LHC Group announces second quarter earnings per diluted share of $0.54
and adjusted earnings per diluted share of $0.52
—————————————-
Total admissions increase 12.3%, with home health admissions up 8.7%
—————————————-
Affirms established fiscal 2016 guidance for EPS, raises revenue guidance
LAFAYETTE, La. (August 3, 2016) – LHC Group, Inc. (NASDAQ: LHCG) today announced its financial results for the three months and six months ended June 30, 2016.
Financial Results for the Second Quarter of 2016 Compared with the Second Quarter of 2015
- Net service revenue increased 12.9% to $226.0 million for the second quarter of 2016 compared with $200.2 million for the second quarter of 2015.
- Net income attributable to LHC Group grew 5.7% to $9.5 million compared with $9.0 million, or 5.9% on a per diluted share basis to $0.54 from $0.51, which includes estimated Medicare reimbursement reductions for the second quarter of 2016 of $0.07 per diluted share.
- Adjusted net income attributable to LHC Group grew 1.1% to $9.1 million compared with $9.0 million, or 2.0% on a per diluted share basis to $0.52 from $0.51, which includes estimated Medicare reimbursement reductions for the second quarter of 2016 of $0.07 per diluted share.
- Total comparable-quarter growth in admissions for all service lines for the second quarter was 12.3%.
- Total comparable-quarter organic growth in home health admissions for the second quarter was 8.7%.
See page 10 for a reconciliation of Non-GAAP items to GAAP results.
“We are pleased with our operating and financial results for the second quarter of 2016,” remarked Keith G. Myers, LHC Group’s chairman and CEO. “We continued to experience strong growth in admissions during the quarter, as well as increased acuity, which produced higher reimbursement per completed episode. These trends helped to drive our 12.9% revenue growth for the quarter, which included an increase in organic revenue for home health services of 4.6%, as well as the positive impact of acquisitions completed over the previous year.
“Our gross margin for the second quarter of 2016 compared with the second quarter last year reflected the higher costs of service related to our acquisitions that have closed in the last 12 months and the negative impact of the 2016 CMS reduction to Medicare Home Health reimbursement. We also incurred higher integration expenses related to the six acquisitions that we have closed through July 1, 2016. Acquisition integration costs also affected general and administrative expenses, although we largely offset those increases through increased operating leverage and cost control in our existing operations. We continue to see improvement in our gross margins related to previous acquisitions, while also deploying strategies to further reduce the negative impact of the reimbursement changes.
“Our data continues to show that our expanding base of joint-venture partnerships with hospitals and health systems is an important contributor to our higher rate of admissions and increased case mix. We have no doubt that the increasing shift to value-based healthcare underlies the healthcare industry’s rising interest in the non‑acute portion of the healthcare continuum, and we believe LHC Group is well positioned to continue benefiting from these trends. In our industry segment, we have the most extensive record of successful joint-ventures with hospitals and health systems, due to an alignment strategy that has been a key strategic focus for nearly two decades. Through this strategy, we have proven to our joint-venture partners our ability to provide high quality, low cost non-acute care, as well as the innovation, flexibility and expertise we bring to making each joint venture a success. Because demonstrated quality of care is of utmost importance in being included in a hospital’s or health system’s integrated care network, we expect the recent release of CMS’s Star ratings, which we led for both quality and patient satisfaction, will further differentiate LHC Group as the partner of choice for non-acute care.”
In addition to three joint-venture transactions the Company closed in the first half of 2016, LHC Group also announced four additional freestanding transactions. Three of the freestanding transactions have closed, including East Arkansas Health Holdings, headquartered in Little Rock, Arkansas, which closed on July 1, 2016. The previously announced proposed acquisition of Professional Health Resources (PHR) has not closed due to the failure of the closing conditions to be satisfied. The completion of the PHR acquisition remains subject to normal closing conditions. LHC Group continues to evaluate additional transaction opportunities in a robust pipeline of potential transactions. Supporting its ability to implement its acquisition strategies, the Company completed the second quarter of 2016 with $19.7 million of cash, $42.9 million of trailing 12 months cash flow from operations and $108.2 million of current availability under its credit agreement.
