Addus HomeCare Corp
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
ADUS$124.31-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000950170-24-054603
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091763
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 142 current paragraphs.
84 unchanged; 41 reworded; 15 added; 2 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
On June 8, 2024, we entered into the Gentiva Purchase Agreement to acquire the personal care operations of Gentiva, consisting of equity interests and certain assets and liabilities, for a purchase price of approximately $350.0 million, payable in full in cash at the closing, subject to typical adjustments for working capital and other customary items. The acquired business operates in Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas, and serve approximately 16,000 patients. The Company expects to close this acquisition following completion of regulatory approvals and subject to customary closing conditions and will fund this acquisition through the Company’s existing revolving credit facility and a portion of the net proceeds from the Public Offering.
Current report
New York Asset Sale
Current report
On May 21, 2024, we entered into the New York Asset Sale. The Company entered into a consulting agreement as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place. In connection with this transaction, the Company will cease operations in New York.
Current report
The Illinois fiscal year 2025 budget includes an increase in hourly rates for in-home care services to $29.63, to take effect January 1, 2025, subject to federal approval. This rate supports the required minimum wage of $18.00 per hour for direct service workers.
Current report
Gross profit, expressed as a percentage of net service revenues, increased to 32.5% for the three months ended June 30, 2024, compared to 31.7% for the same period in 2023, due to an increase in revenue and higher margin in our home health and hospice segments due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Net service revenues increased by 11.0% to $567.7 million for the six months ended June 30, 2024 compared to $511.6 million for the six months ended June 30, 2023. Net service revenue increased by $32.5 million in our personal care segment, by $12.6 million in our hospice segment and by $11.0 million in our home health segment during the six months ended June 30, 2024, compared to the same period in 2023. During the six months ended June 30, 2024, the increase in our personal care segment net service revenues was primarily due to an increase in revenue per billable hour, attributable to the rate increases discussed above, compared to the same period in 2023. The increase in net service revenues in our hospice and home health segments is primarily attributable to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Current report
General and administrative expenses increased to $124.6 million for the six months ended June 30, 2024 as compared to $113.8 million for the six months ended June 30, 2023. The increase in general and administrative expenses was primarily due to the Tennessee Quality Care acquisitions that resulted in an increase in administrative employee wages, bonus, taxes and benefit costs of $5.9 million and an increase in acquisition-related expense of $2.5 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 22.0% for the six months ended June 30, 2024, from 22.2% for the six months ended June 30, 2023.
Current report
Interest expense increased to $4.9 for the six months ended June 30, 2024, as compared to $4.8 million for the six months ended June 30, 2023. The increase in interest expense was primarily due to increased interest rates under our credit facility for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Current report
The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 38.6% and 40.0% of our net service revenues for the three months ended June 30, 2024 and 2023, respectively, and accounted for 38.5% and 39.5% of our net service revenues for the six months ended June 30, 2024 and 2023, respectively. One payor, the Illinois Department on Aging, accounted for 21.1% and 21.5% of net service revenues for the three months ended June 30, 2024 and 2023, respectively, and accounted for 20.9% and 21.5% of net service revenues for the six months ended June 30, 2024 and 2023, respectively.
Current report
Gross profit, expressed as a percentage of net service revenues, increased to 28.2% for the three months ended June 30, 2024 from 27.4% for the three months ended June 30, 2023. This increase was primarily due to an increase in revenues per billable hours of 7.4% resulting in decreases in direct payroll and benefits as a percentage of net service revenues for the three months ended June 30, 2024. Gross profit, expressed as a percentage of net service revenues, increased to 27.5% for the six months ended June 30, 2024 from 27.3% for the six months ended June 30, 2023.This increase was primarily due to an increase in revenues per billable hour of 8.5% resulting in decreases in direct payroll and benefits as a percentage of net service revenues for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current report
General and administrative expenses, expressed as a percentage of net service revenues, were 7.7% and 8.3% for the six months ended June 30, 2024 and 2023, respectively.
Current report
Public Offering
Current report
On June 28, 2024, the Company completed a public offering of an aggregate 1,725,000 shares of common stock, par value $0.001 per share, including 225,000 shares of common stock sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $108.00 per share (the “Public Offering”). The Company received net proceeds of approximately $175.6 million, after deducting underwriting discounts and estimated offering expenses of approximately $10.7 million. The Company used approximately $81.4 million from the net proceeds of the Public Offering for the repayment of indebtedness outstanding under its credit facility and may use any remaining net proceeds of the Public Offering for general corporate purposes, including the Company’s previously announced planned acquisition of the personal care assets of Gentiva and any future acquisitions or investments. The Public Offering resulted in an increase to additional paid in capital of approximately $175.6 million on the Company’s Unaudited Condensed Consolidated Balance Sheet at June 30, 2024.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Removed paragraphs (2)
Previous report
The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 7.4% and 8.4% for the three months ended March 31, 2024 and 2023, respectively.
Previous report
Net service revenues from Medicare accounted for 90.7% for both the three months ended March 31, 2024 and 2023, respectively. Net service revenues from managed care organizations accounted for 3.3% and 3.4% for the three months ended March 31, 2024 and 2023, respectively.
