Addus HomeCare Corp

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 interest rates, legislative and political developments, including any hold on or cancellation of congressionally authorized spending or interruptions in the distribution of government funds, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and the potential adverse effects of current conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, military conflicts, pandemics, civil insurrection or social unrest; 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; the implementation of new, and possible changes to, existing, federal and state laws or regulations, or our failure to comply with such laws or regulations or comply on a timely basis; the impact of decisions of the U.S. Supreme Court regarding the actions of federal agencies; changes in presidential administrations; changes in the structure and administration of, and funding for, federal and state agencies and programs; 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 e…

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 interest rates, legislative and political developments, including federal government shutdowns, any lapse in appropriations and any hold on or cancellation of congressionally authorized spending or interruptions in the distribution of government funds, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and the potential adverse effects of current conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, military conflicts, pandemics, civil insurrection or social unrest; 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; the implementation of new, and possible changes to, existing, federal and state laws or regulations, or our failure to comply with such laws or regulations or comply on a timely basis; the impact of decisions of the U.S. Supreme Court regarding the actions of federal agencies; changes in presidential administrations; changes in the structure and administration of, and funding for, federal and state agencies and programs; 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 w…

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 35.6% and 34.2% of our net service revenues during the three months ended June 30, 2025 and 2024, respectively, and 35.6% and 34.2% of our net service revenues during the six months ended June 30, 2025 and 2024, 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 37.0% and 34.3% of our net service revenues during the three months ended September 30, 2025 and 2024, respectively, and 36.7% and 35.1% of our net service revenues during the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

As of June 30, 2025, we provided our services in 23 states through 260 offices. We served approximately 78,000 and 70,000 discrete individuals, respectively, during the six months ended June 30, 2025 and 2024. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes, and hospice facilities.

Current wording

As of September 30, 2025, we provided our services in 23 states through 265 offices. We served approximately 96,000 and 80,000 discrete individuals, respectively, during the nine months ended September 30, 2025 and 2024. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes, and hospice facilities.

Previous wording

The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 33.0% and 38.6% of our net service revenues for the three months ended June 30, 2025 and 2024, respectively, and accounted for 33.0% and 38.5% of our net service revenues for the six months ended June 30, 2025 and 2024, respectively.

Current wording

The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 32.0% and 38.6% of our net service revenues for the three months ended September 30, 2025 and 2024, respectively, and accounted for 32.6% and 38.5% of our net service revenues for the nine months ended September 30, 2025 and 2024, 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 18.6% and 21.1% of our net service revenues for the three months ended June 30, 2025 and 2024, respectively, and accounted for 18.6% and 20.9% of our net service revenues for the six months ended June 30, 2025 and 2024, 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 18.1% and 21.4% of our net service revenues for the three months ended September 30, 2025 and 2024, respectively, and accounted for 18.4% and 21.1% of our net service revenues for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The Illinois fiscal year 2026 budget includes an increase in hourly rates for in-home care services to $30.80, to take effect January 1, 2026, subject to standard federal approval. This rate sustains a minimum wage of $18.75 per hour for direct service workers.

Current wording

The Illinois fiscal year 2026 budget includes an increase in hourly rates for in-home care services to $30.80, to take effect January 1, 2026, subject to federal approval. This rate sustains a minimum wage of $18.75 per hour for direct service workers.

Previous wording

The Texas fiscal year 2026 budget includes an increase in hourly rates to $17.13 for in-home care services effective September 1, 2025, subject to standard federal approval.

Current wording

The Texas fiscal year 2026 budget includes an increase in hourly rates to $17.13 for in-home care services effective September 1, 2025.

