EXHIBIT 99.1
Contact:
Amedisys, Inc. Noonan Russo Presence
Chief Financial Officer Investors/Media
Greg Browne John Capodanno
225-292-2031 212-845-4258
gbrowne@amedisys.com john.capodanno@nrp-euro.com
RJ Falkner & Company, Inc.,
Investor Relations Counsel
800-377-9893
info@rjfalkner.com
AMEDISYS REPORTS CHARGES RELATING TO NATIONAL
CENTURY FINANCIAL ENTERPRISES, RESTRUCTURING OF
OPERATIONS AND INCREASES IN RESERVES
BATON ROUGE, Louisiana (January 30, 2003) - Amedisys, Inc. (NasdaqNMS: "AMED" or
the "Company"), one of America's leading home health nursing companies, today
announced several charges and reserve changes that the Company will book for its
fiscal fourth quarter ended December 31, 2002.
The Company has maintained an accounts receivable financing agreement with a
subsidiary of National Century Financial Enterprises, Inc. ("NCFE") since 1998.
NCFE, and its subsidiaries, filed for bankruptcy on November 18, 2002, at which
time the Company had approximately $7.1 million residing in bank accounts
controlled by NCFE, and such funds have yet to be returned to the Company.
Numerous recent news reports indicate that NCFE will cease business within the
next few months.
After consultation with legal advisors, the Company believes that it has
incurred a loss with respect to this receivable. While it intends to
aggressively pursue both damages and full recovery, the amount and timing of any
recovery is uncertain; therefore the Company has determined that a reserve for
the full amount of the receivable ($7.1 million) is appropriate. The Company has
incurred $250,000 in related legal expenses in the recently completed fourth
quarter and additional legal expenses are likely to be incurred in fiscal 2003.
In response to the significant reduction in Medicare reimbursement that took
effect on October 1, 2002, and in anticipation of a further reduction scheduled
for April 1, 2003, management has initiated major changes in its operations,
including personnel reductions
and termination of some of its operating leases. The Company will record a
restructuring charge of $1.7 million at December 31, 2002, for the severance and
lease buyout costs associated with this restructuring.
Further, Amedisys elected to terminate nineteen payor contracts with various
insurance and managed care companies during the recently completed fourth
quarter due to both low profitability and slow payment. Although the Company
will vigorously pursue collection, management believes that the reserve for bad
debts should be increased by approximately $600,000 to provide for the reduced
possibility of collection of residual amounts on these contracts.
Amedisys advised in its 10Q for the quarter ended September 30, 2002, that its
Medicare fiscal intermediary had re-opened various previously settled cost
reports for the fiscal year ended December 31, 1997. Management initiated a
further review of both the possible liabilities for these re-opened cost
reports, and existing reserves covering all periods through the commencement of
the new payment system on October 1, 2000, and, although the Company will appeal
these matters where appropriate, has determined that an additional reserve of
$1.0 million should be recorded at December 31, 2002. Final determination of
cost report matters is expected to take several years.
The total amount of the above charges and increased reserves, on a pre-tax
basis, will be approximately $10.7 million, or $6.6 million on an after tax
basis.
Management confirmed previously communicated earnings guidance for the fourth
quarter of $0.08 to $0.12 per diluted share (prior to the above charges),
although as a result of the above charges, the Company will report a loss for
the fourth quarter.
William F. Borne, Chief Executive Officer, commented, "Amedisys will enter 2003
with a solid operating structure and positive outlook, despite the above
charges, and we reaffirm our preliminary earnings guidance for fiscal 2003 of
$0.48 to $ 0.58 per share. Amedisys will look to expand into attractive,
contiguous markets, while continuing our strong internal growth in existing
markets."
THE COMPANY WILL PROVIDE FURTHER INFORMATION TOMORROW ON THESE RESULTS DURING A
TELECONFERENCE CALL THAT IS SCHEDULED FOR 10:00 A.M. EST ON JANUARY 31, 2003. TO
ACCESS THIS CALL, PLEASE DIAL 973-317-5319 A FEW MINUTES BEFORE 10:00 A.M. EST.
A REPLAY OF THE CONFERENCE CALL WILL BE AVAILABLE UNTIL FEBRUARY 7, 2003, BY
DIALING 973-709-2089. THE ACCESS CODE IS #284723 FOR THE REPLAY.
Amedisys, Inc., a leading provider of home health nursing services, is
headquartered in Baton Rouge, Louisiana. Its common stock trades on the Nasdaq
National Market System under the symbol "AMED".
This press release includes statements that may constitute "forward-looking"
statements, usually containing the words "believe", "estimate", "project",
"expect" or similar expressions. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or contribute to
such differences include,
but are not limited to, continued acceptance of the Company's products and
services in the marketplace, competitive factors, changes in government
reimbursement procedures, dependence upon third-party vendors, and other risks
discussed in the Company's periodic filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes after the date
of this release.
Additional information on this Company can be found on the World Wide
Web
http://www.amedisys.com