Company Raises Revenue Guidance and Reaffirms EPS Guidance
for Full-Year 2009
Third Quarter Highlights:
* Net service revenue increases 35.2% to $132.5 million;
* Net income attributable to LHC Group increases 22.4% to
$9.8 million; and
* Diluted earnings per share increases 20% to $0.54.
LAFAYETTE, La., Oct. 28, 2009 (GLOBE NEWSWIRE) LHC Group, Inc. (Nasdaq:LHCG), one of the largest providers of home health services in the United States, announced today its financial results for the third quarter and nine months ended September 30, 2009.
Financial Results for the Third Quarter
* Net service revenue for the third quarter of 2009 increased 35.2%
to $132.5 million compared with $98.0 million for the same
period in 2008.
* Home-based net service revenue for the third quarter of 2009
increased 38.1% to $116.7 million compared with $84.5 million
for the same period in 2008.
* Net income attributable to LHC Group for the third quarter of
2009 increased 22.4% to $9.8 million, or $0.54 per diluted share,
compared with net income of $8.0 million, or $0.45 per diluted
share, for the third quarter of 2008.
* Days sales outstanding, or DSO, for the three months ended
September 30, 2009, was 48 days as compared with 52 days for the
same three-month period in 2008.
Financial Results for the Nine Months
* Net service revenue for the nine months ended September 30, 2009,
increased 43.5% to $389.3 million compared with $271.2 million
for the same period in 2008.
* Home-based net service revenue for the nine months ended
September 30, 2009, increased 49.9% to $343.7 million compared
with $229.3 million for the same period in 2008.
* Net income attributable to LHC Group for the nine months ended
September 30, 2009, increased 58.2% to $31.2 million, or $1.73
per diluted share, compared with net income of $19.7 million, or
$1.10 per diluted share, for the same period in 2008. Net
income attributable to LHC Group for the nine months ended
September 30, 2009, includes a $211,000 after tax loss from
discontinued operations, which resulted in a $0.01 decrease in
earnings per share.
In commenting on the results, Keith G. Myers, President and Chief Executive Officer of LHC Group, said, "I am extremely proud of the results produced by the entire LHC Group team during the third quarter. Despite the constantly changing health care reform news, our team remained focused on delivering quality patient care while producing outstanding financial results. Our team also implemented significant infrastructure initiatives in the areas of quality, technology and compliance that will prepare us for continued growth and position us to remain a leader in home care regardless of the outcome of health care reform."
Guidance
The Company is raising its previously stated guidance range issued on May 6, 2009, with respect to full-year net service revenue from the original range of $500 million to $510 million, to $515 million to $525 million. The Company is reaffirming guidance of fully diluted earnings per share in the range of $2.15 to $2.25. This guidance does not take into account the impact of any future acquisitions, if made, or de novo locations, if opened.
Conference Call
LHC Group will conduct a conference call on Thursday, October 29, 2009, beginning at 11:00 a.m. Eastern time. Speakers on the call will include key members of the LHC Group senior management team. The toll-free number to call for this interactive teleconference is (888) 523-1245 (international callers should call 719-325-2348). A telephonic replay of the conference call will be available through midnight on Friday, November 6, 2009, by dialing (888) 203-1112 (international callers should call 719-457-0820) and entering confirmation number 1242619.
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, or at www.opencompany.info. An online replay of the conference call will also be available on the Company's website for one year, beginning approximately an hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. (www.LHCGroup.com) is one of the largest providers of home health services in the United States providing quality cost effective healthcare services to patients within the comfort and privacy of their home or place of residence.