Previous wording

Hospice services provided to Medicare beneficiaries are paid under the Medicare Hospice Prospective Payment System, under which CMS sets a daily rate for each day a patient is enrolled in the hospice benefit. The daily rate depends on the level of care provided to a patient (routine home care, continuous home care, inpatient respite care, or general inpatient care). Daily rates are adjusted for factors such as area wage levels. CMS updates hospice payment rates each federal fiscal year. Effective October 1, 2024, CMS increased hospice payment rates by 2.9%. This reflects a 3.4% market basket increase and a negative 0.5 percentage point productivity adjustment. Hospices that do not satisfy quality reporting requirements are subject to a 4-percentage point reduction to the market basket update.

Current wording

Hospice services provided to Medicare beneficiaries are paid under the Medicare Hospice Prospective Payment System, under which CMS sets a daily rate for each day a patient is enrolled in the hospice benefit. The daily rate depends on the level of care provided to a patient (routine home care, continuous home care, inpatient respite care, or general inpatient care). Daily rates are adjusted for factors such as area wage levels. CMS updates hospice payment rates each federal fiscal year. Effective October 1, 2025, CMS increased hospice payment rates by 2.6%. This reflects a 3.3% market basket increase and a negative 0.7 percentage point productivity adjustment. Hospices that do not satisfy quality reporting requirements are subject to a 4-percentage point reduction to the market basket update.

Previous wording

Overall payments made by Medicare to each hospice provider number are subject to an inpatient cap and an aggregate cap. The inpatient cap limits the number of days of inpatient care for which Medicare will pay to no more than 20% of total patient care days. Days in excess of the limitation are paid at the routine home care rate. The aggregate cap limits the total Medicare reimbursement that a hospice may receive in a cap year (typically the federal fiscal year) based on an annual per-beneficiary cap amount, which is set each federal fiscal year, and the number of Medicare patients served. The per-beneficiary cap amount was updated to $34,465.34 for federal fiscal year 2025. If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay Medicare the excess amount.

Current wording

Overall payments made by Medicare to each hospice provider number are subject to an inpatient cap and an aggregate cap. The inpatient cap limits the number of days of inpatient care for which Medicare will pay to no more than 20% of total patient care days. Days in excess of the limitation are paid at the routine home care rate. The aggregate cap limits the total Medicare reimbursement that a hospice may receive in a cap year (typically the federal fiscal year) based on an annual per-beneficiary cap amount, which is set each federal fiscal year, and the number of Medicare patients served. The per-beneficiary cap amount was updated to $35,361.44 for federal fiscal year 2026. If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay Medicare the excess amount.

Previous wording

Home care and other healthcare providers may be significantly impacted by changes to the Medicaid program, including changes resulting from legislation and administrative actions at the federal and state levels. Federal actions may impact funding for, or the structure of, the Medicaid program, including through changes to Medicaid waiver programs, and may shape provider reimbursement rates, eligibility and coverage policies, and other aspects of state Medicaid programs. For example, the OBBBA includes policy changes that are expected to eventually result in significant cuts to federal healthcare spending, including significant changes to the Medicaid program, if fully implemented as enacted. The OBBBA limits eligibility for Medicaid through work requirements for some populations, reduces federal Medicaid funding and expands cost-sharing obligations for certain enrollees. Among other changes, the law makes significant changes to Medicaid financing mechanisms, including restrictions on provider tax arrangements that are intended to reduce the federal matching funds received by state Medicaid programs. In addition, the OBBBA, if implemented as enacted, would require eligibility redeterminations at least every six months for individuals covered under Medicaid expansion, with state compliance required by December 31, 2026. The law also would eventually prohibit states from establishing new provider taxes or increasing rates of existing provider taxes while also limiting the structure of such taxes. Future Medicaid reform initiatives at the federal and state levels may result in further reductions to Medicaid expenditures and involve additional administrative changes. Reduced funding for Medicaid or other changes to Medicaid programs, including Medicaid waiver programs could put pressure on state budgets and result in reductions to Medicaid payments, scope of coverage and enrollment. Such reductions could, in turn, affect our reimbursements for services rendered. We expect the impact of the OBBBA on the home care business will be less significant than the impact on other healthcare businesses.

