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Amedisys Reports Second Quarter Financial Results

/EIN News/ -- ANNOUNCES EXECUTIVE RETIREMENT

TO HOST CONFERENCE CALL AUGUST 3, 2016 AT 11:00 A.M. ET

BATON ROUGE, La., Aug. 02, 2016 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ:AMED), a leading home health and hospice company, today reported its financial results for the three and six-month periods ended June 30, 2016.

Three-Month Periods Ended June 30, 2016 and 2015 

  • Net service revenue increased $46.6 million to $360.7 million compared to $314.1 million in 2015.
  • Net income attributable to Amedisys, Inc. of $10.7 million compared to $10.6 million in 2015.
  • Net income attributable to Amedisys, Inc. per diluted share remained at $0.32 per diluted share when compared to 2015.

Adjusted Results* 

  • Adjusted net service revenue of $361.7 million compared to $314.1 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. of $14.1 million compared to $14.5 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.42 compared to $0.43 in 2015.
  • 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) of $29.8 million compared to $31.7 million in 2015.

Six-Month Periods Ended June 30, 2016 and 2015 

  • Net service revenue increased $93.8 million to $709.5 million compared to $615.7 million in 2015.
  • Net income attributable to Amedisys, Inc. of $16.9 million compared to $24.4 million net loss in 2015.
  • Net income attributable to Amedisys, Inc. per diluted share increased $1.24 to $0.50 compared to $0.74 net loss per diluted share in 2015.

Adjusted Results* 

  • Adjusted net service revenue of $710.5 million compared to $615.7 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. of $25.0 million compared to $24.3 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.74 compared to $0.73 in 2015.
  • Adjusted EBITDA of $53.8 million compared to $58.0 million in 2015.

*  See pages 11 and 12 for the reconciliations of non-GAAP financial measures to GAAP measures.

Executive Retirement

On August 2, 2016, Ronald A. LaBorde, the Vice Chairman and Chief Financial Officer of the Company, announced his intention to retire from the Company and the Board of Directors as of January 2, 2017.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am proud of the strong results our team delivered in the second quarter, even as we incurred deeper than anticipated software implementation disruption costs. We delivered strong growth across the board in all segments, drove improving clinical quality metrics and saw reduced employee turnover. We are continuing to progress successfully through our technology transformation and remain confident in our ability to deliver on the efficiencies that we have promised to our shareholders.”

Kusserow continued, “Lastly, while five months away, I would like to thank Ronnie LaBorde for his contribution to Amedisys which been invaluable, particularly during the turnaround in 2014. I appreciate his contribution as a trusted colleague and friend. He will leave the company in a strong and stable position with a great future trajectory. You couldn’t ask for a better legacy.”

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, 2015, 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 on the conference call, please call a few minutes 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 September 3, 2016 by dialing (877) 660-6853 (Toll- Free) or (201) 612-7415 (Toll) and entering conference ID #13641920.

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.

Amedisys, Inc. (the “Company”) is headquartered in Baton Rouge, Louisiana and 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, 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 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.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures as defined under SEC rules: (1) EBITDA, defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization; (2) adjusted EBITDA, defined as EBITDA excluding certain items; (3) adjusted net service revenue, defined as net service revenue excluding certain items; (4) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (5) 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. 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.

AMEDISYS, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED FINANCIAL STATEMENT DATA AND SUPPLEMENTAL INFORMATION
(Amounts in thousands, except share, per share data and statistical information)

Balance Sheet Information            
             
    June 30, 2016      December 31, 2015  
    (Unaudited)        
ASSETS            
Current assets:            
Cash and cash equivalents $   9,968   $   27,502  
Patient accounts receivable, net of allowance for doubtful accounts of $15,950 and $16,526   152,213      125,010  
Prepaid expenses   7,931     8,110  
Other current assets     9,407       14,641  
Total current assets   179,519     175,263  
Property and equipment, net of accumulated depreciation of $139,433 and $141,793   44,617     42,695  
Goodwill   280,349     261,663  
Intangible assets, net of accumulated amortization of $26,525 and $25,386   47,728     44,047  
Deferred income taxes   121,014     125,245  
Other assets, net     37,875       32,802  
Total assets $    711,102   $   681,715  
LIABILITIES AND EQUITY    
Current liabilities:    
Accounts payable $   35,070   $   25,682  
Payroll and employee benefits   86,075     72,546  
Accrued expenses   63,641     71,965  
Current portion of long-term obligations   5,000     5,000  
Total current liabilities   189,786     175,193  
Long-term obligations, less current portion   89,500     91,630  
Other long-term obligations   3,991     4,456  
Total liabilities   283,277     271,279  
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; 35,136,248 and 34,786,966 shares issued; and 33,499,944 and 33,607,282 shares outstanding   35     35  
Additional paid-in capital   523,583     504,290  
Treasury stock at cost, 1,636,304 and 1,179,684 shares of common stock   (45,829 )   (26,966 )
Accumulated other comprehensive income   15     15  
Retained earnings     (50,897 )     (67,806 )
Total Amedisys, Inc. stockholders’ equity   426,907     409,568  
Noncontrolling interests     918     868  
Total equity   427,825     410,436  
Total liabilities and equity $    711,102   $
  681,715  
             