Reworded paragraphs (41)
Previous wording
You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of macroeconomic conditions, including significant global inflation and elevated interest rates, legislative developments, trade disruptions and the potential adverse effects of current geopolitical conditions; business disruptions due to natural disasters, acts of terrorism, pandemics, riots, civil insurrection or social unrest, looting, protests, strikes or street demonstrations; changes in operational and reimbursement processes and payment structures at the state or federal levels; changes in Medicaid, Medicare, other government program and managed care organizations policies and payment rates, and the timeliness of reimbursements received under government programs; changes in, or our failure to comply with, existing, federal and state laws or regulations, or our failure to comply with new government laws or regulations on a timely basis; competition in the healthcare industry; the geographical concentration of our operations; changes in the case mix of consumers and payment methodologies; operational changes resulting from the assumption by managed care organizations of responsibility for managing and paying for our services to consumers; the nature and success of future financial and/or delivery system reforms; changes in estimates and judgments associated with critical accounting policies; our ability to maintain or establish new referral sources; our ability to renew significant agreements or groups of agreements; our ability to attract and retain qualified personnel; federal, state and city minimum wage pressure, including any failure of any governmental entity to enact a minimum wage offset and/or the timing of any such enactment; changes in payments and covered services due to the overall economic conditions and deficit reduction measures by federal and state governments, and our expectations regarding these changes; cost…
Excerpt shortened here; the source contains the full paragraph.
Current wording
You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of macroeconomic conditions, including significant global inflation and elevated interest rates, legislative and political developments, trade disruptions and the potential adverse effects of current geopolitical conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, pandemics, riots, civil insurrection or social unrest, looting, protests, strikes or street demonstrations; changes in operational and reimbursement processes and payment structures at the state or federal levels; changes in Medicaid, Medicare, other government program and managed care organizations policies and payment rates, and the timeliness of reimbursements received under government programs; changes in, or our failure to comply with, existing, federal and state laws or regulations, or our failure to comply with new government laws or regulations on a timely basis; competition in the healthcare industry; the geographical concentration of our operations; changes in the case mix of consumers and payment methodologies; operational changes resulting from the assumption by managed care organizations of responsibility for managing and paying for our services to consumers; the nature and success of future financial and/or delivery system reforms; changes in estimates and judgments associated with critical accounting policies; our ability to maintain or establish new referral sources; our ability to renew significant agreements or groups of agreements; our ability to attract and retain qualified personnel; federal, state and city minimum wage pressure, including any failure of any governmental entity to enact a minimum wage offset and/or the timing of any such enactment; changes in payments and covered services due to the overall economic conditions and deficit reduction measures by federal and state governments, and our expectati…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are a home care services provider operating three segments: personal care, hospice and home health. Our services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. Managed care organizations accounted for 35.8% and 36.6% of our net service revenues during the three months ended March 31, 2024 and 2023, respectively.
Current wording
We are a home care services provider operating three segments: personal care, hospice and home health. Our services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. Managed care organizations accounted for 35.1% and 36.6% of our net service revenues during the three months ended June 30, 2024 and 2023, respectively, and 35.4% and 36.6% of our net service revenues during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
As of March 31, 2024, we provided our services in 22 states through 214 offices. We served approximately 57,000 and 55,000 discrete individuals, respectively, during the three months ended March 31, 2024 and 2023. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes and hospice facilities.
Current wording
As of June 30, 2024, we provided our services in 22 states through 214 offices. We served approximately 70,000 and 62,000 discrete individuals, respectively, during the six months ended June 30, 2024 and 2023. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes and hospice facilities.
Previous wording
In addition to our organic growth, we have grown through acquisitions that have expanded our presence in current markets, with the goal of having all three levels of in-home care in our markets or facilitating our entry into new markets where in-home care has been moving to managed care organizations or that present other strategic opportunities.
Current wording
In addition to our organic growth, we have grown through acquisitions that have expanded our presence in current markets, with the goal of having all three levels of in-home care in our markets or facilitating our entry into new markets where in-home care has been moving to managed care organizations.
Previous wording
As the labor market continues to be tight and unemployment remains at low levels, the competition for new caregivers, including skilled healthcare staff, and support staff continues to be significant. In addition, the United States economy continues to experience significant inflationary pressures and a competitive labor market. To the extent that we continue to experience a shortage of caregivers, it may hinder our ability to fully meet the continuing demand for both our non-clinical and clinical services.
Current wording
As the labor market continues to be tight and unemployment remains at low levels, the competition for new caregivers, including skilled healthcare staff, and support staff continues to be significant. In addition, the United States economy continues to experience significant inflationary pressures. To the extent that we continue to experience a shortage of caregivers, it may hinder our ability to fully meet the continuing demand for both our non-clinical and clinical services.
