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CST: 06/12/2019 20:42:19   

LHC Group Announces Second Quarter 2019 Financial Results

121 Days ago

Strong Execution on Organic Growth and M&A Strategy 
Affirms 2019 Guidance

LAFAYETTE, La., Aug. 07, 2019 (GLOBE NEWSWIRE) -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended June 30, 2019. Unless otherwise noted, all results for the second quarter ended June 30, 2019 are compared with the second quarter ended June 30, 2018.

Second Quarter of 2019 Financial Results - All Businesses on Track for First Half of 2019

  • Net service revenue increased 3.2% to $517.8 million.
  • Net income attributable to LHC Group’s common stockholders increased 48.8% to $25.0 million. Earnings per diluted share attributable to LHC Group’s common stockholders increased 45.4% to $0.80 which includes the effect of costs and expenses described within the adjusted results below. 
  • Adjusted net income attributable to LHC Group’s common stockholders increased 28.8% to $33.3 million. Adjusted earnings per diluted share attributable to LHC Group’s common stockholders increased 27.4% to $1.07.
  • Adjusted results for the second quarter of 2019 exclude transaction and other transition related costs and expenses and charges and expenses related to certain closures and relocations in the aggregate amount of $8.3 million after tax, or $0.27 per diluted share.
  • Organic growth in home health admissions was 9.1% excluding Almost Family locations.
  • Organic growth in home health revenue was 6.6% excluding Almost Family locations.
  • Organic growth in hospice admissions was 9.6% excluding Almost Family locations.

A reconciliation of all non-GAAP financial results in this release appears on page 12.

Operational and Strategic Highlights

  • LHC Group quality and patient satisfaction scores continue to exceed the national average and outpace industry peers with 99% of its same store locations having CMS Quality Star ratings of four stars or greater when excluding Almost Family locations and other recent acquisitions. We continue to experience quarter over quarter improvement in each of our quality and patient satisfaction scores through our Almost Family locations and other recently acquired locations.
  • LHC Group realized a total of approximately $7.8 million in pre-tax cost synergies in the second quarter from its acquisition of Almost Family, which now brings the realized cost synergies to an annual run rate of $31.2 million.
  • To date in 2019, LHC Group has acquired or agreed to acquire 15 home health, six hospice, and three home and community based services locations in seven states and the District of Columbia, the majority of which are hospital joint ventures. These acquisitions represent approximately $81.0 million in annualized revenue.

Commenting on the results, Keith G. Myers, LHC Group’s Chairman and Chief Executive Officer, said, “Since our founding 25 years ago, change in the healthcare industry is something to which we are accustomed and has transformed us into the leader we are today in in-home healthcare. Navigating change requires organizational alignment, leadership and clinical alignment. With a seat at the table with our more than 350 hospital system joint venture partners and with payors in value-based arrangements, we are uniquely positioned to benefit from the transition of patients to the most clinically appropriate, cost-effective setting possible – within the comfort and privacy of the home or place of residence.” 

“At LHC Group, we are always clinically focused and ensure that within any model of care that we are patient-first, outcomes-based, and deliver industry leading quality and patient satisfaction,” added Myers. “This commitment, backed by an exceptionally deep team and national scale, continues to generate strong organic growth. It also provides the foundation for the compelling value proposition so attractive to joint venture partners and for the pursuit of new growth opportunities that can extend our in-home healthcare footprint.”

M&A Strategy - Executing on Strong Pipeline of Joint Ventures and Acquisitions
On January 31, 2019, LHC Group and Unity Health finalized an equity partnership agreement to purchase and share ownership of two home health providers in Arkansas: Unity Health – White County Medical Center Home Health in Searcy and Unity Health – Harris Medical Center Home Health in Newport. These agencies, which serve their local communities and the Northeast Arkansas region, represent annualized revenue of approximately $3.5 million.

LHC Group and Geisinger Home Health and Hospice, and AtlantiCare Home Health and Hospice finalized their joint venture partnership to enhance home health and hospice services at Geisinger locations in Pennsylvania on April 1, 2019 and at AtlantiCare - a Member of Geisinger in Atlantic County, New Jersey, on June 1, 2019. These agencies, which serve their local communities in the states of Pennsylvania and New Jersey, represent annualized revenue of approximately $35.0 million.