Mr. Myers concluded, “Our success depends on the sustained effort and skill of healthcare professionals across our company, who are providing care to our patients every hour of every day. We thank everyone on our team for their selfless dedication. The work they do is the foundation of LHC Group’s strong competitive market position and its prospects for further profitable growth.”
FY 2016 Guidance
LHC Group today raised its fiscal year 2016 guidance for net service revenue to be in an expected range of $885 million to $900 million, from the previous range of $870 million to $890 million, and affirmed its established fiscal 2016 guidance for fully diluted earnings per share to be in an expected range of $1.90 to $2.00. This guidance includes:
1. the negative impact from the Medicare Home Health Prospective Payment System for 2016, which is expected to reduce 2016 Medicare Home Health revenue by approximately 1.5% to 2.0%, or $7.1 million to $9.5 million, and fully diluted earnings per share by $0.24 to $0.32;
2. the negative impact from the Medicare Long-Term Care Hospital (LTCH) Prospective Payment System (PPS), which is expected to reduce 2016 Medicare LTCH revenue by 4.9%, or $3.6 million, and fully diluted earnings per share by a net $0.06 after implementation strategies;
3. the negative impact from the reduction of 18 beds in one of the Company’s LTACs beginning June 1, 2016, which is expected to reduce 2016 LTCH revenue by $3.1 million and fully diluted earnings per share by a net $0.03 after implementation strategies;
4. the negative impact on the fourth quarter of 2016 from the proposed Medicare Home Health Prospective Payment System for 2017, which is expected to reduce fourth quarter Medicare Home Health revenue by approximately 2.3%, or $900,000, and fully diluted earnings per share by $0.03; and
5. the positive impact from the 2017 Medicare Hospice Wage Index and Payment Rate final rule, effective October 1, 2016, which is expected to increase our Medicare Hospice revenue for the fourth quarter of 2016 by 2.1%, or $650,000, and fully diluted earnings per share by $0.02.
The Company’s financial guidance does not take into account the impact of other future reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, or future legal expenses, if necessary.
Conference Call
LHC Group will host a conference call on Thursday, August 4, 2016, at 11:00 a.m. Eastern time to discuss its second quarter 2016 results. The toll-free number to call for this interactive teleconference is (866) 393‑1608 (international callers should call (973) 890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, August 11, 2016, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 44465665. A live broadcast of LHC Group’s conference call will be available under the Investor Relations section of the Company’s website, www.LHCgroup.com. A one-year online replay will be available approximately an hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. is a national provider of non-acute healthcare services, providing quality, cost-effective healthcare to patients primarily within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of healthcare services through home health, hospice, community‑based services agencies and long-term acute care hospitals (LTACHs). At June 30, 2016, LHC Group operated 283 home health services locations, 62 hospice locations, 11 community-based service locations and six LTACHs with eight locations.