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Amedisys Reports Third Quarter Financial Results

BATON ROUGE, La., Nov. 03, 2016 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ:AMED), a leading home health and hospice company, today reported its financial results for the three and nine-month periods ended September 30, 2016.

Three-Month Periods Ended September 30, 2016 and 2015

  • Net service revenue increased $35.2 million to $361.6 million compared to $326.4 million in 2015.

  • Net income attributable to Amedisys, Inc. of $11.4 million compared to $8.4 million in 2015.

  • Net income attributable to Amedisys, Inc. per diluted share of $0.34 per diluted share compared to $0.25 in 2015.

Adjusted Results*

  • Adjusted net service revenue of $361.6 million compared to $326.4 million in 2015.

  • Adjusted net income attributable to Amedisys, Inc. of $12.1 million compared to $11.5 million in 2015.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.36 compared to $0.34 in 2015.

  • Adjusted EBITDA (defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization excluding certain items) of $25.6 million compared to $26.4 million in 2015.

Nine-Month Periods Ended September 30, 2016 and 2015

  • Net service revenue increased $129.0 million to $1,071.2 million compared to $942.2 million in 2015.

  • Net income attributable to Amedisys, Inc. of $28.3 million compared to $15.9 million net loss in 2015.

  • Net income attributable to Amedisys, Inc. per diluted share increased $1.32 to $0.84 compared to $0.48 net loss per diluted share in 2015.

Adjusted Results*

  • Adjusted net service revenue of $1,072.1 million compared to $942.2 million in 2015.

  • Adjusted net income attributable to Amedisys, Inc. of $37.2 million compared to $35.8 million in 2015.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $1.10 compared to $1.09 in 2015.

  • Adjusted EBITDA of $79.4 million compared to $84.4 million in 2015.

* See pages 10 and 11 for the reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am extremely proud of our organization for their dedication to delivering high-quality, low-cost care to our patients while the company continues to undergo a significant transition. Our employees delivered solid results across all three business segments. As outlined in our earnings preannouncement last week, we did encounter some challenges in home health volumes as well as increased health insurance and bad debt expenses. However, as of October 31, our last group of care centers is live on HomeCare HomeBase, an effort that involved training over 11,000 employees over the course of only 15 months. We are focused on continued growth and delivering on the operational efficiencies we have promised our shareholders. At the same time, we are actively pursuing opportunities to reinvest in our business and deploy capital toward accretive acquisitions. We are extremely excited about the opportunities in front of us as we continue to execute on our strategy.”

We urge caution in considering the current trends disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com. We disclaim any obligations to update disclosed information on trends.

Earnings Call and Webcast Information

To participate on the conference call, please call a few minutes before 11:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through December 3, 2016 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13648537.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Amedisys, Inc. (the “Company”) is headquartered in Baton Rouge, Louisiana and our common stock trades on the NASDAQ Global Select Market under the symbol “AMED”.

Additional information

Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. We also use our website to expedite public access to time-critical information regarding our company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investor Relations subpage of our website for important and time-critical information. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing Federal and State laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the home health industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to attract and retain qualified personnel, changes in payments and covered services due to the economic downturn and deficit spending by Federal and State governments, future cost containment initiatives undertaken by third-party payors, our access to financing due to the volatility and disruption of the capital and credit markets, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate and manage our information systems, our ability to comply with requirements stipulated in our corporate integrity agreement and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures as defined under SEC rules: (1) EBITDA, defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization; (2) adjusted EBITDA, defined as EBITDA excluding certain items; (3) adjusted net service revenue, defined as net service revenue excluding certain items; (4) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (5) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. In accordance with SEC rules, we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP. Management believes that these are useful gauges of our performance and are common measures used in our industry to assess relative financial performance among companies.

