LHC Group announces fourth quarter and full year 2020 financial results

Issues full year and first quarter 2021 guidance

LAFAYETTE, La., Feb. 25, 2021 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended December 31, 2020. Unless otherwise noted, all results are compared with the fourth quarter and year ended December 31, 2019.

Fourth Quarter 2020 Financial Results

  • Net service revenue was $532.3 million.
  • Net income attributable to LHC Group's common stockholders increased 39.3% to $30.4 million, or $0.97 per diluted share.
  • Adjusted net income attributable to LHC Group's common stockholders increased 23.0% to $44.2 million, or $1.40 adjusted earnings per diluted share. Adjusted results for the fourth quarter of 2020 exclude a pre-tax amount of $3.2 million in acquisition and de novo related expenses, $12.2 million in COVID-19 related costs and expenses for purchases of personal protective equipment (PPE), supplies, employee related costs and expenses and other categories of costs and expenses incurred in response to the pandemic and $4.0 million in costs, expenses and impairments related to agency closures or consolidations.
  • Adjusted EBITDA increased 28.3% to $68.4 million.

Full Year 2020 Financial Results

  • Net service revenue was $2.063 billion.
  • Net income attributable to LHC Group's common stockholders increased 16.6% to $111.6 million, or $3.56 per diluted share.
  • Adjusted net income attributable to LHC Group's common stockholders increased 12.9% to $157.3 million, or $5.01 per diluted share. Adjusted results for the full year 2020 exclude a pre-tax amount of $7.8 million in acquisition and de novo related expenses, $52.8 million in COVID-19 related costs and expenses noted above and $5.2 million in costs, expenses and impairments related to agency closures or consolidations.
  • Adjusted EBITDA increased 12.5% to $238.7 million.

A reconciliation of all non-GAAP financial results in this release appears on pages 12-13.

Operational and Strategic Highlights

  • LHC Group's quality and patient satisfaction scores continue to exceed the national average as the Company remains a leader among industry peers.
  • Organic growth in home health admissions increased 2.2% in the fourth quarter of 2020 compared with the same period in 2019 and increased sequentially by 1.0% over the third quarter of 2020.
  • Continued strong sequential organic growth in home health Medicare revenue with a 4.6% sequential increase in the fourth quarter of 2020 following a 10.7% sequential increase in the third quarter of 2020.
  • Non-Medicare episodic organic growth in home health admissions increased by 28.7% in the fourth quarter of 2020 compared with the same period in 2019 and increased by 32.0% in 2020 over 2019.
  • Organic growth in hospice admissions increased 10.9% in the fourth quarter of 2020 compared with the same period in 2019 and increased by 4.6% sequentially over the third quarter of 2020.
  • On October 1, 2020, LHC Group finalized a joint venture with University Health Care System to enhance home health and hospice services in Georgia and South Carolina. The joint venture includes ten total locations and LHC Group expects incremental annualized revenue from this joint venture of approximately $8.3 million.
  • On October 1, 2020, LHC Group finalized a joint venture with Northeast Georgia Health System to share ownership of SunCrest Home Health in Gainesville, Georgia. LHC Group also closed on the purchase of Santa Rita Hospice in Aurora, Colorado, where it will operate under the At Home Hospice name in a shared space with LHC Group's home health provider in Aurora.
  • On November 1, 2020, LHC Group finalized an expansion of its joint venture with CHRISTUS Health with the addition of a hospice provider in San Marcos, Texas. LHC Group expects incremental annualized revenue from this joint venture of approximately $1.6 million.
  • On December 31, 2020, LHC Group finalized the purchase of Grace Hospice in Tulsa, Oklahoma and Valley Hospice and East Valley Palliative Care in Mesa, Arizona. The Company expects the purchase of Grace Hospice to produce approximately $12.1 million in annualized revenue. The Company expects the purchase of Valley Hospice and East Valley Palliative Care to produce approximately $4.8 million in annualized revenue.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "LHC Group plays an increasingly critical role in the nation's healthcare system with the last twelve months clearly demonstrating the importance of home as the most patient-preferred and cost-effective setting for care. The swift, comprehensive approach we took to the public health emergency caused by COVID-19 had a positive impact on the evolution of healthcare delivery models, helped to protect our employees and patients, boosted our organic growth trajectory and strengthened our value proposition to patients, partners and payors. Looking ahead to 2021 and beyond, we believe LHC Group has an unprecedented opportunity to lead our industry's transition to value-based care and address the growing needs of the population aged 65 and over that is expected to double by 2060."

