Amedisys Reports Second Quarter Financial Results

Amedisys, Inc. (NASDAQ: AMED), a leading home health and hospice company, today reported its financial results for the second quarter ended June 30, 2012.

Three-Month Periods Ended June 30, 2012 and 2011

• Net service revenue of $378.5 million compared to $368.4 million in 2011, an increase of $10.1 million or 2.7%.

• Net income from continuing operations attributable to Amedisys, Inc., of $8.0 million compared to $22.9 million in 2011, a decrease of 65.1%.

• Net income from continuing operations attributable to Amedisys, Inc. per diluted share of $0.27 compared to $0.79 per diluted share in 2011, a decrease of 65.8%.

• Earnings before interest, taxes, depreciation and amortization attributable to continuing operations (“EBITDA”) of $25.6 million compared to $49.6 million in 2011, a decrease of 48.4%.

Six-Month Periods Ended June 30, 2012 and 2011

• Net service revenue of $749.3 million compared to $727.7 million in 2011, an increase of $21.6 million or 3.0%.

• Net income from continuing operations attributable to Amedisys, Inc., of $14.5 million compared to $39.9 million in 2011, a decrease of 63.7%.

• Net income from continuing operations attributable to Amedisys, Inc. per diluted share of $0.48 compared to $1.38 per diluted share in 2011, a decrease of 65.2%.

• EBITDA of $48.8 million compared to $88.9 million in 2011, a decrease of 45.1%.

William F. Borne, Chief Executive Officer stated, “We are encouraged by our results for the quarter and are on pace to meet our plans for the year. The organizational changes we have implemented are showing positive returns. We continue to focus on providing excellent care to our many home health and hospice patients while navigating cost pressures and reform legislation. There are many opportunities in front of us and we are positioning Amedisys to capitalize on those prospects.”

2012 Guidance

• Net service revenue is anticipated to be in the range of $1.490 billion to $1.525 billion.

• Diluted earnings per share is expected to be in the range of $0.95 and $1.10 based on an estimated 30.2 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made; effects of any share repurchases; any non-recurring costs or charges that may be incurred during the year or the impact of any future Medicare rate changes.

We urge caution in considering the current trends and 2012 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, 2011, 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 in the conference call, please dial (888) 710-4011 (Toll free) or (913) 312-1495 (Toll) a few minutes before 10:00 a.m. ET on Tuesday, August 7, 2012. A replay of the conference call will be available through August 14, 2012. The replay dial in number is (888) 203-1112 (Toll free) or (719) 457-0820 (Toll). The replay pin number is 5164963.

The call will also be available through our website and for seven days thereafter at the following web address: http://www.amedisys.com/investors.

We are headquartered in Baton Rouge, Louisiana. 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, changes in or developments with respect to any litigation or investigations relating to the Company, including the SEC investigation and the U.S. Department of Justice Civil Investigative Demand and 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 measure as defined under SEC rules: EBITDA, defined as net income from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization. In accordance with SEC rules, we have provided herein a reconciliation of this non-GAAP financial measure to the most directly comparable measure under GAAP. Management believes that this is a useful gauge of our performance and is a common measure 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)
(Unaudited)
 
Balance Sheet Information
 
 
June 30, 2012 December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents $ 37,158 $ 48,004
Patient accounts receivable, net of allowance for doubtful accounts of $19,603 and $17,438 163,161 148,061
Prepaid expenses 11,180 11,321
Other current assets   24,801     24,630  
 
Total current assets 236,300 232,016
 
Property and equipment, net of accumulated depreciation of $96,891, and $94,266 146,207 148,536
Goodwill 343,353 334,695
Intangible assets, net of accumulated amortization of $22,024 and $20,611 49,335 50,067
Deferred tax asset 59,498 68,649
Other assets, net   23,606     24,322  
 
Total assets $ 858,299   $ 858,285  
 
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 24,425 $ 25,475
Payroll and employee benefits 86,590 82,130
Accrued expenses 62,218 68,493
Current portion of long-term obligations 60,700 33,888
Current portion of deferred income taxes   11,071     11,748  
 
Total current liabilities 245,004 221,734
Long-term obligations, less current portion 67,701 111,551
Other long-term obligations   4,274     4,852  
 
Total liabilities   316,979     338,137  
 
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; 32,110,141 and 31,017,363 shares issued; and 31,328,783 and 30,328,549 shares outstanding 31 30
Additional paid-in capital 441,479 432,390
Treasury stock at cost, 781,358 and 688,814 shares of common stock (17,014 ) (15,770 )
Accumulated other comprehensive income 15 13
Retained earnings   115,507     102,205  
 