Current wording

Changes resulting from legislation and administrative actions at the federal and state levels, may impact home care and other healthcare providers. Federal and state actions may impact funding for, or the structure of, the Medicaid program, including through changes to Medicaid waiver programs, and may shape provider reimbursement rates, eligibility and coverage policies, and other aspects of state Medicaid programs. For example, the budget reconciliation legislation enacted on July 4, 2025, commonly known as the “One Big Beautiful Bill Act” (“OBBBA”), includes policy changes that are expected to reduce federal healthcare spending, including through changes to the Medicaid program, if the law is implemented as enacted. The OBBBA requires changes to Medicaid financing mechanisms such as provider taxes and state-directed payment arrangements. These changes may prohibit states from establishing new provider taxes or increasing rates of existing provider taxes, and may limit the structure and applicability of such taxes, with greater restrictions in states that have expanded Medicaid. Some of these changes, which will be phased in over time, are intended to reduce the federal matching funds received by state Medicaid programs. In addition, the OBBBA limits Medicaid eligibility and increases administrative and financial obligations for states and enrollees, although most of these reforms are focused on adults in the Medicaid expansion population. Future Medicaid reform initiatives at the federal and state levels may further reduce Medicaid expenditures and involve additional administrative changes. Reduced funding for Medicaid or other changes to Medicaid programs, including Medicaid waiver programs, could put pressure on state budgets and result in reductions to Medicaid payments, scope of coverage and enrollment. Such reductions could, in turn, affect our reimbursements for services rendered. We expect the impact of the OBBBA on home care businesses, including our business, will be less significant than the impact on other healthcare businesses.

Previous wording

The federal deficit and other federal and state budgetary pressures affect government healthcare program expenditures, and we anticipate that these effects will continue. For example, the OBBBA is expected to decrease federal healthcare spending, particularly with respect to Medicaid, and is generally expected to have a significant impact on state budgets, which may result in state-level changes such as reductions to the scope of covered services or tax increases. In addition, the OBBBA increases the federal budget deficit in a manner that triggers a statutorily mandated sequestration under the Pay-As-You-Go Act of 2010. As a result, a Medicare spending reduction of up to 4% is required to take effect in early 2026, absent congressional action. These reductions would be in addition to the payment reductions required by the Budget Control Act of 2011 and subsequent legislation, which are currently set to continue through the first ten months of federal fiscal year 2032. It is possible that future deficit reduction legislation will impose additional spending reductions.

Current wording

The federal deficit and other federal and state budgetary pressures affect government healthcare program expenditures, and we anticipate that these effects will continue. For example, the OBBBA is expected to decrease federal healthcare spending, particularly with respect to Medicaid, and is generally expected to increase pressures on state budgets, particularly in Medicaid expansion states. The impact on state budgets may result in state-level changes such as reductions to the scope of covered services or tax increases. In addition, the OBBBA increases the federal budget deficit in a manner that triggers a statutorily mandated sequestration under the Pay-As-You-Go Act of 2010. As a result, a Medicare spending reduction of up to 4% is required to take effect in early 2026, absent congressional action. These reductions would be in addition to the payment reductions required by the Budget Control Act of 2011 and subsequent legislation, which are currently set to continue through the first ten months of federal fiscal year 2032. It is possible that future deficit reduction legislation will impose additional spending reductions.

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 rates were 26.4%and 26.3% for the three months ended June 30, 2025 and 2024, respectively. The effective income tax rates were 24.0% and 26.0% for the six months ended June 30, 2025 and 2024, 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 or 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 states in which we operate. The effective income tax rates were 24.7% and 26.1% for the three months ended September 30, 2025 and 2024, respectively. The effective income tax rates were 24.3% and 26.1% for the nine months ended September 30, 2025 and 2024, 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 or benefit and the use of federal employment tax credits.