COVID-19 Update
The COVID-19 pandemic had an impact on our operations and financial results for the fourth quarter of 2020 with a continued impact expected in 2021, although to a lesser extent than what we have experienced to date. During the fourth quarter, we incurred $12.2 million ($8.6 million net of tax), or $0.27 per diluted share, in additional COVID-19 costs and expenses related to PPE, supplies, employee related costs and expenses, including, without limitation, bonuses, increased wages, and wage supplements for front line caregivers, and other categories of costs and expenses incurred in response to the pandemic. For the year ended December 31, 2020 we incurred $52.8 million ($38.6 million net of tax), or $1.23 per diluted share, in COVID-19 costs and expenses.

LHC Group has also implemented a number of cost containment initiatives, including eliminating non-essential travel and expenses and other measures. We continue to have strong access to capital with approximately $530 million of available liquidity from cash and our revolving credit facility net of the $411.3 million liability associated with the Medicare Accelerated and Advance Payments and Provider Relief Funds.

Since April 2020, we received funds totaling $318.0 million under the Medicare Accelerated and Advance Payment Program as provided for by the CARES Act. 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 12 months after receipt by the provider, by withholding 25% of future Medicare fee-for service payments for claims for 11 months and then withholding 50% of future Medicare fee-for service payments for claims for an additional six months. An interest rate of 4% will be assessed on any outstanding balances after 29 months from the date of the initial advance but we intend to repay the full amount before any interest will accrue. Cash flows from operations for the full year ended December 31, 2020 included $318.0 million of accelerated Medicare payments, all of which remains deferred on the balance sheet at December 31, 2020.

As of December 31, 2020, we have received funds totaling $93.3 million related to the Provider Relief Fund as provided for by the CARES Act. The full amount received was recorded as a short-term liability in government stimulus advance in our condensed consolidated balance sheet, but no funds were recognized in our condensed consolidated statements of income for the twelve months ended December 31, 2020. It is our intent to return the funds to the government.

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

Full Year 2021 and First Quarter 2021 Guidance
Full year 2021 net service revenue is expected to be in a range of $2.2 billion to $2.26 billion, adjusted earnings per diluted share is expected to be in a range of $5.65 to $5.90, and EBITDA, less non-controlling interest, is expected to be in a range of $268 million to $280 million.

For the first quarter ending March 31, 2021, net service revenue is expected to be $515 million to $530 million, adjusted earnings per diluted share is expected to be in a range of $1.20 to $1.30, and EBITDA, less non-controlling interest, is expected to be in a range of $55 million to $60 million.

The Company's guidance ranges reflect a number of assumptions that are subject to change based on uncertainties related to the impact of the COVID-19 pandemic. The Company's guidance ranges do not take into account the impact of future COVID-19 related costs and expenses. The Company is estimating COVID-19 related costs and expenses in the range of $20 million to $25 million in the full year of 2021 and $8 million to $12 million in the first quarter of 2021.  The Company's guidance ranges also do not take into account reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, location closures, if any, or future legal expenses, if necessary. Please refer to the supplemental information that can be found under Financial Results on the Company's Investor Relations page to access more detailed guidance assumptions. 

