Exhibit 99.1
LHC Group Reports First Quarter 2017 EPS of $0.53 on Revenue of $246.6 Million
Company Raises Fiscal Year 2017 Guidance for Fully Diluted Earnings Per Share to a Range of $2.23 to $2.33 and Net Service Revenue to a Range of $1.02 Billion to $1.04 Billion
LAFAYETTE, La., May 03, 2017 (GLOBE NEWSWIRE) -- LHC Group, Inc. (NASDAQ:LHCG) today announced its financial results for the three months ended March 31, 2017.
Financial Results for the First Quarter of 2017 Compared with the First Quarter of 2016
- Net service revenue increased 10.8% to $246.6 million for the first quarter of 2017 compared with $222.6 million for the first quarter of 2016.
- Net income attributable to LHC Group was $9.5 million, or $0.53 per diluted share, for the first quarter of 2017 compared with $7.7 million, or $0.44 per diluted share, for the first quarter of 2016. Results for the first quarter of 2017 included a lower tax expense for the quarter due to an excess tax benefit of $838,000, or $0.05 per diluted share, associated with the adoption of a new accounting standard for stock-based compensation.
- Total comparable-quarter organic growth in home health admissions for the first quarter was 11.7%.
- Total comparable-quarter organic growth in hospice admissions for the first quarter was 6.2%.
Commenting on the announcement, Keith G. Myers, LHC Group’s chairman and CEO, said, “LHC Group’s financial results for the first quarter have given us a strong start to 2017, as the momentum driving organic revenue growth and our productive acquisition strategy continued to lift our performance. Comparable-quarter growth in total admissions and organic home health admissions both increased at a double-digit pace for the third consecutive quarter, and this growth has accelerated for organic home health admissions for six consecutive quarters.
“Organic home health admissions growth remains relatively balanced between our joint venture locations and stand-alone locations. Due to the greater average acuity of our admissions combined with our strong organic admissions growth, our organic net home health revenues increased 8.0% for the quarter.
“We have also continued the momentum evident in 2016 in our acquisition strategy, especially through joint ventures with hospitals and health systems. On January 1, 2017, we finalized our previously announced joint venture with LifePoint Health, through which we will phase in the acquisitions of 41 LifePoint home health and hospice locations throughout 2017, beginning with 12 home health and eight hospice locations acquired effective January 1, 2017. We also began managing 10 additional LifePoint home health locations at the start of the year. On April 1, 2017, we completed the acquisition of seven additional home health and five hospice locations under the joint venture, and we are scheduled to acquire the 10 remaining home health locations we now manage on September 1, 2017.
“Since the end of the first quarter, we have also announced two additional joint ventures with high-quality hospitals. We have expanded our presence in West Virginia and Ohio through our joint venture with Pleasant Valley Hospital in Point Pleasant, West Virginia, which, among other services, offers co-located home health and hospices services through a location in Point Pleasant and one in Pomeroy, Ohio. We have also announced a definitive agreement to create a joint venture with Baptist Memorial Health Care system, to enhance home health and hospice care in Tennessee and Mississippi. Under this joint venture, which we expect to complete on June 1, 2017, subject to customary closing conditions, we will acquire three home health and five hospice locations in Tennessee and Mississippi.
“We believe the momentum we continue to experience in our organic growth and acquisition strategies reflects the healthcare industry’s rapidly growing recognition of our ability to provide high quality care for post-acute and sub-acute patients in highly cost-effective venues, such as the home and hospice. Our reputation for high quality has been further strengthened by the CMS Star ratings for quality and patient satisfaction for the home health industry, which after the April 2017 release, we have now led for the past year. Further, we believe our work with hospitals and health systems to reduce re-hospitalization and lower healthcare costs through home healthcare is receiving wider attention in the healthcare industry. We also continue to execute a long-term strategy of creating joint ventures with hospitals and health systems with a goal of becoming the industry’s home health and hospice partner of choice. Today, we are engaged in 73 joint ventures with hospitals and health systems that operate a total of 190 hospitals, a leadership position that is clear evidence of our ability to provide the high quality care that leading hospitals demand.”
