Amedisys Reports Third Quarter Financial Results

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

Three-Month Periods Ended September 30, 2012 and 2011

• After adding back $574.1 million ($434.6 million, net of income tax) or $15.10 per diluted share for the goodwill and other intangibles impairment charge in 2011, the following would have been our adjusted results:

• Net service revenue of $375.6 million compared to $370.3 million in 2011, an increase of $5.3 million or 1.4%.

• Net income from continuing operations attributable to Amedisys, Inc., of $10.0 million compared to $12.3 million in 2011, a decrease of 19.2%.

• Net income from continuing operations attributable to Amedisys, Inc. per diluted share of $0.33 compared to $0.42 per diluted share in 2011, a decrease of 21.4%.

• Earnings before interest, taxes, depreciation and amortization attributable to continuing operations (“EBITDA”) of $24.9 million compared to $29.0 million in 2011, a decrease of 14.0%.

Nine-Month Periods Ended September 30, 2012 and 2011

• After adding back $574.1 million ($434.6 million, net of income tax) or $15.18 per diluted share for the goodwill and other intangibles impairment charge in 2011, the following would have been our adjusted results:

• Net service revenue of $1,124.9 million compared to $1,098.0 million in 2011, an increase of $26.9 million or 2.5%.

• Net income from continuing operations attributable to Amedisys, Inc., of $24.4 million compared to $52.2 million in 2011, a decrease of 53.2%.

• Net income from continuing operations attributable to Amedisys, Inc. per diluted share of $0.81 compared to $1.80 per diluted share in 2011, a decrease of 55.0%.

• EBITDA of $73.8 million compared to $118.0 million in 2011, a decrease of 37.5%.

William F. Borne, Chief Executive Officer stated, “Overall, we were pleased with bottom line results for the quarter and remain on pace to meet our earnings plans for the year. Job and investment tax credits benefitted quarterly results. Operationally, we displayed our second consecutive quarter of positive year-over-year episodic admissions growth, continued to grow our managed care business and our hospice average census was up considerably. Our focus remains on providing excellent care to our patients, growing our business and achieving greater efficiencies as we navigate reimbursement pressures.”

2012 Guidance

• Net service revenue is anticipated to be in the range of $1.485 billion to $1.505 billion.

• Diluted earnings per share is expected to be in the range of $1.00 to $1.06 based on an estimated 30.2 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made, any costs associated with the closing of our new credit agreement or any severance related charges.

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 (877) 490-9717 (Toll free) or (704) 385-4855 (Toll) a few minutes before 10:00 a.m. ET on Tuesday, November 6, 2012. A replay of the conference call will be available through November 13, 2012. The replay dial in number is (855) 859-2056 (Toll free) or (404) 537-3406 (Toll). The replay pin number is 43473527.

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 measures 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, adjusted EBITDA, defined as EBITDA plus the goodwill and other intangibles impairment charge, adjusted net income from continuing operations attributable to Amedisys, Inc., defined as net income (loss) from continuing operations attributable to Amedisys, Inc. plus the goodwill and other intangibles impairment charge and adjusted net income from continuing operations attributable to Amedisys, Inc. per diluted share, defined as net income (loss) from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share plus the earnings per share effect of the goodwill and other intangibles impairment charge. 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)

(Unaudited)

 

Balance Sheet Information
 
 
September 30, 2012 December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents $ 39,106 $ 48,004
Patient accounts receivable, net of allowance for doubtful accounts of $20,447 and $17,438 163,461 148,061
Prepaid expenses 10,646 11,321
Other current assets   20,635     24,630  
 
Total current assets 233,848 232,016
Property and equipment, net of accumulated depreciation of $105,157, and $94,266 150,947 148,536
Goodwill 367,495 334,695
Intangible assets, net of accumulated amortization of $22,745 and $20,611 51,959 50,067
Deferred tax asset 54,512 68,649
Other assets, net   16,963     24,322  
 
Total assets $ 875,724   $ 858,285  
 
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 21,690 $ 25,475
Payroll and employee benefits 81,751 82,130
Accrued expenses 64,460 68,493
Current portion of long-term obligations 54,307 33,888
Current portion of deferred income taxes   9,249     11,748  
 
