LHC Group announces third quarter 2021 financial results

Increases full year 2021 revenue guidance

LAFAYETTE, La., Nov. 3, 2021 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended September 30, 2021.

Third Quarter 2021 Financial Results

  • Net service revenue increased 6.6% to $565.5 million.
  • Net income attributable to LHC Group's common stockholders was $27.7 million, or $0.88 per diluted share.
  • Adjusted net income attributable to LHC Group's common stockholders was $45.7 million, or $1.45 adjusted earnings per diluted share.
  • Adjusted EBITDA, less non-controlling interest, was $68.8 million.

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

Operational and Strategic Highlights

  • Year-to-date, LHC Group has closed on the acquisition of approximately $300 million in annualized revenue. This M&A activity, which brought the Company's national footprint to 917 locations in 37 states and the District of Columbia, compares favorably to $37.8 million acquired in 2020 and $114.3 million acquired in 2019.
  • The Company currently expects the $300 million of acquired annualized revenue in 2021 to generate an incremental EBITDA contribution in 2022 in a range of $20 million to $25 million.
  • LHC Group increased its 2021 revenue guidance previously issued on October 18, 2021 to reflect the completion of the acquisition of home health, hospice, and therapy assets from the HCA Healthcare and Brookdale Healthcare Services Venture on November 1, 2021. The Company now expects net service revenue of $2.215 billion to $2.220 billion (compared with $2.200 billion to $2.205 billion previously). The Company affirmed its expectations for adjusted EBITDA, less non-controlling interest, of $265 million to $270 million, and adjusted earnings per diluted share of $5.75 to $5.85.
  • Organic growth in home health admissions increased 3.6% in the third quarter of 2021 as compared to the third quarter of 2020.
  • Non-Medicare episodic organic growth in home health admissions increased by 11.6% in the third quarter of 2021 compared with the same period in 2020.
  • Organic growth in hospice admissions increased 0.1% in the third quarter of 2021 as compared to the third quarter of 2020 and increased sequentially by 3.3% in the third quarter of 2021 over the second quarter of 2021.
  • LHC Group has experienced improving operating trends to date in the fourth quarter of 2021. All locations temporarily closed due to Hurricane Ida have reopened; the percentage of clinicians on quarantine has declined to 1.8% as of November 1, 2021; new COVID cases have quickly declined after spiking in the third quarter of 2021; and average daily Home Health census for October 2021 increased 1,164 to 85,422, up 1.4% compared with the third quarter of 2021.
  • LHC Group continues to be an industry leader in quality and patient satisfaction. Recent data provided in September 2021 by Strategic Healthcare Programs (SHP) shows that the company's overall home health quality star rating improved to 4.43 as compared to 4.39 in June 2021 and 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.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "Despite the temporary headwinds we encountered in the third quarter, our improving operating trends to date in the fourth quarter, combined with a record level of M&A activity, have positioned us to deliver strong year-over-year growth for 2021 and beyond. There is a fundamental shift underway that is rapidly transforming and prioritizing the delivery of high-quality care in patients' homes or places of residence. Consumer preference, along with the rapidly increasing recognition that high quality services provided in a patient's home or place of residence can deliver equal or better outcomes at significantly lower costs than alternative inpatient post-acute settings, will continue to provide significant growth opportunities for our industry. We are confident that LHC Group, with our industry leading quality outcomes and patient satisfaction along with our strong financial position, will benefit from continued M&A activity and substantially increasing organic growth in patient admissions across our expanding footprint for many years to come."     

Revenues in the third quarter of 2021 totaled $565.5 million, compared to $530.7 million in the third quarter of 2020. Net income attributable to LHC Group, Inc. totaled $27.7 million, or $0.88 per diluted share, compared to $14.5 million, or $0.46 per diluted share, in the third quarter of 2020.

