Press Release

LHC Group announces first quarter 2020 financial results

Updates response to COVID-19 pandemic

Company Release - 5/7/2020 4:45 PM ET

LAFAYETTE, La., May 07, 2020 (GLOBE NEWSWIRE) -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended March 31, 2020. Unless otherwise noted, all results are compared with the first quarter ended March 31, 2019.

First Quarter 2020 Financial Results

  • Net service revenue increased 2.0% to $512.9 million.
  • Net income attributable to LHC Group’s common stockholders increased 16.8% to $22.0 million. Earnings per diluted share attributable to LHC Group’s common stockholders increased 16.7% to $0.70.
  • Adjusted net income attributable to LHC Group’s common stockholders was $23.4 million, or $0.75 adjusted earnings per diluted share, compared with $30.7 million, or $0.98 per diluted share, in the same period in 2019. Adjusted results for the first quarter of 2020 exclude a pre-tax amount of $1.5 million in acquisition and de novo related expenses associated with acquisitions completed in late 2019 and in the first quarter of 2020 and $0.5 million in closure related expenses associated with residual cost from closures in the fourth quarter of 2019 as well as the first quarter of 2020.
  • EBITDA increased 12.0% to $33.3 million.
  • Adjusted EBITDA was $38.1 million compared with $46.1 million in the same period in 2019.
  • Organic growth in home health admissions was 7.1%.
  • Organic growth in hospice admissions was 0.2%.

A reconciliation of all non-GAAP financial results in this release appears on page 10.

Operational and Strategic Highlights

  • Across all operations of LHC Group, quality and patient satisfaction scores continue to exceed the national average and outpace industry peers.
  • 85% of LHC Group’s same store providers have CMS Quality Star ratings of four stars or greater when excluding 2019 acquisitions.
  • Home health organic admission growth was 7.1% in the first quarter of 2020 as compared to the same period in 2019. For the pre-COVID period of January 1, 2020 to March 14, 2020, LHC Group experienced home health organic admission growth of 10%.
  • On January 1, 2020, LHC Group completed the acquisition of eight home health and hospice providers in three states, all of which were hospital joint ventures. These acquisitions represent approximately $23.8 million in annualized revenue.

Commenting on the results, Keith G. Myers, LHC Group’s Chairman and Chief Executive Officer, said, “We experienced two distinct periods within the first quarter and the following weeks. The first - January 1 to March 14 - was highlighted by revenues, earnings and organic growth above our forecasts for the quarter, strong execution under our PDGM care model and an expanding pipeline of new acquisition opportunities. The second period - March 15 to March 31 - was marked by a global health pandemic. Our focus shifted to ensuring our employees had adequate supplies of personal protective equipment for their safety and in-turn to fulfill our mission to safely care for the patients, families and communities we are privileged to serve; and our efforts to support our joint venture partners and referral sources who needed to discharge or transfer as many patients as possible to an in-home setting. We have taken several proactive steps to be part of the solution to this national pandemic for our employees, patients, communities, hospital partners, referral sources, payors, and governmental partners at the local, state and federal levels. During both periods, our demonstration of LHC Group’s core purpose -- ‘It’s all about helping people’ -- has proven to be the true difference between success and failure. I’m proud of the teamwork, preparedness, adaptability and fearless nature of service our employees have shown throughout this pandemic.” 

COVID-19 Update 
Beginning in mid-March, the impact of the COVID-19 pandemic had an impact on our operations and financial results for the first quarter of 2020 with an expected continued impact in the second quarter. We incurred $2.9 million, or $0.07 per diluted share, in additional COVID-19 costs related to personal protective equipment (PPE) supplies and wages. We also benefitted from a tax benefit of $2.2 million, or $0.07 per diluted share, related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which lifts certain tax deduction limitations and eliminates 80% of taxable income limitations for Net Operating Losses (“NOL”), which we are now able to fully utilize NOLs associated with Almost Family prior to the merger.

We experienced lower patient volumes from our referral sources related to various COVID-19 policies implemented by local, state and federal public health and governmental authorities, a reduction in home visits, and a reduction in elective procedures. These reductions in patient volumes continued through mid-April but have begun to stabilize as we are beginning to see improvement in all of these areas.

