Press Release

Amedisys Reports Fourth Quarter and Year End 2017 Financial Results

Issues 2018 Guidance

Company Release - 2/27/2018 5:00 PM ET

BATON ROUGE, La., Feb. 27, 2018 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ:AMED) today reported its financial results for the three month period and year ended December 31, 2017.

Three Month Periods Ended December 31, 2017 and 2016

  • Net service revenue increased $37.9 million to $404.2 million compared to $366.3 million in 2016.

  • Net loss attributable to Amedisys, Inc. of $3.8 million which is inclusive of a $21.4 million reduction in net income as a result of the enactment of H.R. 1 (Tax Cuts and Jobs Act), compared to net income attributable to Amedisys, Inc. of $8.9 million in 2016.

  • Net loss attributable to Amedisys, Inc. per diluted share of $0.11 compared to net income attributable to Amedisys, Inc. of $0.26 in 2016.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $37.1 million compared to $30.5 million in 2016.

  • Adjusted net service revenue of $404.2 million compared to $365.1 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. of $19.4 million compared to $15.0 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.56 compared to $0.44 in 2016.

Years Ended December 31, 2017 and 2016

  • Net service revenue increased $96.2 million to $1,533.7 million compared to $1,437.4 million in 2016.

  • Net income attributable to Amedisys, Inc. of $30.3 million which is inclusive of a $21.4 million reduction in net income as a result of the enactment of H.R. 1 (Tax Cuts and Jobs Act), compared to $37.3 million in 2016.

  • Net income attributable to Amedisys, Inc. per diluted share of $0.88 compared to $1.10 in 2016.

Adjusted Year End Results*

  • Adjusted EBITDA of $142.2 million compared to $109.9 million in 2016.

  • Adjusted net service revenue of $1,540.2 million compared to $1,437.3 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. of $75.9 million compared to $52.2 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $2.21 compared to $1.55 in 2016.

*   See pages 12 and 13 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am extremely pleased with the results that our team delivered during the fourth quarter and in 2017. We demonstrated solid growth across all three line of business, continued to improve our position as an industry leader in clinical quality and realized the efficiencies that we promised to our stakeholders in early 2016; all of which helped deliver significant increases in revenue, EBITDA and earnings per share. Entering 2018, we remain focused on our four strategic areas of focus: clinical distinction, employer of choice, operational efficiency and driving growth. As a result of our efforts in the last few years, we have a strong balance sheet and will look to deploy capital to expand our businesses and continue our dedication to deliver value to our patients, referral sources, and, ultimately, our shareholders.”

2018 Guidance

  • Net service revenue is anticipated to be in the range of $1.60 billion to $1.64 billion.

  • Adjusted EBITDA is anticipated to be in the range of $158 million to $163 million.

  • Adjusted diluted earnings per share is anticipated to be in the range of $2.97 to $3.08 based on an estimated 34.85 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made.

We urge caution in considering the current trends and 2018 guidance disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends and guidance 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, 2017, 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, February 28, 2018, at 12:00 p.m. ET to discuss its fourth quarter and year end results. To participate on the conference call, please call before 12:00 p.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through March 28, 2018 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13676051.

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 (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items; (2) adjusted net service revenue, defined as net service revenue excluding certain items; (3) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (4) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income (loss) 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 3,000 hospitals and 59,000 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 17,900 employees, in 421 care centers in 34 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 369,000 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, investor 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.

   
Contact:Investor Contact:Media Contact:
 Amedisys, Inc.Amedisys, Inc.
 David CastilleKendra Kimmons
 Managing Director, Treasury/FinanceVice President, Marketing & Communications
 (855) 259-2046(225) 299-3720
 IR@amedisys.comkendra.kimmons@amedisys.com
   

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)

     
 For the Three Month Period
Ended December 31,

  For the Year Ended
December 31,

 
 2017
 2016
  2017
 2016
 
          
 (Unaudited)  
Net service revenue$  404,238  $  366,296   $  1,533,680  $  1,437,454  
Cost of service, excluding depreciation and amortization   238,534     212,589      900,726     833,055  
General and administrative expenses:    
Salaries and benefits   79,406     75,902      305,938     306,981  
Non-cash compensation   4,507     3,845      16,295     16,401  
Other   39,757     45,097      159,980     180,048  
Provision for doubtful accounts   6,981     5,855      25,059     19,519  
Depreciation and amortization   3,984     5,016      17,123     19,678  
Asset impairment charge   1,323     4,432      1,323     4,432  
Securities Class Action Lawsuit settlement, net   —      —       28,712     —   
Operating expenses   374,492     352,736      1,455,156     1,380,114  
           