On July 30, 2019, LHC Group agreed to purchase a home health and home and community based services (HCBS) provider located in Baltimore from VNA of Maryland and Elite Home Care Services. The agreement includes 100 percent of the provider’s assets and is expected to close on September 1, 2019, subject to customary closing conditions. LHC Group expects annualized revenue from this acquisition of approximately $35.0 million.

On August 1, 2019, LHC Group and Capital Regional Medical Center (CRMC) finalized their joint venture to purchase from SSM Health the assets of three home health and hospice locations in Jefferson City and Mexico, Missouri. These agencies, which serve their local communities in the state of Missouri, represent annualized revenue of approximately $3.5 million.

On August 1, 2019, LHC Group and Atmore Community Hospital finalized a JV partnership agreement to purchase and share ownership of a home health provider in Atmore, Alabama. The provider will continue operating under the name Atmore Community Home Care, serving patients and families in the community and the region with in-home healthcare. LHC Group expects annualized revenue from this joint venture of approximately $2.0 million.

On August 1, 2019, LHC Group purchased two HCBS locations in West Union and Waverly, Ohio from Comfort Home Care. The agreement includes 100 percent of each location’s assets, which will be consolidated under LHC Group’s existing HCBS provider, HomeCare by Blackstone, in Columbus. LHC Group expects annualized revenue from this acquisition of approximately $2.0 million.

Full Year 2019 Guidance Affirmed - 21.1% Year-over-Year Adjusted Earnings Growth at the Midpoint Continues to be Fueled by Strong Organic Growth and Acquisition Accretion

The Company affirmed its full year 2019 guidance issued on May 8, 2019 for net service revenue in a range of $2.09 billion to $2.14 billion; adjusted earnings per diluted share in a range of $4.25 to $4.35; and Adjusted EBITDA, less non-controlling interest, in a range of $214 million to $220 million.

The Company’s guidance ranges do not take into account the impact of future reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, location closures, if any, or future legal expenses, if necessary. The adjusted earnings guidance for 2019 is presented on a non-GAAP basis, as it does not include the impact of transaction related costs, integration related expenses or other expenses related to the acquisition of Almost Family or other acquisitions. Given the difficulty in predicting the future amount and timing of these expenses, the Company cannot reasonably provide a full reconciliation of its fiscal year 2019 adjusted earnings per share guidance to GAAP earnings per share.

Joshua L. Proffitt, LHC Group’s Chief Financial Officer, added, “We are in growth mode for the balance of 2019 and 2020 as we are confident we will thrive no matter the eventual outcome of PDGM or other regulatory initiatives. With the achievement of annualized run rate pre-tax synergies of $31.2 million from the Almost Family acquisition, we continue planning for the next phase of both earnings and top line growth that we expect in 2020 from completion of our final phases of the Almost Family integration, the pursuit of additional revenue synergies and our continual improvements in quality of care and patient satisfaction Star ratings across the former Almost Family locations. Our strong capital structure and available liquidity provide a solid advantage for us to maintain and even increase our M&A activity.”

Conference Call
LHC Group will host a conference call on Thursday, August 8, 2019, at 9:00 a.m. Eastern time to discuss its second quarter 2019 results. The toll-free number to call for this interactive teleconference is (866) 393‑1608 (international callers: (973) 890-8327). A telephonic replay of the conference call will be available through midnight on August 15, 2019, by dialing (855) 859‑2056 (international callers: (404) 537-3406) and entering confirmation number 2959016.

The Company has posted supplemental financial information on the second quarter results that it will reference during the conference call. The supplemental information can be found under Quarterly Results on the Company’s Investor Relations page. A live webcast 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 one hour following the conclusion of the live broadcast.

About LHC Group, Inc.
LHC Group, Inc. is a national provider of in-home healthcare services and innovations, providing quality, affordable healthcare services to patients in the privacy and comfort of their home or place of residence. LHC Group’s services cover a wide range of healthcare needs for patients and families dealing with illness, injury, or chronic conditions. The company’s 32,000 employees deliver home health, hospice, home and community based services, and facility-based care in 35 states and the District of Columbia - reaching 60 percent of the U.S. population aged 65 and older. LHC Group is the preferred in-home healthcare partner for 350 leading hospitals around the country. In 2019, the company was named to the inaugural Forbes list of “America’s Best-in-State Employers.”

