LHC Group announces second quarter 2021 financial results

More than doubles acquired annual revenue target for 2021

LAFAYETTE, La., Aug. 4, 2021 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended June 30, 2021.

Second Quarter 2021 Financial Results

  • Net service revenue increased 12.0% to $545.9 million.
  • Net income attributable to LHC Group's common stockholders was $37.6 million, or $1.20 per diluted share.
  • Adjusted net income attributable to LHC Group's common stockholders was $50.9 million, or $1.62 adjusted earnings per diluted share.
  • Adjusted EBITDA was $73.6 million.

 A reconciliation of all non-GAAP financial results in this release appears on pages 11-12.

Operational and Strategic Highlights

  • LHC Group continues to be an industry leader in quality and patient satisfaction. Recent data provided in June 2021 by Strategic Healthcare Programs (SHP) shows that the company's overall home health quality star rating improved to 4.39 as compared to an overall home health quality star rating of 4.23 in the last published data from the Centers for Medicare and Medicaid Services (CMS) in October 2020.
  • Organic growth in home health admissions increased 16.4% in the second quarter of 2021 as compared to the second quarter of 2020 and increased sequentially by 1.0% in the second quarter of 2021 over the first quarter of 2021.
  • Medicare organic growth in home health admissions increased by 8.8% in the second quarter of 2021 compared with the same period in 2020 and increased sequentially by 1.2% in the second quarter of 2021 over the first quarter of 2021.
  • Non-Medicare episodic organic growth in home health admissions increased by 37.0% in the second quarter of 2021 compared with the same period in 2020 and increased by 4.0% sequentially over the first quarter of 2021.
  • Organic growth in hospice admissions increased 1.1% in the second quarter of 2021 as compared to the second quarter of 2020.
  • LHC Group's acquisition pipeline is currently over $400 million with over $300 million of the targets in exclusive discussions, which enabled the Company to increase its target for acquired revenue in 2021 to a range of $350 million to $500 million (compared with a range of $150 million to $200 million previously) and an expected incremental Adjusted EBITDA contribution in 2022 in a range of $35 million to $50 million.
  • Year-to-date, LHC Group has closed on or announced the acquisition of 26 hospice locations, three home health locations, and one HCBS location in 11 states representing annualized revenue of $161.7 million.
  • On July 7, 2021, LHC Group announced the formation of a strategic partnership to jointly develop and deliver an expanded service offering of advanced clinical care services in the home. This innovative, clinician-led, proprietary model will elevate in-home care and deliver higher acuity care in the home by harnessing the combined talent and experience of partner physicians and the nurses, therapists, and physician extenders at LHC Group as well as LHC Group's industry leading in-home patient care, proprietary data analytics capabilities, clinical modeling, and technologies.
  • On August 3, the Company closed on an expanded revolving credit facility totaling $800 million with lower borrowing costs and an accordion feature that increases the total borrowing capacity to $1.3 billion, an increase from the previous borrowing capacity of $700 million.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "Favorable industry tailwinds continue to propel at home care and LHC Group with strong bi-partisan support for the recently introduced Choose Home legislation, our recently announced partnership that provides the missing link that advanced home care programs have needed, and leading quality scores that are driving market share gains. Recent third-party polling data demonstrates an overwhelming preference by patients to be treated in the safety and comfort of their home or residence. We are seeing the same kind of demand from our hospital partners for SNF-at-home and hospital-at-home programs that started during the pandemic and has accelerated since our recent announcement to launch a comprehensive offering of clinicians covering all aspects of advanced clinical care services in the home later this year."     

Revenues in the second quarter of 2021 increased 12.0% to $545.9 million, compared to $487.3 million in the second quarter of 2020. Net income attributable to LHC Group, Inc. totaled $37.6 million, or $1.20 per diluted share, compared to $44.7 million, or $1.43 per diluted share, in the second quarter of 2020. The Company recognized $36.8 million, $27.2 million net of tax, or $0.87 per diluted share, in government stimulus income during the second quarter of 2020 related to general distribution funds received from the provider relief fund established by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. During November 2020, the Company announced it would return, or repay early, its share of provider relief fund distributions of approximately $93.3 million and approximately $317.9 million in Medicare accelerated payments. In the third quarter of 2020, the Company reversed the $44.4 million of government stimulus income that it recognized during the second quarter of 2020.