Total Amedisys, Inc. stockholders’ equity 540,018 518,868
Noncontrolling interests   1,302     1,280  
 
Total equity   541,320     520,148  
 
Total liabilities and equity $ 858,299   $ 858,285  
                 

Income Statement Information
 
 
For the Three-Month Periods Ended June 30, For the Six-Month Periods Ended June 30,
2012 2011 2012 2011
Net service revenue $ 378,498 $ 368,424 $ 749,331 $ 727,738
Cost of service, excluding depreciation and amortization 212,266 189,426 420,772 376,730
General and administrative expenses:
Salaries and benefits 86,499 78,695 173,576 162,083
Non-cash compensation 2,298 3,205 4,780 5,115
Other 47,286 45,221 91,680 89,517
Provision for doubtful accounts 4,695 2,266 10,558 5,380
Depreciation and amortization   9,905     9,550     19,959     18,730  
 
Operating expenses   362,949     328,363     721,325     657,555  
 
Operating income 15,549 40,061 28,006 70,183
Other (expense) income:
Interest income 27 89 42 207
Interest expense (2,002 ) (2,254 ) (4,076 ) (4,506 )
Equity in earnings from equity investments 396 466 701 789
Miscellaneous, net   (134 )   (376 )   295     (671 )
 
Total other expense, net   (1,713 )   (2,075 )   (3,038 )   (4,181 )
 
Income before income taxes 13,836 37,986 24,968 66,002
Income tax expense   (5,742 )   (14,997 )   (10,362 )   (26,055 )
 
Income from continuing operations 8,094 22,989 14,606 39,947
Discontinued operations, net of tax   (128 )   (1,278 )   (1,177 )   (2,912 )
 
Net income 7,966 21,711 13,429 37,035
Net income attributable to noncontrolling interests   (84 )   (55 )   (127 )   (91 )
 
Net income attributable to Amedisys, Inc. $ 7,882   $ 21,656   $ 13,302   $ 36,944  
 
Basic earnings per common share:
Income from continuing operations attributable to Amedisys, Inc. common stockholders $ 0.27 $ 0.80 $ 0.49 $ 1.40
Discontinued operations, net of tax   (0.01 )   (0.04 )   (0.04 )   (0.10 )
 
Net income attributable to Amedisys, Inc. common stockholders $ 0.26   $ 0.76   $ 0.45   $ 1.30  
 
Weighted average shares outstanding   29,780     28,625     29,584     28,495  
 
Diluted earnings per common share:
Income from continuing operations attributable to Amedisys, Inc. common stockholders $ 0.27 $ 0.79 $ 0.48 $ 1.38
Discontinued operations, net of tax   (0.01 )   (0.04 )   (0.04 )   (0.10 )
 
Net income attributable to Amedisys, Inc. common stockholders $ 0.26   $ 0.75   $ 0.44   $ 1.28  
 
Weighted average shares outstanding   30,026     29,010     29,903     28,938  
 
Amounts attributable to Amedisys, Inc. common stockholders:
Income from continuing operations $ 8,010 $ 22,934 $ 14,479 $ 39,856
Discontinued operations, net of tax   (128 )   (1,278 )   (1,177 )   (2,912 )
 
Net income $ 7,882   $ 21,656   $ 13,302   $ 36,944  
             

Cash Flow Information
 
For the Three-Month Periods ended June 30, For the Six-Month Periods ended June 30,
2012 2011 2012 2011
Net cash provided by operating activities $ 23,151 $ 23,959 $ 35,022 $ 76,513
Net cash used in investing activities (17,878 ) (135,589 ) (27,931 ) (151,535 )
Net cash used in financing activities (9,405 ) (9,106 ) (17,937 ) (17,141 )
 
Net decrease in cash and cash equivalents (4,132 ) (120,736 ) (10,846 ) (92,163 )
Cash and cash equivalents at beginning of period 41,290 148,868 48,004 120,295
 
Cash and cash equivalents at end of period $ 37,158 $ 28,132 $ 37,158 $ 28,132
                       

Supplemental Information - Home Health

 
For the Three-Month Periods Ended June 30,
2012 2011
Same Store Start-ups/ Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Episodic-based revenue $ 274.5 $ 1.4 $ 275.9 $ 297.9 $ 5.2 $ 303.1
Non-episodic revenue   28.9     28.9   18.3   0.2   18.5
 
Net service revenue 303.4 1.4 304.8 316.2 5.4 321.6
Episodic-based revenue growth (2)  