We believe the impact that COVID-19 will have on future operations and financial results will depend upon many factors, most of which are beyond our control or ability to predict. Due to the lack of visibility created by the ongoing impact and disruption from COVID-19, we have withdrawn our previously issued guidance for the year ending December 31, 2020.

To create the safest environment possible for our employees, patients and communities we serve, in March we initiated employee pre-screening and protection protocols in accordance with Centers for Disease Control recommendations for all 32,000 employees that complemented our pre-existing infectious disease protocols for providing care in the home setting. LHC Group also introduced a number of programs to support our employees, including a special COVID-19 pandemic grant program as part of our 501(c)(3) LHC Group Purpose Fund that supports employees experiencing financial hardships, retirement plan amendments, special cash-in opportunities for accumulated paid time off, and expanded offerings in our employee assistance program while also implementing a wage supplement program designed to restore certain lost wages for frontline direct patient care-giving employees that qualify.

LHC Group has also implemented a number of cost containment initiatives, including eliminating non-essential travel and expenses along with employee flexing, furloughs, and other measures. We continue to have strong access to capital with over $385.4 million of available liquidity from cash and our revolving credit facility.

On March 30, 2020, we applied for advanced payments under the Medicare Accelerated and Advance Payment Program as provided for by the CARES Act. During April, we received funds totaling $307.6 million under this program. The accelerated Medicare payments are interest free and the program currently requires that the Centers for Medicare and Medicaid Services (“CMS”) recoup the accelerated payments beginning 120 days after receipt by the provider, by withholding future Medicare fee-for service payments for claims until such time as the full accelerated payment has been recouped. The program currently requires Medicare Part A providers to repay the funds within 210 days of receipt.

On April 10, 2020, we received funds totaling $87.5 million related to the Provider Relief Fund as provided for by the CARES Act. There was no impact on our financial statements for the quarter ended March 31, 2020 and we continue to evaluate how best to account for these funds in our future financial results.

Pre-COVID-19 and Post COVID-19 Trends
Please refer to the supplemental information that can be found under Quarterly Results on the Company’s Investor Relations page to access more detailed statistics on pre-COVID-19 and post-COVID-19 trends.

Outlook
Joshua L. Proffitt, LHC Group’s Chief Financial Officer, added, “The accelerating organic growth and results we generated in the first 11 weeks of the first quarter combined with our new care model and associated operational strategies under PDGM exceeded our previous expectations. We had a brief but good look at the future of LHC Group – and we really like what we see. With a ramp up of patient volumes anticipated in the second half of the year as elective surgeries begin again and as we are able to fully execute under the PDGM model, we believe we are well positioned for a much higher velocity entering 2021. Working closely with our joint venture partners in hospitals and health systems throughout the country during this pandemic has allowed us to demonstrate our value proposition in real time. With those partnerships proving out every day and the historic consolidation we are anticipating within the in-home healthcare industry only temporarily forestalled due to COVID-19, we believe all of the factors are in place to drive an even more compelling consolidation opportunity than predicted a few months ago.”

Conference Call
LHC Group will host a conference call on Friday, May 8, 2020, at 10:00 a.m. Eastern time to discuss its first quarter 2020 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 May 15, 2020, by dialing (855) 859‑2056 (international callers: (404) 537-3406) and entering confirmation number 5694184.

The Company has posted supplemental financial information on the first 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 high-quality and affordable healthcare services to patients in the privacy and comfort of the 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.

