17 and this rate increase is included effective April 1, 2021. The governor also included funding in his budget for an additional rate increase to offset the upcoming July 1, $1 minimum wage increase in Chicago. However, this increase is scheduled to be delayed six months becoming effective on January 1, 2022. This is the last scheduled minimum wage increase for Chicago. I also want to update you on recent developments pertaining to our New York business. We currently operate two types of personal care in the state: PCA, which is a type of personal care services that represent the majority of our overall revenue; and secondly CDPAP, which is a special program where we act as the fiscal intermediary for certain individuals who hire and employ their own caregivers. In New York, CDPAP, we are technically not considered the employer of the caregiver even though they are paid as W-2 employees as the client is responsible for hiring, training, scheduling and direction of caregivers. Recently the state announced the winners of an open bidding process that had been underway for a number of months related to the CDPAP program in an effort to reduce the number of providers and reduce cost. Even though we are a relatively large provider of CDPAP services in the state, we were not selected as a winning bidder as part of this process. We know other large providers who are not selected. Our current revenue from this service is approximately $52 million annually. At that time – at this time, it is unclear whether the selected parties will have the ability to fully meet the program's needs. We believe that any transition of clients as a result of this process will not take place during the next six to 12 months during which time we will continue to explore our options including a recently filed protest, which may allow us to continue to provide these services. Let me now turn back to COVID for a minute. In late September, we began to experience an increase in the number of reported suspected and positive COVID cases for both our patients and caregivers. The weekly average number of confirmed or suspected cases more than tripled between September and December. Our weekly case numbers began to particularly accelerate from early November to the middle of December. Our peak employee cases occurred mid-December and have continued to trend lower each week since that time. This surge of the pandemic affected our visits, particularly in our personal care segment but also to a degree in our clinical care service lines. Our personal care segment was primarily impacted by the substantial increase in personal care staff who were subject to a mandatory 14-day quarantine period. Our clinical service lines were impacted due to a further tightening of facility access restrictions and hospitals limiting elective surgeries due to increased COVID-related hospitalizations in certain hard-hit communities. For the fourth quarter of 2020, our personal care same-store revenue growth was 2.6%. This growth rate was negatively affected by the increase in COVID cases we experienced across our markets. This new surge of the pandemic led to a number of challenges for our company. As discussed above, during November and December, we saw a significant increase in the number of our caregivers who had to enter into quarantine. We also saw client call-offs increase again starting in November with this increase lasting until the first week of February. Our caregiver hires for August through – for the August through October time frame were up approximately 9% over the same period in 2019. However, during November and December, when we saw the increased virus counts, our hiring slowed to where we were down 1.3% versus those same two months in 2019. While our January 2021 hiring levels were still down slightly from 2020, we did see a nice sequential increase from the hiring numbers we saw in December of 2020. For the fourth quarter of 2020, our hospice same-store revenue decreased 10.6%, as we saw our average daily census decrease 13.5% year-over-year, primarily due to continuing facility access issues in our New York, Mexico hospice programs. With continued limits on access to facility-based settings, such as assisted living facilities and skilled nursing facilities, our team has encountered challenges in identifying and working with new patients who need hospice services. We did however experience sequential same-store hospice admission growth of approximately 7%, due primarily to an increase in our non-facility referral base. Our home health same-store revenue decreased by 8.2% year-over-year. We were having our best month of the year in October, when we experienced the increase in COVID cases and saw some of our New Mexico hospitals resume holes on elective surgeries. Since the beginning of 2021, our home health admissions have increased steadily with this favorable trend continuing into February. Our acquisition pipeline and liquidity position remains strong. And while we are being appropriately cautious, we continue to believe that we can close additional acquisitions during the next several months. We are primarily focused on acquisitions which strengthen our coverage in existing markets or add clinical services to our Personal Care business. While purchase multiples for clinical services remain high, we will continue to pursue transactions that bring both revenue and operating synergies to Addus. As I look back over the past 11 months, I am proud of our team as they have continued to do a tremendous job of living our mission during these extraordinary times. Our caregivers have been able to positively affect the trajectory and impact of the COVID-19 pandemic by continuing to serve the needs of our consumers and patients in their homes. All caregivers, in all segments of healthcare, deserve our appreciation for their commitment to patient care. I especially want to thank the Addus team for continuing to put our patients first. Before I turn the call over to Brian, I want to remind our team of the value of our services. While the COVID virus is still a challenge for our country as well as the world, we need to continue to live our mission and values while serving our consumers and patients. Each of these individuals need to be in their homes, where we can help to keep them safe from this virus while providing much needed care. With that, let me turn the call over to Brian.