Total current liabilities 231,457 221,734
Long-term obligations, less current portion 67,856 111,551
Other long-term obligations   4,431     4,852  
 
Total liabilities   303,744     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; 32,423,585 and 31,017,363 share issued; and 31,640,832 and 30,328,549 share outstanding 32 30
Additional paid-in capital 446,233 432,390
Treasury stock at cost, 782,753 and 688,814 shares of common stock (17,034 ) (15,770 )
Accumulated other comprehensive income 15 13
Retained earnings   125,429     102,205  
 
Total Amedisys, Inc. stockholders’ equity 554,675 518,868
Noncontrolling interests   17,305     1,280  
 
Total equity   571,980     520,148  
 
Total liabilities and equity $ 875,724   $ 858,285  

Statement of Operations Information
   
For the Three-Month Periods EndedSeptember 30, For the Nine-Month Periods EndedSeptember 30,
2012 2011 2012 2011
Net service revenue $ 375,625 $ 370,288 $ 1,124,956 $ 1,098,026
Cost of service, excluding depreciation and amortization 214,131 202,093 634,903 578,823
General and administrative expenses:
Salaries and benefits 81,627 85,092 255,203 247,175
Non-cash compensation 1,285 3,150 6,065 8,265
Other 48,261 46,711 139,941 136,228
Provision for doubtful accounts 5,677 4,354 16,235 9,734
Depreciation and amortization 9,963 9,659 29,922 28,389
Goodwill and other intangibles impairment charge       574,114         574,114  
 
Operating expenses   360,944     925,173     1,082,269     1,582,728  
 
Operating income (loss) 14,681 (554,885 ) 42,687 (484,702 )
Other (expense) income:
Interest income 10 18 52 225
Interest expense (1,982 ) (2,187 ) (6,058 ) (6,693 )
Equity in earnings from equity investments 390 325 1,091 1,114
Miscellaneous, net   (14 )   (172 )   281     (843 )
 
Total other expense, net   (1,596 )   (2,016 )   (4,634 )   (6,197 )
 
Income (loss) before income taxes 13,085 (556,901 ) 38,053 (490,899 )
Income tax (expense) benefit   (3,049 )   134,686     (13,411 )   108,631  
 
Income (loss) from continuing operations 10,036 (422,215 ) 24,642 (382,268 )
Discontinued operations, net of tax   (41 )   (1,482 )   (1,218 )   (4,394 )
 
Net income (loss) 9,995 (423,697 ) 23,424 (386,662 )
Net income attributable to noncontrolling interests   (73 )   (25 )   (200 )   (116 )
 
Net income (loss) attributable to Amedisys, Inc. $ 9,922   $ (423,722 )$   23,224   $ (386,778 )
 
Basic earnings per common share:
Income (loss) from continuing operations attributable to Amedisys, Inc. common stockholders $ 0.33 $ (14.68 ) $ 0.82 $ (13.38 )
Discontinued operations, net of tax       (0.05 )   (0.04 )   (0.15 )
 
Net income (loss) attributable to Amedisys, Inc. common stockholders $ 0.33   $ (14.73 ) $ 0.78   $ (13.53 )
 
Weighted average shares outstanding   30,055     28,770     29,741     28,587  
 
Diluted earnings per common share:
Income (loss) from continuing operations attributable to Amedisys, Inc. common stockholders $ 0.33 $ (14.68 ) $ 0.81 $ (13.38 )
Discontinued operations, net of tax       (0.05 )   (0.04 )   (0.15 )
 
Net income (loss) attributable to Amedisys, Inc. common stockholders $ 0.33   $ (14.73 ) $ 0.77   $ (13.53 )
 
Weighted average shares outstanding   30,423     28,770     30,068     28,587  
 
Amounts attributable to Amedisys, Inc. common stockholders:
Income (loss) from continuing operations $ 9,963 $ (422,240 ) $ 24,442 $ (382,384 )
Discontinued operations, net of tax   (41 )   (1,482 )   (1,218 )   (4,394 )
 
Net income (loss) $ 9,922   $ (423,722 ) $ 23,224   $ (386,778 )