Previous wording

Net service revenues increased by 21.8% to $349.4 millionfor the three months ended June 30, 2025 compared to $286.9 million for the three months ended June 30, 2024. Revenue increased by $56.4 million in our personal care segment, by $6.2 million in our hospice segment and remained constant at approximately $18.1 million in our home health segment during the three months ended June 30, 2025, compared to the same period in 2024. The increase in our personal care segment was primarily due to the completion of the Gentiva Acquisition on December 2, 2024. The increase in our hospice segment revenue was due to organic growth.

Current wording

Net service revenues increased by 25.0% to$362.3 million for the three months ended September 30, 2025 compared to$289.8 million for the three months ended September 30, 2024. Revenue increased by$60.3 million in our personal care segment, by$11.6 million in our hospice segment and by $0.6 million in our home health segment during the three months ended September 30, 2025, compared to the same period in 2024. The increase in our personal care segment was primarily due to the completion of the Gentiva Acquisition on December 2, 2024 and the Helping Hands Acquisition on August 1, 2025. The increase in our hospice segment revenue was due to organic growth.

Previous wording

Gross profit, expressed as a percentage of net service revenues, increased to 32.6% for the three months ended June 30, 2025, compared to 32.5% for the same period in 2024 due to growth in our higher margin hospice segment and the New York Asset Sale.

Current wording

Gross profit, expressed as a percentage of net service revenues, increased to 32.2% for the three months ended September 30, 2025, compared to 31.8% for the same period in 2024 due to growth in our higher margin hospice segment and the New York Asset Sale.

Previous wording

General and administrative expenses increased to $77.1 million for the three months ended June 30, 2025, as compared to $63.6 million for the three months ended June 30, 2024. Theincrease in general and administrative expenses was primarily due to the Gentiva Acquisition that resulted in an increase in administrative employee wage, bonus, tax, and benefit costs of $9.0 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 22.1% for the three months ended June 30, 2025, from 22.2% for the three months ended June 30, 2024.

Current wording

General and administrative expenses increased to$79.4 million for the three months ended September 30, 2025, as compared to$62.8 million for the three months ended September 30, 2024. The increase in general and administrative expenses was primarily due to a non-recurring $1.5 million recruitment expense as well as the Gentiva and Helping Hands Acquisitions that resulted in an increase in administrative employee wage, bonus, tax, and benefit costs of $10.3 million. General and administrative expenses, expressed as a percentage of net service revenues, marginally increased to 21.9% for the three months ended September 30, 2025, from 21.7% for the three months ended September 30, 2024.

Previous wording

Interest expense increased to $3.5 millionfor the three months ended June 30, 2025 from $2.1 million for the three months ended June 30, 2024. The increase in interest expense was primarily due to higher average outstanding borrowings held under our credit facility for the three months ended June 30, 2025,compared to the three months ended June 30, 2024.

Current wording

Interest expense increased to$3.3 million for the three months ended September 30, 2025 from$0.6 million for the three months ended September 30, 2024. The increase in interest expense was primarily due to higher average outstanding borrowings held under our credit facility for the three months ended September 30, 2025,compared to the three months ended September 30, 2024.

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 24.0% and 26.0% for the six months ended June 30, 2025 and 2024, respectively. Our lower effective income tax rate for the six months ended June 30, 2025, was principally due to a higher excess tax benefit with a higher benefit from the use of federal employment tax credits. For the six months ended June 30, 2025 and 2024, the excess tax benefit and federal employment tax credits were 4.8% and 3.1%, 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 24.7% and 26.1% for the three months ended September 30, 2025 and 2024, respectively. Our lower effective income tax rate for the three months ended September 30, 2025, was principally due to a higher excess tax benefit with a higher benefit from the use of federal employment tax credits. For the three months ended September 30, 2025 and 2024, the excess tax benefit and federal employment tax credits were 6.5% and 3.1%, respectively.