Previous wording
In 2019, New York initiated a new RFO process to competitively procure CDPAP fiscal intermediaries. The Company was not one of the entities selectedto enter into contracts as a Lead Fiscal Intermediary through the initial RFO process. However, the New York legislature intervened in 2022, authorizing fiscal intermediary applicants who satisfied certain criteria to continue operating in all counties contained in their RFO application. Although the Company was permitted to continue its CDPAP fiscal intermediary operations, the Company decided in November 2022 to suspend materially all of its new fee-for-service patient admissions through County Social Service Departments in the CDPAP. On June 6, 2023, the NYSDOH notified the Company that it had received a contract award. 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. The CDPAP continues to be a focus for changes by New York governmental authorities. For example, the New York fiscal year 2025 budget will replace the CDPAP fiscal intermediaries with a single statewide fiscal intermediary with a stated deadline of April 1, 2025. The statewide fiscal intermediary, which will be selected by the NYSDOH, will be able to subcontract with several entities to facilitate the delivery of fiscal intermediary services. All service providers seeking to offer services under CDPAP will be required to contract with the statewide fiscal intermediary or its contractors in order to offer services. The Company does not currently believe it is likely to be selected as the single statewide fiscal intermediary and it is not possible at this time to assess the likelihood of becoming a subcontractor or the financial terms of any such arrangement. At this time, it is difficult to predict the details of the implementation of these modifications and their final timeline and, thus, their impact on the Company’s business and operations. However, we expect this could have a negative impact on our New York CDPAP business, though it would not be material to our business as a whole.
Current wording
The selection process for CDPAP fiscal intermediaries has changed significantly in recent years, and the program continues to be an area of focus for New York governmental authorities. The Company was not one of the entities selected through an RFO process to competitively procure fiscal intermediaries that was initiated in 2019 and, in November 2022, decided to suspend materially all of its new fee-for-service patient admissions through County Social Service Departments. The Company received a contract award in June 2023 and resumed new fee-for-service patient admissions. However, the New York fiscal year 2025 budget will replace the CDPAP fiscal intermediaries with a single statewide fiscal intermediary with a stated deadline of April 1, 2025. All service providers seeking to offer services under CDPAP will be required to contract with the statewide fiscal intermediary or its contractors in order to offer services. The Company does not believe it is likely to be selected as the single statewide fiscal intermediary, and it is difficult to predict the details of the implementation of these modifications and their final timeline and, thus, their impact on the Company’s business and operations. As a result of the changes and uncertainty in the state, the Company determined that its New York personal care operations no longer fit its growth strategy and reached an agreement to divest these operations. See Note 4 to the Notes to Unaudited Condensed Consolidated Financial Statements, Acquisition and Divestiture, for additional details regarding our divestiture.
Previous wording
The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 38.3% and 39.1% of our net service revenues for the three months ended March 31, 2024 and 2023, respectively. One payor, the Illinois Department on Aging, accounted for 20.8% and 21.5% of net service revenues for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 38.6% and 40.0% of our net service revenues for the three months ended June 30, 2024 and 2023, respectively, and accounted for 38.5% and 39.5% of our net service revenues for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
A significant amount of our net service revenues are derived from one payor, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 20.8% and 21.5% of our net service revenues for the three months ended March 31, 2024 and 2023, respectively.
Current wording
A significant amount of our net service revenues are derived from one payor, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 21.1% and 21.5% of our net service revenues for the three months ended June 30, 2024 and 2023, respectively, and accounted for 20.9% and 21.5% of the Company’s net service revenues for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
The Illinois fiscal year 2024 budget passed in June 2023 included an increase in hourly rates for in-home care services to $28.07, which took effect on January 1, 2024 and required a minimum wage rate of $17.00 per hour.
Current wording
The Illinois Medicaid omnibus legislation passed in June 2023 included an increase in hourly rates for in-home care services to $28.07, which took effect on January 1, 2024 and required a minimum wage rate of $17.00 per hour. CMS approved an amendment to the Illinois HCBS Waiver for Persons Who are Elderly, which included the rate increase for in-home care services to $28.07, effective January 1, 2024.
Previous wording
In certain states, payment of claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals and improve provider compliance with Medicare program requirements. The program currently applies to home health agencies in certain states, including Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas. Providers in states subject to the Review Choice Demonstration may initially select from the following claims review and approval processes: pre-claim review, post-payment review or a minimal post-payment review with a 25% payment reduction. Home health agencies that maintain high compliance levels will be eligible for additional options that may be less burdensome. This program has not had a material impact on our results of operations or financial position.
Current wording
In certain states, payment of claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals and improve provider compliance with Medicare program requirements. The program currently applies to home health agencies in certain states, including Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas. Providers in states subject to the Review Choice Demonstration may initially select either pre-claim review or post-payment review. Previously, providers could also opt for minimal post-payment review with a 25% payment reduction, but CMS has removed this option. Providers that had selected the minimal post-payment review option will transition to pre-claim or post-payment review in mid-July. Home health agencies that maintain high compliance levels are eligible for additional options that may be less burdensome. This program has not had a material impact on our results of operations or financial position.
Previous wording
The CDPAP is a self-directed care alternative program that allows eligible individuals who need help with activities of daily living or skilled nursing services to choose their caregivers. We provide support services as a CDPAP fiscal intermediary. The Company recognized approximately $10.4 million and $10.1 million in revenue from the program for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The CDPAP is a self-directed care alternative program that allows eligible individuals who need help with activities of daily living or skilled nursing services to choose their caregivers. We provide support services as a CDPAP fiscal intermediary. The Company recognized approximately $10.6 million and $21.0 million in revenue from the program for the three and six months ended June 30, 2024 and $10.3 million and $20.4 million in revenue from the program for the three and six months ended June 30, 2023, respectively.
