Amedisys Reports Fourth Quarter and Year End 2017 Financial Results

BATON ROUGE, La., Feb. 27, 2018 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ:AMED) today reported its financial results for the three month period and year ended December 31, 2017.

Three Month Periods Ended December 31, 2017 and 2016

  • Net service revenue increased $37.9 million to $404.2 million compared to $366.3 million in 2016.

  • Net loss attributable to Amedisys, Inc. of $3.8 million which is inclusive of a $21.4 million reduction in net income as a result of the enactment of H.R. 1 (Tax Cuts and Jobs Act), compared to net income attributable to Amedisys, Inc. of $8.9 million in 2016.

  • Net loss attributable to Amedisys, Inc. per diluted share of $0.11 compared to net income attributable to Amedisys, Inc. of $0.26 in 2016.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $37.1 million compared to $30.5 million in 2016.

  • Adjusted net service revenue of $404.2 million compared to $365.1 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. of $19.4 million compared to $15.0 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.56 compared to $0.44 in 2016.

Years Ended December 31, 2017 and 2016

  • Net service revenue increased $96.2 million to $1,533.7 million compared to $1,437.4 million in 2016.

  • Net income attributable to Amedisys, Inc. of $30.3 million which is inclusive of a $21.4 million reduction in net income as a result of the enactment of H.R. 1 (Tax Cuts and Jobs Act), compared to $37.3 million in 2016.

  • Net income attributable to Amedisys, Inc. per diluted share of $0.88 compared to $1.10 in 2016.

Adjusted Year End Results*

  • Adjusted EBITDA of $142.2 million compared to $109.9 million in 2016.

  • Adjusted net service revenue of $1,540.2 million compared to $1,437.3 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. of $75.9 million compared to $52.2 million in 2016.

  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $2.21 compared to $1.55 in 2016.

* See pages 12 and 13 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am extremely pleased with the results that our team delivered during the fourth quarter and in 2017. We demonstrated solid growth across all three line of business, continued to improve our position as an industry leader in clinical quality and realized the efficiencies that we promised to our stakeholders in early 2016; all of which helped deliver significant increases in revenue, EBITDA and earnings per share. Entering 2018, we remain focused on our four strategic areas of focus: clinical distinction, employer of choice, operational efficiency and driving growth. As a result of our efforts in the last few years, we have a strong balance sheet and will look to deploy capital to expand our businesses and continue our dedication to deliver value to our patients, referral sources, and, ultimately, our shareholders.”

2018 Guidance

  • Net service revenue is anticipated to be in the range of $1.60 billion to $1.64 billion.

  • Adjusted EBITDA is anticipated to be in the range of $158 million to $163 million.

  • Adjusted diluted earnings per share is anticipated to be in the range of $2.97 to $3.08 based on an estimated 34.85 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made.

We urge caution in considering the current trends and 2018 guidance disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends and guidance 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, 2017, 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.

Earnings Call and Webcast Information

Amedisys will host a conference call on Wednesday, February 28, 2018, at 12:00 p.m. ET to discuss its fourth quarter and year end results. To participate on the conference call, please call before 12:00 p.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through March 28, 2018 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13676051.

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.

Non-GAAP Financial Measures

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measures as defined under SEC rules are as follows: (1) 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; (2) adjusted net service revenue, defined as net service revenue excluding certain items; (3) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (4) 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. Management believes that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, are useful gauges of our current performance and are also included in internal management reporting. These non-GAAP financial measures should be considered in addition to, and not more meaningful than or as an alternative to the GAAP financial measures presented in this earnings release and the company’s financial statements. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

Additional information

Amedisys, Inc. (the “Company”) is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 3,000 hospitals and 59,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With 17,900 employees, in 421 care centers in 34 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 369,000 patients in need every year. For more information about the Company, please visit: www.amedisys.com.

We use our website as a channel of distribution for important company information. Important information, including press releases, investor 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. 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 healthcare industry, our ability to integrate our personal care segment into our business efficiently, 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 by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, 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, manage and keep our information systems secure, 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.

