LHC Group Announces First Quarter 2009 Results

LAFAYETTE, La.--(BUSINESS WIRE)-- LHC Group, Inc. (NASDAQ: LHCG):

First Quarter Highlights:

    --  Net service revenue increases 49.3% to $124.6 million;
    --  Net income increases 108% to $11.1 million; and
    --  Diluted earnings per share increases 107% to $0.62.

LHC Group, Inc. (NASDAQ: LHCG), one of the largest providers of home nursing services in the United States, announced today its financial results for the first quarter ended March 31, 2009.

Financial Results for the First Quarter

    --  Net service revenue for the first quarter of 2009 increased 49.3% to
        $124.6 million compared with $83.5 million for the same period in 2008.
    --  Home-based net service revenue for the first quarter of 2009 increased
        60% to $109.3 million compared with $68.4 million for the same period in
        2008.
    --  Net income for the first quarter of 2009 totaled $11.1 million, or $0.62
        per diluted share, compared with net income of $5.3 million, or $0.30
        per diluted share, for the first quarter of 2008.
    --  Days sales outstanding, or DSO, for the three months ended March 31,
        2009, was 47 days as compared with 74 days for the same three-month
        period in 2008.
    --  Home-based commercial and managed care net revenue per commercial and
        managed care patient day increased 55.7% in the first quarter of 2009 to
        $49.74 as compared with $31.94 in the first quarter of 2008. Home-based
        Medicare net revenue per Medicare patient day in the first quarter of
        2009 is $48.15.

In commenting on the results, Keith G. Myers, Chief Executive Officer of LHC Group, said, "We continue to be very pleased with the overall performance of our company. All credit goes to the hard working, caring and dedicated employees of the LHC Group Family. The long-term commitment to excellence that is ingrained in our culture and in every member of our team is a key element of our continued success. Our long-term commitment to delivering cost-effective, high-quality healthcare services to the patients, families and communities we serve is at the heart of everything we do and every decision we make."

Guidance

The Company also announced that it is increasing its guidance for full-year 2009. Full-year net service revenue is expected to be in the range of $500 million to $510 million as compared with the previous guidance of $480 million to $500 million. Fully diluted earnings per share is expected to be in the range of $2.15 to $2.25 as compared with the previous guidance of $2.00 to $2.10. This guidance takes into consideration certain investments in infrastructure to be made in 2009, which will be discussed on our earnings call, but does not take into account the impact of any future acquisitions or de novo locations.

Conference Call

LHC Group will conduct a conference call on Thursday, May 7, 2009, beginning at 11:00 a.m. Eastern time. Speakers on the call will include key members of the LHC Group Senior Management Team. The toll-free number to call for this interactive teleconference is (877) 718-5101 (international callers should call 719-325-4760). A telephonic replay of the conference call will be available through midnight on Thursday, May 14, 2009, by dialing (888) 203-1112 (international callers should call 719-457-0820) and entering confirmation number 4207762.

A live broadcast of LHC Group's conference call will be available under the Investor Relations section of the Company's website, www.lhcgroup.com, or at www.opencompany.info. An online replay of the conference call will also be available on the Company's website for one year, beginning approximately an hour following the conclusion of the live broadcast.

About LHC Group, Inc.

LHC Group, Inc. is one of the largest providers of home nursing services in the United States providing quality cost effective healthcare services to patients within the comfort and privacy of their home or place of residence.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's future financial performance and the strength of the Company's operations. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including changes in reimbursement, changes in government regulations, changes in LHC Group's relationships with referral sources, increased competition for LHC Group's services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in Item 1A. Risk Factors in LHC Group's Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission. LHC Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


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

                                                     March 31,    Dec. 31,

                                                     2009         2008

                                                     (Unaudited)

ASSETS

Current assets:

Cash                                                 $ 5,195      $ 3,511

Receivables:

Patient accounts receivable, less allowance for
uncollectible accounts of $10,413 and $9,976,          65,008       61,524
respectively

