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| 8-K - FORM 8-K FILING DOCUMENT - LHC Group, Inc | document.htm |
EXHIBIT 99.1
LHC Group Announces Third Quarter 2011 Results
LAFAYETTE, La., Nov. 2, 2011 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health and hospice services, announced today its financial results for the three and nine months ended September 30, 2011.
Financial Results for the Third Quarter
- Net service revenue for the third quarter of 2011 decreased to $153.4 million compared with $165.7 million for the same period in 2010.
- The Company reported a net loss attributable to LHC Group for the third quarter of 2011 of $38.0 million, including an after-tax charge of $45.0 million associated with the previously announced settlement agreement with the government, an unexpected increase in self insured employee healthcare costs during the third quarter of $2.3 million, and the positive impact of pay for performance payments in the third quarter, which increased net income by $715,000, after tax.
- Loss per share was $2.08 for the third quarter of 2011.
- Organic growth in total new home health admissions was 5.1% for the third quarter of 2011.
In commenting on the results, Keith G. Myers, Chief Executive Officer of LHC Group, said, "The third quarter of 2011 presented LHC Group with many short-term challenges. I commend and thank our experienced leaders throughout the Company and all of the dedicated hard working employees of LHC Group for their long-term commitment to quality patient care and their ability to remain focused on the fundamentals of our business when challenges come our way. This has long been a hallmark of our team, and, once again, they have risen to the challenge. It is important to remember that home health remains the most cost-effective manner of providing care to the elderly population we serve. Further, according to the U.S. Census Bureau, the age 65 and over population will more than double over the next 30 years. As a result, I am more confident than ever that, over the long term, home health will continue to have an ever expanding role in health care. Because of our long‑term conservative approach to management and the investments we've made in technology, quality, and people over the past three years, we are well positioned to withstand the short-term challenges we face and take advantage of the opportunities that lie ahead."
Financial Results for the Nine Months
- Net service revenue for the nine months ended September 30, 2011, increased to $476.2 million compared with $464.5 million for the same period in 2010.
- The Company reported a net loss attributable to LHC Group for the nine months ended September 30, 2011, of $20.5 million, including the aforementioned items in the third quarter.
- Loss per share was $1.12 for the nine months ended September 30, 2011, including the aforementioned items in the third quarter.
Guidance
As reported on October 26, 2011, the Company is updating its previously stated guidance with respect to fiscal year 2011 by adjusting its guidance for net service revenue to a range of $630 million to $640 million and loss per share to a range of $0.82 to $0.72. This guidance for fiscal year 2011 does not take into account the impact of any future acquisitions or share repurchases, if made, de novo locations, if opened, future legal or other expenses associated with the Company's ongoing investigations or future reimbursement changes, if any. Specifically, this guidance does not take into account the proposed 2012 rule issued by the Centers for Medicare and Medicaid Services, which if adopted would apply to episodes for patients on service at December 31, 2011. The Company estimates the impact to the fourth quarter 2011 operating results from the proposed 2012 rule would be to decrease revenue approximately $1.2 million and impact fully diluted earnings per share by $0.04, after tax.