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s future financial performance and the strength of the Company’s operations. Such forward-looking statements may be identified by words such as “continue,” “expect,” and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including changes in reimbursement, changes in government regulations, changes in LHC Group’s relationships with referral sources, increased competition for LHC Group’s services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations and other risks set forth in Item 1A. Risk Factors in LHC Group’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission. LHC Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
|
June 30,
2016
|
Dec. 31,
2015
|
|
|
ASSETS
|
||
|
Current assets:
|
||
|
Cash
|
$ 19,725
|
$ 6,139
|
|
Receivables:
|
||
|
Patient accounts receivable, less allowance for uncollectible accounts
of $28,692 and $26,712, respectively
|
121,644
|
110,350
|
|
Other receivables
|
2,095
|
2,093
|
|
Amounts due from governmental entities
|
964
|
1,081
|
|
Total receivables, net
|
124,703
|
113,524
|
|
Prepaid income taxes
|
6,030
|
1,949
|
|
Prepaid expenses
|
16,092
|
10,833
|
|
Other current assets
|
6,987
|
5,835
|
|
Receivable due from insurance carrier
|
—
|
550
|
|
Total current assets
|
173,537
|
138,830
|
|
Property, building and equipment, net of accumulated depreciation
of $39,034 and $38,907, respectively
|
45,894
|
38,096
|
|
Goodwill
|
297,160
|
290,694
|
|
Intangible assets, net of accumulated amortization of $9,716 and $8,496, respectively
|
100,690
|
96,405
|
|
Other assets
|
2,364
|
2,029
|
|
Total assets
|
$ 619,645
|
$ 566,054
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||
|
Current liabilities:
|
||
|
Accounts payable and other accrued liabilities
|
$ 24,471
|
$ 24,586
|
|
Salaries, wages and benefits payable
|
49,210
|
28,098
|
|
Self-insurance reserve
|
12,341
|
9,636
|
|
Current portion of long-term debt
|
246
|
241
|
|
Amounts due to governmental entities
|
5,038
|
7,055
|
|
Legal settlement payable
|
—
|
550
|
|
Total current liabilities
|
91,306
|
70,166
|
|
Deferred income taxes
|
25,787
|
23,729
|
|
Income tax payable
|
1,678
|
3,415
|
|
Revolving credit facility
|
110,000
|
98,000
|
|
Long-term debt, less current portion
|
423
|
543
|
|
Total liabilities
|
229,194
|
195,853
|
|
Noncontrolling interest – redeemable
|
12,642
|
12,408
|
|
Stockholders’ equity:
|
||
|
Common stock – $0.01 par value: 40,000,000 shares authorized;
22,402,310 and 22,224,423 shares issued in 2016 and 2015, respectively
|
224
|
222
|
|
Treasury stock – 4,821,124 and 4,776,560 shares at cost, respectively
|
(38,842)
|
(37,139)
|
|
Additional paid-in capital
|
117,142
|
113,793
|
|
Retained earnings
|
294,856
|
277,706
|
|
Total LHC Group, Inc. stockholders’ equity
|
373,380
|
354,582
|
|
Noncontrolling interest – non-redeemable
|
4,429
|
3,211
|
|
Total stockholders’ equity
|
377,809
|
357,793
|
|
Total liabilities and stockholders’ equity
|
$ 619,645
|
$ 566,054
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||
|
2016
|
2015
|
2016
|
2015
|
|
|
Net service revenue
|
$ 226,031
|
$ 200,172
|
$ 448,583
|
$ 393,251
|
|
Cost of service revenue
|
137,128
|
116,639
|
272,729
|
231,065
|
|
Gross margin
|
88,903
|
83,533
|
175,854
|
162,186
|
|
Provision for bad debts