Joshua L. Proffitt, LHC Group's President, added, "Our original intent for 2020 and all of the work we had accomplished beforehand was to exit the year with maximum velocity into 2021. While the shape of that trajectory was altered by the public health emergency, we have been able to generate sequential quarterly improvement in our organic admissions growth, census and number of unique physician referrals since the peak of the pandemic. This re-acceleration in our business to pre-pandemic levels was a direct result of the real-time demonstration of our value proposition, leading quality and patient satisfaction scores, extraordinary commitment from our employees and the contributions from our joint venture and co-location strategies. The high-quality growth we are generating from our differentiated strategy positions us very well to deliver for our patients, employees, partners and shareholders in 2021." 

Conference Call
LHC Group will host a conference call on Friday, February 26, 2021, at 9:00 a.m. Eastern time to discuss its fourth quarter 2020 results. The toll-free number to call for this interactive teleconference is (877) 870-4263 (international callers: (412) 317-6011). A telephonic replay of the conference call will be available through midnight on Friday, March 5, 2021, by dialing (877) 344-7529 (international callers: (412) 317-0088) and entering confirmation number 10151937.

The Company has posted supplemental financial information on the fourth quarter results that it will reference during the conference call. The supplemental information can be found under Financial 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 for communities around the nation, offering quality, value-based healthcare to patients primarily within the comfort and privacy of their home or place of residence. The company's approximately 30,000 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. As the preferred joint venture partner for almost 400 leading U.S. hospitals and health systems, LHC Group works in cooperation with providers to customize each partnership and reach more patients and families with an effective and efficient model of care.

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)

For the Year Ended Dec. 31,

2020

2019

ASSETS

Current assets:

Cash

$

286,569

$

31,672

Receivables:

Patient accounts receivable

301,209

284,962

Other receivables

11,522

10,832

Total receivables

312,731

295,794

Prepaid income taxes

9,652

Prepaid expenses

22,058

21,304

Other current assets

25,664

21,852

Total current assets

647,022

380,274

Property, building and equipment, net of accumulated depreciation of $82,721 and $69,441, respectively

138,366

97,908

Goodwill

1,259,147

1,219,972

Intangible assets, net of accumulated amortization of $17,659 and $16,431, respectively

315,355

305,556

Assets held for sale

1,900

2,500

Operating lease right of use asset

100,046

95,452

Other assets

21,518

38,633

Total assets

$

2,483,354

$

2,140,295

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and other accrued liabilities

$

64,864

$

83,572

Salaries, wages, and benefits payable

88,666

85,631

Self-insurance reserves

35,103

31,188

Government stimulus advance

93,257

Contract liabilities – deferred revenue

317,962

Current operating lease liabilities

32,676

28,701

Amounts due to governmental entities

1,516

1,880

Income taxes payable

21,464

Current liabilities – deferred employer payroll tax

25,928

Total current liabilities

681,436

230,972

Deferred income taxes

47,237

60,498

Income taxes payable

6,203

3,867

Revolving credit facility

20,000

253,000

Other long term liabilities

25,928

Operating lease payable

70,275

69,556

                                   Total liabilities

851,079

617,893

Noncontrolling interest – redeemable

18,921

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; 36,355,497 and 36,129,280 shares
issued, and 31,139,840 and 30,992,390 shares outstanding, respectively

364

361

Treasury stock – 5,215,657 and 5,136,890 shares at cost, respectively

(69,011)

(60,060)

Additional paid-in capital

962,120

949,321

Retained earnings

635,297

523,701

Total LHC Group, Inc. stockholders' equity

1,528,770

1,413,323

Noncontrolling interest – non-redeemable

84,584

93,928

Total stockholders' equity

1,613,354

1,507,251

Total liabilities and stockholders' equity

$

2,483,354

$

2,140,295

 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

Three Months Ended
December 31,

Year Ended 
 December 31,

2020

2019

2020

2019

Net service revenue

$

532,329

$

531,315

$

2,063,204

$

2,080,241

Cost of service revenue (excluding depreciation and amortization)

317,243

343,267

1,250,403

1,324,887

Gross margin

215,086

188,048

812,801

755,354

General and administrative expenses

162,944

155,372

632,847

596,006

Impairment of intangibles and other

1,227

200

1,849

7,734

Operating income

50,915

32,476

178,105

151,614

Interest expense

(89)