For the second quarter of 2021, adjusted net income attributable to LHC Group's common stockholders increased 32.0% to $50.9 million, or $1.62 per diluted share, compared to $38.6 million, or $1.23 per diluted share, in the second quarter of 2020. For the second quarter of 2021, Adjusted EBITDA increased 27.5% to $73.6 million, compared to $57.7 million in the second quarter of 2020. Adjusted net income attributable to LHC Group's common stockholders and Adjusted EBITDA are non-GAAP financial measures. A table providing reconciliation of these non-GAAP financial results is provided in this release on pages 11-12.

Full Year 2021 Guidance
The Company affirmed its 2021 guidance for revenue and adjusted EBITDA, less non-controlling interest, of $2.215 billion to $2.265 billion and $290 million to $300 million, respectively, and raised its adjusted earnings per diluted share guidance to be in a range of $6.30 to $6.50 (compared with $6.20 to $6.40 previously).

Joshua L. Proffitt, LHC Group's President, added, "With the second quarter results in line with our expectations, we enter the back half of 2021 with increased confidence in our organic growth trajectory. Our total organic home health, Medicare and non-Medicare episodic admissions are all up year over year and sequentially while organic admissions, length of stay and average daily census are up year over year and census is up sequentially on improving length of stay in our hospice service line. We had previously anticipated this would be a record year for M&A transactions, and we have already exceeded those initial projections. Based on the breadth and depth of our pipeline, we have more than doubled our original target to $350 million to $500 million in acquired annual revenue in 2021 with a corresponding increase in Adjusted EBITDA that will accelerate next year's growth as well."

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 $30 million to $35 million in the full year 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. 

Conference Call
LHC Group will host a conference call on Thursday, August 5, 2021, at 9:00 a.m. Eastern time to discuss its second quarter 2021 results. The toll-free number to call for this interactive teleconference is (888) 347-8204 (international callers: (412) 902-4249). A telephonic replay of the conference call will be available through midnight on Thursday, August 12, 2021, by dialing (877) 344-7529 (international callers: (412) 317-0088) and entering confirmation number 10158292.

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 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 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. Through Imperium Health, the company's ACO management and enablement company, LHC Group helps partners improve both savings and patient outcomes with a value-based approach. As the preferred joint venture partner for over 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 2021 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)



June 30,
2021


December 31,
2020

ASSETS




Current assets:




Cash

$

112,108



$

286,569


Receivables:




Patient accounts receivable

329,166



301,209


Other receivables

9,214



11,522


Amounts due from governmental entities

149




Total receivables

338,529



312,731


Prepaid income taxes

13,739




Prepaid expenses

26,542



22,058


Other current assets

18,749



25,664


Total current assets

509,667



647,022


Property, building and equipment, net of accumulated depreciation of $90,652 and $82,721, respectively

145,314



138,366


Goodwill

1,259,726



1,259,147


Intangible assets, net of accumulated amortization of $18,261 and $17,659, respectively

313,638



315,355


Assets held for sale

1,900



1,900


Operating lease right of use asset

105,201



100,046


Other assets

31,679



21,518


Total assets

$

2,367,125



$

2,483,354


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and other accrued liabilities

$

56,888



$

64,864


Salaries, wages, and benefits payable

88,030



88,666


Self-insurance reserves

31,140



35,103


 Income tax payable



21,464


Government stimulus advance



93,257


Contract liabilities - deferred revenue

252,936



317,962


Current operating lease liabilities

33,081



32,676


Amounts due to governmental entities

1,608



1,516


Current liabilities - deferred employer payroll tax

25,928



25,928


Total current liabilities

489,611



681,436


Deferred income taxes

66,726



47,237


Income taxes payable

6,625



6,203


Revolving credit facility



20,000


Other long term liabilities

25,928



25,928


Long-term operating lease liabilities

74,993



70,275


                                   Total liabilities

663,883



851,079


Noncontrolling interest — redeemable

18,589



18,921


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; 36,525,831  and 36,355,497 shares issued, and 31,252,929 and 31,139,840 shares outstanding, respectively