Statement of Operations Information (Unaudited)  
                         
    For the Three-Month Periods Ended June 30,     For the Six-Month Periods Ended June 30,  
    2016     2015     2016     2015  
Net service revenue $    360,746   $    314,152   $ 709,563   $ 615,724  
Cost of service, excluding depreciation and amortization   206,505     175,699     408,342     346,660  
General and administrative expenses:        
Salaries and benefits   77,343     71,249     154,060     139,804  
Non-cash compensation   3,736     2,193     7,806     4,577  
Other   45,576     42,113     92,293     75,183  
Provision for doubtful accounts   4,253     2,756     8,193     5,732  
Depreciation and amortization   4,975     4,615     9,448     11,152  
Asset impairment charge               75,193  
Operating expenses     342,388       298,625        680,142        658,301  
Operating income (loss)   18,358     15,527     29,421     (42,577 )
Other (expense) income:        
Interest income   9     4     31     26  
Interest expense   (1,303 )   (2,416 )   (2,415 )   (4,842 )
Equity in earnings from equity method investments   363     4,826     358     6,777  
Miscellaneous, net     658       498       1,393       2,632  
Total other (expense) income, net   (273 )   2,912     (633 )   4,593  
Income (loss) before income taxes   18,085     18,439     28,788     (37,984 )
Income tax (expense) benefit   (7,242 )   (7,566 )   (11,630 )   14,025  
Net income (loss)   10,843     10,873     17,158     (23,959 )
Net income attributable to noncontrolling interests   (147 )   (236 )   (249 )   (413 )
Net income (loss) attributable to Amedisys, Inc. $   10,696   $   10,637   $    16,909   $  (24,372 )
Basic earnings per common share:        
Net income (loss) attributable to Amedisys, Inc. common stockholders    $ 0.32   $   0.32   $   0.51   $   (0.74 )
Weighted average shares outstanding       33,197     33,004     33,059     32,871  
Diluted earnings per common share:
       
Net income (loss) attributable to Amedisys, Inc. common stockholders   $   0.32   $   0.32   $   0.50   $   (0.74 )
Weighted average shares outstanding     33,708     33,459     33,641     32,871  
           


Cash Flow and Days Revenue Outstanding, Net Information  
                         
    For the Three-Month Periods Ended June 30,     For the Six-Month Periods Ended June 30,  
    2016     2015     2016     2015  
Net cash provided by operating activities $ 14,651   $ 42,554   $ 26,895   $ 57,037  
Net cash used in investing activities   (3,597 )   (9,754 )   (37,751 )   (11,822 )
Net cash used in financing activities   (8,910 )   (2,731 )   (6,678 )   (20,046 )
Net increase (decrease) in cash and cash equivalents   2,144     30,069     (17,534 )   25,169  
Cash and cash equivalents at beginning of period   7,824     3,132     27,502     8,032  
Cash and cash equivalents at end of period $   9,968   $   33,201   $   9,968   $    33,201  
Days revenue outstanding, net (1)   37.2     31.0     37.2     31.0  
                         

(1) Our calculation of days revenue outstanding, net at June 30, 2016 and 2015 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 June 30, 2016 and 2015, respectively.

