1 unchanged sentence
Evaluation of Disclosure Controls and Procedures
−Removed: Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
−Removed: Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
+Added: Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
+Added: Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.
−Removed: Management’s Annual Report on Internal Control Over Financial Reporting
+Added: Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
−Removed: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control —
−Removed: Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
−Removed: Based on our assessment under the framework in Internal Control —
−Removed: Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
+Added: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
+Added: Based on our assessment under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
Under SEC Staff guidance, companies are permitted to exclude acquisitions from their first assessment of internal control over financial reporting which covers the period in which such acquisition was completed.
−Removed: We excluded JourneyCare Inc.
−Removed: (“JourneyCare”) and Apple Home HealthCare, LTD (“Apple Home”) each of which are wholly-owned subsidiaries, from our assessment of internal
−Removed: control over financial reporting as of December 31, 2022 because they were acquired in purchase business combinations on February 1, 2022 and October 1, 2022, respectively.
−Removed: JourneyCare represented 5% of our revenues and 11% of our operating income, respectively, for the year ended December 31, 2022.
−Removed: Apple Home represented 0.24% of our revenues and 0.24% of our operating income, respectively, for the year ended December 31, 2022.
−Removed: The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which appears within Part IV, Item 15—“Exhibits and Financial Statement Schedules.”.
+Added: We excluded Coastal Nursecare of Florida, Inc.
+Added: (“CareStaff”) and American Home Care, LLC, a Tennessee limited liability company (“AHC”), and its subsidiaries, Homecare, LLC, a Tennessee limited liability company (“Homecare”), Tennessee Valley Home Care, LLC (d/b/a Tennessee Quality Care – Home Health), a Tennessee limited liability company (“TQC – Home Health”), and Tri-County Home Health and Hospice, LLC (d/b/a Tennessee Quality Care - Hospice), a Tennessee limited liability company (“TQC – Hospice”, and collectively with AHC, Homecare, and TQC – Home Health “Tennessee Quality Care”) each of which are wholly-owned subsidiaries, from our assessment of internal control over financial reporting as of December 31, 2023 because they were acquired in purchase business combinations on January 1, 2023 and August 1, 2023, respectively.
+Added: CareStaff represented 0.2% of our revenues and 0.4% of our operating income, respectively, for the year ended December 31, 2023.
+Added: Tennessee Quality Care represented 1.5% of our revenues and 3.3% of our operating income, respectively, for the year ended December 31, 2023.
+Added: The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which appears within Part IV, Item 15—“Exhibits and Financial Statement Schedules.”.
Changes in Internal Control Over Financial Reporting
2 unchanged sentences
Not applicable.
+Added: Without limiting the generality of the foregoing, during the quarter ended December 31, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements, as such terms are defined in Item 408 of Regulation S-K.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
3 unchanged sentences
The information required by this item is incorporated by reference to the 2024 Proxy Statement to be filed with the SEC not later than 120 days after the end of the fiscal year ended December 31, 2023.
−Removed: We have adopted a Code of Business Conduct and Ethics (“Code of Conduct”) that is applicable to all of our employees, officers and members of our Board of Directors, and our subsidiaries.
+Added: We have adopted a Code of Business Conduct and Ethics (“Code of Conduct”) that is applicable to all of our employees, officers and members of our Board of Directors, and our subsidiaries.
The Code of Conduct addresses, among other things, legal compliance, conflicts of interest, corporate opportunities, protection and proper use of Company assets, confidential and proprietary information, integrity of records, compliance with accounting principles and relations with government agencies.
−Removed: A copy of the current version of our Code of Conduct is available in the Investors—Corporate Governance section of our internet website located at www.addus.com.
+Added: A copy of the current version of our Code of Conduct is available in the Investors—Corporate Governance section of our internet website located at www.addus.com.
A copy of the Code of Conduct is also available in print, free of charge, to any stockholder who requests it by writing to Addus HomeCare Corporation, 6303 Cowboys Way, Suite 600, Frisco, TX 75034.
18 unchanged sentences
Description of Securities of Addus HomeCare Corporation Registered under Section 12 of the Exchange Act.
−Removed: Separation and General Release Agreement, dated as of September 20, 2009, between Addus HealthCare, Inc.
−Removed: Andrew Wright, III.
−Removed: Addus HealthCare, Inc.
−Removed: Home Health and Home Care Division Vice President and Regional Director Bonus Plan.
−Removed: Addus HealthCare, Inc.
−Removed: Support Center Vice President and Department Director Bonus Plan.
Addus Holding Corporation 2006 Stock Incentive Plan.
2 unchanged sentences
2009 Form of Indemnification Agreement.
−Removed: License Agreement for Horizon Homecare Software, dated March 24, 2006, between McKesson Information Solutions, LLC and Addus HealthCare, Inc.
−Removed: Contract Supplement to License Agreement No.
−Removed: C0608555, dated March 24, 2006.
−Removed: Contract Supplement to License Agreement No.
−Removed: 00608555, dated March 28, 2006.
−Removed: Amendment to License Agreement No.
−Removed: C0608555, dated March 28, 2006, between McKesson Information Solutions LLC and Addus HealthCare, Inc.
Form of Addus HomeCare Corporation 2009 Stock Incentive Plan.
1 unchanged sentence
Form of Restricted Stock Award Agreement pursuant to the 2009 Stock Incentive Plan.
−Removed: The Executive Nonqualified “Excess”
−Removed: Plan Adoption Agreement, by Addus HealthCare, Inc., dated April 1, 2012.
−Removed: The Executive Nonqualified Excess Plan Document.
−Removed: Asset Purchase Agreement, dated as of February 7, 2013, by and among Addus HealthCare, Inc., its subsidiaries identified therein, LHC Group, Inc.
−Removed: and its subsidiaries identified therein.
−Removed: Employment and Non-Competition Agreement, effective December 15, 2014, by and between Addus HealthCare, Inc.
−Removed: and Maxine Hochhauser.
Securities Purchase Agreement, dated as of April 24, 2015, by and among Addus HealthCare, Inc., Margaret Coffey, Carol Kolar, South Shore Home Health Service, Inc.
and Acaring Home Care, LLC.
−Removed: Separation Agreement and General Release, dated as of March 18, 2016, by and between Addus HealthCare, Inc.
−Removed: and Inna Berkovich.
−Removed: Separation Agreement and General Release, effective May 25, 2016, by and between Addus HealthCare, Inc.
−Removed: and Donald Klink.
−Removed: Separation Agreement and General Release, dated as of March 1, 2016, by and between Addus HomeCare Corporation and Mark S.
−Removed: Severance Agreement and General Release, dated as of February 13, 2017, by and between Addus HomeCare Corporation and Maxine Hochhauser.
Credit Agreement, dated as of May 8, 2017, by and among Addus Healthcare, Inc., as the Borrower, the other parties from time to time a party thereto, and Capital One, National Association, as a Lender and Swing Lender and as Agent for all Lenders, Suntrust Bank, as Documentation Agent, Bank of the West, Compass Bank, Fifth Third Bank and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, the other financial institutions party thereto, as Lenders, Capital One, National Association, Bank of the West, Compass Bank, Fifth Third Bank and JPMorgan Chase Bank, N.A.
and Suntrust Robinson Humphrey as Joint Lead Arrangers and Capital One, National Association, as Sole Bookrunner.
−Removed: Addus HomeCare Corporation’s 2017 Omnibus Incentive Plan, effective as of April 27, 2017.
+Added: Addus HomeCare Corporation’s 2017 Omnibus Incentive Plan, effective as of April 27, 2017.
Form of Nonqualified Stock Option Award Agreement pursuant to the 2017 Omnibus Incentive Plan.
Form of Restricted Stock Award Agreement pursuant to the 2017 Omnibus Incentive Plan.
−Removed: Amended and Restated Employment and Non-Competition Agreement, dated April 25, 2017, by and between Addus HealthCare, Inc.
−Removed: and Brenda Belger.
−Removed: Transition Agreement and Release, effective as of August 14, 2017, by and between Addus HealthCare, Inc.
−Removed: and Brenda Belger.
Stock Purchase Agreement, dated February 27, 2018, by and among Addus Healthcare, Inc., Michael J.
Merrell and Mary E.
−Removed: individually, Michael J.
+Added: Merrell, individually, Michael J.
Merrell and Mary E.
8 unchanged sentences
Second Amended and Restated Employment and Non-Competition Agreement, dated November 5, 2018, by and between Addus HealthCare, Inc.
−Removed: and James Zoccoli.
−Removed: Second Amended and Restated Employment and Non-Competition Agreement, dated November 5, 2018, by and between Addus HealthCare, Inc.
and Darby Anderson.
1 unchanged sentence
Bradley Bickham.
−Removed: Amended and Restated Employment and Non-Competition Agreement, dated November 5, 2018, by and between Addus HealthCare, Inc.
−Removed: and Laurie Manning.
Amended and Restated Credit Agreement, dated as of October 31, 2018, by and among Addus HealthCare, Inc., as borrower, the Company, the other Credit Parties party thereto, the Lenders and L/C Issuers party thereto, and Capital One, National Association, as administrative agent.
5 unchanged sentences
and Mike Wattenbarger.
−Removed: Transition Agreement and Release, effective as of July 31, 2019, by and between Addus HealthCare, Inc.
−Removed: and James “Zeke”
−Removed: Equity Purchase Agreement, dated August 25, 2019, by and among Addus Healthcare, Inc., Hospice Partners of America, LLC, New Capital Partners II –
−Removed: HS, Inc., Senior Care Services, LLC, Eastside Partners II, L.P., and New Capital Partners II, LLC.
+Added: Equity Purchase Agreement, dated August 25, 2019, by and among Addus Healthcare, Inc., Hospice Partners of America, LLC, New Capital Partners II – HS, Inc., Senior Care Services, LLC, Eastside Partners II, L.P., and New Capital Partners II, LLC.
First Amendment to Amended and Restated Credit Agreement, dated as of September 12, 2019, by and among Addus HealthCare, Inc., as the Borrower, Addus HomeCare Corporation, other Credit Parties party thereto, Capital One, National Association, as administrative agent and as a Lender, and the other Lenders party thereto.
1 unchanged sentence
Amendment to Unit Purchase Agreement, dated December 3, 2020, by and among Addus Healthcare, Inc., Queen City Hospice, LLC, Miracle City Hospice, LLC, and QCH Holdings LLC.
−Removed: Transition Agreement and Release, effective June 11, 2021, by and among Addus HealthCare, Inc.
−Removed: and Laurie Manning.
Employment and Non-Competition Agreement, effective June 14, 2021, by and between Addus HealthCare, Inc.
2 unchanged sentences
2022 Form of Indemnification Agreement.
+Added: Amended and Restated Employment and Non-Competition Agreement, effective March 1, 2022, by and between Addus HealthCare, Inc.
+Added: and Monica Raines .
+Added: Employment and Non-Competition Agreement, effective April 20, 2022, by and between Addus HealthCare, Inc.
+Added: and Cliff Blessing.
+Added: Third Amendment to Amended and Restated Credit Agreement, dated as of April 26, 2023, by and among Addus HealthCare, Inc., as the Borrower, Addus HomeCare Corporation, the other Credit Parties party thereto, Capital One, National Association, as administrative agent and as a Lender, and the other Lenders party thereto.
+Added: Addus HomeCare Corporation Amended and Restated 2017 Omnibus Incentive Plan.
+Added: Membership Interests Purchase Agreement, dated June 28, 2023, by and among Addus HealthCare, Inc., HHH Newco Holdings, LLC, American Health Companies, LLC, American Home Care, LLC, Homecare, LLC, Tennessee Valley Home Care, LLC, and Tri-County Home Health and Hospice, LLC.
Subsidiaries of Addus HomeCare Corporation.
6 unchanged sentences
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: Addus Homecare Corporation Compensation Recoupment Policy
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
8 unchanged sentences
The Company hereby undertakes to furnish supplementally a copy of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.
+Added: ***Filed herewith
FORM 10-K SUMMARY
11 unchanged sentences
February 27, 2024
+Added: /s/ HEATHER DIXON
+Added: Heather Dixon
+Added: February 27, 2024
/s/ MICHAEL EARLEY
3 unchanged sentences
February 27, 2024
−Removed: /s/ ESTEBAN LÓPEZ, M.D.
