05/05/2022 - Addus HomeCare Corporation: 2021 Annual Report

Comparison of 5-Year Cumulative Total Returns

The following graph compares the performance of our common stock with performance of a market index, the Nasdaq U.S. Stocks Benchmark index, and a peer group index, the Nasdaq Health Care Providers index. The following graph covers the period from December 31, 2016 through December 1, 2021. The graph assumes that $100 was invested at the closing price on December 1, 2016 in our common stock, the market index and the peer group index, and that all dividends were reinvested.

$400

$350

$300

• • Addus HomeCare

• • Nasdaq U.S. Stocks Benchmark

$250

• • Nasdaq Health Care Providers

$200

$150

$100

$50

0

12/31/20

The stock performance in this graph is not necessarily indicative of future stock price performance.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34504

ADDUS HOMECARE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-5340172
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
6303 Cowboys Way, Suite 600 Frisco, TX	75034
(Address of principal executive offices)	(Zip Code)

469-535-8200

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	ADUS	The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐

No ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submitsuch files).

Yes ☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)

Yes ☐

No ☒

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, based on the last sale price on The Nasdaq Global Market on June 30, 2021 (the last business day of the registrant's most recently completed second fiscal quarter) was approximately $1,364,290,000.

As of February 18, 2022, there were 15,952,001 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's Definitive Proxy Statement for its 2022 Annual Meeting of Stockholders (which is expected to be filed with the Commission within 120 days after the end of the registrant's 2021 fiscal year) are incorporated by reference into Part III of this Annual Report on Form 10-K.

Auditor Firm PCAOB Id:

238

Auditor Name:PricewaterhouseCoopers LLPAuditor Location:

Dallas, Texas

TABLE OF CONTENTS

PART I .......................................................................................................................................................................................... 3

Item 1.

Business ............................................................................................................................................................... 3

Item 1A. Risk Factors ........................................................................................................................................................ 14

Item 1B. Unresolved Staff Comments .............................................................................................................................. 29

Item 2.

Properties ............................................................................................................................................................ 29

Item 3.

Legal Proceedings ............................................................................................................................................... 29

Item 4.

Mine Safety Disclosures ..................................................................................................................................... 29

PART II ........................................................................................................................................................................................ 30

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities ................................................................................................................................................. 30

Item 6.

[Reserved] ............................................................................................................................................................ 30

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations ...................... 31

Item 7A. Quantitative and Qualitative Disclosures about Market Risk ....................................................................... 51

Item 8.

Financial Statements and Supplementary Data .............................................................................................. 51

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...................... 51

Item 9A. Controls and Procedures ................................................................................................................................... 51

Item 9B. Other Information .............................................................................................................................................. 52

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ......................................................... 52

PART III ....................................................................................................................................................................................... 53

Item 10. Directors, Executive Officers and Corporate Governance ............................................................................. 53

Item 11. Executive Compensation .................................................................................................................................... 53

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 53

Item 13. Certain Relationships and Related Transactions, and Director Independence ........................................... 53

Item 14. Principal Accounting Fees and Services ........................................................................................................... 53

PART IV ....................................................................................................................................................................................... 54

Item 15. Exhibits and Financial Statement Schedules ................................................................................................... 54

Item 16. Form 10-K Summary ......................................................................................................................................... 57

SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

When included in this Annual Report on Form 10-K, or in other documents that we file with the Securities and Exchange Commission ("SEC") or in statements made by or on behalf of the Company, 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 anticipated impact to our business with respect to developments related to the COVID-19 pandemic, including, without limitation, those related to the length and severity of the pandemic, as well as the timing, availability and acceptance of effective medical treatments, vaccines and booster shots; the spread of potentially more contagious and/or virulent forms of the virus; the pandemic's impact on our operations, reimbursement and our consumer population; measures we are taking to respond to the pandemic; the impact of government regulation, stimulus and relief measures, including the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), Paycheck Protection Program and Health Care Enhancement Act ("PPPHCE Act"), the Consolidated Appropriations Act, 2021 ("CAA"), the COVID-Related Tax Relief Act of 2020, the American Rescue Plan of 2021 ("ARPA") and any other stimulus or relief legislation, along with the related uncertainties regarding such measures and any future measures related to COVID-19; increased expenses related to personal protective equipment ("PPE"), labor, supply chain, or other expenditures; workforce disruptions, including shortages and increased labor expenses, associated with competitive labor market conditions and the impact of quarantines; the impact of vaccine mandates on the workforce; and supply shortages and disruptions;

• • 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;

• • 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, including economic and business conditions resulting from the COVID-19 pandemic, and deficit spending by federal and state governments;

• • cost containment initiatives undertaken by federal, state and other third-party payors;

• • our ability to access financing through the capital and credit markets;

1