For the third quarter of 2021, adjusted net income attributable to LHC Group's common stockholders totaled $45.7 million, or $1.45 per diluted share, compared to $51.3 million, or $1.63 per diluted share, in the third quarter of 2020. For the third quarter of 2021, Adjusted EBITDA totaled $68.8 million, compared to $74.5 million in the third 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 increased its 2021 revenue guidance previously issued on October 18, 2021 to reflect the completion of the acquisition of home health, hospice, and therapy assets from the HCA Healthcare and Brookdale Healthcare Services Venture on November 1, 2021. The Company now expects net service revenue of $2.215 billion to $2.220 billion (compared with $2.200 billion to $2.205 billion previously). The Company affirmed its expectations for adjusted EBITDA, less non-controlling interest, of $265 million to $270 million, and adjusted earnings per diluted share of $5.75 to $5.85. At the midpoint, the full year 2021 guidance implies a 7.5% increase in net service revenue, a 12.1% increase in adjusted EBITDA, and a 15.8% increase in adjusted EPS compared with 2020.

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 of approximately $45 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, November 4, 2021, at 9:00 a.m. Eastern time to discuss its third quarter 2021 results. The toll-free number to call for this interactive teleconference is (877) 407-9208 (international callers: (201) 493-6784). A telephonic replay of the conference call will be available through midnight on Thursday, November 11, 2021, by dialing (844) 512-2921 (international callers: (412) 317-6671) and entering confirmation number 13723484.

The Company has posted supplemental financial information on the third 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 37 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 more than 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)



September 30,
2021


December 31,
2020

ASSETS




Current assets:




Cash

$

29,516



$

286,569


Receivables:




Patient accounts receivable

333,088



301,209


Other receivables

21,543



11,522


Total receivables

354,631



312,731


Prepaid taxes

12,509




Prepaid income taxes

11,575




Prepaid expenses

22,048



22,058


Other current assets

21,320



25,664


Total current assets

451,599



647,022


Property, building and equipment, net of accumulated depreciation of $94,344 and $82,721, respectively

150,909



138,366


Goodwill

1,603,360



1,259,147


Intangible assets, net of accumulated amortization of $18,701 and $17,659, respectively

350,528



315,355


Assets held for sale



1,900


Operating lease right of use asset

111,550



100,046


Other assets

44,740



21,518


Total assets

$

2,712,686



$

2,483,354


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and other accrued liabilities

$

83,159



$

64,864


Salaries, wages, and benefits payable

82,994



88,666


Self-insurance reserves

35,094



35,103


Income tax payable



21,464


Government stimulus advance



93,257


Contract liabilities - deferred revenue

176,333



317,962


Current operating lease liabilities

35,964



32,676


Amounts due to governmental entities

785



1,516


Current liabilities - deferred employer payroll tax

26,774



25,928


Total current liabilities

441,103



681,436


Deferred income taxes

70,593



47,237


Income taxes payable

6,848



6,203


Revolving credit facility

355,000



20,000


Other long term liabilities

26,774



25,928


Long-term operating lease liabilities

78,445



70,275


                                   Total liabilities

978,763



851,079


Noncontrolling interest — redeemable

17,730



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; 36,540,219 and 36,355,497 shares issued, and 31,263,385 and 31,139,840 shares outstanding, respectively

365



364


Treasury stock —  5,276,834 and  5,215,657 shares at cost, respectively

(80,605)



(69,011)


Additional paid-in capital

974,680



962,120


Retained earnings

735,333



635,297


Total LHC Group, Inc. stockholders' equity

1,629,773



1,528,770


Noncontrolling interest — non-redeemable

86,420



84,584


Total stockholders' equity

1,716,193



1,613,354


Total liabilities and stockholders' equity

$

2,712,686



$

2,483,354


 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)



Three Months Ended
September 30, 2021


Nine Months Ended
September 30,


2021


2020


2021


2020

Net service revenue

$

565,451



$

530,684



$

1,636,193



$

1,530,875


Cost of service revenue (excluding depreciation and amortization)

