EXHIBIT 99.1
LHC Group Announces Third Quarter 2012 Results
Highlights:
- Net service revenue was $158.9 million for the third quarter of 2012;
- Net income attributable to LHC Group per diluted share was $0.36 for the third quarter of 2012; and
- Organic growth in new home health admissions was 3.0% for the third quarter of 2012 and 5.0% for the nine months ended September 30, 2012.
LAFAYETTE, La., Nov. 7, 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 nine months ended September 30, 2012.
Financial Results for the Third Quarter
- Net service revenue for the third quarter of 2012 was $158.9 million, compared with $153.4 million for the same period in 2011.
- Net income attributable to LHC Group for the third quarter of 2012 was $6.3 million, compared with a net loss attributable to LHC Group for the third quarter of 2011 of $38.0 million, which included a $45.0 million after tax charge related to the company's settlement with the Department of Justice. The 2012 amount includes:
-- $505,000 benefit from a lower tax rate due to Work Opportunity Tax Credits ($0.03 per share), and
-- $390,000 after tax expense associated with an intangibles impairment charge ($0.02 per share). - Estimated revenue loss of $571,000 ($321,000 after tax) in the third quarter of 2012 due to Hurricane Isaac.
- Diluted earnings per share was $0.36 for the third quarter of 2012, including approximately $0.01 benefit from the share repurchases during 2012.
Keith G. Myers, LHC Group's chairman and CEO, said the company continues to demonstrate its proven ability to operate efficiently and effectively, posting solid operating results despite the significant impact of Hurricane Isaac and ongoing uncertainties in the regulatory environment.
"Like residents all along the Gulf Coast, LHC Group grappled with many short-term challenges from Hurricane Isaac," Myers said. "This slow-moving storm affected 85 of our locations for an extended period. However, we are proud of the dedication exhibited by our clinicians, who helped make sure every patient was safe before, during and after the storm.
"Our LHC Group team continues to show resiliency in the face of challenge and adversity. Once again, we have clearly demonstrated our ability to operate efficiently, delivering high-quality care in a cost-effective manner, even under the most difficult of circumstances. Our industry-leading model of post-acute care partnerships with hospitals and health systems positions us well for the future, and we are well poised to continue delivering value to our patients, our partners and all stakeholders."
Myers said the company's commitment to excellence recently propelled nearly 60 percent of LHC Group's home health agencies to HomeCare Elite status for 2012. Compiled annually by OCS HomeCare and DecisionHealth, HomeCare Elite recognizes the top 25 percent of home health agencies in the country based on quality of care, quality improvement, patient experience, process measure implementation and financial performance.
Financial Results for the Nine Months
- Net service revenue for the nine months ended September 30, 2012, was $475.7 million, compared with $476.2 million for the same period in 2011.
- Net income attributable to LHC Group for the nine months ended September 30, 2012, was $20.0 million, compared with a net loss attributable to LHC Group for the nine months ended September 30, 2011, of $20.5 million, which included a $45.0 million after tax charge related to the company's settlement with the Department of Justice. The 2012 amount includes:
-- $1.2 million after tax expense associated with the strategic alternatives process and legal or other expenses associated with the company's previously announced investigations ($0.06 per share),
-- $505,000 benefit from a lower tax rate due to Work Opportunity Tax Credits ($0.03 per share),
-- $390,000 after tax expense associated with an intangibles impairment charge ($0.02 per share), and
-- $109,000 after tax loss from locations acquired in the period ($0.01). - Estimated revenue loss of $571,000 ($321,000 after tax) for the nine months ended September 30, 2012, due to Hurricane Isaac.
- Diluted earnings per share was $1.10 for the nine months ended September 30, 2012, compared with a loss per share of $1.12 for the same period in 2011. The 2012 amount includes $0.01 per share benefit from the share repurchases during the period.
Guidance
The company is adjusting its full year 2012 guidance issued January 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 to net service revenue of $635 million to $645 million and fully diluted earnings per share in the range of $1.45 to $1.55, which includes the effect of share repurchases and acquisitions made through September 30, 2012. 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, and excludes legal or other expenses associated with the company's ongoing investigations.