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 2020 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)
(Unaudited)

 March 31, 2020 December 31, 2019
ASSETS   
Current assets:   
Cash$8,308  $31,672 
Receivables:   
  Patient accounts receivable351,763  284,962 
  Other receivables11,984  10,832 
     Total receivables363,747  295,794 
Prepaid income taxes14,189  9,652 
Prepaid expenses33,032  21,304 
Other current assets20,217  21,852 
     Total current assets439,493  380,274 
Property, building and equipment, net of accumulated depreciation of $73,963 and $69,441, respectively107,622  97,908 
Goodwill1,234,191  1,219,972 
Intangible assets, net of accumulated amortization of $16,748 and $16,431, respectively310,870  305,556 
Assets held for sale2,500  2,500 
Operating lease right of use asset96,078  95,452 
Other assets21,528  38,633 
     Total assets$2,212,282  $2,140,295 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable and other accrued liabilities$75,215  $83,572 
Salaries, wages, and benefits payable108,337  85,631 
Self-insurance reserves33,482  31,188 
Current operating lease liabilities33,444  28,701 
Amounts due to governmental entities1,931  1,880 
     Total current liabilities252,409  230,972 
Deferred income taxes64,865  60,498 
Income taxes payable6,165  3,867 
Revolving credit facility298,071  253,000 
Operating lease payable65,396  69,556 
         Total liabilities686,906  617,893 
Noncontrolling interest — redeemable19,431  15,151 
Commitments and contingencies   
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; 36,297,106 and 36,129,280 shares issued, and 31,100,826 and 30,992,390 shares outstanding, respectively363  361 
  Treasury stock — 5,196,280 and 5,136,890 shares at cost, respectively(67,182) (60,060)
  Additional paid-in capital951,330  949,321 
  Retained earnings545,725  523,701 
     Total LHC Group, Inc. stockholders’ equity1,430,236  1,413,323 
Noncontrolling interest — non-redeemable75,709  93,928 
     Total stockholders' equity1,505,945  1,507,251 
     Total liabilities and stockholders' equity$2,212,282  $2,140,295 
 

 

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

 Three Months Ended
March 31,
 2020 2019
Net service revenue$512,871  $502,585 
Cost of service revenue (excluding depreciation and amortization)321,202  320,992 
Gross margin191,669  181,593 
General and administrative expenses157,866  145,221 
Impairment of intangibles and other  6,319 
Operating income33,803  30,053 
Interest expense(2,768) (3,052)
Income before income taxes and noncontrolling interest31,035  27,001 
Income tax expense3,359  3,600 
Net income27,676  23,401 
Less net income attributable to noncontrolling interests5,652  4,545 
Net income attributable to LHC Group, Inc.’s common stockholders$22,024  $18,856 
    
Earnings per share:   
     Basic$0.71  $0.61 
     Diluted$0.70  $0.60 
Weighted average shares outstanding:   
     Basic31,020  30,837 
     Diluted31,303  31,187 
      

 

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

 Three Months Ended
March 31,
 
 2020 2019 
Operating activities:    
Net income$27,676  $23,401  
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense5,133  4,202  
Amortization of operating lease right of use asset8,512  7,399  
Stock-based compensation expense3,680  1,804  
Deferred income taxes4,367  1,578  
  Amortization of operating leases(13)   
Loss on disposal of assets47  56  
  Impairment of intangibles and other  6,319  
Changes in operating assets and liabilities, net of acquisitions:    
Receivables(67,470) (16,284) 
Prepaid expenses(11,728) (1,069) 
Other assets2,268  1,539  
Prepaid income taxes(4,537) 1,883  
Accounts payable and accrued expenses(11,159) (10,413) 
Salaries, wages, and benefits payable24,826  16,169  
Operating lease liabilities(8,415) (5,285) 
Income taxes payable2,298  184  
Net amounts due to/from governmental entities51  (55) 
Net cash (used in) provided by operating activities(24,464) 31,428  
Investing activities:    
Purchases of property, building and equipment(13,502) (2,801)
Proceeds from sales of property, building and equipment1,149   
Cash received (paid) for acquisitions3,125  (1,413)
Net cash used in investing activities(9,228) (4,214)
Financing activities:    
Proceeds from line of credit188,728  17,000 
Payments on line of credit(143,657) (13,000)
Proceeds from employee stock purchase plan610  478 
Payments on debt  (7,650)
Noncontrolling interest distributions(4,874) (9,194)
Withholding taxes paid on stock-based compensation(7,064) (7,577)
Purchase of additional controlling interest(23,575) (18,000)
Exercise of vested awards and stock options160  (114)
Net cash provided by (used in) financing activities10,328  (38,057)
Change in cash(23,364) (10,843)
Cash at beginning of period31,672  49,363 
Cash at end of period$8,308  $38,520 
Supplemental disclosures of cash flow information:    
Interest paid$2,830  $2,855 
Income taxes paid$1,269  $318 
Non-Cash Operating Activity:    
Operating right of use assets in exchange for lease obligations$9,041  $91,174 
Non-Cash Investing Activity:    
Accrued capital expenditures$2,226  $4,600 
        