Contact:Investor Contact:Media Contact:
Amedisys, Inc.Amedisys, Inc.
David CastilleKendra Kimmons
Managing Director, Treasury/FinanceVice President, Marketing & Communications
(855) 259-2046(225) 299-3720
IR@amedisys.comkendra.kimmons@amedisys.com

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)

For the Three Month Period
Ended December 31,

For the Year Ended
December 31,

2017
2016
2017
2016
(Unaudited)
Net service revenue$ 404,238 $ 366,296 $ 1,533,680 $ 1,437,454
Cost of service, excluding depreciation and amortization 238,534 212,589 900,726 833,055
General and administrative expenses:
Salaries and benefits 79,406 75,902 305,938 306,981
Non-cash compensation 4,507 3,845 16,295 16,401
Other 39,757 45,097 159,980 180,048
Provision for doubtful accounts 6,981 5,855 25,059 19,519
Depreciation and amortization 3,984 5,016 17,123 19,678
Asset impairment charge 1,323 4,432 1,323 4,432
Securities Class Action Lawsuit settlement, net 28,712
Operating expenses 374,492 352,736 1,455,156 1,380,114
Operating income 29,746 13,560 78,524 57,340
Other income (expense):
Interest income 54 30 158 75
Interest expense (1,431 ) (1,613 ) (5,031 ) (5,164 )
Equity in earnings from equity method investments 232 1,986 3,381 5,588
Miscellaneous, net 487 621 3,769 3,727
Total other income (expense), net (658 ) 1,024 2,277 4,226
Income before income taxes 29,088 14,584 80,801 61,566
Income tax expense (32,794 ) (5,612 ) (50,118 ) (23,935 )
Net income (loss) (3,706 ) 8,972 30,683 37,631
Net income attributable to noncontrolling interests (142 ) (55 ) (382 ) (370 )
Net income (loss) attributable to Amedisys, Inc.$ (3,848 )$ 8,917 $ 30,301 $ 37,261
Basic earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common
stockholders
$ (0.11 )$ 0.27 $ 0.90 $ 1.12
Weighted average shares outstanding 33,898 33,365 33,704 33,198
Diluted earnings per common share:
Net income (loss) attributable to Amedisys, Inc. common
stockholders
$ (0.11 )$ 0.26 $ 0.88 $ 1.10
Weighted average shares outstanding 33,898 33,866 34,304 33,741


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except share data)

December 31, 2017
December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents$ 86,363 $ 30,197
Patient accounts receivable, net of allowance for doubtful accounts of $20,866 and
$17,716
201,196 166,056
Prepaid expenses 7,329 7,397
Other current assets 16,268 11,260
Total current assets 311,156 214,910
Property and equipment, net of accumulated depreciation of $146,814 and $138,650 31,122 36,999
Goodwill 319,949 288,957
Intangible assets, net of accumulated amortization of $30,610 and $27,864 46,061 46,755
Deferred income taxes 56,064 107,940
Other assets, net 49,130 38,468
Total assets$ 813,482 $ 734,029
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$ 25,384 $ 30,358
Payroll and employee benefits 89,936 82,480
Accrued expenses 89,104 63,290
Current portion of long-term obligations 10,638 5,220
Total current liabilities 215,062 181,348
Long-term obligations, less current portion 78,203 87,809
Other long-term obligations 3,791 3,730
Total liabilities 297,056 272,887
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or
outstanding
Common stock, $0.001 par value, 60,000,000 shares authorized; 35,747,134 and
35,253,577 shares issued; and 33,964,767 and 33,597,215 shares outstanding
35 35
Additional paid-in capital 568,780 537,472
Treasury stock at cost, 1,782,367 and 1,656,362 shares of common stock (53,713 ) (46,774 )
Accumulated other comprehensive income 15 15
Retained earnings (deficit) 204 (30,545 )
Total Amedisys, Inc. stockholders’ equity 515,321 460,203
Noncontrolling interests 1,105 939
Total equity 516,426 461,142
Total liabilities and equity$ 813,482 $ 734,029


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING, NET
(Amounts in thousands, except statistical information)