Cash Flow Information
   
For the Three-Month Periods endedSeptember 30, For the Nine-Month Periods endedSeptember 30,
2012 2011 2012 2011
Net cash provided by operating activities $ 21,882 $ 27,780 $ 56,904 $ 104,293
Net cash used in investing activities (12,318 ) (17,128 ) (40,249 ) (168,663 )
Net cash used in financing activities   (7,616 )   (9,322 )   (25,553 )   (26,463 )
 
Net increase (decrease) in cash and cash equivalents 1,948 1,330 (8,898 ) (90,833 )
Cash and cash equivalents at beginning of period   37,158     28,132     48,004     120,295  
 
Cash and cash equivalents at end of period $ 39,106   $ 29,462   $ 39,106   $ 29,462  

Supplemental Information—Home Health
         
For the Three-Month Periods Ended September 30,
2012   2011
Same Store Start-ups/Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Episodic-based revenue $ 270.0 $ 1.3 $ 271.3 $ 282.7 $ 4.4 $ 287.1
Non-episodic revenue   29.3     0.5     29.8     18.8   0.1     18.9
 
Net service revenue 299.3 1.8 301.1 301.5 4.5 306.0
Episodic-based revenue growth (2)   (4 %)   (6 %)
 
Cost of service   174.8     1.1     175.9     164.1   3.1     167.2
 
Gross margin 124.5 0.7 125.2 137.4 1.4 138.8
Other operating expenses   77.3     0.8     78.1     76.1   2.9     79.0
 
Operating income beforeimpairment (5) $ 47.2   $ (0.1 ) $ 47.1   $ 61.3 $ (1.5 ) $ 59.8
 
Key Statistical Data:
Admissions:
Episodic-based 57,660 327 57,987 56,309 903 57,212
Non-episodic   15,539     31     15,570     10,802   128     10,930
 
Total admissions   73,199     358     73,557     67,111   1,031     68,142
 
Episodic-based admission growth (2)   2 %   1 %
 
Recertifications:
Episodic-based 40,385 149 40,534 42,757 570 43,327
Non-episodic   6,233     5     6,238     4,239   38     4,277
 
Total recertifications   46,618     154     46,772     46,996   608     47,604
 
Episodic-based recertification growth (2)   (6 %)   (6 %)
 
Completed Episodes:
Episodic-based   94,284     433     94,717     95,075   1,600     96,675
 
Visits:
Episodic-based 1,814,367 8,373 1,822,740 1,852,942 28,094 1,881,036
Non-episodic   297,766     758     298,524     201,889   1,778     203,667
 
Total visits   2,112,133     9,131     2,121,264     2,054,831   29,872     2,084,703
 
Cost per Visit $ 82.72   $ 123.89   $ 82.90   $ 79.95 $ 100.30   $ 80.24
 
Average episodic-based revenue per completed episode (3) $ 2,834   $ 3,002   $ 2,835   $ 2,972 $ 3,083   $ 2,974
 
Episodic-based visits per completed episode (4)   18.8     18.3     18.8     18.7   18.7     18.7
           
For the Nine-Month Periods Ended September 30,
2012 2011
Same Store Start-ups/Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Episodic-based revenue $ 820.4 $ 4.2 $ 824.6 $ 876.3 $ 16.6 $ 892.9
Non-episodic revenue   82.0     0.7     82.7     55.1   0.4     55.5
Net service revenue 902.4 4.9 907.3 931.4 17.0 948.4
Episodic-based revenue growth (2)   (6 %)   (8 %)
 
Cost of service   519.0     3.2     522.2     488.0   10.5     498.5
 
Gross margin 383.4 1.7 385.1 443.4 6.5 449.9
Other operating expenses   230.2     2.4     232.6     224.2   10.8     235.0
 
Operating income before impairment (5) $ 153.2   $ (0.7 ) $ 152.5   $ 219.2 $ (4.3 ) $ 214.9
 
Key Statistical Data:
Admissions:
Episodic-based 175,843 1,086 176,929 172,880 3,634 176,514
Non-episodic   45,136     153     45,289     31,528   404     31,932
 
