EXHIBIT 99.1
LHC Group Announces Second Quarter 2012 Results
Highlights:
- Net service revenue was $158.1 million for the second quarter of 2012;
- Adjusted net income attributable to LHC Group per diluted share was $0.35 for the second quarter of 2012; and
- Organic growth in new home health admissions was 6.3% for the second quarter of 2012 and 6.0% for the six months ended June 30, 2012.
LAFAYETTE, La., Aug. 6, 2012 (GLOBE NEWSWIRE) -- LHC Group Inc. (Nasdaq:LHCG), a national provider of post-acute care services, today announced its financial results for the three and six months ended June 30, 2012.
Financial Results for the Second Quarter
- Net service revenue for the second quarter of 2012 was $158.1 million, compared with $161.0 million for the same period in 2011.
- Net income attributable to LHC Group for the second quarter of 2012 was $6.0 million, compared with $9.8 million for the same period in 2011. The 2012 amount includes $471,000, after tax, of expense associated with the strategic alternatives process completed in June 2012 and legal or other expenses associated with the company's previously announced investigations.
- Diluted earnings per share was $0.32 for the second quarter of 2012, including $0.03 per diluted share, after tax, of expense associated with the strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, compared with $0.53 for the same period in 2011.
"I congratulate and thank our team members, who consistently deliver high-quality care to the growing number of patients, families and communities we serve," said Keith G. Myers, LHC Group's chairman and CEO. "We are pleased with our solid performance through the first two quarters, which are in line with forecast and guidance. Our 6.3 percent increase in organic growth in home health admissions in the second quarter, building on a 5.6 percent increase in organic growth in home health admissions in the first quarter, is a clear indicator that more hospitals, physicians and patients around the country are choosing LHC Group for post-acute care. Additionally, our 13 percent decrease in corporate overhead costs demonstrates that our efficiency initiatives are yielding results. Our company's proven ability to grow admissions while simultaneously becoming more efficient in our operations is the key to long-term success in today's healthcare environment."
LHC Group continues to strengthen its position as the leading post-acute partner for hospitals and health systems nationwide. On July 1, the company announced a joint venture partnership with Texas Health Resources and Methodist Health System, two of the leading healthcare providers in North Texas.
"Our unique joint venture strategy positions our company, as well as our existing and future hospital partners, to be at the forefront of change as our country moves toward a more integrated healthcare delivery system," Myers said.
Financial Results for the Six Months
- Net service revenue for the six months ended June 30, 2012, was $316.8 million compared with $322.8 million for the same period in 2011.
- Net income attributable to LHC Group for the six months ended June 30, 2012, was $13.7 million, including $884,000, after tax, of expense associated with the previously mentioned strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, compared with $17.5 million for the same period in 2011.
- Diluted earnings per share was $0.74 for the six months ended June 30, 2012, including $0.05 per diluted share, after tax, of expense associated with the strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, compared with $0.95 for the same period in 2011.
Guidance
The company is reaffirming its full year 2012 guidance issued Jan. 4, 2012, for net service revenue of $640 million to $660 million and fully diluted earnings per share in the range of $1.45 to $1.65. This guidance does not take into account the impact of any future acquisitions or share repurchases, if made, de novo locations, if opened, future reimbursement changes, if any, or future legal or other expenses associated with the company's ongoing investigations.
Conference Call
LHC Group will host a conference call Tuesday, Aug. 7, 2012, at 11 a.m. Eastern time to discuss its second quarter 2012 results. The toll-free number to call for this interactive teleconference is (866) 393-1608 (international callers should call 973-890-8327). A telephonic replay of the conference call will be available through midnight on Tuesday, Aug. 14, 2012, by dialing (855) 859-2056 (international callers should call 404-537-3406) and entering confirmation number 93666677. 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. A one-year online replay will be available approximately an hour after the conclusion of the live broadcast.
About LHC Group Inc.
