Highlights:
- Company raises FY 2010 guidance to revenue in the range of $615 million to $625 million and fully diluted earnings per share in the range of $2.75 to $2.85;
- Quality outcomes improved in all 12 home care compare categories;
- Net service revenue was $145.9 million; and
- Diluted earnings per share was $0.64.
LAFAYETTE, La., April 28, 2010 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health and hospice services, announced today its financial results for the first quarter ended March 31, 2010.
Financial Results for the First Quarter
- Net service revenue for the first quarter of 2010 increased 17.2% to $145.9 million compared with $124.5 million for the same period in 2009.
- Days sales outstanding, or DSO, at March 31, 2010, was 45 days as compared with 47 days at March 31, 2009.
- Net income attributable to LHC Group for the first quarter of 2010 totaled $11.6 million, or $0.64 per diluted share, compared with net income of $11.1 million, or $0.62 per diluted share, for the first quarter of 2009.
In commenting on the results, Keith G. Myers, chief executive officer of LHC Group, said, "During the first quarter of 2010, our dedicated caregivers and employees have once again exceeded expectations. I would like to congratulate and thank our entire team for their unwavering commitment to delivering the highest quality of care to the growing number of patients, families and communities we serve. With the passage of comprehensive healthcare reform during the first quarter, we now have more certainty in regards to the long term reimbursement environment. We expect a period of significant consolidation in the industry over the next several years, and we are prepared to absorb this growth both organically and through acquisitions or joint ventures. As a company with 53.9% of the patients we serve residing in rural America, we are pleased with the six year 3% rural add-on that became effective April 1, 2010. We believe that the six year rural add-on included in the recent legislation is a sign that decision makers in Washington D.C. have come to more fully understand the additional costs and challenges associated with providing home health services to patients in rural communities and are committed to ensuring access to these vital, cost-effective services. We have increased our 2010 guidance solely to take into account the impact of the 3% rural add-on in the three remaining quarters of 2010."
Guidance
The Company is raising its fiscal year 2010 guidance issued on March 3, 2010, for net service revenue from the original range of $610 million to $620 million to a range of $615 million to $625 million and fully diluted earnings per share from the original range of $2.60 to $2.70 to a range of $2.75 to $2.85. This guidance does not take into account the impact of any future acquisitions, if made, or de novo locations, if opened.
Conference Call
LHC Group will host a conference call on Thursday, April 29, 2010, at 11:00 a.m. Eastern time. The toll-free number to call for this interactive teleconference is (800) 677-1840 (international callers should call 973-890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, May 6, 2010, by dialing (800) 642-1687 (international callers should call 706-645-9291) and entering confirmation number 68028520.
A live broadcast of LHC Group's conference call will be available under the Investor Relations section of the Company's website, www.lhcgroup.com or at www.opencompany.info. A one-year online replay will be available approximately an hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. (www.LHCGroup.com) is a national provider of home health and hospice care, providing quality, cost-effective healthcare services to patients within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of post-acute healthcare services through home health and hospice locations in its home-based division and long-term acute care hospitals in its facility-based division.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's future financial performance and the strength of the Company's operations. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including changes in reimbursement, changes in government regulations, changes in LHC Group's relationships with referral sources, increased competition for LHC Group's services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in Item 1A. Risk Factors in LHC Group's Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission. LHC Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| LHC GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (amounts in thousands except share data) | ||