Previous wording
In 2019, New York initiated a new RFO process to competitively procure CDPAP fiscal intermediaries. The Company was not one of the entities selected to enter into contracts as a Lead Fiscal Intermediary through the initial RFO process. However, the New York legislature intervened in 2022, authorizing fiscal intermediary applicants who satisfied certain criteria to continue operating in all counties contained in their RFO application. Although the Company was permitted to continue its CDPAP fiscal intermediary operations, the Company decided in November 2022 to suspend materially all of its new fee-for-service patient admissions through County Social Service Departments in the CDPAP. On June 6, 2023, the NYSDOH notified the Company that it had received a contract award. 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. The CDPAP continues to be a focus for changes by New York governmental authorities. For example, the New York fiscal year 2025 budget, which was signed by the governor on April 20, 2024, will replace the CDPAP fiscal intermediaries with a single statewide fiscal intermediary with a stated deadline of April 1, 2025. The statewide fiscal intermediary, which will be selected by the NYSDOH, will be able to subcontract with several entities to facilitate the delivery of fiscal intermediary services. All service providers seeking to offer services under CDPAP will be required to contract with the statewide fiscal intermediary or its contractors in order to offer services. The Company does not currently believe it is likely to be selected as the single statewide fiscal intermediary and it is not possible at this time to assess the likelihood of becoming a subcontractor or the financial terms of any such arrangement. At this time, it is difficult to predict the details of the implementation of these modifications and their final timeline and, thus, their impact on the Company’s business and operations. However, we expect this could have a negative impact on our New York CDPAP business, though it would not be material to our business as a whole.
Current wording
The selection process for CDPAP fiscal intermediaries has changed significantly in recent years and the program continues to be an area of focus for New York governmental authorities. The Company was not one of the entities selected through an RFO process to competitively procure fiscal intermediaries that was initiated in 2019 and, in November 2022, decided to suspend materially all of its new fee-for-service patient admissions through County Social Service Departments. The Company received a contract award in June 2023 and resumed new fee-for-service patient admissions. However, the New York fiscal year 2025 budget will replace the CDPAP fiscal intermediaries with a single statewide fiscal intermediary with a stated deadline of April 1, 2025. All service providers seeking to offer services under CDPAP will be required to contract with the statewide fiscal intermediary or its contractors in order to offer services. The Company does not believe it is likely to be selected as the single statewide fiscal intermediary, and it is difficult to predict the details of the implementation of these modifications and their final timeline and, thus, their impact on the Company’s business and operations. As a result of the changes and uncertainty in the state, the Company determined that its New York personal care operations no longer fit its growth strategy and reached an agreement to divest these operations. See Note 4 to the Notes to Unaudited Condensed Consolidated Financial Statements, Acquisition and Divestiture, for additional details regarding our divestiture.
Previous wording
On April 22, 2024, CMS announced a final rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems. The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under certain programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions. States are required to ensure compliance with the 80/20 requirement by mid-2030. The final rule made a number of technical changes to the definitions used in calculating compliance that clarified or narrowed the revenue covered by the calculation and clarified or expanded the payments to workers that are counted in satisfying the requirement, which combined to make compliance less onerous to providers.
Current wording
On April 22, 2024, CMS announced a final rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems. The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions. States are required to ensure compliance with the 80/20 requirement by mid-2030. The final rule made a number of technical changes to the definitions used in calculating compliance that clarified or narrowed the revenue covered by the calculation and clarified or expanded the payments to workers that are counted in satisfying the requirement, which combined to make compliance less onerous to providers.
Previous wording
All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 25.7% and 22.0% for the three months ended March 31, 2024 and 2023, respectively, compared to our federal statutory rate of 21%. The difference between our federal statutory and effective income tax rates was principally due to the inclusion of state taxes, non-deductible compensation, excess tax expense/benefit and the use of federal employment tax credits.
Current wording
All of our income is from domestic sources. We incur state and local taxes in the states in which we operate. The effective income tax rates were 26.3% and 23.8% for the three months ended June 30, 2024 and 2023, respectively. The effective income tax rates were 26.0% and 23.0% for the six months ended June 30, 2024 and 2023, respectively. The difference between our federal statutory rate of 21% and our effective income tax rates is principally due to the inclusion of state taxes and non-deductible compensation, partially offset by the use of federal employment tax credits.
Previous wording
The following table sets forth our unaudited condensed consolidated results of operations.
Current wording
The following table sets forth, for the periods indicated, our unaudited condensed consolidated results of operations.
