AMED - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the Amedisys First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Staff. of Chief Muscato, Nick Please go ahead.

Nicholas Muscato

copy and Thank on Form conference ended X-K the release, the A investor filings with are Relations to to you, March slides, discuss available related XXXX. quarter Investor operator, Web-site. call first the Amedisys the page press our SEC welcome results and our of the XX, supplemental of of

Also from and Ginn, Counsel today's of call Dave Amedisys us Officer. Chief Chief Officer, on Paul and President Affairs. will Government Gerard, Speaking Kusserow, and Chris Scott Executive and Financial Officer, President Chief joining are be Senior Operating Vice General Kemmerly,

call other such outcomes and statements securities call, that Safe the are in of subsequent Before results available of include cause we actual required this Company's are protected the and today and on Harbor our today. may materially statements differ SEC Reform uncertainties, Litigation our as events, risks information obligation including a risks X-K. Private involve on the than reflect These statements like to provided forward-looking XX-K, to to company call forward-looking filings, forward-looking I Amedisys statements with Act. The applicable on and which XX-Q, made laws. update or the statements. may based no detailed information on These forms to from this remind to These everyone uncertainties get under number conference started Securities factors constitute would assumes our may

will you, the now, our most X-K. reconciliation mentioned SEC XX-K, in as any required a Kusserow. to call comparable also call non-GAAP and to Thank our available during by Paul and forms addition, today turn In be XX-Q, the I'll over of GAAP measures G, measures Regulation

Paul Kusserow

to the XXXX welcome Earnings and Quarter First Call. Amedisys Nick, Thanks,

adjusted earnings very up generated of adjusted per year-over-year; million and are $XX XX% XX% revenue, EBITDA year-over-year. million, of results We for quarter. $X.XX, $XXX up with the up year-over-year; pleased our We in X% share

our impressive quarter by Another delivered nearly employees. XX,XXX

progress the we focus, our starting strategic Let's four areas distinction. clinical that within made have dive to right of in with

on care centers sequential an X.X and again paid last better. now up XXXX at rated now at overall X.XX, has focus of stars is dividends up average us STARs unwavering X as the July straight of improvement preview have quarter score at rated stars. of or stars, clinical April XX% in quarter, release. puts from portfolio from Our XX% our the in This X our is XXth XX We once quality

further also in performance financial our to We to improve to industry on clinical Value-Based the differentiating focus pilot are Health Home committed ratings program beginning an quality indicates. star Purchasing leader returns as continuing generate is quality. and ourselves in as This our

This $XXX,XXX received is pilot limited year payments we states, the in in. the approximately to operate For from the CMS bonus first of quarter, year seven is CMS. which bonus we of payments, nine and

by revenue our of quality percentage performance. VBP payments from meaningful XXXX, X% the see we X% for to As upside grows continued will in

reimbursement that quality tied believe should and before, As I've be we stated to outcomes.

Value-Based to be should we such, deliver who Purchasing expand again encourage those If it the CMS important, is rewarded. nationwide. As quality program

the Hospice Amedisys the in quality shows Compare categories. XXXX national release measurement metrics May business, seven Hospice our of outperforming all For average

performance initial these We to expect the and with results quality pleased very are fully industry. lead our Hospice

are of know, as choice, people to we a you on the employer Moving business.

the development clinicians, past first are steadily XXXX, and four ended discussed focused or increased talents, As XXX with FTEs and the best-in-class this We quarters. business we staff. operators, BD retaining throughout on have hiring quarter we whether number

with at full-time improve tirelessly worked approximately XX%. to our also have retention, turnover voluntary We

an readmission we patients. have drive ability increase direct area on impact a of down our tighter turnover as We We our that a better focus. clinical XXXX. in turnover identified further to to focus market, to on believe rates, has Anticipating our lowering and labor clinical productivity, will nursing retaining continue care provide staff specifically ultimately

quarter, are our Last labor efficiency. seeing the discussed operational rollout discuss and improvements of the we we from productivity and tool. staffing let's Now productivity

you helps care demand optimize As centers clinician scheduling. and to tool predict may then recall, this clinician our

material We XXXX. continue nearly our PT February impact skilled disciplines, on down per These visit, which cost impact made to productivity is see productivity since $X.XX all improving year-over-year. its productivity improvements improving XX% of nursing productivity and with nearly have across X% a on

of to having We having also to the optimization, think or we work licenses. PTs right clinicians LPNs we through ratio RNs mix their clinician it, at as top the PTAs, additional have and specifically of margin upside, call

scheduling and process fully As tool, we to productivity. continue our our to expect proprietary we staffing utilize refine continue improving

on significant our operating over efficiency EBITDA focus is reflected in Hospice in to we show segment Our leverage expansion, achieving year. continues also the segments. up XXX points are prior basis margin

XX expanded face over prior the reimbursement the margins EBITDA year, a Health all in segment X.X% Home of of approximately cut Health points Home basis for Our quarter.