Supplemental Information - Home Health
 
    For the Three-Month Periods Ended June 30,  
Financial Information (in millions):   201     2015  
Medicare $ 208.4   $ 188.3  
Non-Medicare   67.1     59.5  
Net service revenue   275.5     247.8  
Cost of service   160.3     142.3  
Gross margin   115.2     105.5  
Other operating expenses   77.4     67.1  
Operating income $ 37.8   $ 38.4  
Key Statistical Data:            
Medicare:            
Same Store Volume (1):            
Revenue   4 %   (1 %)
Admissions   4 %   0 %
Recertifications   2 %   (6 %)
Total (2):    
Admissions   48,982     44,188  
Recertifications   26,020     24,607  
Completed episodes   74,027     67,702  
Visits   1,315,417     1,203,648  
Average revenue per completed episode (3) $ 2,850   $ 2,828  
Visits per completed episode (4)   17.7     17.5  
Non-Medicare:    
Same Store Volume (1):    
Revenue   13 %   16 %
Admissions   2 %   15 %
Recertifications   12 %   8 %
Total (2):    
Admissions   24,237     23,792  
Recertifications   9,640     8,637  
Visits   515,062     482,689  
Total (2):    
Cost per Visit $ 87.56   $ 84.43  
Visits   1,830,479     1,686,337  
     


             
    For the Six-Month Periods Ended June 30,  
Financial Information (in millions):   2016     2015  
Medicare $ 415.2   $ 375.5  
Non-Medicare   133.0     113.7  
Net service revenue   548.2     489.2  
Cost of service   321.1     281.0  
Gross margin   227.1     208.2  
Other operating expenses   153.1     134.0  
Operating income $ 74.0   $ 74.2  
Key Statistical Data:    
Medicare:    
Same Store Volume (1):    
Revenue   4 %   2 %
Admissions   4 %   1 %
Recertifications   3 %   (3 %)
Total (2):    
Admissions   99,400     89,539  
Recertifications   52,043     48,966  
Completed episodes   146,059     133,013  
Visits   2,626,788     2,371,898  
Average revenue per completed episode (3) $ 2,831   $ 2,811  
Visits per completed episode (4)   17.6     17.4  
Non-Medicare:    
Same Store Volume (1):    
Revenue   17 %   18 %
Admissions   6 %   16 %
Recertifications   17 %   12 %
Total (2):    
Admissions   49,804     46,941  
Recertifications   19,466     16,625  
Visits   1,043,031     920,154  
Total (2):    
Cost per Visit $ 87.51   $ 85.36  
Visits   3,669,819     3,292,052  
             

(1) Same store Medicare and Non-Medicare revenue, admissions or recertifications growth (decline) is 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 which includes the impact of sequestration.
(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.

Supplemental Information - Hospice  
    For the Three-Month Periods Ended June 30,  
    2016     2015  
Medicare $   71.3   $   62.5  
Non-Medicare   4.5     3.8  
Net service revenue   75.8     66.3  
Cost of service   39.4     33.4  
Gross margin   36.4     32.9  
Other operating expenses   18.4     16.0  
Operating income $   18.0   $   16.9  
Key Statistical Data:            
Same Store Volume (1):            
Medicare revenue   14 %   10 %
Non-Medicare revenue   15 %   5 %
Hospice admissions   18 %   11 %
Average daily census   16 %   7 %
Total (2):    
Hospice admissions   5,576     4,713  
Average daily census   5,730     4,944  
Revenue per day, net $   145.40   $   147.53  
Cost of service per day $   75.69   $   74.07  
Average length of stay   94     86  
             

 

    For the Six-Month Periods Ended June 30,  
    2016     2015  
Financial Information (in millions):            
Medicare $   140.0   $   118.9  
Non-Medicare   8.8     7.6  
Net service revenue   148.8     126.5  
Cost of service   78.2     65.7  
Gross margin   70.6     60.8  
Other operating expenses   36.3     31.2  
Operating income $   34.3   $   29.6  
Key Statistical Data:            
Same Store Volume (1):            
Medicare revenue   18 %   6 %
Non-Medicare revenue   15 %   9 %
Hospice admissions   19 %   9 %
Average daily census   19 %   4 %
Total (2):    
Hospice admissions   11,006     9,277  
Average daily census   5,618     4,744  
Revenue per day, net $   145.52   $   147.39  
Cost of service per day $   76.51   $   76.47  
Average length of stay   95     88  
             

(1) Same store Medicare and Non-Medicare revenue, Hospice admissions or average daily census growth (decline) is 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.