Previous wording
Net service revenues increased by 11.6% to $280.7 million for the three months ended March 31, 2024 compared to $251.6 million for the three months ended March 31, 2023. Revenue increased by $18.0 million in our personal care segment, $6.8 million in our hospice segment and by $4.4 million in our home health segment during the three months ended March 31, 2024, compared to the same period in 2023. The increase in our personal care segment was due to organic growth. The increase in our hospice and home health segment revenue was due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Current wording
Net service revenues increased by 10.4% to $286.9 million for the three months ended June 30, 2024 compared to $260.0 million for the three months ended June 30, 2023. Revenue increased by $14.5 million in our personal care segment, $5.8 million in our hospice segment and $6.6 million in our home health segment during the three months ended June 30, 2023, compared to the same period in 2022. The increase in our personal care segment was mainly due to an increase in revenues per billable hour for the three months ended June 30, 2023. The increase in our hospice and home health segment was primarily due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Previous wording
General and administrative expenses increased to $61.1 million for the three months ended March 31, 2024, as compared to $56.4 million for the three months ended March 31, 2023. The increase in general and administrative expenses was primarily due to the Tennessee Quality Care acquisition that resulted in an increase in administrative employee wage, bonus, tax and benefit costs of $2.1 million and an increase in acquisition expense of $1.5 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 21.8% for the three months ended March 31, 2024, from 22.4% for the three months ended March 31, 2023.
Current wording
General and administrative expenses increased to $63.6 million for the three months ended June 30, 2024, as compared to $57.4 million for the three months ended June 30, 2023. The increase in general and administrative expenses was primarily due to the Tennessee Quality Care acquisition that resulted in an increase in administrative employee wages, bonus, taxes and benefit costs of $3.7 million and an increase in acquisition-related expense of $1.1 million. General and administrative expenses, expressed as a percentage of net service revenues, increased to 22.2% for the three months ended June 30, 2024, from 22.1% for the three months ended June 30, 2023.
Previous wording
Interest expense increased to $2.8 million for the three months ended March 31, 2024 from $2.5 million for the three months ended March 31, 2023. The increase in interest expense was primarily due to increased interest rates under our credit facility for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Interest expense decreased to $2.1 million for the three months ended June 30, 2024 from $2.3 million for the three months ended June 30, 2023. The decrease in interest expense was primarily due to decreased amounts held under our credit facility for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Previous wording
All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 25.7% and 22.0% for the three months ended March 31, 2024 and 2023, respectively. Our higher effective income tax rate for the three months ended March 31, 2024 was principally due to a lower excess tax benefit as well as a lower benefit from the use of federal employment tax credits. For the three months ended March 31, 2024 and 2023, the excess tax benefit and federal employment tax credits were 3.5% and 6.8%, respectively.
Current wording
All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 26.3% and 23.8% for the three months ended June 30, 2024 and 2023, respectively. Our higher effective income tax rate for the three months ended June 30, 2024 was principally due to a lower excess tax benefit as well as a lower benefit from the use of federal employment tax credits. For the three months ended June 30, 2024 and 2023, the excess tax benefit and federal employment tax credits were 2.8% and 5.6%, respectively.
Previous wording
Gross profit, expressed as a percentage of net service revenues, increased to 31.4% for the three months ended March 31, 2024, compared to 31.2% for the same period in 2023 due to growth in our higher margin hospice segment.
Current wording
Gross profit, expressed as a percentage of net service revenues, increased to 31.9% for the six months ended June 30, 2024 compared to 31.4% for the six months ended June 30, 2023 due to an increase in net service revenues and gross profit in our personal care segment and higher margin in our home health and hospice segments due to the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Previous wording
Net service revenues from state, local and other governmental programs accounted for 51.8% and 50.1% of net service revenues for the three months ended March 31, 2024 and 2023, respectively. Managed care organizations accounted for 45.3% and 46.3% of net service revenues for the three months ended March 31, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of net service revenues.
Current wording
Net service revenues from state, local and other governmental programs accounted for 53.1% and 50.6% of personal care segment net service revenues for the three months ended June 30, 2024 and 2023, respectively. Managed care organizations accounted for 44.2% and 46.0% of personal care segment net service revenues for the three months ended June 30, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of personal care segment net service revenues. Net service revenues from state, local and other governmental programs accounted for 52.5% and 50.4% of net service revenues for the six months ended June 30, 2024 and 2023, respectively. Managed care organizations accounted for 44.8% and 46.1% of personal care segment net service revenues for the six months ended June 30, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of net service revenues.
Previous wording
Net service revenues increased by 9.5% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Net service revenues included a 9.5% increase in revenues per billable hour for the three months ended March 31, 2024, mainly attributed to rate increases discussed above, as compared to the three months ended March 31, 2023. Gross profit, expressed as a percentage of net service revenues, decreased marginally to 26.7% for the three months ended March 31, 2024 from 27.2% for the three months ended March 31, 2023. This decrease was primarily due to increases in direct payroll and benefits expenses for the three months ended March 31, 2024.
Current wording
Personal care segment net service revenues increased by 7.3% and 8.4% for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023. Net service revenues included a 7.4% and 8.5% increase in revenues per billable hour for the three and six months ended June 30, 2024, respectively, mainly attributed to rate increases discussed above, as compared to the three and six months ended June 30, 2023.
Previous wording
Hospice generates revenue by providing care to patients with a life expectancy of six months or less, as well as related services for their families. Hospice offers four levels of care, as defined by Medicare, to meet the varying needs of patients and their families. The four levels of hospice include routine home care, continuous home care, general inpatient care and respite care. Our hospice segment principally provides routine home care.