365



364


Treasury stock —  5,272,902 and  5,215,657 shares at cost, respectively

(79,765)



(69,011)


Additional paid-in capital

969,897



962,120


Retained earnings

707,599



635,297


Total LHC Group, Inc. stockholders' equity

1,598,096



1,528,770


Noncontrolling interest — non-redeemable

86,557



84,584


Total stockholders' equity

1,684,653



1,613,354


Total liabilities and stockholders' equity

$

2,367,125



$

2,483,354


 

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,


2021


2020


2021


2020

Net service revenue

$

545,907



$

487,320



$

1,070,742



$

1,000,191


Cost of service revenue (excluding depreciation and amortization)

317,872



306,712



628,144



627,914


Gross margin

228,035



180,608



442,598



372,277


General and administrative expenses

167,061



150,574



330,310



308,440


Impairment of intangibles and other

760



600



937



600


Government stimulus income



(44,435)





(44,435)


Operating income

60,214



73,869



111,351



107,672


Interest expense

(143)



(841)



(406)



(3,609)


Income before income taxes and noncontrolling interest

60,071



73,028



110,945



104,063


Income tax expense

13,318



15,227



22,759



18,586


Net income

46,753



57,801



88,186



85,477


Less net income attributable to noncontrolling interests

9,110



13,109



15,884



18,761


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

$

37,643



$

44,692



$

72,302



$

66,716










Earnings per share:








Basic

$

1.21



$

1.44



$

2.32



$

2.15


Diluted

$

1.20



$

1.43



$

2.30



$

2.13


Weighted average shares outstanding:








Basic

31,225



31,104



31,188



31,060


Diluted

31,430



31,324



31,423



31,301


 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)



Six Months Ended
June 30,


2021


2020


Operating activities:





Net income

$

88,186



$

85,477



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





Depreciation and amortization expense

9,541



10,385



Amortization of operating lease right of use asset

17,995



17,090



Stock-based compensation expense

7,506



6,943



Deferred income taxes

19,489



10,461



Loss on disposal of assets

19



154



    Impairment of intangibles and other

937



600



Changes in operating assets and liabilities, net of acquisitions:





Receivables

(25,649)



(38,186)



Prepaid expenses

(4,484)



(2,436)



Other assets

6,170



(4,169)



Prepaid income taxes

(13,739)



3,322



Accounts payable and accrued expenses

(9,148)



(16,354)



Salaries, wages, and benefits payable

(4,560)



3,850



Government stimulus advance



44,273



Contract liabilities - deferred revenue

(65,026)



310,712



Other long term liabilities



17,818



Operating lease liabilities

(17,962)



(16,876)



Income taxes payable

(21,042)



2,506



Net amounts due to/from governmental entities

(57)



306



Net cash provided by (used in) operating activities

(11,824)



435,876



Investing activities:





Purchases of property, building and equipment

(15,619)



(40,944)



Proceeds from sale of property, building and equipment

150



7,142



Cash received (paid) for acquisitions

(649)



3,125



Proceeds from sale of an entity

1,531





Investments

(10,100)





Net cash used in investing activities

(24,687)



(30,677)



Financing activities:





Proceeds from line of credit



256,230



Payments on line of credit

(20,000)



(479,230)



Government stimulus advance

(93,257)





Proceeds from employee stock purchase plan

1,222



1,107



Noncontrolling interest distributions

(13,332)



(10,267)



Withholding taxes paid on stock-based compensation

(10,754)



(8,602)



Purchase of additional controlling interest

(2,113)



(23,575)