343,862



305,246



972,006



933,160


Gross margin

221,589



225,438



664,187



597,715


General and administrative expenses

176,444



161,463



506,754



469,903


Impairment of intangibles and other



22



937



622


Government stimulus (income) expense



44,435






Operating income

45,145



19,518



156,496



127,190


Interest expense

(1,135)



(431)



(1,541)



(4,040)


Income before income taxes and noncontrolling interest

44,010



19,087



154,955



123,150


Income tax expense

10,150



4,595



32,909



23,181


Net income

33,860



14,492



122,046



99,969


Less net income (loss) attributable to noncontrolling interests

6,126



(8)



22,010



18,753


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

$

27,734



$

14,500



$

100,036



$

81,216










Earnings per share:








Basic

$

0.89



$

0.47



$

3.21



$

2.61


Diluted

$

0.88



$

0.46



$

3.18



$

2.59


Weighted average shares outstanding:








Basic

31,238



31,121



31,205



31,080


Diluted

31,434



31,411



31,422



31,334


 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)



Nine Months Ended
September 30,


2021


2020

Operating activities:




Net income

$

122,046



$

99,969


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




Depreciation and amortization expense

14,899



15,601


Amortization of operating lease right of use asset

27,526



25,799


Stock-based compensation expense

11,717



11,133


Deferred income taxes

23,356



15,038


(Gain) loss on disposal of assets

(1,190)



291


   Impairment of intangibles and other

937



622


Changes in operating assets and liabilities, net of acquisitions:




Receivables

(27,038)



(36,194)


Prepaid expenses

397



(1,487)


Other assets

(6,368)



(3,183)


Prepaid income taxes

(11,575)



(10,035)


Prepaid taxes

(12,509)




Accounts payable and accrued expenses

6,626



(17,085)


Salaries, wages, and benefits payable

(9,687)



25,913


Contract liabilities - deferred revenue

(141,629)



317,938


Other long term liabilities



33,632


Operating lease liabilities

(27,472)



(25,485)


Income taxes payable

(20,819)



2,721


Net amounts due to/from governmental entities

(833)



555


Net cash (used in) provided by operating activities

(51,616)



455,743


Investing activities:




Purchases of property, building and equipment

(23,548)



(51,241)


Proceeds from sale of property, building and equipment

3,350



7,142


Cash received (paid) for acquisitions, net of cash acquired

(383,475)



2,326


Proceeds from sale of an entity

1,531




Minority interest investments

(10,100)




Net cash used in investing activities

(412,242)



(41,773)


Financing activities:




Proceeds from line of credit

544,056



276,229


Payments on line of credit

(209,056)



(509,229)


Government stimulus advance

(93,257)



93,257


Proceeds from employee stock purchase plan

1,877



1,679


   Payments on deferred financing fees

(2,855)




Noncontrolling interest distributions

(22,187)



(22,505)


Withholding taxes paid on stock-based compensation

(11,594)



(9,854)


Purchase of additional controlling interest

(2,113)



(23,575)


Sale of noncontrolling interest

1,934



2,120


Net cash provided by (used in) financing activities

206,805



(191,878)


Change in cash

(257,053)



222,092


Cash at beginning of period

286,569



31,672


Cash at end of period

$

29,516



$

253,764


Supplemental disclosures of cash flow information:




Interest paid

$

1,532



$

4,556


Income taxes paid

$

42,036



$

15,583


Non-Cash Operating Activity:




Operating right of use assets in exchange for lease obligations

$

41,776



$

25,633


Reduction to right of use assets and liabilities

$

2,746



Non-Cash Investing Activity:




Accrued capital expenditures

$

1,807



$

5,851


 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Three Months Ended September 30, 2021


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

386,699



$

82,653



$

45,800



$

32,415



$

17,884



$

565,451


Cost of service revenue (excluding depreciation and amortization)

230,839



51,631



34,386



23,725



3,281



343,862


General and administrative expenses

126,695



22,548



11,764



11,050



4,387



176,444


Operating income (loss)