Other receivables                                      2,862        2,317

Amounts due from governmental entities                 1,804        2,434

Total receivables, net                                 69,674       66,275

Deferred income taxes                                  5,560        4,959

Assets held for sale                                   450          -

Prepaid expenses and other current assets              5,809        6,464

Total current assets                                   86,688       81,209

Property, building and equipment, net                  17,715       16,348

Goodwill                                               120,713      112,572

Intangible assets, net                                 32,559       29,975

Other assets                                           3,970        3,296

Total assets                                         $ 261,645    $ 243,400

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and other accrued liabilities       $ 15,923     $ 15,422

Salaries, wages and benefits payable                   22,147       16,400

Amounts due to governmental entities                   6,023        6,023

Income taxes payable                                   4,966        10,682

Current portion of long-term debt and capital lease    523          583
obligations

Total current liabilities                              49,582       49,110

Deferred income taxes                                  7,172        5,718

Long-term debt, less current portion                   4,399        4,483

Other long-term obligations                            104          145

Stockholders' equity:

LHC Group, Inc. stockholders' equity:

Common stock - $0.01 par value: 40,000,000 shares
authorized; 20,925,957 and 20,853,463 shares issued    179          179
and 17,954,763 and 17,895,832 shares outstanding,
respectively

Treasury stock - 2,971,194 and 2,957,631 shares at     (3,356  )    (3,072  )
cost, respectively

Additional paid-in capital                             86,202       85,404

Retained earnings                                      105,419      94,310

Total LHC Group, Inc. stockholders' equity             188,444      176,821

Noncontrolling interest                                11,944       7,123

Total equity                                           200,388      183,944

Total liabilities and stockholders' equity           $ 261,645    $ 243,400




LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share and per share data)
(unaudited)

                                                  Three Months Ended
                                                  March 31,

                                                  2009            2008

Net service revenue                               $ 124,622       $ 83,473

Cost of service revenue                             62,221          41,272

Gross margin                                        62,401          42,201

Provision for bad debts                             1,183           3,686

General and administrative expenses                 38,897          27,497

Operating income                                    22,321          11,018

Interest expense                                    (59        )    (148       )

Non-operating (loss) income                         (460       )    402

Income from continuing operations before income     21,802          11,272
taxes

Income tax expense                                  6,739           3,363

Income from continuing operations                   15,063          7,909

Loss from discontinued operations (net of income    -               131
tax benefit of $84)

Net income                                          15,063          7,778

Less net income attributable to noncontrolling      3,982           2,440
interests

Net income attributable to LHC Group, Inc.          11,081          5,338

Redeemable noncontrolling interest                  28              101

Net income available to LHC Group, Inc.'s common  $ 11,109        $ 5,439
stockholders

Earnings per share - basic and diluted:

Income from continuing operations attributable    $ 0.62          $ 0.31
to LHC Group, Inc.

Loss from discontinued operations, attributable     -               (0.01      )
to LHC Group, Inc.

Net income attributable to LHC Group, Inc.          0.62            0.30

Redeemable noncontrolling interest                  -               0.01

Net income available to LHC Group, Inc.'s common  $ 0.62          $ 0.31
stockholders

Weighted average shares outstanding:

Basic                                               17,924,238      17,800,066

Diluted                                             17,991,618      17,813,967




LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)

                                                        Three Months Ended
                                                        March 31,

                                                        2009         2008

Operating activities

Net income attributable to LHC Group, Inc.              $ 11,081     $ 5,338

Net income attributable to noncontrolling interest        3,982        2,330

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation and amortization expense                     1,118        877

Provision for bad debts                                   1,183        4,040

Stock-based compensation expense                          457          385

Deferred income taxes                                     853          (86     )

Loss on impairment of intangible assets                   542          -

Gain on sale of assets                                    -            (346    )

Changes in operating assets and liabilities, net of
acquisitions:

Receivables                                               (5,496  )    (2,817  )

Prepaid expenses and other assets                         184          472

Income taxes payable                                      (5,715  )    1,529

Accounts payable and accrued expenses                     6,173        4,583

Net amounts due to/from governmental entities             630          210

Net cash provided by operating activities                 14,992       16,515

Investing activities

Purchases of property, building, and equipment            (1,857  )    (5,527  )

Proceeds from sale of assets                              -            3,081

Cash paid for acquisitions, primarily goodwill,           (8,170  )    (14,031 )
intangible assets and advance payments on acquisitions

