EXHIBIT 99.1
LHC Group Announces Fourth Quarter and Full-Year 2014 Results
LAFAYETTE, La., Feb. 25, 2015 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health, hospice and comprehensive post-acute healthcare services, today announced its financial results for the three months and year ended December 31, 2014.
Financial Results for the Fourth Quarter
- Net service revenue for the fourth quarter of 2014 was $193.4 million.
- Net income attributable to LHC Group for the fourth quarter of 2014 was $5.5 million, or $0.32 per diluted share.
- Adjusted net income attributable to LHC Group for the fourth quarter of 2014 was $7.7 million, or $0.45 per diluted share. (1)
Financial Results for the Year
- Net service revenue for the year ended December 31, 2014, was $733.6 million.
- Net income attributable to LHC Group for the year ended December 31, 2014, was $21.8 million, or $1.26 per diluted share.
- Adjusted net income attributable to LHC Group for the year ended December 31, 2014, was $24.0 million, or $1.39 per diluted share. (1)
(1) See "Reconciliation of Non-GAAP Measures - Adjusted net income attributable to LHC Group" to GAAP results on page 9
Commenting on the results, Keith G. Myers, LHC Group's chairman and CEO, said, "We are pleased with our operating results and the overall performance of our company and our team in 2014. Our focus on reducing overhead costs, combined with the investments we've made in point-of-care technology over the past several years, is allowing us to operate more efficiently and improve clinical outcomes through more meaningful coordination and collaboration with physicians, hospitals, and other healthcare providers in the continuum or care."
Myers added, "As we celebrate our first 20 years and look forward to the next chapter in our company's story, our proven healthcare delivery model, combined with our unique hospital joint venture strategy, positions us well to take advantage of the unprecedented growth opportunities ahead and to be at the forefront of change as our country moves toward a more integrated healthcare delivery system.
FY 2015 Guidance
Fiscal year net service revenue is expected to be in the range of $755 million to $775 million, and fully diluted earnings per share are expected to be in the range of $1.50 to $1.70.
This guidance does not take into account the impact of other future reimbursement changes, if any, future acquisitions or share repurchases, if made, de novo locations, if opened, or future legal expenses, if necessary.
Conference Call
LHC Group will host a conference call Thursday, February 26, 2015, at 11:00 a.m. Eastern time to discuss its fourth quarter and full-year 2014 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, March 5, 2015, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 62252687. 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 healthcare services, providing quality, cost-effective healthcare to patients within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of healthcare services through home health, hospice and community‑based services agencies in its home-based and hospice-based divisions 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, 2013, 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 |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Amounts in thousands, except share data) |
| (Unaudited) |
| |
| | Dec. 31,
2014 | Dec. 31,
2013 |
| ASSETS |
| Current assets: | | |
| Cash | $ 531 | $ 14,014 |
| Receivables: | | |
| Patient accounts receivable, less allowance for uncollectible accounts of $18,582 and $14,334, respectively | 97,498 | 88,964 |
| Other receivables | 1,334 | 608 |
| Amounts due from governmental entities | 1,164 | 1,234 |
| Total receivables, net | 99,996 | 90,806 |
| Deferred income taxes | 11,381 | 9,251 |
| Prepaid income taxes | 3,093 | 4,069 |
