Press Release

Amedisys Reports First Quarter 2017 Financial Results

Announces Closure of Acquisition of Home Health and Hospice Care Centers From Tenet Healthcare

Company Release - 5/2/2017 4:55 PM ET

BATON ROUGE, La., May 02, 2017 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ:AMED) today reported its financial results for the three month period ended March 31, 2017.

Three Month Periods Ended March 31, 2017 and 2016

  • Net income attributable to Amedisys, Inc. of $15.1 million compared to $6.2 million in 2016.
  • Net income attributable to Amedisys, Inc. per diluted share of $0.44 per diluted share compared to $0.19 in 2016.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $32.0 million compared to $23.9 million in 2016.
  • Adjusted net income attributable to Amedisys, Inc. of $16.0 million compared to $10.9 million in 2016.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.47 compared to $0.33 in 2016.

* See table entitled Reconciliation of Non-GAAP Financial Measures to GAAP Measures for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Tenet Healthcare Acquisition

On May 1, 2017, Amedisys closed on its previously announced acquisition of Tenet Healthcare’s (NYSE:THC) home health and hospice operations in Arizona, Illinois, Massachusetts and Texas, for a purchase price of $20.5 million.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am pleased with our first quarter results as we continued to make progress in all four key areas of our strategy. While we did see softer volumes than anticipated in home health, continued strong performance from our hospice segment as well as disciplined cost control helped to deliver significant increases in revenue, EBITDA, earnings per share and cash flow from operations compared to the first quarter of 2016. Our primary focus as a company for the remainder of 2017 will be on organic admissions growth in home health, and we have developed detailed market-by-market plans to reach our organic growth goals in the second half of this year. In addition, our M&A pipeline is strong and we have a flexible balance sheet that will allow us to capitalize on attractive opportunities. We remain focused on continuing to deliver value to our patients, referral sources, and, ultimately, our shareholders.”

We urge caution in considering the current trends disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com.

Earnings Call and Webcast Information

Amedisys will host a conference call on Wednesday, May 3, 2017, at 11:00 a.m. ET to discuss its first quarter results. To participate on the conference call, please call before 11:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through June 3, 2017 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13660189.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Non-GAAP Financial Measures

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measures as defined under SEC rules are as follows: (1) Adjusted EBITDA, defined as net income attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items; (2) adjusted net income attributable to Amedisys, Inc., defined as net income attributable to Amedisys, Inc. excluding certain items; and (3) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. Management believes that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, are useful gauges of our current performance and are also included in internal management reporting. These non-GAAP financial measures should be considered in addition to, and not more meaningful than or as an alternative to the GAAP financial measures presented in this earnings release and the company’s financial statements. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

Additional information

Amedisys, Inc. (the “Company”) is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 2,200 hospitals and 61,900 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With approximately 16,000 employees, in 421 care centers in 34 states, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 385,000 patients in need every year. For more information about the Company, please visit: www.amedisys.com.

We use our website as a channel of distribution for important company information. Important information, including press releases, financial presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the healthcare industry, our ability to integrate our personal care segment into our business efficiently, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to comply with requirements stipulated in our corporate integrity agreement and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

   
AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 For the Three Month Period Ended March 31,  
  2017     2016   
Net service revenue $  370,458  $  348,817 
Cost of service, excluding depreciation and amortization    215,785     201,837 
General and administrative expenses:         
Salaries and benefits    74,459     76,717 
Non-cash compensation    3,874     4,070 
Other    40,417     46,717 
Provision for doubtful accounts    6,341     3,940 
Depreciation and amortization    4,417     4,473 
         
Operating expenses    345,293     337,754 
         
Operating income    25,165     11,063 
Other expense:         
Interest income    19     22 
Interest expense    (1,068)    (1,112)
Equity in loss from equity method investments    (106)    (5)
Miscellaneous, net    1,112     735 
         
   Total other expense, net    (43)    (360)
Income before income taxes    25,122     10,703 
Income tax expense    (9,923)    (4,388)
         
