Records U.S. Department of Justice Settlement Charge

To Host Conference Call Today at 10:00 A.M. ET

BATON ROUGE, La.--(BUSINESS WIRE)-- Amedisys, Inc. (NASDAQ:AMED), a leading home health and hospice company, today reported its financial results for the third quarter ended September 30, 2013.

U.S. Department of Justice Settlement Charge

During the third quarter of 2013, we recorded an accrual of $150 million related to the tentative settlement of both the U.S. Department of Justice investigation and the Stark Law Self-Referral matter (the “U.S. Department of Justice settlement”). We have agreed to this tentative settlement without any admission of wrongdoing in order to resolve these matters and to avoid the uncertainty and expense of protracted litigation. In connection with the tentative settlement, we expect to enter into a corporate integrity agreement with the Office of the Inspector General – HHS.

On November 11, 2013, we entered into a second amendment to our Credit Agreement dated as of October 26, 2012, amending certain covenants, representations and other provisions to, among other things, allow for the U.S. Department of Justice settlement. In connection with entering into the second amendment, we repaid the $20 million outstanding principal amount of our Series B Senior Notes due March 25, 2014.

Three-Month Periods Ended September 30, 2013 and 2012

• After adding back for the 2013 period $145.0 million ($90.2 million, net of tax) or $2.86 per diluted share for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items* and deducting for the 2012 period $1.4 million ($1.8 million, net of income tax) or $0.06 per diluted share for certain other items*, our adjusted results were as follows:
  • Net service revenue of $301.6 million compared to $364.3 million in 2012.
  • Net (loss) income from continuing operations attributable to Amedisys, Inc., of $(0.2) million compared to $8.5 million in 2012. (Net (loss) income from continuing operations of $(90.4) million compared to $10.4 million in 2012 on a GAAP basis.)
  • Net (loss) income from continuing operations attributable to Amedisys, Inc. per diluted share of $(0.01) compared to $0.28 per diluted share in 2012. (Net (loss) income from continuing operations attributable to Amedisys, Inc. per diluted share of $(2.87) compared to $0.34 per diluted share in 2012 on a GAAP basis.)
  • Earnings before interest, taxes, depreciation and amortization attributable to continuing operations (“EBITDA”) of $8.7 million compared to $26.4 million in 2012.

Nine-Month Periods Ended September 30, 2013 and 2012

• After adding back for the 2013 period $152.1 million ($94.6 million, net of tax) or $3.04 per diluted share for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items* and after adding back for the 2012 period $3.7 million ($1.2 million, net of income tax) or $0.04 per diluted share for certain other items*, our adjusted results were as follows:
  • Net service revenue of $947.1 million compared to $1.1 billion in 2012.
  • Net income from continuing operations attributable to Amedisys, Inc., of $10.1 million compared to $26.8 million in 2012. (Net (loss) income from continuing operations of $(84.5) million compared to $25.7 million in 2012 on a GAAP basis.)
  • Net income from continuing operations attributable to Amedisys, Inc. per diluted share of $0.32 compared to $0.89 per diluted share in 2012. (Net (loss) income from continuing operations attributable to Amedisys, Inc. per diluted share of $(2.72) compared to $0.85 per diluted share in 2012 on a GAAP basis.)
  • EBITDA of $46.5 million compared to $81.5 million

* See page 10 & 11 for explanation of these certain items and the reconciliations of non-GAAP financial measures

William F. Borne, Chief Executive Officer, stated, “Adjusting for the accrual related to our U.S. Department of Justice settlement, and for other certain items disclosed in more detail elsewhere in this earnings release, we reported results for the quarter that were below expectations. We ended the quarter with an adjusted loss from continuing operations of 1 cent per diluted share which caused us to lower our guidance for the year. Consistent with previous communications, these adjusted numbers do not include legal costs associated with the U.S. Department of Justice and other matters. Results were impacted by soft volume in both our home health and hospice business units and higher costs, primarily in our home health cost of revenue line.