For the Three Month Period
Ended December 31,

For the Year Ended
December 31,

2017 2016 2017 2016
(Unaudited)
Cash Flows from Operating Activities:
Net income (loss)$ (3,706 ) $ 8,972 $ 30,683 $ 37,631
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization 3,984 5,016 17,123 19,678
Provision for doubtful accounts 6,981 5,855 25,059 19,519
Non-cash compensation 4,507 3,845 16,295 16,401
401(k) employer match 2,207 1,741 8,754 6,875
Write-off of investment 196 196
Loss on disposal of property and equipment 22 26 582
Deferred income taxes 34,950 5,858 52,178 24,547
Equity in earnings from equity method investments (232 ) (1,986 ) (3,381 ) (5,588 )
Amortization of deferred debt issuance costs 180 185 735 740
Return on equity investment 665 2,410 5,321 4,323
Asset impairment charge 1,323 4,432 1,323 4,432
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable (30,807 ) (9,412 ) (59,731 ) (55,519 )
Other current assets 956 3,361 (4,940 ) 4,231
Other assets (547 ) 494 (12,749 ) (11,415 )
Accounts payable 2,587 (3,338 ) (2,843 ) 3,970
Accrued expenses 9,259 1,482 31,843 (7,618 )
Other long-term obligations (140 ) (576 ) 61 (726 )
Net cash provided by operating activities 32,189 28,561 105,731 62,259
Cash Flows from Investing Activities:
Proceeds from sale of deferred compensation plan assets 622 230
Proceeds from sale of property and equipment 131 249
Purchases of property and equipment (1,633 ) (2,215 ) (10,707 ) (15,717 )
Purchase of investments (40 ) (290 ) (476 ) (1,040 )
Acquisitions of businesses, net of cash acquired (9,587 ) (4,144 ) (33,715 ) (35,522 )
Net cash used in investing activities (11,129 ) (6,649 ) (44,027 ) (52,049 )
Cash Flows from Financing Activities:
Proceeds from issuance of stock upon exercise of stock options and warrants 340 4,554
Proceeds from issuance of stock to employee stock purchase plan 584 665 2,382 2,483
Shares withheld upon stock vesting (485 ) (6,939 )
Tax benefit from stock options exercised and restricted stock vesting 7,241
Non-controlling interest distribution (45 ) (216 ) (329 )
Proceeds from revolving line of credit 6,000 134,500
Repayments of revolving line of credit (6,000 ) (134,500 )
Principal payments of long-term obligations (1,250 ) (1,250 ) (5,319 ) (5,000 )
Purchase of company stock (12,315 )
Assets contributed to equity investment 405
Net cash used in financing activities (811 ) (630 ) (5,538 ) (7,515 )
Net increase in cash and cash equivalents 20,249 21,282 56,166 2,695
Cash and cash equivalents at beginning of period 66,114 8,915 30,197 27,502
Cash and cash equivalents at end of period$ 86,363 $ 30,197 $ 86,363 $ 30,197
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest$ 509 $ 621 $ 2,697 $ 2,897
Cash paid for income taxes, net of refunds received$ $ (3 ) $ 315 $ 755
Days revenue outstanding, net (1) 44.0 40.2 44.0 40.2

(1) Our calculation of days revenue outstanding, net at December 31, 2017 and 2016 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 periods ended December 31, 2017 and 2016, respectively.


AMEDISYS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION
(Amounts in millions, except statistical information)
(Unaudited)

Segment Information - Home Health

For the Three Month Period Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ 205.0 $ 203.2
Non-Medicare 82.3 65.1
Net service revenue 287.3 268.3
Cost of service 174.9 160.1
Gross margin 112.4 108.2
Provision for doubtful accounts 5.4 3.1
Asset impairment charge 1.3
Other operating expenses 71.3 69.6
Operating income$ 34.4 $ 35.5
Same Store Growth (1):
Medicare revenue 2 % (1 %)
Non-Medicare revenue 26 % (2 %)
Medicare admissions (2 %) 2 %
Total Episodic admissions 2 % 4 %
Total Episodic volume 5 % 3 %
Total admissions 3 % - %
Key Statistical Data - Total (2):
Medicare:
Admissions 46,421 47,637
Recertifications 27,896 25,628
Total volume 74,317 73,265
Completed episodes 73,037 71,855
Visits 1,273,435 1,230,434
Average revenue per completed episode (3)$ 2,858 $ 2,851
Visits per completed episode (4) 17.6 17.2
Non-Medicare:
Admissions 27,421 24,309
Recertifications 12,415 9,673
Visits 619,745 501,215
Total (2):
Visiting Clinician Cost per Visit$ 83.88 $ 83.46
Clinical Manager Cost per Visit$ 8.49 $ 9.01
Total Cost per Visit$ 92.37 $ 92.47
Visits 1,893,180 1,731,649