|
3,782
|
4,805
|
8,383
|
10,064
|
|
General and administrative expenses
|
68,261
|
60,250
|
134,297
|
119,264
|
|
Loss on disposal of assets
|
1,043
|
120
|
1,247
|
404
|
|
Operating income
|
15,817
|
18,358
|
31,927
|
32,454
|
|
Interest expense
|
(466)
|
(554)
|
(1,351)
|
(1,099)
|
|
Income before income taxes and
noncontrolling interest
|
15,351
|
17,804
|
30,576
|
31,355
|
|
Income tax expense
|
3,596
|
6,220
|
8,938
|
10,949
|
|
Net income
|
11,755
|
11,584
|
21,638
|
20,406
|
|
Less net income attributable to
noncontrolling interest
|
2,291
|
2,634
|
4,488
|
4,651
|
|
Net income attributable to LHC Group, Inc.’s common stockholders
|
$ 9,464
|
$ 8,950
|
$ 17,150
|
$ 15,755
|
|
Earnings per share – basic:
|
||||
|
Net income attributable to LHC Group, Inc.’s common stockholders
|
$ 0.54
|
$ 0.51
|
$ 0.98
|
$ 0.91
|
|
Earnings per share – diluted:
|
||||
|
Net income attributable to LHC Group, Inc.’s common stockholders
|
$ 0.54
|
$ 0.51
|
$ 0.97
|
$ 0.90
|
|
Weighted average shares outstanding:
|
||||
|
Basic
|
17,566,097
|
17,410,971
|
17,525,937
|
17,366,141
|
|
Diluted
|
17,685,147
|
17,529,100
|
17,649,620
|
17,528,101
|
|
Six Months Ended
June 30,
|
||
|
2016
|
2015
|
|
|
Operating activities:
|
||
|
Net income
|
$ 21,638
|
$ 20,406
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||
|
Depreciation and amortization expense
|
5,911
|
5,801
|
|
Provision for bad debts
|
8,383
|
10,064
|
|
Stock based compensation expense
|
2,236
|
2,073
|
|
Deferred income taxes
|
2,058
|
1,008
|
|
Impairment of intangibles and other
|
—
|
248
|
|
Loss on disposal of assets
|
1,247
|
404
|
|
Changes in operating assets and liabilities, net of acquisitions:
|
||
|
Receivables
|
(19,758)
|
(12,812)
|
|
Prepaid expenses and other assets
|
(6,446)
|
(3,735)
|
|
Prepaid income taxes
|
(4,364)
|
868
|
|
Accounts payable and accrued expenses
|
21,867
|
24,341
|
|
Net amounts due to/from governmental entities
|
(1,900)
|
(715)
|
|
Net cash provided by operating activities
|
30,872
|
47,951
|
|
Investing activities:
|
||
|
Purchases of property, building and equipment
|
(13,712)
|
(5,205)
|
|
Cash paid for acquisitions, primarily goodwill and intangible assets
|
(11,515)
|
(566)
|
|
Other
|
273
|
—
|
|
Net cash used in investing activities
|
(24,954)
|
(5,771)
|
|
Financing activities:
|
||
|
Proceeds from line of credit
|
35,000
|
2,000
|
|
Payments on line of credit
|
(23,000)
|
(22,000)
|
|
Proceeds from employee stock purchase plan
|
445
|
389
|
|
Payments on debt
|
(115)
|
(113)
|
|
Noncontrolling interest distributions
|
(4,338)
|
(4,069)
|
|
Excess tax benefits from vesting of stock awards
|
1,218
|
811
|
|
Withholding taxes paid on stock-based compensation
|
(1,703)
|
(1,329)
|
|
Purchase of additional controlling interest
|
—
|
(275)
|
|
52
|
—
|
|
|
Proceeds from exercise of stock options
|
109
|
145
|
|
Net cash provided by (used in) financing activities
|
7,668
|
(24,441)
|
|
Change in cash
|
13,586
|
17,739
|
|
Cash at beginning of period
|
6,139
|
531
|
|
Cash at end of period
|
$ 19,725
|
$ 18,270
|
|
Supplemental disclosures of cash flow information
|
||
|
Interest paid
|
$ 1,489
|
$ 765
|
|
Income taxes paid
|
$ 10,635
|
$ 8,208
|
|
Three Months Ended June 30, 2016
|
|||||
|
Home
Health Services
|
Hospice Services
|
Community-Based Services
|
Facility-
Based
Services
|
Total
|
|
|
Net service revenue
|
$ 163,174