LHC Group Inc. is a national provider of post-acute care, providing quality, cost-effective health care 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, hospice and private duty 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, 2011, 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) |
| | | |
| | June 30,
2012 | Dec. 31,
2011 |
| | | |
| ASSETS | | |
| Current assets: | | |
| Cash | $ 385 | $ 256 |
| Receivables: | | |
| Patient accounts receivable, less allowance for uncollectible accounts of $10,909 and $10,692, respectively | 90,506 | 91,183 |
| Other receivables | 1,218 | 1,636 |
| Amounts due from governmental entities | 190 | 315 |
| Total receivables, net | 91,914 | 93,134 |
| Deferred income taxes | 7,506 | 7,269 |
| Prepaid income taxes | 15,551 | 26,667 |
| Prepaid expenses | 6,550 | 6,576 |
| Other current assets | 2,905 | 4,363 |
| Total current assets | 124,811 | 138,265 |
| Property, building and equipment, net of accumulated depreciation of $30,895 and $28,073, respectively | 27,909 | 28,182 |
| Goodwill | 164,731 | 164,731 |
| Intangible assets, net of accumulated amortization of $2,712 and $2,325, respectively | 60,702 | 59,389 |
| Other assets | 5,203 | 5,809 |
| Total assets | $ 383,356 | $ 396,376 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Current liabilities: | | |
| Accounts payable and other accrued liabilities | $ 20,569 | $ 23,119 |
| Salaries, wages and benefits payable | 29,261 | 25,571 |
| Self insurance payable | 4,888 | 5,612 |
| Amounts due to governmental entities | 3,241 | 3,234 |
| Total current liabilities | 57,959 | 57,536 |
| Deferred income taxes | 24,563 | 22,523 |
| Income tax payable | 3,415 | 3,415 |
| Revolving credit facility | 8,309 | 34,820 |
| Total liabilities | 94,246 | 118,294 |
| Noncontrolling interest- redeemable | 11,033 | 11,348 |
| Stockholders' equity: | | |
| Common stock – $0.01 par value: 40,000,000 shares authorized; 21,534,814 and 21,374,264 shares issued and 18,191,813 and 18,298,659 shares outstanding, respectively | 184 | 183 |
| Treasury stock – 3,343,001 and 3,075,605 shares at cost, respectively | (10,779) | (6,216) |
| Additional paid-in capital | 98,483 | 95,964 |
| Retained earnings | 187,456 | 173,752 |
| Total LHC Group Inc. stockholders' equity | 275,344 | 263,683 |
| Noncontrolling interest- non-redeemable | 2,733 | 3,051 |
| Total equity | 278,077 | 266,734 |
| Total liabilities and stockholders' equity | $ 383,356 | $ 396,376 |
| |
| LHC GROUP INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF INCOME |
| (amounts in thousands, except share and per share data) |
| (unaudited) |
| | | | | |
| | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | 2012 | 2011 | 2012 | 2011 |
| Net service revenue | $ 158,055 | $ 161,015 | $ 316,816 | $ 322,798 |
| Cost of service revenue | 92,218 | 86,216 | 182,077 | 175,172 |
| Gross margin | 65,837 | 74,799 | 134,739 | 147,626 |
| Provision for bad debts | 2,647 | 3,143 | 5,408 | 5,704 |
| General and administrative expenses | 50,967 | 52,154 | 101,849 | 107,195 |
| Operating income | 12,223 | 19,502 | 27,482 | 34,727 |
| Interest expense | (208) | (195) | (567) | (290) |
| Non-operating income | (51) | 4 | 14 | 177 |
| Income before income taxes and noncontrolling interest | 11,964 | 19,311 | 26,929 | 34,614 |
| Income tax expense | 4,092 | 6,549 | 9,318 | 11,710 |
