Exhibit 99.1
Coordinated Personal Home Care
A pre?acute solution to the post-acute problemSM
AvondalePartners
August 14, 2013
Forward-Looking Statements
The following information contains, or may be deemed to contain, forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of Addus may vary from the results expressed in, or implied by, the following forward-looking statements, possibly to a material degree, and historical results may not be an indication of future performance. For a discussion of some of the important factors that could cause Addus’ results to differ from those expressed in, or implied by, the following forward-looking statements, please refer to Addus’ most recent Annual Report on Form 10-K, and its Quarterly Reports on Form 10-Q, each of which is available at www.SEC.gov, particularly the Sections entitled “Risk Factors”. Addus undertakes no obligation to update or revise any forward-looking statements, except as may be required by law.
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Mission
It is the primary mission of Addus HealthCare to improve the health and well being of our consumers through the provision of quality, cost-effective home and community based services.
We will accomplish our goals by fostering an environment in which our employees enthusiastically support and advance our mission.
Reward for accomplishing our mission includes pride in our organization, contribution to the community and a reasonable profit.
Investment Highlights
Large & Growing Market
Broad Range of Services and Payors
Differentiated, Coordinated Care Model
Positioned to Excel under Healthcare Reform
Significant Operational Scale Across National Footprint
History of Growth through Acquisition Multiple Organic Growth Opportunities Experienced Management Team
About Addus
Who is Addus?
Comprehensive provider of home and community based services, which are primarily social in nature, focused primarily on the Dual Eligible population:
Personal Care
Private Duty
Adult Day Service
Key Facts:
Founded in 1979
14,000+ employees
26,000+ consumers (many dual eligible)
2012 Revenues of $244.3 million
„Diversified payor base (200+ payors)
Largest payor —64% of 2012 total revenues
98 Locations Across 20 States
Who We Serve
Focusing on the Dual Eligible Population
Concentration of Health Care Spending in the U.S. Population, 2007
Percentof Population, Ranked by Health Care Spending
Addus focuses on the top 5% who utilize 50% of resources and expenditures!
Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), 2007
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Addus Dual AdvantageTM
The New Paradigm
Long term care risk makes it essential that health plan dual eligible members live safely and healthfully at home as long as possible
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Where are we in the Continuum of Care
Transportation Rehab Facility Home Health $ $ $ $ $ Personal Companion $ Emergency Home Hospital
Family and Response Case Physicians Ambulance/ER Intensive Care Nursing Home Community (PERS) Management $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Friendly Psychiatric Healthy Inpatient $ $ $ $ $ Living—Eat Visiting ?? Tele Health $ Hospice $ $ an Apple
Specialty Sub-Acute Telephone Diagnostics $ $ $ Facilities $ $ $ $ $ Reassurance Hospital $ $ $ $ Meals at Personal Care $ Behavioral Home Health $ $ Adult Day
Pre-Acute Acute
Long-Term Care Expenditures
Growth in Medicaid Long Term Care Expenditures
Medicaid Spending Per Beneficiary
Insitutional Care Expenditures(Billions)
Home & Community Based Services Expenditures (Billions)
.
SOURCE: KCMU and Urban Institute analysis of HCFA/CMS64 data. June 2011
Source: Kassner, Reinhard, Fox Grage, Houser, Accius, Coleman and Milne. AARP Public Policy Institute: “A Balancing Act: State Long?Term Care Reform,” July 2008
$80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0
1990 1995 2000 2002 2004 2006 2008 2009
$30,000 $25,000 $24,500 $20,000
$15,000 $9,200 $10,000
$5,000
$0
Nursing Home Home Care
THE LANDSCAPE IS SHIFTING
States are shifting responsibility for care to health plans and managed care Focus on managing and coordinating care for the costly dual eligible population
Dual Eligible
What is the Opportunity?
Medicare Program
Populations 65+ years
Hospital Services (Part A)
Post Acute Care SNF / Rehab
Professional Services (Part B)
Post acute Home Care Services
Prescription Services (Part D)
Duals Represent 36% of Total Medicare Spending
Medicaid Programs
Generally populations 65+ years w Income limits Home Based Personal Care Long term Nursing Home Care Duals Represent 39% of Total Medicaid Spending 69% of Medicaid Spending is for Long Term Care
Pilot Program Features / Objectives
Total $300 Billion in annual spending for dual eligible enrollees in 2007
Funding for both programs administered through the States
26 States have indicated they will participate over the next 3 years
Each State will decide on the size, nature and timing of the pilots
Approximately 9 million are “Duals”
Bids are being solicited from multiple “Managed Care Companies”
Stated Objectives:
Eliminate service duplication / streamline administration
Keep member functioning in the home environment
Avoid / lower the cost for Acute Care services
Sources: Kaiser Commission on Medicaid and the Uninsured, April 2011
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States Pursuing a Dual Program
MCO Plans/Programs already implemented
2013 Implementation Plans
2014 Implementation Plans
No Implementation Plans
Source: Kaiser Commission on Medicaid and the Uninsured, May 2012
Addus location(s)
Health Plan’s Worst Nightmare
The Choice is Obvious!