Exercise of vested awards and stock options



218



Sale of noncontrolling interest

284





Net cash (used in) provided  by financing activities

(137,950)



(264,119)



Change in cash

(174,461)



141,080



Cash at beginning of period

286,569



31,672



Cash at end of period

$

112,108



$

172,752



Supplemental disclosures of cash flow information:





Interest paid

$

1,322



$

4,083



Income taxes paid

$

38,103



$

2,375



Non-Cash Operating Activity:





Operating right of use assets in exchange for lease obligations

$

25,656



$

18,690



Non-Cash Investing Activity:





Accrued capital expenditures

$

1,108



$

2,348



 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Three Months Ended June 30, 2021


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

396,534



$

63,804



$

48,407



$

31,030



$

6,132



$

545,907


Cost of service revenue (excluding depreciation and amortization)

219,925



39,647



34,683



20,460



3,157



317,872


General and administrative expenses

123,245



18,114



11,923



10,906



2,873



167,061


Impairment of intangibles and other

760











760


Operating income (loss)

52,604



6,043



1,801



(336)



102



60,214


Interest expense

(106)



(20)



(10)



(5)



(2)



(143)


Income (loss) before income taxes and noncontrolling interest

52,498



6,023



1,791



(341)



100



60,071


Income tax expense (benefit)

11,706



1,280



470



(152)



14



13,318


Net income (loss)

40,792



4,743



1,321



(189)



86



46,753


Less net income (loss) attributable to non controlling interests

7,500



1,208



85



322



(5)



9,110


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

$

33,292



$

3,535



$

1,236



$

(511)



$

91



$

37,643


Total assets

$

1,681,871



$

288,985



$

245,071



$

85,520



$

65,678



$

2,367,125





Three Months Ended June 30, 2020


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

339,872



$

61,055



$

47,675



$

33,639



$

5,079



$

487,320



Cost of service revenue (excluding depreciation and amortization)

205,146



37,271



38,747



21,785



3,763



306,712



General and administrative expenses

110,209



16,266



11,124



10,165



2,810



150,574



Impairment of intangibles and other



600









600



Government stimulus income

(35,019)



(4,731)



(2,865)



(1,656)



(164)



(44,435)



Operating income (loss)

59,536



11,649



669



3,345



(1,330)



73,869



Interest expense

(594)



(97)



(79)



(47)



(24)



(841)



Income (loss) before income taxes and noncontrolling interest

58,942



11,552



590



3,298



(1,354)



73,028



Income tax expense (benefit)

12,807



2,439



(12)



373



(380)



15,227



Net income (loss)

46,135



9,113



602



2,925



(974)



57,801



Less net income (loss) attributable to non controlling interests

9,922



2,164



33



997



(7)



13,109



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

$

36,213



$

6,949



$

569



$

1,928



$

(967)



$

44,692



Total assets

$

1,656,022



$

268,771



$

259,742



$

101,258



$

71,306



$

2,357,099



 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Six Months Ended June 30, 2021


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

770,362



$

126,538



$

97,532



$

64,399



$

11,911



$

1,070,742


Cost of service revenue (excluding depreciation and amortization)

432,298



78,217



69,555



41,635



6,439



628,144


General and administrative expenses

242,642



36,241



23,452



22,163



5,812



330,310


Impairment of intangibles and other

937











937


Operating income (loss)

94,485



12,080



4,525



601



(340)



111,351


Interest expense

(288)



(56)



(34)



(19)



(9)



(406)


Income (loss) before income taxes and noncontrolling interest

94,197



12,024



4,491



582



(349)



110,945


Income tax expense (benefit)

19,596



2,347



988



(95)



(77)



22,759


Net income (loss)

74,601



9,677



3,503



677



(272)



88,186


Less net income (loss) attributable to non controlling interests

12,349



2,223



364



979



(31)



15,884


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

$

62,252



$

7,454



$

3,139



$

(302)



$

(241)



$

72,302





Six Months Ended June 30, 2020


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

707,693



$

121,586



$

96,139



$

63,320



$

11,453



$

1,000,191



Cost of service revenue (excluding depreciation and amortization)