(8%)
 

(9%)
 
Cost of service   173.3   1.0   174.3   160.9   3.3   164.2
 
Gross margin 130.1 0.4 130.5 155.3 2.1 157.4
Other operating expenses   75.1   0.7   75.8   73.2   3.2   76.4
 
Operating income $ 55.0 $ (0.3 ) $ 54.7 $ 82.1 $ (1.1 ) $ 81.0
 
Key Statistical Data:
Admissions:
Episodic-based 58,725 343 59,068 56,775 1,120 57,895
Non-episodic   15,229   19   15,248   10,321   135   10,456
 
Total admissions   73,954   362   74,316   67,096   1,255   68,351
 
Episodic-based admission growth (2)   3%   2%
 
Recertifications:
Episodic-based 40,378 132 40,510 43,172 620 43,792
Non-episodic   5,549   11   5,560   4,339   41   4,380
 
Total recertifications   45,927   143   46,070   47,511   661   48,172
 
Episodic-based recertification growth (2)  

(6%)
 

(7%)
 
Completed Episodes:
Episodic-based   95,916   380   96,296   97,589   2,012   99,601
 
Visits:
Episodic-based 1,864,017 9,552 1,873,569 1,871,575 32,873 1,904,448
Non-episodic   288,316   347   288,663   199,091   1,991   201,082
 
Total visits   2,152,333   9,899   2,162,232   2,070,666   34,864   2,105,530
 
Cost per Visit $ 80.52 $ 100.60 $ 80.61 $ 77.68 $ 95.59 $ 77.98
 
Average episodic-based revenue per completed episode (3) $ 2,859 $ 3,061 $ 2,860 $ 3,031 $ 3,087 $ 3,032
 
Episodic-based visits per completed episode (4)   19.1   17.7   19.1   18.9   18.3   18.9
                       
For the Six-Month Periods Ended June 30,
2012 2011
Same Store Start-ups/ Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Episodic-based revenue $ 550.4 $ 2.9 $ 553.3 $ 593.6 $ 12.2 $ 605.8
Non-episodic revenue   52.7   0.2   52.9   36.3   0.3   36.6
 
Net service revenue 603.1 3.1 606.2 629.9 12.5 642.4
Episodic-based revenue growth (2)   (7 %)   (9 %)
 
Cost of service   344.2   2.1   346.3   323.9   7.4   331.3
 
Gross margin 258.9 1.0 259.9 306.0 5.1 311.1
Other operating expenses   152.9   1.6   154.5   148.1   7.9   156.0
 
Operating income $ 106.0 $

(0.6)
$ 105.4 $ 157.9 $

(2.8)
$ 155.1
 
Key Statistical Data:
Admissions:
Episodic-based 118,183 759 118,942 116,571 2,731 119,302
Non-episodic   29,597   122   29,719   20,726   276   21,002
 
Total admissions   147,780   881   148,661   137,297   3,007   140,304
 
Episodic-based admission growth (2)   1 %   -
 
Recertifications:
Episodic-based 81,026 283 81,309 85,707 1,346 87,053
Non-episodic   10,256   30   10,286   8,543   78   8,621
 
Total recertifications   91,282   313   91,595   94,250   1,424   95,674
 
Episodic-based recertification growth (2)   (5 %)   (7 %)
 
Completed Episodes:
Episodic-based   190,213   806   191,019   193,357   4,260   197,617
 
Visits:
Episodic-based 3,734,936 18,785 3,753,721 3,736,817 76,426 3,813,243
Non-episodic   536,362   2,020   538,382   395,072   3,818   398,890
 
Total visits   4,271,298   20,805   4,292,103   4,131,889   80,244   4,212,133
 
Cost per Visit $ 80.59 $ 101.30 $ 80.69 $ 78.36 $ 93.13 $ 78.64
 
Average episodic-based revenue per completed episode (3) $ 2,856 $ 3,061 $ 2,857 $ 3,028 $ 3,135 $ 3,030
 
Episodic-based visits per completed episode (4)   18.9   17.8   18.9   18.7   18.9   18.7
 
(1) Care centers for the prior period which are not considered same store care centers (i.e., care centers consolidated in prior period or unopened startups).
(2) Episodic-based revenue, admissions or recertifications growth is the percent increase in our episodic-based revenue, admissions or recertifications for the period as a percent of the episodic-based revenue, admissions or recertifications of the prior period.
(3) Average episodic-based revenue per completed episode is the average episodic-based revenue earned for each episodic-based completed episode of care.
(4) Episodic-based visits per completed episode are the home health episodic-based visits on completed episodes divided by the home health episodic-based episodes completed during the period.