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, 2008, 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
(dollars in thousands, except share data)
(unaudited)
Sept. 30, Dec. 31,
2009 2008
ASSETS
Current assets:
Cash $ 2,508 $ 3,511
Receivables:
Patient accounts receivable, less allowance for
uncollectible accounts of $9,989 and $9,976,
respectively 68,753 61,524
Other receivables 3,154 2,317
Amounts due from governmental entities 1,431 2,434
Total receivables, net 73,338 66,275
Deferred income taxes 5,413 4,959
Assets held for sale 450
Prepaid income taxes 4,147
Prepaid expenses and other current assets 6,404 6,464
Total current assets 92,260 81,209
Property, building and equipment, net 20,058 16,348
Goodwill 130,285 112,572
Intangible assets, net 38,125 29,975
Other assets 2,620 3,296
Total assets $283,348 $243,400
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities $ 17,365 $ 15,422
Salaries, wages and benefits payable 25,626 16,400
Amounts due to governmental entities 3,211 6,023
Income taxes payable 10,682
Current portion of long-term debt and capital
lease obligations 427 583
Total current liabilities 46,629 49,110
Deferred income taxes 8,614 5,718
Long-term debt, less current portion 4,180 4,483
Other long-term obligations 66 145
Stockholders' equity:
LHC Group, Inc. stockholders' equity:
Common stock - $0.01 par value: 40,000,000
shares authorized; 20,947,421 and 20,853,463
shares issued and 17,974,561 and 17,895,832
shares outstanding, respectively 179 179
Treasury stock - 2,972,860 and 2,957,631 shares
at cost, respectively (3,402) (3,072)
Additional paid-in capital 87,820 85,404
Retained earnings 125,530 94,310
Total LHC Group, Inc. stockholders' equity 210,127 176,821
Noncontrolling interest 13,732 7,123
Total equity 223,859 183,944
Total liabilities and stockholders' equity $283,348 $243,400
======== ========
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share and per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
- - - -
Net service
revenue $ 132,491 $ 97,991 $ 389,300 $ 271,206
Cost of service
revenue 69,242 47,207 197,723 133,103
- - - -
Gross margin 63,249 50,784 191,577 138,103
Provision for bad
debts 1,072 3,158 4,062 10,467
General and
administrative
expenses 43,790 31,237 126,000 87,897
- - - -
Operating income 18,387 16,389 61,515 39,739
Interest expense (20) (132) (115) (365)
Non-operating
(loss) income 51 76 (337) 891
- - - -
Income from
continuing
operations before
income taxes and
noncontrolling
interest 18,418 16,333 61,063 40,265
Income tax expense 5,636 5,259 18,836 12,578
- - - -
Income from
continuing
operations 12,782 11,074 42,227 27,687
Loss from
discontinued
operations (net of
income tax benefit
of $36, $18, $124
and $175,
respectively) 57 30 211 513
- - - -
Net income 12,725 11,044 42,016 27,174
Less net income
attributable to
noncontrolling
interest 2,893 3,012 10,841 7,469
- - - -
Net income
attributable to
LHC Group, Inc. 9,832 8,032 31,175 19,705
Redeemable
noncontrolling
interest (3) (29) 45 36
- - - -
Net income
available to LHC
Group, Inc.'s
common
stockholders $ 9,829 $ 8,003 $ 31,220 $ 19,741
=========== =========== =========== ===========
Earnings per share
- basic:
Income from
continuing
operations
attributable to
LHC Group, Inc. $ 0.55 $ 0.45 $ 1.75 $ 1.12
Loss from
discontinued
operations
attributable to
LHC Group, Inc. (0.01) (0.02)
- - - -
Net income
attributable to
LHC Group, Inc. 0.55 0.45 1.74 1.10
Redeemable
noncontrolling
interest
- - - -
Net income
available to LHC
Group, Inc.'s
common
stockholders $ 0.55 $ 0.45 $ 1.74 $ 1.10
=========== =========== =========== ===========
Earnings per share
- diluted:
Income from
continuing
operations
attributable to
LHC Group, Inc. $ 0.54 $ 0.45 $ 1.74 $ 1.12
Loss from
discontinued
operations
attributable to
LHC Group, Inc. (0.01) (0.02)
- - - -
Net income
attributable to
LHC Group, Inc. 0.54 0.45 1.73 1.10
Redeemable
noncontrolling
interest
- - - -
Net income
available to
LHC Group,
Inc.'s common
stockholders $ 0.54 $ 0.45 $ 1.73 $ 1.10
=========== =========== =========== ===========
Weighted average
shares
outstanding:
Basic 17,971,352 17,881,228 17,951,986 17,843,869
Diluted 18,116,984 17,976,305 18,040,918 17,967,488
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Nine Months Ended