−Removed: Esteban López, M.D.
+Added: /s/ ESTEBAN LÓPEZ, M.D.
+Added: Esteban López, M.D.
February 27, 2024
11 unchanged sentences
Consolidated Statements of Income
−Removed: Consolidated Statements of Stockholders’
+Added: Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
1 unchanged sentence
All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
−Removed: Report of Independent Regist ered Public Accounting Firm
+Added: Report of Independent Regi stered Public Accounting Firm
To the Board of Directors and Stockholders of Addus HomeCare Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of Addus HomeCare Corporation and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of stockholders’
−Removed: equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).
+Added: We have audited the accompanying consolidated balance sheets of Addus HomeCare Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.
+Added: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
−Removed: The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.
−Removed: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
+Added: The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.
+Added: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
8 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded JourneyCare Inc.
−Removed: (“JourneyCare”) and Apple Home HealthCare, LTD (“Apple Home”) from its assessment of internal control over financial reporting as of December 31, 2022, because they were acquired by the Company in purchase business combinations during 2022.
−Removed: We have also excluded JourneyCare and Apple Home from our audit of internal control over financial reporting.
−Removed: JourneyCare and Apple Home are wholly-owned subsidiaries whose total revenues and total operating income excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 5% and 0.24% of total revenues, respectively, and approximately 11% and 0.24% of total operating income, respectively, of the related consolidated financial statement amounts for the year ended December 31, 2022.
+Added: As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded Coastal Nursecare of Florida, Inc.
+Added: (“CareStaff”) and American Home Care, LLC, a Tennessee limited liability company (“AHC”), and its subsidiaries, Homecare, LLC, a Tennessee limited liability company (“Homecare”), Tennessee Valley Home Care, LLC (d/b/a Tennessee Quality Care – Home Health), a Tennessee limited liability company (“TQC – Home Health”), and Tri-County Home Health and Hospice, LLC (d/b/a Tennessee Quality Care - Hospice), a Tennessee limited liability company (“TQC – Hospice”, and collectively with AHC, Homecare, and TQC – Home Health “Tennessee Quality Care”), from its assessment of internal control over financial reporting as of December 31, 2023, because they were acquired by the Company in purchase business combinations during 2023.
+Added: We have also excluded Carestaff and Tennessee Quality Care from our audit of internal control over financial reporting.
+Added: Carestaff and Tennessee Quality Care are wholly-owned subsidiaries whose total revenues and total operating income excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 0.2% and 1.5% of total revenues, respectively, and approximately 0.4% and 3.3% of total operating income, respectively, of the related consolidated financial statement amounts for the year ended December 31, 2023.
Definition and Limitations of Internal Control over Financial Reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
−Removed: maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
1 unchanged sentence
Critical Audit Matters
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Accounts Receivable, Net of Allowances for Implicit Price Concessions
3 unchanged sentences
The evaluation of these historical and other factors involves complex, subjective judgments.
−Removed: Accounts receivable, net of allowances for implicit price concessions (before the allowance for doubtful accounts), were $127.1 million as of December 31, 2022.
−Removed: The principal considerations for our determination that performing procedures relating to the valuation of accounts receivable, net of allowances for implicit price concessions is a critical audit matter are (i) the significant judgment by management when developing the estimate of the valuation of accounts receivable, net of allowances for implicit price concessions and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit evidence obtained related to the estimate.
+Added: Accounts receivable, net of allowances for implicit price concessions (before the allowance for credit losses) were $117.8 million as of December 31, 2023.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of accounts receivable, net of allowances for implicit price concessions is a critical audit matter are (i) the significant judgment by management when developing the estimate of accounts receivable, net of allowances for implicit price concessions and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the estimate.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s estimate of the valuation of accounts receivable, net of implicit price concessions, including controls over the allowance for implicit price concessions.
−Removed: These procedures also included, among others (i) testing management’s process for developing the estimate of accounts receivable, net of allowances for implicit price concessions, (ii) evaluating the relevance and use of historical experience data as an input into the estimate, (iii) testing the completeness and accuracy of underlying historical collection data used in the estimate, (iv) testing, on a sample basis, the accuracy of revenue transactions and cash collections from the billing and collection data used in management’s estimate, (v) evaluating the historical accuracy of management’s estimate of the amount expected to be collected by comparing actual cash collections to the related accounts receivable, and (vi) performing a retrospective comparison of actual cash collected subsequent to year-end to evaluate the reasonableness of the prior year estimate.
+Added: These procedures included testing the effectiveness of controls relating to management’s estimate of accounts receivable, net of implicit price concessions, including controls over the allowance for implicit price concessions.
+Added: These procedures also included, among others (i) testing management’s process for developing the estimate of accounts receivable, net of allowances for implicit price concessions;
+Added: (ii) evaluating the relevance and use of historical experience data as an input into management’s estimate;
+Added: (iii) testing the completeness and accuracy of underlying historical collection data used as an input into management’s estimate;
+Added: (iv) testing, on a sample basis, the accuracy of revenue transactions and cash collections from the billing and collection data used as an input into the estimate;
+Added: (v) evaluating the historical accuracy of management’s estimate of the amount expected to be collected by performing a retrospective comparison of actual cash collections to the related accounts receivable;
+Added: and (vi) performing a comparison of the remaining uncollected accounts receivable balance as of a date subsequent to year end, to expected future cash collections based on the Company's historical collection patterns.
+Added: Goodwill Impairment Assessment – Hospice Reporting Unit
+Added: As described in Notes 1 and 5 to the consolidated financial statements, the Company’s goodwill balance was $663.0 million as of December 31, 2023, and the goodwill associated with the Hospice reporting unit was $432.8 million.
+Added: Management tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred.
+Added: The goodwill impairment test involves comparing the fair value of a reporting unit with its carrying value, including goodwill.
+Added: Management estimated the fair value of the Hospice reporting unit using the discounted cash flow and market multiple approaches.
+Added: These types of models require management to make assumptions and estimates regarding future cash flows, industry-specific economic factors and the profitability of future business strategies.
+Added: The discounted cash flow model uses a projection of estimated operating results and cash flows that are discounted using a weighted-average cost of capital.
+Added: The market multiple model estimates fair value based on market multiples of earnings before interest, taxes and depreciation and amortization (EBITDA).
+Added: Under the discounted cash flow model, the projection uses management’s best estimates of economic and market conditions over the projected period for each reporting unit using significant assumptions such as revenue growth rates, operating margins, and the weighted-average cost of capital.
+Added: The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Hospice reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Hospice reporting unit;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates, operating margins, and the weighted-average cost of capital used in the discounted cash flow model, and the market multiples of EBITDA used in the market multiple model;
+Added: and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
+Added: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
+Added: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Hospice reporting unit.
+Added: These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Hospice reporting unit;
+Added: (ii) evaluating the appropriateness of the discounted cash flow model and market multiple model used by management;
+Added: (iii) testing the completeness and accuracy of underlying data used by management in the discounted cash flow model and market multiple model;
+Added: and (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rates, operating margins, and the weighted-average cost of capital used in the discounted cash flow model and the market multiples of EBITDA used in the market multiple model.
+Added: Evaluating management’s assumptions related to the revenue growth rates and operating margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Hospice reporting unit;
+Added: (ii) the consistency with external market and industry data;
+Added: and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
+Added: Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow model and market multiples model, and the reasonableness of the weighted-average cost of capital and market multiples of EBITDA significant assumptions.
/s/ PricewaterhouseCoopers LLP
1 unchanged sentence
February 27, 2024
−Removed: We have served as the Company’s auditor since 2019.
+Added: We have served as the Company’s auditor since 2019.
ADDUS HOMECARE CORPORATION
4 unchanged sentences
Current assets
−Removed: Accounts receivable, net of allowances
+Added: Accounts receivable, net of allowances for credit losses
Prepaid expenses and other current assets
4 unchanged sentences
Total other assets
−Removed: Liabilities and stockholders’
+Added: Liabilities and stockholders’ equity
Current liabilities
2 unchanged sentences
Accrued expenses
+Added: Operating lease liabilities, current portion
Government stimulus advances
−Removed: Accrued workers’
−Removed: compensation insurance
+Added: Accrued workers’ compensation insurance
Total current liabilities
Long-term liabilities
−Removed: Long-term debt, less current portion, net of debt issuance costs
+Added: Long-term debt, net of debt issuance costs
Long-term operating lease liabilities
2 unchanged sentences
Total liabilities
−Removed: Stockholders’
−Removed: Common stock—
−Removed: $.001 par value;
+Added: Stockholders’ equity
+Added: Common stock—$ .001 par value;
40,000 authorized and 16,227 and 16,128 shares
2 unchanged sentences
Retained earnings
−Removed: Total stockholders’
−Removed: Total liabilities and stockholders’
+Added: Total stockholders’ equity
+Added: Total liabilities and stockholders’ equity
See accompanying Notes to Consolidated Financial Statements
16 unchanged sentences
Income tax expense
−Removed: Basic income per share
−Removed: Diluted income per share
+Added: Net income per common share
+Added: Basic net income per share
+Added: Diluted net income per share
Weighted average number of common shares and potential common shares
2 unchanged sentences
AND SUBSIDIARIES
−Removed: CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
+Added: CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the years ended December 31, 2023, 2022 and 2021
(amounts and shares in thousands)
−Removed: Stockholders’
+Added: Stockholders’
Balance at January 1, 2021
15 unchanged sentences
restricted stock award agreements
−Removed: Forfeiture of shares of common stock under
−Removed: restricted stock award agreements
Stock-based compensation
17 unchanged sentences
Provision for credit losses
−Removed: Impairment of assets
+Added: Impairment of operating lease assets
+Added: Gain on termination of operating leases
Changes in operating assets and liabilities, net of acquisitions:
8 unchanged sentences
Business acquisition, net of cash acquired
−Removed: Proceeds on disposal of businesses
Purchases of property and equipment
+Added: Proceeds on disposal of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
−Removed: Proceeds from issuance of common stock, net of issuance costs
−Removed: Borrowings on revolver —
−Removed: credit facility
−Removed: Payments on revolver —
−Removed: credit facility
−Removed: Payments on term loan —
−Removed: credit facility
−Removed: Payments on financing lease obligations
+Added: Borrowings on revolver — credit facility
+Added: Payments on revolver — credit facility
+Added: Payments on term loan — credit facility
Payments for debt issuance costs under the credit facility
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Basis of Presentation and Description of Business
−Removed: The Consolidated Financial Statements include the accounts of Addus HomeCare Corporation (“Holdings”) and its subsidiaries (together with Holdings, the “Company,”
−Removed: “we,”
−Removed: “us,”
−Removed: or “our”).
+Added: The Consolidated Financial Statements include the accounts of Addus HomeCare Corporation (“Holdings”) and its subsidiaries (together with Holdings, the “Company,” “we,” “us,” or “our”).
The Company operates as a multi-state provider of three distinct but related business segments providing in-home services.
2 unchanged sentences
In its home health segment, the Company provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy.
−Removed: The Company’s payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals.
+Added: The Company’s payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals.
Principles of Consolidation
3 unchanged sentences
Receipts are from federal, state and local governmental agencies, managed care organizations, commercial insurers and private consumers for services rendered.
−Removed: The Company assesses the consumers’
−Removed: ability to pay at the time of their admission based on the Company’s verification of the customer’s insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance programs.
+Added: The Company assesses the consumers’ ability to pay at the time of their admission based on the Company’s verification of the customer’s insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance programs.
Laws and regulations governing the governmental programs in which the Company participates are complex and subject to interpretation.
1 unchanged sentence
Amounts collected from all sources may be less than amounts billed due to implicit price concessions, resulting from client eligibility issues, insufficient or incomplete documentation, services at levels other than authorized, pricing differences and other reasons unrelated to credit risk.
−Removed: The Company monitors our net service revenues and collections from these sources and records any necessary adjustment to net service revenues based upon management’s assessment of historical write offs and expected net collections, business and economic conditions, trends in federal, state and private employer healthcare coverage and other collection indicators.
+Added: The Company monitors our net service revenues and collections from these sources and records any necessary adjustment to net service revenues based upon management’s assessment of historical write offs and expected net collections, business and economic conditions, trends in federal, state and private employer healthcare coverage and other collection indicators.