growing up pending Finally, impressive expect X,XXX approval ADC and and at novo at X%, driving pace, to build for we to our regulatory launched first de this location, to in number which the we licensure. year. Hospice throughout growth; quarter. XX% the April, an build continues is Also, Admits were

novos part de Hospice growth As of strategy. three-pronged we discussed are our previously,

end efforts with we on division, plus improvements look to efforts, X% growth, we novo to continue same-store de In at quarter total the ending Home additional there. and is is from goal Health our growth locations admissions up make Our recertifications. volume ramp our the to year which our

growth admission same-store total our X%. was Finally,

we that guidance. confident per XX%. XXXX Care, Personal still quarter grew approximately target our are In in growth out total will we admission laid hours total X% meet the We

the acquired of half the and first their XXXX, optimizing of focus integration infrastructure on operational For assets Care XXXX. team the Personal finishing we in two the will current

have seen front, sponsors financial at multiples. Hospice assets, interested some we entry On and driven our though the recent remain done competition valuations. We higher lofty very The has market in deals relatively the unchanged. in been get interested has of is unattractive increased M&A and pricing strategy very Hospice

priority deals and looking focus Personal we at where expansion This are tuck-ins just our Hospice good are several As our a in as continue by and Hospice East Personal have final evidenced Tennessee geographies. strategic Health, Home on we on week. value to focused novo we mentioned, is de strong received assets of we we midsized Care in acquisition Services Care, have we In in Tennessee and regulatory Home Personal approval presence. launched strategic Care on in strategy geographies. closed In Health our last

of in six on Kentucky. which Christian access X.X-star new new X of closed established by we acquisition us in counties and centers Western Care Green, earned currently counties ratings quarter, quality the care During our in Certificate Bowling be These Owensboro high-quality and respectively. serviced Communities, will giving Need our

be forward Services continues the Amedisys family. disciplined our Overall, MA new to and are in seeing these excited year, the look this our offers also but continue to to use to capital forward of we'll three take Tennessee to growth coming Christian and employees East the we in We Care We Care with regard by the welcome valuation. like opportunity business strong in Personal and Kentucky new all putting look Health to a pipeline remain to to Home to would acquisition operators counties. for our moment lines

a the rate are front, the in regulatory Index April, at CMS the The X.X% payment Hospice Wage which aggregate corresponding positive by Hospice and the hospice proposed payments October will the issued increase end of cap update, rate increase increase beginning X, XXXX on and at in industry XXXX. Finally, Hospice proposed X.X% Amedisys. for

late and a on to on that variety rule our measures also until submitting looks we forward The Finally, proposals. period public of open input comments this CMS proposed comment quality to currently is Amedisys CMS studying. are seeking reporting these for is June

Hospice recent Act Given the positive in reimbursement tape three value the advisory CMS' home, of technical conversations in Personal update MA allowance regulatory the all burden XXXX, environment members private the of of by red the Budget with Bipartisan feel of current CMS, Congress by for of around and clear payors panel and XXXX, language the the lines businesses. and reduction, in for Care about quite care recognition of recent X.X% our the we benefit, convened

had over review of detailed are the that, QX. to see, With turn performance poised momentum into a continue you financial to another and Scott, it who quarter. we the more great through quarter As our will I'll going can for us take Scott?

Scott Ginn

on Thanks, excellent Paul. to quarter pleased another of I'm very report results. financial

increase of XX% $X.XX For the GAAP had compared X% per XXXX, of $X.XX in $XXX XXXX. $XX we of to increase a an of diluted revenue, or million compared generated share, We income quarter an or net first to million XXXX. basis, on

slides as characterized income these or income our Slide results of our in we XX minimally the statement adjusting details For impacts. have items one-time non-core, and that the by our adjustment GAAP detail were provides temporary, regarding quarter, of supplemental line expense nature. results each items, or impacted items

For or $X.XX million share. $XX XX% million on per results XX% as EPS basis, to $XXX nearly grew $XX X% adjusted the $X.XX or quarter, $XX were or an Revenue EBITDA follows. million. our increased million. increased to to

second highest Our which margin the reimbursement XX.X% the XXXX. margin of improvement is XXXX quarter since and was of net We EBITDA cuts as quarter, the both XXXX. in in a percentage this EBITDA face achieved for revenue the of

growth X%. in sources. $XX.X $XXX admissions adjusted up million to Home in to was Now, year. all performance, Revenue admissions from a total recertifications turning compared up Same-store volumes both episodic Same-store episodic admissions was driven which and includes up up Same-store by were total our were segment volumes, prior X%. first increase X% same-store quarter Health, million, revenue payor were X%.

rate $XX to the was This and XXXX admits trailing is revenue during from for in XXX loss compared Revenue despite year. the episode the quarter, We basis the Health XXXX. rate was that relatively year, was lowest Health up Home which our six XX.X%. episodic year. million, reduction quarters. of margin. Increases weather weather XX% a gross $X.XX to in accounted first productivity $XXX,XXX Inclement revenue at basis our and an wage the helped $X.XX prior the recertification to during EBITDA visit Other commission EBITDA decreased decrease. $XX staff point was segment went with a effect per cost or XX.X%, third overall of included the increases to of reimbursement adjusted Medicare with margin of from $X the in XXX per prior approximately $X impacting million, planned patients. of up Our of quarter, cost point visit was increased added acuity compared impacting G&A the X.X% of quarter. quarter down costs the Visiting by prior per is salary million, which driven $XXX,XXX cut. flat approximately that impact Home of XX level the improvement quarter for a for estimate Segment results items for offset approximately