For the Year Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ 793.3 $ 822.4
Non-Medicare 308.5 263.1
Net service revenue 1,101.8 1,085.5
Cost of service 670.9 643.7
Gross margin 430.9 441.8
Provision for doubtful accounts 17.9 13.8
Asset impairment charge 1.3
Other operating expenses 281.9 289.4
Operating income$ 129.8 $ 138.6
Same Store Growth (1):
Medicare revenue (4 %) 2 %
Non-Medicare revenue 17 % 8 %
Medicare admissions (2 %) 3 %
Total Episodic admissions 1 % 4 %
Total Episodic volume 3 % 3 %
Total admissions 2 % 2 %
Key Statistical Data - Total (2):
Medicare:
Admissions 190,132 194,662
Recertifications 106,774 103,193
Total volume 296,906 297,855
Completed episodes 290,227 289,862
Visits 5,067,436 5,124,002
Average revenue per completed episode (3)$ 2,823 $ 2,839
Visits per completed episode (4) 17.3 17.5
Non-Medicare:
Admissions 107,665 98,448
Recertifications 46,364 38,618
Visits 2,347,363 2,050,975
Total (2):
Visiting Clinician Cost per Visit$ 82.04 $ 81.18
Clinical Manager Cost per Visit$ 8.44 $ 8.53
Total Cost per Visit$ 90.48 $ 89.71
Visits 7,414,799 7,174,977

(1) Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, admissions or volume for the period as a percent of the Medicare and Non-Medicare revenue, admissions or volume 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.
(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.


Segment Information - Hospice

For the Three Month Period Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ 92.7 $ 80.7
Non-Medicare 5.5 4.5
Net service revenue 98.2 85.2
Cost of service 49.9 43.0
Gross margin 48.3 42.2
Provision for doubtful accounts 1.0 2.7
Other operating expenses 20.8 18.7
Operating income$ 26.5 $ 20.8
Same Store Growth (1):
Medicare revenue 14 % 14 %
Non-Medicare revenue 20 % (7 %)
Hospice admissions 8 % 16 %
Average daily census 12 % 13 %
Key Statistical Data - Total (2):
Hospice admissions 6,371 5,769
Average daily census 7,162 6,318
Revenue per day, net$ 149.12 $ 146.56
Cost of service per day$ 75.74 $ 73.91
Average discharge length of stay 96 99
For the Year Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ 350.7 $ 297.7
Non-Medicare 20.3 18.3
Net service revenue 371.0 316.0
Cost of service 184.8 163.1
Gross margin 186.2 152.9
Provision for doubtful accounts 5.9 5.5
Other operating expenses 77.5 71.5
Operating income$ 102.8 $ 75.9
Same Store Growth (1):
Medicare revenue 17 % 15 %
Non-Medicare revenue 10 % 9 %
Hospice admissions 11 % 17 %
Average daily census 15 % 16 %
Key Statistical Data -Total (2):
Hospice admissions 25,381 22,526
Average daily census 6,820 5,912
Revenue per day, net$ 149.04 $ 146.05
Cost of service per day$ 74.25 $ 75.36
Average discharge length of stay 93 96

(1) Same store information represents 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.


Segment Information - Personal Care

For the Three Month Period Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ $
Non-Medicare 18.7 12.7
Net service revenue 18.7 12.7
Cost of service 13.7 9.5
Gross margin 5.0 3.2
Provision for doubtful accounts 0.6 0.1
Other operating expenses 4.4 2.8
Operating income$ 0.0 $ 0.3
Key Statistical Data:
Billable hours 782,140 548,703
Clients served 12,693 7,392
Shifts 365,360 245,535
Revenue per hour$ 23.94 $ 23.16
Revenue per shift$ 51.26 $ 51.75
Hours per shift 2.1 2.2
For the Year Ended December 31,
2017 2016
Financial Information (in millions):
Medicare$ $
Non-Medicare 60.9 35.9
Net service revenue 60.9 35.9
Cost of service 45.0 26.3
Gross margin 15.9 9.6
Provision for doubtful accounts 1.3 0.2
Other operating expenses 13.8 7.9
Operating income$ 0.8 $ 1.5
Key Statistical Data:
Billable hours 2,604,794 1,539,093
Clients served 16,826 10,219
Shifts 1,195,511 696,956
Revenue per hour$ 23.37 $ 23.32
Revenue per shift$ 50.92 $ 51.49
Hours per shift 2.2 2.2


Segment Information - Corporate

For the Three Month Period Ended December 31,
2017 2016
Financial Information (in millions):
Other operating expenses$ 28.3 $ 35.5
Depreciation and amortization 2.9 3.1
Total operating expenses before asset impairment charge 31.2 38.6
Asset impairment charge 4.4
Total operating expenses$ 31.2 $ 43.0
For the Year Ended December 31,
2017 2016
Financial Information (in millions):
Other operating expenses$ 113.7 $ 141.9
Depreciation and amortization 12.5 12.4
Total operating expenses before asset impairment charge and Securities
Class Action Lawsuit settlement, net
126.2 154.3
Asset impairment charge 4.4
Securities Class Action Lawsuit settlement, net 28.7
Total operating expenses$ 154.9 $ 158.7