Net cash used in investing activities                     (10,027 )    (16,477 )

Financing activities

Proceeds from line of credit                              16,857       5,442

Payments on line of credit                                (16,857 )    (5,442  )

Proceeds from debt issuance                               -            5,050

Principal payments on debt                                (119    )    (2,932  )

Payments on capital leases                                (37     )    (23     )

Excess tax benefits from vesting of restricted stock      95           33

Proceeds from employee stock purchase plan                139          134

Noncontrolling interest distributions, net                (3,359  )    (2,383  )

Net cash used in financing activities                     (3,281  )    (121    )

Change in cash                                            1,684        (83     )

Cash at beginning of period                               3,511        1,155

Cash at end of period                                   $ 5,195      $ 1,072

Supplemental disclosures of cash flow information

Interest paid                                           $ 59         $ 148

Income taxes paid                                       $ 11,583     $ 1,885




LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(dollars in thousands)
(unaudited)

                                          Three Months Ended March 31, 2009

                                          Home-        Facility-
                                          Based        Based       Total
                                          Services     Services

Net service revenue                       $ 109,348    $ 15,274    $ 124,622

Cost of service revenue                     53,586       8,635       62,221

Provision for bad debts                     1,029        154         1,183

General and administrative expenses         34,912       3,985       38,897

Operating income                            19,821       2,500       22,321

Interest expense                            (52     )    (7     )    (59     )

Non-operating (loss) income                 (474    )    14          (460    )

Income from continuing operations before    19,295       2,507       21,802
income taxes and noncontrolling interest

Noncontrolling interest                     3,498        484         3,982

Income from continuing operations before    15,797       2,023       17,820
income taxes

Total assets                              $ 239,131    $ 22,514    $ 261,645

                                          Three Months Ended March 31, 2008

                                          Home-        Facility-
                                          Based        Based       Total
                                          Services     Services

Net service revenue                       $ 68,363     $ 15,110    $ 83,473

Cost of service revenue                     32,848       8,424       41,272

Provision for bad debts                     3,246        440         3,686

General and administrative expenses         23,692       3,805       27,497

Operating income                            8,577        2,441       11,018

Interest expense                            (101    )    (47    )    (148    )

Non-operating income                        285          117         402

Income from continuing operations before    8,761        2,511       11,272
income taxes and noncontrolling interest

Noncontrolling interest                     1,740        700         2,440

Income from continuing operations before    7,021        1,811       8,832
income taxes

Total assets                              $ 161,891    $ 26,269    $ 188,160




    LHC GROUP, INC. AND SUBSIDIARIES
    SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
    (unaudited)

                                                      Three Months Ended
                                                      March 31,

                                                      2009         2008

    Key Data:

    Home Health locations                               209          150

    Hospice locations                                   19           9

    Acquired (1)                                        2            0

    De novo (1)                                         2            4

    Home Nursing:

    Total new admissions                                18,104       13,367

    Medicare new admissions                             12,807       9,774

    Average weekly census                               27,834       18,958

    Average Medicare weekly census                      22,363       14,876

    Medicare completed episodes                         36,604       25,793

    Average Medicare case mix for completed Medicare    1.27         1.30
    episodes

    Average reimbursement per completed Medicare      $ 2,361      $ 2,106
    episodes

    Total visits                                        678,694      479,024

    Total Medicare visits                               534,220      359,080

    Average visits per completed Medicare episodes      14.6         13.9

    Organic growth (2):

    Net revenue                                         27.4    %    6.9     %

    Net Medicare revenue                                29.2    %    8.6     %

    Total new admissions                                0.8     %    2.0     %

    Medicare new admissions                             0.8     %    8.5     %

    Average weekly census                               22.9    %    6.9     %

    Average Medicare weekly census                      27.7    %    12.1    %

    Medicare completed episodes                         20.9    %    27.6    %

    Facility-based Services:

    Long-term Acute Care Hospital locations             7            7

    Patient days                                        11,981       12,034

    Patient acuity mix                                  1.0068       0.9829

(1) Inclusive of both home health and hospice agencies.

(2) 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.



LHCG-E


    Source: LHC Group, Inc.