Previous wording

Net service revenues increased by 21.0% to $687.2 million for the six months ended June 30, 2025 compared to $567.7 million for the six months ended June 30, 2024. Revenue increased by $106.6 million in our personal care segment, by $11.8 million in our hospice segment and by $1.1 million in our home health segment during the six months ended June 30, 2025, compared to the same period in 2024. The increase in our personal care and home health segments was primarily due to the completion of the Gentiva Acquisition on December 2, 2024. The increase in our hospice segment revenue was due to organic growth.

Current wording

Net service revenues increased by 22.4% to$1,049.5 million for thenine months ended September 30, 2025 compared to$857.5 million for thenine months ended September 30, 2024. Revenue increased by$167.0 million in our personal care segment, by$23.3 million in our hospice segment and by$1.7 million in our home health segment during thenine months ended September 30, 2025, compared to the same period in 2024. The increase in our personal care and home health segments was primarily due to the completion of the Gentiva Acquisition on December 2, 2024. The increase in our hospice segment revenue was due to organic growth.

Previous wording

Gross profit, expressed as a percentage of net service revenues, increased to 32.2% for the six months ended June 30, 2025, compared to 31.9% for the same period in 2024 due to growth in hospice segment and the New York Asset Sale.

Current wording

Gross profit, expressed as a percentage of net service revenues, increased to 32.2% for thenine months ended September 30, 2025, compared to 31.9% for the same period in 2024 due to growth in our higher margin hospice segment and the New York Asset Sale.

Previous wording

General and administrative expenses increased to $150.3 million for the six months ended June 30, 2025, as compared to $124.6 million for the six months ended June 30, 2024. The increase in general and administrative expenses was primarily due to the Gentiva Acquisition that resulted in an increase in administrative employee wage, bonus, tax, and benefit costs of $19.5 million. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 21.9%for the six months ended June 30, 2025, from 22.0% for the six months ended June 30, 2024.

Current wording

General and administrative expenses increased to$229.7 million for thenine months ended September 30, 2025, compared to$187.4 million for thenine months ended September 30, 2024. The increase in general and administrative expenses was primarily due to a $1.5 million non-recurring recruitment expense as well as the Gentiva and Helping Hands Acquisitions that resulted in an increase in administrative employee wage, bonus, tax, and benefit costs of $29.8 million. General and administrative expenses, expressed as a percentage of net service revenues, was consistent at 21.9% for both thenine months ended September 30, 2025 and thenine months ended September 30, 2024.

Previous wording

Interest expense increased to $7.5 million for the six months ended June 30, 2025 from $4.9 million for the six months ended June 30, 2024. The increase in interest expense was primarily due to higher average outstanding borrowings held under our credit facility for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Interest expense increased to$10.9 million for thenine months ended September 30, 2025 from$5.4 million for thenine months ended September 30, 2024. The increase in interest expense was primarily due to higher average outstanding borrowings held under our credit facility for thenine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

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 26.4% and 26.3% for the three months ended June 30, 2025 and 2024, respectively. Our higher effective income tax rate for the three months ended June 30, 2025, was principally due to a higher excess tax expense with a higher benefit from the use of federal employment tax credits. For the three months ended June 30, 2025 and 2024, the excess tax expense and federal employment tax credits were 2.6% and 2.8%, 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 24.3% and 26.1% for thenine months ended September 30, 2025 and 2024, respectively. Our lower effective income tax rate for thenine months ended September 30, 2025, was principally due to a higher excess tax benefit with a lower benefit from the use of federal employment tax credits. For thenine months ended September 30, 2025 and 2024, the excess tax benefit and federal employment tax credits were 5.4% and 3.1%, respectively.

Previous wording

The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 33.0% and 38.6% of our net service revenues for the three months ended June 30, 2025 and 2024, respectively, and accounted for 33.0% and 38.5% of our net service revenues for the six months ended June 30, 2025 and 2024, respectively. One payor, the Illinois Department on Aging, accounted for 18.6% and 21.1% of net service revenues for the three months ended June 30, 2025 and 2024, respectively, and accounted for 18.6% and 20.9% of net service revenues for the six months ended June 30, 2025 and 2024, respectively.