Current wording
The hospice segment generates net service revenues by providing care to patients with a life expectancy of six months or less, as well as related services for their families. Hospice offers four levels of care, as defined by Medicare, to meet the varying needs of patients and their families. The four levels of hospice include routine home care, continuous home care, general inpatient care and respite care. Our hospice segment principally provides routine home care and continuous home care services, and with the JourneyCare acquisition, expanded into providing general inpatient care services. In our hospice segment, net service revenues from Medicare accounted for 91.2% and 90.7% of total hospice segment net service revenues for the three months ended June 30, 2024 and 2023, respectively, and 91.0% for both the six months ended June 30, 2024 and 2023. Net service revenues from managed care organizations accounted for 3.1% and 3.8% of total hospice segment net service revenues for each the three months ended June 30, 2024 and 2023, respectively, and 3.3% and 3.2% for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
Net service revenues increased by $6.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily attributed to organic growth and the acquisition of the operations of Tennessee Quality Care on August 1, 2023.
Current wording
Hospice net service revenues increased by $5.8 million and $12.6 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023, primarily attributed to organic growth and the acquisitions of the operations of Tennessee Quality Care on August 1, 2023.
Previous wording
Gross profit, expressed as a percentage of net service revenues, was 48.1% and 44.4% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, the increase was mainly attributed to a decrease in direct employee wage, tax and benefit costs as a percentage of net service revenues.
Current wording
Gross profit, expressed as a percentage of net service revenues, was 46.9% and 47.0% for the three months ended June 30, 2024 and 2023, respectively, and 47.5% and 45.7% for the six months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024, gross profit was relatively consistent with the prior period, and for the six months ended June 30, 2024, the increase was mainly attributed to a decrease in direct employee wages, taxes and benefit costs as a percentage of net service revenues.
Previous wording
The hospice segment’s general and administrative expenses primarily consist of administrative employee wage, tax and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 24.1% and 26.5% for the three months ended March 31, 2024 and 2023, respectively. The decrease in general and administrative expenses as a percentage of net service revenues was primarily due to more efficient operations for administrative employees for the three months ended March 31, 2024.
Current wording
The hospice segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 24.0% and 25.4% for the three months ended June 30, 2024 and 2023, respectively, and 24.0% and 26.0% for the six months ended June 30, 2024 and 2023, respectively. The decrease in general and administrative expenses as a percentage of net service revenues was primarily due to more efficient operations for administrative employees for the three and six months ended June 30, 2024.
Previous wording
The home health segment generates net service revenues by providing home health services on a short-term, intermittent or episodic basis to individuals, generally to treat an illness or injury. Net service revenues from Medicare accounted for 69.1% and 74.2%, managed care organizations accounted for 26.1% and 20.3% and other accounted for 4.8% and 5.5% for the three months ended March 31, 2024 and 2023, respectively. Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System, which uses national, standardized 30-day period payment rates for periods of care. CMS uses the PDGM as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics. An outlier adjustment may be paid for periods of care in which costs exceed a specific threshold amount.
Current wording
The home health segment generates net service revenues by providing home health services on a short-term, intermittent or episodic basis to individuals, generally to treat an illness or injury. Net service revenues from Medicare accounted for 69.3% and 76.1%, managed care organizations accounted for 25.9% and 19.6% and other accounted for 4.3% and 6.4% of total home health segment net service revenues for the three months ended June 30, 2024 and 2023, respectively. Net service revenues from Medicare accounted for 69.2% and 75.1%, managed care organizations accounted for 26.0% and 20.0% and other accounted for 4.9% and 6.3% of total home health segment net service revenues for the six months ended June 30, 2024 and 2023, respectively. Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System, which uses national, standardized 30-day period payment rates for periods of care. CMS uses the PDGM as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics. An outlier adjustment may be paid for periods of care in which costs exceed a specific threshold amount.
Previous wording
Net service revenues increased by $4.4 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Total visits increased for the three months ended March 31, 2024, mainly attributed to the acquisition of Tennessee Quality Care on August 1, 2023.
Current wording
Home health net service revenues increased by $6.6 million and $4.1 million for the three and six months ended June 30, 2024, respectively, compared to the three and six months ended June 30, 2023. Total visits increased for the three months and six months ended June 30, 2024, mainly attributed to the acquisition of Tennessee Quality Care on August 1, 2023.
Previous wording
Gross profit, expressed as a percentage of net service revenues, was 34.4% and 39.7% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, the decrease was primarily due to an increase in cost of services revenues that more than offset the increase in net service revenues compared to the three months ended March 31, 2023. Cost of services revenues for the three months ended March 31, 2024 increased compared to the corresponding period in 2023 due to an increase in direct employee wage, tax and benefit costs.
Current wording
Gross profit, expressed as a percentage of net service revenues, was 37.6% and 38.2% for the three months ended June 30, 2024 and 2023, respectively, and 36.1% and 38.9% for the six months ended June 30, 2024 and 2023, respectively. For the three and six months ended June 30, 2024, the decrease was primarily due to an increase in cost of service revenues, which more than offset the increase in net service revenues compared to the three and six months ended June 30, 2023.
Previous wording
The home health segment’s general and administrative expenses primarily consist of administrative employee wage, tax and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 26.9% and 23.1% for the three months ended March 31, 2024 and 2023, respectively. General and administrative expenses for the three months ended March 31, 2024 increased compared to the corresponding period in 2023, primarily due to an increase in administrative employee wage, tax and benefit costs for the three months ended March 31, 2024.