(2,622)

(4,129)

(11,155)

Income before income taxes and noncontrolling interest

50,826

29,854

173,976

140,459

Income tax expense

12,862

3,942

36,043

26,607

Net income

37,964

25,912

137,933

113,852

Less net income (loss) attributable to noncontrolling interests

7,584

4,109

26,337

18,126

Net income attributable to LHC Group, Inc.'s common stockholders

$

30,380

$

21,803

$

111,596

$

95,726

Earnings per share:

Basic

$

0.98

$

0.70

$

3.59

$

3.09

Diluted

$

0.97

$

0.70

$

3.56

$

3.07

Weighted average shares outstanding:

Basic

31,128

30,978

31,092

30,933

Diluted

31,443

31,270

31,366

31,210

 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)

For the Year Ended December 31,

2020

2019

Operating activities:

Net income

$

137,933

$

113,852

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

Depreciation and amortization expense

21,249

18,254

      Amortization and impairment of operating lease right of use asset

34,546

33,368

Stock-based compensation expense

14,347

9,646

Deferred income taxes

(13,261)

18,400

Loss on disposal of assets

412

802

Impairment of intangibles and other

1,849

7,734

Changes in operating assets and liabilities, net of acquisitions:

Receivables

(16,561)

(38,907)

Prepaid expenses

(754)

3,530

Other assets

(3,169)

(2,923)

Prepaid income taxes

9,652

(78)

Accounts payable and accrued expenses

(22,506)

(457)

Salaries, wages, and benefits payable and self-insurance reserves

6,482

(2,625)

Other long term liabilities

51,856

Contract liabilities - deferred revenue

317,962

Operating lease payable

(34,226)

(28,062)

Income tax payable

23,800

(431)

Net amounts due to/from governmental entities

(364)

(1,641)

Net cash provided by operating activities

529,247

130,462

Investing activities:

Cash paid for acquisitions, net of cash acquired

(24,545)

(74,293)

Proceeds from sale of assets

7,920

Purchases of property, building and equipment

(65,875)

(33,609)

Net cash used in investing activities

(82,500)

(107,902)

Financing activities:

Proceeds from line of credit

296,229

267,000

Payments on line of credit

(529,229)

(249,000)

Government stimulus advance

93,257

Proceeds from employee stock purchase plan

2,177

2,066

Payments on debt

(7,650)

Noncontrolling interest distributions

(24,837)

(24,082)

Purchase of additional controlling interest

(24,295)

(19,663)

Sale of noncontrolling interest

4,856

756

Withholding taxes paid on stock-based compensation

(10,008)

(10,687)

Exercise of options

1,009

Net cash (used in) provided by financing activities

(191,850)

(40,251)

Change in cash

254,897

(17,691)

Cash at beginning of period

31,672

49,363

Cash at end of period

$

286,569

$

31,672

Supplemental disclosures of cash flow information

Interest paid

$

5,011

$

11,015

Income taxes paid

$

16,830

$

10,109

Non-Cash Operating activity:

Operating right of use assets in exchange for lease obligations

43,047

129,290

Non-Cash Investing activity:

Accrued capital expenditures

2,922

2,729

Non-Cash Financing activity:

Contribution of noncontrolling interest

230


 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

Three Months Ended December 31, 2020

Home health

Hospice

Home and
community-
based

Facility-
based

HCI

Total

Net service revenue

$

382,636

$

62,419

$     50,058

$

31,914

$

5,302

$

532,329

Cost of service revenue

217,554

38,190

36,514

21,487

3,498

317,243

Gross margin

165,082

24,229

13,544

10,427

1,804

215,086

General and administrative expenses

119,544

16,894

11,923

11,451

3,132

162,944

Impairment of intangibles and other

1,227

1,227

Operating income (loss)

44,311

7,335

1,621

(1,024)

(1,328)

50,915

Interest expense

(52)

(18)

