LHC (LHCG) 8-K LHC Group Reports Fourth-Quarter 2016 EPS of $0.55 and Adjusted EPS of $0.58 on Revenue of $235.4 Million

EXHIBIT 99.1

LHC Group Reports Fourth-Quarter 2016 EPS of $0.55 and Adjusted EPS of $0.58 on Revenue of $235.4 Million

PRODUCES FULL-YEAR 2016 EPS OF $2.07

Establishes Financial Guidance for 2017

LAFAYETTE, La., March 08, 2017 (GLOBE NEWSWIRE) -- LHC Group, Inc. (NASDAQ:LHCG) today announced its financial results for the three months and year ended December 31, 2016.

Financial Results for the Fourth Quarter of 2016 Compared with the Fourth Quarter of 2015

• Net service revenue increased 7.5% to $235.4 million for the fourth quarter of 2016 compared with $219.0 million for the fourth quarter of 2015.
• Net income attributable to LHC Group was $9.8 million, or $0.55 per diluted share, for the latest quarter, compared with $7.7 million, or $0.44 per diluted share, for the fourth quarter of 2015. Adjusted net income attributable to LHC Group for the fourth quarter of 2016 was $0.58 per diluted share⁽¹⁾ compared with $0.53 per diluted share for the fourth quarter of 2015⁽¹⁾.  
• For the fourth quarter of 2016, net income attributable to LHC Group and adjusted net income attributed to LHC Group reflect the impact of estimated net Medicare reimbursement reductions of $0.11 per diluted share compared with the fourth quarter of 2015.
• Total comparable-quarter growth in admissions for all service lines for the fourth quarter was 13.2%.
• Total comparable-quarter organic growth in home health admissions for the fourth quarter was 10.8%.

⁽¹⁾ See “Reconciliation of Non-GAAP Measures - Adjusted net income attributable to LHC Group” to GAAP results on page 10.

Financial Results for Full-Year 2016 Compared with Full-Year 2015

• Net service revenue increased 12.1% to $914.8 million for 2016 compared with $816.4 million for 2015.
• Net income attributable to LHC Group grew 13.1% to $36.6 million compared with $32.3 million and 12.5% to $2.07 per diluted share compared with $1.84 per diluted share. Results for 2016 include estimated net Medicare reimbursement reductions of $0.28 per diluted share compared with 2015.  
• Total comparable-annual growth in admissions for all service lines for 2016 was 12.9%.
• Total comparable-annual organic growth in home health admissions for 2016 was 9.3%.

Commenting on the announcement, Keith G. Myers, LHC Group’s chairman and CEO, said, “We are pleased with our fourth-quarter financial results and with the operating momentum we built throughout 2016. A continuation of favorable admission trends drove double-digit growth in both total admissions and organic home health admissions for the second consecutive quarter. In addition, the acuity of our home health admissions further increased resulting in a 4.7% rise in average Medicare reimbursement. Reflecting the strength of these increases, our home health organic revenue increased 7.3% for the fourth quarter and 6.4% for the full year.

“We expect to continue our organic home health growth momentum in 2017. This growth, in part, reflects the expansion of our marketing efforts into our substantial secondary markets – those in which we are licensed but do not have an agency location – due to our enhanced capabilities resulting from the completion of our point of care system in 2014. We believe these markets represent a meaningful long-term growth opportunity.

“We also attribute much of our fourth quarter and full-year organic growth and increased patient acuity to our 72 hospital and health system joint venture partnerships.  We believe our increasing volume from these partners - at a time when the healthcare industry’s shift to value-based care is intensifying - has resulted from our ability to provide high quality care for their post-acute and non-acute patients and, thereby, create significant costs savings for these partners. We are further favorably differentiated within our industry by the CMS Star ratings for quality and patient satisfaction, both of which LHC Group has now led for three consecutive quarters. The Company also continues to be the country’s only home health provider that is 100% accredited with the Joint Commission excluding recent acquisitions.

“These attributes provide very substantial support to our ongoing effort to be the leading partner of choice for hospitals and health systems that recognize the value in improving their patients’ non-acute care.  We expect them to drive continued organic growth from our existing joint venture partnerships and, as the recent completion of our newest joint venture with LifePoint Health indicates, to drive further success in our strategy to develop new joint venture partnerships.