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

 Three Months Ended March 31, 2020
 Home health
services
 Hospice
services
 Home and
community-
based
services
 Facility-
based
services
 HCI Total
Net service revenue$367,821  $60,531  $48,464  $29,681  $6,374  $512,871 
Cost of service revenue220,440  38,034  38,453  20,342  3,933  321,202 
General and administrative expenses116,023  16,626  11,459  10,380  3,378  157,866 
Operating income (loss)31,358  5,871  (1,448) (1,041) (937) 33,803 
Interest expense(1,900) (303) (266) (219) (80) (2,768)
Income (loss) before income taxes and noncontrolling interest29,458  5,568  (1,714) (1,260) (1,017) 31,035 
Income tax expense (benefit)3,289  608  (206) (199) (133) 3,359 
Net income (loss)26,169  4,960  (1,508) (1,061) (884) 27,676 
Less net income (loss) attributable to non controlling interests4,606  967  (155) 243  (9) 5,652 
Net income (loss) attributable to LHC Group, Inc.'s common stockholder$21,563  $3,993  $(1,353) $(1,304) $(875) $22,024 
Total assets$1,548,224  $251,354  $252,846  $90,791  $69,067  $2,212,282 
 

 

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

 Three Months Ended March 31, 2019
 Home health
services
 Hospice
services
 Home and
community-
based
services
 Facility-
based
services
 HCI Total
Net service revenue$363,035  $51,736  $51,785  $27,701  $8,328  $502,585 
Cost of service revenue226,123  33,176  39,855  17,732  4,106  320,992 
General and administrative expenses104,839  14,853  10,982  9,177  5,370  145,221 
Other intangible impairment charge6,318  1        6,319 
Operating income (loss)25,755  3,706  948  792  (1,148) 30,053 
Interest expense(2,138) (343) (301) (180) (90) (3,052)
Income (loss) before income taxes and noncontrolling interest23,617  3,363  647  612  (1,238) 27,001 
Income tax expense (benefit)3,208  446  151  5  (210) 3,600 
Net income (loss)20,409  2,917  496  607  (1,028) 23,401 
Less net income (loss) attributable to noncontrolling interests3,780  601  (310) 481  (7) 4,545 
Net income (loss) attributable to LHC Group, Inc.'s common stockholders$16,629  $2,316  $806  $126  $(1,021) $18,856 
Total assets$1,421,000  $220,347  $226,991  $79,257  $66,262  $2,013,857 
 

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

  Three Months Ended
March 31,
Key Data:    2020 2019
Key data for the three months ended March 31, 2020 was impacted by the COVID-19 pandemic      
Home Health Services:      
Locations     556  540 
Acquired      
De novo     —  — 
Divested/consolidated     (3) (6 )
Total new admissions     108,182  93,674 
Medicare new admissions     59,880  57,456 
Average daily census     76,978  75,675 
Average Medicare daily census     46,093  49,411 
Medicare completed and billed episodes     90,227  90,971 
Average Medicare case mix for completed and billed Medicare episodes     1.06  1.08 
Average reimbursement per completed and billed Medicare episodes       $2,797  $3,038 
Total visits     2,135,791  2,521,009 
Total Medicare visits     1,236,711  1,666,907 
Average visits per completed and billed Medicare episodes     13.7  18.3 
Organic growth: (1)(2)      
Net revenue     (2.5)% 7.0 %
Net Medicare revenue     (6.3)% 1.7 %
Total new admissions     7.1 % 5.7 %
Medicare new admissions     (2.4)% 0.2 %
Average daily census     (1.5)% 3.6 %
Average Medicare daily census     (9.4)% (1.8 )%
Medicare completed and billed episodes     (3.3)% (0.7 )%
       