(8)

(9)

(2)

(89)

Income (loss) before income taxes and
noncontrolling interest

44,259

7,317

1,613

(1,033)

(1,330)

50,826

Income tax expense (benefit)

10,936

1,631

301

76

(82)

12,862

Net income (loss)

33,323

5,686

1,312

(1,109)

(1,248)

37,964

Less net income (loss) attributable to
noncontrolling interests

6,154

1,370

104

(35)

(9)

7,584

Net income (loss) attributable to LHC Group,
Inc.'s common stockholders

$

27,169

$

4,316

$

1,208

$

(1,074)

$

(1,239)

$

30,380

 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

Three Months Ended December 31, 2019

Home health

Hospice

Home and
community-
based

Facility-
based

HCI

Total

Net service revenue

$

389,506

$

58,101

$     50,845

$

27,418

$

5,445

$

531,315

Cost of service revenue

244,953

36,324

38,763

19,462

3,765

343,267

Gross margin

144,553

21,777

12,082

7,956

1,680

188,048

General and administrative expenses

115,161

16,023

11,021

10,348

2,819

155,372

Impairment of intangibles and other

180

20

200

Operating income (loss)

29,212

5,734

1,061

(2,392)

(1,139)

32,476

Interest expense

(1,843)

(293)

(255)

(154)

(77)

(2,622)

Income (loss) before income taxes and
noncontrolling interest

27,369

5,441

806

(2,546)

(1,216)

29,854

Income tax expense (benefit)

3,969

637

115

(501)

(278)

3,942

Net income (loss)

23,400

4,804

691

(2,045)

(938)

25,912

Less net income (loss) attributable to
noncontrolling interests

3,346

1,267

(149)

(344)

(11)

4,109

Net income (loss) attributable to LHC Group,
Inc.'s common stockholders

$

20,054

$

3,537

$

840

$

(1,701)

$

(927)

$

21,803


 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

Year Ended December 31, 2020

Home Health

Hospice

Home and
community-
based

Facility-
based

HCI

Total

Net service revenue

$

1,463,779

$

243,806

$

194,584

$

128,578

$

32,457

$

2,063,204

Cost of service revenue

848,663

150,675

150,378

85,827

14,860

1,250,403

Gross margin

615,116

93,131

44,206

42,751

17,597

812,801

General and administrative expenses

464,568

66,454

45,443

43,435

12,947

632,847

Impairment of intangibles and other

1,249

600

1,849

Operating income (loss)

149,299

26,077

(1,237)

(684)

4,650

178,105

Interest expense

(2,856)

(469)

(390)

(297)

(117)

(4,129)

Income (loss) before income taxes and
noncontrolling interests

146,443

25,608

(1,627)

(981)

4,533

173,976

Income tax expense (benefit)

30,435

4,925

(357)

(185)

1,225

36,043

Net income (loss)

116,008

20,683

(1,270)

(796)

3,308

137,933

Less net income (loss) attributable to
noncontrolling interests

20,525

4,822

(171)

1,193

(32)

26,337

Net income (loss) attributable to LHC Group,
Inc.'s common stockholders

$

95,483

$

15,861

$

(1,099)

$

(1,989)

$

3,340

$

111,596

Total assets

$

1,741,044

$

301,475

$

263,708

$

103,401

$

73,726

$

2,483,354

 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

Year Ended December 31, 2019

Home health

Hospice

Home and
community-
based

Facility-
based

HCI

Total

Net service revenue

$

1,503,393

$

226,922

$

208,455

$

111,809

$

29,662

$

2,080,241

Cost of service revenue

939,035

140,177

157,817

73,274

14,584

1,324,887

Gross margin

564,358

86,745

50,638

38,535

15,078

755,354

General and administrative expenses

437,276

61,190

44,025

38,358

15,157

596,006

Impairment of intangibles and other

7,443

291

7,734

Operating income (loss)

119,639

25,264

6,613

177

(79)

151,614

Interest expense

(7,762)

(1,269)