Forward-looking Statements
This press release contains “forward-looking statements” (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of the Company, or anticipated benefits of the transaction. Words such as “anticipate,” “expect,” “project,” “intend,” “believe,” “will,” “estimates,” “may,” “could,” “should” and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to: our 2019 revenue and earnings guidance, statements about the benefits of the acquisition, including anticipated earnings accretion, synergies and cost savings and the timing thereof; the Company’s plans, objectives, expectations, projections and intentions; and other statements relating to the transaction that are not historical facts. Forward-looking statements are based on information currently available to the Company and involve estimates, expectations and projections. Investors are cautioned that all such forward-looking statements are subject to risks and uncertainties, and important factors could cause actual events or results to differ materially from those indicated by such forward-looking statements. With respect to the acquisition, these risks, uncertainties and factors include, but are not limited to: the risk that the businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the transaction may not be fully realized or may take longer to realize than expected; the diversion of management time on integration-related issues; and the risk that costs associated with the integration of the businesses are higher than anticipated. With respect to the Company’s  businesses, these risks, uncertainties and factors include, but are not limited to: changes in, or failure to comply with, existing government regulations that impact the Company’s businesses; legislative proposals for healthcare reform; the impact of changes in future interpretations of fraud, anti-kickback, or other laws; changes in Medicare and Medicaid reimbursement levels; changes in laws and regulations with respect to Accountable Care Organizations; changes in the marketplace and regulatory environment for Health Risk Assessments; decrease in demand for the Company’s services; the potential impact of the transaction on relationships with customers, joint venture and other partners, competitors, management and other employees, including the loss of significant contracts or reduction in revenues associated with major payor sources; ability of customers to pay for services; risks related to any current or future litigation proceedings; potential audits and investigations by government and regulatory agencies, including the impact of any negative publicity or litigation; the ability to attract new customers and retain existing customers in the manner anticipated; the ability to hire and retain key personnel; increased competition from other entities offering similar services as offered by the  Company; reliance on and integration of information technology systems; ability to protect intellectual property rights; impact of security breaches, cyber-attacks or fraudulent activity on the Company’s reputation; the risks associated with assumptions the parties make in connection with the parties’ critical accounting estimates and legal proceedings; the risks associated with the Company’s expansion strategy, the successful integration of recent acquisitions, and if necessary, the ability to relocate or restructure current facilities; and the potential impact of an economic downturn or effects of tax assessments or tax positions taken, risks related to goodwill and other intangible asset impairment, tax adjustments, anticipated tax rates, benefit or retirement plan costs, or other regulatory compliance costs.

Many of these risks, uncertainties and assumptions are beyond the Company’s ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the information currently available to the Company on the date they are made, and the Company does not undertake any obligation to update publicly or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release. The Company does not give any assurance (1) that the Company will achieve its guidance or expectations, or (2) concerning any result or the timing thereof. All subsequent written and oral forward-looking statements concerning the transaction or other matters and attributable to the Company or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