| Net income | 7,872 | 12,762 | 17,611 | 22,904 |
| Less net income attributable to noncontrolling interest | 1,909 | 2,974 | 3,907 | 5,422 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 5,963 | $ 9,788 | $ 13,704 | $ 17,482 |
| | | | | |
| Earnings per share – basic: | | | | |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 0.32 | $ 0.54 | $ 0.75 | $ 0.96 |
| | | | | |
| Earnings per share – diluted: | | | | |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 0.32 | $ 0.53 | $ 0.74 | $ 0.95 |
| | | | | |
| Weighted average shares outstanding: | | | | |
| Basic | 18,385,783 | 18,278,479 | 18,357,362 | 18,247,238 |
| Diluted | 18,423,258 | 18,346,441 | 18,396,453 | 18,338,605 |
| |
| LHC GROUP INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (amounts in thousands) |
| (unaudited) |
| | | |
| | Six Months Ended
June 30, |
| | 2012 | 2011 |
| Operating activities | | |
| Net income | $ 17,611 | $ 22,904 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization expense | 3,836 | 3,939 |
| Provision for bad debts | 5,408 | 5,704 |
| Stock-based compensation expense | 2,387 | 1,960 |
| Deferred income taxes | 1,803 | 3,375 |
| Loss on sale of assets | 113 | – |
| Changes in operating assets and liabilities, net of acquisitions: | | |
| Receivables | (4,875) | (4,254) |
| Prepaid expenses, other assets | 2,090 | 5,984 |
| Prepaid income taxes | 10,802 | (3,899) |
| Accounts payable and accrued expenses | 416 | (1,950) |
| Net amounts due to/from governmental entities | 132 | – |
| Net cash provided by operating activities | 39,723 | 33,763 |
| | | |
| Investing activities | | |
| Purchases of property, building, and equipment | (3,314) | (5,761) |
| Proceeds from sale of assets | 23 | – |
| Cash paid for acquisitions, primarily goodwill and intangible assets and advance payment on acquisitions | (1,700) | (11,770) |
| Net cash used in investing activities | (4,991) | (17,531) |
| | | |
| Financing activities | | |
| Proceeds from line of credit | 66,446 | 49,187 |
| Payments on line of credit | (92,957) | (49,187) |
| Payments on capital leases | – | (14) |
| Excess tax benefits from vesting of restricted stock | – | 318 |
| Proceeds from employee stock purchase plan | 407 | 426 |
| Payments on repurchase of common stock | (4,001) | (577) |
| Noncontrolling interest distributions | (4,452) | (6,645) |
| Purchase of additional controlling interest | (126) | (816) |
| Sale of noncontrolling interest | 80 | – |
| Net cash used in financing activities | (34,603) | (7,308) |
| Change in cash | 129 | 8,924 |
| Cash at beginning of period | 256 | 288 |
| Cash at end of period | $ 385 | $ 9,212 |
| | | |
| Supplemental disclosures of cash flow information | | |
| Interest paid | $ 567 | $ 290 |
| Income taxes paid | $ 8,203 | $ 11,956 |
| |
| |
| LHC GROUP INC. AND SUBSIDIARIES |
| SEGMENT INFORMATION |
| (amounts in thousands) |
| (unaudited) |
| | | | | | | |
| | Three Months Ended
June 30, 2012 | Six Months Ended
June 30, 2012 |
| | Home-
Based
Services | Facility-
Based
Services | Total | Home-
Based
Services | Facility-
Based
Services | Total |
| Net service revenue | $ 139,996 | $ 18,059 | $ 158,055 | $ 279,591 | $ 37,225 | $ 316,816 |
| Cost of service revenue | 80,707 | 11,511 | 92,218 | 159,768 | 22,309 | 182,077 |
| Provision for bad debts | 2,334 | 313 | 2,647 | 4,957 | 451 | 5,408 |