(1,112)

(678)

(334)

(11,155)

Income (loss) before income taxes and
noncontrolling interests

111,877

23,995

5,501

(501)

(413)

140,459

Income tax expense (benefit)

21,147

4,353

1,394

(204)

(83)

26,607

Net income (loss)

90,730

19,642

4,107

(297)

(330)

113,852

Less net income (loss) attributable to
noncontrolling interests

14,651

3,979

(906)

435

(33)

18,126

Net income (loss) attributable to LHC Group,
Inc.'s common stockholders

$

76,079

$

15,663

$

5,013

$

(732)

$

(297)

$

95,726

Total assets

$

1,486,012

$

244,105

$

249,524

$

91,337

$

69,317

$

2,140,295

 

LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

Key Data:

2020

2019

2020

2019

Home Health Services:

Locations

537

553

537

553

Acquired

4

2

13

16

De novo

1

4

Divested/consolidated

(16)

(4)

(30)

(22)

Total new admissions

104,440

100,445

410,408

389,459

Medicare new admissions

54,968

58,216

221,300

232,007

Average daily census

83,686

78,380

80,112

77,025

Average Medicare daily census

47,219

49,108

46,311

49,341

Medicare completed and billed episodes

89,824

96,065

350,239

372,816

Average Medicare case mix for completed and billed Medicare
episodes

1.01

1.08

1.02

1.09

Average reimbursement per Medicare episode (1)

$

2,840

$

2,795

$

2,795

$

2,837

Total visits

2,100,914

2,581,022

8,282,047

10,283,251

Total Medicare visits

1,141,298

1,640,023

4,615,612

6,688,321

Average visits per Medicare episodes

12.7

17.1

13.2

17.9

Organic growth: (2)

Net revenue

(0.1)

%

4.2

%

(4.8)

%

6.5

%

Net Medicare revenue

(5.0)

%

3.2

%

(9.7)

%

3.4

%

Total new admissions

2.2

%

10.3

%

1.6

%

9.1

%

Medicare new admissions

(6.0)

%

4.2

%

(7.4)

%

2.9

%

Average daily census

4.9

%

5.2

%

1.5

%

5.1

%

Average Medicare daily census

(5.4)

%

0.1

%

(8.2)

%

0.0

%

Medicare completed and billed episodes

(7.9)

%

2.3

%

(8.0)

%

1.3

%

Hospice Services:

Locations

120

110

120

110

Acquired

3

3

6

8

De novo

6

6

Divested/consolidated

(1)

(2)

(6)

Admissions

5,454

4,768

20,460

18,515

Average daily census

4,320

4,238

4,333

4,062

Patient days

397,456

389,926

1,590,322

1,483,146

Average revenue per patient day

$

157.55

$

151.82

$

155.33

$

152.87

Organic growth: (2)

Total new admissions

10.9

%

4.6

%

6.4

%

5.6

%

Home and Community-Based Services:

Locations (3)

124

107

124

107

Acquired

2

4

2

De novo

3

16

24

Divested/consolidated

(1)

(3)

Average daily census

14,021

13,896

14,365

13,910

Billable hours

1,884,411

2,111,816

7,734,517

8,907,461

Revenue per billable hour

$

27.33

$

24.96

$

26.22

$

24.06

Facility-Based Services:

Long-term Acute Care

Locations

12

13

12

13

Acquired

1

1

Divested/consolidated

(1)

(1)

Patient days

21,836

20,313

89,930

78,837

Average revenue per patient day

$

1,407

$

1,287

$

1,373

$

1,304

Average Daily Census

237

221

246

216

(1)

Prior year Medicare revenue per episode calculation was previously based on standard Medicare episodes. This calculation has been modified to include LUPAs and Outliers in order to achieve a proper comparison to current year under PDGM.

(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.