Current wording
The home health segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 25.3% and 23.1% for the three months ended June 30, 2024 and 2023, respectively, and 26.1% and 23.1% for the six months ended June 30, 2024 and 2023, respectively. The increase in general and administrative expenses as a percentage of net service revenues was primarily due to increases in administrative employee wages, taxes and benefit costs for the three and six months ended June 30, 2024.
Previous wording
Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At March 31, 2024 and December 31, 2023, we had cash balances of $76.7 million and $64.8 million, respectively. At March 31, 2024, we had a $600.0 million revolving credit facility and a $125.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility is July 30, 2026.
Current wording
Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At June 30, 2024 and December 31, 2023, we had cash balances of $173.3 million and $64.8 million, respectively. At June 30, 2024, we had a $600.0 million revolving credit facility and a $125.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility is July 30, 2026.
Previous wording
During the three months ended March 31, 2024, we used $0.4 million in cash to fund the Upstate acquisition and repaid $25.0 million under our revolving credit facility. As of March 31, 2024, we had a total of $101.4 million in revolving loans, with an interest rate of 7.18% outstanding on our credit facility and after giving effect to the amount drawn on our 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), we had $486.9 million of capacity and $377.5 million available for borrowing under our credit facility. At December 31, 2023, we had a total of $126.4 million revolving credit loans, with an interest rate of 7.21%, outstanding on our credit facility.
Current wording
During the six months ended June 30, 2024, we used $0.4 million in cash to fund the Upstate acquisition and repaid $126.4 million under our revolving credit facility. As of June 30, 2024, we had no revolving loans outstanding on our credit facility and after giving effect to the amount drawn on our 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), we had $504.4 million of capacity and $496.4 million available for borrowing under our credit facility. At December 31, 2023, we had a total of $126.4 million revolving credit loans, with an interest rate of 7.21%, outstanding on our credit facility.
Previous wording
See Note 7 to the Notes to Condensed Consolidated Financial Statements, Long-Term Debt, for additional details of our long-term debt.
Current wording
See Note 9 to the Notes to Unaudited Condensed Consolidated Financial Statements, Long-Term Debt, for additional details of our long-term debt.
Previous wording
Economic conditions in the United States continue to be challenging in various respects. For example, the United States economy continues to experience significant inflationary pressures, elevated interest rates and challenging labor market conditions. Any resulting economic downturn would pose a risk to states’ revenues, which in turn could affect our reimbursements and collections received for services rendered. Depending on the severity and length of any potential economic downturn as well as the extent of any federal support, states could face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax withholdings could be depressed in fiscal year 2023 (which will end June 30, 2024 in most states), and, potentially, future fiscal years. For example, Illinois, New Mexico and New York, our top three personal care markets, previously revised revenue estimates downward for the 2022 fiscal year as the result of earlier negative economic conditions arising from the COVID-19 pandemic. Also, in response to reduced revenues, the state of New York authorized the issuance of short-term bonds and implemented uniform reductions to Medicaid payments, applicable to home health and personal care services (hospice services were exempt).
Current wording
Economic conditions in the United States continue to be challenging in various respects. For example, the United States economy continues to experience significant inflationary pressures, elevated interest rates and challenging labor market conditions. Any resulting economic downturn would pose a risk to states’ revenues, which in turn could affect our reimbursements and collections received for services rendered. Depending on the severity and length of any potential economic downturn as well as the extent of any federal support, states could face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax withholdings could be depressed. For example, Illinois, New Mexico and New York, our top three personal care markets, previously revised revenue estimates downward for the 2022 fiscal year as the result of earlier negative economic conditions arising from the COVID-19 pandemic. Also, in response to reduced revenues, the state of New York authorized the issuance of short-term bonds and implemented uniform reductions to Medicaid payments, applicable to home health and personal care services (hospice services were exempt).
Previous wording
amount of $10.2 million. The Company did not record revenue and related costs of service revenue during the three months ended March 31, 2024, because revenue recognition criteria were not met. Instead, the Company deferred recognition of the entire $10.2 million, which was received from states with specific spending plans and reporting requirements. Of the total state funding received by the Company pursuant to the ARPA through March 31, 2024, the Company utilized $2.4 million during the three months ended March 31, 2024, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of March 31, 2024, the deferred portion of ARPA funding of $13.5 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.
Current wording
During the three and six months ended June 30, 2024, the Company received additional state funding provided by the ARPA in an aggregate amount of $2.0 million and $12.2 million, respectively. The Company did not record revenue and related costs of service revenue during the three and six months ended June 30, 2024, because revenue recognition criteria were not met. Instead, the Company deferred recognition of the entire $12.2 million, which was received from states with specific spending plans and reporting requirements. Of the total state funding received by the Company pursuant to the ARPA through June 30, 2024, the Company utilized $2.5 million and $4.9 million during the three and six months ended June 30, 2024, respectively, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of June 30, 2024, the deferred portion of ARPA funding of $13.0 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.