| General and administrative expenses | 45,566 | 5,401 | 50,967 | 90,792 | 11,057 | 101,849 |
| Operating income | 11,389 | 834 | 12,223 | 24,074 | 3,408 | 27,482 |
| Interest expense | (187) | (21) | (208) | (510) | (57) | (567) |
| Non-operating income (loss) | (50) | (1) | (51) | 3 | 11 | 14 |
| Income before income taxes and noncontrolling interest | 11,152 | 812 | 11,964 | 23,567 | 3,362 | 26,929 |
| Income tax expense | 3,697 | 395 | 4,092 | 8,428 | 890 | 9,318 |
| Net income | 7,455 | 417 | 7,872 | 15,139 | 2,472 | 17,611 |
| Noncontrolling interest | 1,826 | 83 | 1,909 | 3,518 | 389 | 3,907 |
| Net income attributable to LHC Group Inc. | $ 5,629 | $ 334 | $ 5,963 | $ 11,621 | $ 2,083 | $ 13,704 |
| Total assets | $ 348,788 | $ 34,568 | $ 383,356 | $ 348,788 | $ 34,568 | $ 383,356 |
| | | | | | | |
| | Three Months Ended
June 30, 2011 | Six Months Ended
June 30, 2011 |
| | Home-
Based
Services | Facility-
Based
Services | Total | Home-
Based
Services | Facility-
Based
Services | Total |
| Net service revenue | $ 141,984 | $ 19,031 | $ 161,015 | $ 283,785 | $ 39,013 | $ 322,798 |
| Cost of service revenue | 74,733 | 11,483 | 86,216 | 151,823 | 23,349 | 175,172 |
| Provision for bad debts | 2,998 | 145 | 3,143 | 5,406 | 298 | 5,704 |
| General and administrative expenses | 47,456 | 4,698 | 52,154 | 97,520 | 9,675 | 107,195 |
| Operating income | 16,797 | 2,705 | 19,502 | 29,036 | 5,691 | 34,747 |
| Interest expense | (175) | (20) | (195) | (261) | (29) | (290) |
| Non-operating income (loss) | (9) | 13 | 4 | 142 | 35 | 177 |
| Income before income taxes and noncontrolling interest | 16,613 | 2,698 | 19,311 | 28,917 | 5,697 | 34,614 |
| Income tax expense | 5,917 | 632 | 6,549 | 10,594 | 1,116 | 11,710 |
| Net income | 10,696 | 2,066 | 12,762 | 18,323 | 4,581 | 22,904 |
| Noncontrolling interest | 2,687 | 287 | 2,974 | 4,782 | 640 | 5,422 |
| Net income attributable to LHC Group Inc. | $ 8,009 | $ 1,779 | $ 9,788 | $ 13,541 | $ 3,941 | $ 17,482 |
| Total assets | $ 342,608 | $ 35,118 | $ 377,726 | $ 342,608 | $ 35,118 | $ 377,726 |
| |
| LHC GROUP INC. AND SUBSIDIARIES |
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA |
| (unaudited) |
| | | | | |
| | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | 2012 | 2011 | 2012 | 2011 |
| Key Data: | | | | |
| Home-Based Services: | | | | |
| Home Health | | | | |
| Locations | 244 | 260 | 244 | 260 |
| Acquired | 0 | 2 | 0 | 5 |
| De novo | 0 | 0 | 1 | 7 |
| Total new admissions | 26,498 | 24,935 | 54,194 | 51,129 |
| Medicare new admissions | 17,837 | 17,423 | 36,883 | 36,012 |
| Average daily census | 32,988 | 33,937 | 32,723 | 34,120 |
| Average Medicare daily census | 24,858 | 26,192 | 24,720 | 26,320 |
| Medicare completed and billed episodes | 42,480 | 44,541 | 83,767 | 86,607 |
| Average Medicare case mix for completed and billed Medicare episodes | 1.26 | 1.24 | 1.26 | 1.25 |
| Average reimbursement per completed and billed Medicare episodes | $ 2,362 | $ 2,340 | $ 2,350 | $ 2,358 |
| Total visits | 896,322 | 883,888 | 1,794,699 | 1,763,823 |
| Total Medicare visits | 653,053 | 667,088 | 1,311,619 | 1,333,273 |
| Average visits per completed and billed Medicare episodes | 15.4 | 15.0 | 15.7 | 15.4 |
| Organic growth (1): | | | | |
| Net revenue | -2.5% | -1.8% | -2.4% | 1.7% |
| Net Medicare revenue | -6.4% | -4.4% | -5.7% | -1.2% |