  Supplemental Information - Corporate
      For the Three-Month Periods Ended June 30,    
      2016     2015    
  Other operating expenses $   34.7   $   36.8    
  Depreciation and amortization   3.1     3.0    
  Total $ 37.8   $ 39.8
   
                         


 
    For the Six-Month Periods Ended June 30,
    2016   2015
Financial Information (in millions):        
Other operating expenses $ 73.7 $ 63.6
Depreciation and amortization   6.0   7.6 
Total before impairment (1) $ 79.7 $ 71.2
         

1) Total of $146.4 million on a GAAP basis for the six-month period ended June 30, 2015 (including $75.2 million asset impairment charge).

AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL STATEMENTS
(Amounts in thousands)

(Unaudited)

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA: 

    For the Three-Month Periods
Ended June 30,
    For the Six-Month Periods
Ended June 30,
 
    2016     2015     2016     2015  
Net income (loss) attributable to Amedisys, Inc. $ 10,696   $ 10,637   $    16,909   $    (24,372 )
Add:        
Income tax expense (benefit)   7,242     7,566     11,630     (14,025 )
Interest expense, net   1,294     2,412     2,384     4,816  
Depreciation and amortization   4,975     4,615     9,448     11,152  
EBITDA (1)(7)   24,207     25,230     40,371     (22,429 )
Add:        
Certain items (2)   5,636     6,427     13,402     80,467  
Adjusted EBITDA (3)(7) $ 29,843   $ 31,657   $    53,773   $ 58,038  
                         

Adjusted Net Service Revenue Reconciliation:

 

    For the Three-Month Periods
Ended June 30,
    For the Six-Month Periods
Ended June 30,
 
    2016     2015     2016     2015  
Net service revenue $ 360,746   $ 314,152   $  709,563   $  615,724  
Add:        
Certain items (2)   948         948      
Adjusted net service revenue (4)(7) $    361,694   $ 314,152    $ 710,511   $  615,724  
                     

Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:

 

    For the Three-Month Periods
Ended June 30,

    For the Six-Month Periods
Ended June 30,

 
    2016     2015     2016     2015  
Net income (loss) attributable to Amedisys, Inc. $ 10,696   $ 10,637   $    16,909   $    (24,372 )
Add:            
Certain items (2)   3,410     3,888     8,108     48,682  
Adjusted net income attributable to Amedisys, Inc. (5)(7) $ 14,106   $ 14,525   $    25,017   $ 24,310  
                         

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

                         
    For the Three-Month Periods
Ended June 30,
    For the Six-Month Periods
Ended June 30,
 
    2016     2015     2016     2015  
Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share $ 0.32   $ 0.32   $ 0.50   $ (0.74 )
Add:        
Certain items (2)   0.10     0.12     0.24     1.48  
Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (6)(7) $ 0.42   $ 0.43   $ 0.74   $ 0.73  
                         

(1) EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense, and depreciation and amortization.

(2) The following details the certain items for the three and six-month periods ended June 30, 2016 and 2015:

 

    For the Three-Month Period
Ended June 30, 2016
    For the Six-Month Period
Ended June 30, 2016
 
    (Income) Expense     (Income) Expense  
HCHB implementation $ 2,593   $ 5,033  
Acquisition costs   337     2,042  
Legal fees - non-routine   459     1,976  
Legal settlements   (265 )   (806 )
Restructuring activity   1,494     3,703  
Third party audit reserve   948     948  
Miscellaneous, other (income) expense, net   70     506  
Total $ 5,636   $ 13,402  
Net of tax   3,410     8,108  
Diluted EPS   0.10     0.24  
             

 

    For the Three-Month Period
Ended June 30, 2015
    For the Six-Month Period
Ended June 30, 2015
 
    (Income) Expense      (Income) Expense   
Wage and Hour litigation $ 8,000   $ 8,000  
Legal settlements   (307 )   (1,125 )
Inventory and Data Security Reporting       2,121  
Asset impairment       75,193  
Restructuring activity   2,679     2,679  
Miscellaneous, other (income) expense, net    (3,945 )   (6,401 )
Total $ 6,427   $ 80,467  
Net of tax $ 3,888   $ 48,682  
Diluted EPS $ 0.12   $ 1.48  
             

(3) Adjusted EBITDA is defined as EBITDA, as defined in footnote 1, excluding certain items as described in footnote 2.
(4) Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 2.
(5) Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. excluding certain other items as described in footnote 2.
(6) Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share excluding the earnings per share effect of certain items as described in footnote 2.
(7) EBITDA, 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, cash flow from operating activities, or other traditional indicators of operating performance. 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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