Amedisys (AMED) 10-Q 27 Oct 09 2009 Q3 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
Current assets:
Cash and cash equivalents	$45,160	$2,847
Patient accounts receivable, net of allowance for doubtful accounts of $28,352 and $27,052	141,011	175,698
Prepaid expenses	9,199	8,086
Other current assets	5,539	7,719
Total current assets	200,909	194,350
Property and equipment, net of accumulated depreciation of $54,192 and $39,208	87,021	79,258
Goodwill	765,137	733,881
Intangible assets, net of accumulated amortization of $10,648 and $7,944	57,361	42,388
Other assets, net	20,512	20,317
Total assets	1,130,940	1,070,194
Current liabilities:
Accounts payable	18,999	18,652
Accrued expenses	158,527	134,049
Obligations due Medicare	4,618	4,631
Current portion of long-term obligations	43,779	42,632
Current portion of deferred income taxes	6,661	4,663
Total current liabilities	232,584	204,627
Long-term obligations, less current portion	179,440	285,942
Deferred income taxes	24,114	11,548
Other long-term obligations	8,654	5,959
Total liabilities	444,792	508,076
Commitments and Contingencies - Note 6	-	-
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.001 par value, 60,000,000 shares authorized; 28,034,474 and 27,191,946 shares issued; and 27,922,432 and 27,083,231 shares outstanding	28	27
Additional paid-in capital	351,582	326,120
Treasury stock at cost, 112,042 and 108,715 shares of common stock	(735)	(617)
Accumulated other comprehensive loss	(36)	(447)
Retained earnings	334,296	236,252
Total Amedisys, Inc. stockholders' equity	685,135	561,335
Noncontrolling interests	1,013	783
Total equity	686,148	562,118
Total liabilities and equity	$1,130,940	$1,070,194

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
Patient accounts receivable, allowance for doubtful accounts	$28,352	$27,052
Property and equipment, accumulated depreciation	54,192	39,208
Intangible assets, accumulated amortization	$10,648	$7,944
Preferred stock, par value	0.001	0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	0.001	0.001
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	28,034,474	27,191,946
Common stock, shares outstanding	27,922,432	27,083,231
Treasury stock at cost, shares	112,042	108,715

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net service revenue	$388,257	$321,561	$1,107,987	$847,319
Cost of service, excluding depreciation and amortization	183,619	151,122	527,096	400,644
General and administrative expenses:
Salaries and benefits	87,260	72,124	242,340	190,823
Non-cash compensation	820	1,923	5,740	4,244
Other	43,765	40,641	128,456	110,146
Provision for doubtful accounts	4,578	6,228	16,481	15,505
Depreciation and amortization	7,481	5,885	20,682	15,728
Operating expenses	327,523	277,923	940,795	737,090
Operating income	60,734	43,638	167,192	110,229
Other (expense) income:
Interest income	28	200	161	938
Interest expense	(2,682)	(5,033)	(9,094)	(11,607)
Miscellaneous, net	979	(186)	2,699	(9)
Total other expense	(1,675)	(5,019)	(6,234)	(10,678)
Income before income taxes	59,059	38,619	160,958	99,551
Income tax expense	(23,033)	(15,144)	(62,774)	(39,253)
Net income	36,026	23,475	98,184	60,298
Net (income) loss attributable to noncontrolling interests	(86)	18	(140)	43
Net income attributable to Amedisys, Inc.	$35,940	$23,493	$98,044	$60,341
Net income attributable to Amedisys, Inc. common stockholders:
Basic	1.31	0.88	3.62	2.29
Diluted	1.29	0.87	3.55	2.25
Weighted average shares outstanding:
Basic	27,340	26,556	27,106	26,363
Diluted	27,912	27,018	27,615	26,835