Total admissions   220,979     1,239     222,218     204,408   4,038     208,446
 
Episodic-based admission growth (2)   2 %   0 %
 
Recertifications:
Episodic-based 121,411 432 121,843 128,464 1,916 130,380
Non-episodic   16,489     35     16,524     12,782   116     12,898
 
Total recertifications   137,900     467     138,367     141,246   2,032     143,278
 
Episodic-based recertificationgrowth (2)   (5 %)   (7 %)
 
Completed Episodes:
Episodic-based   284,497     1,239     285,736     288,432   5,860     294,292
 
Visits:
Episodic-based 5,549,303 27,158 5,576,461 5,589,759 104,520 5,694,279
Non-episodic   834,128     2,778     836,906     596,961   5,596     602,557
 
Total visits   6,383,431     29,936     6,413,367     6,186,720   110,116     6,296,836
 
Cost per Visit $ 81.29   $ 108.19   $ 81.42   $ 78.89 $ 95.08   $ 79.17
 
Average episodic-based revenue per completed episode (3) $ 2,849   $ 3,040   $ 2,849   $ 3,009 $ 3,121   $ 3,012
 
Episodic-based visits per completed episode (4)  

18.9
    18.0     18.9     18.7   18.8     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.

(5)

  Operating loss of $514.3 million and $359.2 million on a GAAP basis for the three and nine-month periods ended September 30, 2011, respectively.

Supplemental Information—Hospice
  For the Three-Month Periods Ended September 30,
2012     2011
Same Store   Start-ups/Acquisitions   Total Same Store   Other (1)   Total
Financial Information (in millions):
Medicare revenue $ 67.6 $ 3.0 $ 70.6 $ 59.7 $ 0.7 $ 60.4
Non-Medicare revenue   3.8     0.1     3.9     3.9       3.9
 
Net service revenue 71.4 3.1 74.5 63.6 0.7 64.3
Medicare revenue growth (2)   13 %   17 %
 
Cost of service   36.1     2.1     38.2     34.3   0.6     34.9
 
Gross margin 35.3 1.0 36.3 29.3 0.1 29.4
Other operating expenses   14.5     1.2     15.7     12.6   0.7     13.3
 
Operating income $ 20.8   $ (0.2 ) $ 20.6   $ 16.7 $ (0.6 ) $ 16.1
 
Key Statistical Data:
Hospice admits 4,479 227 4,706 4,537 52 4,589
Hospice days 494,570 21,983 516,553 444,126 4,785 448,911
Average daily census 5,376 239 5,615 4,827 52 4,879
Revenue per day $ 144.27 $ 141.77 $ 144.17 $ 143.10 $ 149.13 $ 143.17
Cost of service per day $ 72.96 $ 98.26 $ 74.03 $ 76.78 $ 127.13 $ 77.32
Average length of stay 88 57 87 86 98 86
 
For the Nine-Month Periods Ended September 30,
2012   2011
Same Store Start-ups/Acquisitions Total Same Store Other (1) Total
Financial Information (in millions):
Medicare revenue $ 162.4 $ 43.3 $ 205.7 $ 138.6 $ 1.6 $ 140.2
Non-Medicare revenue   9.6     2.3     11.9     9.3   0.1     9.4
 
Net service revenue 172.0 45.6 217.6 147.9 1.7 149.6
Medicare revenue growth (2)   17 %   47 %
 
Cost of service   86.8     25.9     112.7     78.7   1.6     80.3
 
Gross margin 85.2 19.7 104.9 69.2 0.1 69.3
Other operating expenses   33.6     10.3     43.9     28.7   2.1     30.8
 
Operating income $ 51.6   $ 9.4   $ 61.0   $ 40.5 $ (2.0 ) $ 38.5
 
Key Statistical Data:
Hospice admits 11,623 2,876 14,499 11,305 149 11,454
Hospice days 1,216,117 272,911 1,489,028 1,058,966 12,109 1,071,075
Average daily census 4,438 996 5,434 3,879 44 3,923
Revenue per day $ 141.42 $ 167.26 $ 146.16 $ 139.64 $ 141.51 $ 139.66
Cost of service per day $ 71.24 $ 95.03 $ 75.59 $ 74.16 $ 133.97 $ 74.83
Average length of stay 92 88 91 86 77 86
 

(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 EndedSeptember 30, For the Nine-Month Periods EndedSeptember 30,
2012 2011 2012 2011
Key Statistical Data:
General
Number of home health care centers 436 482 436 482
Number of hospice care centers 97 90 97 90
Number of care centers acquired (1) 5 11 22
Number of care centers opened asstart-up locations (1) 1 2 3 10
Days revenue outstanding, net (2) 38.7 35.9 38.7 35.9
 
 

(1)

 Includes both home health and hospice care centers.