Thank you, Dirk, and good morning, everyone. Addus had another solid financial performance in the fourth quarter of 2020 and for the full year, continuing to demonstrate consistent profitable growth, despite the ongoing challenges and disruptions related to the COVID-19 pandemic. As Dirk noted, total net service revenues for the fourth quarter were $196 million. The revenue breakdown is as follows. Personal Care revenues were $164.4 million or 83.9% of revenue. Hospice care revenues were $27.6 million or 14.1% of revenue and Home Health revenues were $4 million or 2% of revenue. Our revenues for the full year 2020 were $764.8 million, up 17.9% from the prior year with contributions from both organic growth and acquisitions. And we continue to execute our growth strategy with favorable results. Our overall volumes were fairly consistent with the third quarter and continue to trend modestly below pre-COVID levels. However, we have a strong business model in place and believe we are well positioned to meet expected demand, especially as vaccines are more widely distributed, consumers become more confident in a less restrictive environment and volumes return to historical levels. Our results also reflect the incremental benefits of the four acquisitions we completed in 2020, three of which closed in the fourth quarter. Together, acquisitions completed over the past two years have combined annual total revenue of approximately $214 million. We continue to evaluate and pursue additional acquisition opportunities and have a robust pipeline of potential transactions that meet our target criteria. Going forward, we believe the market landscape in 2021 will be advantageous for us to enhance our current operations while looking to complement with clinical services and expansion into select attractive markets. Other financial results for the fourth quarter of 2020 include the following. Our gross margin percentage was 30.2% compared with 29.9% for the fourth quarter last year. We continue to benefit from the increased mix of clinical services, most recently with our Queen City acquisition in December. While we have been impacted by the recent increase in Chicago minimum wage without an offsetting reimbursement increase, we anticipate the recovery of that margin with the upcoming April 1 state-wide rate increase in Illinois. G&A expense was 22.6% of revenue for the quarter, up from 20.7% last year, primarily related to higher M&A expenses associated with our recent acquisitions. Adjusted G&A expense was 19.5% of revenue, up slightly from 19% sequentially with a higher mix of skilled business with a higher G&A profile. The company's adjusted EBITDA increased to $20.9 million for the fourth quarter of 2020 compared to $18.8 million in the fourth quarter of 2019. Adjusted EBITDA margin was 10.7% an increase from 9.8% for the fourth quarter of 2020 and up sequentially from 10.1% in the third quarter. Adjusted net income per diluted share was $0.82 for the fourth quarter, up from $0.73 in the prior year quarter. The adjusted per-share results for the fourth quarter of 2020 exclude the following: COVID-19 expenses of $0.01, M&A transaction expenses of $0.15, restructuring and other costs of $0.03 and noncash stock-based compensation of $0.10. Our adjusted per share results for the fourth quarter of 2019 exclude the impact of the retroactive Illinois rate increase of $0.12, M&A transaction expenses of $0.08, restructuring and other costs of $0.01 and noncash stock-based compensation of $0.08. Our tax rate for the fourth quarter of 2020 was 22.4% consistent with our expectation. Based on recent legislation and extension of certain tax benefits the company has experienced historically for 2021, we continue to expect our tax rate to remain in the low to mid-20s. DSOs were 60.8 days at the end of the fourth quarter of 2020 compared with 55.8 days at the end of the third quarter. We continue to see consistent payments from the majority of our payers with home and community based service providers being prioritized in many of our markets. Our fourth quarter net cash provided by operations totaled $36.1 million and $109.4 million for the year, a new annual record for Addus. As Dirk referenced, we did apply for and received Provider Relief Funds during the fourth quarter without, which our cash provided by operations would have been approximately $24 million for the quarter. We intend to utilize the Medicaid-based relief funds to benefit our frontline team as they have continued to work tirelessly even in the midst of this pandemic. At December 31, 2020, the company had cash of $145.1 million, $196.6 million of bank debt and $112.6 million in availability under our revolver. Even after our most recent acquisitions, we continue to benefit from low net leverage and remain well-positioned to continue to execute on our acquisition strategy. This concludes our prepared comments this morning and I want to thank you all for being with us. I'll now ask the operator to please open the line for your questions.