| Prepaid expenses | 8,724 | 6,966 |
| Other current assets | 3,777 | 4,449 |
| Receivable due from insurance carrier | 7,850 | – |
| Total current assets | 135,352 | 129,555 |
| Property, building and equipment, net of accumulated depreciation of $44,683 and $40,935, respectively | 34,787 | 31,052 |
| Goodwill | 240,019 | 194,893 |
| Intangible assets, net of accumulated amortization of $6,560 and $4,518, respectively | 79,685 | 62,184 |
| Other assets | 1,896 | 4,542 |
| Total assets | $ 491,739 | $ 422,226 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: | | |
| Accounts payable and other accrued liabilities | $ 19,278 | $ 17,217 |
| Salaries, wages and benefits payable | 22,466 | 31,927 |
| Self-insurance reserve | 6,559 | 5,862 |
| Current portion of long-term debt | 230 | 249 |
| Amounts due to governmental entities | 4,459 | 4,391 |
| Legal settlement payable | 7,850 | – |
| Total current liabilities | 60,842 | 59,646 |
| Deferred income taxes | 33,592 | 29,060 |
| Income tax payable | 3,415 | 3,415 |
| Revolving credit facility | 60,000 | 22,000 |
| Long-term debt, less current portion | 778 | 963 |
| Total liabilities | 158,627 | 115,084 |
| Noncontrolling interest- redeemable | 11,517 | 11,258 |
| Stockholders' equity: | | |
| Common stock – $0.01 par value: 40,000,000 shares authorized; 22,015,211 and 21,801,634 shares issued in 2014 and 2013, respectively | 220 | 218 |
| Treasury stock – 4,734,363 and 4,693,647 shares at cost, respectively | (35,660) | (34,715) |
| Additional paid-in capital | 108,708 | 103,972 |
| Retained earnings | 245,371 | 223,534 |
| Total LHC Group, Inc. stockholders' equity | 318,639 | 293,009 |
| Noncontrolling interest- non-redeemable | 2,956 | 2,875 |
| Total stockholders' equity | 321,595 | 295,884 |
| Total liabilities and stockholders' equity | $ 491,739 | $ 422,226 |
| LHC GROUP, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (Amounts in thousands, except share and per share data) |
| (Unaudited) |
| |
| | Three Months Ended
December 31, | Year Ended
December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| Net service revenue | $ 193,371 | $ 165,280 | $ 733,632 | $ 658,283 |
| Cost of service revenue | 112,792 | 95,241 | 434,775 | 383,464 |
| Gross margin | 80,579 | 70,039 | 298,857 | 274,819 |
| Provision for bad debts | 4,081 | 4,096 | 15,780 | 13,929 |
| General and administrative expenses | 61,287 | 54,806 | 233,945 | 213,633 |
| Impairment of intangibles and other | 3,646 | 520 | 3,646 | 520 |
| Operating income | 11,565 | 10,617 | 45,486 | 46,737 |
| Interest expense | (625) | (440) | (2,486) | (1,995) |
| Non-operating income | 106 | 79 | 265 | 263 |
| Income from continuing operations before income taxes and noncontrolling interest | 11,046 | 10,256 | 43,265 | 45,005 |
| Income tax expense | 3,314 | 3,623 | 14,513 | 15,859 |
| Income from continuing operations | 7,732 | 6,633 | 28,752 | 29,146 |
| Less net income attributable to noncontrolling interests | 2,198 | 1,664 | 6,915 | 6,804 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 5,534 | $ 4,969 | $ 21,837 | $ 22,342 |
| | | | | |
| Earnings per share – basic: | | | | |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 0.32 | $ 0.29 | $ 1.27 | $ 1.31 |
| | | | | |
| Earnings per share – diluted: | | | | |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 0.32 | $ 0.29 | $ 1.26 | $ 1.30 |
| | | | | |
| Weighted average shares outstanding: | | | | |
| Basic | 17,274,677 | 17,096,360 | 17,229,026 | 17,049,794 |
| Diluted | 17,419,423 | 17,228,499 | 17,315,333 | 17,132,751 |
| |
| LHC GROUP, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Amounts in thousands) |
| (Unaudited) |
| |
| | Year Ended
December 31, |
| | 2014 | 2013 |
| Operating activities | | |
| Net income | $ 28,752 | $ 29,146 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization expense | 9,571 | 8,325 |