“In addition to the positive industry and Company dynamics that have created a strong corporate development pipeline of potential hospital and health system joint ventures, rising consolidation pressures in the home health industry have also produced a robust pipeline of potential transactions for freestanding home health and hospice providers. Combined, these pipelines generated announced transactions in 2016 for over $106 million in annualized revenue. We remain well-positioned to fund future acquisitions, with significant anticipated cash flow from operations, which totaled $67.5 million for 2016, and $130 million of availability under our credit agreement.”

Mr. Myers concluded, “The strength of LHC Group’s differentiated quality of care, competitive positioning and market potential all reflect the character, experience, and work ethic, of our team, including both healthcare professionals and all those who support them throughout the Company.  The commitment and compassion this team brings to their jobs every day make a vital difference in the lives of those we are privileged to care for and serve, every day. We thank them for their unceasing effort, while recognizing that this team of skilled and dedicated people provides the foundation of the Company’s prospects for long-term growth and increased shareholder value.”

FY 2017 Guidance
Fiscal year 2017 net service revenue is expected to be in the range of $1 billion to $1.03 billion, and fully diluted earnings per share are expected to be in the range of $2.07 to $2.23. This guidance includes:

⁽¹⁾   the negative impact from the Medicare Home Health Prospective Payment System for 2017, which is expected to have an approximate 2% impact, or $10 million reduction to Medicare Home Health revenue and $0.34 reduction in fully diluted earnings per share for 2017;
⁽²⁾  the negative impact from the Medicare Long-Term Care Hospital (LTCH) Prospective Payment System (PPS), which is expected to reduce Medicare LTCH revenue by $6 million or $0.12 net reduction in fully diluted earnings per share for 2017 after mitigation strategies;
⁽³⁾  the positive impact from the 2017 Medicare Hospice Wage Index and Payment Rate final rule, effective October 1, 2016, which is expected to increase our Medicare Hospice revenue for 2017 by 2.1%, or $2.7 million, and fully diluted earnings per share by $0.09; and
⁽⁴⁾  the Home Health and Hospice Joint Venture with LifePoint which was effective January 1, 2017 and is anticipated to achieve approximately $50 - $55 million in revenue and $0.02-$0.05 in EPS attributable to LHC Group in 2017.

The Company’s financial guidance does not take into account the impact of other future reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, or future legal expenses, if necessary.

Conference Call
LHC Group will host a conference call on Thursday, March 9, 2017, at 11:00 a.m. Eastern time to discuss its fourth quarter and year-end 2016 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 16, 2017, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 52252764. 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 following the conclusion of the live broadcast.

About LHC Group, Inc.
LHC Group, Inc. is a national provider of non-acute healthcare services, providing quality, cost-effective healthcare to patients primarily 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, community‑based services agencies and facility-based services. LHC Group operates 298 home health services locations, 72 hospice locations, 16 community-based service locations and six long-term acute care hospitals (LTACHs) with eight locations.

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, 2015, 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, 2016			Dec. 31, 2015
ASSETS
Current assets:
Cash	$	3,264		$	6,139
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $29,036 and $26,712, respectively		124,803			110,350
Other receivables		5,115			2,093
Amounts due from governmental entities		942			1,081
Total receivables, net		130,860			113,524
Prepaid income taxes		–			1,949
Prepaid expenses		9,821			10,833
Other current assets		5,796			5,835
Receivable due from insurance carrier		–			550
Total current assets		149,741			138,830
Property, building and equipment, net of accumulated depreciation of $35,226 and $38,907, respectively		43,251			38,096
Goodwill		307,317			290,694
Intangible assets, net of accumulated amortization of $10,968 and $8,496, respectively		102,006			96,405
Other assets		11,756			2,029
Total assets	$	614,071		$	566,054
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	26,805		$	24,586
Salaries, wages, and benefits payable		34,265			28,098
Self-insurance reserves		10,691			9,636
Current portion of long-term debt		252			241
Amounts due to governmental entities		4,955			7,055
Income tax payable		3,499			–
Legal settlement payable		–			550
Total current liabilities		80,467			70,166
Deferred income taxes		31,941			23,729
Income tax payable		–			3,415
Revolving credit facility		87,000			98,000
Long-term debt, less current portion		544			543
Total liabilities		199,952			195,853
Noncontrolling interest – redeemable		12,567			12,408
Stockholders’ equity:
LHC Group, Inc. stockholders’ equity:
Common stock – $0.01 par value; 40,000,000 shares authorized; 22,429,041 and 22,224,423 shares issued in 2016 and 2015, respectively		224			222
Treasury stock –  4,828,679 and 4,776,560 shares at cost, respectively		(39,135	)		(37,139	)
Additional paid-in capital		119,748			113,793
Retained earnings		314,289			277,706
Total LHC Group, Inc. stockholders’ equity		395,126			354,582
Noncontrolling interest – non-redeemable		6,426			3,211
Total equity		401,552			357,793
Total liabilities and equity	$	614,071		$	566,054