|
$ 33,905
|
$ 10,587
|
$ 18,365
|
$ 226,031
|
|
Cost of service revenue
|
97,590
|
20,966
|
7,829
|
10,743
|
137,128
|
|
Provision for bad debts
|
2,618
|
792
|
216
|
156
|
3,782
|
|
General and administrative expenses
|
51,182
|
9,425
|
2,215
|
5,439
|
68,261
|
|
Loss on disposal of assets
|
706
|
205
|
46
|
86
|
1,043
|
|
Operating income
|
11,078
|
2,517
|
281
|
1,941
|
15,817
|
|
Interest expense
|
(350)
|
(51)
|
(23)
|
(42)
|
(466)
|
|
Income before income taxes and noncontrolling interest
|
10,728
|
2,466
|
258
|
1,899
|
15,351
|
|
Income tax expense
|
2,043
|
789
|
102
|
662
|
3,596
|
|
Net income
|
8,685
|
1,677
|
156
|
1,237
|
11,755
|
|
Less net income attributable to noncontrolling interest
|
1,555
|
498
|
(14)
|
252
|
2,291
|
|
Net income attributable to
LHC Group, Inc.’s
common stockholders
|
$ 7,130
|
$ 1,179
|
$ 170
|
$ 985
|
$ 9,464
|
|
Total assets
|
$ 429,780
|
$ 118,353
|
$ 33,247
|
$ 38,265
|
$ 619,645
|
|
Three Months Ended June 30, 2015
|
|||||
|
Home-
Health Services
|
Hospice Services
|
Community-Based Services
|
Facility-
Based
Services
|
Total
|
|
|
Net service revenue
|
$ 153,272
|
$ 18,632
|
$ 10,312
|
$ 17,956
|
$ 200,172
|
|
Cost of service revenue
|
87,045
|
10,844
|
7,456
|
11,294
|
116,639
|
|
Provision for bad debts
|
3,645
|
299
|
691
|
170
|
4,805
|
|
General and administrative expenses
|
47,488
|
5,100
|
2,054
|
5,608
|
60,250
|
|
Loss on disposal of assets
|
88
|
11
|
14
|
7
|
120
|
|
Operating income
|
15,006
|
2,378
|
97
|
877
|
18,358
|
|
Interest expense
|
(438)
|
(61)
|
(6)
|
(49)
|
(554)
|
|
Income before income taxes and noncontrolling interest
|
14,568
|
2,317
|
91
|
828
|
17,804
|
|
Income tax expense
|
4,740
|
723
|
215
|
542
|
6,220
|
|
Net income
|
9,828
|
1,594
|
(124)
|
286
|
11,584
|
|
Less net income attributable to noncontrolling interest
|
2,251
|
253
|
(52)
|
182
|
2,634
|
|
Net income attributable to LHC Group, Inc.’s
common stockholders
|
$ 7,577
|
$ 1,341
|
$ (72)
|
$ 104
|
$ 8,950
|
|
Total assets
|
$ 400,906
|
$ 36,178
|
$ 33,131
|
$ 38,830
|
$ 509,045
|
|
Six Months Ended June 30, 2016
|
|||||
|
Home
Health Services
|
Hospice Services
|
Community-Based Services
|
Facility-
Based
Services
|
Total
|
|
|
Net service revenue
|
$ 324,561
|
$ 64,729
|
21,030
|
$ 38,263
|
$ 448,583
|
|
Cost of service revenue
|
194,302
|
40,593
|
15,556
|
22,278
|
272,729
|
|
Provision for bad debts
|
6,073
|
1,567
|
298
|
445
|
8,383
|
|
General and administrative expenses
|
100,655
|
18,296
|
4,294
|
11,052
|
134,297
|
|
Loss on disposal of assets
|
791
|
324
|
46
|
86
|
1,247
|
|
Operating income
|
22,740
|
3,949
|
836
|
4,402
|
31,927
|
|
Interest expense
|
(1,028)
|
(142)
|
(65)
|
(116)
|
(1,351)
|
|
Income before income taxes and noncontrolling interest
|
21,712
|
3,807
|
771
|
4,286
|
30,576
|
|
Income tax expense
|
5,893
|
1,209
|
330
|
1,506
|
8,938
|
|
Net income
|
15,819
|
2,598
|
441
|
2,780
|
21,638
|
|
Less net income attributable to noncontrolling interest
|
3,149
|
815
|
(57)
|
581
|
4,488
|
|
Net income attributable to
LHC Group, Inc.’s
common stockholders
|
$ 12,670
|
$ 1,783
|
$ 498
|
$ 2,199
|
$ 17,150
|
|
Six Months Ended June 30, 2015
|
|||||
|
Home-
Health Services
|
Hospice Services
|
Community-Based Services
|
Facility-
Based
Services
|
Total
|
|
|
Net service revenue
|
$ 299,864
|
$ 35,483
|
$ 20,085
|
$ 37,819
|
$ 393,251
|
|
Cost of service revenue
|
172,591