As approximately segment flat year-over-year. health expense and is the sequentially expected, our for dropped $X million

turning was year, an up G&A up up day million for X% was admissions growth. of $XX from and quarter, increase up per additional daily $X development million, $XX approximately to over day and million. reimbursement X%. of $XX Net to or was points increase census and million, X% segment of an were benefited segment revenue Hospice by XX% $XX.XX. expanded XX%. EBITDA employees versus Now continued XXX an despite $XXX.XX, administrative first our revenue segment per to the support in in million was business and The drive Same-store EBITDA was to prior The staff margin prior average same-store Segment Hospice $X our XX% increase year. of approximately service cost investments basis up

in was Additionally, planned This day. cost we census. which in to our added QX, growth a support increase commissions increased per late

as comp targets. reach moderate this we our expect We to census

are representing in over Our in the with approximately not and prior million Included Intercity revenue acquisitions our $XX first Personal billable XX% year approximately segment hours. Care these Home generated in results in were Staff XXX,XXX growth from quarter, results. that of million $X revenue in

half investing pace Additionally, Personal future we're the in of Because far. progress and to in rapid first this million spending infrastructure are these we platform's period. in the for acquisitions contributed slightly the allow of $X G&A segment, year of during acquisition the Care pleased have made with costs growth over the the thus

and due down revenue of basis G&A From continued revenue. health general adjusted an $X.X and total support and percentage G&A quarter, ended our debt a was increases million by Sequentially, in total lower $XXX million as growth. million. on in we and cash million in prior XX.X $XXX were for or spent on we year. the [indiscernible], office decrease business Turning G&A to of and to basis, development staff operations was a $XX We primarily over from million XX.X% cash decreased million, XXX a to compared Total drive Care generated expenses, is points offset capital days, administrative X.X cash $X sequentially. expenditures. $XX outstanding the Days quarter perspective, flows in Christian approximately flow the of approximately with million days sales of $X acquisition and to which

Our cash approximately million line, combined credit us with on of $XXX the available provides balance, our million liquidity under available credit revolving facilities. $XXX total existing

cash Our and provide ample M&A opportunities. generation and for strong debt strategic capital us flexibility low other levels with deployment

$X.XX the of prepared million Finally, we Operator, per our to are; you questions. are XXXX to supplemental for our revenue as of million, deck, EPS of billion, share. XX reiterating $X.X guidance open billion $XXX and see line ranges, to conclude please will can on slide remarks. of Page EBITDA $XXX This $X.XX $X.XX our which

Operator

Our Brian Please Tanquilut with [Operator proceed line Jefferies. the with Instructions] your from of comes question. first question

Brian Tanquilut

Congrats.

as of think rate can put the Paul, you to, you initiatives first looking where that X% think question quarter. this macro Solid and same-store where you should for up all moving does given quarter, parts be on that the land in I growth I'm at put the terms or this you, that you've all where admissions, about growth you really that place? in think push

Paul Kusserow

feel Sure. that building Thanks we a steam. good we've Brian. of growth. Yes, head We good feel up been very about

better each at look better. past we've quarters, getting you been been the has If and doing what over three quarter

expect the meet target. in we the comments, will we that said growth we X% As

occurred The there feels that good it. I But very we think [miss] about if this versus quarter X% very on came was I that any potentially it. about [ph] little was team good at in X%. feel

are new BD We very tracking well with folks. the

be at the the year. XXX end to expect up by of We

we continue in, filling take need can where to of business. in are clinicians We capacity that The [indiscernible] are the of we terms so down.

it. further growth good we about I don't any side? So know, Chris, very feel on the

Chris Gerard

year. Sure. in this I'd we carried last incremental QX year XX say BD also that heads QX additional versus

in on They based year a as are historical guys expected XXXX that As were nice recall, this you about are we brought trends. hired on ramping reps XXX we in that into ramp.

quarter to is So, as along. that expect of as we growth our third we continue productivity, up to and bring episodic. improved see to growth the those in year-over-year, result This higher improved also goes year consecutive Medicare

this So, we also expect year to see that as well. continue throughout

Paul Kusserow

talked one the are a to growth. and stuff building a got put bit catching throwing levels we're sure things, is support of cognizant into Yes, think efforts very about here. enough pitching us. making we that lot have Brian, we've We who and of enough of in We're higher capacity pitchers to

in, we've time labor been so, lot a And in what's of market. putting becoming tougher a

good very about side So, as we well. feel that

Brian Tanquilut

in maintaining cash of balance terms guess that I as and position net now Scott, Paul, you about sheet, think good. and sounds strategy. discipline clear hear in we're a loud acquisition you That for and the I I you're the

limits you valuations market So, on are optimization your the capital structure the M&A? in are thinking given that about putting how

Paul Kusserow

I'll let dig into that. Scott

I'm environment, know, I been check is a I've I love particularly on on believe to and any can very there we've holding in things the the think you go been going if fundamentally with market, out – so very that there, been pencil of out that have any and As have out guy, some ourselves team frustrated in but Scott we downturns. don't that deal been disciplined, there

confident So, got good pipeline. feel we've a we that

will we confident, point feel things some pop. So, at

We've feel assets then quite thus else. our far. like all to a uncontested area doing haven't good at We're Hospice We're about very everybody of bids. And strategy. We in about also bit Those good or sourcing of relatively We're there. our We're that putting we in big very the worked midsized in pipeline pipeline. we're realistic sole got three-pronged deals de novos. do the feel deals that good looking starting uncontested. completely

feel the plays like, strategic with specific Health we're more we coming in back a way at growth So that very Home there. about And good looking then are Health, and we open to our that. Home

optimization to balance terms In the it just of sheet, turn over Scott. I'll on the