AMEDISYS, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED FINANCIAL STATEMENT DATA AND SUPPLEMENTAL INFORMATION
(Amounts in thousands, except share, per share data and statistical information)

Balance Sheet Information
September 30, 2016
December 31, 2015
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$ 8,915 $ 27,502
Patient accounts receivable, net of allowance for doubtful accounts of $16,710 and $16,526 162,500 125,010
Prepaid expenses 9,948 8,110
Other current assets 12,070 14,641
Total current assets 193,433 175,263
Property and equipment, net of accumulated depreciation of $144,055 and $141,793 42,960 42,695
Goodwill 284,552 261,663
Intangible assets, net of accumulated amortization of $27,180 and $25,386 47,249 44,047
Deferred income taxes 113,797 125,245
Other assets, net 39,741 32,802
Total assets$ 721,732 $ 681,715
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$ 33,088 $ 25,682
Payroll and employee benefits 78,754 72,546
Accrued expenses 65,112 71,965
Current portion of long-term obligations 5,220 5,000
Total current liabilities 182,174 175,193
Long-term obligations, less current portion 88,874 91,630
Other long-term obligations 4,306 4,456
Total liabilities 275,354 271,279
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding.
Common stock, $0.001 par value, 60,000,000 shares authorized; 35,195,655 and 34,786,966
shares issued; and 33,551,441 and 33,607,282 shares outstanding
35 35
Additional paid-in capital 531,112 504,290
Treasury stock at cost, 1,644,214 and 1,179,684 shares of common stock (46,253) (26,966)
Accumulated other comprehensive income 15 15
Retained earnings (39,462) (67,806)
Total Amedisys, Inc. stockholders’ equity 445,447 409,568
Noncontrolling interests 931 868
Total equity 446,378 410,436
Total liabilities and equity$ 721,732 $ 681,715


Statement of Operations Information (Unaudited)
For the Three-Month Periods
Ended September 30,

For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net service revenue$ 361,595 $ 326,450 $ 1,071,158 $ 942,174
Cost of service, excluding depreciation and amortization 212,124 186,772 620,466 533,432
General and administrative expenses:
Salaries and benefits 77,019 69,993 231,079 209,797
Non-cash compensation 4,750 3,060 12,556 7,637
Other 42,658 39,551 134,951 114,734
Provision for doubtful accounts 5,471 3,638 13,664 9,370
Depreciation and amortization 5,214 4,646 14,662 15,798
Asset impairment charge 2,075 77,268
Operating expenses 347,236 309,735 1,027,378 968,036
Operating income (loss) 14,359 16,715 43,780 (25,862)
Other income (expense):
Interest income 14 7 45 33
Interest expense (1,136) (4,936) (3,551) (9,778)
Equity in earnings from equity method investments 3,244 1,924 3,602 8,701
Miscellaneous, net 1,713 1,330 3,106 3,962
Total other income (expense), net 3,835 (1,675) 3,202 2,918
Income (loss) before income taxes 18,194 15,040 46,982 (22,944)
Income tax (expense) benefit (6,693) (6,465) (18,323) 7,560
Net income (loss) 11,501 8,575 28,659 (15,384)
Net income attributable to noncontrolling interests. (66) (135) (315) (548)
Net income (loss) attributable to Amedisys, Inc.$ 11,435 $ 8,440 $ 28,344 $ (15,932)
Basic earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common stockholders$ 0.34 $ 0.25 $ 0.86 $ (0.48)
Weighted average shares outstanding 33,309 33,128 33,142 32,957
Diluted earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common stockholders$ 0.34 $ 0.25 $ 0.84 $ (0.48)
Weighted average shares outstanding 33,823 33,631 33,699 32,957



Cash Flow and Days Revenue Outstanding, Net Information (Unaudited)
For the Three-Month Periods
Ended September 30,
For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net cash provided by operating activities$ 6,803 $ 30,704 $ 33,698 $ 87,741
Net cash used in investing activities (7,649) (8,037) (45,400) (19,859)
Net cash (used in) provided by financing activities (207) 1,183 (6,885) (18,863)
Net (decrease) increase in cash and cash equivalents (1,053) 23,850 (18,587) 49,019
Cash and cash equivalents at beginning of period 9,968 33,201 27,502 8,032
Cash and cash equivalents at end of period$ 8,915 $ 57,051 $ 8,915 $ 57,051
Days revenue outstanding, net (1) 40.0 33.1 40.0 33.1

(1) Our calculation of days revenue outstanding, net at September 30, 2016 and 2015 is derived by dividing our ending patient accounts receivable (i.e., net of estimated revenue adjustments and allowance for doubtful accounts) by our average daily net patient revenue for the three-month period ended September 30, 2016 and 2015, respectively.