Mr. Myers concluded, “LHC Group’s reputation for high quality and its leadership in home health rests on the skill and commitment of our healthcare professionals, and those who support them, who care for our patients and their families. Because of their capabilities and compassion, our patients can safely live exactly where they want to be, in the comfort of their own homes. We thank all our team members for their hard work and their commitment to making such an important difference in our patients’ lives.”
FY 2017 Guidance
LHC Group today raised its fiscal year 2017 guidance for net service revenue to be in an expected range of $1.02 billion to $1.04 billion, from the previous range of $1 billion to $1.03 billion, and fully diluted earnings per share to be in an expected range of $2.23 to $2.33, from the previous range of $2.07 to $2.23. As of January 1, 2017, the Company adopted a new accounting standard, ASU 2016-09, under which adjustments to the income tax effects of share-based awards are now recognized in the income statement as a component of the provision for income taxes when the awards vest, instead of through equity on the balance sheet. The Company’s financial guidance includes the $838,000 income tax benefit, or $0.05 per diluted share, related to the adoption of this new accounting standard.
The Company’s financial guidance does not take into account the recently announced definitive agreement with Baptist Memorial Health Care, the impact of 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, May 4, 2017, at 11:00 a.m. Eastern time to discuss its first quarter 2017 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, May 11, 2017, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 6053355. 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 305 home health services locations, 73 hospice locations, 11 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, 2016, 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) |
| | | |
| | March 31,
2017 | | Dec. 31,
2016 |
| | | | | | | | |
| ASSETS |
| Current assets: | | |
| Cash | $ | 16,781 | | | $ | 3,264 | |
| Receivables: | | |
| Patient accounts receivable, less allowance for uncollectible accounts of $27,641 and $29,036, respectively | | 125,455 | | | | 124,803 | |
| Other receivables | | 7,008 | | | | 5,115 | |
| Amounts due from governmental entities | | 830 | | | | 942 | |
| Total receivables, net | | 133,293 | | | | 130,860 | |
| Prepaid expenses | | 10,769 | | | | 9,821 | |
| Other current assets | | 6,289 | | | | 5,796 | |
| Total current assets | | 167,132 | | | | 149,741 | |
| Property, building and equipment, net of accumulated depreciation of $36,614 and $35,226, respectively | | 43,088 | | | | 43,251 | |
| Goodwill | | 319,045 | | | | 307,317 | |
| Intangible assets, net of accumulated amortization of $11,601 and $10,968, respectively | | 106,626 | | | | 102,006 | |
| Other assets | | 6,834 | | | | 11,756 | |
| Total assets | $ | 642,725 | | | $ | 614,071 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current liabilities: | | |
| Accounts payable and other accrued liabilities | $ | 34,569 | | | $ | 26,805 | |
| Salaries, wages, and benefits payable | | 45,056 | | | | 34,265 | |
| Self-insurance reserve | | 11,776 | | | | 10,691 | |
| Current portion of long-term debt | | 255 | | | | 252 | |
| Amounts due to governmental entities | | 3,858 | | | | 4,955 | |
| Income tax payable | | 3,663 | | | | 3,499 | |
| Total current liabilities | | 99,177 | | | | 80,467 | |
| Deferred income taxes | | 32,416 | | | | 31,941 | |
| Revolving credit facility | | 78,000 | | | | 87,000 | |