Conference Call
LHC Group will host a conference call on Thursday, November 3, 2011, at 11:00 a.m. Eastern time to discuss its third quarter 2011 results. The toll-free number to call for this interactive teleconference is (866) 393-1608 (international callers should call 973-890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, November 10, 2011, by dialing (800) 642-1687 (international callers should call 706-645-9291) and entering confirmation number 44151158. A live broadcast of LHC Group's conference call will be available under the Investor Relations section of the Company's website, www.LHCGroup.com. A one-year online replay will be available approximately an hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. is a national provider of home health and hospice services, providing quality, cost-effective healthcare to patients within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of post-acute healthcare services through home health, hospice and private duty locations in its home-based division and long-term acute care hospitals in its facility-based division.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's future financial performance and the strength of the Company's operations. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including changes in reimbursement, changes in government regulations, changes in LHC Group's relationships with referral sources, increased competition for LHC Group's services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in Item 1A. Risk Factors in LHC Group's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission. LHC Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| LHC GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (amounts in thousands, except share data) | ||
| (unaudited) | ||
| Sept. 30, | Dec. 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash | $11,134 | $288 |
| Receivables: | ||
| Patient accounts receivable, less allowance for uncollectible accounts of $10,808 and $9,769, respectively | 78,594 | 79,939 |
| Other receivables | 2,407 | 5,210 |
| Amounts due from governmental entities | 315 | 429 |
| Total receivables, net | 81,316 | 85,578 |
| Deferred income taxes | 7,745 | 5,941 |
| Prepaid income taxes | 30,309 | 5,326 |
| Prepaid expenses | 5,311 | 6,573 |
| Other current assets | 4,148 | 3,442 |
| Total current assets | 139,963 | 107,148 |
| Property, building and equipment, net of accumulated depreciation of $20,163 and $15,329, respectively | 27,901 | 26,862 |
| Goodwill | 164,731 | 157,338 |
| Intangible assets, net of accumulated amortization of $2,129 and $1,499, respectively | 59,585 | 54,051 |
| Advance payment on acquisitions | – | 6,947 |
| Other assets | 5,713 | 4,959 |
| Total assets | $397,893 | $357,305 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and other accrued liabilities | $22,929 | $21,017 |
| Salaries, wages and benefits payable | 22,925 | 27,289 |
| Amounts due to governmental entities | 3,262 | 3,159 |
| Total current liabilities | 49,116 | 51,465 |
| Deferred income taxes | 21,455 | 16,817 |
| Income tax payable | 3,415 | – |
| Revolving credit facility | 54,000 | – |
| Total liabilities | 127,986 | 68,282 |
| Noncontrolling interest- redeemable | 11,858 | 13,535 |
| Stockholders' equity: | ||
| Common stock – $0.01 par value: 40,000,000 shares authorized; 21,352,211 and 21,180,286 shares issued and 18,281,181 and 18,172,022 shares outstanding, respectively | 183 | 181 |
| Treasury stock – 3,071,030 and 3,008,264 shares at cost, respectively | (6,146) | (4,453) |
| Additional paid-in capital | 94,559 | 91,017 |
| Retained earnings | 166,518 | 186,996 |
| Total LHC Group, Inc. stockholders' equity | 255,114 | 273,741 |
| Noncontrolling interest- non-redeemable | 2,935 | 1,747 |
| Total equity | 258,049 | 275,488 |
| Total liabilities and equity | $397,893 | $357,305 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (amounts in thousands, except share and per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Net service revenue | $153,398 | $165,672 | $476,196 | $464,475 |
| Cost of service revenue | 87,815 | 87,227 | 262,987 | 239,952 |
| Gross margin | 65,583 | 78,445 | 213,209 | 224,523 |
| Provision for bad debts | 3,199 | 1,699 | 8,903 | 5,299 |
| Settlement with government agencies | 65,000 | – | 65,000 | – |