Previous wording
Cash flows from operating activities represent the inflow of cash from our payors and the outflow of cash for payroll and payroll taxes, operating expenses, interest and taxes. Net cash provided by operating activities was $38.7 million for the three months ended March 31, 2024, compared to net cash used in operating activities of $18.8 million for the same period in 2023. The increase in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of government stimulus funds. The changes in accounts receivable were primarily related to the growth in revenue and a decrease in days sales outstanding (“DSO”) during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The related receivables due from the Illinois Department on Aging represented 20.8% and 21.5% of the Company’s net accounts receivable at March 31, 2024 and March 31, 2023, respectively.
Current wording
Cash flows from operating activities represent the inflow of cash from our payors and the outflow of cash for payroll and payroll taxes, operating expenses, interest and taxes. Net cash provided by operating activities was $57.5 million for the six months ended June 30, 2024, compared to net cash provided by operating activities of $60.4 million for the same period in 2023. The decrease in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of government stimulus funds. The changes in accounts receivable were primarily related to the growth in revenue and a decrease in days sales outstanding (“DSO”) during the six months ended June 30, 2024 compared to 2023, as described below. The related receivables due from the Illinois Department on Aging represented 21.7% and 13.0% of the Company’s net accounts receivable at June 30, 2024 and June 30, 2023, respectively, as discussed below.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024, primarily consisted of $0.4 million of net cash used for the Upstate acquisition and $1.4 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets. Net cash used in investing activities for the three months ended March 31, 2023 primarily consisted of $1.0 million of net cash used for the CareStaff acquisition and $0.7 million of cash used for property and equipment purchases.
Current wording
Net cash provided by investing activities for the six months ended June 30, 2024 primarily consisted of $0.4 million of net cash used for the Upstate acquisition and $2.4 million for property and equipment purchases, which were primarily related to our ongoing investments in our technology infrastructure, offset by $4.6 million in proceeds received as a deposit on the sale of our New York business. Net cash used in investing activities for the six months ended June 30, 2023 primarily consisted of $0.9 million of net cash used for the CareStaff acquisition and $1.8 million of cash used for the purchase of property and equipment.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2024, primarily consisted of a $25.0 million payment on the revolver portion of our credit facility. Net cash used in financing activities for the three months ended March 31, 2023 primarily consisted of $23.5 million payment on the revolver portion of our credit facility.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2024 primarily related to a $126.4 million payment on the revolver portion of our credit facility, offset by $175.6 million in net proceeds received from the Public Offering. Net cash used in financing activities for the six months ended June 30, 2023 primarily related to a $53.5 million payment on the revolver portion of our credit facility. For the six months ended June 30, 2023, net cash provided by financing activities included cash received from the exercise of stock options of $0.25 million.
Previous wording
Gross accounts receivable as of March 31, 2024 and December 31, 2023 were approximately $106.8 million and $117.8 million, respectively. Outstanding accounts receivable, net of allowance for credit losses, decreased by $10.8 million as of March 31, 2024 as compared to December 31, 2023. Accounts receivable for the Illinois Department on Aging decreased approximately $10.6 million during the quarter ended March 31, 2024. Our collection procedures include review of account aging and direct contact with our payors. We have historically not used collection agencies. An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.
Current wording
Gross accounts receivable as of June 30, 2024 and December 31, 2023 were approximately $111.5 million and $117.8 million, respectively. Outstanding accounts receivable, net of allowance for credit losses, decreased by $6.3 million as of June 30, 2024 as compared to December 31, 2023. Accounts receivable for the Illinois Department on Aging decreased approximately $5.2 million during the six months ended June 30, 2024. Our collection procedures include review of account aging and direct contact with our payors. We have historically not used collection agencies. An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.
Previous wording
We calculate our DSO by taking the trade accounts receivable outstanding, net of allowance for credit losses for doubtful accounts, divided by the net service revenues for the last quarter, multiplied by the number of days in that quarter. Our DSOs were 35 days and 39 days at March 31, 2024 and December 31, 2023, respectively. The DSOs for our largest payor, the Illinois Department on Aging, were 30 days and 50 days at March 31, 2024 and December 31, 2023, respectively.
Current wording
We calculate our DSO by taking the trade accounts receivable outstanding, net of allowance for credit losses for doubtful accounts, divided by the net service revenues for the last quarter, multiplied by the number of days in that quarter. Our DSOs were 36 days and 39 days at June 30, 2024 and December 31, 2023, respectively. The DSOs for our largest payor, the Illinois Department on Aging, were 37 days and 50 days at June 30, 2024 and December 31, 2023, respectively.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The following table sets forth, for the periods indicated, our unaudited condensed consolidated results of operations.
Current report — wording carried from elsewhere
All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 26.0% and 23.0% for the six months ended June 30, 2024 and 2023, respectively. Our higher effective income tax rate for the six months ended June 30, 2024 was principally due to a lower excess tax benefit as well as a lower benefit from the use of federal employment tax credits. For the six months ended June 30, 2024 and 2023, the excess tax benefit and federal employment tax credits were 3.1% and 6.2%, respectively.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 38.3% and 39.1% of our net service revenues for the three months ended March 31, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
During the three months ended March 31, 2024, the Company received additional state funding provided by the ARPA in an aggregate
Previous report — wording carried elsewhere
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023