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,
		2016			2015			2016			2015
Net service revenue	$	235,443		$	218,993		$	914,823		$	816,366
Cost of service revenue		144,089			128,940			557,650			480,878
Gross margin		91,354			90,053			357,173			335,488
Provision for bad debts		3,131			4,370			14,790			19,243
General and administrative expenses		69,050			68,076			270,622			247,919
Impairment of intangibles and other		–			1,025			–			1,273
(Gain) loss on disposal of assets		(190	)		30			1,199			710
Operating income		19,363			16,552			70,562			66,343
Interest expense		(768	)		(769	)		(2,936	)		(2,302	)
Non-operating income		213			100			492			457
Income before income taxes and noncontrolling interest		18,808			15,883			68,118			64,498
Income tax expense		6,676			5,751			22,176			22,848
Net income		12,132			10,132			45,942			41,650
Less net income attributable to noncontrolling interests		2,315			2,399			9,359			9,315
Net income attributable to LHC Group, Inc.’s common stockholders	$	9,817		$	7,735		$	36,583		$	32,335
Earnings per share – basic:
Net income attributable to LHC Group, Inc.’s common stockholders	$	0.56		$	0.44		$	2.08		$	1.86
Earnings per share – diluted:
Net income attributable to LHC Group, Inc.’s common stockholders	$	0.55		$	0.44		$	2.07		$	1.84
Weighted average shares outstanding:
Basic		17,597,190			17,447,691			17,559,477			17,405,379
Diluted		17,764,066			17,647,483			17,682,820			17,547,531

LHC GROUP, INC. AND SUBSIDIARIES  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Amounts in thousands)  (Unaudited)
	Year Ended December 31,
		2016			2015
Operating activities:
Net income	$	45,942		$	41,650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		12,160			11,955
Provision for bad debts		14,790			19,243
Stock-based compensation expense		4,872			4,225
Deferred income taxes		7,402			1,518
Loss on disposal of assets		1,199			710
Impairment of intangibles and other		–			1,280
Changes in operating assets and liabilities, net of acquisitions:
Receivables		(28,873	)		(27,951	)
Prepaid expenses and other assets		1,034			(3,793	)
Prepaid income taxes		1,641			441
Accounts payable and accrued expenses		9,182			10,526
Income tax payable		84			–
Net amounts due to/from governmental entities		(1,961	)		130
Net cash provided by operating activities		67,472			59,934
Investing activities:
Cash paid for acquisitions, primarily goodwill and intangible assets		(23,156	)		(70,572	)
Purchases of property, building and equipment		(16,009	)		(13,283	)
Advanced payments on acquisitions		(11,488	)		–
Other		273			–
Net cash (used in) investing activities		(50,380	)		(83,855	)
Financing activities:
Proceeds from line of credit		38,000			83,000
Payments on line of credit		(49,000	)		(45,000	)
Excess tax benefits from vesting of stock awards		1,303			914
Proceeds from employee stock purchase plan		912			782
Payments on debt		(238	)		(233	)
Noncontrolling interest distributions		(9,413	)		(8,324	)
Purchase of additional controlling interest		–			(275	)
Sale of noncontrolling interest		356			–
Withholding taxes paid on stock-based compensation		(1,996	)		(1,479	)
Proceeds from exercise of stock options		109			144
Net cash (used in) provided by financing activities		(19,967	)		29,529
Change in cash		(2,875	)		5,608
Cash at beginning of period		6,139			531
Cash at end of period	$	3,264		$	6,139
Supplemental disclosures of cash flow information
Interest paid	$	3,123		$	1,870
Income taxes paid	$	11,533		$	20,361

LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands) (Unaudited)
	Three Months Ended December 31, 2016
	Home Health Services			Hospice Services			Community- Based Services			Facility- Based  Services			Total
Net service revenue	$	173,806		$	34,898		$	11,067		$	15,672		$	235,443
Cost of service revenue		104,091			21,523			7,947			10,528			144,089
Provision for bad debts		1,486			1,037			309			299			3,131
General and administrative expenses		52,255			9,393			2,217			5,185			69,050
Gain (loss) on disposal of assets		47			9			2			(248	)		(190	)
Operating income		15,927			2,936			592			(92	)		19,363
Interest expense		(576	)		(85	)		(38	)		(69	)		(768	)
Non-operating income (loss)		208			(1	)		1			5			213
Income from continuing operations before income taxes and noncontrolling interest		15,559			2,850			555			(156	)		18,808
Income tax expense		5,480			1,001			237			(42	)		6,676
Net income		10,079			1,849			318			(114	)		12,132
Less net income attributable to noncontrolling interests		1,875			499			(2	)		(57	)		2,315
Net income attributable to LHC Group, Inc.’s common stockholders	$	8,204		$	1,350		$	320		$	(57	)	$	9,817
Total assets	$	427,782		$	116,090		$	33,520		$	36,679		$	614,071

	Three Months Ended December 31, 2015
	Home- Health Services			Hospice Services			Community- Based Services			Facility- Based Services			Total
Net service revenue	$	158,277		$	31,166		$	10,489		$	19,061		$	218,993
Cost of service revenue		92,146			18,272		��	7,444			11,078			128,940
Provision for bad debts		3,627			305			385			53			4,370
General and administrative expenses		49,327			11,091			2,155			5,501			68,228
Impairment of intangibles and other		1,025			–			–			–			1,025
Loss on sale of asset		25			4			–			–			29
Operating income		12,127			1,494			505			2,429			16,555
Interest expense		(608	)		(85	)		(6	)		(70	)		(769	)
Non-operating income (loss)		88			13			1			(3	)		99
Income before income taxes and noncontrolling interest		11,607			1,422			500			2,356			15,885
Income tax expense		4,174			485			230			862			5,751
Net income		7,433			937			270			1,494			10,134
Less net income attributable to noncontrolling interests		1,840			299			(43	)		303			2,399
Net income attributable to LHC Group, Inc.’s common stockholders	$	5,593		$	638		$	313		$	1,191		$	7,735
Total assets	$	394,392		$	101,641		$	31,235		$	38,786		$	566,054

LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Continued) (Amounts in thousands) (Unaudited)
	Year Ended December 31, 2016
	Home Health Services			Hospice Services			Community- Based Services			Facility- Based Services			Total
Net service revenue	$	665,896		$	134,948		$	43,891		$	70,088		$	914,823
Cost of service revenue		398,450			83,359			32,603			43,238			557,650
Provision for bad debts		9,609			3,401			797			983			14,790
General and administrative expenses		203,418			37,207			8,785			21,212			270,622
Loss (gain) on disposal of assets		857			338			49			(45	)		1,199
Operating income		53,562			10,643			1,657			4,700			70,562
Interest expense		(2,216	)		(317	)		(144	)		(259	)		(2,936	)
Non-operating income		422			25			14			31			492
Income from continuing operations before income taxes and noncontrolling interest		51,768			10,351			1,527			4,472			68,118
Income tax expense		16,505			3,485			651			1,535			22,176
Net income		35,263			6,866			876			2,937			45,942
Less net income attributable to noncontrolling interests		6,876			1,867			(58	)		674			9,359
Net income attributable to LHC Group, Inc.’s common stockholders	$	28,387		$	4,999		$	934		$	2,263		$	36,583

	Year Ended December 31, 2015
	Home- Health Services			Hospice Services			Community- Based Services			Facility- Based  Services			Total
Net service revenue	$	613,188		$	85,854		$	41,202		$	76,122		$	816,366
Cost of service revenue		354,750			50,906			29,076			46,146			480,878
Provision for bad debts		15,736			1,002			1,816			689			19,243
General and administrative expenses		190,591			26,437			8,465			22,426			247,919
Impairment of intangibles and other		1,245			–			28			–			1,273
Loss on sale of asset		544			80			41			45			710
Operating income		50,322			7,429			1,776			6,816			66,343
Interest expense		(1,819	)		(253	)		(23	)		(207	)		(2,302	)
Non-operating income		397			38			3			19			457
Income before income taxes and noncontrolling interest		48,900			7,214			1,756			6,628			64,498
Income tax expense		17,173			2,541			787			2,347			22,848
Net income		31,727			4,673			969			4,281			41,650
Less net income attributable to noncontrolling interests		7,424			1,077			(144	)		958			9,315
Net income attributable to LHC Group, Inc.’s common stockholders	$	24,303		$	3,596		$	1,113		$	3,323		$	32,335