Updated 2013 Guidance

• Net service revenue is anticipated to be in the range of $1.240 billion to $1.250 billion.
• Diluted earnings per share is expected to be in the range of $0.20 to $0.25 based on an estimated 31.7 million shares outstanding.

This guidance excludes the accrual related to our U.S. Department of Justice settlement, and other certain items disclosed in more detail elsewhere in this earnings release. However, our guidance includes an estimate of legal costs associated with our on-going legal matters.

We urge caution in considering the current trends and 2013 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, 2012, 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. We disclaim any obligations to update disclosed information on trends.

Earnings Call and Webcast Information

To participate in the conference call, please call a few minutes before 10:00 a.m. ET on Tuesday, November 12, 2013, to either (877) 512-9171 (Toll free) or (815) 573-0979 (Toll), use conference ID #93623188. A replay of the conference call will be available through November 19, 2013. The replay dial in number is (855) 859-2056 (Toll free) or (404) 537-3406 (Toll), use conference ID #93623188.

The call will also be available through our website and for seven days thereafter at the following web address: http://investors.amedisys.com.

We are headquartered in Baton Rouge, Louisiana. Our common stock trades on the NASDAQ Global Select Market under the symbol “AMED.”

Additional information

Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst 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. We also use our website to expedite public access to time-critical information regarding our company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investor Relations subpage of our website for important and time-critical information. 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, our ability to divest care centers currently held for sale, 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 home health industry, 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 due to the economic downturn and deficit spending by Federal and State governments, future cost containment initiatives undertaken by third-party payors, our access to financing due to the volatility and disruption of the capital and credit markets, 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 and manage our information systems, our ability to agree on the terms of a settlement to resolve both the U.S. Department of Justice investigation and the Stark Law Self-Referral matter or fund required settlement payments in the manner currently contemplated and changes in law or developments with respect to any litigation or investigations relating to the Company, including the SEC investigation, the OIG Self-Disclosure issues and 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.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures as defined under SEC rules: EBITDA, defined as net (loss) income from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, adjusted EBITDA, defined as EBITDA excluding the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items*, adjusted net income from continuing operations attributable to Amedisys, Inc., defined as net (loss) income from continuing operations attributable to Amedisys, Inc. excluding the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items*, and adjusted net income from continuing operations attributable to Amedisys, Inc. per diluted share, defined as net (loss) income from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share excluding the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items*. In accordance with SEC rules, we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP. Management believes that these are useful gauges of our performance and are common measures used in our industry to assess relative financial performance among companies.

(1) EBITDA is defined as net (loss) income from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense, and depreciation and amortization. EBITDA should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. This calculation of EBITDA may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP financial measure in the same manner.

(2) The following details the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items for the three and nine month periods ended September 30, 2013 and 2012:

(3) Adjusted EBITDA is defined as net (loss) income from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense, depreciation and amortization excluding the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items*. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. This calculation of adjusted EBITDA may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP financial measure in the same manner.

(4) Adjusted net income from continuing operations attributable to Amedisys, Inc. is defined as net (loss) income from continuing operations attributable to Amedisys, Inc. excluding the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and certain other items*. Adjusted net income from continuing operations attributable to Amedisys, Inc. should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. This calculation of adjusted net income from continuing operations attributable to Amedisys, Inc. may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP measure in the same manner.

(5) Adjusted net income from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted (loss) earnings from continuing operations per share excluding the earnings per share effect of the accrual for the U.S. Department of Justice settlement, proceeds from our D&O insurance and other certain other items*. Adjusted net income from continuing operations 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, cash flow from operating activities, or other traditional indicators or operating performance. This calculation of adjusted net income from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP financial measure in the same manner.

Amedisys, Inc.
Investor Relations:
Tom Dolan, 225-292-3391
Senior Vice President, Finance and Treasurer
[email protected]
or
Media Relations:
Jacqueline Chen Valencia, 225-299-3688
Senior Vice President – Marketing & Communications
[email protected]

Source: Amedisys, Inc.