Conference Call
LHC Group will host a conference call Thursday, November 8, 2012, at 11 a.m. Eastern time to discuss its third 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 Thursday, November 15, 2012, by dialing (855) 859‑2056 (international callers should call 404-537-3406) and entering confirmation number 37823587. 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.
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| LHC GROUP INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (amounts in thousands, except share data) |
| (unaudited) |
| | | |
| | Sept. 30,
2012 | Dec. 31,
2011 |
| | | |
| ASSETS | | |
| Current assets: | | |
| Cash | $276 | $256 |
| Receivables: | | |
| Patient accounts receivable, less allowance for uncollectible accounts of $11,218 and $10,692, respectively | 89,945 | 91,183 |
| Other receivables | 961 | 1,636 |
| Amounts due from governmental entities | 187 | 315 |
| Total receivables, net | 91,093 | 93,134 |
| Deferred income taxes | 8,630 | 7,269 |
| Prepaid income taxes | 12,365 | 26,667 |
| Prepaid expenses | 5,780 | 6,576 |
| Other current assets | 3,274 | 4,363 |
| Total current assets | 121,418 | 138,265 |
| Property, building and equipment, net of accumulated depreciation of $32,610 and $28,073, respectively | 29,374 | 28,182 |
| Goodwill | 168,984 | 164,731 |
| Intangible assets, net of accumulated amortization of $2,848 and $2,325, respectively | 62,275 | 59,389 |
| Other assets | 5,447 | 5,809 |
| Total assets | $387,498 | $396,376 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| Current liabilities: | | |
| Accounts payable and other accrued liabilities | $17,780 | $23,119 |
| Salaries, wages and benefits payable | 24,971 | 25,571 |
| Self insurance payable | 4,954 | 5,612 |
| Amounts due to governmental entities | 3,241 | 3,234 |
| Total current liabilities | 50,946 | 57,536 |
| Deferred income taxes | 25,436 | 22,523 |
| Income tax payable | 3,415 | 3,415 |
| Revolving credit facility | 25,085 | 34,820 |
| Total liabilities | 104,882 | 118,294 |
| Noncontrolling interest- redeemable | 10,781 | 11,348 |
| Stockholders' equity: | | |
| Common stock – $0.01 par value: 40,000,000 shares authorized; | 216 | 183 |
| 21,554,171 and 21,374,264 shares issued and 17,352,151 and 18,298,659 shares outstanding, respectively | |
| Treasury stock – 4,202,020 and 3,075,605 shares at cost, respectively | (25,835) | (6,216) |
| Additional paid-in capital | 99,615 | 95,964 |
| Retained earnings | 193,792 | 173,752 |
| Total LHC Group Inc. stockholders' equity | 267,788 | 263,683 |
| Noncontrolling interest- non-redeemable | 4,047 | 3,051 |
| Total equity | 271,835 | 266,734 |
| Total liabilities and stockholders' equity | $387,498 | $396,376 |
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| LHC GROUP INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (amounts in thousands, except share and per share data) |
| (unaudited) |
| | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2012 | 2011 | 2012 | 2011 |
| Net service revenue | $158,926 | $153,398 | $475,742 | $476,196 |
| Cost of service revenue | 91,234 | 87,815 | 273,311 | 262,987 |
| Gross margin | 67,692 | 65,583 | 202,431 | 213,209 |
| Provision for bad debts | 2,987 | 3,199 | 8,395 | 8,903 |
| General and administrative expenses | 52,464 | 52,656 | 154,313 | 159,851 |
| Other intangibles impairment charge | 650 | – | 650 | – |
| Settlement with government agencies | – | 65,000 | – | 65,000 |
| Operating income (loss) | 11,591 | (55,272) | 39,073 | (20,545) |