Current wording

The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 32.0% and 38.6% of our net service revenues for the three months ended September 30, 2025 and 2024, respectively, and accounted for 32.6% and 38.5% of our net service revenues for the nine months ended September 30, 2025 and 2024, respectively. One payor, the Illinois Department on Aging, accounted for 18.1% and 21.4% of net service revenues for the three months ended September 30, 2025 and 2024, respectively, and accounted for 18.4% and 21.1% of net service revenues for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net service revenues from state, local, and other governmental programs accounted for 51.4% and 53.1% of net service revenues for the three months ended June 30, 2025 and 2024, respectively. Managed care organizations accounted for 45.3% and 44.2% of net service revenues for the three months ended June 30, 2025 and 2024, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues. Net service revenues from state, local, and other governmental programs accounted for 51.4% and 52.5% of net service revenues for the six months ended June 30, 2025 and 2024, respectively. Managed care organizations accounted for 45.3% and 44.8% of net service revenues for the six months ended June 30, 2025 and 2024, 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 50.5% and 54.2% of net service revenues for the three months ended September 30, 2025 and 2024, respectively. Managed care organizations accounted for 46.2% and 43.3% of net service revenues for the three months ended September 30, 2025 and 2024, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues. Net service revenues from state, local, and other governmental programs accounted for 51.1% and 53.0% of net service revenues for the nine months ended September 30, 2025 and 2024, respectively. Managed care organizations accounted for 45.6% and 44.3% of net service revenues for the nine months ended September 30, 2025 and 2024, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues.

Previous wording

Net service revenues increased by 26.5% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Net service revenues included a 7.2% decrease in revenues per billable hour for the three months ended June 30, 2025, due to lower reimbursement rates attributable to the Gentiva Acquisition, as well as the New York Asset Sale, compared to the three months ended June 30, 2024.

Current wording

Net service revenues increased by 28.0% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Net service revenues included a 8.2% decrease in revenues per billable hour for the three months ended September 30, 2025, due to lower reimbursement rates attributable to the Gentiva and Helping Hands Acquisitions, as well as the New York Asset Sale, compared to the three months ended September 30, 2024.

Previous wording

Gross profit, expressed as a percentage of net service revenues, increased to 27.9% for the six months ended June 30, 2025 from 27.5% for the six months ended June 30, 2024. This increase was due to decreases in direct payroll and benefits expenses as a percentage of revenue for thesix months ended June 30, 2025 primarily related to the New York Asset Sale.

Current wording

Gross profit, expressed as a percentage of net service revenues, increased to 27.7% for the nine months ended September 30, 2025 from 27.5% for the nine months ended September 30, 2024. This increase was due to decreases in direct payroll and benefits expenses as a percentage of revenue for thenine months ended September 30, 2025 primarily related to the New York Asset Sale.

Previous wording

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 9.1% and 7.7% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

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 9.0% and 7.8% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net service revenues from Medicare accounted for 93.0% and 91.2% for the three months ended June 30, 2025 and 2024, respectively, and 92.7% and 91.0% for the six months ended June 30, 2025 and 2024, respectively. Net service revenues from managed care organizations accounted for 3.2% and 3.4% for the three months ended June 30, 2025 and 2024, respectively, and for 3.3% for both the six months ended June 30, 2025 and 2024.

Current wording

Net service revenues from Medicare accounted for 93.1% and 91.5% for the three months ended September 30, 2025 and 2024, respectively, and 92.9% and 91.1% for the nine months ended September 30, 2025 and 2024, respectively. Net service revenues from managed care organizations accounted for 3.2% for both the three months ended September 30, 2025 and 2024, and 3.2% and 3.3% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net service revenues increased by $6.2 million and $11.8 million for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, primarily attributed to organic growth in average daily census.