29,165



8,474



(350)



(2,360)



10,216



45,145


Interest expense

(811)



(139)



(109)



(54)



(22)



(1,135)


Income (loss) before income taxes and noncontrolling interest

28,354



8,335



(459)



(2,414)



10,194



44,010


Income tax expense (benefit)

6,407



1,874



(99)



(554)



2,522



10,150


Net income (loss)

21,947



6,461



(360)



(1,860)



7,672



33,860


Less net income (loss) attributable to non controlling interests

5,157



1,085



77



(187)



(6)



6,126


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

$

16,790



$

5,376



$

(437)



$

(1,673)



$

7,678



$

27,734


Total assets

$

1,632,670



$

681,954



$

239,452



$

83,276



$

75,334



$

2,712,686





Three Months Ended September 30, 2020


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

373,450



$

59,801



$

48,387



$

33,344



$

15,702



$

530,684


Cost of service revenue (excluding depreciation and amortization)

205,523



37,180



36,664



22,213



3,666



305,246


General and administrative expenses

118,792



16,668



10,937



11,439



3,627



161,463


Impairment of intangibles and other

22











22


Government stimulus (income) expense

35,019



4,731



2,865



1,656



164



44,435


Operating income (loss)

14,094



1,222



(2,079)



(1,964)



8,245



19,518


Interest expense

(310)



(51)



(37)



(22)



(11)



(431)


Income (loss) before income taxes and noncontrolling interest

13,784



1,171



(2,116)



(1,986)



8,234



19,087


Income tax expense (benefit)

3,403



247



(440)



(435)



1,820



4,595


Net income (loss)

10,381



924



(1,676)



(1,551)



6,414



14,492


Less net income (loss) attributable to noncontrolling interests

(157)



321



(153)



(12)



(7)



(8)


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

$

10,538



$

603



$

(1,523)



$

(1,539)



$

6,421



$

14,500


Total assets

$

1,721,278



$

277,358



$

263,414



$

108,118



$

86,168



$

2,456,336


 

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Nine Months Ended September 30, 2021


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

1,157,061



$

209,191



$

143,332



$

96,814



$

29,795



$

1,636,193


Cost of service revenue (excluding depreciation and amortization)

663,137



129,848



103,941



65,360



9,720



972,006


General and administrative expenses

369,337



58,789



35,216



33,213



10,199



506,754


Impairment of intangibles and other

937











937


Operating income (loss)

123,650



20,554



4,175



(1,759)



9,876



156,496


Interest expense

(1,099)



(195)



(143)



(73)



(31)



(1,541)


Income (loss) before income taxes and noncontrolling interest

122,551



20,359



4,032



(1,832)



9,845



154,955


Income tax expense (benefit)

26,003



4,221



889



(649)



2,445



32,909


Net income (loss)

96,548



16,138



3,143



(1,183)



7,400



122,046


Less net income (loss) attributable to non controlling interests

17,506



3,308



441



792



(37)



22,010


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

$

79,042



$

12,830



$

2,702



$

(1,975)



$

7,437



$

100,036





Nine Months Ended September 30, 2020


Home health
services


Hospice
services


Home and
community-
based
services


Facility-
based
services


HCI


Total

Net service revenue

$

1,081,143



$

181,387



$

144,526



$

96,664



$

27,155



$

1,530,875


Cost of service revenue (excluding depreciation and amortization)

631,109



112,485



113,864



64,340



11,362



933,160


General and administrative expenses

345,024



49,560



33,520



31,984



9,815



469,903


Impairment of intangibles and other

22



600









622


Government stimulus (income) expense












Operating income (loss)

104,988



18,742



(2,858)



340



5,978



127,190


Interest expense

(2,804)



(451)



(382)



(288)



(115)



(4,040)


Income (loss) before income taxes and noncontrolling interest

102,184



18,291



(3,240)