| Interest expense | (405) | (217) | (972) | (507) |
| Non-operating income | 94 | 1,396 | 108 | 1,573 |
| Income (loss) before income taxes and noncontrolling interest | 11,280 | (54,093) | 38,209 | (19,479) |
| Income tax expense (benefit) | 3,388 | (18,130) | 12,706 | (6,420) |
| Net income (loss) | 7,892 | (35,963) | 25,503 | (13,059) |
| Less net income attributable to noncontrolling interest | 1,556 | 1,997 | 5,463 | 7,419 |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $6,336 | $ (37,960) | $20,040 | $ (20,478) |
| | | | | |
| Earnings per share – basic: | | | | |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $0.36 | $ (2.08) | $1.11 | $ (1.12) |
| | | | | |
| Earnings per share – diluted: | | | | |
| Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $0.36 | $ (2.08) | $1.10 | $ (1.12) |
| | | | | |
| Weighted average shares outstanding: | | | | |
| Basic | 17,656,842 | 18,263,237 | 18,121,217 | 18,251,648 |
| Diluted | 17,726,819 | 18,263,237 | 18,160,489 | 18,251,648 |
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| LHC GROUP INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (amounts in thousands) |
| (unaudited) |
| | | |
| | | |
| | Nine Months Ended
September 30, |
| | 2012 | 2011 |
| Operating activities | | |
| Net income (loss) | $25,503 | $ (13,059) |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
| Depreciation and amortization expense | 5,801 | 5,719 |
| Provision for bad debts | 8,395 | 8,903 |
| Stock-based compensation expense | 3,398 | 3,041 |
| Deferred income taxes | 1,552 | 2,834 |
| Loss on sale of assets | 100 | – |
| Other intangibles impairment change | 650 | – |
| Changes in operating assets and liabilities, net of acquisitions: | |
| Receivables | (7,084) | (5,871) |
| Prepaid expenses, other assets | 2,247 | 6,762 |
| Prepaid income taxes | 13,960 | (21,569) |
| Accounts payable and accrued expenses | (6,597) | (2,627) |
| Net amounts due to/from governmental entities | 135 | 217 |
| Net cash (used in) provided by operating activities | 48,060 | (15,650) |
| | | |
| Investing activities | | |
| Purchases of property, building, and equipment | (6,508) | (6,058) |
| Proceeds from sale of assets | 25 | – |
| Cash paid for acquisitions, primarily goodwill and intangible assets and advance payment on acquisitions | (6,764) | (11,745) |
| Net cash (used in) investing activities | (13,247) | (17,803) |
| | | |
| Financing activities | | |
| Proceeds from line of credit | 173,562 | 103,187 |
| Payments on line of credit | (183,297) | (49,187) |
| Payments on capital leases | – | (14) |
| Excess tax benefits from vesting of restricted stock | – | 319 |
| Proceeds from employee stock purchase plan | 587 | 648 |
| Payments on repurchase of common stock | (19,017) | (577) |
| Noncontrolling interest distributions | (6,582) | (9,537) |
| Purchase of additional controlling interest | (126) | (816) |
| Sale of noncontrolling interest | 80 | 276 |
| Net cash (used in) provided by financing activities | (34,793) | 44,299 |
| Change in cash | 20 | 10,846 |
| Cash at beginning of period | 256 | 288 |
| Cash at end of period | $276 | $11,134 |
| | | |
| Supplemental disclosures of cash flow information | |
| Interest paid | $972 | $507 |
| Income taxes paid | $8,644 | $12,335 |
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| LHC GROUP INC. AND SUBSIDIARIES |
| SEGMENT INFORMATION |
| (amounts in thousands) |
| (unaudited) |
| | | | | | | |
| | Three Months Ended
September 30, 2012 | Nine Months Ended
September 30, 2012 |
| | Home-
Based
Services | Facility-
Based