Operating income   29,746     13,560      78,524     57,340  
Other income (expense):    
Interest income   54     30      158     75  
Interest expense   (1,431 )   (1,613 )    (5,031 )   (5,164 )
Equity in earnings from equity method investments   232     1,986      3,381     5,588  
Miscellaneous, net   487     621      3,769     3,727  
     Total other income (expense), net   (658 )   1,024      2,277     4,226  
           
Income before income taxes   29,088     14,584      80,801     61,566  
Income tax expense   (32,794 )   (5,612 )    (50,118 )   (23,935 )
           
Net income (loss)   (3,706 )   8,972      30,683     37,631  
Net income attributable to noncontrolling interests   (142 )   (55 )    (382 )   (370 )
Net income (loss) attributable to Amedisys, Inc.$  (3,848 )$  8,917   $  30,301  $  37,261  
           
Basic earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common
     stockholders
$  (0.11 )$  0.27   $  0.90  $  1.12  
Weighted average shares outstanding   33,898     33,365      33,704     33,198  
Diluted earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common
     stockholders
$  (0.11 )$  0.26   $  0.88  $  1.10  
Weighted average shares outstanding   33,898     33,866      34,304     33,741  
              


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share data)

   
 December 31, 2017
  December 31, 2016
 
ASSETS  
Current assets:  
Cash and cash equivalents$  86,363   $  30,197  
Patient accounts receivable, net of allowance for doubtful accounts of $20,866 and
     $17,716
   201,196      166,056  
Prepaid expenses   7,329      7,397  
Other current assets   16,268      11,260  
     
     Total current assets   311,156      214,910  
Property and equipment, net of accumulated depreciation of $146,814 and $138,650   31,122      36,999  
Goodwill   319,949      288,957  
Intangible assets, net of accumulated amortization of $30,610 and $27,864   46,061      46,755  
Deferred income taxes   56,064      107,940  
Other assets, net   49,130      38,468  
     Total assets$  813,482   $  734,029  
     
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable$  25,384   $  30,358  
Payroll and employee benefits   89,936      82,480  
Accrued expenses   89,104      63,290  
Current portion of long-term obligations   10,638      5,220  
     Total current liabilities   215,062      181,348  
Long-term obligations, less current portion   78,203      87,809  
Other long-term obligations   3,791      3,730  
     Total liabilities   297,056      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; 35,747,134 and
     35,253,577 shares issued; and 33,964,767 and 33,597,215 shares outstanding
   35      35  
Additional paid-in capital   568,780      537,472  
Treasury stock at cost, 1,782,367 and 1,656,362 shares of common stock   (53,713 )    (46,774 )
Accumulated other comprehensive income   15      15  
Retained earnings (deficit)   204      (30,545 )
     
     Total Amedisys, Inc. stockholders’ equity   515,321      460,203  
Noncontrolling interests   1,105      939  
     Total equity   516,426      461,142  
     Total liabilities and equity$  813,482   $  734,029  
     


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING, NET
(Amounts in thousands, except statistical information)

     
 For the Three Month Period
Ended December 31,

 For the Year Ended
December 31,

 2017 2016 2017 2016
          
 (Unaudited)  
Cash Flows from Operating Activities:    
Net income (loss)$  (3,706 ) $  8,972   $  30,683   $  37,631  
Adjustments to reconcile net income (loss) to net cash provided by operating
     activities:
    
Depreciation and amortization   3,984      5,016      17,123      19,678  
Provision for doubtful accounts   6,981      5,855      25,059      19,519  
Non-cash compensation   4,507      3,845      16,295      16,401  
401(k) employer match   2,207      1,741      8,754      6,875  
Write-off of investment   —       196      —       196  
Loss on disposal of property and equipment   22      26      —       582  
Deferred income taxes   34,950      5,858      52,178      24,547  
Equity in earnings from equity method investments   (232 )    (1,986 )    (3,381 )    (5,588 )
Amortization of deferred debt issuance costs   180      185      735      740  
Return on equity investment   665      2,410      5,321      4,323  
Asset impairment charge   1,323      4,432      1,323      4,432  
Changes in operating assets and liabilities, net of impact of acquisitions:    
Patient accounts receivable   (30,807 )    (9,412 )    (59,731 )    (55,519 )
Other current assets   956      3,361      (4,940 )    4,231  
Other assets   (547 )    494      (12,749 )    (11,415 )
Accounts payable   2,587      (3,338 )    (2,843 )    3,970  
Accrued expenses   9,259      1,482      31,843      (7,618 )
Other long-term obligations   (140 )    (576 )    61      (726 )
Net cash provided by operating activities   32,189      28,561      105,731      62,259  
     