Thank you. [Operator Instructions] Your first response is from Matt Borsch of BMO Capital Markets. Please go ahead.

Yeah. I was hoping that you could talk a little bit more about if you are able to about the contract that you were -- you and other large providers were excluded from. Is there a characteristic to those that either are new or continuing with the program as opposed to those that were shut out? And how do you -- would you have any thoughts on how you think the protest process will go from here?

We don't know of any characteristics. Some of the providers that were selected quite honestly are quite small and have very little business. So it's a little bit of a black box about the formula was undertaken. We have requested information from the state so that we can better understand what went on. We have not yet received that information. As far as the protest, we believe that enough people protests that have not received the contract. There may be an opportunity for the state to relook at how they did it. But for our standpoint, we're not just stopping with the process. We're looking at other things. It's not -- honestly it's not an extremely profitable business for us. In fact it's probably one of our lowest-margin businesses across the country. But it is something, we will continue to look at as an internal team, talk to the state about and see what's the best direction for the company going forward.

That makes sense. Maybe just one more question if I could. On the M&A pipeline, particularly on the personal care side, I think you -- maybe it was across all three segments but highlighting some good opportunities. Is some of that coming out of just the difficulty -- of continuing difficulty of smaller organizations to manage through the pandemic? And maybe that was worsened by what happened with the virus surge in November-December?

Yeah. I think -- Matt, this is Brian. I think we've seen especially in the personal care segment several opportunities of various sizes. I think a couple of factors there. I definitely think, it's been a little challenging for folks to manage through in a smaller setting in this environment. We are also seeing more states, particularly this year moving into EVV, which I think we've talked about in the past. A lot of those folks had kind of moved that can down the road just a bit. But a lot of the states are starting that transition process, which I think is making business for some of the smaller providers a little more difficult and probably a little more likely to be attractive for us.

Got it. Thank you.

Thank you. Your next response is from Brian Tanquilut of Jefferies. Please go ahead.

Hi. Good morning. This is Jack Levine on for Brian. Thanks for taking my questions. First, one on the New York state budget just wanted – we've been getting a lot of questions from investors. Wanted to see, if you guys had any thoughts on the budget overall. What the impacts from that purpose cut could be? And then, also, if you've seen any sort of pass-through or impact from the retroactive cut to the managed care plans?

Yeah. Yes, Jack, we trying to tell you what's come out of the New York budget is really difficult. I am not even sure that everybody understands what is in there even at the state level. Certainly, from the Medicaid standpoint, I think it's talking at a potential 1% additional reduction in Medicaid fees. We'll see, if that comes through. From our standpoint, we are just trying to make sure that in that state we are operating as efficiently as we can because of the challenges we see with the overall status – financial status at the state.

Yeah. This is Brad. We have not seen any impact to the rates currently. Right now, we just recently went through contract renegotiations and payer rates with most of our large providers regarding minimum wage pass-throughs and those went successfully. So we're not exactly sure how that will if it all pass through to us.

Okay. Great. That's helpful. And then one more for me, just on the – the employment market outlook, particularly for personal care. I think over the past couple of years we viewed the rate-limiting factor for growth in the personal care segment is really on the supply side of things. Just wondering, if there's any color you could give on the outlook for that employment market incremental to some of the commentary you gave on what hiring’s looked like recently?