| (unaudited) | ||
|
March 31, 2010 |
Dec. 31, 2009 |
|
| ASSETS | ||
| Current assets: | ||
| Cash | $ 17,256 | $ 394 |
| Receivables: | ||
|
Patient accounts receivable, less allowance for uncollectible accounts of $8,959 and $8,262, respectively |
73,207 | 73,651 |
| Other receivables | 2,462 | 3,850 |
| Amounts due from governmental entities | 911 | 1,184 |
| Total receivables, net | 76,580 | 78,685 |
| Deferred income taxes | 5,483 | 4,370 |
| Prepaid income taxes | – | 3,131 |
| Prepaid expenses and other current assets | 8,104 | 8,798 |
| Total current assets | 107,423 | 95,378 |
| Property, building and equipment, net | 21,784 | 21,361 |
| Goodwill | 142,659 | 139,474 |
| Intangible assets, net | 49,078 | 46,851 |
| Other assets | 2,156 | 3,169 |
| Total assets | $ 323,100 | $ 306,233 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and other accrued liabilities | $ 18,136 | $ 20,873 |
| Salaries, wages and benefits payable | 30,459 | 22,521 |
| Amounts due to governmental entities | 3,208 | 3,208 |
| Income taxes payable | 2,137 | – |
| Current portion of long-term debt | 387 | 387 |
| Total current liabilities | 54,327 | 46,989 |
| Deferred income taxes | 13,378 | 12,475 |
| Revolving credit facility | – | 5,723 |
| Long-term debt, less current portion | 4,012 | 4,096 |
| Other long-term obligations | 1,540 | 1,567 |
| Noncontrolling interest- redeemable | 13,912 | 13,823 |
| Stockholders' equity: | ||
|
Common stock – $0.01 par value: 40,000,000 shares authorized; 21,114,983 and 20,967,418 shares issued and 18,113,034 and 17,990,685 shares outstanding, respectively |
181 | 179 |
| Treasury stock – 3,001,949 and 2,976,733 shares at cost, respectively | (4,286) | (3,513) |
| Additional paid-in capital | 89,004 | 86,310 |
| Retained earnings | 149,861 | 138,196 |
| Total LHC Group, Inc. stockholders' equity | 234,760 | 221,172 |
| Noncontrolling interest- non-redeemable | 1,171 | 388 |
| Total equity | 235,931 | 221,560 |
| Total liabilities and equity | $ 323,100 | $ 306,233 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (amounts in thousands, except share and per share data) | ||
| (unaudited) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2009 | |
| Net service revenue | $ 145,883 | $ 124,457 |
| Cost of service revenue | 74,710 | 62,095 |
| Gross margin | 71,173 | 62,362 |
| Provision for bad debts | 2,059 | 1,183 |
| General and administrative expenses | 45,767 | 38,805 |
| Operating income | 23,347 | 22,374 |
| Interest expense | (24) | (59) |
| Non-operating income (loss) | 29 | (460) |
|
Income from continuing operations before income taxes and noncontrolling interest |
23,352 | 21,855 |
| Income tax expense | 7,510 | 6,760 |
| Income from continuing operations | 15,842 | 15,095 |
| Loss from discontinued operations (net of income tax benefit of $21) | – | 32 |
| Net income | 15,842 | 15,063 |
| Less net income attributable to noncontrolling interest | 4,218 | 3,982 |
| Net income attributable to LHC Group, Inc. | 11,624 | 11,081 |
| Redeemable noncontrolling interest | 41 | 28 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 11,665 | $ 11,109 |
| Earnings per share — basic and diluted: | ||
| Income from continuing operations attributable to LHC Group, Inc. | $ 0.64 | $ 0.62 |
| Loss from discontinued operations attributable to LHC Group, Inc. | – | – |
| Net income attributable to LHC Group, Inc. | 0.64 | 0.62 |
| Redeemable noncontrolling interest | – | – |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 0.64 | $ 0.62 |
| Weighted average shares outstanding: | ||
| Basic | 18,041,563 | 17,924,238 |
| Diluted | 18,179,013 | 17,991,618 |
| LHC GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (amounts in thousands) | ||
| (unaudited) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2009 | |
| Operating activities | ||
| Net income | $ 15,842 | $ 15,063 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||
| Depreciation and amortization expense | 1,534 | 1,118 |
| Provision for bad debts | 2,059 | 1,183 |
| Stock-based compensation expense | 942 | 457 |
| Deferred income taxes | (210) | 853 |
| Loss on impairment of intangible assets | – | 542 |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Receivables | (1,000) | (5,496) |
| Prepaid expenses and other assets | 1,946 | 184 |
| Income taxes payable | 5,268 | (5,715) |
| Accounts payable and accrued expenses | 5,166 | 6,173 |
| Net amounts due to governmental entities | 273 | 630 |
| Net cash provided by operating activities | 31,820 | 14,992 |
| Investing activities | ||
| Purchases of property, building, and equipment | (1,770) | (1,857) |