| General and administrative expenses | 52,656 | 51,056 | 159,851 | 146,509 |
| Operating income (loss) | (55,272) | 25,690 | (20,545) | 72,715 |
| Interest expense | (217) | (33) | (507) | (83) |
| Non-operating income | 1,396 | 90 | 1,573 | 711 |
| Income (loss) before income taxes and noncontrolling interest | (54,093) | 25,747 | (19,479) | 73,343 |
| Income tax expense (benefit) | (18,130) | 8,631 | (6,420) | 24,119 |
| Net income (loss) | (35,963) | 17,116 | (13,059) | 49,224 |
| Less net income attributable to noncontrolling interest | 1,997 | 3,818 | 7,419 | 11,910 |
| Net income (loss) attributable to LHC Group, Inc. | (37,960) | 13,298 | (20,478) | 37,314 |
| Redeemable noncontrolling interest | – | – | – | 41 |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ (37,960) | $13,298 | $ (20,478) | $37,355 |
| Earnings per share – basic: | ||||
| Net Income (loss) attributable to LHC Group, Inc. | $ (2.08) | $0.73 | $ (1.12) | $2.06 |
| Redeemable noncontrolling interest | – | – | – | – |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ (2.08) | $0.73 | $ (1.12) | $2.06 |
| Earnings per share – diluted: | ||||
| Net Income (loss) attributable to LHC Group, Inc. | $ (2.08) | $0.73 | $ (1.12) | $2.05 |
| Redeemable noncontrolling interest | – | – | – | – |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ (2.08) | $0.73 | $ (1.12) | $2.05 |
| Weighted average shares outstanding: | ||||
| Basic | 18,263,237 | 18,148,678 | 18,251,648 | 18,103,196 |
| Diluted | 18,263,237 | 18,224,019 | 18,251,648 | 18,208,445 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (amounts in thousands) | ||
| (unaudited) | ||
| Nine Months Ended | ||
| September 30, | ||
| 2011 | 2010 | |
| Operating activities | ||
| Net income (loss) | $ (13,059) | $49,224 |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization expense | 5,719 | 5,354 |
| Provision for bad debts | 8,903 | 5,299 |
| Stock-based compensation expense | 3,041 | 2,791 |
| Deferred income taxes | 2,834 | 818 |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Receivables | (5,871) | (9,858) |
| Prepaid expenses and other assets | 6,762 | (199) |
| Prepaid income taxes | (21,569) | – |
| Accounts payable and accrued expenses | (2,627) | 4,523 |
| Net amounts due to/from governmental entities | 217 | 498 |
| Net cash (used in) provided by operating activities | (15,650) | 58,450 |
| Investing activities | ||
| Purchases of property, building, and equipment | (6,058) | (11,145) |
| Cash paid for acquisitions, primarily goodwill and intangible assets and advance payment on acquisitions | (11,745) | (21,994) |
| Net cash used in investing activities | (17,803) | (33,139) |
| Financing activities | ||
| Proceeds from line of credit | 103,187 | 9,023 |
| Payments on line of credit | (49,187) | (14,746) |
| Principal payments on debt | – | (303) |
| Payments on capital leases | (14) | (24) |
| Excess tax benefits from vesting of restricted stock | 319 | 634 |
| Proceeds from employee stock purchase plan | 648 | 595 |
| Noncontrolling interest distributions | (9,537) | (11,763) |
| Payments on repurchase of common stock | (577) | – |
| Purchase of additional controlling interest | (816) | (1,914) |
| Sale of noncontrolling interest | 276 | – |
| Net cash (used in) provided by financing activities | 44,299 | (18,498) |
| Change in cash | 10,846 | 6,813 |
| Cash at beginning of period | 288 | 394 |
| Cash at end of period | $11,134 | $7,207 |
| Supplemental disclosures of cash flow information | ||
| Interest paid | $507 | $83 |
| Income taxes paid | $12,335 | $25,170 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||||||
| SEGMENT INFORMATION | ||||||
| (amounts in thousands) | ||||||
| (unaudited) | ||||||
| Three Months Ended | Nine Months Ended | |||||
| September 30, 2011 | September 30, 2010 | |||||
| Home-Based | Facility-Based | Home-Based | Facility-Based | |||
| Services | Services | Total | Services | Services | Total | |
| Net service revenue | $134,950 | $18,448 | $153,398 | $418,735 | $57,461 | $476,196 |
| Cost of service revenue | 77,331 | 10,484 | 87,815 | 229,153 | 33,834 | 262,987 |
| Provision for bad debts | 3,097 | 102 | 3,199 | 8,503 | 400 | 8,903 |
| Settlement with government agencies | 65,000 | -- | 65,000 | 65,000 | -- | 65,000 |