Net income    15,199     6,315 
Net income attributable to noncontrolling interests    (69)    (102)
         
Net income attributable to Amedisys, Inc. $  15,130  $  6,213 
         
Basic earnings per common share:   
Net income attributable to Amedisys, Inc. common stockholders $  0.45  $  0.19 
         
Weighted average shares outstanding    33,443     32,920 
         
Diluted earnings per common share:   
Net income attributable to Amedisys, Inc. common stockholders $  0.44  $  0.19 
         
Weighted average shares outstanding    34,073     33,508 


 
AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share data)
   March 31, 2017     December 31, 2016   
   (Unaudited)     
ASSETS        
Current assets:        
Cash and cash equivalents $  48,334  $  30,197 
Patient accounts receivable, net of allowance for doubtful accounts of $19,249 and $17,716    172,707     166,056 
Prepaid expenses    10,097     7,397 
Other current assets    11,964     11,260 
         
   Total current assets    243,102     214,910 
         
Property and equipment, net of accumulated depreciation of $142,185 and $138,650    36,676     36,999 
Goodwill    292,793     288,957 
Intangible assets, net of accumulated amortization of $28,557 and $27,864    46,220     46,755 
Deferred income taxes    98,943     107,940 
Other assets, net    38,894     38,468 
         
   Total assets $  756,628  $  734,029 
         
LIABILITIES AND EQUITY        
Current liabilities:        
Accounts payable $  29,444  $  30,358 
Payroll and employee benefits    81,909     82,480 
Accrued expenses    65,663     63,290 
Current portion of long-term obligations    6,888     5,220 
         
   Total current liabilities    183,904     181,348 
Long-term obligations, less current portion    85,472     87,809 
Other long-term obligations    4,306     3,730 
         
   Total liabilities    273,682     272,887 
         
Equity:        
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or
   outstanding
      
Common stock, $0.001 par value, 60,000,000 shares authorized; 35,364,752 and
   35,253,577 shares issued; and 33,693,027 and 33,597,215 shares outstanding
    35     35 
Additional paid-in capital    544,428     537,472 
Treasury stock at cost, 1,671,725 and 1,656,362 shares of common stock    (47,531)    (46,774)
Accumulated other comprehensive income    15     15 
Retained earnings    (14,967)    (30,545)
         
   Total Amedisys, Inc. stockholders’ equity    481,980     460,203 
Noncontrolling interests    966     939 
         
   Total equity    482,946     461,142 
         
   Total liabilities and equity $  756,628  $  734,029 
         


 
AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING, NET
(Amounts in thousands, except statistical information)
(Unaudited)
  For the Three Month Period Ended March 31,  
   2017     2016   
Cash Flows from Operating Activities:         
Net income  $15,199  $6,315 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization     4,417     4,473 
Provision for doubtful accounts     6,341     3,940 
Non-cash compensation     3,874     4,070 
401(k) employer match     2,227     1,737 
(Gain) loss on disposal of property and equipment     (16)    360 
Deferred income taxes     9,445     4,038 
Equity in loss from equity method investments    106     5 
Amortization of deferred debt issuance costs     185     185 
Return on equity investment     150     362 
Changes in operating assets and liabilities, net of impact of acquisitions:         
Patient accounts receivable     (12,493)    (27,689)
Other current assets     (3,403)    7,845 
Other assets     (990)    (2,775)
Accounts payable     93     9,098 
Accrued expenses     1,386     801 
Other long-term obligations     576     (521)
          
Net cash provided by operating activities     27,097     12,244 
          
Cash Flows from Investing Activities:         
Proceeds from sale of deferred compensation plan assets     565     230 
Purchase of investment     (256)    —  
Purchases of property and equipment     (4,385)    (6,702)
Acquisitions of businesses, net of cash acquired     (4,099)    (27,682)
          
Net cash used in investing activities    (8,175)    (34,154)
          