  June 30,
 2019
  December
31, 2018
  (Unaudited)    
ASSETS      
Current assets:      
Cash $ 26,737     $ 49,363  
Receivables:      
Patient accounts receivable 272,941     252,592  
Other receivables 6,153     6,658  
Amounts due from governmental entities 1,018     830  
Total receivables 280,112     260,080  
Prepaid income taxes 4,511     11,788  
Prepaid expenses 25,134     24,775  
Other current assets 21,310     20,899  
Total current assets 357,804     366,905  
Property, building and equipment, net of accumulated depreciation of $62,354 and $55,253, respectively 80,088     79,563  
Goodwill 1,188,227     1,161,717  
Intangible assets, net of accumulated amortization of $15,854 and $15,176, respectively 296,716     297,379  
Assets held for sale 2,500     2,850  
Operating lease right of use asset 84,638      
Other assets 19,882     20,301  
Total assets $ 2,029,855     $ 1,928,715  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable and other accrued liabilities $ 79,038     $ 77,135  
Salaries, wages, and benefits payable 81,645     84,254  
Self-insurance reserves 32,570     32,776  
Current operating lease liabilities 26,453      
Current portion of long-term debt     7,773  
Amounts due to governmental entities 5,065     4,174  
Total current liabilities 224,771     206,112  
Deferred income taxes 46,919     43,306  
Income taxes payable 4,671     4,297  
Revolving credit facility 230,000     235,000  
Long term notes payable     930  
Operating lease payable 59,980      
Total liabilities 566,341     489,645  
Noncontrolling interest — redeemable 15,467     14,596  
Stockholders’ equity:      
LHC Group, Inc. stockholders’ equity:      
Preferred stock – $0.01 par value; 5,000,000 shares authorized; none issued or outstanding      
Common stock — $0.01 par value; 60,000,000 shares authorized in 2019 and 2018; 35,837,779 and 35,636,414 shares issued in 2019 and 2018, respectively 358     356  
Treasury stock —  5,052,927 and 4,958,721shares at cost, respectively (57,893 )   (49,374 )
Additional paid-in capital 941,923     937,968  
Retained earnings 471,831     427,975  
Total LHC Group, Inc. stockholders’ equity 1,356,219     1,316,925  
Noncontrolling interest — non-redeemable 91,828     107,549  
Total equity 1,448,047     1,424,474  
Total liabilities and equity $ 2,029,855     $ 1,928,715  
               


LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)

  Three Months Ended June 30,   Six Months Ended June 30,
  2019   2018   2019   2018
Net service revenue $ 517,842     $ 502,024     $ 1,020,427     $ 793,078  
Cost of service revenue 325,860     321,004     646,852     509,622  
Gross margin 191,982     181,020     373,575     283,456  
General and administrative expenses 148,584     149,214     293,805     241,245  
Other intangible impairment charge 1,018     778     7,337     778  
Operating income 42,380     31,028     72,433     41,433  
Interest expense (2,885 )   (3,202 )   (5,937 )   (4,652 )
Income before income taxes and noncontrolling interest 39,495     27,826     66,496     36,781  
Income tax expense 9,557     7,170     13,157     8,147  
Net income 29,938     20,656     53,339     28,634  
Less net income attributable to noncontrolling interests 4,938     3,859     9,483     6,842  
Net income attributable to LHC Group, Inc.’s common stockholders $ 25,000     $ 16,797     $ 43,856     $ 21,792  
               
Earnings per share:              
Basic $ 0.81     $ 0.55     $ 1.42     $ 0.90  
Diluted $ 0.80     $ 0.55     $ 1.41     $ 0.89  
Weighted average shares outstanding:              
Basic 30,960     30,498     30,899     24,179  
Diluted 31,201     30,742     31,188     24,403  


LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

  Six Months Ended
 June 30,
  2019   2018
Operating activities:      
Net income $ 53,339     $ 28,634  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization expense 8,400     7,548  
Amortization of operating lease right of use asset 15,528      
Stock-based compensation expense 4,392     3,919  
Deferred income taxes 4,821     1,714  
Loss (gain) on disposal of assets 312     (126 )
Impairment of intangibles and other 7,337     778  
Changes in operating assets and liabilities, net of acquisitions:      
Receivables (22,704 )   (18,897 )
Prepaid expenses and other assets (324 )   (6,521 )
Prepaid income taxes 5,063     4,624  
Accounts payable and accrued expenses (18,735 )   8,729  
Income taxes payable 374      
Net amounts due to/from governmental entities 528     (704 )
Net cash provided by operating activities 58,331     29,698  
Investing activities:      
Purchases of property, building and equipment (7,599 )   (13,760 )
Cash acquired from business combinations, net of cash paid (20,431 )   13,086  
Net cash used in investing activities (28,030 )   (674 )
Financing activities:      
Proceeds from line of credit 25,000     270,084  
Payments on line of credit (30,000 )   (278,884 )
Proceeds from employee stock purchase plan 931     634  
Payments on debt (7,650 )   135  
Payments on deferred financing fees     (1,881 )
Noncontrolling interest distributions (13,857 )   (5,763 )
Withholding taxes paid on stock-based compensation (8,519 )   (4,095 )
Purchase of additional controlling interest (18,748 )   (55 )
Exercise of options (84 )    
Sale of noncontrolling interest     3,322  
Net cash (used in) financing activities (52,927 )   (16,503 )
Change in cash (22,626 )   12,521  
Cash at beginning of period 49,363     2,849  
Cash at end of period $ 26,737     $ 15,370  
Supplemental disclosures of cash flow information:      
Interest paid $ 4,038     $ 3,112  
Income taxes paid $ 4,042     $ 2,139  
               