425,586



75,305



77,200



42,127



7,696



627,914



General and administrative expenses

226,232



32,892



22,583



20,545



6,188



308,440



Impairment of intangibles and other



600









600



Government stimulus income

(35,019)



(4,731)



(2,865)



(1,656)



(164)



(44,435)



Operating income (loss)

90,894



17,520



(779)



2,304



(2,267)



107,672



Interest expense

(2,494)



(400)



(345)



(266)



(104)



(3,609)



Income (loss) before income taxes and noncontrolling interest

88,400



17,120



(1,124)



2,038



(2,371)



104,063



Income tax expense (benefit)

16,096



3,047



(218)



174



(513)



18,586



Net income (loss)

72,304



14,073



(906)



1,864



(1,858)



85,477



Less net income (loss) attributable to non controlling interests

14,528



3,131



(122)



1,240



(16)



18,761



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

$

57,776



$

10,942



$

(784)



$

624



$

(1,842)



$

66,716



 

LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)



Three Months Ended
June 30,


Six Months Ended
June 30,

Key Data:

2021


2020


2021


2020









Home Health Services:








Locations

531



553



531



553


Acquired

1





1



6


De novo








Divested/consolidated

(1)



(3)



(4)



(6)


Total new admissions

109,082



93,482



217,004



201,664


Medicare new admissions

54,990



50,545



109,403



110,425


Average daily census

85,554



77,530



84,745



77,254


Average Medicare daily census

45,134



44,811



45,186



45,453


Medicare completed and billed episodes

85,663



81,218



170,273



171,445


Average Medicare case mix for completed and billed Medicare episodes

1.02



0.99



1.02



1.02


Average reimbursement per completed and billed Medicare episodes

$

2,899



$

2,771



$

2,881



$

2,785


Total visits

2,151,665



1,963,924



4,209,298



4,099,715


Total Medicare visits

1,091,779



1,088,026



2,153,757



2,324,737


Average visits per completed and billed Medicare episodes

12.7



13.4



12.6



13.6


Organic growth: (1)








Net revenue

16.4

%


(12.7)

%


9.4

%


(7.7)

%

Net Medicare revenue

10.3

%


(18.6)

%


3.2

%


(12.6)

%

Total new admissions

16.4

%


(4.7)

%


7.3

%


1.1

%

Medicare new admissions

8.8

%


(14.3)

%


-0.9

%


(8.3)

%

Average daily census

10.3

%


(2.4)

%


10.2

%


(2.0)

%

Average Medicare daily census

0.9

%


(12.3)

%


0.0

%


(10.9)

%

Medicare completed and billed episodes

6.2

%


(16.9)

%


0.5

%


(10.3)

%









Hospice Services:








Locations

120



112



120



112


Acquired

2





2



3


De novo





1




Divested/consolidated

(2)





(2)



(1)


Admissions

4,967



4,869



10,418



9,929


Average daily census

4,454



4,377



4,433



4,333


Patient days

405,339



398,283



802,313



788,652


Average revenue per patient day

$

158.54



$

153.86



$

160.19



$

154.00


Organic growth: (1)








Total new admissions

1.1

%


1.8

%


4.7

%


0.9

%









Home and Community-Based Services:








Locations (2)

133



111



133



111


Acquired

1





1



4


De novo

3





7




Divested/consolidated








Average daily census

13,514



14,333



13,625



14,358


Billable hours

1,878,138



1,921,900



3,779,419



3,907,500


Revenue per billable hour

$

25.88



$

25.95



$

25.96



$

25.64










Facility-Based Services:








Long-term Acute Care








Locations

12



13



12



13


Acquired








Divested/consolidated








Patient days

20,199



23,658



41,359



43,819


Average revenue per patient day

$

1,517



$

1,385



$

1,517



$

1,371


Average Daily Census

222



260



229



241




(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
June 30,

Six Months

Ended
June 30,


2021


2020


2021


2020

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

$

37,643



$

44,692



$

72,302



$

66,716


Add (net of tax):