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Flows from Operating Activities:
Net income	$98,184	$60,298
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,682	15,728
Provision for doubtful accounts	16,481	15,505
Non-cash compensation	5,740	4,244
401(k) employer match	13,827	8,726
Loss on disposal of property and equipment	593	611
Deferred income taxes	11,677	17,939
Write off of deferred debt issuance costs	0	406
Equity in earnings of unconsolidated joint ventures	(1,721)	(557)
Amortization of deferred debt issuance costs	1,182	813
Return on equity investment	625	187
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	18,155	(54,829)
Other current assets	1,415	(3,223)
Other assets	1,930	(211)
Accounts payable	3,572	(13,501)
Accrued expenses	23,885	36,661
Other long-term obligations	2,695	(1,963)
Net cash provided by operating activities	218,922	86,834
Cash Flows from Investing Activities:
Proceeds from sale of deferred compensation plan assets	956	600
Proceeds from the sale of property and equipment	41	13
Purchases of deferred compensation plan assets	(3,064)	(1,761)
Purchases of property and equipment	(25,998)	(20,610)
Acquisitions of businesses, net of cash acquired	(31,492)	(447,082)
Acquisitions of reacquired franchise rights	(5,214)	0
Net cash (used in) investing activities	(64,771)	(468,840)
Cash Flows from Financing Activities:
Outstanding checks in excess of bank balance	(3,422)	4,542
Proceeds from issuance of stock upon exercise of stock options and warrants	966	2,757
Proceeds from issuance of stock to employee stock purchase plan	4,081	2,665
Tax benefit from stock option exercises	847	2,764
Proceeds from Revolving Line of Credit	50,200	183,700
Repayments of Revolving Line of Credit	(130,700)	(81,700)
Proceeds from issuance of long-term obligations	0	250,000
Payment of deferred financing fees	0	(8,124)
Principal payments of long-term obligations	(33,810)	(25,124)
Net cash (used in) provided by financing activities	(111,838)	331,480
Net increase (decrease) in cash and cash equivalents	42,313	(50,526)
Cash and cash equivalents at beginning of period	2,847	56,190
Cash and cash equivalents at end of period	45,160	5,664
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	9,885	10,406
Cash paid for income taxes, net of refunds received	47,135	18,783
Supplemental Disclosures of Non-Cash Financing and Investing Activities:
Notes payable issued for acquisitions	8,455	6,688
Notes payable issued for software licenses	$0	$2,126

1. NATURE OF OPERATIONS, CONSOL

1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS	1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS Amedisys, Inc., a Delaware corporation, and its consolidated subsidiaries (Amedisys, we, us, or our) are a multi-state provider of home health and hospice services with approximately 88% of our net service revenue derived from Medicare for the three and nine-month periods ended September30, 2009 compared to 87% for the same periods in 2008. As of September30, 2009, we had 508 Medicare-certified home health and 61 Medicare-certified hospice agencies in 38 states within the United States, the District of Columbia and Puerto Rico. Basis of Presentation In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations and our cash flows in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Our results of operations for the interim periods presented are not necessarily indicative of results of our operations for the entire year and have not been audited by our independent auditors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December31, 2008 as filed with the Securities and Exchange Commission (SEC) on February17, 2009 (the Form 10-K), which includes information and disclosures not included herein. We have evaluated all events or transactions that occurred from September30, 2009 through October27, 2009, the date our financial statements were issued. During this period, we did not have any material recognizable subsequent events. Use of Estimates Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications and Comparability Certain reclassifications have been made to prior periods financial statements in order to conform them to the current periods presentation. In accordance with U.S. GAAP, we have changed the name of minority interests to noncontrolling interests for all periods presented. Additionally, noncontrolling interests is included as part of our total reported equity in the accompanying condensed consolidated balance sheets and we have reordered the presentation of such amounts in the condensed consolidated income statements. Additionally, we adopted the revised U.S. GAAP guidance on business combinations as of January1, 2009, which amended the requirements of how to account for business combinations, by requiring the expensing of most acquisition related costs associated with an acquisition as opposed to inclu