Current wording

Net service revenues increased by $11.6 million and $23.3 million for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, primarily attributed to organic growth in average daily census.

Previous wording

Gross profit, expressed as a percentage of net service revenues, was 47.9% and 46.9% for the three months ended June 30, 2025 and 2024, respectively, and 47.7% and 47.5% for the six months ended June 30, 2025 and 2024, respectively. For the three and six months ended June 30, 2025, the increase was mainly attributed to organic growth.

Current wording

Gross profit, expressed as a percentage of net service revenues, was 49.4% and 46.8% for the three months ended September 30, 2025 and 2024, respectively, and 48.3% and 47.3% for the nine months ended September 30, 2025 and 2024, respectively. For the three and nine months ended September 30, 2025, the increase was mainly attributed to organic growth.

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 24.0% for the three months ended June 30, 2025 and 2024, respectively, and 23.9% and 24.0% for the six months ended June 30, 2025 and 2024, respectively.

Current 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 22.1% and 24.6% for the three months ended September 30, 2025 and 2024, respectively, and 23.2% and 24.2% for the nine months ended September 30, 2025 and 2024, respectively.

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 69.4% and 69.3%, managed care organizations accounted for 23.6% and 25.9%, and state, local, and other governmental programs accounted for 4.4% and 0.2% for the three months ended June 30, 2025 and 2024, respectively. Net service revenues from Medicare accounted for 69.7% and 69.2%, managed care organizations accounted for 22.4% and 26.0%, and state, local, and other governmental programs accounted for 5.2% and 0.2% for the six months ended June 30, 2025 and 2024, 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 65.9% and 70.6%, managed care organizations accounted for 25.5% and 24.7%, and state, local, and other governmental programs accounted for 5.6% and 0.0% for the three months ended September 30, 2025 and 2024, respectively. Net service revenues from Medicare accounted for 68.4% and 69.6%, managed care organizations accounted for 23.4% and 25.6%, and state, local, and other governmental programs accounted for 5.3% and 0.0% for the nine months ended September 30, 2025 and 2024, 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 remained constant for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and increased by $1.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to the Gentiva Acquisition.

Current wording

Net service revenues remained constant for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and increased by $1.7 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the Gentiva Acquisition.

Previous wording

Gross profit, expressed as a percentage of net service revenues, was 45.9% and 37.6% for the three months ended June 30, 2025 and 2024, respectively, and 42.9% and 36.1% for the six months ended June 30, 2025 and 2024, respectively. For the three and six months ended June 30, 2025, the increase was mainly attributed to a decrease in direct care wages, taxes and benefit costs as a percentage of net service revenues, compared to thethree and six months ended June 30, 2024.

Current wording

Gross profit, expressed as a percentage of net service revenues, was 39.8% and 36.4% for the three months ended September 30, 2025 and 2024, respectively, and 41.9% and 36.2% for the nine months ended September 30, 2025 and 2024, respectively. For the three and nine months ended September 30, 2025, the increase was mainly attributed to a decrease in direct care wages, taxes and benefit costs as a percentage of net service revenues, compared to thethree and nine months ended September 30, 2024.

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 21.6% and 25.3% for the three months ended June 30, 2025 and 2024, respectively, and 22.4% and 26.1% for the six months ended June 30, 2025 and 2024, respectively. General and administrative expenses for the three and six months ended June 30, 2025 decreased compared to the corresponding period in 2024, primarily due to more efficient operations for administrative employees for the three and six months ended June 30, 2025.

Current 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 25.4% and 25.5% for the three months ended September 30, 2025 and 2024, respectively, and 23.4% and 25.9% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At June 30, 2025 and December 31, 2024, we had cash balances of $91.2 million and $98.9 million, respectively. At June 30, 2025, we had a $650.0 million revolving credit facility and a $150.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility was extended to July 30, 2028.