| Provision for bad debts | 15,780 | 13,929 |
| Stock based compensation expense | 4,094 | 3,886 |
| Deferred income taxes | 2,402 | 2,351 |
| Impairment of intangibles and other | 3,650 | 520 |
| Changes in operating assets and liabilities, net of acquisitions: | | |
| Receivables | (16,372) | (18,961) |
| Prepaid expenses and other assets | 191 | (749) |
| Prepaid income taxes | 911 | 3,299 |
| Accounts payable and accrued expenses | (10,460) | 4,395 |
| Net amounts due to/from governmental entities | 138 | (226) |
| Net cash provided by operating activities | 38,657 | 45,915 |
| | | |
| Investing activities | | |
| Cash paid for acquisitions, primarily goodwill and intangible assets | (73,933) | (26,920) |
| Purchases of property, building and equipment | (8,105) | (8,343) |
| Net cash (used in) investing activities | (82,038) | (35,263) |
| | | |
| Financing activities | | |
| Proceeds from line of credit | 75,000 | 73,000 |
| Payments on line of credit | (37,000) | (70,500) |
| Excess tax benefits from vesting of stock awards | 124 | 18 |
| Proceeds from employee stock purchase plan | 782 | 786 |
| Proceeds from debt issuance | – | 1,212 |
| Payments on debt | (202) | – |
| Noncontrolling interest distributions | (6,843) | (8,126) |
| Payment of deferred financing fees | (852) | – |
| Purchase of additional controlling interest | (359) | (1,879) |
| Sale of noncontrolling interest | 193 | – |
| Redemption of treasury shares | (945) | (869) |
| Net cash provided by (used in) financing activities | 29,898 | (6,358) |
| Change in cash | (13,483) | 4,294 |
| Cash at beginning of period | 14,014 | 9,720 |
| Cash at end of period | $ 531 | $ 14,014 |
| | | |
| Supplemental disclosures of cash flow information | | |
| Interest paid | $ 2,461 | $ 1,961 |
| Income taxes paid | $ 11,781 | $ 21,606 |
| |
| LHC GROUP, INC. AND SUBSIDIARIES |
| SEGMENT INFORMATION |
| (Amounts in thousands) |
| (Unaudited) |
| | Three Months Ended December 31, 2014 |
| | Home-Based Services | Hospice Services | Facility-Based Services | Total |
| Net service revenue | $ 157,076 | $ 18,260 | $ 18,035 | $ 193,371 |
| Cost of service revenue | 91,294 | 10,325 | 11,173 | 112,792 |
| Provision for bad debts | 3,470 | 442 | 169 | 4,081 |
| General and administrative expenses | 51,085 | 4,888 | 5,314 | 61,287 |
| Impairment of intangibles and other | 3,269 | 202 | 175 | 3,646 |
| Operating income | 7,958 | 2,403 | 1,204 | 11,565 |
| Interest expense | (499) | (63) | (63) | (625) |
| Non-operating income | 100 | 3 | 3 | 106 |
| Income from continuing operations before income taxes and noncontrolling interest | 7,559 | 2,343 | 1,144 | 11,046 |
| Income tax expense | 2,341 | 558 | 415 | 3,314 |
| Income from continuing operations | 5,218 | 1,785 | 729 | 7,732 |
| Less net income attributable to noncontrolling interests | 1,756 | 294 | 148 | 2,198 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 3,462 | $ 1,491 | $ 581 | $ 5,534 |
| Total assets | $ 420,538 | $ 34,847 | $ 36,354 | $ 491,739 |
| | Three Months Ended December 31, 2013 |
| | Home-Based Services | Hospice Services | Facility-Based Services | Total |
| Net service revenue | $ 132,266 | $ 15,184 | $ 17,830 | $ 165,280 |
| Cost of service revenue | 75,521 | 8,754 | 10,966 | 95,241 |
| Provision for bad debts | 3,619 | 428 | 49 | 4,096 |
| General and administrative expenses | 45,026 | 4,350 | 5,430 | 54,806 |
| Impairment of intangibles and other | 344 | 175 | 1 | 520 |
| Operating income | 7,756 | 1,477 | 1,384 | 10,617 |
| Interest expense | (332) | (64) | (44) | (440) |
| Non-operating income | 48 | 5 | 26 | 79 |
| Income from continuing operations before income taxes and noncontrolling interest | 7,472 | 1,418 | 1,366 | 10,256 |
| Income tax expense | 2,552 | 728 | 343 | 3,623 |