Yes. This is Brad again. Certainly on the – with respect to the employment, we've done a pretty good job recruiting. We saw some significant decline in November and December due to the COVID surge. Numbers started coming back up in January, have continued to increase slightly into February. When we're looking at long term with the elevated unemployment rates, I think there's the potential there. Now, there's going to be some dampening effect of that, if the – with respect to the proposal on the $400 unemployment benefit that's currently out there or currently proposed. So that may in the near-term cause some challenges for us. But I think once that that expires there should be some good opportunities for us to ramp up recruiting.

Great. Thanks, and congrats on a good quarter.

Thank you.

Thank you. Your next response is from Scott Fidel of Stephens. Please go ahead.

Hey, guys. This is Kato Bezel [ph] on for Scott. I'm just wondering, if you could help size the impact from the Illinois rate increases for 2021 on an annualized basis? And then just given that you were able to absorb the minimum wage increases in the second half 2020 without much margin impact, I'm wondering how we should think about the potential margin impact on the rate increase for 2021 given that there is the Chicago minimum wage hike coming in over the summer? So we're just wondering, if this is kind of more net-neutral or if there's a directional margin impact from those two dynamics?

Yeah, Kato, I think we expect – similar to prior years, we've had a similar dynamic in play. When we do get the statewide rate increase keep in mind we saw a higher minimum wage only in our Chicago market. The rate increase we're going to get is going to be statewide. And at that time, we will do our typical negotiations with the union on all the non-Chicago workers on those wage rates. So typically, how we've seen this transpire and how we would expect it to in the next couple of instances in April and then January of next year, is an increase in revenue with a corresponding kind of typical margin that we would see in that market. So we've characterized, I believe in the past that, the rate increase we expect to get in April should be on an annualized basis, just north of $20 million in additional revenue and then some margin on that. So the rate increase expected for January of next year would be similar in profile.

That's it for me. Thanks guys.

Thank you. Our next response is from John Ransom of Raymond James. Please go ahead.

Hey good morning. Dirk I'm just curious where you see market multiples now for particularly home care assets where there just hasn't been a lot of M&A recently.

Yes. John certainly, it's no surprise for anybody that's followed health care services that the multiples for clinical service particularly have been increasing have been quite high. I mean if you look at the hospice multiples they've been 12, 14 or so on an adjusted run rate basis. We suspect that home health is probably near that maybe slightly below. But again there's not been as many quite as many home health deals announced as of this point in time. But certainly the clinical services are in that 12 to 14-plus range at least at this point. Personal care, again personal care has been a little bit quiet the last six to nine months. We have always targeted our personal care the smaller deals at six to seven times; maybe the larger deals eight times, eight and a half times. And our guess is those multiples were probably still pretty common where we think they'll be. We don't think there has been a great uptick in the personal care market as far as valuation at this time.

Great. Second question just on your obviously labor is a perennial issue. I mean it's something you got to manage through every year. Are you able to assist with getting your personal caregivers vaccinations, or are they kind of on their own from that standpoint?

Yes. This is Brad. Great question. We have assisted from the standpoint we've offered a stipend for them to incentivize them to get both doses of the vaccine. That's going pretty well. But as far as being able to schedule for them that's been challenging. What we have done is blasted out information as we get it as to availability of vaccines and how to register and that sort of thing. And I've also put out a fair amount of educational materials to just help them understand the vaccine the safety of it, the efficacy of it. And then in some a couple of markets in New Mexico mainly where we have skilled services that are located -- co-located in the same buildings as the personal care they have participated in some drive-through vaccinations.

And do you have an estimate on what percent of your workforce has been able to be vaccinated?

It's -- I wish the numbers were greater. I mean right now we don't really collect that information until they get that second dose and they submit their verification for payments. So, it's going a little slower than we would like, but at least, we are seeing kind of steady progress.

And I would guess I mean given the not majority but just the prevalence of family-on-family, it's maybe a bit less of an issue in aggregate for you than say for home health I mean personal care versus home health. I'm balling down I'm guessing but less of an issue?

