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LHC Group Announces First Quarter 2013 Results

Stocks in this article: LHCG

LAFAYETTE, La., May 8, 2013 (GLOBE NEWSWIRE) -- LHC Group Inc. (Nasdaq:LHCG), a national provider of post-acute care services, today announced its financial results for the three months ended March 31, 2013.

Financial Results for the First Quarter

  • Net service revenue for the first quarter of 2013 was $162.0 million, compared with $158.8 million for the same period in 2012.
  • Net income attributable to LHC Group for the first quarter of 2013 was $6.3 million, compared with $7.7 million in the prior year quarter.
  • Diluted earnings per share was $0.37 for the first quarter of 2013, compared with $0.42 for the same period in 2012.
  • Organic growth in new home health admissions in the first quarter of 2013 was 3.7% compared with the same period in 2012.

In commenting on the results, Keith G. Myers, chief executive officer of LHC Group, said, "I am extremely proud of the strong and well-balanced operating results our team delivered during the first quarter. I am particularly proud of our ability to once again achieve a solid organic growth rate in total new admissions of 3.7% over the first quarter of 2012. I would like to congratulate and thank our 8,500 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. Because of our team's dedication to clinical excellence and compassion for those we serve, we have experienced positive organic growth in total new admissions for 18 consecutive quarters dating back to 2008."

Guidance

The company is reaffirming its full year 2013 guidance issued on March 6, 2013, for net service revenue of $660 million to $680 million and fully diluted earnings per share in the range of $1.10 to $1.30. This guidance includes the impact of sequestration, as well as the impact of the recently announced acquisition of the home health service line of Addus HomeCare Corp.  This guidance, however, does not take into account the impact of other 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 Thursday, May 9, 2013, at 11 a.m. Eastern time to discuss its first quarter 2013 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 Thursday, May 16, 2013, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 31667703.  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 care, providing quality, cost-effective health care to patients within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of post-acute healthcare services through home health, hospice and community-based service agencies in its home-based division and long-term acute care hospitals in its facility-based division.

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, 2012, 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
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(unaudited)
 
  March 31, 2013 Dec. 31, 2012
ASSETS
Current assets:    
Cash $ 3,404 $ 9,720
Receivables:    
Patient accounts receivable, less allowance for uncollectible accounts  of $12,917 and $11,863, respectively 81,238 83,951
Other receivables 622 589
Amounts due from governmental entities 1,237 1,596
Total receivables, net 83,097 86,136
Deferred income taxes 9,283 7,671
Prepaid income taxes 3,733 7,436
Prepaid expenses 6,573 6,818
Other current assets 3,893 2,949
Total current assets 109,983 120,730
Property, building and equipment, net of accumulated depreciation of $35,947 and $34,331, respectively 29,037 29,531
Goodwill 189,153 169,150
Intangible assets, net of accumulated amortization of $3,113 and $2,985, respectively 61,328 62,042
Other assets 5,406 5,441
Total assets $ 394,907 $ 386,894
     
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:    
Accounts payable and other accrued liabilities $ 17,647 $ 14,897
Salaries, wages and benefits payable 23,581 29,890
Self insurance reserve 6,170 5,444
Amounts due to governmental entities 4,301 4,979
Total current liabilities 51,699 55,210
Deferred income taxes 27,587 25,129
Income tax payable 3,415 3,415
Revolving credit facility 22,996 19,500
Note payable 201
Total liabilities 105,898 103,254
Noncontrolling interest- redeemable 11,791 11,426
Stockholders' equity:    
Common stock – $0.01 par value: 40,000,000 shares authorized; 21,727,657 and 21,578,772 shares issued in 2013 and 2012, respectively 217 216
Treasury stock – 4,681,930 and 4,653,039 shares at cost, respectively (34,453) (33,846)
Additional paid-in capital 101,346 100,619
Retained earnings 207,478 201,192
Total LHC Group Inc. stockholders' equity 274,588 268,181
Noncontrolling interest- non-redeemable 2,630 4,033
Total equity 277,218 272,214
Total liabilities and stockholders' equity $ 394,907 $ 386,894
 
 
LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except share and per share data)
(unaudited)
 
  Three Months Ended March 31,
  2013 2012
Net service revenue $ 161,953 $ 158,761
Cost of service revenue 93,248 89,859
Gross margin 68,705 68,902
Provision for bad debts 3,917 2,761
General and administrative expenses 51,623 50,882
Operating income 13,165 15,259
Interest expense  (425) (359)
Non-operating income 65 65
Income from continuing operations before income taxes and noncontrolling interest 12,805 14,965
Income tax expense 4,536 5,226
Net income 8,269 9,739
Less net income attributable to noncontrolling interest 1,983 1,998
Net income attributable to LHC Group, Inc.'s common stockholders $ 6,286 $ 7,741
     
Earnings per share – basic and diluted:    
Net income attributable to LHC Group, Inc.'s common stockholders $ 0.37 $ 0.42
     