| Income from continuing operations | 4,920 | 690 | 1,023 | 6,633 |
| Less net income attributable to noncontrolling interests | 1,179 | 279 | 206 | 1,664 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 3,741 | $ 411 | $ 817 | $ 4,969 |
| Total assets | $ 356,842 | $ 29,073 | $ 36,311 | $ 422,226 |
| |
| LHC GROUP, INC. AND SUBSIDIARIES |
| SEGMENT INFORMATION (Continued) |
| (Amounts in thousands) |
| (Unaudited) |
| |
| | Year Ended December 31, 2014 |
| | Home-Based Services | Hospice Services | Facility-Based Services | Total |
| Net service revenue | $ 592,664 | $ 67,621 | $ 73,347 | $ 733,632 |
| Cost of service revenue | 349,467 | 39,804 | 45,504 | 434,775 |
| Provision for bad debts | 13,945 | 909 | 926 | 15,780 |
| General and administrative expenses | 193,832 | 18,882 | 21,231 | 233,945 |
| Impairment of intangibles and other | 3,269 | 202 | 175 | 3,646 |
| Operating income | 32,151 | 7,824 | 5,511 | 45,486 |
| Interest expense | (1,988) | (249) | (249) | (2,486) |
| Non-operating income | 203 | 43 | 19 | 265 |
| Income from continuing operations before income taxes and noncontrolling interest | 30,366 | 7,618 | 5,281 | 43,265 |
| Income tax expense | 11,104 | 1,955 | 1,454 | 14,513 |
| Income from continuing operations | 19,262 | 5,663 | 3,827 | 28,752 |
| Less net income attributable to noncontrolling interests | 5,085 | 1,122 | 708 | 6,915 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 14,177 | $ 4,541 | $ 3,119 | $ 21,837 |
| Total assets | $ 420,538 | $ 34,847 | $ 36,354 | $ 491,739 |
| | Year Ended December 31, 2013 |
| | Home-Based Services | Hospice Services | Facility-Based Services | Total |
| Net service revenue | $ 526,719 | $ 56,172 | $ 75,392 | $ 658,283 |
| Cost of service revenue | 304,987 | 34,212 | 44,265 | 383,464 |
| Provision for bad debts | 11,628 | 1,215 | 1,086 | 13,929 |
| General and administrative expenses | 176,074 | 16,210 | 21,349 | 213,633 |
| Impairment of intangibles and other | 344 | 175 | 1 | 520 |
| Operating income | 33,686 | 4,360 | 8,691 | 46,737 |
| Interest expense | (1,600) | (200) | (195) | (1,995) |
| Non-operating income | 142 | 26 | 95 | 263 |
| Income from continuing operations before income taxes and noncontrolling interest | 32,228 | 4,186 | 8,591 | 45,005 |
| Income tax expense | 12,545 | 1,797 | 1,517 | 15,859 |
| Income from continuing operations | 19,683 | 2,389 | 7,074 | 29,146 |
| Less net income attributable to noncontrolling interests | 4,596 | 956 | 1,252 | 6,804 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 15,087 | $ 1,433 | $ 5,822 | $ 22,342 |
| Total assets | $ 356,842 | $ 29,073 | $ 36,311 | $ 422,226 |
| |
| LHC GROUP, INC. AND SUBSIDIARIES |
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA |
| (Unaudited) |
| |
| | Three Months Ended
December 31, | Year Ended
December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| Key Data: | | | | |
| Home-Based Services: | | | | |
| Home Health | | | | |
| Locations | 276 | 255 | 276 | 255 |
| Acquired | 2 | 1 | 40 | 23 |
| De novo | – | – | 3 | – |
| Divested/Consolidated | (11) | – | (22) | – |
| Total new admissions | 34,329 | 29,565 | 133,054 | 121,750 |
| Medicare new admissions | 23,404 | 20,384 | 90,490 | 83,507 |
| Average daily census | 36,153 | 32,940 | 35,299 | 34,074 |
| Average Medicare daily census | 26,781 | 25,183 | 26,336 | 25,845 |
| Medicare completed and billed episodes | 46,726 | 43,232 | 182,896 | 170,898 |
| Average Medicare case mix for completed and billed Medicare episodes(1) | 1.01 | 1.30 | 0.99 | 1.27 |
| Average reimbursement per completed and billed Medicare episodes | $ 2,445 | $ 2,413 | $ 2,397 | $ 2,423 |
| Total visits | 1,012,677 | 896,385 | 3,911,293 | 3,579,291 |
| Total Medicare visits | 750,924 | 682,641 | 2,912,440 | 2,707,119 |
| Average visits per completed and billed Medicare episodes | 16.1 | 15.8 | 15.9 | 15.8 |