AMEDISYS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
(Amounts in thousands)
(Unaudited)

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

For the Three Month Period
Ended December 31,
For the Year Ended December 31,
2017 2016 2017
2016
Net income (loss) attributable to Amedisys, Inc.$ (3,848 ) $ 8,917 $ 30,301 $ 37,261
Add:
Income tax expense 32,794 5,612 50,118 23,935
Interest expense, net 1,377 1,583 4,873 5,089
Depreciation and amortization 3,984 5,016 17,123 19,678
Certain items (1) 24,414 9,999 61,429 24,559
Interest component of certain items (1) (168 ) (625 ) (263 ) (625 )
Tax component of certain items (1) (21,424 ) (21,424 )
Adjusted EBITDA (2) (6)$ 37,129 $ 30,502 $ 142,157 $ 109,897

Adjusted Net Service Revenue Reconciliation:

For the Three Month Period
Ended December 31,

For the Year Ended December 31,
2017 2016 2017 2016
Net service revenue$ 404,238 $ 366,296 $ 1,533,680 $ 1,437,454
Add:
Certain items (1) (1,149 ) 6,506 (201 )
Adjusted net service revenue (3) (6)$ 404,238 $ 365,147 $ 1,540,186 $ 1,437,253

Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:

For the Three Month Period
Ended December 31,
For the Year Ended December 31,
2017 2016 2017 2016
Net income (loss) attributable to Amedisys, Inc.$ (3,848 ) $ 8,917 $ 30,301 $ 37,261
Add:
Certain items (1) 23,233 6,114 45,627 14,923
Adjusted net income attributable to Amedisys, Inc. (4) (6)$ 19,385 $ 15,031 $ 75,928 $ 52,184

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

For the Three Month Period
Ended December 31,
For the Year Ended December 31,
2017 2016 2017 2016
Net income (loss) attributable to Amedisys, Inc. common
stockholders per diluted share
$ (0.11 ) $ 0.26 $ 0.88 $ 1.10
Add:
Certain items (1) 0.67 0.18 1.33 0.44
Adjusted net income attributable to Amedisys, Inc. common
stockholders per diluted share (5) (6)
$ 0.56 $ 0.44 $ 2.21 $ 1.55

(1) The following details the certain items for the three month periods and years ended December 31, 2017 and 2016:


Certain Items:

For the Three Month Period
Ended December 31, 2017
For the Year Ended
December 31, 2017

(Income) Expense (Income) Expense
Certain Items Impacting Net Service Revenue:
Florida ZPIC audit$ $ 6,506
Certain Items Impacting Operating Expenses:
Acquisition costs 48 1,025
Legal fees - non-routine 358 1,768
Securities Class Action Lawsuit settlement, net 28,712
Restructuring activity 648 2,318
Data center relocation 940
Asset impairment 1,323 1,323
Certain Items Impacting Total Other Income (Expense):
Legal settlements (2,014 )
Miscellaneous, other (income) expense, net 613 (573 )
Certain Items Impacting Income Tax Expense:
Remeasurement of deferred tax assets and liabilities 21,424 21,424
Total$ 24,414 $ 61,429
Net of tax$ 23,233 $ 45,627
Diluted EPS$ 0.67 $ 1.33
For the Three Month Period
Ended December 31, 2016
For the Year Ended
December 31, 2016

(Income) Expense (Income) Expense
Certain Items Impacting Net Service Revenue:
Reduction of cost report reserve$ (1,149 ) $ (1,149 )
Third party audit reserve 948
Certain Items Impacting Operating Expenses:
HCHB implementation 1,345 8,371
Acquisition costs 876 3,384
Legal fees - non-routine 543 1,992
Frontier litigation 2,479 2,979
Wage and Hour litigation (119 ) 282
Asset impairment 4,432 4,432
Restructuring activity 1,976 7,645
Sales/use tax audit reserve 460 460
Disaster relief 129 467
Certain Items Impacting Total Other Income (Expense):
Sales/use tax audit reserve 625 625
Legal settlements (280 ) (2,328 )
Miscellaneous, other (income) expense, net (1,318 ) (3,549 )
Total$ 9,999 $ 24,559
Net of tax$ 6,114 $ 14,923
Diluted EPS$ 0.18 $ 0.44

(2) Adjusted EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items as described in footnote 1.
(3) Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 1.
(4) Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.
(5) Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in footnote 1.
(6) 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 or other measure calculated in accordance with GAAP. 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.

Source:Amedisys, Inc.