| Cash paid for acquisitions, primarily goodwill and intangible assets | (5,479) | (8,170) |
| Net cash used in investing activities | (7,249) | (10,027) |
| Financing activities | ||
| Proceeds from line of credit | 9,022 | 16,857 |
| Payments on line of credit | (14,745) | (16,857) |
| Issuance of stock | 950 | – |
| Principal payments on debt | (84) | (119) |
| Payments on capital leases | (7) | (37) |
| Excess tax benefits from vesting of restricted stock | 614 | 95 |
| Proceeds from employee stock purchase plan | 189 | 139 |
| Noncontrolling interest distributions | (3,648) | (3,359) |
| Net cash used in financing activities | (7,709) | (3,281) |
| Change in cash | 16,862 | 1,684 |
| Cash at beginning of period | 394 | 3,511 |
| Cash at end of period | $ 17,256 | $ 5,195 |
| Supplemental disclosures of cash flow information | ||
| Interest paid | $ 24 | $ 59 |
| Income taxes paid | $ 1,912 | $ 11,583 |
| LHC GROUP, INC. AND SUBSIDIARIES | |||
| SEGMENT INFORMATION | |||
| (amounts in thousands) | |||
| (unaudited) | |||
|
Three Months Ended March 31, 2010 |
|||
|
Home- Based Services |
Facility- Based Services |
Total |
|
| Net service revenue | $ 128,679 | $ 17,204 | $ 145,883 |
| Cost of service revenue | 64,623 | 10,087 | 74,710 |
| Provision for bad debts | 1,955 | 104 | 2,059 |
| General and administrative expenses | 41,492 | 4,275 | 45,767 |
| Operating income | 20,609 | 2,738 | 23,347 |
| Interest expense | (22) | (2) | (24) |
| Non-operating income (loss) | 41 | (12) | 29 |
|
Income from continuing operations before income taxes and noncontrolling interest |
20,628 | 2,724 | 23,352 |
| Income tax expense | 6,759 | 751 | 7,510 |
| Income from continuing operations | 13,869 | 1,973 | 15,842 |
| Noncontrolling interest | 3,766 | 452 | 4,218 |
| Total assets | $ 295,640 | $ 27,460 | $ 323,100 |
|
Three Months Ended March 31, 2009 |
||||
|
Home- Based Services |
Facility- Based Services |
Total |
||
| Net service revenue | $ 109,348 | $ 15,109 | $ 124,457 | |
| Cost of service revenue | 53,586 | 8,509 | 62,095 | |
| Provision for bad debts | 1,029 | 154 | 1,183 | |
| General and administrative expenses | 34,912 | 3,893 | 38,805 | |
| Operating income | 19,821 | 2,553 | 22,374 | |
| Interest expense | (52) | (7) | (59) | |
| Non-operating (loss) income | (474) | 14 | (460) | |
|
Income from continuing operations before income taxes and noncontrolling interest |
19,295 | 2,560 | 21,855 | |
| Income tax expense | 6,066 | 694 | 6,760 | |
| Income from continuing operations | 13,229 | 1,866 | 15,095 | |
| Noncontrolling interest | 3,498 | 484 | 3,982 | |
| Total assets | $ 239,131 | $ 22,514 | $ 261,645 | |
| LHC GROUP, INC. AND SUBSIDIARIES | ||||||
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA | ||||||
| (unaudited) | ||||||
|
Three Months Ended March 31, |
||||||
| 2010 | 2009 | |||||
| Key Data: | ||||||
| Home-Based Services: | ||||||
| Home Health locations | 233 | 209 | ||||
| Hospice locations | 22 | 19 | ||||
| Acquired (1) | 4 | 2 | ||||
| De novo (1) | 2 | 2 | ||||
| Home Health: | ||||||
| Total new admissions | 21,805 | 18,104 | ||||
| Medicare new admissions | 16,152 | 12,242 | ||||
| Average weekly census | 30,721 | 27,834 | ||||
| Average Medicare weekly census | 24,640 | 22,363 | ||||
| Medicare completed and billed episodes | 38,736 | 34,121 | ||||
| Average Medicare case mix for completed and billed Medicare episodes | 1.27 | 1.27 | ||||
| Average reimbursement per completed and billed Medicare episodes | $ 2,481 | $ 2,432 | ||||
| Total visits | 786,457 | 678,694 | ||||
| Total Medicare visits | 617,367 | 534,220 | ||||
| Average visits per completed and billed Medicare episodes | 15.9 | 15.7 | ||||
| Organic growth (2): | ||||||
| Net revenue | 8.7% | 27.4% | ||||
| Net Medicare revenue | 8.4% | 29.2% | ||||
| Total new admissions | 8.9% | 0.8% | ||||
| Medicare new admissions | 21.1% | 0.8% | ||||
| Average weekly census | 1.6% | 22.9% | ||||
| Average Medicare weekly census | 2.7% | 27.7% | ||||
| Medicare completed and billed episodes | 6.3% | 24.9% | ||||
| Facility-Based Services: | ||||||
| Long-Term Acute Care Hospital locations | 8 | 7 | ||||
| Patient days | 13,872 | 11,981 | ||||
| Patient acuity mix | 0.98 | 1.01 | ||||
|
_____________________________________ |
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| (1) Inclusive of both home health and hospice agencies. | ||||||
|
(2) Organic growth is calculated as the sum of same store plus denovo for the period divided by the total from the same period in the prior year. |
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