| Long-term debt, less current portion | | 476 | | | | 544 | |
| Total liabilities | | 210,069 | | | | 199,952 | |
| Noncontrolling interest – redeemable | | 12,893 | | | | 12,567 | |
| Stockholders’ equity: | | |
| LHC Group, Inc. stockholders’ equity: | | |
| Common stock – $0.01 par value; 40,000,000 shares authorized; 22,604,974 and 22,429,041 shares issued in 2017 and 2016, respectively | | 226 | | | | 224 | |
| Treasury stock – 4,881,623 and 4,828,679 shares at cost, respectively | | (41,704 | ) | | | (39,135 | ) |
| Additional paid-in capital | | 121,137 | | | | 119,748 | |
| Retained earnings | | 323,756 | | | | 314,289 | |
| Total LHC Group, Inc. stockholders’ equity | | 403,415 | | | | 395,126 | |
| Noncontrolling interest – non-redeemable | | 16,348 | | | | 6,426 | |
| Total equity | | 419,763 | | | | 401,552 | |
| Total liabilities and equity | $ | 642,725 | | | $ | 614,071 | |
| | | | | | | | |
| LHC GROUP, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (Amounts in thousands, except share and per share data) |
| (Unaudited) |
| | |
| | Three Months Ended
March 31, |
| | 2017 | | % of
Revenue | | 2016 | | % of
Revenue |
| Net service revenue | $ | 246,618 | | | 100.0 | % | | $ | 222,552 | | | 100.0 | % |
| Cost of service revenue | | 154,370 | | | 62.6 | | | | 135,601 | | | 60.9 | |
| Gross margin | | 92,248 | | | 37.4 | | | | 86,951 | | | 39.1 | |
| Provision for bad debts | | 2,369 | | | 1.0 | | | | 4,601 | | | 2.1 | |
| General and administrative expenses | | 72,011 | | | 29.2 | | | | 66,240 | | | 29.8 | |
| Operating income | | 17,868 | | | 7.2 | | | | 16,110 | | | 7.2 | |
| Interest expense | | (780 | ) | | (0.3 | ) | | | (885 | ) | | (0.4 | ) |
| Income before income taxes and noncontrolling interest | | 17,088 | | | 6.9 | | | | 15,225 | | | 6.8 | |
| Income tax expense | | 5,173 | | | 41.1 | (1) | | | 5,342 | | | 41.0 | (1) |
| Net income | | 11,915 | | | 4.8 | | | | 9,883 | | | 4.4 | |
| Less net income attributable to noncontrolling interests | | 2,448 | | | 1.0 | | | | 2,197 | | | 1.0 | |
| Net income attributable to LHC Group, Inc.’s common stockholders | $ | 9,467 | | | 3.8 | % | | $ | 7,686 | | | 3.5 | % |
| | | | | | | | | | | | | | |
| Earnings per share attributable to LHC Group, Inc.’s common stockholders: | | | | | | | | | | | | | |
| Basic | $ | 0.54 | | | | $ | 0.44 | | |
| Diluted | $ | 0.53 | | | | $ | 0.44 | | |
| | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | |
| Basic | | 17,643,463 | | | | | 17,485,766 | | |
| Diluted | | 17,817,880 | | | | | 17,633,549 | | |
(1) Effective tax rate as a percentage of income from continuing operations attributable to LHC Group, Inc.’s common stockholders, excluding the impact of adopting ASU 2016-09 "Improvements to Employee Share-Based Payment Accounting” of approximately $0.8 million for the three months ended March 31, 2017.
| |
| LHC GROUP, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Amounts in thousands) |
| (Unaudited) |
| | |
| | Three Months Ended
March 31, |
| | 2017 | | 2016 |
| Operating activities: | | |
| Net income | $ | 11,915 | | | $ | 9,883 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization expense | | 3,190 | | | | 2,948 | |
| Provision for bad debts | | 2,369 | | | | 4,601 | |
| Stock-based compensation expense | | 1,581 | | | | 982 | |
| Deferred income taxes | | 475 | | | | (124 | ) |
| Loss on disposal of assets | | 152 | | | | 204 | |
| Changes in operating assets and liabilities, net of acquisitions: | | |
| Receivables | | (341 | ) | | | (12,446 | ) |
| Prepaid expenses and other assets | | (2,413 | ) | | | (162 | ) |