The initial estimate of net service revenues is determined by reducing the standard charge by any contractual adjustments, discounts and implicit price concessions.
Subsequent changes to the estimate of net service revenues are generally recorded in the period of the change.
−Removed: Changes in estimates of implicit price concessions, discounts and contractual adjustments recognized during the year ended December 31, 2022 for performance obligations satisfied in years prior to 2022 resulted in an increase to net service revenue of approximately $ 8.8 million.
−Removed: Changes in estimates of implicit price concessions, discounts and contractual adjustments recognized during the year ended December 31, 2021 for performance obligations satisfied in years prior to 2021 resulted in an increase to net service revenue of approximately $ 5.7 million.
−Removed: Subsequent changes that are determined to be the result of an adverse change in the patient’s ability to pay are recorded as bad debt expense.
+Added: Subsequent changes that are determined to be the result of an adverse change in the patient’s ability to pay are recorded as bad debt expense.
Personal Care
−Removed: The majority of the Company’s net service revenues are generated from providing personal care services directly to consumers under contracts with state, local and other governmental agencies, managed care organizations, commercial insurers and private consumers.
+Added: The majority of the Company’s net service revenues are generated from providing personal care services directly to consumers under contracts with state, local and other governmental agencies, managed care organizations, commercial insurers and private consumers.
Generally, these contracts, which are negotiated based on current contracting practices as appropriate for the payor, establish the terms of a customer relationship and set the broad range of terms for services to be performed at a stated rate.
13 unchanged sentences
The aggregate cap, which is calculated each federal fiscal year, limits the amount of Medicare reimbursement a hospice may receive, based on the number of Medicare patients served.
−Removed: If a hospice’s Medicare payments exceed its aggregate cap, it must repay Medicare for the excess amount.
+Added: If a hospice’s Medicare payments exceed its aggregate cap, it must repay Medicare for the excess amount.
In federal fiscal year 2024, the aggregate cap is $ 33,494.01 .
3 unchanged sentences
Generally, these contracts, which are negotiated based on current contracting practices as appropriate for the payor, establish the terms of a relationship and set the broad range of terms for services to be performed on an episodic basis at a stated rate.
−Removed: Home health Medicare services were paid under the Medicare Home Health Prospective Payment System (“HHPPS”), for the years ended December 31, 2022 and 2021, which are based on 30-day periods of care as a unit of service.
+Added: Home health Medicare services are paid under the Medicare Home Health Prospective Payment System (“HHPPS”), which is based on 30-day periods of care as a unit of service.
The HHPPS permits multiple, continuous periods per patient.
−Removed: Medicare payment rates for periods under HHPPS are determined through use of a case-mix classification system, the Patient-Driven Groupings Model (“PDGM”), which assigns patients to resource groups based on a patient’s clinical characteristics.
−Removed: The Company elects to use the same 30-day periods that Medicare recognizes as standard but accelerates revenue upon discharge to align with a patient’s episode length if less than the expected 30 days, which depicts the transfer of services and related benefits received by the patient over the term of the contract necessary to satisfy the obligations.
+Added: Medicare payment rates for periods under HHPPS are determined through use of a case-mix classification system, the Patient-Driven Groupings Model (“PDGM”), which assigns patients to resource groups based on a patient’s clinical characteristics.
+Added: The Company elects to use the same 30-day periods that Medicare recognizes as standard but accelerates revenue upon discharge to align with a patient’s episode length if less than the expected 30 days, which depicts the transfer of services and related benefits received by the patient over the term of the contract necessary to satisfy the obligations.
The Company recognizes revenue based on the number of days elapsed during a period of care within the reporting period.
8 unchanged sentences
In addition, the Company compares its cash collections to recorded net service revenues and evaluates its historical allowance, including implicit price concessions, based upon the ultimate resolution of the accounts receivable balance.
−Removed: Subsequent adjustments to accounts receivable determined to be the result of an adverse change in the payor’s ability to pay are recognized as provision for credit losses.
+Added: Subsequent adjustments to accounts receivable determined to be the result of an adverse change in the payor’s ability to pay are recognized as provision for credit losses.
The majority of what historically was classified as provision for credit losses under operating expenses is now treated as an implicit price concession factored into the determination of net service revenues discussed above.
2 unchanged sentences
An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.
−Removed: As of December 31, 2022 and 2021, the allowance for credit losses balance was $ 1.6 m illion and $ 1.4 million, respectively, which is included in accounts receivable, net of allowances for credit losses on the Company’s Consolidated Balance Sheets.
+Added: As of December 31, 2023 and 2022, the allowance for credit losses balance was $ 2.3 m illion and $ 1.6 million, respectively, which is included in accounts receivable, net of allowances for credit losses on the Company’s Consolidated Balance Sheets.
Activity in the allowance for credit losses is as follows (in thousands):
19 unchanged sentences
Lesser of useful life or lease term
−Removed: The Company recognizes a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with a term greater than twelve months on the balance sheet.
+Added: The Company recognizes a lease liability and a right-of-use (“ROU”) asset for all leases, including operating leases, with a term greater than twelve months on the balance sheet.
We have historically entered into operating leases for local branches, our corporate headquarters and certain equipment.
−Removed: The Company’s current leases have expiration dates through 2031.
+Added: The Company’s current leases have expiration dates through 2031.
Certain of our arrangements have free rent periods and/or escalating rent payment provisions.
We recognize rent expense on a straight-line basis over the lease term.
−Removed: Certain of the Company’s leases include termination options and renewal options for periods ranging from one to five years .
+Added: Certain of the Company’s leases include termination options and renewal options for periods ranging from one to five years .
Renewal options generally are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments unless we are reasonably certain to exercise the renewal option.
5 unchanged sentences
Operating lease assets are tested for impairment in the same manner as our long-lived assets.
−Removed: For the year ended December 31, 2022, the Company recorded $ 1.2 million in impairment charges on operating lease assets, included within general and administrative expenses, and no material impairment charges for the year ended December 31, 2021.
−Removed: For the year ended December 31, 2020, the Company sublet certain support center office space and incurred an impairment charge of approximately $ 1.0 million in operating lease assets, included within general and administrative expenses.
−Removed: See Note 2 for additional information related to leases.
+Added: For the years ended December 31, 2023 and 2022 , the Company recorded $ 13,000 and $ 1.2 million, respectively, in impairment charges on operating lease assets, included within general administrative expenses.
+Added: For the year ended December 31, 2021, the Company recorded no material impairment charges.
Goodwill and Intangible Assets
Under business combination accounting, assets and liabilities are generally recognized at their fair values and the difference between the consideration transferred, excluding transaction costs, and the fair values of the assets and liabilities is recognized as goodwill.
−Removed: The Company’s significant identifiable intangible assets consist of customer and referral relationships, trade names and trademarks and state licenses.
+Added: The Company’s significant identifiable intangible assets consist of customer and referral relationships, trade names and trademarks and state licenses.
The Company uses various valuation techniques to determine initial fair value of its intangible assets, including relief-from-royalty, income approach, discounted cash flow analysis, and multi-period excess earnings, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
Under these valuation approaches, we are required to make estimates and assumptions about future market growth and trends, forecasted revenue and costs, expected periods over which the assets will be utilized, appropriate discount rates and other variables.
−Removed: The Company estimates the fair values of the
−Removed: trade names using the relief-from-royalty method, which requires assumptions such as the long-term growth rates of future revenues, the relief from royalty rate for such revenue, the tax rate and the discount rate.
+Added: The Company estimates the fair values of the trade names using the relief-from-royalty method, which requires assumptions such as the long-term growth rates of future revenues, the relief from royalty rate for such revenue, the tax rate and the discount rate.
The Company estimates the fair value of existing indefinite-lived state licenses based on a blended approach of the replacement cost method and cost savings method, which involves estimating the total process costs and opportunity costs to obtain a license, by estimating future earnings before interest and taxes and applying an estimated discount rate, tax rate and time to obtain the license.
2 unchanged sentences
The Company estimates the fair value of non-competition agreements based on a method of analyzing the factors to compete and factors not to compete, which involves estimating historical financial data, forecasted financial statements, growth rates, tax amortization benefit, discount rate, review of factors to compete and factors not to compete as well as an assessment of the probability of successful competition for each non-competition agreement.
−Removed: As of December 31, 2022 and 2021, goodwill was $ 582.8 million and $ 504.4 million, respectively, included on the Company’s Consolidated Balance Sheets.
−Removed: The Company’s carrying value of goodwill is the excess of the purchase price over the fair value of the net assets acquired from various acquisitions.
−Removed: In accordance with Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets , goodwill and intangible assets with indefinite useful lives are not amortized.
+Added: As of December 31, 2023 and 2022, goodwill was $ 663.0 million and $ 582.8 million, respectively, included on the Company’s Consolidated Balance Sheets.
+Added: The Company’s carrying value of goodwill is the excess of the purchase price over the fair value of the net assets acquired from various acquisitions.
+Added: In accordance with Accounting Standards Codification (“ASC”) Topic 350, Goodwill and Other Intangible Assets , goodwill and intangible assets with indefinite useful lives are not amortized.
The Company tests goodwill for impairment at the reporting unit level on an annual basis, as of October 1, or whenever potential impairment triggers occur, such as a significant change in business climate or regulatory changes that would indicate that an impairment may have occurred.
1 unchanged sentence
The Company may also bypass the qualitative assessment and perform a quantitative test.
−Removed: Additionally, it is the Company’s policy to update the fair value calculation of our reporting units and perform the quantitative goodwill impairment test on a periodic basis.
+Added: Additionally, it is the Company’s policy to update the fair value calculation of our reporting units and perform the quantitative goodwill impairment test on a periodic basis.
The quantitative goodwill impairment test involves comparing the fair value of a reporting unit with its carrying value, including goodwill.
6 unchanged sentences
The market multiple model estimates fair value based on market multiples of earnings before interest, taxes and depreciation and amortization.
−Removed: Under the discounted cash flow model, the projection uses management’s best estimates of economic and market conditions over the projected period for each reporting unit using significant assumptions such as revenue growth rates and the weighted-average cost of capital.
+Added: Under the discounted cash flow model, the projection uses management’s best estimates of economic and market conditions over the projected period for each reporting unit using significant assumptions such as revenue growth rates, operating margins and the weighted-average cost of capital.
Based on the totality of the information available, the Company concluded that it was more likely than not that the estimated fair values of our reporting units were greater than their carrying values.
Consequently, the Company concluded that there were no impairments for the years ended December 31, 2023, 2022 or 2021.
−Removed: For the fiscal year 2022 impairment tests, the fair value of the reporting units exceeded their respective carrying values (commonly referred to as “headroom”) by at least 100 % in the personal care reporting unit, 75 % in the home health reporting unit, and 67 % in the hospice reporting unit.
The Company bases its fair value estimates on assumptions management believes to be reasonable but which are unpredictable and inherently uncertain.
Actual future results may differ from those estimates.
−Removed: As of December 31, 2022 and 2021, intangibles, net of accumulated amortization, was $ 72.2 million and $ 64.3 million, respectively, included on the Company’s Consolidated Balance Sheets.
−Removed: The Company’s identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-competition agreements.
+Added: As of December 31, 2023 and 2022, intangibles, net of accumulated amortization, was $ 92.0 million and $ 72.2 million, respectively, included on the Company’s Consolidated Balance Sheets.
+Added: The Company’s identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-competition agreements.
Definite-lived intangible assets are amortized using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from one to twenty-five years , and assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
1 unchanged sentence
The Company would recognize an impairment loss when the estimated future non-discounted cash flows associated with the intangible asset are less than the carrying value.
−Removed: An impairment charge would
−Removed: then be recorded for the excess of the carrying value over the fair value.
+Added: An impairment charge would then be recorded for the excess of the carrying value over the fair value.
The Company estimates the fair value of these intangible assets using the income approach.
2 unchanged sentences
No impairment charge was recorded for the years ended December 31, 2023, 2022 or 2021 .
−Removed: Amortization of intangible assets is reported in the statement of income caption, “Depreciation and amortization”
−Removed: and not included in the income statement caption cost of service revenues.