|
20,943
|
14,356
|
23,175
|
231,065
|
|
Provision for bad debts
|
8,121
|
646
|
871
|
426
|
10,064
|
|
General and administrative expenses
|
93,727
|
9,961
|
4,247
|
11,329
|
119,264
|
|
Loss on disposal of assets
|
303
|
38
|
38
|
25
|
404
|
|
Operating income
|
25,122
|
3,895
|
573
|
2,864
|
32,454
|
|
Interest expense
|
(868)
|
(121)
|
(12)
|
(98)
|
(1,099)
|
|
Income before income taxes and noncontrolling interest
|
24,254
|
3,774
|
561
|
2,766
|
31,355
|
|
Income tax expense
|
8,397
|
1,343
|
260
|
949
|
10,949
|
|
Net income
|
15,857
|
2,431
|
301
|
1,817
|
20,406
|
|
Less net income attributable to noncontrolling interest
|
3,772
|
499
|
(72)
|
452
|
4,651
|
|
Net income attributable to
LHC Group, Inc.’s
common stockholders
|
$ 12,085
|
$ 1,932
|
$ 373
|
$ 1,365
|
$ 15,755
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||
|
2016
|
2015
|
2016
|
2015
|
|
|
Key Data:
|
||||
|
Home-Health Services:
|
||||
|
Home Health
|
||||
|
Locations
|
283
|
276
|
283
|
276
|
|
Acquired
|
2
|
0
|
5
|
1
|
|
De novo
|
0
|
2
|
1
|
2
|
|
Divested/Consolidated
|
3
|
1
|
6
|
4
|
|
Total new admissions
|
38,949
|
35,211
|
78,073
|
71,176
|
|
Medicare new admissions
|
25,817
|
23,862
|
51,953
|
48,737
|
|
Average daily census
|
38,357
|
36,834
|
38,262
|
36,607
|
|
Average Medicare daily census
|
28046
|
27,336
|
28,143
|
27,262
|
|
Medicare completed and billed episodes
|
50,479
|
47,825
|
98,965
|
94,509
|
|
Average Medicare case mix for completed and billed Medicare episodes
|
1.06
|
1.02
|
1.04
|
1.01
|
|
Average reimbursement per completed and billed Medicare episodes
|
$ 2,697
|
$ 2,577
|
$ 2,654
|
$ 2,544
|
|
Total visits
|
1,149,895
|
1,041,777
|
2,276,729
|
2,031,912
|
|
Total Medicare visits
|
840,961
|
773,422
|
1,670,228
|
1,515,272
|
|
Average visits per completed and billed Medicare episodes
|
16.7
|
16.4
|
16.9
|
16.0
|
|
Organic growth:(1)
|
||||
|
Net revenue
|
4.6%
|
2.7%
|
6.4%
|
4.1%
|
|
Net Medicare revenue
|
4.2%
|
1.7%
|
4.8%
|
2.9%
|
|
Total new admissions
|
8.7%
|
1.7%
|
8.0%
|
4.4%
|
|
Medicare new admissions
|
6.4%
|
0.9%
|
4.9%
|
4.1%
|
|
Average daily census
|
2.2%
|
-0.4%
|
2.5%
|
-1.8%
|
|
Average Medicare daily census
|
0.7%
|
-0.9%
|
1.2%
|
-2.6%
|
|
Medicare completed and billed episodes
|
3.7%
|
-0.6%
|
2.9%
|
0.3%
|
|
Community-Based Services:
|
||||
|
Locations
|
11
|
13
|
11
|
13
|
|
Acquired
|
0
|
0
|
0
|
1
|
|
De novo
|
0
|
0
|
0
|
0
|
|
Divested/Consolidated
|
0
|
1
|
2
|
1
|
|
Average daily census
|
1,619
|
1,337
|
1,613
|
1,316
|
|
Billable hours
|
330,350
|
303,596
|
634,837
|
597,612
|
|
Revenue per billable hour
|
$ 32
|
$ 34
|
$ 33
|
$ 34
|
|
Hospice-Based Services:
|
||||
|
Locations
|
62
|
38
|
62
|
38
|
|
Acquired
|
1
|
0
|
7
|
0
|
|
De novo
|
0
|
0
|
0
|
0
|
|
Divested/Consolidated
|
0
|
0
|
1
|
0
|
|
Admissions
|
2,523
|
1,497
|
4,986
|
2,978
|
|
Average daily census
|
2,615
|
1,446
|
2,520
|
1,402
|
|
Patient days
|
237,968
|
131,565
|
458,662
|
253,744
|
|
Average revenue per patient day
|
$ 142
|
$ 142
|
$ 141
|
$ 140
|
|
Facility-Based Services:
|
||||
|
Long-term Acute Care
|
||||
|
Locations
|
8
|
8
|
8
|
8
|
|
Patient days
|
13,929
|
15,393
|
29,466
|
31,555
|
|
Average revenue per patient day
|
$ 1,239
|
$ 1,125
|
$ 1,224
|
$ 1,157
|
-
Organic growth is calculated as the sum of same store plus de novo for the period divided by total from the same period in the prior year.
