Addus HomeCare Corporation (NASDAQ:ADUS) Q3 2018 Earnings Conference Call Transcript
Nov 06, 2018 • 09:00 am ET
Good morning, and welcome to the Addus HomeCare Corporation Third Quarter 2018 Earnings Conference Call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the company's website and reviewing yesterday's news release.
(Forward-Looking Cautionary Statement)
I would like to now turn the call over to the company's President and CEO, Mr. Dirk Allison. Please go ahead, sir.
Thank you, Drew. Good morning, everyone, and thank you for joining us for our third quarter conference call. With me today is Brian Poff, our CFO. I will begin with some overall comments, and then Brian will discuss the third quarter results that we issued yesterday afternoon. After that, we would be happy to respond to any questions.
As we announced yesterday, our strong operating performance continued in the third quarter of 2018, leading to our solid financial results. Revenue for the third quarter was $137.6 million compared to $108.6 million for the same period in 2017, an increase of 26.7%, driven by a combination of 3.7% organic growth and our acquisitions.
Adjusted earnings per diluted share for the third quarter of 2018 increased to $0.48 as compared to $0.42 for the same period in 2017, an increase of 14.3%. Our adjusted EBITDA for the third quarter of 2018 increased 20.2% to $11.6 million from $9.6 million, with an adjusted EBITDA margin of 8.4%, even with the lack of a minimum wage price increase offset in Illinois. We ended the third quarter with $147.5 million of cash on hand and $103.2 million of bank debt.
Our current cash position reflects both our recent stock offering that we completed in August as well as our strong cash collections from all of our payers, including the State of Illinois. In addition to our strong cash position, yesterday, we announced an amended credit facility, which will lower our borrowing cost and give us the capital to continue our acquisition strategy. We appreciate our bank group led by Capital One for working with Addus to complete this agreement.
During our last earnings call, we mentioned that the offset to the Chicago minimum wage increase we were expecting in 2019 Illinois budget did not occur. This negatively affected our third quarter margins by approximately 70 basis points. Our team is continuing to work with the Illinois state leaders to implement a price increase. Our ongoing meetings with these leaders lead us to believe that they understand the importance of passing this reimbursement increase to offset this mandated minimum wage increase we experienced July 1st of this year. While we cannot be certain when or if the minimum wage offset will be enacted, we do believe there is a good chance that after today's election, we can start to see more clarity around this important issue.
As we announced yesterday, Addus has signed a definitive agreement to acquire the