| Prepaid income taxes | | — | | | | 374 | |
| Accounts payable and accrued expenses | | 18,524 | | | | 13,110 | |
| Income taxes payable | | 164 | | | | — | |
| Net amounts due to/from governmental entities | | (985 | ) | | | (2,209 | ) |
| Net cash provided by operating activities | | 34,631 | | | | 17,161 | |
| | | |
| Investing activities: | | |
| Purchases of property, building and equipment | | (2,523 | ) | | | (2,622 | ) |
| Cash paid for acquisitions, primarily goodwill and intangible assets | | (449 | ) | | | (10,577 | ) |
| Advanced payments on acquisitions | | (4,487 | ) | | | — | |
| Other | | — | | | | 273 | |
| Net cash used in investing activities | | (7,459 | ) | | | (12,926 | ) |
| | | |
| Financing activities: | | |
| Proceeds from line of credit | | 5,000 | | | | 4,000 | |
| Payments on line of credit | | (14,000 | ) | | | (6,000 | ) |
| Proceeds from employee stock purchase plan | | 256 | | | | 230 | |
| Payments on debt | | (65 | ) | | | (56 | ) |
| Noncontrolling interest distributions | | (2,391 | ) | | | (2,185 | ) |
| Sale of noncontrolling interest | | 114 | | | | — | |
| Excess tax benefits from vesting of stock awards | | — | | | | 651 | |
| Withholding taxes paid on stock-based compensation | | (2,569 | ) | | | (1,421 | ) |
| Net cash used in financing activities | | (13,655 | ) | | | (4,781 | ) |
| Change in cash | | 13,517 | | | | (546 | ) |
| Cash at beginning of period | | 3,264 | | | | 6,139 | |
| Cash at end of period | $ | 16,781 | | | $ | 5,593 | |
| | | | | | | | |
| Supplemental disclosures of cash flow information | | |
| Interest paid | $ | 721 | | | $ | 749 | |
| Income taxes paid | $ | 4,580 | | | $ | 4,466 | |
| | | | | | | | |
| LHC GROUP, INC. AND SUBSIDIARIES |
| SEGMENT INFORMATION |
| (Amounts in thousands) |
| (Unaudited) |
| | |
| | Three Months Ended March 31, 2017 |
| | Home
Health
Services | | Hospice
Services | | Community-
Based
Services | | Facility-
Based
Services | | Total |
| Net service revenue | $ | 182,141 | | | $ | 36,445 | | | $ | 10,816 | | | $ | 17,216 | | | $ | 246,618 | |
| Cost of service revenue | | 112,086 | | | | 23,273 | | | | 7,948 | | | | 11,063 | | | | 154,370 | |
| Provision for bad debts | | 1,483 | | | | 497 | | | | 275 | | | | 114 | | | | 2,369 | |
| General and administrative expenses | | 53,922 | | | | 10,406 | | | | 2,311 | | | | 5,372 | | | | 72,011 | |
| Operating income | | 14,650 | | | | 2,269 | | | | 282 | | | | 667 | | | | 17,868 | |
| Interest expense | | (585 | ) | | | (117 | ) | | | (39 | ) | | | (39 | ) | | | (780 | ) |
| Income before income taxes and noncontrolling interest | | 14,065 | | | | 2,152 | | | | 243 | | | | 628 | | | | 17,088 | |
| Income tax expense | | 4,253 | | | | 659 | | | | 83 | | | | 178 | | | | 5,173 | |
| Net income | | 9,812 | | | | 1,493 | | | | 160 | | | | 450 | | | | 11,915 | |
| Less net income attributable to noncontrolling interests | | 2,028 | | | | 286 | | | | 8 | | | | 126 | | | | 2,448 | |
| Net income attributable to LHC Group, Inc.’s common stockholders | $ | 7,784 | | | $ | 1,207 | | | $ | 152 | | | $ | 324 | | | $ | 9,467 | |
| Total assets | $ | 447,807 | | | $ | 126,068 | | | $ | 32,961 | | | $ | 35,889 | | | $ | 642,725 | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2016 |
| | Home
Health
Services | | Hospice
Services | | Community-
Based
Services | | Facility-
Based
Services | | Total |
| Net service revenue | $ | 161,387 | | | $ | 30,824 | | | $ | 10,443 | | | $ | 19,898 | | | $ | 222,552 | |
| Cost of service revenue | | 96,712 | | | | 19,627 | | | | 7,727 | | | | 11,535 | | | | 135,601 | |
| Provision for bad debts | | 3,455 | | | | 775 | | | | 82 | | | | 289 | | | | 4,601 | |