Cash Flows from Investing Activities:    
Proceeds from sale of deferred compensation plan assets   —       —       622      230  
Proceeds from sale of property and equipment   131      —       249      —   
Purchases of property and equipment   (1,633 )    (2,215 )    (10,707 )    (15,717 )
Purchase of investments   (40 )    (290 )    (476 )    (1,040 )
Acquisitions of businesses, net of cash acquired   (9,587 )    (4,144 )    (33,715 )    (35,522 )
Net cash used in investing activities   (11,129 )    (6,649 )    (44,027 )    (52,049 )
     
Cash Flows from Financing Activities:    
Proceeds from issuance of stock upon exercise of stock options and warrants   340      —       4,554      —   
Proceeds from issuance of stock to employee stock purchase plan   584      665      2,382      2,483  
Shares withheld upon stock vesting   (485 )    —       (6,939 )    —   
Tax benefit from stock options exercised and restricted stock vesting   —       —       —       7,241  
Non-controlling interest distribution   —       (45 )    (216 )    (329 )
Proceeds from revolving line of credit   —       6,000      —       134,500  
Repayments of revolving line of credit   —       (6,000 )    —       (134,500 )
Principal payments of long-term obligations   (1,250 )    (1,250 )    (5,319 )    (5,000 )
Purchase of company stock   —       —       —       (12,315 )
Assets contributed to equity investment   —       —       —       405  
Net cash used in financing activities   (811 )    (630 )    (5,538 )    (7,515 )
Net increase in cash and cash equivalents   20,249      21,282      56,166      2,695  
Cash and cash equivalents at beginning of period   66,114      8,915      30,197      27,502  
Cash and cash equivalents at end of period$  86,363   $  30,197   $  86,363   $  30,197  
     
Supplemental Disclosures of Cash Flow Information:    
Cash paid for interest$  509   $  621   $  2,697   $  2,897  
Cash paid for income taxes, net of refunds received$  —    $  (3 ) $  315   $  755  
Days revenue outstanding, net (1)   44.0      40.2      44.0      40.2  
                

(1) Our calculation of days revenue outstanding, net at December 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 periods ended December 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 December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  205.0   $  203.2  
Non-Medicare   82.3      65.1  
Net service revenue   287.3      268.3  
Cost of service   174.9      160.1  
Gross margin   112.4      108.2  
Provision for doubtful accounts   5.4      3.1  
Asset impairment charge   1.3      —   
Other operating expenses   71.3      69.6  
Operating income$  34.4   $  35.5  
   
Same Store Growth (1):  
Medicare revenue   2 %    (1 %)
Non-Medicare revenue   26 %    (2 %)
Medicare admissions   (2 %)    2 %
Total Episodic admissions   2 %    4 %
Total Episodic volume   5 %    3 %
Total admissions   3 %    - %
   
Key Statistical Data - Total (2):  
Medicare:  
Admissions   46,421      47,637  
Recertifications   27,896      25,628  
Total volume   74,317      73,265  
   
Completed episodes   73,037      71,855  
Visits   1,273,435      1,230,434  
Average revenue per completed episode (3)$  2,858   $  2,851 
Visits per completed episode (4)   17.6      17.2  
   
Non-Medicare:  
Admissions   27,421      24,309  
Recertifications   12,415      9,673  
Visits   619,745      501,215  
Total (2):  
Visiting Clinician Cost per Visit$  83.88   $  83.46 
Clinical Manager Cost per Visit$  8.49   $  9.01 
Total Cost per Visit$  92.37   $  92.47 
Visits   1,893,180      1,731,649  
        


   
 For the Year Ended December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  793.3   $  822.4  
Non-Medicare   308.5      263.1  
Net service revenue   1,101.8      1,085.5  
Cost of service   670.9      643.7  
Gross margin   430.9      441.8  
Provision for doubtful accounts   17.9      13.8  
Asset impairment charge   1.3      —   
Other operating expenses   281.9      289.4  
Operating income$  129.8   $  138.6  
   
Same Store Growth (1):  
Medicare revenue   (4 %)    2 %
Non-Medicare revenue   17 %    8 %
Medicare admissions   (2 %)    3 %
Total Episodic admissions   1 %    4 %
Total Episodic volume   3 %    3 %
Total admissions   2 %    2 %
   