Supplemental Information - Home Health

For the Three-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Medicare$ 203.9 $ 190.2
Non-Medicare 65.0 63.2
Net service revenue 268.9 253.4
Cost of service 162.4 150.0
Gross margin 106.5 103.4
Other operating expenses 77.4 70.0
Operating income$ 29.1 $ 33.4
Key Statistical Data:
Medicare:
Same Store Volume (1):
Revenue 1% 3%
Admissions 1% 4%
Recertifications (3%) 0%
Total (2):
Admissions 47,625 44,434
Recertifications 25,522 25,420
Completed episodes 71,948 67,288
Visits 1,266,780 1,208,853
Average revenue per completed episode (3)$ 2,841 $ 2,821
Visits per completed episode (4) 17.5 17.5
Non-Medicare:
Same Store Volume (1):
Revenue 4% 22%
Admissions (1%) 21%
Recertifications 1% 15%
Total (2):
Admissions 24,335 24,792
Recertifications 9,479 9,447
Visits 506,729 504,441
Total (2):
Cost per Visit$ 91.58 $ 87.54
Visits 1,773,509 1,713,294


For the Nine-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Medicare$ 619.2 $ 565.8
Non-Medicare 198.0 176.8
Net service revenue 817.2 742.6
Cost of service 483.6 431.0
Gross margin 333.6 311.6
Other operating expenses 230.5 204.0
Operating income$ 103.1 $ 107.6
Key Statistical Data:
Medicare:
Same Store Volume (1):
Revenue 3% 2%
Admissions 3% 2%
Recertifications 1% (2%)
Total (2):
Admissions 147,025 133,973
Recertifications 77,565 74,386
Completed episodes 218,007 200,301
Visits 3,893,568 3,580,751
Average revenue per completed episode (3)$ 2,835 $ 2,816
Visits per completed episode (4) 17.5 17.4
Non-Medicare:
Same Store Volume (1):
Revenue 12% 19%
Admissions. 4% 17%
Recertifications 11% 13%
Total (2):
Admissions 74,139 71,733
Recertifications 28,945 26,072
Visits 1,549,760 1,424,595
Total (2):
Cost per Visit$ 88.83 $ 86.10
Visits 5,443,328 5,005,346

(1) Same store Medicare and Non-Medicare revenue, admissions or recertifications growth (decline) is the percent increase (decrease) in our Medicare and Non-Medicare revenue, admissions or recertifications for the period as a percent of the Medicare and Non-Medicare revenue, admissions or recertifications of the prior period.
(2) Total includes acquisitions.
(3) Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care which includes the impact of sequestration.
(4) Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.


Supplemental Information - Hospice
For the Three-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Medicare$ 77.0 $ 68.6
Non-Medicare. 5.0 4.4
Net service revenue 82.0 73.0
Cost of service 41.9 36.8
Gross margin 40.1 36.2
Other operating expenses 19.3 16.9
Operating income$ 20.8 $ 19.3
Key Statistical Data:
Same Store Volume (1):
Medicare revenue 12% 17%
Non-Medicare revenue 14% 14%
Hospice admissions 16% 26%
Average daily census 14% 17%
Total (2):
Hospice admissions 5,751 4,962
Average daily census 6,087 5,346
Revenue per day, net$ 146.49 $ 148.47
Cost of service per day$ 74.77 $ 74.82
Average length of stay 92 92


For the Nine-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Medicare$ 217.0 $ 187.6
Non-Medicare 13.8 12.0
Net service revenue 230.8 199.6
Cost of service 120.1 102.4
Gross margin 110.7 97.2
Other operating expenses 55.6 48.2
Operating income$ 55.1 $ 49.0
Key Statistical Data:
Same Store Volume (1):
Medicare revenue 16% 10%
Non-Medicare revenue 15% 11%
Hospice admissions 18% 14%
Average daily census 17% 8%
Total (2):
Hospice admissions 16,757 14,239
Average daily census 5,776 4,947
Revenue per day, net$ 145.86 $ 147.79
Cost of service per day$ 75.89 $ 75.87
Average length of stay 94 90

(1) Same store Medicare and Non-Medicare revenue, Hospice admissions or average daily census growth (decline) is the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.
(2) Total includes acquisitions.