Acquisition, de novo and legal expenses (1)

3,477



410



3,477



1,516


Closures/relocations/consolidations (2)

1,048



523



1,179



866


COVID-19 impact: 












PPE, supplies and other expenses (3)

7,999



20,170



16,851



22,278


CARES Act tax benefit (4)







(2,210)


Provider Relief Fund (PRF) (5)



(32,882)





(32,882)


NCI associated with PRF (6)



5,643





5,643


ERP implementation (7)

728





728




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

$

50,895



$

38,556



$

94,537



$

61,927


 

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,


2021


2020


2021


2020

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

$

1.20



$

1.43



$

2.30



$

2.13


Add (net of tax):








Acquisition, de novo and legal expenses (1)

0.11



0.01



0.11



0.05


Closures/relocations/consolidations (2)

0.03



0.02



0.04



0.03


COVID-19 impact:












PPE, supplies and other expenses (3)

0.26



0.64



0.54



0.71


CARES Act tax benefit (4)







(0.07)


Provider Relief Fund (PRF) (5)



(1.05)





(1.05)


NCI associated with PRF (6)



0.18





0.18


ERP implementation (7)

0.02





0.02




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

$

1.62



$

1.23



$

3.01



$

1.98


 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA

(Amounts in thousands)

(Unaudited)



Three Months Ended
June 30,

Six Months Ended
June 30,


2021


2020


2021


2020

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

$

37,643



$

44,692



$

72,302



$

66,716


Add:








Income tax expense

13,318



15,227



22,759



18,586


Interest expense, net

143



841



406



3,609


Depreciation and amortization 

4,542



5,252



9,541



10,385


Adjustment items (1) 

17,942



(8,292)



30,109



(3,436)


Adjusted EBITDA

$

73,588



$

57,720



$

135,117



$

95,860


















1. Adjustment items (pre-tax):








Acquisition, de novo and legal expenses (1)

4,708



554



4,708



2,064


Closures/relocation/consolidations (2)

1,419



706



1,596



1,174


COVID-19 PPE, supplies and other expenses (3)

10,829



27,257



22,819



30,135


Provider Relief Fund (PRF) (5)



(44,435)





(44,435)


NCI associated with PRF (6)



7,626





7,626


ERP implementation (7)

986






986





Total adjustments

$

17,942



$

(8,292)



$

30,109



$

(3,436)




















1.

Expenses and other costs associated with recently announced or completed acquisitions, de novos and legal expenses ($4.7 million pre-tax in the three and six months ended June 30, 2021; $0.5 million pre-tax in the three months ended June 30, 2020 and $2.1 million pre-tax in the six months ended June 30, 2020).

2.

Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($1.4 million pre-tax in the three months ended June 30, 2021 and $1.6 million in the six months ended June 30, 2021; ($0.7 million pre-tax in the three months ended June 30, 2020 and $1.2 million pre-tax in the six months ended June 30, 2020).

3.

COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies and wage adjustments ($10.8 million pre-tax in the three months ended June 30, 2021 and $22.8 million pre-tax in the three months ended June 30, 2020; ($27.3 million pre-tax in the three months ended June 30, 2020 and $30.1 million pre-tax in the six months ended June 30, 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.

Government stimulus income recognized during the second quarter of 2020 related to general distribution funds received from the Provider Relief Fund ($44.4 million pre-tax in the three and six months ended June 30, 2020).

6.

Non-controlling interest distributed to our Joint Venture partners in association with the Government stimulus income recognized during the second quarter of 2020 ($7.6 million pre-tax in the three months ended June 30, 2020).

7.

Expenses and other costs associated with the implementation of an Enterprise Resource Planning software ($1.0 million pre-tax in the second quarter and first half of 2020).

 

Contact:

Eric Elliott


Senior Vice President of Finance


(337) 233-1307


eric.elliott@lhcgroup.com

 

SOURCE LHC Group, Inc.