Key Statistical Data - Total (2):  
Medicare:  
Admissions   190,132      194,662  
Recertifications   106,774      103,193  
Total volume   296,906      297,855  
   
Completed episodes   290,227      289,862  
Visits   5,067,436      5,124,002 
Average revenue per completed episode (3)$  2,823   $  2,839 
Visits per completed episode (4)   17.3      17.5 
   
Non-Medicare:  
Admissions   107,665      98,448 
Recertifications   46,364      38,618  
Visits   2,347,363      2,050,975  
   
Total (2):  
Visiting Clinician Cost per Visit$  82.04   $  81.18 
Clinical Manager Cost per Visit$  8.44   $  8.53 
Total Cost per Visit$  90.48   $  89.71 
Visits   7,414,799      7,174,977 
        

(1) Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, admissions or volume for the period as a percent of the Medicare and Non-Medicare revenue, admissions or volume 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 December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  92.7   $  80.7  
Non-Medicare   5.5      4.5  
Net service revenue   98.2      85.2  
Cost of service   49.9      43.0  
   
Gross margin   48.3      42.2  
Provision for doubtful accounts   1.0      2.7  
Other operating expenses   20.8      18.7  
Operating income$  26.5   $  20.8  
   
Same Store Growth (1):  
Medicare revenue   14 %    14 %
Non-Medicare revenue   20 %    (7 %)
Hospice admissions   8 %    16 %
Average daily census   12 %    13 %
Key Statistical Data - Total (2):  
Hospice admissions   6,371      5,769  
Average daily census   7,162      6,318  
Revenue per day, net$  149.12   $  146.56  
Cost of service per day$  75.74   $  73.91  
Average discharge length of stay   96      99  
  
 For the Year Ended December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  350.7   $  297.7  
Non-Medicare   20.3      18.3  
Net service revenue   371.0      316.0  
Cost of service   184.8      163.1  
   
Gross margin   186.2      152.9  
Provision for doubtful accounts   5.9      5.5  
Other operating expenses   77.5      71.5  
Operating income$  102.8   $  75.9  
   
Same Store Growth (1):  
Medicare revenue   17 %    15 %
Non-Medicare revenue   10 %    9 %
Hospice admissions   11 %    17 %
Average daily census   15 %    16 %
Key Statistical Data -Total (2):  
Hospice admissions   25,381      22,526  
Average daily census   6,820      5,912  
Revenue per day, net$  149.04   $  146.05  
Cost of service per day$  74.25   $  75.36  
Average discharge length of stay   93      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 December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  —   $  — 
Non-Medicare   18.7     12.7
Net service revenue   18.7     12.7
Cost of service   13.7     9.5
   
Gross margin   5.0     3.2
Provision for doubtful accounts   0.6     0.1
Other operating expenses   4.4     2.8
Operating income$  0.0  $  0.3
   
Key Statistical Data:  
Billable hours   782,140     548,703
Clients served   12,693     7,392
Shifts   365,360     245,535
Revenue per hour$  23.94  $  23.16
Revenue per shift$  51.26  $  51.75
Hours per shift   2.1     2.2
  
 For the Year Ended December 31,  
 2017 2016
Financial Information (in millions):  
Medicare$  —   $  — 
Non-Medicare   60.9     35.9
Net service revenue   60.9     35.9
Cost of service   45.0     26.3
   
Gross margin   15.9     9.6
Provision for doubtful accounts   1.3     0.2
Other operating expenses   13.8     7.9
Operating income$  0.8  $  1.5
   
Key Statistical Data:  
Billable hours   2,604,794     1,539,093
Clients served   16,826     10,219
Shifts   1,195,511     696,956
Revenue per hour$  23.37  $  23.32
Revenue per shift$  50.92  $  51.49
Hours per shift   2.2     2.2
      


Segment Information - Corporate

   
 For the Three Month Period Ended December 31,  
 2017 2016
Financial Information (in millions):  
Other operating expenses$  28.3  $  35.5
Depreciation and amortization   2.9     3.1
Total operating expenses before asset impairment charge   31.2     38.6
Asset impairment charge   —      4.4
Total operating expenses$  31.2  $  43.0
   
  
 For the Year Ended December 31,  
 2017 2016
Financial Information (in millions):  
Other operating expenses$  113.7  $  141.9
Depreciation and amortization   12.5     12.4
Total operating expenses before asset impairment charge and Securities
     Class Action Lawsuit settlement, net
   126.2     154.3
Asset impairment charge   —      4.4
Securities Class Action Lawsuit settlement, net   28.7     — 
Total operating expenses$  154.9  $  158.7
   