Current wording

Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At September 30, 2025 and December 31, 2024, we had cash balances of $101.9 million and $98.9 million, respectively. At September 30, 2025, we had a$650.0 million revolving credit facility and a $150.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility was extended to July 30, 2028.

Previous wording

During the six months ended June 30, 2025, we used $3.4 million in cash to fund the Jacksonville Acquisition and the Great Lakes Acquisition and repaid $50.0 million under our revolving credit facility. As of June 30, 2025, we had a total of $173.0 million in revolving loans, with an interest rate of 6.07% 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 $635.6 million of capacity and $454.6 million available for borrowing under our credit facility. At December 31, 2024, we had a total of $223.0 million revolving credit loans, with an interest rate of 6.34%, outstanding on our credit facility.

Current wording

During the nine months ended September 30, 2025, we used $3.4 million in cash to fund the Jacksonville Acquisition and the Great Lakes Acquisition, drew $11.3 million on the revolver portion of our credit facility to fund, in part, the purchase price paid in connection with the Helping Hands Acquisition, and repaid $80.0 million under our revolving credit facility. As of September 30, 2025, we had a total of $154.3 million in revolving loans, with an interest rate of 5.92% outstanding on our credit facility and after giving effect to the amount drawn on our credit facility, approximately$7.9 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 $650.0 million of capacity and $487.7 million available for borrowing under our credit facility. At December 31, 2024, we had a total of $223.0 million revolving credit loans, with an interest rate of 6.34%, outstanding on our credit facility.

Previous wording

During the three and six months ended June 30, 2025, the Company did not receive additional state funding provided by the ARPA. Of the total state funding received by the Company pursuant to the ARPA through June 30, 2025, the Company utilized $0.8 million and $3.3 million during the three and six months ended June 30, 2025, 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, 2025, the deferred portion of ARPA funding of $7.9 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.

Current wording

During the three and nine months ended September 30, 2025, the Company did not receive additional state funding provided by the ARPA. Of the total state funding received by the Company pursuant to the ARPA through September 30, 2025, the Company utilized $2.2 million and $5.5 million during the three and nine months ended September 30, 2025, 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 September 30, 2025, the deferred portion of ARPA funding of $5.8 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 $41.5 million for the six months ended June 30, 2025, compared to net cash provided by operating activities of $57.5 million for the same period in 2024. 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, 2025 as compared to the six months ended June 30, 2024. The related receivables due from the Illinois Department on Aging represented 18.6% and 21.7% of the Company’s net accounts receivable at June 30, 2025 and June 30, 2024, 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 $92.7 million for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $106.0 million for the same period in 2024. The decrease in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of receipt and utilization 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 thenine months ended September 30, 2025 as compared to thenine months ended September 30, 2024. The related receivables due from the Illinois Department on Aging represented 16.6% and 21.7% of the Company’s net accounts receivable at September 30, 2025 and September 30, 2024, respectively.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2025, primarily consisted of $3.4 million of net cash used for the Jacksonville Acquisition and the Great Lakes Acquisition, $3.1 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets, offset by $3.8 million in proceeds received relating to the New York Asset Sale and $2.9 million in proceeds received relating to the Gentiva Acquisition. Net cash used in 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 of cash used for property and equipment purchases, offset by $4.6 million in proceeds received relating to the New York Asset Sale.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2025, primarily consisted of $24.2 million of net cash used for the Helping Hands Acquisition, the Jacksonville Acquisition and the Great Lakes Acquisition, $5.1 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets, offset by $3.8 million in proceeds received relating to the New York Asset Sale and $2.9 million in proceeds received relating to the Gentiva Acquisition. Net cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $0.4 million of net cash used for the Upstate acquisition and $4.4 million of cash used for property and equipment purchases, offset by $4.6 million in proceeds received relating to the New York Asset Sale.