Weighted average shares outstanding:    
Basic 16,966,525 18,333,838
Diluted 17,073,543 18,399,608
 
 
LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
 
  Three Months Ended March 31,
  2013 2012
Operating activities    
Net income $ 8,269 $ 9,739
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense 1,830 1,919
Provision for bad debts 3,917 2,761
Stock based compensation expense 888 1,408
Deferred income taxes 846 (353)
Loss on sale of assets 14
Changes in operating assets and liabilities, net of acquisitions:    
Receivables (1,237) (3,774)
Prepaid expenses and other assets (664) 1,200
Prepaid income taxes 3,703 18,349
Accounts payable and accrued expenses (3,178) (5,484)
Net amounts due to/from governmental entities (319) (180)
Net cash provided by operating activities 14,069 25,585
     
Investing activities    
Purchases of property, building, and equipment (1,151) (1,160)
Cash paid for acquisitions, primarily goodwill and intangible assets (19,655) (1,700)
Net cash used in investing activities (20,806) (2,860)
     
Financing activities    
Proceeds from line of credit 41,500 26,879
Payments on line of credit (38,004) (47,486)
Proceeds from Employee stock purchase plan 179 189
Proceeds from debt issuance 201
Noncontrolling interest distributions (2,509) (2,302)
Excess tax benefits from vesting of restricted stock 11
Redemption of treasury shares (607)
Purchase of additional controlling interest (350)
Sale of noncontrolling interest 80
Net cash provided by (used in) financing activities 421 (22,640)
Change in cash (6,316) 85
Cash at beginning of period 9,720 256
Cash at end of period $ 3,404 $ 341
     
Supplemental disclosures of cash flow information    
Interest paid $ 425 $ 359
Income taxes paid $ 10,337 $ 243
 
 
LHC GROUP INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(amounts in thousands)
(unaudited)
 
  Three Months Ended March 31, 2013
  Home- Based Services Facility- Based Services Total
Net service revenue $ 141,987 $ 19,966 $ 161,953
Cost of service revenue 81,590 11,658 93,248
Provision for bad debts 3,277 640 3,917
General and administrative expenses 46,172 5,451 51,623
Operating income 10,948 2,217 13,165
Interest expense (387) (38) (425)
Non-operating income 41 24 65
Income before income taxes and noncontrolling interest 10,602 2,203 12,805
Income tax expense 4,087 449 4,536
Net income 6,515 1,754 8,269
Less net income attributable to noncontrolling interest 1,599 384 1,983
Net income attributable to LHC Group, Inc.'s common stockholders $ 4,916 $ 1,370 $ 6,286
Total assets $ 358,140 $ 36,767 $ 394,907
   
  Three Months Ended March 31, 2012
  Home- Based Services Facility- Based Services Total
Net service revenue $ 139,595 $ 19,166 $ 158,761
Cost of service revenue 79,061 10,798 89,859
Provision for bad debts 2,623 138 2,761
General and administrative expenses 45,226 5,656 50,882
Operating income 12,685 2,574 15,259
Interest expense (323) (36) (359)
Non-operating income 53 12 65
Income before income taxes and noncontrolling interest 12,415 2,550 14,965
Income tax expense 4,731 495 5,226
Net income 7,684 2,055 9,739
Less net income attributable to noncontrolling interest 1,692 306 1,998
Net income attributable to LHC Group, Inc.'s common stockholders $ 5,992 $ 1,749 $ 7,741
Total assets $ 345,287 $ 34,761 $ 380,048
 
 
LHC GROUP INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
 
  Three Months Ended March 31,
  2013 2012
Key Data:    
Home-Based Services:    
Home Health    
Locations 251 246
Acquired 19 0
De novo 0 1
Total new admissions 30,214 27,696
Medicare new admissions 20,527 19,046
Average daily census 35,481 32,608
Average Medicare daily census 26,890 24,689
Medicare completed and billed episodes 42,808 41,287
Average Medicare case mix for completed and billed Medicare episodes 1.26 1.26
Average reimbursement per completed and billed Medicare episodes $ 2,297 $ 2,345
Total visits 859,498 898,377
Total Medicare visits 653,796 658,566
Average visits per completed and billed Medicare episodes 15.3 16.0
Organic growth: (1)    
Net revenue -2.9% -2.9%
Net Medicare revenue -2.1% -6.1%
Total new admissions 3.7% 5.6%
Medicare new admissions  3.2% 2.1%
Average daily census 1.7% -6.0%
Average Medicare daily census 1.5% -7.7%
Medicare completed and billed episodes 0.6% -1.9%
     
Hospice    
Locations 33 32
Acquired 1 0
Admissions 1,380 1,109
Average daily census 1,148 934
Patient days 96,385 84,964
Average revenue per patient day $ 139 $ 139
     
Facility-Based Services:    
Long-term Acute Care    
Locations 9 9
Patient days 16,118 16,191
Average revenue per patient day $ 1,194 $ 1,156
     
(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

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