                       
Supplemental Information - Hospice
For the Three-Month Periods Ended June 30,
2012   2011
Same Store Start-ups/ Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Medicare revenue $ 52.9 $ 16.9 $ 69.8 $ 43.2 $ 0.5 $ 43.7
Non-Medicare revenue   3.0     0.9   3.9     3.1       3.1
 
Net service revenue 55.9 17.8 73.7 46.3 0.5 46.8
Medicare revenue growth (2)   22 %   60 %
 
Cost of service   27.7     10.3   38.0     24.8   0.4     25.2
 
Gross margin 28.2 7.5 35.7 21.5 0.1 21.6
Other operating expenses   10.4     4.0   14.4     8.9   0.6     9.5
 
Operating income $ 17.8   $ 3.5 $ 21.3   $ 12.6 $ (0.5 ) $ 12.1
 
Key Statistical Data:
Hospice admits 3,846 1,045 4,891 3,658 44 3,702
Hospice days 393,662 106,564 500,226 336,818 4,051 340,869
Average daily census 4,326 1,171 5,497 3,701 45 3,746
Revenue per day $ 142.10 $ 166.76 $ 147.36 $ 137.39 $ 133.78 $ 137.34
Cost of service per day $ 70.13 $ 96.66 $ 75.78 $ 73.52 $ 112.66 $ 73.99
Average length of stay 97 88 95 86 77 86
 
For the Six-Month Periods Ended June 30,
2012   2011
Same Store Start-ups/ Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Medicare revenue $ 94.8 $ 40.3 $ 135.1 $ 78.9 $ 0.9 $ 79.8
Non-Medicare revenue   5.8     2.2   8.0     5.4   0.1     5.5
 
Net service revenue 100.6 42.5 143.1 84.3 1.0 85.3
Medicare revenue growth (2)   20 %   69 %
 
Cost of service   50.7     23.8   74.5     44.4   1.0     45.4
 
Gross margin 49.9 18.7 68.6 39.9 39.9
Other operating expenses   19.1     9.1   28.2     16.1   1.4     17.5
 
Operating income $ 30.8   $ 9.6 $ 40.4   $ 23.8 $ (1.4 ) $ 22.4
 
Key Statistical Data:
Hospice admits 7,144 2,649 9,793 6,768 97 6,865
Hospice days 721,547 250,928 972,475 614,840 7,324 622,164
Average daily census 3,965 1,378 5,343 3,397 40 3,437
Revenue per day $ 139.47 $ 169.49 $ 147.22 $ 137.14 $ 136.53 $ 137.13
Cost of service per day $ 70.06 $ 94.74 $ 76.42 $ 72.26 $ 138.43 $ 73.04
Average length of stay 94 90 93 87 67 87
 
(1) Care centers for the prior period which are not considered same store care centers (i.e. care centers consolidated in prior period or unopened startups).
(2) Medicare revenue growth is the percent increase in our Medicare revenue for the period as a percent of the Medicare revenue of the prior period.
           

AMEDISYS, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL DATA AND

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL STATEMENTS

(Amounts in thousands, except key statistical data)

(Unaudited)
 
For the Three-Month Periods Ended June 30, For the Six-Month Periods Ended June 30,
2012 2011 2012 2011
Key Statistical Data:
General
Number of home health care centers 437 485 437 485
Number of hospice care centers 93 90 93 90
Number of care centers acquired (1) 6 22 6 22
Number of care centers opened as start-up locations (1) 2 2 8
Days revenue outstanding, net (2) 38.0 36.0 38.0 36.0
 
(1) Includes both home health and hospice care centers.
(2) Our calculation of days revenue outstanding, net at June 30, 2012 and 2011 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 June 30, 2012 and 2011, respectively.
 

Earnings From Continuing Operations Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)
           
For the Three-Month Periods Ended June 30, For the Six-Month Periods Ended June 30,
2012 2011 2012 2011
Net income from continuing operations attributable to Amedisys, Inc. $ 8,010 $ 22,934 $ 14,479 $ 39,856
Add:
Provision for income taxes 5,742 14,997 10,362 26,055
Interest expense, net 1,975 2,165 4,034 4,299
Depreciation and amortization   9,905   9,550   19,959   18,730
 
EBITDA (1) $ 25,632 $ 49,646 $ 48,834 $ 88,940

(1) EBITDA is defined as net income from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense, and depreciation and amortization. EBITDA 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. This calculation of EBITDA may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP financial measure in the same manner.

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