(3)

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
 December 31,

Twelve Months Ended
 December 31,

2020

2019

2020

2019

Net income attributable to LHC Group, Inc.'s common stockholders

$

30,380

$

21,803

$

111,596

$

95,726

Add (net of tax):

   Acquisition and de novo expenses (1)

2,284

5,303

5,629

25,766

   Closures/relocations/consolidations (2)

2,856

1,108

3,722

5,830

   COVID-19 impact: 

      Supplies and wage expenses (3)

8,641

38,608

      CARES Act tax benefit (4)

(2,210)

 

   Operation realignment and PDGM implementation cost (5) 

5,032

5,032

   Dispute settlements (6)  

2,671

2,671

   Provider moratorium impairment (7)

4,332

Adjusted net income attributable to LHC Group, Inc.'s
common stockholders

$

44,161

$

35,917

$

157,345

$

139,357

 

RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE

(Amounts in thousands)

(Unaudited)  

Three Months Ended
 December 31,

Twelve Months Ended
 December 31,

2020

2019

2020

2019

Net income attributable to LHC Group, Inc.'s common stockholders

$

0.97

$

0.70

$

3.56

$

3.07

Add (net of tax):

   Acquisition and de novo expenses (1)

0.07

0.17

0.17

0.83

   Closures/relocations/consolidations (2)

0.09

0.04

0.12

0.19

   COVID-19 impact:

      Supplies and wage expenses (3)

0.27

1.23

      CARES Act tax benefit (4)

(0.07)

   Operation realignment and PDGM implementation cost (5) 

0.16

0.16

   Dispute settlements (6)

0.08

0.08

   Provider moratorium impairment (7)

0.14

Adjusted net income attributable to LHC Group, Inc.'s
common stockholders

$

1.40

$

1.15

$

5.01

$

4.47

 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA

(Amounts in thousands)

(Unaudited)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2020

2019

2020

2019

Net income attributable to LHC Group, Inc.'s common stockholders

$

30,380

$

21,803

$

111,596

$

95,726

Add:

   Income tax expense

12,862

3,942

36,043

26,607

   Interest expense, net

89

2,622

4,129

11,156

   Depreciation and amortization 

5,648

5,442

21,249

18,254

   Adjustment items (1) 

19,392

19,522

65,731

60,363

Adjusted EBITDA

$

68,371

$

53,331

$

238,748

$

212,106

1. Adjustment items (pre-tax):

   Acquisition and de novo expenses (1)

3,214

7,335

7,770

35,640

   Closures/relocation/consolidations (2)

4,019

1,532

5,193

8,068

   COVID-19 PPE, supplies and wages (3)

12,159

52,768

   Operation realignment and PDGM implementation cost (5)

6,960

6,960

   Dispute settlements (6)

3,695

3,695

   Provider moratorium impairment (7)

6,000

Total adjustments

$

19,392

$

19,522

$

65,731

$

60,363

1.

Expenses and other costs associated with diligence or completed acquisitions and de novos. ($3.2 million pre-tax in the three months ended December 31, 2020 and $7.8 million pre-tax in the twelve months ended December 31, 2020).

2.

Loss on the sale of an asset, impairment and other expenses associated with a closure or consolidation ($4.0 million in the three months ended December 31, 2020 and $5.2 million pre-tax in the twelve months ended December 31, 2020).

3.

COVID-19 related expenses for purchases of personal protective equipment ("PPE"), supplies and employee benefit expenses including, without limitation, bonuses and increased wages, wage supplements and PTO replenishments for front line caregivers. ($12.2 million pre-tax in the three months ended December 31, 2020 and $52.8 million pre-tax in the twelve months ended December 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.

Expenses, severance payments and other expenses and costs associated with a realignment of our home health divisions and PDGM preparedness, software implementation and training cost ($6.9 million pre-tax in the three months and twelve months ended December 31, 2019).

6.

In the fourth quarter of 2019, the Company settled disputed contractual payments ($3.7 million pre-tax).

7.

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.

 

Contact:

Eric Elliott

Senior Vice President of Finance

(337) 233-1307

eric.elliott@lhcgroup.com

 

SOURCE LHC Group, Inc.