I mean that's probably correct. I mean certainly on the skilled side when you're providing services in a facility setting that's something that they're going to be looking for. So, we have certainly been promoting and encouraging our folks on the skilled side to get vaccinated quickly. They also have the easier opportunities. They're in that first-tier folks to get vaccinated. So, we're seeing a higher percentage in the skilled side. But I agree with you on the personal care side when you're talking about family caregivers it's probably not as I'd say critical until everybody gets vaccinated in the home.

Great. And I know you've got operations everywhere but did the Texas weather issue did it cause any ripples in your operations or hope you guys are all okay and have water and power all that stuff that look terrific. But does that cause any issues this quarter that we should be aware?

Yes. Fortunately in Texas, we have just the skilled services. So, they weren't as impacted from as the personal care would be. That being said Texas certainly got the lion's share of the headlines related to the storm, but we did see some impact in particularly downstate Illinois some of the more rural markets that we serve that also got hit hard with the weather.

Got you. Okay. Thank you. That’s it for me.

[Operator Instructions] Your next response is from Mitra Ramgopal of Sidoti. Please go ahead.

Yes, hi, good morning and thanks for taking the questions. First, the personal care business certainly held up well despite the pandemic. But on the hospice/home health side those lagged a little. I was just wondering, how comfortable or confident you are in terms of resumption of organic growth in those segments as we look out this year and beyond.

Hi Mitra, this is Brad. We certainly saw the more significant impact on the hospice and the home health. And first off, on the home health piece of the business, our assets are primarily located in New Mexico. They got hit pretty hard with the surge. We saw some of the hospitals there curtail elective procedures in the November and particularly more in the December time frame. What we have seen on home health actually is a pretty good bounce back in January and February with admission volume. So feel pretty comfortable on the home health side. With respect to hospice, we've looked at the data several different ways. And even though we've had good admissions, sequential admission growth between Q3 and Q4 and we've actually seen that trend continue into January and February, I think a lot of it is short length-of-stay patients. And when you look at the data, we've seen our length of stay particularly with -- we look at it patients that are in service for less than 30 days. That percentage has increased. But even within that segment, we've seen the average length of stay for those decline a couple of days. And it's going to take a while to -- a little while to see that trend reverse that I think will have an impact on ADC. I can tell you January ADC has stabilized. February ADC has ticked up over January. So we're seeing an encouraging steady increase, but it's going to probably take a little while to get back on track on the hospice side. I would look more to the second half of the year for kind of getting back to normal.

Okay. That's very helpful. Then on the acquisition front Dirk, I know you mentioned you have a really strong pipeline across all the segments. I was just curious if -- is there going to be a greater emphasis in terms of entering new geography so to speak or just -- before to consolidate in terms of the existing markets at this point?

Mitra, our real focus is strengthening the markets in which we currently operate. We have -- if you look at the number of states, I believe its 23. Now, we have left a couple of very small states consolidated that business back into other markets. Our goal going forward it's to take those states which we operate and we want to drive hopefully eventually three levels of care in those markets and try to backfill and do that with our acquisition strategy. Now, it doesn't mean that if we had an opportunity in a substantial way to enter in a new market where we felt, we could then get to two or three levels of care in that market, we would certainly look at that. But you can -- for most of what we're looking at today it's more in the markets than where we are currently operating.

Okay. No that's great. And then finally, just coming back to New York. Do you see that sort of one-off or potentially a risk with maybe some other states adopting similar approaches and leading to potentially being locked out of some of these contracts?

New York has always been special. And from our standpoint, it's the state that is kind of an outlier as it looks at this. We don't anticipate -- we have no -- with everything we know in the other states and we operate, this is not even something they would be looking at. There are some states that are going to more -- adding some self-directed programs which we work very well with as an agency with self-directed care. But as far as a true CDPAP where the patient themselves are the -- really the employer of the caregiver and we're just kind of that fiscal intermediary that is not something we see elsewhere nor think will spread.

Okay. Thanks again for taking the question s.

I am showing no further questions at this time. I would like to turn the call back over to Dirk Allison.

Thank you, operator. And I want to thank you all today for your interest in Addus and for being part of our earnings call today. We hope you have a great week. Thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. Have a wonderful day and you may all disconnect.