| Total new admissions | 6.3% | 4.8% | 6.0% | 9.4% |
| Medicare new admissions | 2.1% | 1.2% | 2.3% | 5.4% |
| Average daily census | -2.8% | 4.7% | -4.1% | 6.4% |
| Average Medicare daily census | -5.1% | 1.6% | -6.1% | 3.0% |
| Medicare completed and billed episodes | -4.6% | 6.2% | -3.3% | 6.0% |
| | | | | |
| Hospice | | | | |
| Locations | 32 | 32 | 32 | 32 |
| Acquired | 0 | 3 | 0 | 8 |
| Admissions | 1,072 | 1,045 | 2,181 | 1,964 |
| Average Daily Census | 995 | 930 | 964 | 882 |
| Patient Days | 90,564 | 84,669 | 175,528 | 159,670 |
| Average revenue per patient day | $ 138 | $ 133 | $ 138 | $ 136 |
| | | | | |
| Facility-Based Services: | | | | |
| Long-term Acute Care | | | | |
| Locations | 9 | 9 | 9 | 9 |
| Patient days | 15,822 | 15,268 | 32,013 | 30,601 |
| Patient acuity mix | 0.98 | 1.05 | 1.00 | 1.03 |
| Average revenue per patient day | $ 1,102 | $ 1,171 | $ 1,129 | $ 1,190 |
| | | | | |
| (1) Organic growth is calculated as the sum of same store plus de novo for the period divided by total from the same period in the prior year. | | | | |
| |
| LHC GROUP INC. AND SUBSIDIARIES |
| RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME |
| (unaudited) |
| | | |
| During the three months and six months ended June 30, 2012, the Company spent $471,000 and $884,000, respectively, after tax, on costs associated with the previously announced strategic alternatives process and legal or other expenses associated with the company's previously announced investigations. In order to reflect the operational performance of the Company during the quarter excluding these costs, company representatives may be asked to provide adjusted net income for the quarter excluding such costs. In the event the Company provides such information, the adjusted net income presented would be a non-GAAP financial measure determined as follows: net income excluding costs related to our previously announced strategic alternatives process and legal or other expenses associated with the company's previously announced investigations. The Company believes adjusted net income would provide investors with helpful information with respect to the performance of the Company's ongoing operations, and management is using adjusted net income to evaluate its ongoing operations and for internal planning and forecasting purposes. Adjusted net income is not a measure of liquidity. See the tables below, which reconcile net income to adjusted net income and GAAP earnings per share to adjusted earnings per share. |
| | | |
| | For The
Three
Months
Ended
June 30,
2012 | For The
Six
Months
Ended
June 30,
2012 |
| | | |
| Adjusted net income attributable to LHC Group: | | |
| Net income attributable to LHC Group Inc. | $ 5,963 | $ 13,704 |
| Add: Costs related to strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, net of tax | 471 | 884 |
| Adjusted net income attributable to LHC Group Inc. | $ 6,434 | $ 14,588 |
| | | |
| Adjusted net income attributable to LHC Group per diluted share: | |
| Net income attributable to LHC Group Inc. | $ 0.32 | $ 0.74 |
| Add: Costs related to strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, net of tax | 0.03 | 0.05 |
| Adjusted net income attributable to LHC Group Inc. | $ 0.35 | $ 0.79 |
CONTACT: Eric Elliott
Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com