| General and administrative expenses | | 49,558 | | | | 8,990 | | | | 2,079 | | | | 5,613 | | | | 66,240 | |
| Operating income | | 11,662 | | | | 1,432 | | | | 555 | | | | 2,461 | | | | 16,110 | |
| Interest expense | | (678 | ) | | | (91 | ) | | | (41 | ) | | | (75 | ) | | | (885 | ) |
| Income before income taxes and noncontrolling interest | | 10,984 | | | | 1,341 | | | | 514 | | | | 2,386 | | | | 15,225 | |
| Income tax expense | | 3,850 | | | | 420 | | | | 228 | | | | 844 | | | | 5,342 | |
| Net income | | 7,134 | | | | 921 | | | | 286 | | | | 1,542 | | | | 9,883 | |
| Less net income attributable to noncontrolling interests | | 1,594 | | | | 317 | | | | (43 | ) | | | 329 | | | | 2,197 | |
| Net income attributable to LHC Group, Inc.’s common stockholders | $ | 5,540 | | | $ | 604 | | | $ | 329 | | | $ | 1,213 | | | $ | 7,686 | |
| Total assets | $ | 400,924 | | | $ | 111,308 | | | $ | 33,133 | | | $ | 37,488 | | | $ | 582,853 | |
| | | | | | | | | | | | | | | | | | | | |
| LHC GROUP, INC. AND SUBSIDIARIES |
| SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA |
| (Unaudited) |
| | |
| | Three Months Ended
March 31, |
| | 2017 | | 2016 |
| Key Data: | | | | | | | |
| Home-Health Services: | | |
| Home Health | | |
| Locations | | 305 | | | | 284 | |
| Acquired | | 22 | | | | 2 | |
| De novo | | 0 | | | | 1 | |
| Divested/Consolidated | | 1 | | | | 2 | |
| Total new admissions | | 47,375 | | | | 39,124 | |
| Medicare new admissions | | 29,957 | | | | 26,136 | |
| Average daily census | | 41,874 | | | | 38,218 | |
| Average Medicare daily census | | 29,244 | | | | 28,246 | |
| Medicare completed and billed episodes | | 51,838 | | | | 48,486 | |
| Average Medicare case mix for completed and billed Medicare episodes | | 1.07 | | | | 1.03 | |
| Average reimbursement per completed and billed Medicare episodes | $ | 2,749 | | | $ | 2,594 | |
| Total visits | | 1,327,711 | | | | 1,126,834 | |
| Total Medicare visits | | 930,918 | | | | 829,267 | |
| Average visits per completed and billed Medicare episodes | | 18.0 | | | | 17.1 | |
| Organic growth:(1) | | |
| Net revenue | | 8.0 | % | | | 8.1 | % |
| Net Medicare revenue | | 4.7 | % | | | 5.3 | % |
| Total new admissions | | 11.7 | % | | | 7.2 | % |
| Medicare new admissions | | 7.5 | % | | | 3.3 | % |
| Average daily census | | 4.0 | % | | | 2.8 | % |
| Average Medicare daily census | | -1.1 | % | | | 1.4 | % |
| Medicare completed and billed episodes | | 1.5 | % | | | 1.9 | % |
| | | |
| Community-Based Services: | | |
| Locations | | 11 | | | | 11 | |
| Acquired | | 0 | | | | 0 | |
| De novo | | 0 | | | | 0 | |
| Divested/Consolidated | | 0 | | | | 2 | |
| Average daily census | | 1,678 | | | | 1,608 | |
| Billable hours | | 344,186 | | | | 304,487 | |
| Revenue per billable hour | $ | 31.42 | | | $ | 34.30 | |
| | | |
| Hospice-Based Services: | | |
| Locations | | 73 | | | | 61 | |
| Acquired | | 8 | | | | 6 | |
| De novo | | 0 | | | | 0 | |
| Divested/Consolidated | | 0 | | | | 1 | |
| Admissions | | 3,112 | | | | 2,463 | |
| Average daily census | | 2,861 | | | | 2,425 | |
| Patient days | | 257,474 | | | | 220,694 | |
| Average revenue per patient day | $ | 142 | | | $ | 140 | |
| | | |
| Facility-Based Services: | | |
| Long-term Acute Care | | |
| Locations | | 8 | | | | 8 | |
| Patient days | | 13,732 | | | | 15,537 | |
| Average revenue per patient day | $ | 1,087 | | | $ | 1,211 | |
| | | | | | | | |
(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.
Contact:
Eric Elliott
Senior Vice President of Finance
(337) 233-1307
eric.elliott@lhcgroup.com