Hospice Services:      
Locations     112  103 
Acquired      — 
De novo     —  — 
Divested/Consolidated     (1)  (1) 
Admissions     5,060  4,587 
Average daily census     4,528  3,752 
Patient days     390,369  337,649 
Average revenue per patient day       $154.13  $156.51 
Organic growth: (1)(2)      
Total new admissions     0.2 % 6.2 %
       
Home and Community-Based Services:      
Locations (3)     111  80 
Acquired      — 
De novo     —  — 
Divested/Consolidated     —  (1) 
Average daily census     14,384  14,065 
Billable hours     1,993,743  2,271,894 
Revenue per billable hour       $25.24  $23.43 
       
Facility-Based Services:      
Long-term Acute Care      
Locations     13  12 
Acquired     —  — 
Divested/Consolidated     —  — 
Patient days     20,161  19,636 
Average revenue per patient day       $1,355  $1,287 
Occupancy rate     65.0 % 70.4 %

(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) The number of locations for HCBS has been updated to not only include the physical standalone locations but also the locations that are part of a home health provider.

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

  Three Months Ended
 March 31,
  2020 2019
Net income attributable to LHC Group, Inc.’s common stockholders $22,024   $18,856 
Add (net of tax):    
  Acquisition and de novo expenses (1) 1,106   5,268 
  Closures/relocations/consolidations (2) 343   2,244 
  COVID-19 impact:      
    PPE, supplies and wages (3) 2,108    
    CARES Act tax benefit (4) (2,210)   
  Provider moratorium impairment (5)    4,332 
Adjusted net income attributable to LHC Group, Inc.’s common stockholders $23,371   $30,700 
 

 

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

  Three Months Ended
 March 31,
  2020 2019
Net income attributable to LHC Group, Inc.’s common stockholders $0.70   $0.60 
Add (net of tax):    
  Acquisition and de novo expenses (1) 0.04   0.17 
  Closures/relocations/consolidations (2) 0.01   0.07 
  COVID-19 impact:      
    PPE, supplies and wages (3) 0.07    
    CARES Act tax benefit (4) (0.07)   
  Provider moratorium impairment (5)    0.14 
Adjusted net income attributable to LHC Group, Inc.’s common stockholders $0.75   $0.98 
  1. Expenses and other costs associated with recently announced or completed acquisitions and de novos. ($1.5 million pre-tax in the three months ended March 31, 2020).
  2. Expenses associated with the closure or consolidation of 4 locations in the first quarter of 2020 along with residual costs and expenses in connection with the closures in the fourth quarter of 2019. ($0.5 million pre-tax in the three months ended March 31, 2020).
  3. COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies and wage adjustments ($2.9 million pre-tax in the three months ended March 31, 2020).
  4. Tax benefit related to new legislation in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which lifts certain tax deduction limitations and eliminates 80% of taxable income limitations for Net Operating Losses (“NOL”), which we are now able to fully utilize NOLs associated with Almost Family prior to the merger.
  5. During the first quarter of 2019, the Company recorded $6.0 million of moratoria fair value 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. In assigning fair value acquired in acquisitions as required by ASC 805, Business Combinations, the Company had assigned fair value to Certificates of need or license moratoria, as applicable, in certain states.

 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(Amounts in thousands)
(Unaudited)

  Three Months Ended
  2020 2019
Net income attributable to LHC Group, Inc.’s common stockholders $22,024  $18,856 
Add:    
  Income tax expense 3,359  3,600 
  Interest expense, net 2,768  3,052 
  Depreciation and amortization 5,133  4,202 
  Adjustment items (1) 4,856  16,404 
Adjusted EBITDA $38,140  $46,114 


1. EBITDA Adjustment items (pre-tax):    
  Acquisition and de novo expenses (1) 1,510  7,295 
  Closures/relocations/consolidations (2) 468  3,109 
  COVID-19 PPE, supplies and wages (3) 2,878   
  Provider moratorium impairment (5)   6,000 
Total adjustments $4,856  $16,404 

 

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

LHC Group

Source: LHC Group