52



5,863



123,150


Income tax expense (benefit)

19,499



3,294



(658)



(261)



1,307



23,181


Net income (loss)

82,685



14,997



(2,582)



313



4,556



99,969


Less net income (loss) attributable to noncontrolling interests

14,371



3,452



(275)



1,228



(23)



18,753


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

$

68,314



$

11,545



$

(2,307)



$

(915)



$

4,579



$

81,216


 

LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)




Three Months Ended
September 30,


Nine Months Ended
September 30,

Key Data:


2021


2020


2021


2020










Home Health Services:









Locations


532



549



532



549


Acquired


2



2



3



8


De novo









Divested/consolidated


(1)



(6)



(2)



(14)


Total new admissions


108,492



104,304



325,496



305,968


Medicare new admissions


52,527



55,907



161,930



166,332


Average daily census


84,258



82,254



84,583



78,920


Average Medicare daily census


43,675



47,120



44,682



46,008


Medicare completed and billed episodes


84,550



88,970



254,823



260,415


Average Medicare case mix for completed and billed Medicare episodes


1.02



1.01



1.02



1.02


Average reimbursement per completed and billed Medicare episodes


$

2,850



$

2,824



$

2,870



$

2,798


Total visits


2,113,205



2,081,418



6,322,502



6,181,133


Total Medicare visits


1,063,086



1,149,577



3,216,843



3,474,314


Average visits per completed and billed Medicare episodes


12.6



12.9



12.6



13.3


Organic growth: (1)









Net revenue


4.5

%


(4.1)

%


8.0

%


(6.5)

%

Net Medicare revenue


(2.6)

%


(8.9)

%


1.2

%


(11.3)

%

Total new admissions


3.6

%


4.7

%


6.1

%


2.4

%

Medicare new admissions


(5.7)

%


(4.4)

%


(2.5)

%


(7.0)

%

Average daily census


2.5

%


4.9

%


7.7

%


(0.4)

%

Average Medicare daily census


(7.4)

%


(5.7)

%


(2.6)

%


(9.2)

%

Medicare completed and billed episodes


(4.0)

%


(3.5)

%


(0.5)

%


(8.1)

%










Hospice Services:









Locations


155



111



155



111


Acquired


24





26



4


De novo






1




Divested/consolidated




(1)



(2)



(2)


Admissions


6,466



5,077



16,884



15,006


Average daily census


5,697



4,393



4,859



4,338


Patient days


524,099



404,214



1,326,412



1,192,866


Average revenue per patient day


$

161.51



$

155.76



$

160.71



$

154.59


Organic growth: (1)









Total new admissions


0.1

%


12.8

%


2.9

%


4.8

%










Home and Community-Based Services:









Locations (2)


130



122



130



122


Acquired






1



4


De novo




13



7



19


Divested/consolidated


(3)



(2)



(3)



(2)


Average daily census


12,978



14,455



13,436



14,391


Billable hours


1,817,711



1,942,706



5,597,129



5,865,309


Revenue per billable hour


$

25.50



$

26.31



$

25.81



$

25.87











Facility-Based Services:









Long-term Acute Care









Locations


12



12



12



12


Acquired









Divested/consolidated




(1)





(1)


Patient days


22,722



24,275



64,081



68,094


Average revenue per patient day


$

1,386



$

1,346



$

1,471



$

1,362


Average Daily Census


247



264



235



249




(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
September 30,

Nine Months
Ended
September 30,



2021


2020


2021


2020

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


$

27,734



$

14,500



$

100,036



$

81,216


Add (net of tax):









   Acquisition, de novo and legal expenses (1)


6,875



1,829



10,352



3,345


   Closures/relocations/consolidations (2)


369





1,548



866


   COVID-19 impact: 













      PPE, supplies and other expenses (3)


10,290



7,689



27,141



29,967


      CARES Act tax benefit (4)








(2,210)


   Provider Relief Fund (PRF) (5)




32,882






   NCI associated with PRF (6)