Services |
Total | Home-
Based
Services | Facility-
Based
Services |
Total |
| Net service revenue | $140,256 | $18,670 | $158,926 | $419,847 | $55,895 | $475,742 |
| Cost of service revenue | 80,579 | 10,655 | 91,234 | 240,347 | 32,964 | 273,311 |
| Provision for bad debts | 2,669 | 318 | 2,987 | 7,626 | 769 | 8,395 |
| General and administrative expenses | 47,110 | 5,354 | 52,464 | 137,902 | 16,411 | 154,313 |
| Other intangibles impairment charge | 650 | – | 650 | 650 | – | 650 |
| Operating income | 9,248 | 2,343 | 11,591 | 33,322 | 5,751 | 39,073 |
| Interest expense | (364) | (41) | (405) | (874) | (98) | (972) |
| Non-operating income | 74 | 20 | 94 | 77 | 31 | 108 |
| Income before income taxes and noncontrolling interest | 8,958 | 2,322 | 11,280 | 32,525 | 5,684 | 38,209 |
| Income tax expense | 3,050 | 338 | 3,388 | 11,478 | 1,228 | 12,706 |
| Net income | 5,908 | 1,984 | 7,892 | 21,047 | 4,456 | 25,503 |
| Noncontrolling interest | 1,308 | 248 | 1,556 | 4,826 | 637 | 5,463 |
| Net income attributable to LHC Group Inc. | $4,600 | $1,736 | $6,336 | $16,221 | $3,819 | $20,040 |
| | | | | | | |
| Total assets | $352,541 | $34,957 | $387,498 | $352,541 | $34,957 | $387,498 |
| | | | | | | |
| | Three Months Ended
September 30, 2011 | Nine Months Ended
September 30, 2011 |
| | Home-
Based
Services | Facility-
Based
Services |
Total | Home-
Based
Services | Facility-
Based
Services |
Total |
| Net service revenue | $134,950 | $18,448 | $153,398 | $418,735 | $57,461 | $476,196 |
| Cost of service revenue | 77,331 | 10,484 | 87,815 | 229,153 | 33,834 | 262,987 |
| Provision for bad debts | 3,097 | 102 | 3,199 | 8,503 | 400 | 8,903 |
| General and administrative expenses | 47,522 | 5,134 | 52,656 | 145,043 | 14,808 | 159,851 |
| Settlement with government agencies | 65,000 | – | 65,000 | 65,000 | – | 65,000 |
| Operating income (loss) | (58,000) | 2,728 | (55,272) | (28,964) | 8,419 | (20,545) |
| Interest expense | (196) | (21) | (217) | (457) | (50) | (507) |
| Non-operating income | 1,374 | 22 | 1,396 | 1,516 | 57 | 1,573 |
| Income (loss) before income taxes and noncontrolling interest | (56,822) | 2,729 | (54,093) | (27,905) | 8,426 | (19,479) |
| Income tax expense (benefit) | (18,506) | 376 | (18,130) | (7,912) | 1,492 | (6,420) |
| Net income (loss) | (38,316) | 2,353 | (35,963) | (19,993) | 6,934 | (13,059) |
| Noncontrolling interest | 1,622 | 375 | 1,997 | 6,404 | 1,015 | 7,419 |
| Net income (loss) attributable to LHC Group Inc. | $ (39,938) | $1,978 | $ (37,960) | $ (26,397) | $5,919 | $ (20,478) |
| | | | | | | |
| Total assets | $356,417 | $41,476 | $397,893 | $356,417 | $41,476 | $397,893 |
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| LHC GROUP INC. AND SUBSIDIARIES |
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA |
| (unaudited) |
| | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2012 | 2011 | 2012 | 2011 |
| Key Data: | | | | |
| Home-Based Services: | | | | |
| Home Health | | | | |
| Locations | 238 | 258 | 238 | 258 |
| Acquired | 2 | 0 | 2 | 5 |
| De novo | 1 | 1 | 1 | 4 |
| Total new admissions | 27,301 | 25,787 | 81,495 | 76,916 |
| Medicare new admissions | 18,415 | 18,445 | 55,298 | 54,511 |
| Average daily census | 32,605 | 31,311 | 32,764 | 32,942 |
| Average Medicare daily census | 24,279 | 24,076 | 24,618 | 25,539 |
| Medicare completed and billed episodes | 41,699 | 41,191 | 125,466 | 127,798 |
| Average Medicare case mix for completed and billed Medicare episodes | 1.25 | 1.24 | 1.25 | 1.24 |