Cash Flows from Financing Activities:         
Proceeds from issuance of stock upon exercise of stock options and warrants     653     —  
Proceeds from issuance of stock to employee stock purchase plan     612     638 
Shares withheld upon stock vesting     (758)    —  
Tax benefit from stock options exercised and restricted stock vesting     —      159 
Non-controlling interest distribution     (42)    —  
Proceeds from revolving line of credit     —      40,500 
Repayments of revolving line of credit    —      (25,500)
Principal payments of long-term obligations     (1,250)    (1,250)
Purchase of company stock     —      (12,315)
          
Net cash (used in) provided by financing activities     (785)    2,232 
          
Net increase (decrease) in cash and cash equivalents     18,137     (19,678)
Cash and cash equivalents at beginning of period     30,197     27,502 
          
Cash and cash equivalents at end of period  $  48,334  $  7,824 
          
Supplemental Disclosures of Cash Flow Information:         
Cash paid for interest  $  706  $  648 
          
Cash paid for income taxes, net of refunds received  $  284  $  (7)
          
Days revenue outstanding, net (1)     40.5     38.9 
 
(1)      Our calculation of days revenue outstanding, net at March 31, 2017 and 2016 is derived by dividing our ending patient accounts
           receivable (i.e., net of estimated revenue adjustments and allowance for doubtful accounts) by our average daily net patient
           revenue for the three month period ended March 31, 2017 and 2016, respectively.


    
AMEDISYS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in millions, except statistical information)
(Unaudited)
Segment Information - Home Health
  For the Three Month Period Ended March 31,  
   2017     2016   
Financial Information (in millions):        
Medicare  $  198.7  $  206.8 
Non-Medicare     72.6     65.9 
         
Net service revenue     271.3     272.7 
Cost of service     163.0     160.8 
         
Gross margin     108.3     111.9 
Other operating expenses     72.6     75.7 
         
Operating income  $  35.7  $  36.2 
         
Key Statistical Data:        
         
Medicare:        
Same Store (1):        
Revenue     (3%)    4%
Admissions     (1%)    4%
Recertifications     (3%)    4%
Total (2):        
Admissions     49,628     50,418 
Recertifications     25,043     26,023 
Completed episodes     71,864     72,032 
Visits     1,263,098     1,311,371 
Average revenue per completed episode (3)  $  2,782  $  2,812 
Visits per completed episode (4)     16.9     17.4 
         
Non-Medicare:        
Same Store (1):        
Revenue     11%    22%
Admissions:        
Episodic     35%    11%
Non-Episodic     (1%)    10%
Recertifications     5%    23%
Total (2):        
Admissions     27,333     25,567 
Recertifications     10,224     9,826 
Visits     555,548     527,969 
         
Total (2):        
Visiting Clinician Cost per Visit  $  81.08  $  79.14 
Clinical Manager Cost per Visit  $  8.53  $  8.31 
         
Total Cost per Visit  $  89.61  $  87.45 
         
Visits     1,818,646     1,839,340 

(1)      Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, admissions or recertifications for the period as a percent of the Medicare and Non-Medicare revenue, admissions or recertifications of the prior period.
(2)      Total includes acquisitions.
(3)      Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.
(4)      Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

    
Segment Information - Hospice
  For the Three Month Period Ended March 31,  
   2017     2016   
Financial Information (in millions):        
Medicare  $  80.7  $  68.7 
Non-Medicare     4.9     4.3 
         
Net service revenue     85.6     73.0 
Cost of service     42.4     38.8 
         
Gross margin     43.2     34.2 
Other operating expenses     20.8     17.9 
         
Operating income  $  22.4  $  16.3 
         
         
Key Statistical Data:        
Same Store (1):        
Medicare revenue     17%    22%
Non-Medicare revenue     15%    16%
Hospice admissions     20%    19%
Average daily census     16%    22%
Total (2):        
Hospice admissions     6,505     5,430 
Average daily census     6,365     5,507 
Revenue per day, net  $  149.41  $  145.65 
Cost of service per day  $  74.08  $  77.36 
Average discharge length of stay     92     96 

(1)      Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.
(2)      Total includes acquisitions.