2. SUMMARY OF SIGNIFICANT ACCOU

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition We earn net service revenue through our home health and hospice agencies by providing a variety of services almost exclusively in the homes of our patients. This net service revenue is earned and billed either on an episode of care basis (on a 60-day episode of care basis for home health services and on a 90-day episode of care basis for the first two hospice episodes of care and on a 60-day episode of care basis for any subsequent hospice episodes), on a per visit basis or on a daily basis depending upon the payment terms and conditions established with each payor for services provided. We refer to home health revenue earned and billed on a 60-day episode of care as episodic-based revenue. For the services we provide, Medicare is our largest payor. When we record our service revenue, we record it net of estimated revenue adjustments and contractual adjustments to reflect amounts we estimate to be realizable for services provided, as discussed below. We believe, based on information currently available to us and based on our judgment, that changes to one or more factors that impact the accounting estimates (such as our estimates related to revenue adjustments, contractual adjustments and episodes in progress) we make in determining net service revenue, which changes are likely to occur from period to period, will not materially impact our reported consolidated financial condition, results of operations, cash flows or our future financial results. Home Health Revenue Recognition Medicare Revenue Net service revenue is recorded under the Medicare payment program (PPS) based on a 60-day episode payment rate that is subject to adjustment based on certain variables including, but not limited to: (a)an outlier payment if our patients care was unusually costly; (b)a low utilization adjustment (LUPA) if the number of visits was fewer than five; (c)a partial payment if our patient transferred to another provider or we received a patient from another provider before completing the episode; (d)a payment adjustment based upon the level of therapy services required (thresholds set at 6, 14 and 20 visits); (e)the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (f)changes in the base episode payments established by the Medicare Program; (g)adjustments to the base episode payments for case mix and geographic wages; and (h)recoveries of overpayments. We make adjustments to Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. We estimate the impact of such payment adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered as an estimated revenue adjustment and a corresponding reduction to patient accounts receivable. Therefore, we bel

3. ACQUISITIONS

3. ACQUISITIONS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3. ACQUISITIONS	3. ACQUISITIONS Each of the following acquisitions was completed in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health and hospice services. The purchase price paid for each acquisition was negotiated through arms length transactions, with consideration based on our analysis of, among other things, comparable acquisitions and expected cash flows for each transaction. Each of the following acquisitions was accounted for as a purchase and is included in our condensed consolidated financial statements from the respective acquisition date. Goodwill generated from the acquisitions was recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of each acquisition to our overall corporate strategy. Summary of 2009 Acquisitions The following table presents details of our acquisitions (dollars in millions): Purchase Price Purchase Price Allocation Number of Agencies (1) Date Acquired Entity (location of assets) Cash Promissory Note Goodwill Other Intangible Assets OtherAssets (Liabilities), Net Home Health Hospice Number of States July 31, 2009 Winyah Community Hospice Care (South Carolina) and Allcare Hospice (Mississippi) $ 12.3 $ 4.6 $ 15.7 $ 1.4 $ (0.2 ) - 10 2 June 15, 2009 Jackson, Mississippi agency 2.5 - 2.2 0.3 - 1 - 1 April 1, 2009 Upper Chesapeake Health System and St. Joseph Medical Center (Baltimore,Maryland) 9.2 2.3 10.7 1.0 (0.2 ) 1 1 1 March 12, 2009 White River Health System (Batesville,Arkansas) 3.2 - 2.6 0.7 (0.1 ) 3 1 1 February3,2009 Arizona Home Rehabilitation and Health Care and Yuma Home Care (Yuma,Arizona) 4.3 1.5 5.0 0.8 - 2 - 1 $ 31.5 $ 8.4 $ 36.2 $ 4.2 $ (0.5 ) 7 12 (1) The acquisitions marked with the cross symbol () were asset purchases. 2008 TLC Health Care Services, Inc. (TLC) Acquisition During the three-month period ended March31, 2009, the remaining $12.8 million of the purchase price that was in escrow in connection with the TLC acquisition for indemnification and working capital price adjustments was released and paid to the selling stockholders under the indemnification provisions of the TLC acquisition agreement. Additionally, we finalized our purchase accounting for the TLC acquisition during the three-month period ended March31, 2009. The following table summarizes, as of March31, 2009, the estimated fair values of the TLC assets acquired and liabilities assumed on March26, 2008 (amounts in millions): Patient accounts receivable, net $ 37.8 Property and equipment 0.5 Goodwill 330.4 Intangible assets 19.2 Deferred taxes 38.2 Other current asse

4. GOODWILL AND OTHER INTANGIBL

4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET	4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET The following table summarizes the activity related to our goodwill and our other intangible assets, net, as of and for the nine-month period ended September30, 2009 (amounts in millions): Other Intangible Assets, Net Goodwill Certificates ofNeedand Licenses Acquired Name of Business Non-Compete Agreements Reacquired Franchise Rights (1) Total Balances at December31, 2008 $ 733.9 $ 32.7 $ 3.3 $ 6.4 $ 42.4 Additions 36.2 2.3 1.3 6.8 10.4 Adjustments related to acquisitions (5.0 ) 7.4 - (0.1 ) 7.3 Amortization - - - (2.7 ) (2.7 ) Balances at September30, 2009 $ 765.1 $ 42.4 $ 4.6 $ 10.4 $ 57.4 (1) The weighted-average amortization period of our non-compete agreements and reacquired franchise rights is 3.4 and 3.3 years, respectively. During 2009, we adjusted goodwill by a net $5.0 million primarily in association with our completion of purchase accounting adjustments for our 2008 acquisition of TLC, where we allocated an additional $7.5 million to the estimated fair value of Medicare licenses acquired and decreased the estimated fair value of the deferred tax liability assumed by $2.9 million.