Scott Ginn

Sure. Thanks, Brian.

there. of we're Paul your a is having an issues continue $XXX if summed dealing mean, up that a certainly balance we pursue I opportunities acquisition lot sheet I right I mean think out the on out of million lot the have cash with issue, now. we'll And it, to there. are

weigh with potentially We'll but cash versus else. what's look to our ability are As we'll do Paul invest what can novo, generating in close we our on have to what we'll our sheet. balance things anything on other said, in things de versus some we cash at

everything a any it and to we would need to us. us be So, good do, open stay that will to makes mindful acquisition sure disciplined some love thing, and do make acquisitions, is much is we for operational which sense right pretty we now, that but we financial but

So, turn I you'll working to discipline, a but we over us pull don't get hard from to everything are done. we back see think can deal

Paul Kusserow

juice Actually from we've make in to excellent from have is lines. so generate, we're which I three hard to build to Brian, think an cadence organic Yes. business in here just we last a responsibility and terms the that all perspective, I And get and a in thing perspective, operators do my there's think we the sure macro the lot is more worked orange. work of continue

think we So, lot there's a there.

knocks a us we deal that game. do to off – where going our aren't we where So,

fit into fit our and that are system do our team maintaining that place. see of we're to And with us that fit got potential. lot business. a They We're extremely We that really management into good in well. a so, going things discipline and too. executing We

which that to makes where do. harder we're taking so And very deals that's mentality, much

Brian Tanquilut

How question, be pretty we one quick I may at that Scott, that, about the the point? is maintaining for quarter, range in last this on the thinking squeeze just good if year. guidance you beat but guidance, the are conservatism simple should

Scott Ginn

As gave we've guidance in five call, we time in talked in February. is given about guidance this the just the first years. We last

So, we're of into we Things very hit second some the on about were there's to and year excited the expecting, of QX kind need moving headwinds front. get we things the growth half results. but where

are going. in came we to get so guiding we X%, at we to So, need X%, that

re-evaluate We'll of into we're our certainly than less optimistic. So, the say, we're insurance, what half be but but second insurance QX. add play, does in we've see will We would where we'll good continue some as results XX% QX and But conservatism talked, cautiously of spent year, the the the I come year. headed. projected we to for health heads throughout BD there spend had year health some

talked the about year. incrementally we heads to, XX As over we'll add

So, are the then, deal we issues second those half year. of we'll raises with. get the in And

kind we've growth. some from are of those that a we're the things organization, think come will we the got So, cover for cost to that with into looking perspective and

it look with again in guidance pleased So, QX. very we talk to we're and about closely, where are, but watching we'll

Paul Kusserow

extremely Brian, where Yes, I we're we pleased think, are.

think guess I I that circumstances hit years, numbers. think for And important until given haven't I under the guidance, sure any it's were regardless I that's I us the we is, five fact we the make add would we that quarter. the don't it's only guidance for think, raise don't if point something would to do to given second we and

Brian Tanquilut

guys. Thanks All right, sounds good.

Operator

line comes from your Kevin Craig question Please proceed Hallum. with of the with Ellich next Our question.

Kevin Ellich

now? you the much increases, labor the getting the market following seeing terms of just second wage about of talked Scott inflation on up things is terms half that in are planned with tight wage in guess, right how I

Paul Kusserow

where harder I'd say, pockets say, it's I'd from people. no. my we're to seeing recruit just perspective,

then preparing very We have have job we ourselves – terms through is, with really very done market. increases. every where being been the and And a the consistent being giving understanding year, market in of wage nice of the

of – this. right now. system it do just a on it's Every we our So, August, part we do

bringing feel we're up we people. so, And

there Yes. employees definitely an Our But more Chris, in do work change towards give his harder that also, raises as we working drive to is basis. know, to pockets fairly, But where pay of of find it's our you some nurses? are mix paraprofessionals. understand efforts annual we to on

by that and it's think our increasing far, alleviate we So, say some not Chris pressure. Thus we'll been I'd Scott, of But extraordinary. mix, anything?

Scott Ginn

year-over-year a We're our still an We focused to think in hire pocket do ability look impressive of it. I down given standing to raises. to and as on We're that issue. No, goes per And continues turnover. pretty that of visit metrics at a clinician It's to expand. that's fair. have our people. We front productivity lot cost lot That's in be of view. a

from things have ability well we of we'll lot and areas an as that markets of certainly are a to but that mindful for cost. work labor on, So, us tight what hire as means

Paul Kusserow

doing, market, a And up good getting industry of below are industry that solves done right average, just to a with We're do brought will we getting a Scott and which point, Kevin. answer us. for below obsessed in really Yes, turnover. lot the labor way and that is problems average really that what tight getting we and

so, this get culture. – we don't go out better better And and see get as have heavily, a we recruit to productivity, we we

these nurse Susan turnover are and focused very, clinician that, So, of and Sender efforts on for Chris very terms we're [ph]. in looking and [turnover]

Kevin Ellich

the That's about of you productivity. one well, in it remarks, fantastic. Scott and as things then talked your prepared is And mentioned

a improvement. You've nice seen

there? you I on how or that, with said get? expect more How in normalized skilled EBITDA can think you And more top EBITDA will we X% XX%. margins up it nicely, do get think take to and you do productivity much nursing how is margin increasing goes long get much where and to of