+Added: Amortization of intangible assets is reported in the statement of income caption, “Depreciation and amortization” and not included in the income statement caption cost of service revenues.
Debt Issuance Costs
2 unchanged sentences
In accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , the Company has classified the debt issuance costs as a direct deduction from the carrying amount of the related liability.
−Removed: Workers’
−Removed: Compensation Program
−Removed: The Company’s workers’
−Removed: compensation insurance program ha s a $ 0.4 mil lion deductible component.
+Added: Workers’ Compensation Program
+Added: The Company’s workers’ compensation insurance program ha s a $ 0.4 mil lion deductible component.
The Company recognizes its obligations associated with this program in the period the claim is incurred.
The cost of both the claims reported and claims incurred but not reported, up to the deductible, have been accrued based on historical claims experience, industry statistics and an actuarial analysis.
−Removed: The future claims payments related to the workers’
−Removed: compensation program are secured by letters of credit.
−Removed: These letters of credit tot aled $ 8.2 million at both December 31, 2022 and 2021.
+Added: The future claims payments related to the workers’ compensation program are secured by letters of credit.
+Added: These letters of credit tot aled $ 8.0 million and $ 8.2 million at December 31, 2023 and 2022, respectively.
The Company monitors its claims quarterly and adjusts its reserves as necessary in the current period.
These costs are recorded primarily as cost of services on the Consolidated Statements of Income.
−Removed: As of December 31, 2022 and 2021, the Company recorded $ 12.9 million and $ 13.0 million, respectively, in accrued workers’
−Removed: compensation insurance on the Company’s Consolidated Balance Sheets.
−Removed: As of December 31, 2022 and 2021, the Company recorded $ 0.7 million and $ 1.6 million, respectively, in workers’
−Removed: compensation insurance receivables.
−Removed: The workers’
−Removed: compensation insurance receivable is included in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets.
+Added: As of December 31, 2023 and 2022, the Company recorded $ 12.0 million and $ 12.9 million, respectively, in accrued workers’ compensation insurance on the Company’s Consolidated Balance Sheets.
+Added: As of December 31, 2023 and 2022, the Company recorded $ 0.6 million and $ 0.7 million, respectively, in workers’ compensation insurance receivables.
+Added: The workers’ compensation insurance receivable is included in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets.
Interest Expense
3 unchanged sentences
The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in its financial statements or tax returns.
−Removed: Deferred taxes, resulting from differences between the financial and tax basis of the Company’s assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted.
+Added: Deferred taxes, resulting from differences between the financial and tax basis of the Company’s assets and liabilities, are also adjusted for changes in tax rates and tax laws when changes are enacted.
ASC Topic 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.
4 unchanged sentences
Stock-based Compensation
−Removed: The Company currently has one stock incentive plan, the 2017 Omnibus Incentive Plan (the “2017 Plan”), under which new grants of stock-based employee compensation are made.
+Added: The Company currently has one stock incentive plan, the Amended and Restated 2017 Omnibus Incentive Plan (the “A&R 2017 Plan”), under which new grants of stock-based employee compensation are made.
The Company accounts for stock-based compensation in accordance with ASC Topic 718, Stock Compensation .
−Removed: Compensation expense is recognized on a straight-line basis under the 2017 Plan over the vesting period of the equity awards based on the grant date fair value of the options and restricted stock awards.
−Removed: The Company utilizes the Black-Scholes Option Pricing Model to value the Company’s options.
+Added: Compensation expense is recognized on a straight-line basis under the A&R 2017 Plan over the vesting period of the equity awards based on the grant date fair value of the options and restricted stock awards.
+Added: The Company utilizes the Black-Scholes Option Pricing Model to value the Company’s options.
Forfeitures are recognized when they occur.
2 unchanged sentences
Diluted net income per common share, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period.
−Removed: The Company’s outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards.
−Removed: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2022 were approximately 468,000 stock options outstanding, of which approximately 248,000 were dilutive.
+Added: The Company’s outstanding securities that may potentially dilute the common stock are stock options and restricted stock awards.
+Added: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2023 were approximately 455,000 stock options outstanding, of which approximately 234,000 were dilutive.
In addition, there were approximately 201,000 restricted stock awards outstanding, of which approximately 82,000 were dilutive for the year ended December 31, 2023.
−Removed: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2021 were approximately 493,000 stock options outstanding, of which approximately 282,000 were dilutive.
+Added: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2022 were approximately 468,000 stock options outstanding, of which approximately 248,000 were dilutive.
In addition, there were approximately 210,000 restricted stock awards outstanding, of which approximately 72,000 were dilutive for the year ended December 31, 2022.
−Removed: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2020 were approximately 506,000 stock options outstanding, of which approximately 304,000 were dilutive.
+Added: Included in the Company’s calculation of diluted earnings per share for the year ended December 31, 2021 were approximately 493,000 stock options outstanding, of which approximately 282,000 were dilutive.
In addition, there were approximately 159,000 restricted stock awards outstanding, of which approximately 44,000 were dilutive for the year ended December 31, 2021 .
1 unchanged sentence
The financial statements are prepared by management in conformity with U.S.
−Removed: Generally Accepted Accounting Principles (“GAAP”) and include estimated amounts and certain disclosures based on assumptions about future events.
−Removed: The Company’s critical accounting estimates include the following areas:
+Added: Generally Accepted Accounting Principles (“GAAP”) and include estimated amounts and certain disclosures based on assumptions about future events.
+Added: The Company’s critical accounting estimates include the following areas:
revenue recognition, goodwill and intangibles and business combinations and when required, the quantitative assessment of goodwill.
1 unchanged sentence
Fair Value Measurements
−Removed: The Company’s financial instruments consist of cash, accounts receivable, payables and debt.
−Removed: The carrying amounts reported on the Company’s Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments.
−Removed: The carrying value of the Company’s long-term debt with variable interest rates approximates fair value based on instruments with similar terms using level 2 inputs as defined under ASC Topic 820, Fair Value Measurement .
+Added: The Company’s financial instruments consist of cash, accounts receivable, payables and debt.
+Added: The carrying amounts reported on the Company’s Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments.
+Added: The carrying value of the Company’s long-term debt with variable interest rates approximates fair value based on instruments with similar terms using level 2 inputs as defined under ASC Topic 820, Fair Value Measurement .
The Company applies fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to goodwill, if required, and indefinite-lived intangible assets and also when determining the fair value of contingent consideration, if applicable.
4 unchanged sentences
Going Concern
−Removed: In connection with the preparation of the financial statements for the years ended December 31, 2022 and 2021 , the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity’s ability to continue as a going concern within one year after the date of the issuance, of the financial statements.
+Added: In connection with the preparation of the financial statements for the years ended December 31, 2023 and 2022 , the Company conducted an evaluation as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to the entity’s ability to continue as a going concern within one year after the date of the issuance, of the financial statements.
Based on the evaluation, we believe that cash flows from operations will be sufficient to meet our ongoing liquidity requirements for at least twelve months from the date of issuance.
Recently Adopted Accounting Pronouncements
−Removed: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes .
−Removed: ASU 2019-12 simplifies various aspects related to accounting for income taxes and removes certain exceptions to the general guidance in ASC 740.
−Removed: In addition, the ASU clarifies and amends existing guidance to improve consistent application of its requirements.
−Removed: The ASU was adopted as of January 1, 2021 and did no t have an impact on the Company’s results of operations or liquidity.
−Removed: In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832):
+Added: In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ASU 2021-10, Government Assistance (Topic 832):
Disclosures by Business Entities about Government Assistance .
ASU 2021-10 requires entities to disclose certain information about the nature of certain governmental assistance received, including the nature of the transaction and the related accounting policy, the financial statement line items impacted by the assistance, as well as the significant terms and conditions of the transactions.
−Removed: The ASU was adopted as of January 1, 2022 and did no t have a material impact on the Company’s results of operations or liquidity.
−Removed: Recently Issued Accounting Pronouncements
+Added: The ASU was adopted as of January 1, 2022 and did no t have a material impact on the Company’s results of operations or liquidity.
+Added: In October 2021, the FASB issued ASU No.
+Added: 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805).
+Added: This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606.
+Added: At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts.
+Added: The ASU was adopted prospectively on January 1, 2023 .
+Added: The additional disclosures required did no t have a material impact on our consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):
Facilitation of the Effects of Reference Rate Reform on Financial Reporting.
−Removed: ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, and other transactions subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued.
+Added: ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, and other transactions subject to meeting certain criteria, that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued.
The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued.
−Removed: Therefore, it will be in effect for a limited time through December 31, 2024.
−Removed: The ASU can be adopted no later than December 1, 2024 with early adoption permitted.
−Removed: As discussed further in Note 7 and pursuant to the Second Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2021, the Company’s Credit Agreement contains hardwired fallback language that contemplates a transition from LIBOR, specifically identifies the Secured Overnight Financing Rate (“SOFR”) as the replacement reference rate and details the mechanism for transition at LIBOR cessation, which is anticipated to occur on June 30, 2023.
−Removed: The transition to SOFR is not expected to have a material impact on the Company’s results of operations or liquidity.
−Removed: Amounts reported on the Company’s Consolidated Balance Sheets for operating leases were as follows:
+Added: Therefore, it was in effect for a limited time through December 31, 2022.
+Added: The ASU could be adopted no later than December 1, 2022 with early adoption permitted.
+Added: As discussed further in Note 8 and pursuant to the Third Amendment to Amended and Restated Credit Agreement dated as of April 26, 2023, the Company amended its credit facility to replace LIBOR with the secured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) as the benchmark reference rate for loans under its credit facility.
+Added: The transition to SOFR did not and is no t expected to have a material impact on the Company’s results of operations or liquidity.
+Added: Recently Issued Accounting Pronouncements
+Added: In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment, as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
+Added: Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024.
+Added: Retrospective application is required, and early adoption is permitted.
+Added: These requirements will result in expanded disclosures.
+Added: In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.
+Added: ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption .
+Added: These requirements are no t expected to have an impact on the Company's financial statements and will expand income tax disclosures.
+Added: Amounts reported on the Company’s Consolidated Balance Sheets for operating leases were as follows:
(Amounts in Thousands)
3 unchanged sentences
Total operating lease liabilities
−Removed: Components of lease costs were reported in general and administrative expenses in the Company’s Consolidated Statements of Income as follows:
+Added: Components of lease costs were reported in general and administrative expenses in the Company’s Consolidated Statements of Income as follows:
For the Years Ended December 31,
18 unchanged sentences
Total lease liabilities
−Removed: Supplemental cash flows information
+Added: Supplemental Cash Flow Information
For the Years Ended December 31,
4 unchanged sentences
Operating leases
−Removed: Commencing on November 14, 2022 , the Company sublet a portion of its corporate headquarters space in Frisco, Texas to a third party under a two-year sublease term for a monthly base rent of $ 0.1 million.
+Added: The Company sublet a portion of its corporate headquarters space in Frisco, Texas in November 2022 to a third party under a two-year sublease term for a monthly base rent of $ 0.1 million.
Acqui sitions
−Removed: The Company’s acquisitions have been accounted for in accordance with ASC Topic 805, Business Combinations , and the resulting goodwill and other intangible assets were accounted for under ASC Topic 350, Goodwill and Other Intangible Assets .
+Added: The Company’s acquisitions have been accounted for in accordance with ASC Topic 805, Business Combinations , and the resulting goodwill and other intangible assets were accounted for under ASC Topic 350, Goodwill and Other Intangible Assets .
Under business combination accounting, the assets and liabilities are generally recognized at their fair values and the difference between the consideration transferred, excluding transaction costs, and the fair values of the assets and liabilities is recognized as goodwill.
The results of each business acquisition are included on the Consolidated Statements of Income from the date of the acquisition.
−Removed: Management’s assessment of qualitative factors affecting goodwill for each acquisition includes estimates of market share at the date of purchase, ability to grow in the market, synergy with existing Company operations and the payor profile in the markets.
−Removed: On February 1, 2022, the Company completed the acquisition of the hospice and palliative operations of JourneyCare Inc.
−Removed: (“JourneyCare”).
−Removed: The purchase price was approximately $ 86.6 million, including the amount of acquired excess cash held by JourneyCare at the closing of the acquisition (approximately $ 0.4 million) plus the finalization of net working capital payable to seller
−Removed: of $ 1.6 million.
