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LHC Group Announces First Quarter 2015 Results

LAFAYETTE, La., May 6, 2015 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health, hospice and community-based and comprehensive post-acute healthcare services, today announced its financial results for the three months ended March 31, 2015.

First Quarter Highlights

  • Net service revenue for the first quarter of 2015 was $193.1 million, an increase of 18% compared with net service revenue of $163.7 million in the same period of 2014.
  • Net income attributable to LHC Group for the first quarter of 2015 was $6.8 million, or $0.39 per diluted share, an increase of 62.5% compared with net income attributable to LHC Group of $4.1 million, or $0.24 per diluted share, in the same period of 2014.
  • Organic growth in Home Health Medicare admissions for the first quarter of 2015 was 6.5% compared to the first quarter of 2014.
  • The Company is raising its FY 2015 guidance for net service revenue to a range of $765 million to $780 million and revising its fully diluted earnings per share to a range of $1.55 to $1.70.

Commenting on the results, Keith G. Myers, LHC Group's chairman and CEO, said, "I am extremely proud of the strong and well-balanced operating results our team delivered during the first quarter. I am particularly pleased with our ability to once again achieve a solid organic growth rate in home health Medicare admissions of 6.5% compared with the first quarter of 2014. I would like to congratulate and thank our nearly 10,000 team members for their unwavering commitment to excellence and for consistently delivering high-quality care to the growing number of patients, families and communities we serve."

FY 2015 Guidance

The Company is raising its full year 2015 guidance issued on February 25, 2015, for net service revenue in the range of $755 million to $775 million to a new range of $765 million to $780 million. In addition, the Company is revising its fully diluted earnings per share in the range of $1.50 to $1.70 by raising the lower end and establishing a new range of $1.55 to $1.70. This guidance does not take into account the impact of future reimbursement changes, if any, future acquisitions or share repurchases, 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 7, 2015, at 11:00 a.m. Eastern time to discuss its first quarter 2015 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 Wednesday, May 13, 2015, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 27216865. 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 after the conclusion of the live broadcast.

About LHC Group, Inc.

LHC Group, Inc. is a national provider of post-acute healthcare services, providing quality, cost-effective healthcare to patients 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 and community-based services and provides inpatient care through long-term acute care hospitals.

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, 2014, 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,
2015
Dec. 31,
2014
ASSETS
Current assets:
Cash $ 4,041 $ 531
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $20,985 and $18,582, respectively 98,041 97,498
Other receivables 2,523 1,334
Amounts due from governmental entities 978 1,164
Total receivables, net 101,542 99,996
Deferred income taxes 12,713 11,381
Prepaid income taxes 615 3,093
Prepaid expenses 10,477 8,724
Other current assets 4,597 3,777
Receivable due from insurance carrier -- 7,850
Total current assets 133,985 135,352
Property, building and equipment, net of accumulated depreciation of $45,784 and $44,683, respectively 35,309 34,787
Goodwill 240,294 240,019
Intangible assets, net of accumulated amortization of $7,124 and $6,560, respectively 79,504 79,685
Other assets 1,872 1,896
Total assets $ 490,964 $ 491,739
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities $ 20,301 $ 19,278
Salaries, wages and benefits payable 30,711 22,466
Self-insurance reserve 7,923 6,559
Current portion of long-term debt 233 230
Amounts due to governmental entities 5,382 4,459
Legal settlement payable -- 7,850
Total current liabilities 64,550 60,842
Deferred income taxes 34,741 33,592
Income tax payable 3,415 3,415
Revolving credit facility 47,000 60,000
Long-term debt, less current portion 719 778
Total liabilities 150,425 158,627
Noncontrolling interest – redeemable 11,297 11,517
Stockholders' equity:
Common stock – $0.01 par value: 40,000,000 shares authorized; 22,168,703 and 22,015,211 shares issued in 2015 and 2014, respectively 222 220
Treasury stock – 4,767,570 and 4,734,363 shares at cost, respectively (36,782) (35,660)
Additional paid-in capital 110,549 108,708
Retained earnings 252,176 245,371
Total LHC Group, Inc. stockholders' equity 326,165 318,639
Noncontrolling interest – non-redeemable 3,077 2,956
Total stockholders' equity 329,242 321,595
Total liabilities and stockholders' equity $ 490,964 $ 491,739

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,
2015 2014
Net service revenue $ 193,079 $ 163,681
Cost of service revenue 114,426 97,334
Gross margin 78,653 66,347
Provision for bad debts 5,259 3,362
General and administrative expenses 59,298 54,579
Operating income 14,096 8,406
Interest expense (545) (388)
Income before income taxes and noncontrolling interest 13,551 8,018
Income tax expense 4,729 2,923
Net income 8,822 5,095
Less net income attributable to noncontrolling interests 2,017 1,027
Net income attributable to LHC Group, Inc.'s common stockholders $ 6,805 $ 4,068
Earnings per share – basic and diluted:
Net income attributable to LHC Group, Inc.'s common stockholders $ 0.39 $ 0.24
Weighted average shares outstanding:
Basic 17,322,791 17,148,043
Diluted 17,489,483 17,268,716

LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three Months Ended
March 31,
2015 2014
Operating activities
Net income $ 8,822 $ 5,095
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 2,716 2,125
Provision for bad debts 5,259 3,362
Stock-based compensation expense 991 1,048
Deferred income taxes (183) 395
Impairment of intangibles and other 79 --
Loss on disposal of assets 284 --
Changes in operating assets and liabilities, net of acquisitions:
Receivables (7,026) 956
Prepaid expenses and other assets (2,549) (39)
Prepaid income taxes 2,478 248
Accounts payable and accrued expenses 10,624 (6,428)
Net amounts due to/from governmental entities 1,109 (659)
Net cash provided by operating activities 22,604 6,103
Investing activities
Purchases of property, building and equipment (2,958) (1,520)
Cash paid for acquisitions, primarily goodwill and intangible assets (567) (61,159)
Net cash (used in) investing activities (3,525) (62,679)
Financing activities
Proceeds from line of credit -- 60,000
Payments on line of credit (13,000) (12,000)
Proceeds from employee stock purchase plan 210 184
Payments on debt (57) (37)
Noncontrolling interest distributions (2,242) (1,768)
Excess tax benefits from vesting of stock awards 642 112
Redemption of treasury shares (1,122) (727)
Sale of noncontrolling interest -- 193
Net cash provided by (used in) financing activities (15,569) 45,957
Change in cash 3,510 (10,619)
Cash at beginning of period 531 14,014
Cash at end of period $ 4,041 $ 3,395
Supplemental disclosures of cash flow information
Interest paid $ 447 $ 370
Income taxes paid $ 1,787 $ 2,413

LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
Three Months Ended March 31, 2015
Home-
Based Services
Community-
Based Services
Hospice
Services
Facility-Based
Services

Total
Net service revenue $ 146,592 $ 9,773 $ 16,851 $ 19,863 $ 193,079
Cost of service revenue 85,546 6,900 10,099 11,881 114,426
Provision for bad debts 4,476 180 347 256 5,259
General and administrative expenses 46,454 2,217 4,888 5,739 59,298
Operating income 10,116 476 1,517 1,987 14,096
Interest expense (430) (6) (60) (49) (545)
Income before income taxes and noncontrolling interest 9,686 470 1,457 1,938 13,551
Income tax expense 3,657 45 620 407 4,729
Net income 6,029 425 837 1,531 8,822
Less net income attributable to noncontrolling interests 1,521 (20) 246 270 2,017
Net income attributable to LHC Group, Inc.'s common stockholders $ 4,508 $ 445 $ 591 $ 1,261 $ 6,805
Total assets $ 385,653 $ 32,971 $ 34,019 $ 38,321 $ 490,964

Three Months Ended March 31, 2014
Home-
Based Services
Community-
Based Services
Hospice
Services
Facility-Based
Services

Total
Net service revenue $ 127,793 $ 887 $ 15,222 $ 19,779 $ 163,681
Cost of service revenue 75,800 644 8,897 11,993 97,334
Provision for bad debts 2,623 31 105 603 3,362
General and administrative expenses 44,194 323 4,444 5,618 54,579
Operating income (loss) 5,176 (111) 1,776 1,565 8,406
Interest expense (307) (3) (39) (39) (388)
Income (loss) before income taxes and noncontrolling interest 4,869 (114) 1,737 1,526 8,018
Income tax expense 2,270 23 346 284 2,923
Net income (loss) 2,599 (137) 1,391 1,242 5,095
Less net income attributable to noncontrolling interest 607 -- 201 219 1,027
Net income (loss) attributable to LHC Group, Inc.'s common stockholders $ 1,992 $ (137) $ 1,190 $ 1,023 $ 4,068
Total assets $ 400,911 $ 1,544 $ 28,919 $ 36,726 $ 468,100

LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(Unaudited)
Three Months Ended
March 31,
2015 2014
Key Data:
Home-Based Services:
Home Health
Locations 272 267
Acquired 1 2
De novo 2 1
Divested/Consolidated 3 2
Total new admissions 35,965 30,913
Medicare new admissions 24,875 21,141
Average daily census 36,450 32,988
Average Medicare daily census 27,235 24,938
Medicare completed and billed episodes 46,684 42,375
Average Medicare case mix for completed and billed Medicare episodes 0.97 0.98
Average reimbursement per completed and billed Medicare episodes $ 2,435 $ 2,360
Total visits 990,135 907,446
Total Medicare visits 741,850 681,523
Average visits per completed and billed Medicare episodes 15.9 16.1
Organic growth:(1)
Net revenue 4.5% -5.1%
Net Medicare revenue 2.9% -5.4%
Total new admissions 6.2% -6.9%
Medicare new admissions 6.5% -7.9%
Average daily census 0.8% -11.5%
Average Medicare daily census (0.5)% -11.6%
Medicare completed and billed episodes 0.3% -3.7%
Community-Based Services:
Locations 14 8
Acquired 1 0
De novo 0 0
Divested/Consolidated 0 0
Average daily census 1,262 461
Billable hours 294,016 41,064
Revenue per billable hour $ 33.24 $ 21.58
Hospice-Based Services:
Locations 38 33
Acquired 0 1
De novo 0 0
Divested/Consolidated 0 1
Admissions 1,481 1,232
Average daily census 1,357 1,223
Patient days 122,179 110,043
Average revenue per patient day $ 138 $ 138
Facility-Based Services:
Long-term Acute Care
Locations 8 8
Patient days 16,162 16,462
Average revenue per patient day $ 1,187 $ 1,154
(1) Organic growth is calculated as the sum of same store plus de novo for the period divided by total from the same period in the prior year.

CONTACT: Eric Elliott Investor Relations (337) 233-1307 eric.elliott@lhcgroup.com

Source:LHC Group