Paul Kusserow

gone and that's I've encouraged their where his when rolling people out, said they've getting at that ambition were been you'll going me there's I our and job now, That's XX%. have I'm been to Homecare to I – and up how to [ph] just a of happened, all way the again have but we lot is, are first there's right still and fantastic I showed a Chris think it. we [Covington] as just Despite cuts with get here, Chris eyes to bit recall, team, our about believe real really Probably Homebase. dream. fantastic a training that go. over Homebase in over deliver and Chris results can his who – still [indiscernible] a so as we well over as of under our done just going Homecare just able do and long talk team experts, have

Chris Gerard

little I'd bit on the productivity more say there's side. a

think that I we had some last nice year. improvement the over

I is think of going on opportunity working around more our our still improving be margin to the side and retention.

that we I help XX, in to our we're as noticed think opportunity, about markets increase on side. the We that to tight you the paraprofessional then had If $X.XX Slide due on and labor geographies. normalized. that mix. or costs, some back going that's margin get a the That's on contractor is mentioned, best specific And really in Paul

I right think bit still are have room the to on quite a that. in of but direction we improve We moving

Kevin Ellich

ones Scott, me. for he's I good quick taken last talked cash operating role, cash be on you growth then since for deals. that the guidance CFO charm any your over think year? you do how free think the midsized two or will it And then And add? who luck should we guess, for Paul, how I much Excellent. define and about midsized might

Paul Kusserow

First M&A Chris an idea on piece, that on. brought was the this forward

between $XX this $XX sole there And find and out working, And kind have that firms million range. of deals Hospice. million for so is to sourcing we us the specific are some

pipeline So, there. a we've nice got very

And there, deals so the looking at. are and working more complex. deals some There's those size big we're through so are out still that. we're They

other dig willing on such clean in a generated complex a we were midsized the we're again pipeline are for nice deal, valuations. got that deals good going which and look team done, but of novos. the if to we I towards these on the big to think effort de deals M&A has more have real got to some We've a get ones

to novo Home good assigning overlap be novos to there's the solely really be Health. novos, de to group. particularly will their de grow people lives going de out just where with devoted We're to expect We and be doing driving

Scott Ginn

million as flow, did this the ops, from On for there. rate $XX run million some good thinking is through development a probably quarter. cash came that $XX that from think about helpful. down, just DSO But I'm cash good it, in was we we There's flow a quarterly us. The through really so thinking range, from

thinking from ops $XXX you free down take out So, cash to if around takes million-ish million. you're cash there, probably flow down flow, Probably $XXX you what's range. about

I think where based that. our comfortable numbers, are current viewing we guidance that's that's on

Kevin Ellich

guys. Thanks

Operator

with question Matt comes your Please from next of Our the line Larew William Blair. proceed with question.

Matt Larew

us for Congrats to focus been care centers you'll on over could had also $X.X the of making. centers? in the EBITDA have underperformed Health improving your benchmark. the they progress few over of here Home wanted investments then the maybe us that line care with the areas the on the some and meaningful of you've balance I and QX about of I XX% year side of think made the last that quarters. detail update talked progress of you the you ask some tune about on what's million to you're And below on Chris, you underperforming just

So, could continue and side? the efforts the you care Home update then us Health the the on broader both on improvement underperforming of some centers to

Chris Gerard

Sure.

again, side, on investment we the street, call around, the as it's the really On there. it, out feet BD,

year. versus added XX reps throughout increase We this that have or year not the XX – in have last year-over-year incremental, we the quarter. QX We first incremental

we'll expect quarter around fourth out to in another the over level at XXX. XX the add We and XX next two quarters probably

more So the convert kind our accounts, call to asked on And investment more I'm us that's trajectory. opportunity that. those growth about for you hit care the underperforming referrals, centers, and referrals, the and glad of get on

QX a is and underperformers to had just not we is. on focus as XX XX size. QX peers graduated sequential performance. we based performing what a profitable, focused million related had but those of internal an what in their carried we We EBITDA reminder, they list. they're agency our to definition are $X.XX identified we basically off our on this. did that of underperformer So improvement of their is, mean and based not an those into We Doesn't of on

So, a nice first our initiative generated this quarter. year. That's this is us It results. new for

to on have line continue basically in to expect with everybody focus we our that until peers. We

Matt Larew

Okay, Advantage failure heart then, you And that. your had the in obviously, Paul, Medicare February And alluded related that published noted to thanks non-skilled a I you program. paper for opportunity. to

about or then market? pilot ask this together positioned any for you just data how more to put think programs So, broadly, publish evolving competitively wanted with are plans to additional either payors? potentially you had And you

Paul Kusserow

Yes, I'd believe Dave but it, an of going We to overview that on to at feel and MA. CMS this They it. let who's love Kemmerly, is part integral bit this, in a this. of I'd charge delighted that they looking be answer that expanding are it. about just talk this I'm can

we this. every figure monetize Dave's little us try we're a going on meat out this, know day think we're to hopeful. I don't enough but we're – if the how to to through to figure there's do going how to bones paperwork for out hang on to

So, Dave?