−Removed: The JourneyCare acquisition was funded with a combination of a $ 35.0 million draw on the Company’s revolving credit facility and available cash.
−Removed: With the JourneyCare acquisition, the Company expanded its hospice services in the state of Illinois.
+Added: Management’s assessment of qualitative factors affecting goodwill for each acquisition includes estimates of market share at the date of purchase, ability to grow in the market, synergy with existing Company operations and the payor profile in the markets.
+Added: Tennessee Quality Care
+Added: On August 1, 2023, the Company completed the acquisition of Tennessee Quality Care .
+Added: The purchase price was approximately $ 111.2 million, including the amount of acquired excess cash held by Tennessee Quality Care at the closing of the acquisition (approximately $ 2.4 million), and is subject to the completion of working capital and related adjustments.
+Added: The Tennessee Quality Care acquisition was funded with a combination of a $ 110.0 million draw on the Company ’s revolving credit facility and available cash.
+Added: With the purchase of Tennessee Quality Care, the Company expanded its services within its hospice and home health segments to Tennessee.
The related acquisition and integration costs were $ 2.1 million and $ 1.0 million, respectively, for the year ended December 31, 2023.
−Removed: These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
−Removed: Based upon management’s valuations, which are preliminary and subject to completion of working capital adjustments, the fair values of the assets and liabilities acquired are as follows:
+Added: The se costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
+Added: Based upon management’s valuations, which are preliminary and subject to completion of working capital adjustments, the fair values of the assets and liabilities acquired are as follows:
(Amounts in Thousands)
7 unchanged sentences
Total purchase price
−Removed: Identifiable intangible assets acquired included $ 9.0 million in a trade name and $ 4.8 million of indefinite-lived state licenses.
−Removed: The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
+Added: Identifiable intangible assets acquired includ ed $ 7.5 million in a trade name and $ 19.2 million of indefinite-lived state licenses.
+Added: The preliminary estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
The fair value analysis and related valuations reflect the conclusions of management.
1 unchanged sentence
The goodwill and intangible assets acquired are deductible for tax purposes.
−Removed: JourneyCare accounted for $ 47.2 million and $ 9.1 million of the Company ’s net service revenues and operating income for the year ended December 31, 2022.
−Removed: Armada Skilled Homecare
−Removed: On August 1, 2021, we completed the acquisition of Armada Skilled Homecare of New Mexico LLC, Armada Hospice of New Mexico LLC and Armada Hospice of Santa Fe LLC (collectively, “Armada”) for approximately $ 29.7 million, including the amount of acquired excess cash held by Armada at the closing of the acquisition (approximately $ 0.7 million).
−Removed: The purchase of Armada was funded with the Company’s revolving credit facility.
−Removed: With the purchase of Armada, the Company expanded its home health and hospice services in the state of New Mexico.
+Added: The Tennessee Quality Care acquisition accounte d for $ 16.3 million of net service revenues and $ 3.0 million of operating income for the year ended December 31, 2023.
+Added: On February 1, 2022, the Company completed the acquisition of the hospice and palliative operations of JourneyCare.
+Added: The purchase price was approximately $ 86.6 million, including the amount of acquired excess cash held by JourneyCare at the closing of the acquisition (approximately $ 0.4 million) plus the finalization of net working capital payable to seller of $ 1.6 million.
+Added: The JourneyCare acquisition was funded with a combination of a $ 35.0 million draw on the Company’s revolving credit facility and available cash.
+Added: With the JourneyCare acquisition, the Company expanded its hospice services to patients in the state of Illinois.
The related acquisition and integration costs were $ 0.5 million and $ 4.3 million, respectively, for the year ended December 31, 2022.
These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
−Removed: Based upon management’s final valuations, the fair values of the assets and liabilities acquired are as follows:
−Removed: Identifiable intangible assets
−Removed: Property and equipment
−Removed: Accounts payable
−Removed: Accrued payroll
−Removed: Total purchase price
−Removed: Identifiable intangible assets acquired included $ 0.6 million of non-competition agreements with estimated useful lives of five years and $ 0.4 million of indefinite-lived state licenses.
−Removed: The estimated fair value of identifiable intangible assets was determined with
−Removed: the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
−Removed: The fair value analysis and related valuations reflect the conclusions of management.
−Removed: All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company.
−Removed: The goodwill and intangible assets acquired are deductible for tax purposes.
−Removed: Queen City Hospice
−Removed: On December 4, 2020, we completed the acquisition of Queen City Hospice, LLC and its affiliate Miracle City Hospice, LLC (together “Queen City Hospice”).
−Removed: The purchase price was approximately $ 194.8 million, including the amount of acquired excess cash held by Queen City Hospice at the closing of the acquisition (approximately $ 15.4 million).
−Removed: The purchase of Queen City Hospice was funded with the Company’s revolving credit facility and available cash.
−Removed: With the purchase of Queen City Hospice, the Company expanded its hospice services in the state of Ohio.
−Removed: The related acquisition costs were $ 1.8 million for the year ended December 31, 2021 .
−Removed: For the year ended December 31, 2021, integration costs were $ 2.2 million.
−Removed: These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
−Removed: Based upon management’s final valuations, the fair values of the assets and liabilities are as follows:
+Added: Based upon management’s valuations, which are preliminary and subject to completion of working capital adjustments, the fair values of the assets and liabilities acquired are as follows:
+Added: (Amounts in Thousands)
Identifiable intangible assets
2 unchanged sentences
Operating lease assets, net
−Removed: Accounts payable
−Removed: Accrued payroll
Accrued expenses
−Removed: Government stimulus advances
−Removed: Long-term operating lease liabilities
−Removed: Total purchase price
−Removed: Identifiable intangible assets acquired included $ 11.0 million in trade names, $ 1.5 million of non-competition agreements with estimated useful lives of fifteen years and five years , respectively, and $ 7.5 million of indefinite lived state licenses.
−Removed: The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
−Removed: The fair value analysis and related valuations reflect the conclusions of management.
−Removed: All estimates, key assumptions, and forecasts were either provided by or reviewed by the Company.
−Removed: The goodwill and intangible assets acquired are deductible for tax purposes.
−Removed: County Homemakers
−Removed: On November 1, 2020, we completed the acquisition of County Homemakers.
−Removed: The purchase price was approximately $ 15.8 million, including the amount of acquired excess cash held by County Homemakers at the closing of the acquisition (approximately $ 1.1 million).
−Removed: The purchase of County Homemakers was funded with the Company’s available cash.
−Removed: With the purchase of County Homemakers, the Company expanded its personal care services in the state of Pennsylvania.
−Removed: The related integration and acquisition costs were $ 0.2 million and $ 0.3 million for the year ended December 31, 2020, respectively.
−Removed: These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
−Removed: Based upon management’s final valuations, the fair values of the assets and liabilities are as follows:
−Removed: Identifiable intangible assets
−Removed: Accounts receivable
−Removed: Property and equipment
−Removed: Operating lease assets, net
−Removed: Accounts payable
Accrued payroll
−Removed: Accrued expenses
Long-term operating lease liabilities
Total purchase price
−Removed: Identifiable intangible assets acquired included approximately $ 0.3 million in state licenses and $ 0.1 million in trade names with estimated useful lives of eight years and one year , respectively.
+Added: Identifiable intangible assets acquired included $ 9.0 million in a trade name and $ 4.8 million of indefinite-lived state licenses.
The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
2 unchanged sentences
The goodwill and intangible assets acquired are deductible for tax purposes.
−Removed: A Plus Health Care
−Removed: On July 1, 2020, we completed the acquisition of A Plus Health Care, Inc.
−Removed: (“A Plus”).
−Removed: The purchase price was approximately $ 14.5 million, including the amount of acquired excess cash held by A Plus at the closing of the acquisition (approximately $ 2.8 million).
−Removed: The purchase of A Plus was funded with the Company’s available cash.
−Removed: With the purchase of A Plus, the Company expanded its personal care services in the state of Montana.
+Added: JourneyCare accounted for $ 47.2 million of net service revenues and $ 9.1 million of operating income for the year ended December 31, 2022.
+Added: Armada Skilled Homecare
+Added: On August 1, 2021, we completed the acquisition of Armada Skilled Homecare of New Mexico LLC, Armada Hospice of New Mexico LLC and Armada Hospice of Santa Fe LLC (collectively, “Armada”) for approximately $ 29.7 million, including the amount of acquired excess cash held by Armada at the closing of the acquisition (approximately $ 0.7 million).
+Added: The purchase of Armada was funded with the Company’s revolving credit facility.
+Added: With the purchase of Armada, the Company expanded its home health and hospice services in the state of New Mexico.
The related acquisition and integration costs were $ 0.4 million and $ 0.5 million, respectively, for the year ended December 31, 2021.
These costs are included in general and administrative expenses on the Consolidated Statements of Income and were expensed as incurred.
−Removed: Based upon management’s final valuations, the fair values of the assets and liabilities are as follows:
+Added: Based upon management’s final valuations, the fair values of the assets and liabilities acquired are as follows:
Identifiable intangible assets
−Removed: Accounts receivable
−Removed: Operating lease assets, net
+Added: Property and equipment
Accounts payable
Accrued payroll
−Removed: Accrued expenses
−Removed: Long-term operating lease liabilities
Total purchase price
−Removed: Identifiable intangible assets acquired included $ 1.4 million in trade names with an estimated useful life of fifteen years .
−Removed: The estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
+Added: Identifiable intangible assets acquired included $ 0.6 million of non-competition agreements with estimated useful lives of five yea rs and $ 0.4 million of indefinite-lived state licenses.
+Added: Th e estimated fair value of identifiable intangible assets was determined with the assistance of a valuation specialist, using Level 3 inputs as defined under ASC Topic 820.
The fair value analysis and related valuations reflect the conclusions of management.
2 unchanged sentences
Other Acquisitions
−Removed: On October 1, 2022 , we completed the acquisition of Apple Home HealthCare LTD (“Apple Home”) for approximately $ 12.7 million, with funding provided by drawing on the Company’s revolving credit facility.
−Removed: In addition to the initial consideration, the total purchase price also includes potential additional contingent consideration to the previous owners of Apple Home of up to approximately $ 2 million.
−Removed: The contingent consideration will vary based upon performance relative to certain agreed upon earnings targets in 2022 and 2023.
+Added: On January 1, 2023, we completed the acquisition of CareStaff for approximately $ 1.0 million, with funding provided by available cash.
+Added: With the purchase of CareStaff, the Company expanded its personal care services segment in Florida and recorded goodwill of $ 0.6 mill ion.
+Added: On October 1, 2022 , we completed the acquisition of Apple Home for approximately $ 12.7 million, with funding provided by drawing on the Company’s revolving credit facility.
+Added: The additional contingent consideration of up to approximately $ 2 million was settled without further payment.
With the purchase of Apple Home, the Company expanded clinical services for its home health segment in Illinois and recorded goodwill of $ 8.9 million.
−Removed: On October 1, 2021, we completed the acquisition of Summit Home Health, LLC (“Summit”) for approximately $ 8.1 million, with funding provided by available cash.
+Added: On October 1, 2021, we completed the acquisition of Summit Home Health, LLC (“Summit”) for approximately $ 8.1 million, with funding provided by available cash.
With the purchase of Summit, we added clinical services to our home health segment in Illinois and recorded goodwill of $ 6.5 million.
+Added: For the year ended December 31, 2023, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the acquisition of Tennessee Quality Care closed on January 1, 2022.
For the year ended December 31, 2022, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the acquisition of JourneyCare closed on January 1, 2021.
For the year ended December 31, 2021, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if the acquisition of Armada closed on January 1, 2020.
−Removed: For the year ended December 31, 2020, the following table contains unaudited pro forma Consolidated Income Statement information of the Company as if each of the acquisitions of Queen City Hospice, A Plus and County Homemakers closed on January 1, 2020.
For the Years Ended December 31,
3 unchanged sentences
Net income from continuing operations
+Added: Net income per common share
+Added: Basic income per share
+Added: Diluted income per share
The pro forma disclosures in the table above include adjustments for amortization of intangible assets, tax expense and acquisition costs to reflect results that are more representative of the combined results of the transactions.