(5,643)






   ERP implementation (7)


498





1,226




   Hurricane Ida (8)


844





844




   Gain on sale of asset (9)


(951)





(951)




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


$

45,659



$

51,257



$

140,196



$

113,184


 

RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE

(Amounts in thousands)

(Unaudited)




Three Months
Ended
September 30,

Nine Months
Ended
September 30,



2021


2020


2021


2020

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


$

0.88



$

0.46



$

3.18



$

2.59


Add (net of tax):









   Acquisition, de novo and legal expenses (1)


0.22



0.05



0.33



0.11


   Closures/relocations/consolidations (2)


0.01





0.05



0.03


   COVID-19 impact:













      PPE, supplies and other expenses (3)


0.33



0.25



0.87



0.95


      CARES Act tax benefit (4)








(0.07)


   Provider Relief Fund (PRF) (5)




1.05






   NCI associated with PRF (6)




(0.18)






   ERP implementation (7)


0.01





0.03




   Hurricane Ida (8)


0.03





0.03




   Gain on sale of asset (9)


(0.03)





(0.03)




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


$

1.45



$

1.63



$

4.46



$

3.61


 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA

(Amounts in thousands)

(Unaudited)




Three Months Ended
September 30,

Nine Months Ended
September 30,



2021


2020


2021


2020

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


$

27,734



$

14,500



$

100,036



$

81,216


Add:









   Income tax expense


10,150



4,595



32,909



23,181


   Interest expense, net


1,135



431



1,541



4,040


   Depreciation and amortization 


5,358



5,217



14,899



15,601


   Adjustment items


24,415



49,775



54,524



46,339


Adjusted EBITDA


$

68,792



$

74,518



$

203,909



$

170,377


Adjustment items (pre-tax):









   Acquisition, de novo and legal expenses (1)


9,364



2,492



14,072



4,556


   Closures/relocation/consolidations (2)


502





2,098



1,174


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


14,016



10,474



36,835



40,609


   Provider Relief Fund (PRF) (5)




44,435






   NCI associated with PRF (6)




(7,626)






   ERP implementation (7)


679





1,665




   Hurricane Ida (8)


1,150





1,150




   Gain on sale of asset (9)


(1,296)





(1,296)




Total adjustments


$

24,415



$

49,775



$

54,524



$

46,339





















1.

Expenses and other costs associated with recently announced or completed acquisitions, de novos and legal expenses ($9.4 million and $14.1 million pre-tax in the three and nine months ended September 30, 2021, respectively; $2.5 million and $4.6 million pre-tax in the three and nine months ended September 30, 2020, respectively).

2.

Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($0.5 million and $2.1 million pre-tax in the three and nine months ended September 30, 2021, respectively; $1.1 million in the nine months ended September 30, 2020).

3.

COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies, wage adjustments and employee healthcare costs ($14.0 million and $36.8 million pre-tax in the three and nine months ended September 30, 2021, respectively; $10.5 million and $40.6 million pre-tax in the three and nine months ended September 30, 2020, respectively).

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.

The reversal of government stimulus income related to general distribution funds received from the Provider Relief Fund ("PRF") under the CARES Act ($44.4 million pre-tax). 

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) was reversed in the three months ended September 30, 2020 as noted above.

7.

Expenses and other costs associated with the implementation of an Enterprise Resource Planning software ($0.7 million and $1.7 million pre-tax in the three and nine months ended September 30, 2021, respectively).

8.

Direct recovery costs associated with Hurricane Ida ($1.2 million pre-tax).

9.

As of December 31, 2020, the Company's assets held for sale was $1.9 million, which consisted of one hospice facility in Knoxville, Tennessee.  The Company sold the property during the third quarter of 2021 for $3.2 million. 

 

Contact:

Eric Elliott


Senior Vice President of Finance


(337) 233-1307


eric.elliott@lhcgroup.com

 

SOURCE LHC Group, Inc.