David Kemmerly

a is I whole I more There's business part care mean, this in place for our patients the don't chronic largest we for population. and include for of lot add. Personal the recognition We as the alone, our CMS, plans country, think of MA by of that I there's the announcement and opportunity Care best benefit. current in personal think to the line mean, a home. is care CMS the especially future for real payor think patient

partners, and our forward can if to quality and our care, ones to enrollees. we conversations others, our look their we So, current and care bring our personal MA our see with

of it. more So, CMS' We're guidance released fully we're more this, into to and throw to memorandums that looking couple released a some – see excited so we're I'll any But opportunity. through understand about back Paul. around digging it the certainly don't we downside and this. to

asked specialty you I about think our programs.

Paul Kusserow

a be encouraging place, for up a I our is what personal doing full and into going palliative. the Health menu it's I of got think we which going Personal can show to theme, – it is first in slate or care Care, people, that to of into Hospice people with the Home think full plays overall it's and why it's

that's think very important. I

is over the talk bit Sender, about specialty and her that can focus to Clinical turn our I'll what Chief there. Susan a On she side, Officer,

Susan Sender

thanks Sure, the absolutely, question. and for

In become that of as the our the very heart We been practices called relates another practice program do program, we've best failure standard it have with pleased terms to that. quality at those COPD has Amedisys. And here have outcomes hit. of

practices hit for standard our will seeing we to And forward. expect outcomes approximately best that We this of some our XX% summer. move become two these again, Those programs patients. as start practice later of

risk makes terms And reducing from so, layering patients' our on will where it touch-points for we in clinical a makes hospitalizations working perspective. best be in it sense, of that practices sense for one as those right where falls, of additional elderly that's we We're the now know patients. high

again, out. they But as these from them the practice we're we're clinical standard programs. quality specialized of excited become our So, we roll that about seeing

Matt Larew

Okay. all the Thanks for comments.

Operator

question comes RBC with Markets. next from question. the Capital your Please Frank line of proceed Morgan with Our

Frank Morgan

issue back mainly of margins, go it to margin your that on off obviously improvement, was looks to leveraging the G&A. like Wanted it generated

in of question of decline component as or margin was just say, you saw, you small would new talked that issues gross some acquisitions just how were that about? there you a margin, other look my was, have you that that at that when some these of impact that affected part an call the that, things but So, did curious, out was, I'm much

Scott Ginn

that mean, Health primarily the would around would decline cut, the XX about and area. in basis around I rate be be I which points around really anything everything is probably would mainly acquisitions net of Home say minimal. any the

because bit any impact kind year. in more staff a in back we add on But So, Hospice activity has growth did little would for this of say acquisition end up some been in order I prepared get to of minimal there. that the

Frank Morgan

profile, how we see actually is of that? it My will see think maybe this sounded the primary the the right Got one question of to it can that, like period about margin before clinical in you start think a can over that you. and process And actually some of what take how when opportunity getting long is, to that optimization was mix. areas long time we I improve

Scott Ginn

right I'll let certainly just important the is staff Chris for kind timeline, us. perspective, of so a but margin talk optimizing overall from

cost deck, If call and that earnings one, you got per our of visit look is kind at our spend. that in We've utilization overview reducing turnover. contract speaks to to some reduce opportunity

margin initiatives top in and the in We a growth. really cost these those XXXX. all achieved from can XXXX margin come biggest frankly built through. The We put margin where in. came We expansion just about line. run platform. is savings to late some there's Homebase rest we line We out decided Homecare So, other talked at gross our that expansion of

structure, now it you're operating structure, our seeing expected cost our be. we to where So,

So think top with opportunity EBITDA to see about expand as Chris within our talk opportunities from a And it's greatest about overall I'll line large growth move that's to clinicians. you leverage let I perspective. around now some continue margin gross that margin. timing forward,

Chris Gerard

bit some We're in PTA the utilization, incremental we're of more lines. improvements so incremental than already our those little utilization, but on both seeing a seeing LPN improvement on

So, right kind care the that like will visits assign that do kind at I schedulers of had the emphasize significant here, the of one going to kind gradually and really seem the to I Homebase. empower of to it our staffing care When structure show working of the we It's up level manner. scheduling Homecare initiative center are they got the margins kind really aspect in remodel so. right didn't just in to a on really around There's think center design starting internally. of we're is continue to

QX a that's initiative for So, us.

start we QX We of coming of that those done should have expect improvement and to fully in two kind see out metrics. we'll

Frank Morgan

we looking some anything market that is some what there novos? looking know to And profile you're is home color you're I asset saying, more for over after kind we the developments that that you. influences criteria your else want specific have this to market where of there, switching your a go? at get these de that what a healthcare novo ability your Got you go the but you're de we if about, screens, mentioned, are are of around maybe do to curious just at, talking could now

Chris Gerard

Obviously, doing of a just consuming. be CON I factors to time say, a and the going would is challenge are de some novo versus CON non-CON.

to is outside So do of We compelling across we create identify do the to we call utilize Home business. some looking again, those kind and Hospice, we have of where got lines kind of synergies not market, that and of creates the for score And that then is in fragmented a market really opportunity market be real for us we're share. a focus attractiveness some last particular if to have reason really have to Also environment. do data some what helps an up prioritize fragmented that seems created that. close can is the looking. so piece We a market, competitive where to that cobble Health us we're us we go and that how