11 unchanged sentences
accumulated depreciation and amortization
−Removed: Computer software includes $ 1.6 million and $ 1.5 million of internally developed software for the years ended December 31, 2022 and 2021, respectively.
+Added: Computer software includes $ 1.6 million of internally developed software for both years ended December 31, 2023 and 2022 .
Depreciation and amortization expense totaled $ 6.9 million, $ 6.8 million and $ 5.9 million for the years ended December 31, 2023, 2022 and 2021 , respectively.
10 unchanged sentences
Goodwill at December 31, 2023
−Removed: In 2022, the Company recognized goodwill in the hospice segment of $ 69.4 million related to the acquisition of JourneyCare and $ 8.9 million with the acquisition of Apple Home in the home health segment.
−Removed: In connection with the acquisition of Armada in 2021, the Company recognized goodwill in its hospice and home health segments of $ 13.4 million and $ 15.0 million, respectively, and $ 6.5 million with the acquisition of Summit in 2021 in our home health segment.
+Added: In 2023, the Company recognized goodwill in the hospice and home health segments of $ 35.0 million and $ 44.3 million, respectively, related to the acquisition of Tennessee Quality Care and $ 0.6 million related to the acquisition of CareStaff in the personal care services segment.
+Added: In connection with the acquisition of JourneyCare in 2022, the Company recognized goodwill in its hospice segment of $ 69.4 million and $ 8.9 million with the acquisition of Apple Home in 2022 in our home health segment.
Goodwill adjustments to previously recorded goodwill are generally related to accounts receivable and accrued expenses based on the final valuations.
See Note 3 to the Notes to Consolidated Financial Statements for additional information regarding the acquisitions made by the Company in 2022 and 2023.
−Removed: The Company’s identifiable intangible assets consist of customer and referral relationships, trade names and trademarks, non-competition agreements and state licenses.
+Added: The Company’s identifiable intangible assets consist of customer and referral relationships, trade names and trademarks, non-competition agreements and state licenses.
Amortization is computed using straight-line and accelerated methods based upon the estimated useful lives of the respective assets, which range from one to twenty-five years .
3 unchanged sentences
The Company estimates the fair value of the reporting unit using both a discounted cash flow model as well as a market multiple model.
−Removed: The cash flow forecasts are adjusted by an appropriate discount rate based on the Company’s estimate of a market participant’s weighted-average cost of capital.
−Removed: These models are both based on the Company’s best estimate of future revenues and operating costs and are reconciled to the Company’s consolidated market capitalization, with consideration of the amount a potential acquirer would be required to pay, in the form of a control premium.
−Removed: The determination of fair value in the Company’s goodwill impairment analysis is based on an estimate of fair value for each reporting unit utilizing known and estimated inputs at the evaluation date.
−Removed: Some of those inputs include, but are not limited to, the most recent price of the Company’s common stock and fair value of long term debt, estimates of future revenue and expense growth, estimated market multiples, expected capital expenditures, income tax rates and cost of invested capital.
+Added: The cash flow forecasts are adjusted by an appropriate discount rate based on the Company’s estimate of a market participant’s weighted-average cost of capital.
+Added: These models are both based on the Company’s best estimate of future revenues and operating costs and are reconciled to the Company’s consolidated market capitalization, with consideration of the amount a potential acquirer would be required to pay, in the form of a control premium.
+Added: The determination of fair value in the Company’s goodwill impairment analysis is based on an estimate of fair value for each reporting unit utilizing known and estimated inputs at the evaluation date.
+Added: Some of those inputs include, but are not limited to, the most recent price of the Company’s common stock and fair value of long term debt, estimates of future revenue and expense growth, estimated market multiples, expected capital expenditures, income tax rates and cost of invested c apital.
Significant assumptions used in the analysis included a 10.0 % discount rate and long-term revenue growth rates that ranged from 3.5 % to 5.8 %.
−Removed: For the fiscal year 2022 impairment test, the fair value of the reporting units exceeded their respective carrying values (commonly referred to as “headroom”) by at least 100 % in the personal care segment, by 75 % in the home health segment, and 67 % in the hospice segment.
The Company did no t record any impairment charges for the years ended December 31, 2023, 2022 or 2021.
The carrying amount and accumulated amortization of each identifiable intangible asset category consisted of the following at December 31, 2023 and 2022:
−Removed: relationships
−Removed: State Licenses
+Added: December 31, 2023
+Added: December 31, 2022
(Amounts in Thousands)
−Removed: Intangible assets with indefinite lives
−Removed: Intangible assets subject to amortization:
−Removed: Gross carrying amount
+Added: (Amounts in Thousands)
+Added: Estimated Useful Life
+Added: Gross carrying value
Accumulated amortization
−Removed: Intangible assets subject to amortization, net
−Removed: Net balance at December 31, 2022
−Removed: Intangible assets with indefinite lives
−Removed: Intangible assets subject to amortization:
−Removed: Gross carrying amount
+Added: Net carrying value
+Added: Gross carrying value
Accumulated amortization
−Removed: Intangible assets subject to amortization, net
−Removed: Net balance at December 31, 2021
+Added: Net carrying value
+Added: Customer and referral relationships
+Added: Trade names and trademarks
+Added: Non-competition agreement
+Added: State Licenses
+Added: State Licenses
+Added: Total intangible assets
+Added: During the year ended December 31, 2023, the Company acquired indefinite-lived state licenses and a trade name of $ 7.6 million and $ 2.1 million, respectively, in its hospice segment related to the acquisition of Tennessee Quality Care.
+Added: The Company also acquired indefinite-lived state licenses and trade name of $ 11.6 million and $ 5.4 million, respectively, in its home health segment in connection with the Tennessee Quality Care acquisition.
During the year ended December 31, 2022, the Company acquired indefinite-lived state licenses and trade names of $ 4.8 million and $ 9.0 million, respectively, related to the acquisition of JourneyCare.
During the year ended December 31, 2022, the Company acquired indefinite lived state licenses and trade names of $ 1.2 million and $ 0.1 million, respectively, related to the acquisition of Apple Home.
−Removed: During the year ended December 31, 2021, the Company acquired indefinite lived state licenses and non-competition agreements of $ 0.4 million and $ 0.6 million, respectively, related to the acquisition of Armada.
Amortization expense related to the identifiable intangible assets amounted to $ 7.1 million, $ 7.2 million and $ 8.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
6 unchanged sentences
(Amounts in Thousands)
−Removed: Income tax receivable
Prepaid payroll
−Removed: Prepaid workers’
−Removed: compensation and liability insurance
−Removed: Workers’
−Removed: compensation insurance receivable
+Added: Prepaid workers’ compensation and liability insurance
+Added: Prepaid licensing fees
+Added: Workers’ compensation insurance receivable
Total prepaid expenses and other current assets
1 unchanged sentence
(Amounts in Thousands)
−Removed: Current portion of operating lease liabilities
+Added: Accrued health benefits
Payor advances (1)
−Removed: Accrued health insurance
Accrued professional fees
−Removed: Accrued payroll taxes
+Added: Accrued payroll and other taxes
Total accrued expenses
9 unchanged sentences
Amended and Restated Senior Secured Credit Facility
−Removed: On October 31, 2018, the Company entered into the Amended and Restated Credit Agreement, dated as of October 31, 2018, with certain lenders and Capital One, National Association, as a lender and as agent for all lenders, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of September 12, 2019, and as further amended by the Second Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2021 (as amended, the “Credit Agreement”;
−Removed: as used throughout this Annual Report on Form 10-K, “credit facility”
−Removed: shall mean the credit facility evidenced by the Credit Agreement).
+Added: On October 31, 2018, the Company entered into the Amended and Restated Credit Agreement, with certain lenders and Capital One, National Association, as a lender and as agent for all lenders, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of September 12, 2019, as further amended by the Second Amendment to Amended and Restated Credit Agreement, dated as of July 30, 2021, and as further amended by the Third Amendment to Amended and Restated Credit Agreement, dated as of April 26, 2023 (as described below, the “Third Amendment”) (as amended, the “Credit Agreement”, as used throughout this Annual Report on Form 10-K, “credit facility” shall mean the credit facility evidenced by the Credit Agreement).
The credit facility consists of a $ 600.0 million revolving credit facility and a $ 125.0 million incremental loan facility, which incremental loan facility may be for term loans or an increase to the revolving loan commitments.
The maturity of this credit facility is July 30, 2026 .
−Removed: Interest on the credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 0.75 % to 1.50 % based on the applicable senior net leverage ratio plus (ii) a base rate equal to the greatest of (a) the rate of interest last quoted by The Wall Street Journal as the “prime rate,”
−Removed: (b) the sum of the federal funds rate plus a margin of 0.50 % and (c) the sum of the adjusted LIBOR that would be applicable to a loan with an interest period of one month advanced on the applicable day (not to be less than 0.00 %) plus a
−Removed: margin of 1.00 % or (y) the sum of (i) an applicable margin ranging from 1.75 % to 2.50 % based on the applicable senior net leverage ratio plus (ii) the offered rate per annum for similar dollar deposits for the applicable interest period that appears on Reuters Screen LIBOR01 Page (not to be less than zero).
−Removed: Swing loans may not be LIBOR loans.
−Removed: The Credit Agreement contains hardwired fallback language that contemplates a transition from LIBOR, specifically identifies the Secured Overnight Financing Rate (“SOFR”) as the replacement reference rate and details the mechanism for transition at LIBOR cessation, which is anticipated to occur on June 30, 2023.
−Removed: The transition to SOFR is not expected to have a material impact on the Company's results of operations or liquidity.
+Added: On April 26, 2023, the Company entered into the Third Amendment to replace LIBOR with SOFR as the benchmark reference rate for loans under its credit facility.
+Added: The Third Amendment did not amend any other terms of the Credit Agreement.
+Added: The transition to SOFR did not and is not expected to have a material impact on the Company’s results of operations or liquidity.
+Added: Interest on the credit facility may be payable at (x) the sum of (i) an applicable margin ranging from 0.75 % to 1.50 % based on the applicable senior net leverage ratio plus (ii) a base rate equal to the greatest of (a) the rate of interest last quoted by The Wall Street Journal as the “prime rate,” (b) the sum of the federal funds rate plus a margin of 0.50 % and (c) the sum of Term SOFR (as published by the CME Group Benchmark Administrative Limited) for an interest period of one month for such applicable day plus 0.10 % (not to be less than 0.00 %), plus a margin of 1.00 % or (y) the sum of (i) an applicable margin ranging from 1.75 % to 2.50 % based on the applicable senior net leverage ratio plus (ii) the rate per annum equal to the sum of Term SOFR (as published by the CME Group Benchmark Administrative Limited) for the applicable interest period plus 0.10 % (not to be less than zero ).
+Added: Swing loans may not be SOFR loans.
Addus HealthCare, Inc.
−Removed: (“Addus HealthCare”) is the borrower, and its parent, Holdings, and substantially all of Holdings’
−Removed: subsidiaries are guarantors under this credit facility, and it is collateralized by a first priority security interest in all of the Company’s and the other credit parties’
−Removed: current and future tangible and intangible assets, including the shares of stock of the borrower and subsidiaries.
+Added: (“Addus HealthCare”) is the borrower, and its parent, Holdings, and substantially all of Holdings’ subsidiaries are guarantors under this credit facility, and it is collateralized by a first priority security interest in all of the Company’s and the other credit parties’ current and future tangible and intangible assets, including the shares of stock of the borrower and subsidiaries.
The Credit Agreement contains affirmative and negative covenants customary for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets.
6 unchanged sentences
As of December 31, 2023, the Company was in compliance with all financial covenants under the Credit Agreement.
−Removed: The Company drew approximately $ 47.0 million under its credit facility to fund, in part, the JourneyCare and Apple Home acquisitions.
+Added: During the twelve months ended December 31, 2023 , the Company drew approximately $ 110.0 million under its credit facility to fund, in part, the Tennessee Quality Care acquisition.
At December 31, 2023, the Company had a total of $ 126.4 million of revolving loans, with an interest rate of 7.21 %, outstanding on its credit facility.