LHC GROUP, INC. AND SUBSIDIARIES SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA (Unaudited)
	Three Months Ended December 31,						Year Ended December 31,
		2016			2015			2016			2015
Key Data:
Home-Health Services:
Home Health
Locations		281			280			281			280
Acquired		3			4			12			9
De novo		1			–			5			–
Divested/Consolidated		(9	)		(3	)		(16	)		(6	)
Total new admissions		41,184			36,249			159,914			143,197
Medicare new admissions		26,812			24,060			105,575			96,911
Average daily census		39,407			37,060			38,587			36,752
Average Medicare daily census		28,381			27,432			28,146			27,297
Medicare completed and billed episodes		51,040			48,636			199,235			191,208
Average Medicare case mix for completed and billed Medicare episodes		1.09			1.05			1.06			1.03
Average reimbursement per completed and billed Medicare episodes	$	2,774		$	2,650		$	2,688		$	2,579
Total visits		1,192,042			1,088,846			4,629,695			4,183,204
Total Medicare visits		869,759			804,537			3,396,164			3,107,029
Average visits per completed and billed Medicare episodes		17.0			16.5			17.0			16.2
Organic growth:(1)
Net revenue		7.3	%		5.9	%		6.4	%		4.5	%
Net Medicare revenue		5.3	%		5.5	%		4.7	%		3.5	%
Total new admissions		10.8	%		4.0	%		9.3	%		3.4	%
Medicare new admissions		8.5	%		1.5	%		6.6	%		2.4	%
Average daily census		3.5	%		0.9	%		2.3	%		0.1	%
Average Medicare daily census		0.8	%		0.9	%		0.4	%		-0.5	%
Medicare completed and billed episodes		2.5	%		3.2	%		2.2	%		1.4	%
Community-Based Services:
Locations		11			13			11			13
Acquired		–			–			1			2
De novo		–			–			–			–
Divested/Consolidated		–			–			(3	)		(1	)
Average daily census		1,633			1,513			1,629			1,371
Billable hours		349,053			307,781			1,339,182			1,213,870
Revenue per billable hour	$	31.71		$	34.08		$	32.77		$	33.94
Hospice-Based Services:
Locations		65			56			65			56
Acquired		–			16			10			17
De novo		1			–			1			2
Divested/Consolidated		–			(2	)		(2	)		(1	)
Admissions		2,607			2,225			10,147			6,787
Average daily census		2,713			2,360			2,623			1,675
Patient days		249,608			217,157			960,023			611,493
Average revenue per patient day	$	140		$	144		$	141		$	140
Facility-Based Services:
Long-term Acute Care
Locations		8			8			8			8
Patient days		13,257			14,450			56,224			61,427
Average revenue per patient day	$	1,060		$	1,249		$	1,159		$	1,183

 ⁽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 ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. (Amounts in thousands) (Unaudited)
	Three Months Ended Dec. 31, 2016		Three Months Ended Dec. 31, 2015
Net income attributable to LHC Group, Inc.’s common stockholders	$	9,817	$	7,734
Add (net of tax):
Disposal costs on closures of underperforming locations (1)		–		657
Goodwill and intangible disposal costs (2)		–		605
Acquisition costs (3)		451		341
Adjusted net income attributable to LHC Group, Inc.’s common stockholders	$	10,268	$	9,337

RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE  (Unaudited)
	Three Months Ended Dec. 31, 2016		Three Months Ended Dec. 31, 2015
Net income attributable to LHC Group, Inc.’s common stockholders per diluted share	$	0.55	$	0.44
Add:
Disposal costs on closures of underperforming locations (1)		–		0.04
Goodwill and intangible disposal costs (2)		–		0.03
Acquisition costs (3)		0.03		0.02
Adjusted net income attributable to LHC Group, Inc.’s common stockholders per diluted share	$	0.58	$	0.53

⁽¹⁾ Disposal costs related to the closures of underperforming locations
⁽²⁾ Goodwill and intangible disposal costs related to closures of underperforming locations and indefinite-lived intangible impairment related to write down of the assets.
⁽³⁾ 2016 Cost associated with PHR and LifePoint and 2015 cost associated with Halcyon and Nurses Registry acquisitions.

Eric Elliott
Senior Vice President of Finance
(337) 233-1307
eric.elliott@lhcgroup.com