| Organic growth:(2) | | | | |
| Net revenue | 2.0% | -5.6% | 1.4% | -2.9% |
| Net Medicare revenue | -0.8% | -3.0% | -0.4% | -0.7% |
| Total new admissions | 4.5% | -0.8% | 1.6% | 3.6% |
| Medicare new admissions | 3.0% | -0.6% | 1.2% | 3.7% |
| Average daily census | -0.7% | -5.0% | -3.5% | -1.1% |
| Average Medicare daily census | -3.1% | -3.5% | -4.1% | -0.5% |
| Medicare completed and billed episodes | -1.2% | -0.2% | 0.9% | 1.2% |
| | | | | |
| Community-Based Services: | | | | |
| Locations | 13 | 8 | 13 | 8 |
| Acquired | – | – | 5 | – |
| De novo | – | 1 | 1 | 1 |
| Divested/Consolidated | (1) | – | (1) | – |
| Average daily census | 1,240 | 439 | 984 | 420 |
| Billable hours | 304,618 | 39,561 | 911,217 | 153,559 |
| Revenue per billable hour | $ 30.99 | $ 21.03 | $ 30.40 | $ 20.88 |
| | | | | |
| Hospice-Based Services: | | | | |
| Locations | 38 | 34 | 38 | 34 |
| Acquired | – | – | 6 | 2 |
| De novo | 1 | – | 1 | – |
| Divested/Consolidated | 1 | – | (3) | – |
| Admissions | 1,412 | 1,180 | 5,546 | 4,916 |
| Average daily census | 1,387 | 1,208 | 1,343 | 1,143 |
| Patient days | 127,633 | 111,107 | 490,252 | 417,069 |
| Average revenue per patient day | $ 143 | $ 137 | $ 138 | $ 135 |
| | | | | |
| Facility-Based Services: | | | | |
| Long-term Acute Care | | | | |
| Locations | 8 | 9 | 8 | 9 |
| Patient days | 15,589 | 15,116 | 62,352 | 61,838 |
| Average revenue per patient day | $ 1,115 | $ 1,132 | $ 1,130 | $ 1,162 |
| |
| (1) The Centers for Medicare and Medicaid Services (CMS) updated the Medicare Home Health Prospective Payment System effective January 1, 2014, which reduced the average case-mix weight for 2014 from 1.3464 to 1.0000. To offset the effect of resetting the case mix average to 1.000, CMS upwardly adjusted the national, standardized 60-day episode payment rate by the same factor that it used to decrease the weights from $2,137.73 in 2013 to $2,869.27 in 2014. |
| (2) 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 ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. |
| (Amounts in thousands) |
| (Unaudited) |
| | Three Months Ended
Dec. 31, 2014 | Year Ended
Dec. 31, 2014 |
| Net income attributable to LHC Group, Inc.'s common stockholders | $ 5,534 | $ 21,837 |
| | | |
| Add (net of tax): | | |
| Disposal costs on closures of underperforming locations (1) | 954 | 954 |
| Intangible impairment (2) | 1,230 | 1,230 |
| Restructure Severance (3) | 369 | 369 |
| Lease terminations (4) | 289 | 289 |
| Less: | | |
| Tax benefit (5) | (657) | (657) |
| Adjusted net income attributable to LHC Group, Inc.'s common stockholders | $ 7,719 | $ 24,022 |
| RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE |
| (Unaudited) |
| |
| | Three Months Ended
Dec. 31, 2014 | Year Ended
Dec. 31, 2014 |
Net income attributable to LHC Group, Inc.'s common stockholders
per diluted share | $ 0.32 | $ 1.26 |
| | | |
| Add: | | |
| Disposal costs on closures of underperforming locations (1) | 0.06 | 0.06 |
| Intangible impairment (2) | 0.07 | 0.07 |
| Restructure Severance (3) | 0.02 | 0.02 |
| Lease terminations (4) | 0.02 | 0.02 |
| Less: | | |
| Tax benefit (5) | (0.04) | (0.04) |
| Adjusted net income attributable to LHC Group, Inc.'s common stockholders per diluted share | $ 0.45 | $ 1.39 |
| |
| (1) Disposal costs related to the closures of underperforming locations |
| (2) Impairment to intangibles for write-down of carrying value of an acquired trade name. |
| (3) Severances associated with reduction of staff related to point of care rollout. |
| (4) Charges associated with lease terminations for closed/consolidated locations. |
| (5) A reduction to tax expense from the identification of additional deductions in 2014 as well as the retroactive reinstatement of the WOTC program. |
CONTACT: Eric Elliott
Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com