Frank Morgan

topic it's variation of beyond to expansion one That's last there You are of category? case? higher don't there hop, that about that's know, or of part if it. clinical lower-waged spotty on is important there I'm workers, any sort don't clinical And markets. talked also regional, since the I maybe so it's an regional if any margin wage about that see? Okay. the know in that turnover turnover with categories, just is story, And the but pressure. much is subject you and turnover the I Thanks I'll just influences applies the guessing, and is that

Susan Sender

Paul This hard and earlier, greatest see operators turnover clinicians we improve. registered making we're, can nurses. things Paul a can perspective. at is lives category some obsessed among our identifying Chris others. where of we our clinical we among areas very happen. said, learned see to mentioned among And surveys of those turnover do Yes, few our turnover nurses sure geographic teams our pockets Probably We registered do recently Sender. easier. from higher quite number their we areas than that conducted working the a and have We've is of and that are Susan our a as like And with things make

Paul Kusserow

going achieve PTs, need we nurse take whoever turnover. that's a in then and so that right levers of tools the the The obviously know driving but programs of really the right do that Nobel drivers if really with we're that's So I quality. putting we're and nurses the productivity is, hard. cracks And we think four the it going still Prize. this. has things the to five or folks know will come. place place We win a that, with referrals can drive trying Susan key code to key this we're we of care is But these and and company we right clinicians all and the us in

to answers them. we there we're we think of moving So, have right implement quickly some the and

Operator

question next of Gillmor question. Our proceed comes Matthew your Baird. from with line the Please with

Matthew Gillmor

of the Purchasing and volumes sources your up curious educate and program, higher-quality you referrals you're so great more connects volumes referral obviously how pilot, STARs to you if the performance the the agencies. those revenue I get better able was contribution follow to Wanted back sort on to mentioned and CMS from and Value-Based if that from

Paul Kusserow

thing, the is at, determines look We you we other So, with. thing what think metric referrals key, live and everybody then and are when I lead quality one by. it's have referrals what one think how generated quality look the is discharge the at that to planners

so The other is ACH, one that's readmissions.

Susan focused, our sure focused we're a so competitors. And distinction lot drive are team of get below of we on way her points several and and making that any

have and well. done that's an we on we've that where area very focused So,

it does yes, correlate. So

have quality, you generally outsized generally then good have The high a other thing correlates generally have and leadership, also when profitability, particularly EBITDA. workforce, stable you is, have you you with it in

from contribution, of that's up, our it that better So, we see but variety that drives see margins. it volume, see scores our we to our we performance, that and drives it a growth, financial it, and us, drives better driving go factors when are

Matthew Gillmor

had number, a expect one you then of more I And share it go nurse turnover, was mean to on that That's terms target lower. obviously the with helpful. you if which was can curious you I XX%, I you us but it in And go ultimately. can said a think where is think great

Paul Kusserow

break the XX%. is employees don't for out, turnover we turnover, it XX%. is overall Company Actually, Company Overall but turnover full-time

The that and if But So, XX%. numbers, what and to we're we look are, in down. numbers and higher turnover turnover two we is drive using believe clinician nurse at XX% those than general, our don't XX%, those the not believe best, are every of five one in like the year. best leaving industry. still pretty I we need to we But better. close fact Company the that do people to the out that's

people think on. we're more and down what I we to working need that's lock

Matthew Gillmor

Thanks Okay. Paul.

Operator

Please of The Benchmark Our the your line with Sutherland Bill Company. next question. with proceed comes question from

William Sutherland

a thought I quite just the this impact notably I of up had I does noticed see the average couple length way? in guess that, economics about stay you point. what some guys and to in I wanted at Hospice, that and just

Paul Kusserow

Chris can talk it. about to you Yes,

Chris Gerard

a into kind not with know, like associated right risk as The stay up, We're as average is our is we What seeing you did and of sure were we from, the of hospitals, majority situation. of into care them dove referrals and typically lower if coming that length of that a you're relatively aware, you exposure we from at going of centers I'm which patients. now. coming run found length really stay kind our low were of were where stay looked cap length

out the focus we XX where of those we're like always days days out initiative on we as days, well. our but And referral I believe We an drove as cap economics, what XX see sources community is. to situation kind of average us coming of in agencies that's as place monitoring exposure to from our or at far XX up don't from the But XX an stay put length So, we're physicians. kind of balancing to XX to and rounding went today. it to

Scott Ginn

quarter, that's a remember, And up. for XX is the stay that We XX, were length number. of at discharge so yes,

through. of coming So, that's lower kind a number

Our average length on. is stay of are focused really actively what we

comfortable cap We Chris' point we around number. very to where issues, that haven't the And disclosed we're are.

William Sutherland

there ultimate is turnover. just made lot progress is a from attainable – What's kind here? clinical in of the And level think of curious, an Okay. you've you that

Paul Kusserow

get hard. we're Zero but try is what I goal there, think to to pretty our don't going we're is. going

love I'd give yes, again, I'm once So, are all XX%. but to and and I think I'd not they timeline, a to me, – going kill love ready

to to in a one of to, go be right we tough achieve get we our do to things think other the people I right and no in I and they think think the if want people and care right treat they if that way places that. that's this can really but we take believe business, there's I

William Sutherland

something you look that seen you you've as guys around in at that looked at? really territory And the good players

Paul Kusserow

some seen of the bigger, it Yes, which smaller, have highly invested more more we've players, mom-and-pop in sophisticated, we've very it. regional shops, seen

So size. we a know of it It's tough. in company rare can be it's our But done.

people be good, If just don't don't to people. I but a we then a work we have better. think again, come every I of company could think we're company. day, And very we're

some that, we think those and increase that these we'll and the on about if our a in those. talking through should doing executing you can how pull we're what we know recognize which us. and keep future, pushing we initiatives, people will things variety things I well And be of us on are, are those is, gravitational of with So, about all you be Susan talking be

William Sutherland

work. good challenge Thanks the We so huge all know a with shortage, it's nursing everybody.