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC.
|
Three Months
Ended
June 30, 2016
|
Six
Months
Ended
June 30, 2016
|
|
|
Income before income taxes
|
$ 13,060
|
$ 26,088
|
|
Severance (1)
|
1,134
|
1,134
|
|
Loss on disposal of asset (2)
|
996
|
996
|
|
Transaction related costs (3)
|
686
|
686
|
|
Interest expense related to reduction to uncertain tax position (5)
|
(382)
|
(382)
|
|
Adjusted pre-tax income
|
$15,494
|
$28,522
|
|
Income tax expense (4)
|
(4,751)
|
(10,093)
|
|
Reduction to uncertain tax position (5)
|
(1,601)
|
(1,601)
|
|
Adjusted net income attributable to LHC Group, Inc.’s common stockholders
|
$ 9,142
|
$ 16,828
|
|
Three Months
Ended
June 30, 2016
|
Six
Months
Ended
June 30, 2016
|
|
|
Net income attributable to LHC Group, Inc.’s common stockholders
per diluted share
|
$ 0.54
|
$ 0.97
|
|
Add:
|
||
|
Severance (1)
|
0.04
|
0.04
|
|
Loss on disposal of asset (2)
|
0.03
|
0.03
|
|
Transaction related costs (3)
|
0.02
|
0.02
|
|
Subtract:
|
||
|
Reduction to uncertain tax position and related interest expense (5)
|
(0.11)
|
(0.11)
|
|
Adjusted net income attributable to LHC Group, Inc.’s common stockholders per diluted share
|
$ 0.52
|
$ 0.95
|
(1) On April 8, 2016, the Company’s Executive Vice President, Chief Financial Officer and Treasurer tendered her resignation, effective on April 30, 2016. In connection with her resignation and the termination of her employment, she received the compensation and benefits provided for in Section 7(a) of her employment agreement that was filed with the Securities and Exchange Commission.
(2) Loss on disposal of damaged aircraft and associated legal and professional fees
(3) Cost associated with Professional Healthcare Resources and East Arkansas Health Holdings transactions.
(4) Income tax expense is calculated at 41% of our adjusted pre-tax income less the $1.6 million reduction to the uncertain tax position.
(5) During the June 30, 2016 quarter, the Company reduced the unrecognized tax benefit by $1.6 million and related interest of $383,000 to reflect its expectations of the potential outcome of the appeal to defend its original position of the deductibility of the full settlement amount on its 2011 tax return.
We have included certain financial measures in this press release, including adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share, which are “non-GAAP financial measures” as defined under the rules and regulations promulgated by the SEC. We define adjusted net income attributable to LHC Group as net income attributable to LHC Group adjusted for the after-tax impact of severance costs, loss on disposal of asset, acquisition transaction costs and reduction in unrecognized tax benefit and related interest. We define adjusted net income attributable to LHC Group per diluted share as net income attributable to LHC Group adjusted for the after-tax impact of severance costs, loss on disposal of asset, acquisition transaction costs and reduction in unrecognized tax benefit and related interest divided by weighted average diluted shares outstanding.
Adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share are supplemental measures of our performance and are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). Adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share are not measures of our financial performance under GAAP and should not be considered as alternatives to net income attributable to LHC Group, net income attributable to LHC Group per diluted share or any other performance measures derived in accordance with GAAP. Our measurements of adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share may not be comparable to similarly titled measures of other companies. We have included information concerning adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share in this press release because we believe that such information is used by certain investors as measures of a company’s historical performance. We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of issuers of equity securities, many of which present adjusted net income and adjusted net income per diluted share when reporting their results. Our presentation of adjusted net income attributable to LHC Group and adjusted net income attributable to LHC Group per diluted share should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
###