After giving effect to the amount drawn on its credit facility, approximately $ 8.0 million of outstanding letters of credit and borrowing limits based on an advance multiple of Adjusted EBITDA (as defined in the Credit Agreement), the Company had $ 470.0 million of capacity and $ 335.6 million available for borrowing under its credit facility.
−Removed: The Company drew approximately $ 29.0 million under its credit facility to fund the acquisition of Armada on August 1, 2021.
+Added: During the twelve months ended December 31, 2022, the Company drew approximately $ 47.0 million under its credit facility to fund in part, the JourneyCare and Apple Home acquisitions.
At December 31, 2022, the Company had a total of $ 134.9 million of revolving loans, with an interest rate of 6.13 %, outstanding on its credit facility.
4 unchanged sentences
Provision for income taxes
−Removed: The tax effects of certain temporary differences between the Company’s book and tax bases of assets and liabilities give rise to significant portions of the deferred income tax assets (liabilities) at December 31, 2022 and 2021.
+Added: The tax effects of certain temporary differences between the Company’s book and tax bases of assets and liabilities give rise to significant portions of the deferred income tax assets (liabilities) at December 31, 2023 and 2022.
The deferred tax assets (liabilities) consisted of the following:
5 unchanged sentences
Accrued compensation
−Removed: Accrued workers’
+Added: Accrued workers’ compensation
Transaction costs
Stock-based compensation
−Removed: Government stimulus advances
+Added: Net operating loss
Restructuring costs
22 unchanged sentences
The effective income tax rate was 23.1 %, 23.5 % and 25.2 % for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: The difference between our federal statutory and effective income tax rates is principally due to the inclusion of state taxes and non-deductible compensation, offset by an excess tax benefit and the use of federal employment tax credits.
−Removed: The excess tax benefit is a discrete item, primarily related to the vesting of equity shares, which requires the Company to recognize the benefit fully in the period.
+Added: The difference between our federal statutory and effective income tax rates was principally due to the inclusion of state taxes and non-deductible compensation, partially offset by an excess tax benefit and the use of federal employment tax credits.
+Added: The excess tax expense/benefit is a discrete item, related to the vesting of equity shares, which requires the Company to recognize the expense or benefit fully in the period.
The Company is subject to taxation in the jurisdictions in which it operates.
2 unchanged sentences
Stock Options and Restricted Stock Awards
−Removed: The Board approved the 2017 Omnibus Incentive Plan (“the 2017 Plan”) as of April 27, 2017, which was approved by our shareholders on June 14, 2017.
−Removed: The 2017 Plan was intended to replace our existing incentive compensation plan, the 2009 Stock Incentive Plan (“the 2009 Plan”).
−Removed: All awards are now granted from the 2017 Plan.
+Added: The Board approved the A&R 2017 Plan as of April 13, 2023 and our shareholders approved it as of June 14, 2023.
+Added: The A&R 2017 Plan amended and restated our 2017 Omnibus Incentive Plan (the “2017 Plan”), which in turn was intended to replace our 2009 Stock Incentive Plan (the “2009 Plan”).
+Added: All awards are now granted from the A&R 2017 Plan.
Outstanding awards under the 2009 Plan will continue to be governed by the 2009 Plan and the agreements under which they were granted.
−Removed: The 2017 Plan allows us to grant performance-based incentive awards and equity-based awards (each an “Award”) to eligible employees, directors and consultants in the form of Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock Units/Restricted Stock Units, Other Stock Units or Performance Awards.
−Removed: The Company’s Board believes that the 2017 Plan is necessary to continue the Company’s effectiveness in attracting, motivating and retaining employees, directors and consultants with appropriate experience and to increase the grantees’
−Removed: alignment of interest with the Company’s shareholders.
−Removed: Under the 2017 Plan, Awards may be made in shares of our common stock.
−Removed: Subject to adjustment as provided by the terms of the 2017 Plan, the maximum aggregate number of shares of common stock with respect to which awards may be granted under the 2017 Plan will be 1,182,270 , less the number of shares subject to awards that are granted pursuant to the 2009 Plan after March 31, 2017.
−Removed: The aggregate awards granted during any calendar year to any single Participant cannot exceed (i) 500,000 shares subject to stock options or stock appreciation rights (“SARs”) or (ii) 300,000 shares subject to Awards denominated in shares of common stock (whether or not settled in common stock).
−Removed: These individual annual limitations are cumulative in that any shares of common stock or cash for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award in that fiscal year, the number of shares of common stock will automatically increase in the subsequent fiscal years during the term of the 2017 Plan until the earlier of the time the increase has been granted to the Participant, or the end of the third fiscal year following the year to which such increase relates.
−Removed: At December 31, 2022, there wer e 350,317 shares of c ommon stock available for future grant under the 2017 Plan.
−Removed: Any shares of common stock subject to an Award under the 2017 Plan that are forfeited, canceled, settled in cash or otherwise terminated without a distribution of shares to a Participant, or that are delivered by attestation or withheld by the Company in connection with an option exercise or the payment of any required income tax withholding upon an option exercise or the vesting of restricted stock, will be deemed available for Awards under the 2017 Plan.
−Removed: Additionally, any shares of common stock subject to an Award under the 2009 Plan that are forfeited, canceled, settled in cash or otherwise terminated without a distribution of shares to a participant, or that are delivered by attestation or withheld by the Company in connection with an option exercise or the payment of
−Removed: any required income tax withholding upon an option exercise or the vesting of restricted stock, will be deemed available for Awards under the 2017 Plan.
−Removed: Stock options are awarded with a strike price equal to the fair market value based on the closing price of our common stock on the date of grant.
+Added: The A&R 2017 Plan allows us to grant performance-based incentive awards and equity-based awards (each, an “Award”) to eligible employees, directors and consultants in the form of Stock Options, Stock Appreciation Rights (“SARs”), Restricted Stock Restricted Stock Units, Performance Awards and Other Stock Unit Awards.
+Added: The Board believes that the A&R 2017 Plan is necessary to continue the Company’s effectiveness in attracting, motivating and retaining employees, directors and consultants with appropriate experience and to increase the grantees’ alignment of interest with the Company’s shareholders.
+Added: Under the A&R 2017 Plan, Awards may be made in shares of our common stock.
+Added: Subject to adjustment as provided by the terms of the A&R 2017 Plan, the maximum aggregate number of shares of common stock with respect to which awards may be granted under the A&R 2017 Plan is 864,215 , comprised of 274,215 shares (the number of shares that were available for issuance under the 2017 Plan as of April 13, 2023) and 590,000 shares (the number of shares newly authorized by the Company’s shareholders upon their approval of the A&R 2017 Plan)..
+Added: The aggregate awards granted during any calendar year to any single Participant cannot exceed 500,000 shares subject to stock options or SARs.
+Added: These individual annual limitations are cumulative in that any shares of common stock or cash for which Awards are permitted to be granted to a Participant during a fiscal year are not covered by an Award in that fiscal year (such shortfall, the “Shortfall Amount”), the number of shares of common stock (or amount of cash, as the case may be) will automatically increase in the subsequent fiscal years during the term of the A&R 2017 Plan until the earlier of the time when the Shortfall Amount has been granted to the Participant, or the end of the third fiscal year following the year to which such Shortfall Amount relates.
+Added: At December 31, 2023, there wer e 854,003 shares of c ommon stock available for future grant under the A&R 2017 Plan.
+Added: Awards made under the 2017 Plan (and the 2009 Plan) that are forfeited, canceled, settled in cash or otherwise terminated without a distribution of shares to a Participant will be deemed available for Awards under the A&R 2017 Plan;
+Added: provided, that the A&R 2017 Plan explicitly prohibits shares withheld for payment of taxes for awards, the exercise price for appreciation awards, shares acquired with the proceeds of appreciation awards, and shares from stock settled SARs from being added back to the share reserve.
+Added: Stock options are awarded with an exercise price equal to the fair market value based on the closing price of our common stock on the date of grant.
Options granted typically vest over a service period ranging from three to four years and expire ten years from the date of grant.
Restricted shares typically vest over a service period ranging from one to four years and expire ten years from date of grant.
+Added: Stock options are awarded with an exercise price equal to the fair market value based on the closing price of our common stock on the date of grant.
+Added: Options granted typically vest over a service period ranging from three to four years and expire ten years from the date of grant.
+Added: Restricted shares typically vest over a service period ranging from one to four years and expire ten years from date of grant.
The exercise prices of stock options outstanding on December 31, 2023 range from $ 19.71 to $ 92.00 .
1 unchanged sentence
Stock Options
−Removed: A summary of stock option activity and weighted average exercise price for the year ended December 31, 2022 follows:
+Added: A summary of stock option activity for the year ended December 31, 2023 follows:
Exercise Price
+Added: Weighted Average Remaining Contractual Terms (Years)
Outstanding, beginning of period
1 unchanged sentence
Outstanding, end of period
+Added: Exercisable, end of period
The weighted-average estimated fair value of employee stock options granted was calculated using the Black-Scholes Option Pricing Model in 2022 and 2021 .
8 unchanged sentences
As of December 31, 2023 , there was $ 1.0 million of total unrecognized compensation cost that is expected to be recognized over a weighted average period of 2.0 years.
−Removed: The intrinsic value of vested and outstanding stock options was $ 24.1 million and $ 1.0 million, respectively, as of December 31, 2022.
+Added: The intrinsic value of exercisable and outstanding stock options was $ 21.0 million and $ 21.2 million, respectively, as of December 31, 2023.
As of December 31, 2023 , there were 415,000 and 40,000 shares of stock options vested and unvested, respectively.
6 unchanged sentences
Restricted stock award compensation expense totaled $ 9.4 million, $ 9.4 million and $ 8.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: As of December 31, 2022, there was $ 10.9 million of total unrecognized compensation cost that is expected to be recognized over a weighted average period o f 1.7 years.
+Added: As of December 31, 2023, there was $ 10.4 million of total unrecognized compensation cost that is expected to be recognized over a weighted average period of 1.4 years.
Employee Benefit Plans
7 unchanged sentences
From time to time, the Company is subject to legal and/or administrative proceedings incidental to its business.
−Removed: On June 2, 2021, the Company received a $ 6.5 million Request for Repayment from Palmetto, GBA, LLC (“Palmetto”), a Medicare administrative contractor, regarding Ambercare Hospice Inc.
−Removed: (“Ambercare”), our subsidiary that provides hospice services in New Mexico.
−Removed: In 2018, the Office of Audit Services (“OAS”), under the HHS Office of Inspector General, initiated a clinical review of certain hospice claims billed during a timeframe from January 1, 2016 to December 31, 2017.
−Removed: The OAS review concluded that certain payments to Ambercare for hospice services during the review period were made in error.
−Removed: The Company acquired Ambercare in May 2018 and has a contractual right to full indemnification from any potential losses from the OAS review through the terms of the Ambercare purchase agreement.
−Removed: The Company disputes the results of the OAS review and related asserted billing errors and is in the process of filing administrative appeals.
−Removed: At this stage, the Company cannot predict the ultimate outcome of the appeal process.
−Removed: It is the opinion of management that the outcome of pending legal and/or administrative proceedings will not have a material effect on the Company’s Consolidated Balance Sheets and Consolidated Statements of Income.
+Added: It is the opinion of management that the outcome of pending legal and/or administrative proceedings will not have a material effect on the Company’s Consolidated Balance Sheets and Consolidated Statements of Income.
Concentration of Cash
3 unchanged sentences
Segment Information
−Removed: Operating segments are defined as components of a company that engage in business activities from which it may earn revenues and incur expenses, and for which separate financial information is available and is regularly reviewed by the Company’s chief operating decision makers, to assess the performance of the individual segments and make decisions about resources to be allocated to
−Removed: the segments.
+Added: Operating segments are defined as components of a company that engage in business activities from which it may earn revenues and incur expenses, and for which separate financial information is available and is regularly reviewed by the Company’s chief operating decision makers, to assess the performance of the individual segments and make decisions about resources to be allocated to the segments.
The Company operates as a multi-state provider of three distinct but related business segments providing in-home services.
2 unchanged sentences
In its home health segment, the Company provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy.
−Removed: The tables below set forth information about the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020 along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
−Removed: Segment assets are not reviewed by the Company’s chief operating decision maker function and therefore are not disclosed below.