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 December 31,
 For the Year Ended December 31,
 2017 2016 2017
 2016
Net income (loss) attributable to Amedisys, Inc.$  (3,848 ) $  8,917   $  30,301   $  37,261  
Add:    
Income tax expense   32,794      5,612      50,118      23,935  
Interest expense, net   1,377      1,583      4,873      5,089  
Depreciation and amortization   3,984      5,016      17,123      19,678  
Certain items (1)   24,414      9,999      61,429      24,559  
Interest component of certain items (1)   (168 )    (625 )    (263 )    (625 )
Tax component of certain items (1)   (21,424 )    —       (21,424 )    —   
Adjusted EBITDA (2) (6)$  37,129   $  30,502   $  142,157   $  109,897  
     

Adjusted Net Service Revenue Reconciliation:

     
 For the Three Month Period
Ended December 31,
 
For the Year Ended December 31,
 2017 2016 2017 2016
Net service revenue$  404,238  $  366,296   $  1,533,680  $  1,437,454  
Add:    
Certain items (1)   —      (1,149 )    6,506     (201 )
Adjusted net service revenue (3) (6)$  404,238  $  365,147   $  1,540,186  $  1,437,253  
     

Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:    

     
 For the Three Month Period
Ended December 31,
 For the Year Ended December 31,
 2017 2016 2017 2016
Net income (loss) attributable to Amedisys, Inc.$  (3,848 ) $  8,917  $  30,301  $  37,261
Add:    
Certain items (1)   23,233      6,114     45,627     14,923
Adjusted net income attributable to Amedisys, Inc. (4) (6)$  19,385   $  15,031  $  75,928  $  52,184
     

Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:    

     
 For the Three Month Period
Ended December 31,
 For the Year Ended December 31,
 2017 2016 2017 2016
Net income (loss) attributable to Amedisys, Inc. common
     stockholders per diluted share
$  (0.11 ) $  0.26  $  0.88  $  1.10
Add:    
Certain items (1)   0.67      0.18     1.33     0.44
     
Adjusted net income attributable to Amedisys, Inc. common
     stockholders per diluted share (5) (6)
$  0.56   $  0.44  $  2.21  $  1.55
     

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


Certain Items:    

   
 For the Three Month Period
Ended December 31, 2017
 For the Year Ended
December 31, 2017

 (Income) Expense (Income) Expense
Certain Items Impacting Net Service Revenue:  
Florida ZPIC audit$  —    $  6,506  
Certain Items Impacting Operating Expenses:  
Acquisition costs   48      1,025  
Legal fees - non-routine   358      1,768  
Securities Class Action Lawsuit settlement, net   —       28,712  
Restructuring activity   648      2,318  
Data center relocation   —       940  
Asset impairment   1,323      1,323  
Certain Items Impacting Total Other Income (Expense):  
Legal settlements   —       (2,014 )
Miscellaneous, other (income) expense, net   613      (573 )
Certain Items Impacting Income Tax Expense:  
Remeasurement of deferred tax assets and liabilities   21,424      21,424  
   
Total$  24,414   $  61,429  
   
Net of tax$  23,233   $  45,627  
   
Diluted EPS$  0.67   $  1.33  
   
   
 For the Three Month Period
Ended December 31, 2016
 For the Year Ended
December 31, 2016

 (Income) Expense (Income) Expense
Certain Items Impacting Net Service Revenue:  
Reduction of cost report reserve$  (1,149 ) $  (1,149 )
Third party audit reserve   —       948  
Certain Items Impacting Operating Expenses:  
HCHB implementation   1,345      8,371  
Acquisition costs   876      3,384  
Legal fees - non-routine   543      1,992  
Frontier litigation   2,479      2,979  
Wage and Hour litigation   (119 )    282  
Asset impairment   4,432      4,432  
Restructuring activity   1,976      7,645  
Sales/use tax audit reserve   460      460  
Disaster relief   129      467  
Certain Items Impacting Total Other Income (Expense):  
Sales/use tax audit reserve   625       625   
Legal settlements   (280 )    (2,328 )
Miscellaneous, other (income) expense, net   (1,318 )    (3,549 )
   
Total$  9,999   $  24,559  
   
Net of tax$  6,114   $  14,923  
   
Diluted EPS$  0.18   $  0.44  
   

(2)      Adjusted EBITDA is defined as net income (loss) 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 service revenue is defined as net service revenue plus certain items as described in footnote 1.
(4)      Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.
(5)      Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in footnote 1.
(6)      Adjusted EBITDA, adjusted net service revenue, 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.

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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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