Amedisys Reports Third Quarter Financial Results

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

Three-Month Periods Ended September 30, 2016 and 2015
  • Net service revenue increased $35.2 million to $361.6 million compared to $326.4 million in 2015.
  • Net income attributable to Amedisys, Inc. of $11.4 million compared to $8.4 million in 2015.
  • Net income attributable to Amedisys, Inc. per diluted share of $0.34 per diluted share compared to $0.25 in 2015.

Adjusted Results*
  • Adjusted net service revenue of $361.6 million compared to $326.4 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. of $12.1 million compared to $11.5 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.36 compared to $0.34 in 2015.
  • Adjusted EBITDA (defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization excluding certain items) of $25.6 million compared to $26.4 million in 2015.

Nine-Month Periods Ended September 30, 2016 and 2015
  • Net service revenue increased $129.0 million to $1,071.2 million compared to $942.2 million in 2015.
  • Net income attributable to Amedisys, Inc. of $28.3 million compared to $15.9 million net loss in 2015.
  • Net income attributable to Amedisys, Inc. per diluted share increased $1.32 to $0.84 compared to $0.48 net loss per diluted share in 2015.

Adjusted Results*
  • Adjusted net service revenue of $1,072.1 million compared to $942.2 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. of $37.2 million compared to $35.8 million in 2015.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $1.10 compared to $1.09 in 2015.
  • Adjusted EBITDA of $79.4 million compared to $84.4 million in 2015.

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

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

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

Earnings Call and Webcast Information

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

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

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

Additional information

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

Forward-Looking Statements

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

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

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:

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

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

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

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

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

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

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

 

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

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