(2)

 Our calculation of days revenue outstanding, net at September 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 September 30, 2012 and 2011, respectively.

Earnings From Continuing Operations Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA
       
For the Three-Month Periods EndedSeptember 30, For the Nine-Month Periods EndedSeptember 30,
2012 2011 2012 2011
Net income (loss) from continuing operationsattributable to Amedisys, Inc. $ 9,963 $ (422,240 ) $ 24,442 $ (382,384 )
Add:
Provision for income taxes 3,049 (134,686 ) 13,411 (108,631 )
Interest expense, net 1,972 2,169 6,006 6,468
Depreciation and amortization   9,963   9,659     29,922   28,389  
 
EBITDA (1) $ 24,947 $ (545,098 ) $ 73,781 $ (456,158 )
 
Add:
Goodwill and other intangiblesimpairment charge (2)     574,114       574,114  
 
Adjusted EBITDA (3) $ 24,947 $ 29,016   $ 73,781 $ 117,956  

Adjusted Net Income From Continuing Operations Attributable to Amedisys, Inc. Reconciliation:
       
For the Three-Month Periods EndedSeptember 30, For the Nine-Month Periods EndedSeptember 30,
2012 2011 2012 2011
Net income (loss) from continuing operations attributable to Amedisys, Inc. $ 9,963 $ (422,240 ) $ 24,442 $ (382,384 )
Add:
Goodwill and other intangibles impairment charge (2)     434,566       434,566  
 
Adjusted net income from continuing operations attributable to Amedisys, Inc. (4) $ 9,963 $ 12,326   $ 24,442 $ 52,182  

Adjusted Net Income From Continuing Operations Attributable to Amedisys, Inc. per Diluted Share:
       
For the Three-Month Periods EndedSeptember 30, For the Nine-Month Periods EndedSeptember 30,
2012 2011 2012 2011
Net income (loss) from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share $ 0.33 $ (14.68 ) $ 0.81 $ (13.38 )
Add:
Goodwill and other intangibles impairment charge (2)     15.10       15.18  
 
Adjusted net income from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share (5) $ 0.33 $ 0.42   $ 0.81 $ 1.80  
 

(1)

 EBITDA is defined as net income (loss) 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.

(2)

  During the three and nine-month periods ended September 30, 2011, we recorded a $574.1 million charge for the impairment of goodwill and other intangibles.

(3)

 Adjusted EBITDA is defined as net income (loss) from continuing operations attributable to Amedisys, Inc. before provision for income taxes, net interest expense, depreciation and amortization plus the goodwill and other intangibles impairment charge described in footnote 2. Adjusted 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 adjusted 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.

(4)

 Adjusted net income from continuing operations attributable to Amedisys, Inc. is defined as net income (loss) from continuing operations attributable to Amedisys, Inc. plus the goodwill and other intangibles impairment charge described in footnote 2. Adjusted net income from continuing operations attributable to Amedisys, Inc. 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 adjusted net income from continuing operations attributable to Amedisys, Inc. may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate this non-GAAP measure in the same manner.

(5)

 Adjusted net income from continuing operations attributable to Amedisys, Inc. per diluted share is defined as diluted earnings (loss) from continuing operations attributable to Amedisys, Inc. common stockholders per diluted share plus the earnings per share effect of the goodwill and other intangibles impairment charge described in footnote 2. Adjusted net income from continuing operations attributable to Amedisys, Inc. 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 or operating performance. This calculation of adjusted net income from continuing operations attributable to Amedisys, Inc. per diluted share 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.

Copyright Business Wire 2010

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