Supplemental Information - Corporate
For the Three-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Other operating expenses$ 32.7 $ 30.8
Depreciation and amortization 3.3 3.1
Total before impairment (1)$ 36.0 $ 33.9
For the Nine-Month Periods Ended September 30,
2016 2015
Financial Information (in millions):
Other operating expenses$106.4 $94.3
Depreciation and amortization 9.3 10.8
Total before impairment (1)$ 115.7 $ 105.1

(1) Total of $36.0 million on a GAAP basis for the three-month period ended September 30, 2015 (including $2.1 million asset impairment charge). Total of $182.4 million on a GAAP basis for the nine-month period ended September 30, 2015 (including $77.3 million asset impairment charge).


AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA:

For the Three-Month Periods
Ended September 30,
For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net income (loss) attributable to Amedisys, Inc.$ 11,435 $ 8,440 $ 28,344 $ (15,932)
Add:
Income tax expense (benefit) 6,693 6,465 18,323 (7,560)
Interest expense, net 1,122 4,929 3,506 9,745
Depreciation and amortization 5,214 4,646 14,662 15,798
EBITDA (1) (7) 24,464 24,480 64,835 2,051
Add:
Certain items (2) 1,158 5,100 14,560 85,567
Debt refinance costs (2) (3,212) (3,212)
Adjusted EBITDA (3) (7)$ 25,622 $ 26,368 $ 79,395 $ 84,406


Adjusted Net Service Revenue Reconciliation:

For the Three-Month Periods
Ended September 30,
For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net service revenue$ 361,595 $ 326,450 $ 1,071,158 $ 942,174
Add:
Certain items (2) 948
Adjusted net service revenue (4) (7) $ 361,595 $ 326,450 $ 1,072,106 $ 942,174


Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:

For the Three-Month Periods
Ended September 30,
For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net income (loss) attributable to Amedisys, Inc.$ 11,435 $ 8,440 $ 28,344 $ (15,932)
Add:
Certain items (2) 700 3,086 8,809 51,768
Adjusted net income attributable to Amedisys, Inc. (5) (7) $ 12,135 $ 11,526 $ 37,153 $ 35,836


Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:

For the Three-Month Periods
Ended September 30,
For the Nine-Month Periods
Ended September 30,
2016 2015 2016 2015
Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share.$ 0.34 $ 0.25 $ 0.84 $ (0.48)
Add:
Certain items (2) 0.02 0.09 0.26 1.57
Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (6) (7) $ 0.36 $ 0.34 $ 1.10 $ 1.09

(1) EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense, and depreciation and amortization.
(2) The following details the certain items for the three and nine-month periods ended September 30, 2016 and 2015:


For the Three-Month Period
Ended September 30, 2016

For the Nine-Month Period
Ended September 30, 2016
(Income) Expense
(Income) Expense
HCHB implementation$ 1,993 $ 7,025
Acquisition costs 467 2,509
Legal fees - non-routine 374 2,350
Legal settlements (1,242) (2,048)
Restructuring activity 1,965 5,669
Third party audit reserve 948
Disaster relief 338 338
Miscellaneous, other (income) expense, net (2,737) (2,231)
Total$ 1,158 $ 14,560
Net of tax 700 8,809
Diluted EPS 0.02 0.26


For the Three-Month Period
Ended September 30, 2015
For the Nine-Month Period
Ended September 30, 2015
(Income) Expense (Income) Expense
Wage and Hour litigation$ $ 8,000
HCHB implementation 2,048 2,048
Legal fees - non-routine 286 286
Legal settlements (1,014) (2,139)
Inventory and Data Security Reporting 2,121
Asset impairment 2,075 77,268
Restructuring activity. 56 2,735
Debt refinance costs 3,212 3,212
Miscellaneous, other (income) expense, net (1,563) (7,964)
Total$ 5,100 $ 85,567
Net of tax$ 3,086 $ 51,768
Diluted EPS$ 0.09 $ 1.57

(3) Adjusted EBITDA is defined as EBITDA, as defined in footnote 1, excluding certain items as described in footnote 2.
(4) Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 2.
(5) Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. excluding certain items as described in footnote 2.
(6) Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share excluding the earnings per share effect of certain items as described in footnote 2.
(7) EBITDA, adjusted EBITDA, adjusted net service revenue, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.


Contact: Investor Contact: Amedisys, Inc. David Castille Managing Director, Treasury/Finance (225) 299-3391 david.castille@amedisys.com Media Contact: Amedisys, Inc. Kendra Kimmons Managing Director, Marketing & Communications (225) 299-3720 kendra.kimmons@amedisys.com

Source:Amedisys, Inc.