Non-cash operating activity: The Company recorded $98.1 million in operating lease right of use assets in exchange for lease obligations.

Non-cash financing activity:  The Company accrued $1.0 million for capital expenditures primarily related to the home office expansion project during the six months ended June 30, 2019.

LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)

  Three Months Ended June 30, 2019
  Home
health
services
  Hospice
services
  Home and
community-
based
services
  Facility-
based
services
  HCI   Total
Net service revenue $ 375,253     $ 55,057     $ 52,414     $ 27,975     $ 7,143     $ 517,842  
Cost of service revenue 230,545     34,858     39,505     17,572     3,380     325,860  
General and administrative expenses 108,958     15,096     11,213     9,335     3,982     148,584  
Other intangible impairment charge 748     270                 1,018  
Operating income (loss) 35,002     4,833     1,696     1,068     (219 )   42,380  
Interest expense (2,023 )   (323 )   (284 )   (170 )   (85 )   (2,885 )
Income (loss) before income taxes and noncontrolling interest 32,979     4,510     1,412     898     (304 )   39,495  
Income tax expense (benefit) 8,070     1,581     (171 )   148     (71 )   9,557  
Net income (loss) 24,909     2,929     1,583     750     (233 )   29,938  
Less net income (loss) attributable to noncontrolling interests 3,948     898     (267 )   365     (6 )   4,938  
Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 20,961     $ 2,031     $ 1,850     $ 385     $ (227 )   $ 25,000  
Total assets $ 1,407,221     $ 234,789     $ 240,746     $ 77,686     $ 69,413     $ 2,029,855  
                                               


  Three Months Ended June 30, 2018
  Home
health
services
  Hospice
services
  Home and
community-
based
services
  Facility-
based
services
  HCI   Total
Net service revenue $ 360,276     $ 50,554     $ 52,753     $ 28,304     $ 10,137     $ 502,024  
Cost of service revenue 223,490     32,998     39,682     19,307     5,527     321,004  
General and administrative expenses 105,674     15,108     12,444     10,601     5,387     149,214  
Other intangible impairment charge 291             487         778  
Operating income (loss) 30,821     2,448     627     (2,091 )   (777 )   31,028  
Interest expense (2,256 )   (473 )   (158 )   (159 )   (156 )   (3,202 )
Income (loss) before income taxes and noncontrolling interest 28,565     1,975     469     (2,250 )   (933 )   27,826  
Income tax expense (benefit) 7,091     483     139     (313 )   (230 )   7,170  
Net income (loss) 21,474     1,492     330     (1,937 )   (703 )   20,656  
Less net income (loss) attributable to noncontrolling interests 3,810     412     (90 )   (207 )   (66 )   3,859  
Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 17,664     $ 1,080     $ 420     $ (1,730 )   $ (637 )   $ 16,797  
Total assets $ 1,306,773     $ 189,447     $ 255,456     $ 66,665     $ 63,329     $ 1,881,670  
                                               

LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)

