Press Release

LHC Group Announces Second Quarter 2019 Financial Results

Company Release - 8/7/2019 5:05 PM ET

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 receivable272,941  252,592 
Other receivables6,153  6,658 
Amounts due from governmental entities1,018  830 
Total receivables280,112  260,080 
Prepaid income taxes4,511  11,788 
Prepaid expenses25,134  24,775 
Other current assets21,310  20,899 
Total current assets357,804  366,905 
Property, building and equipment, net of accumulated depreciation of $62,354 and $55,253, respectively80,088  79,563 
Goodwill1,188,227  1,161,717 
Intangible assets, net of accumulated amortization of $15,854 and $15,176, respectively296,716  297,379 
Assets held for sale2,500  2,850 
Operating lease right of use asset84,638   
Other assets19,882  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 payable81,645  84,254 
Self-insurance reserves32,570  32,776 
Current operating lease liabilities26,453   
Current portion of long-term debt  7,773 
Amounts due to governmental entities5,065  4,174 
Total current liabilities224,771  206,112 
Deferred income taxes46,919  43,306 
Income taxes payable4,671  4,297 
Revolving credit facility230,000  235,000 
Long term notes payable  930 
Operating lease payable59,980   
Total liabilities566,341  489,645 
Noncontrolling interest — redeemable15,467  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, respectively358  356 
Treasury stock —  5,052,927 and 4,958,721shares at cost, respectively(57,893) (49,374)
Additional paid-in capital941,923  937,968 
Retained earnings471,831  427,975 
Total LHC Group, Inc. stockholders’ equity1,356,219  1,316,925 
Noncontrolling interest — non-redeemable91,828  107,549 
Total equity1,448,047  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 revenue325,860  321,004  646,852  509,622 
Gross margin191,982  181,020  373,575  283,456 
General and administrative expenses148,584  149,214  293,805  241,245 
Other intangible impairment charge1,018  778  7,337  778 
Operating income42,380  31,028  72,433  41,433 
Interest expense(2,885) (3,202) (5,937) (4,652)
Income before income taxes and noncontrolling interest39,495  27,826  66,496  36,781 
Income tax expense9,557  7,170  13,157  8,147 
Net income29,938  20,656  53,339  28,634 
Less net income attributable to noncontrolling interests4,938  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:       
Basic30,960  30,498  30,899  24,179 
Diluted31,201  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 expense8,400  7,548 
Amortization of operating lease right of use asset15,528   
Stock-based compensation expense4,392  3,919 
Deferred income taxes4,821  1,714 
Loss (gain) on disposal of assets312  (126)
Impairment of intangibles and other7,337  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 taxes5,063  4,624 
Accounts payable and accrued expenses(18,735) 8,729 
Income taxes payable374   
Net amounts due to/from governmental entities528  (704)
Net cash provided by operating activities58,331  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 credit25,000  270,084 
Payments on line of credit(30,000) (278,884)
Proceeds from employee stock purchase plan931  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 period49,363  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 revenue230,545  34,858  39,505  17,572  3,380  325,860 
General and administrative expenses108,958  15,096  11,213  9,335  3,982  148,584 
Other intangible impairment charge748  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 interest32,979  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 interests3,948  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 revenue223,490  32,998  39,682  19,307  5,527  321,004 
General and administrative expenses105,674  15,108  12,444  10,601  5,387  149,214 
Other intangible impairment charge291      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 interest28,565  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 interests3,810  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 revenue456,668  68,034  79,360  35,304  7,486  646,852 
General and administrative expenses213,797  29,949  22,195  18,512  9,352  293,805 
Other intangible impairment charges7,066  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 interest56,596  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 interests7,728  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 revenue353,651  61,016  50,472  38,956  5,527  509,622 
General and administrative expenses171,963  28,406  15,742  19,747  5,387  241,245 
Other intangible impairment charges291      487    778 
Operating income38,558  3,758  630  (736) (777) 41,433 
Interest expense(3,344) (690) (229) (232) (157) (4,652)
Income (loss) before income taxes and noncontrolling interest35,214  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 interests6,047  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 

 

LHC Group

Source: LHC Group