| General and administrative expenses | 47,522 | 5,134 | 52,656 | 145,043 | 14,808 | 159,851 |
| Operating income (loss) | (58,000) | 2,728 | (55,272) | (28,964) | 8,419 | (20,545) |
| Interest expense | (196) | (21) | (217) | (457) | (50) | (507) |
| Non-operating income | 1,374 | 22 | 1,396 | 1,516 | 57 | 1,573 |
| Income (loss) before income taxes and noncontrolling interest | (56,822) | 2,729 | (54,093) | (27,905) | 8,426 | (19,479) |
| Income tax expense (benefit) | (18,506) | 376 | (18,130) | (7,912) | 1,492 | (6,420) |
| Net income (loss) | (38,316) | 2,353 | (35,963) | (19,993) | 6,934 | (13,059) |
| Noncontrolling interest | 1,622 | 375 | 1,997 | 6,404 | 1,015 | 7,419 |
| Net income (loss) attributable to LHC Group, Inc. | $ (39,938) | $1,978 | $ (37,960) | $ (26,397) | $5,919 | $ (20,478) |
| Total assets | $356,417 | $41,476 | $397,893 | $356,417 | $41,476 | $397,893 |
| Three Months Ended | Nine Months Ended | |||||
| September 30, 2011 | September 30, 2010 | |||||
| Home-Based | Facility-Based | Home-Based | Facility-Based | |||
| Services | Services | Total | Services | Services | Total | |
| Net service revenue | $144,829 | $20,843 | $165,672 | $408,524 | $55,951 | $464,475 |
| Cost of service revenue | 74,483 | 12,744 | 87,227 | 207,069 | 32,883 | 239,952 |
| Provision for bad debts | 1,848 | (149) | 1,699 | 5,140 | 159 | 5,299 |
| General and administrative expenses | 46,119 | 4,937 | 51,056 | 132,954 | 13,555 | 146,509 |
| Operating income | 22,379 | 3,311 | 25,690 | 63,361 | 9,354 | 72,715 |
| Interest expense | (30) | (3) | (33) | (75) | (8) | (83) |
| Non-operating income | 38 | 52 | 90 | 663 | 48 | 711 |
| Income before income taxes and noncontrolling interest | 22,387 | 3,360 | 25,747 | 63,949 | 9,394 | 73,343 |
| Income tax expense | 7,793 | 838 | 8,631 | 21,772 | 2,347 | 24,119 |
| Net income | 14,594 | 2,522 | 17,116 | 42,177 | 7,047 | 49,224 |
| Noncontrolling interest | 3,440 | 378 | 3,818 | 10,624 | 1,286 | 11,910 |
| Net income attributable to LHC Group, Inc. | $11,154 | $2,144 | $13,298 | $31,553 | $5,761 | $37,314 |
| Total assets | $310,380 | $37,035 | $347,415 | $310,380 | $37,035 | $347,415 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||||
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Key Data: | ||||
| Home-Based Services: | ||||
| Home Health | ||||
| Locations | 258 | 251 | 258 | 251 |
| Acquired | 0 | 13 | 5 | 17 |
| De novo | 0 | 3 | 6 | 8 |
| Total new admissions | 25,787 | 23,807 | 76,916 | 68,152 |
| Medicare new admissions | 18,445 | 17,100 | 54,457 | 49,626 |
| Average weekly census | 31,311 | 33,402 | 32,942 | 31,823 |
| Average Medicare weekly census | 24,076 | 26,236 | 25,539 | 25,276 |
| Medicare completed and billed episodes | 41,191 | 42,813 | 127,798 | 122,058 |
| Average Medicare case mix for completed and billed Medicare episodes | 1.24 | 1.27 | 1.24 | 1.27 |
| Average reimbursement per completed and billed Medicare episodes | $2,344 | $2,531 | $2,352 | $2,535 |
| Total visits | 862,220 | 888,961 | 2,626,043 | 2,509,768 |
| Total Medicare visits | 644,392 | 683,756 | 1,977,665 | 1,948,664 |
| Average visits per completed and billed Medicare episodes | 15.6 | 16.0 | 15.5 | 16.0 |
| Organic growth (1): | ||||
| Net revenue | -11.2% | 15.2% | -1.9% | 11.6% |
| Net Medicare revenue | -13.4% | 13.2% | -4.6% | 10.6% |
| Total new admissions | 5.1% | 9.6% | 9.5% | 11.5% |
| Medicare new admissions | 4.5% | 11.0% | 6.5% | 13.4% |
| Average weekly census | -8.2% | 9.3% | 1.6% | 3.1% |
| Average Medicare weekly census | -10.2% | 9.2% | -0.8% | 3.5% |
| Medicare completed and billed episodes | -5.6% | 6.5% | 2.9% | 5.9% |
| Hospice | ||||
| Locations | 32 | 26 | 32 | 26 |
| Acquired | 0 | 5 | 8 | 6 |
| Admissions | 1,061 | 796 | 3,025 | 2,154 |
| Average Daily Census | 918 | 658 | 894 | 605 |
| Patient Days | 84,410 | 60,513 | 244,080 | 165,185 |
| Average revenue per patient day | $134 | $135 | $135 | $135 |
| Facility-Based Services: | ||||
| Long-term Acute Care | ||||
| Locations | 9 | 9 | 9 | 9 |
| Patient days | 15,385 | 16,736 | 45,986 | 44,679 |
| Patient acuity mix | 1.02 | 1.04 | 1.03 | 1.03 |
| Average revenue per patient day | $1,167 | $1,155 | $1,182 | $1,156 |
| (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. | ||||
CONTACT: Eric Elliott
Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com