  Six Months Ended June 30, 2019
  Home
health
services
  Hospice
services
  Home and
community-
based
services
  Facility-
based
services
  HCI   Total
Net service revenue $ 738,288     $ 106,793     $ 104,199     $ 55,676     $ 15,471     $ 1,020,427  
Cost of service revenue 456,668     68,034     79,360     35,304     7,486     646,852  
General and administrative expenses 213,797     29,949     22,195     18,512     9,352     293,805  
Other intangible impairment charges 7,066     271                 7,337  
Operating income (loss) 60,757     8,539     2,644     1,860     (1,367 )   72,433  
Interest expense (4,161 )   (666 )   (585 )   (350 )   (175 )   (5,937 )
Income (loss) before income taxes and noncontrolling interest 56,596     7,873     2,059     1,510     (1,542 )   66,496  
Income tax expense (benefit) 11,278     2,027     (20 )   153     (281 )   13,157  
Net income (loss) 45,318     5,846     2,079     1,357     (1,261 )   53,339  
Less net income (loss) attributable to noncontrolling interests 7,728     1,499     (577 )   846     (13 )   9,483  
Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 37,590     $ 4,347     $ 2,656     $ 511     $ (1,248 )   $ 43,856  
                                               


  Six Months Ended June 30, 2018
  Home
health
services
  Hospice
services
  Home and
community-
based
services
  Facility-
based
services
  HCI   Total
Net service revenue $ 564,463     $ 93,180     $ 66,844     $ 58,454     $ 10,137     $ 793,078  
Cost of service revenue 353,651     61,016     50,472     38,956     5,527     509,622  
General and administrative expenses 171,963     28,406     15,742     19,747     5,387     241,245  
Other intangible impairment charges 291             487         778  
Operating income 38,558     3,758     630     (736 )   (777 )   41,433  
Interest expense (3,344 )   (690 )   (229 )   (232 )   (157 )   (4,652 )
Income (loss) before income taxes and noncontrolling interest 35,214     3,068     401     (968 )   (934 )   36,781  
Income tax expense (benefit) 7,814     594     124     (155 )   (230 )   8,147  
Net income (loss) 27,400     2,474     277     (813 )   (704 )   28,634  
Less net income (loss) attributable to noncontrolling interests 6,047     829     (69 )   101     (66 )   6,842  
Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 21,353     $ 1,645     $ 346     $ (914 )   $ (638 )   $ 21,792  
                                               


LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATIISTICAL AND FINANCIAL DATA
(Unaudited)

    Three Months Ended
June 30,
  Six Months Ended
June 30,
Key Data:   2019   2018   2019   2018
                 
Home Health Services:                
Locations   539       568     539       568  
Acquired   7       253     15       254  
De novo                    
Divested/consolidated   (8 )     (4 )   (16 )     (5 )
Total new admissions   95,198       93,905     191,388       147,028  
Medicare new admissions   57,391       59,012     116,284       92,040  
Average daily census   77,137       76,708     76,925       76,708  
Average Medicare daily census   49,827       51,279     49,918       51,279  
Medicare completed and billed episodes   93,824       96,370     184,795       150,908  
Average Medicare case mix for completed and billed Medicare episodes   1.10       1.10     1.10       1.09  
Average reimbursement per completed and billed Medicare episodes   $ 3,084       $ 2,933     $ 3,067       $ 2,871  
Total visits   2,562,147       2,505,210     5,083,156       4,000,328  
Total Medicare visits   1,686,243       1,703,373     3,353,150       2,712,798  
Average visits per completed and billed Medicare episodes   18.0       17.6     18.1       18.0  
Organic growth excluding Almost Family (1)(2)                
Net revenue   6.6   %   9.0 %   6.8   %   9.0 %
Net Medicare revenue   4.7   %   5.1 %   3.2   %   4.9 %
Total new admissions   9.1   %   7.9 %   7.4   %   7.2 %
Medicare new admissions   1.9   %   5.4 %   1.0   %   4.8 %
Average daily census   4.6   %   2.3 %   4.3   %   2.9 %
Average Medicare daily census   (0.6 ) %   (1.0 )%   (1.2 ) %   (0.8 )%
Medicare completed and billed episodes   0.2   %   2.4 %   (0.2 ) %   1.0 %
                 
Hospice Services:                
Locations   104       106     104       106  
Acquired   5       15     6       15  
De novo                    
Divested/Consolidated   (4 )         (5 )      
Admissions   4,637       4,528     9,225       8,582  
Average daily census   4,070       3,659     3,911       3,399  
Patient days   370,407       332,978     707,875       615,198  
Average revenue per patient day   $ 152.44       $ 153.28     $ 154.42       $ 153.27  
Organic growth excluding Almost Family: (1)(2)                
Total new admissions   9.6   %   2.5 %   7.9   %   3.8 %
                 