| Average reimbursement per completed and billed Medicare episodes | $2,337 | $2,344 | $2,337 | $2,352 |
| Total visits | 883,257 | 862,220 | 2,677,956 | 2,626,043 |
| Total Medicare visits | 637,310 | 644,392 | 1,948,929 | 1,977,665 |
| Average visits per completed and billed Medicare episodes | 15.3 | 15.6 | 15.5 | 15.5 |
| Organic growth (1): | | | | |
| Net revenue | 1.7% | -11.2% | -1.1% | -1.9% |
| Net Medicare revenue | -1.9% | -13.4% | -4.5% | -4.6% |
| Total new admissions | 3.0% | 5.1% | 5.0% | 9.5% |
| Medicare new admissions | -1.8% | 4.5% | 0.9% | 6.5% |
| Average daily census | 3.2% | -8.2% | -1.4% | 1.6% |
| Average Medicare daily census | 0.3% | -10.2% | -4.1% | -0.8% |
| Medicare completed and billed episodes | 0.7% | -5.6% | -2.0% | 2.9% |
| | | | | |
| Hospice | | | | |
| Locations | 32 | 32 | 32 | 32 |
| Acquired | 0 | 0 | 0 | 8 |
| Admissions | 1,117 | 1,061 | 3,298 | 3,025 |
| Average Daily Census | 1,021 | 918 | 984 | 894 |
| Patient Days | 93,972 | 84,410 | 269,500 | 244,080 |
| Average revenue per patient day | $138 | $134 | $138 | $135 |
| | | | | |
| Facility-Based Services: | | | | |
| Long-term Acute Care | | | | |
| Locations | 9 | 9 | 9 | 9 |
| Patient days | 15,335 | 15,385 | 47,348 | 45,986 |
| Patient acuity mix | 1.01 | 1.02 | 1 | 1.03 |
| Average revenue per patient day | $1,172 | $1,167 | $1,143 | $1,182 |
| | | | | |
| (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 nine months ended September 30, 2012, the company incurred costs or received benefits related to the previously announced strategic alternative process, the previously announced investigations or that related to circumstances that are not considered part of the company's normal ongoing operating results by management. In order to reflect the operational performance of the company during the quarter or nine month period excluding these costs, company representatives may be asked to provide adjusted net income for the quarter excluding such costs or benefits. In the event the company provides such information, the adjusted net income presented would be a non-GAAP financial measure. 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
Sept. 30,
2012 | For The
Nine
Months
Ended
Sept. 30,
2012 |
| Adjusted net income attributable to LHC Group: | | |
| Net income attributable to LHC Group Inc. | $ 6,336 | $ 20,040 |
| Costs related to legal or other expenses associated with the company's previously announced investigations, net of tax | 90 | 1,164 |
| Other intangibles impairment charge, net of tax | 390 | 390 |
| Loss from acquisition, net of tax | 109 | 109 |
| Estimated revenue loss from Hurricane Isaac, net of tax | 321 | 321 |
| Tax credits offset by consulting fees, net of tax | (505) | (505) |
| Adjusted net income attributable to LHC Group Inc. | $ 6,741 | $ 21,519 |
| | | |
| Adjusted net income attributable to LHC Group per diluted share: | | |
| Net income attributable to LHC Group Inc. | $ 0.36 | $ 1.10 |
| Costs related to strategic alternatives process and legal or other expenses associated with the company's previously announced investigations, net of tax | 0.01 | 0.06 |
| Other intangibles impairment charge, net of tax | 0.02 | 0.02 |
| Loss from acquisition, net of tax | 0.01 | 0.01 |
| Estimated revenue loss from Hurricane Isaac, net of tax | 0.02 | 0.02 |
| Tax credits offset by consulting fees, net of tax | (0.03) | (0.03) |
| Effect of share repurchase | (0.01) | (0.01) |
| Adjusted net income attributable to LHC Group Inc. | $ 0.38 | $ 1.17 |
CONTACT: Eric Elliott
Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com