+Added: The tables below set forth information about the Company’s reportable segments for the years ended December 31, 2023, 2022 and 2021 along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
+Added: Segment assets are not reviewed by the Company’s chief operating decision maker function and therefore are not disclosed below.
Segment operating income consists of revenue generated by a segment, less the direct costs of service revenues and general and administrative expenses that are incurred directly by the segment.
33 unchanged sentences
Significant Payors
−Removed: For 2022, 2021 and 2020, the Company’s revenue by payor type was as follows:
+Added: For 2023, 2022 and 2021, the Company’s revenue by payor type was as follows:
Personal Care
34 unchanged sentences
Total hospice segment net service revenues
−Removed: With the acquisition of Queen City Hospice in late 2020, the Company expanded its hospice services in the state of Ohio, and with the JourneyCare acquisition in 2022, the Company also expanded its hospice services in the state of Illinois.
+Added: With the acquisition of JourneyCare in 2022, the Company expanded its hospice services to patients in the state of Illinois.
For the Years Ended December 31,
3 unchanged sentences
Total home health segment net service revenues
−Removed: With the acquisition of Summit in 2021, the Company expanded its home health services in the state of Illinois.
−Removed: A substantial portion of the Company’s revenue and accounts receivable are derived from services performed for state and local governmental agencies.
+Added: With the acquisition of Tennessee Quality Care in 2023, the Company expanded its home health services to patients in the state of Tennessee.
+Added: A substantial portion of the Company’s revenue and accounts receivable is derived from services performed for state and local governmental agencies.
We derive a significant amount of our net service revenues in Illinois, which represented 44.5 %, 43.8 % and 38.2 % of our net service revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: The Illinois Department on Aging, the largest payor program for the Company’s Illinois personal care operations, accounted for 20.7 %, 21.4 % and 23.0 % of the Company’s net service revenues for 2022, 2021 and 2020, respectively.
−Removed: The related receivables due from the Illinois Department on Aging represented 18.0 % and 16.1 % of the Company’s net accounts receivable at December 31, 2022 and 2021, respectively.
−Removed: In 2019, New York initiated a new Request For Offer (“RFO”) process to competitively procure CDPAP fiscal intermediaries.
+Added: The Illinois Department on Aging, the largest payor program for the Company’s Illinois personal care operations, accounted for 20.9 %, 20.7 % and 21.4 % of the Company’s net service revenues for 2023, 2022 and 2021, respectively.
+Added: The related receivables due from the Illinois Department on Aging represented 25.8 % and 18.0 % of the Company’s net accounts receivable at December 31, 2023 and 2022, respectively.
+Added: In 2019, New York initiated a new RFO process to competitively procure CDPAP fiscal intermediaries.
The Company was not selected in the initial RFO process.
−Removed: We submitted a formal protest in response to the selection process, which
−Removed: was filed and accepted in March 2021.
−Removed: The New York fiscal year 2023 state budget, passed in April 2022, amends the current Fiscal Intermediary RFO process to authorize all fiscal intermediaries that submitted an RFO application and served at least 200 clients in New York City or 50 clients in other counties between January 1, 2020 and March 31, 2020 to contract with the New York State Department of Health and continue to operate in all counties contained in their application, if the fiscal intermediary submits an attestation and supporting information to the New York State Department of Health no later than November 29, 2022.
−Removed: The Company submitted an attestation on November 22, 2022.
−Removed: Under this provision, the Company is allowed to continue to contract with all of its current payors for CDPAP services, as of the contract award date, which is anticipated to be April 1, 2023.
−Removed: The Company continues to assess the future of its participation in this program.
−Removed: Given the current profitability of the program, the Company has suspended materially all of its new fee-for-service patient admissions through County Social Service Departments in the CDPAP program .
+Added: We submitted a formal protest in response to the selection process, which was filed and accepted in March 2021.
+Added: The New York fiscal year 2023 state budget, passed in April 2022, amended the Fiscal Intermediary RFO process to authorize all fiscal intermediaries that submitted an RFO application and served at least 200 clients in New York City or 50 clients in other counties between January 1, 2020 and March 31, 2020 to contract with the New York State Department of Health and continue to operate in all counties contained in their application, if the fiscal intermediary submitted an attestation and supporting information to the New York State Department of Health no later than November 29, 2022.
+Added: The Company submitted an attestation on November 22, 2022, which allowed the Company to continue its CDPAP fiscal intermediary operations.
+Added: However, the Company decided at that time to suspend materially all of its new fee-for-service patient admissions in the CDPAP through County Social Service Departments.
+Added: On June 6, 2023, the New York State Department of Health notified the Company that it had received a contract award.
+Added: Under this contract, the Company is providing services to all current payors and has resumed new fee-for-service patient admissions through County Social Service Departments in the CDPAP.
+Added: The CDPAP continues to be targeted for changes by New York governmental authorities, however.
+Added: For example, the governor’s most recent update on the state budget contained proposals that could adversely affect the Company’s ability to participate in the CDPAP.
The Company recognized approximat ely $ 40.7 million from the program for the year ended December 31, 2023.
−Removed: Government Actions to Mitigate COVID-19’s Impact
−Removed: In March 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a global pandemic.
−Removed: The COVID-19 pandemic continues to cause disruption in the economy, in terms of increased costs and disruptions in the labor market.
−Removed: Although vaccines and booster shots for the COVID-19 virus have become widely available in the United States, COVID-19 has continued to result in a significant number of hospitalizations, and the future course of the pandemic remains uncertain, particularly due to the spread of COVID-19 variants.
+Added: Government Actions to Mitigate COVID-19’s Impact
+Added: The acute phase of the COVID-19 pandemic has faded, but the future course of COVID-19 remains uncertain.
We will continue to closely monitor the impact of COVID-19 on all aspects of our business, including the impacts to our employees, patients and suppliers.
−Removed: In recognition of the significant threat to the liquidity of financial markets posed by the COVID-19 pandemic, the Federal Reserve and Congress have taken dramatic actions to provide liquidity to businesses and the banking system in the United States.
−Removed: One of the primary sources of relief for healthcare providers is the CARES Act, which was expanded by the Paycheck Protection Program and Health Care Enhancement (“PPPHCE”) Act, and the Consolidated Appropriations Act (“CAA”).
−Removed: The American Rescue Plan Act of 2021 (“ARPA”), one relief package with numerous provisions that affect healthcare providers, was signed into law in March 2021.
−Removed: ARPA provides for $ 350 billion in relief funding for eligible state, local, territorial, and Tribal governments to mitigate the fiscal effects of the COVID-19 public health emergency.
−Removed: Additionally, the law provides for a 10 -percentage point increase in federal matching funds for Medicaid home and community-based services (“HCBS”) from April 1, 2021, through March 31, 2022, provided the state satisfied certain conditions.
+Added: In recognition of the significant threat to the liquidity of financial markets posed by the COVID-19 pandemic, the Federal Reserve and Congress took dramatic actions to provide liquidity to businesses and the banking system in the United States, including relief for healthcare providers in the CARES Act, which was expanded by the Paycheck Protection Program and Health Care Enhancement (“PPPHCE”) Act, and the Consolidated Appropriations Act (“CAA”), as well as the ARPA.
+Added: The ARPA provides for $ 350 billion in relief funding for eligible state, local, territorial, and Tribal governments to mitigate the fiscal effects of the COVID-19 public health emergency.
+Added: Additionally, the law provides for a 10 -percentage point increase in federal matching funds for Medicaid home and community-based services (“HCBS”) from April 1, 2021, through March 31, 2022, provided the state satisfied certain conditions.
States are permitted to use the state funds equivalent to the additional federal funds through March 31, 2025.
3 unchanged sentences
Funds may be subject to recoupment if not expended or if they are expended on non-approved uses.
−Removed: During the year ended December 31, 2021, the Company received state funding provided by the ARPA in aggregate amount of $ 1.0 million.
−Removed: The Company recorded revenue of $ 1.0 million and related costs of service revenue of $ 0.7 million for a state which met the revenue recognition criteria.
−Removed: During the twelve months ended December 31, 2022, the Company received state funding provided by the ARPA in an aggregate amount of $ 23.4 million.
−Removed: The Company recorded revenue of $ 1.9 million and related cost of service revenues of $ 1.5 million for certain states that met the revenue recognition criteria.
−Removed: The Company deferred the remaining $ 21.5 million, which was received from states with specific spending plans and reporting requirements.
−Removed: The Company utilized $ 8.6 million of these funds during the twelve months ended December 31 2022, primarily for caregivers and adding support to recruiting and retention efforts, $ 7.0 million included as a reduction of cost of service revenues and $ 1.6 million included as a reduction of general and administrative expenses in the Company’s Consolidated Statements of Income.
−Removed: As of December 31, 2022, the deferred portion of ARPA funding was $ 12.9 million, which is included within Government stimulus advances on the Company’s Consolidated Balance Sheets.
+Added: The Company received state funding provided by the ARPA in an aggregate amount of $ 3.7 million and $ 23.4 million for the years ended December 31, 2023 and 2022, respectively.
+Added: The Company recorded revenue of $ 0.3 million and $ 1.9 million and related cost of service revenues of $ 0.1 million and $ 1.5 million for certain states that met the revenue recognition criteria for the years ended December 31, 2023 and 2022, respectively.
+Added: The Company deferred the remaining $ 3.4 million and $ 21.5 million for the years ended December 31, 2023 and 2022, respectively, which was received from states with specific spending plans and reporting requirements.
+Added: The Company utilized $ 10.5 million and $ 8.6 million of these funds during the years ended December 31, 2023 and 2022, respectively, primarily for caregivers and adding support to recruiting and retention efforts.
+Added: The deferred portion of ARPA funding was $ 5.8 million and $ 12.9 million as of December 31, 2023 and 2022, respectively, which is included within Government stimulus advances on the Company’s Consolidated Balance Sheets.
Provider Relief Funds
1 unchanged sentence
In November 2020, the Company received grants in an aggregate principal amount of $ 13.7 million from the Provider Relief Fund.
−Removed: The Company utilized $ 12.3 million remaining of these
−Removed: funds during the year ended December 31, 2021 for healthcare related expenses, including retention payments, attributable to COVID-19 that were unreimbursed by other sources.
+Added: The Company utilized $ 12.3 million remaining of these funds during the year ended December 31, 2021 for healthcare related expenses, including retention payments, attributable to COVID-19 that were unreimbursed by other sources.
The Company documented the use of such funds in 2021 in reports to the U.S.
−Removed: Department of Health and Human Services (“HHS”), as required, and submitted the reports to HHS prior to the deadline of March 31, 2022.
+Added: Department of Health and Human Services ( “HHS” ), as required, and submitted the reports to HHS prior to the deadline of March 31, 2022.
During the year ended December 31, 2023, we submitted an unmodified audit report to HHS for 2022 in accordance with Generally Accepted Government Auditing Standards, as required for commercial organizations that received and expended total awards of $ 750,000 or more.
2 unchanged sentences
The sequestration payment adjustment was phased back in with a 1 % reduction beginning April 1, 2022, and returned to 2 % on July 1, 2022.
−Removed: These sequestration cuts have been extended through 2032.
−Removed: The ARPA increases the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the Pay-As-You-Go Act of 2010 (“PAYGO Act”).
+Added: These sequestration cuts have been extended through April 2032.
+Added: The ARPA increases the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the Pay-As-You-Go Act of 2010 (“PAYGO Act”).
As a result, an additional Medicare payment reduction of up to 4 % was required to take effect in January 2022.
6 unchanged sentences
The Company received a cash benefit of approximately $ 7.1 million related to the deferral of employer payroll taxes for 2020 under the CARES Act, for the period April 2, 2020 through June 30, 2020.
−Removed: Effective July 1, 2020, the Company began paying its deferred portion of employer Social Security payroll taxes and repaid $ 4.1 million and $ 3.0 million as of December 31, 2022 and 2021 respectively.
−Removed: Government stimulus advances consisted of the following:
−Removed: (Amounts in Thousands)
−Removed: Payroll tax deferral
−Removed: Total government stimulus advances
+Added: Effective July 1, 2020, the Company began paying its deferred portion of employer Social Security payroll taxes and re paid $ 4.1 mill ion and $ 3.0 million as of December 31, 2022 and 2021 respectively.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.