Home and Community-Based Services:                
Locations   80       80     80       80  
Acquired   3       64     3       64  
De novo                   4  
Divested/Consolidated   (3 )         (3 )      
Average daily census   14,002       14,557     14,033       14,528  
Billable hours   2,292,719       2,227,831     4,564,613       2,706,614  
Revenue per billable hour   $ 23.46       $ 24.13     $ 23.44       $ 25.15  
                 
Facility-Based Services:                
Long-term Acute Care                
Locations   12       12     12       12  
Acquired                    
Divested/Consolidated         (2 )         (2 )
Patient days   19,970       21,303     39,606       43,863  
Average revenue per patient day   $ 1,270       $ 1,300     $ 1,278       $ 1,274  
Occupancy rate   70.8   %   69.9 %   70.6   %   72.4 %

(1) 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.
(2) Almost Family locations remain counted as acquired locations due to continued system integrations, which will be completed by the end of 2019.


LHC GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF REVENUE AFTER ADOPTION OF ASU 2014-09
(Amounts in thousands)
(Unaudited)

    Three Months Ended
 June 30,
Six Months Ended
 June 30,
    2019   2018   2019   2018
Revenue   $ 525,120     $ 509,742     $ 1,036,057     $ 805,722  
Less:  Implicit price concession (1)   7,278     7,718     15,630     12,644  
Net service revenue   $ 517,842     $ 502,024     $ 1,020,427     $ 793,078  
                                 

RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC.
(Amounts in thousands)
(Unaudited)

    Three Months Ended
 June 30,
Six Months Ended
 June 30,
    2019   2018   2019   2018
Net income attributable to LHC Group, Inc.’s common stockholders   $ 25,000     $ 16,797     $ 43,856     $ 21,792  
Add (net of tax):                
AFAM and other acquisition expenses (2)   6,713     5,860     11,981     12,171  
Closures/relocations/consolidations (3)   1,537     2,464     3,781     2,464  
Income tax effect of adjustments to income       689         689  
Provider moratorium impairment (4)           4,332      
Adjusted net income attributable to LHC Group, Inc.’s common stockholders   $ 33,250     $ 25,810     $ 63,950     $ 37,116  
                                 

RECONCILIATION OF ADJUSTED NET INCOME
ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE
(Amounts in thousands)
(Unaudited)  

    Three Months Ended
 June 30,
Six Months Ended
 June 30,
    2019   2018   2019   2018
Net income attributable to LHC Group, Inc.’s common stockholders   $ 0.80     $ 0.55     $ 1.41     $ 0.89  
Add (net of tax):                
  AFAM and other acquisition expenses (2)   0.22     0.19     0.39     0.53  
  Closures/relocations/consolidations (3)   0.05     0.08     0.12     0.08  
  Income tax effect of adjustments to income       0.02         0.02  
  Provider moratorium impairment (4)           0.14      
Adjusted net income attributable to LHC Group, Inc.’s common stockholders   $ 1.07     $ 0.84     $ 2.06     $ 1.52  
  1. Provision for bad debts are classified as implicit price concessions in determining the transaction price of the Company's net service revenue.
  2. Transition, integration and Homecare Homebase conversion expenses and other costs associated with the acquisition of Almost Family and other recently announced or completed acquisitions. ($9.3 million pre-tax in the three months ended June 30, 2019 and $16.6 million in the six months ended June 30, 2019, which includes a $2.2 million lease termination charge that occurred in the second quarter of 2019).
  3. Expenses and impairments associated with the closure or consolidation of 13 locations in the second quarter of 2019 along with residual costs and expenses in connection with the closures in the first quarter of 2019. ($2.1 million pre-tax in the three months ended June 30, 2019 and $5.2 million in the six months ended June 30, 2019).
  4. During the six months ended June 30, 2019, the Company recorded $6.0 million of moratoria impairment as a result of the Centers for Medicare and Medicaid Services (“CMS”) action to remove all federal moratoria with regard to Medicare provider enrollment.

Contact: 
Eric Elliott 
Senior Vice President of Finance
(337) 233-1307
eric.elliott@lhcgroup.com 

 

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