 
Segment Information - Personal Care
  For the Three Month Period Ended March 31,  
   2017     2016  
Financial Information (in millions):       
Medicare $  —   $  — 
Non-Medicare    13.6     3.1
        
Net service revenue    13.6     3.1
Cost of service    10.4     2.2
        
Gross margin    3.2     0.9
Other operating expenses    3.4     0.4
        
Operating (loss) income $  (0.2) $  0.5
        
Key Statistical Data:       
Billable hours    588,216     137,883
Clients served    8,822     5,017


 
  Segment Information - Corporate
  For the Three Month Period Ended March 31,  
   2017     2016  
Financial Information (in millions):       
Other operating expenses $  29.5  $  39.0
Depreciation and amortization    3.2     2.9
        
Total operating expenses $  32.7  $  41.9
        


    
AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
(Amounts in thousands)
(Unaudited)
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”):
  For the Three Month Period Ended March 31,  
   2017     2016  
Net income attributable to Amedisys, Inc. $  15,130  $  6,213
Add:       
Income tax expense    9,923     4,388
Interest expense, net    1,049     1,090
Depreciation and amortization    4,417     4,473
Certain items (1)    1,466     7,766
        
Adjusted EBITDA (2) (5) $  31,985  $  23,930
        


 
Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:
  For the Three Month Period Ended March 31,  
   2017     2016  
Net income attributable to Amedisys, Inc. $  15,130  $  6,213
Add:       
Certain items (1)    887     4,698
        
Adjusted net income attributable to Amedisys,
   Inc. (3) (5)
 $  16,017  $  10,911
        


 
Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:
  For the Three Month Period Ended March 31,  
   2017     2016  
Net income attributable to Amedisys, Inc.
   common stockholders per diluted share
 $  0.44  $  0.19
Add:       
Certain items (1)    0.03     0.14
        
Adjusted net income attributable to
   Amedisys, Inc. common stockholders per
   diluted share (4) (5)
 $  0.47  $  0.33
        

(1)      The following details the certain items for the three month periods ended March 31, 2017 and 2016:

 
Certain Items: 
  For the Three Month Period
Ended March 31, 2017
 
     For the Three Month Period
Ended March 31, 2016 
 
  (Income) Expense     (Income) Expense    
Certain Items Impacting Operating
   Expenses:
         
HCHB implementation $  —    $  2,440 
Acquisition costs    682      1,704 
Legal fees - non-routine    123      1,517 
Restructuring activity    —       1,762 
Data center relocation    714      448 
Certain Items Impacting Total Other
   Income (Expense):
         
Legal settlements    (674)     (541)
Miscellaneous, other (income) expense, net    621      436 
          
Total $  1,466   $  7,766 
          
Net of tax $  887   $  4,698 
          
Diluted EPS $  0.03   $  0.14 
          

(2)      Adjusted EBITDA is defined as net income attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items as described in footnote 1.
(3)      Adjusted net income attributable to Amedisys, Inc. is defined as net income attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.
(4)      Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in footnote 1.
(5)      Adjusted EBITDA, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes or other measure calculated in accordance with GAAP. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.

 

Contact:

Investor Contact:
Amedisys, Inc.
David Castille
Managing Director, Treasury/Finance
(225) 299-3391
david.castille@amedisys.com

Media Contact:
Amedisys, Inc.
Kendra Kimmons
Managing Director, Marketing & Communications
(225) 299-3720
kendra.kimmons@amedisys.com

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Source: Amedisys, Inc.

Contact Information

Amedisys Corporate Headquarters
3854 American Way
Baton Rouge, LA 70816
(225) 292-2031
Amedisys Executive Office
209 10th Avenue S.
Suite 512
Nashville, TN 37203
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