Emergency Room $1,700/visit
Total Episodic Cost & one?year of Nursing
Ambulance Home $1,000/ride $75,620 Acute Care Hospital $12,320/stay
.
Nursing Home $42,000/year Rehab Facility $18,600/stay
Home Personal Care $9,200/year
Sources: Consumer Health Ratings.com CMS.gov
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Addus Dual AdvantageTM
The Addus Homecare Aid—A Powerful Resource
No one knows more about the member…
No one is in a better position to positively effect health outcomes…
…Than the Addus Home Care Aide
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Home Care
Integrated Clinical Strategy Begins In The Home
Family
Addus Addus Home Call Care Aide Center
Community?Based Resources Interdisciplinary
& Advocacy Care Team Groups
Client Health Plan Primary Care Case Health Manager Providers Community?Based Providers & Pharmacies
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A System Connecting the Aid to the Health Plan
Service Excellence
Connect Aide to Health System
Touch Member based on Acuity
Bring Aide into Addus Culture
Empower Aide through Self?Service
Centralize Transactions by Areas of Excellence
Drive Health Outcomes
Continuous Training
Increase Employee Interaction
Eliminate Paper
Use Technology to Touch Members
Operating Platform
Application Software
Central Data Repository
Interoperability
Mobile Tools
IPads &Smart Phones
Smart Messaging
Picture & Videos
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Addus Dual AdvantageTM
Utilizing Technology to Link the Homecare Aid to the Healthcare Team
Changes in Condition – Real time reports through the device, triggering an alert to appropriate personnel.
Additional Information – Pictures and short videos.
Monitoring per Diagnosis –
Customized to primary diagnosis.
Reporting – Reports directly from the Aide to Health Plan.
Addus Contact Center
Supporting High Touch In Home Care-giver Strategy
Case Intake
Support inbound & outbound traffic Integrates with payor strategy & needs Processes customized to support payor
Serves as an additional connection point to the consumer
– Support the medical plan of care
– Support field team’s activities, integrating with in?home visits
– Provides additional resource for screening, check?ins and follow?up
Taking transactions out of the Clinician’s work day.
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Addus Dual AdvantageTM
Outstanding Outcomes Begin With Good Communication
Addus Employees Represent A Diverse Group With A Multitude of Language Skills
American Sign Navajo
Bosnian Nigerian
Cambodian Polish
Cantonese Russian
English Spanish
Farsi Swahili
French Tagalog
Greek Ukrainian
Hindi Vietnamese
Japanese Yugoslav
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Addus Care System Framework
Intake Consumer Employee GL & Accounts Mobile Services Services Receivables Web
Referrals Scheduling HR Billing, Reimbursement Electronic Visit Reception Best Fit Staffing Employee Outreach and Collections Verification Personnel & Client Visit Assignment Payroll Self?Service Maintenance Wellness Monitoring Wellness Observations and Reporting
Integration Layer
Other Payers Managed Care HCBS Network Counties Organizations Medical Groups
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Addus Dual AdvantageTM
A Model for Extending the Reach of Health Plan Case Managers
Serving the dual eligible population at home:
Complicated
Logistics intense
Highly transactional
Requires disciplined processes
Provides tremendous opportunity for case management extension!
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Addus Dual AdvantageTM
Strong Union Relationships Drive Addus Success
Addus Named to American Rights at Work, a leading labor policy and advocacy organization, inaugural “Labor Day List: Partnerships that Work”
Organized since 1985
More than 11,000 Addus Home Care Aides are members of SEIU Nationally National Collective Bargaining & Neutrality Agreement
13 Local Collective Bargaining Economic Agreements Serve as Taft –Hartley Trustee for Health Care in Illinois & Washington Serve as Trustee on Training Trust in Illinois
& Washington
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Home Care Programs Improve Outcomes
Nursing home admissions fell, in spite of rising populations; substantial savings
HCBS Strategies Study
Illinois Residents Age 75+
Total Population vs. Nursing Home Residents
1,000,000 800,000 600,000 400,000 200,000 0
80,000 78,000 76,000 74,000 72,000 70,000 68,000
1980 2008
Medicaid 75+ Nursing Home Population
Source: CCP Cost Effectiveness: Comparison of CCP growth with Nursing Facility Prevalence Reductions HCBS Strategies Inc. February 10, 2010
Scripps Gerontology Center Study
Ohio Residents Age 60+