Operator

of Please comes from of with question. Merrill the question proceed America Our Joanna next Gajuk Lynch. with your line Bank

Joanna Gajuk

a few So left. of have minutes A couple I follow-ups. I guess

maybe increased kind turnover that So your of but we about rates think your you on for see you year what of increases, say, year-over-year couple around level you year does areas kind of the when a of happening, and discussion some project compare wage terms in of of that this a wage I where and ago, it employees? to ago sort to, increases years how give guess

Scott Ginn

number, In about we guided X% increase guidance year-over-year. our wage to

Joanna Gajuk

Okay. last And over two, changed the three that years? has

Scott Ginn

same always consistent. employee we're And that's of we'll at. come where but where it at this care we're that's doesn't number, from a but year. looking mean, specific, looking by go center, to fairly that kind perspective been center at employee, be It's in through care and by guidance exactly I it's pretty for

Paul Kusserow

– we've doing this I consistently, what's that's for our very and been been caused employees. that's think Yes, so good

fact important. this, and their increase doing I every appreciate come think that's wages, they've think I the we're that we to year that

Joanna Gajuk

All labor inflation labor you maybe cost that right. employee because of about how you impact guess areas all-in think higher where And does for then cost, when some your Company? I sort there's talked about all-in turnover,

Paul Kusserow

the diligently. the and team Chris' think there where country very are working team in Susan's I selected out and are obviously areas operators

our a to we and of the think I this think spots anticipate spots So, those therefore, thing the down. in, good and in at mop-up to point because that labor there's we're with is resources I about And Company to we couple get were couple I think going where is out. going we're doing spots those of I and are dealing a aren't using – we're where dealing going going them our costs straighten just better we're to drive work numbers

things ago, spots, but in couple controllable. two So, better of the And there's we to Company we've yes, lot of feel years just a majority than a are well. always that things is less the really feel much We it's of where gotten for control were there a spots are example. where doing point very now there

Scott Ginn

[indiscernible] we our just told we and X% year-over-year opportunity look in X%, I we down so to at visit. and now on we totally guidance way cost you Joanna, just, have the X%, it, right per said clear, be to Yes,

As concerned. is mix to less more In we're in just getting have X% outer number because clinician we the opportunities right, reducing That's think the as to X% to increasing to the retention, productivity, salaries good why opportunities contractor use on number it will years, that costs, focused. Hopefully we in reduce see increase that. help we we offset about costs. a thinking an XXXX of kind continue are we sense how numbers have that, make we're But this to and about be us [indiscernible] from us. to focus better we'll talking that's will that believe

Joanna Gajuk

said so are terms pay that go you're the mid-sized in these acquisition, willing you're you guess that that color. not high willing considering? to lofty great you you but of on to multiples, acquisitions multiples be And would for It's how I paying Hospice these

Paul Kusserow

then we look look It it XXx. in the doable. We and up think we not depends We with a is But things. hope we is the very pencil lot can operators fair make we'd often best, best in us be prices do post below I arena. the are think good, of to said, there. synergies, out. it's on so hospice for like And always highest synergy, with that We the XXx of if kind zone. We go, we the really, as Hospice think things we're times, I if have,

And synergies more think of can most. we so, than generate I a lot

quality making issues that of advantage aren't But any that why out issues. gives also So, or that going we go there we a we that are and that's up. think to look earnings we get of an number, us synergy with maybe at spend lot to stung any time sure quality

big as hard. think we've novos, So, ones, Not to got to keep down. That's the will them a to on keeping the be on deal don't medium done it going going our but it pop out. getting we the on discipline just We're discipline, harder. de be And we're our going ones.

Joanna Gajuk

just a $XX.X the the I equity for was from full unconsolidated guess year I and guess it helpful. almost the modeling may squeeze That's question, And JVs line $X earnings was versus million million. one, if detailed last I positive

run per is million the line for So, good rate a $X quarter item? of the that kind year for

Scott Ginn

Joanna, that, added fair about a at gain investment $X.X Probably look per quarter. closer on million. to probably is our you If had in a run we about $XXX,XXX rate add-backs. We

Joanna Gajuk

Okay, Thank you Great. much. got Helpful. so it.

Operator

like end have and the Kusserow, remarks. the CEO, turn to reached for question-and-answer the Paul to and of session, Ladies back gentlemen, I would we call closing

Paul Kusserow

the will who and all would and also us our call today. who much, like everyone We of also continue interest appreciate very has Amedisys. look these call on joined all August. really employees on We great We on you hope thank would to and progress next Thank thanks our to a day your and Take everybody deliver in you to earnings care, I our forward in updating we on fantastic and our to out everybody. continue results. road

Operator

This conference. concludes today's

you at lines this your disconnect participation. time. your may You Thank for

Amedisys (AMED) 12 May 182018 Q1 Earnings call transcript