T.S. Eliot said that April is the cruelest month. He must have been an investor in the 2022 stock market.
Stocks took a beating across the board in April, with the S&P falling nearly 10%. And according to the Home Health (HHI) and Post-Acute Care (PAI) indices from national mergers and acquisitions advisory firm Stoneridge Partners, home health and post-acute care companies were certainly not immune to the market’s decline.
“Providers who made it out of the pandemic are now weathering supply chain issues, soaring increases in fuel prices and the lingering effects of the Great Resignation,” said Stoneridge Partners Managing Partner Brian Bruenderman. “But these challenges are facing all businesses, not just the healthcare sector – the S&P is off to its worst start since 1939. I wouldn’t regard weakness in the market overall as weakness in the market for home health and post-acute care.”
The Stoneridge HHI dropped more than 13% from March to April, while the PAI (what percentage drop?).
Home Health Index
Perhaps the most startling decline among companies on the Home Health Index was Amedisys, Inc. (Nasdaq: AMED), which dropped almost 26% from March to April. LHC Group, Inc. (Nasdaq: LHCG) was down by just shy of 2% over the same period.
Both Amedisys and LHC have had to deal with COVID-19-related disruption the first quarter with approximately 7% of each company’s clinicians in quarantine, leading to higher contract labor costs. The difference for Amedisys may have been the increase in gas prices – the company spends almost $4 million monthly on fuel.
Post-Acute Care Index
Addus HomeCare Corporation (Nasdaq: ADUS) also experienced a stock value dip in April, dropping by nearly 10%.
During Q1, Addus experienced its highest employee-quarantine rate ever at 4%. Hiring also became a company pain point. The company saw a 4% to 5% increase in per-hour pay for home health and hospice workers due to wage pressure.
Quote of the Month
“We know we are not alone on this one. The challenge can be that we are all struggling in one way or another and this can impact the amount of support one can get from others.” – Dr. Jacqueline Hidalgo, Psy.D. with Lee Health
Read the Full Article Here: Take Care of Yourself: May is Mental Health Awareness Month
Articles Featuring Stoneridge
Where is the activity in the healthcare M&A market right now? Home Health Care News turned to the experts at Stoneridge Partners to find out. See what Managing Partner Brian Bruenderman had to say about where the home health, home care and behavioral health markets stand right now — and where they may be heading.
Visit the Speaker Series Webinar Library on our website to watch our most recent Speaker Series discussing how to avoid common pitfalls when selling your healthcare business.
See It To Believe It!
The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:
- LHC Group (LHCG)
- Amedisys (AMED)
Here are the results of the stock prices for the past two years:
| Company | 4/30/22 | 1 mos change | YTD change | 4/30/21 | 4/30/20 |
| Amedisys | 127.65 | -25.91% | -21.15% | 269.85 | 184.16 |
| LHC Group | 165.85 | -1.63% | -20.86% | 208.27 | 129.99 |
| HH Index* | 146.75 | -13.90% | -1.88% | 239.06 | 157.08 |
| S&P | 4117.75 | -9.51% | -13.60% | 4181.17 | 2912.43 |
| Addus | 84.28 | -9.66% | -9.87% | 105.8 | 81.02 |
Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.
Enterprise Value (EV)
| EV (in M) | 2022 | 2021 | 2020 |
| Amedisys | 4660 | 9560 | 6470 |
| LHC Group | 5910 | 6430 | 4220 |
| HH Index Total | 10570 | 15990 | 10690 |
| Addus | 1450 | 1780 | 1130 |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
| Company | 2022 | 2021 | 2020 |
| Amedisys | 210% | 452% | 331% |
| LHC Group | 266% | 312% | 203% |
| HH Index Average* | 238% | 382% | 267% |
| Addus | 168% | 232% | 189% |
The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care companies, all listed on the NASDAQ:
- LHC Group (LHCG)
- Amedisys (AMED)
- Addus (ADUS)
- The Pennant Group, Inc. (PNTG)
- Encompass Health (EHC)
- Brookdale Senior Living Inc. (BKD)
This graph displays Post-Acute Care Index performance starting late 2019.
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index May 2022 | Stoneridge Partners)
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Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.
Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.
Hospice agency. 6 counties in northern California. Moratorium in place. Minimal census. Accredited.
Medicare home health agency. Health system relationship. Rare KY CON opportunity, multiple counties
Opportunity to establish a Houston-based hospice. Low-census provider licensed for regions 3, 4, 5 and 6.
Opportunity to establish a Medicare hospice and Medicare home health agency. Greater Salt Lake city area. Clean provider number with management and field staff in...
Large, established franchise territory. $2.5 million revenue. Two offices with strong leadership teams in place.
ABA in-home and community-based autism treatment for children and families. Located in Northeastern VA. $1M in revenue. Completely self-sufficient staff to remain.
Home health with $8+M in revenue. Medicare/Medicaid-certified. 90+% traditional Medicare/episodic. Services central Texas and licensed for entire state. Strong management team in place.
Home care franchisee. $8.4M in revenue. Highly profitable agency. Medicaid/private pay.
Skilled home health agency. JCAHO accredited, zero deficiencies. Excellent reputation and referral relationships. $400k in revenue, impressive growth potential.
Medicare-certified home health agency. Houston-area. Minimal census.
Medicare-certified home health agency. $1M+ in revenue. Long-established agency with excellent community rapport.
In-home DME manufacturer. Patented mobility system. $7.7M+ in revenue. GSA/VA contract. Strong industry supplier partnerships.
Private pay home care. $1.6M in revenue. Profitable, great reputation. Tenured staff.
Medicare-certified home health agency. District 3. Approximately $700k in revenue. Accredited.
Medicare-certified home health agency. District 5. Minimal census. Accredited.
$19.5M large home care franchisee. 89% Medicaid. Well-established company operating more than 20 years. Phenomenal year-over-year revenue growth.
$27M highly profitable, tech-enabled health care staffing company. Provides on-demand workers for LTC facilities. Impressive growth trends with extraordinary upside
Well-established and profitable franchisee. Revenue of $4.9M. Medicaid and private pay.
ABA in-home autism therapy for children. $2.4M in revenue. Strong growth and bottom line.
Opportunity to acquire a Medicare-certified home health agency. JCAHO-accredited. Zero deficiencies. Region 9.
Opportunity to acquire a Medicare-certified home health agency. JACHO-accredited. Zero deficiencies. Minimal census.
Opportunity to acquire a Medicare-certified home health agency. Zero deficiencies. Minimal census.
Rare southern hospice/home health CON opportunity. $3.5M in revenue, 60+ hospice ADC. Strong staff recruiting and retention.
Medicaid/private pay, Medicare-certified. $3 million in revenue. CHAP-accredited.
4-star home health agency. $2.5 million revenue. Experienced management team. Strong financials with outstanding local reputation. Huge growth opportunities.
$1.5 million revenue chiropractic/physical therapy business. High profit margin/low operating costs. Diverse referral sources.
$3.3 million in revenue. Autism center providing ABA, OT, PT and ST. In-clinic and in-home services.
Non-skilled licensed home care organization. Approx. $2 million in annual revenue. Strong management team in place. Southern California.
Central Ohio-based home health company with private pay. $2.3 million in revenue. 13.5% EBITDA. Strong growth trends, full staff in place.
Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.
$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.
Home Health Index May 2022 | Stoneridge Partners
From Brian Bruenderman, Publisher of “Home Health Index.” Brian can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group