Total Population vs. Nursing Home Residents
2,300,000 2,200,000 2,100,000 2,000,000 1,900,000 1,800,000 1,700,000
2,300,000 2,200,000 2,100,000 2,000,000 1,900,000 1,800,000 1,700,000
1997 2009
Ohio 60+ Population
Medicaid 60+ Nursing Home Population
Source: Coming of Age: Tracking the Progress and Challenges of Delivering Long?Term Services and Supports in Ohio Scripps Gerontology Center, Miami University of Ohio, June 2011
The home is the lowest cost setting in which to provide care, and is preferred by consumers and families
Census—Revenue—EBITDA Trends
Census from Continuing Operations
28,000 27,000 26,000 25,000 24,000 23,000 22,000 21,000 20,000 19,000 18,000
12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 6/30/13
We define Adjusted EBITDA as earnings before discontinued operations, preferred stock dividends, reevaluation of contingent consideration, interest expense, taxes, depreciation, amortization, and stock?based compensation expense. Adjusted EBITDA is a
performance measure used by management that is not calculated in accordance with generally accepted accounting principles in
the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP
Revenue from Continuing Operations
($ in
$280.0
$260.0 $240.0 $220.0 $200.0 $180.0 $160.0 $140.0 $120.0 $100.0
12/31/08 12/31/09 12/31/10 12/31/11 12/31/12
($ in thousands)
$22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000
EBITDA
12/31/08 12/31/09 12/31/10 12/31/11 12/31/12
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Condensed Consolidated Statements of Income
Continuing Operations
($ in millions) Year Ended Six Months Ended 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 6/30/2012 6/30/2013
Net Service Revenues $ 197.9 $ 219.9 $ 230.1 $ 230.1 $ 244.3 $ 119.3 $ 128.8 Cost of Service Revenues (147.3) (162.7) (170.4) (168.6) (180.2) (88.5) (96.3) General Administrative (38.6) (45.1) (47.0) (45.4) (45.9) (23.0) (23.6)
Operating Margin $ 12.0 $ 12.1 $ 12.7 $ 16.1 $ 18.2 $ 7.8 $ 8.9
Gross Margin Percentage 25.6% 26.0% 25.9% 26.7% 26.2% 25.8% 25.2%
Operating Margin Percentage 6.1% 5.5% 5.5% 7.0% 7.4% 6.5% 6.9%
Note: Operating Margin is defined as Net Service Revenues less Cost of Service Revenues and General Administrative expenses and does not include depreciation and amortization. Operating Margin is a performance measure used by management that is not calculated under generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP. Six month data for periods ended 6/30/2013 and 6/30/2012 amounts are unaudited.
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Select Balance Sheet Information
($ in millions)
Key Balances 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 6/30/2013
Cash $ 6.1 $ 0.5 $ 0.8 $ 2.0 $ 1.7 $ 38.8 Accounts receivable, net 49.2 70.5 71.0 72.4 71.3 43.6 Total Assets 135.7 161.3 166.9 154.7 149.9 155.2 Debt, including current maturities 63.2 49.2 45.2 31.5 16.5 ?Stock holders’ equity $ 34.6 $ 80.6 $ 88.1 $ 86.4 $ 94.4 $ 110.3 Debt to capital ratio 64.6% 37.9% 33.9% 26.7% 14.8% 0.0%
Balances for 6/30/2013 are unaudited.
Investment Highlights
Large & Growing Market
Broad Range of Services and Payors
Differentiated, Coordinated Care Model
Positioned to Excel under Healthcare Reform
Significant Operational Scale Across National Footprint
History of Growth through Acquisition Multiple Organic Growth Opportunities Experienced Management Team
EBITDA Reconciliation
Continuing Operations
($ in millions) Year Ended Six Months Ended 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 6/30/2012 6/30/2013
Net Income $ (0.2) $ (1.8) $ 6.0 $ (2.0) $ 7.6 $ 2.1 $ 15.7 Less: (Earnings) loss from discontinued ops (2.5) (2.4) (1.7) 10.4 1.7 1.5 (10.4) Net Income from continuing operations (2.7) (4.2) 4.3 8.4 9.3 3.6 5.3
Preferred stock dividends 4.3 5.4 ? ? ?
Revaluation of contingent consideration ? ? ? (0.5) ? ? ?Interest Income (0.2) (2.3) (0.2) ? ?Interest Expense 5.7 6.8 3.2 2.5 1.7 0.8 0.3 Income Tax Expense (0.5) (0.1) 1.9 4.3 4.8 2.1 2.1 Depreciation and amortization 5.2 4.1 3.4 3.2 2.5 1.3 1.1 Stock based compensation expense 0.3 0.3 0.3 0.3 0.3 0.1 0.2
Adjusted EBITDA (1) $ 12.3 $ 12.3 $ 12.9 $ 15.9 $ 18.4 $ 7.9 $ 9.0
(1) We define Adjusted EBITDA as earnings before discontinued operations, preferred stock dividends, revaluation of contingent consideration, interest expense, taxes, depreciation, amortization, severance costs related to former chairman and stock?based compensation expense.
Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). It should not be considered in isolation or as a substitute for net income, operating income or any (2) Six months ended 6/30/2013 and 6/30/2012 amounts are unaudited
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