5. LONG-TERM OBLIGATIONS

5. LONG-TERM OBLIGATIONS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5. LONG-TERM OBLIGATIONS	5. LONG-TERM OBLIGATIONS Long-term debt, including capital lease obligations, consisted of the following for the periods indicated (amounts in millions): September30,2009 December31,2008 Senior Notes: $35.0 million Series A Notes; semi-annual interest only payments; interest rate at 6.07% per annum; due March25, 2013 $ 35.0 $ 35.0 $30.0 million Series B Notes; semi-annual interest only payments; interest rate at 6.28% per annum; due March25, 2014 30.0 30.0 $35.0 million Series C Notes; semi-annual interest only payments; interest rate at 6.49% per annum; due March25, 2015 35.0 35.0 Term Loan; $7.5 million principal payments plus accrued interest payable quarterly; interest rate at ABR Rate plus applicable percentage or Eurodollar Rate plus the applicable percentage (1.27% and 3.08% at September30, 2009 and December31, 2008, respectively); due March26, 2013 105.0 127.5 $250.0 million Revolving Credit Facility; interest only quarterly payments; interest rate at ABR Rate plus applicable percentage or Eurodollar Rate plus the applicable percentage (1.34% and 1.72% at September30, 2009 and December31, 2008, respectively); due March26, 2013 - 80.5 Promissory notes 18.0 20.3 Capital leases 0.2 0.2 223.2 328.5 Current portion of long-term obligations (43.8 ) (42.6 ) Total $ 179.4 $ 285.9 Our weighted-average interest rates for our five year Term Loan (the Term Loan) and our $250.0 million, five year Revolving Credit Facility (the Revolving Credit Facility) were as follows: Forthethree-monthperiods ended September30, Forthenine-monthperiods ended September30, 2009 2008 2009 2008 Term Loan 1.3 % 4.1 % 1.8 % 4.3 % Revolving Credit Facility 1.3 % 4.1 % 1.7 % 4.3 % As of September30, 2009, our total leverage ratio (used to compute the margin and commitment fees, described in more detail in Note 5 of the financial statements included in our Form 10-K) was 0.9 and our fixed charge coverage ratio was 2.4. The following table presents our availability under our $250.0 million Revolving Credit Facility as of September30, 2009 (amounts in millions): Total Revolving Credit Facility $ 250.0 Less: outstanding revolving credit loans - Less: outstanding swingline loans - Less: outstanding letters of credit (10.9 ) Remaining availability under the Revolving Credit Facility $ 239.1 See Note 5 of the financial statements included in our Form 10-K for additional details on our outstanding long-term obligations.

6. COMMITMENTS AND CONTINGENCIE

6. COMMITMENTS AND CONTINGENCIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6. COMMITMENTS AND CONTINGENCIES	6. COMMITMENTS AND CONTINGENCIES Legal Proceedings We are involved in legal actions in the normal course of business, some of which seek monetary damages, including claims for punitive damages. We do not believe that these actions, when finally concluded and determined, will have a material impact on our consolidated financial condition, results of operations or cash flows. Insurance We are obligated for certain costs associated with our insurance programs, including employee health, workers compensation and professional liability. While we maintain various insurance programs to cover these risks, we are self-insured for a substantial portion of our potential claims. We recognize our obligations associated with these costs in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported, up to specified deductible limits. These costs have generally been estimated based on historical data of our claims experience. Such estimates, and the resulting reserves, are reviewed and updated by us on a quarterly basis. Our health insurance has a retention limit of $0.3 million, our workers compensation insurance has a retention limit of $0.4 million and our professional liability insurance has a retention limit of $0.3 million.

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 22, 2009
Entity [Text Block]
Trading Symbol	AMED
Entity Registrant Name	AMEDISYS INC
Entity Central Index Key	0000896262
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		27,963,990