September 30,
2009 2008
Operating activities
Net income $ 42,016 $ 27,174
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 3,494 2,730
Provision for bad debts 4,141 10,820
Stock-based compensation expense 1,755 1,380
Deferred income taxes 1,692 497
Loss on impairment of intangible assets 542
Gain on sale of assets (343)
Changes in operating assets and liabilities,
net of acquisitions:
Receivables (12,208) 1,272
Prepaid expenses, income taxes and other assets (3,613) 859
Accounts payable and accrued expenses (1,225) 11,946
Net amounts due to/from governmental entities (1,810) 3,099
Net cash provided by operating activities 34,784 59,434
Investing activities
Purchases of property, building, and equipment (6,124) (7,351)
Purchase of certificate of deposit (522)
Proceeds from sale of assets 3,094
Cash paid for acquisitions, primarily goodwill and
intangible assets (18,481) (40,039)
Net cash used in investing activities (24,605) (44,818)
Financing activities
Proceeds from line of credit 20,605 32,851
Payments on line of credit (20,605) (32,851)
Payment of deferred financing fees (263) (71)
Proceeds from debt issuance 5,050
Principal payments on debt (412) (3,220)
Payments on capital leases (74) (74)
Excess tax benefits from vesting of
restricted stock 98 34
Proceeds from employee stock purchase plan 457 385
Noncontrolling interest distributions (10,988) (6,724)
Net cash used in financing activities (11,182) (4,620)
Change in cash (1,003) 9,996
Cash at beginning of period 3,511 1,155
Cash at end of period $ 2,508 $ 11,151
======== ========
Supplemental disclosures of cash flow information
Interest paid $ 115 $ 356
======== ========
Income taxes paid $ 31,828 $ 8,553
======== ========
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, 2009 September 30, 2009
Home- Facility- Home- Facility-
Based Based Based Based
Services Services Total Services Services Total
Net service
revenue $116,746 $ 15,745 $132,491 $343,702 $ 45,598 $389,300
Cost of
service
revenue 59,621 9,621 69,242 170,583 27,140 197,723
Provision
for bad
debts 1,232 (160) 1,072 4,068 (6) 4,062
General and
admin-
istrative
expenses 39,258 4,532 43,790 114,124 11,876 126,000
Operating
income 16,635 1,752 18,387 54,927 6,588 61,515
Interest
expense (18) (2) (20) (104) (11) (115)
Non
-operating
(loss)
income 45 6 51 (365) 28 (337)
Income from
continuing
operations
before
income
taxes and
noncon-
trolling
interest 16,662 1,756 18,418 54,458 6,605 61,063
Noncon-
trolling
interest 2,719 174 2,893 9,820 1,021 10,841
Income from
continuing
operations
before
income
taxes 13,943 1,582 15,525 44,638 5,584 50,222
Total
assets $256,942 $ 26,406 $283,348 $256,942 $ 26,406 $283,348
Three Months Ended Nine Months Ended
September 30, 2008 September 30, 2008
Home- Facility- Home- Facility-
Based Based Based Based
Services Services Total Services Services Total
Net service
revenue $ 84,514 $ 13,477 $ 97,991 $229,296 $ 41,910 $271,206
Cost of
service
revenue 39,385 7,822 47,207 109,145 23,958 133,103
Provision
for bad
debts 2,759 399 3,158 9,090 1,377 10,467
General and
admin-
istrative
expenses 28,227 3,010 31,237 77,508 10,389 87,897
Operating
income 14,143 2,246 16,389 33,553 6,186 39,739
Interest
expense (113) (19) (132) (276) (89) (365)
Non-
operating
income 58 18 76 703 188 891
Income from
continuing
operations
before
income
taxes and
noncon-
trolling
interest 14,088 2,245 16,333 33,980 6,285 40,265
Noncon-
trolling
interest 2,754 258 3,012 6,471 1,239 7,710
Income from
continuing
operations
before
income
taxes 11,334 1,987 13,321 27,509 5,046 32,555
Total
assets $194,672 $ 21,893 $216,565 $194,672 $ 21,893 $216,565
LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Key Data:
Home Health locations 223 172 223 172
Hospice locations 21 13 21 13
Acquired (1) 3 6 11 27
De novo (1) 2 3 10 9
Home Nursing:
Total new admissions 21,485 14,113 59,368 41,168
Medicare new
admissions 14,927 10,482 41,890 30,309
Average weekly census 28,150 21,733 28,454 20,386
Average Medicare
weekly census 22,486 17,810 22,868 16,410
Medicare completed
episodes 39,678 30,082 118,048 85,179
Average Medicare case
mix for completed
Medicare episodes 1.27 1.27 1.27 1.26
Average reimbursement
per completed
Medicare episodes $ 2,318 $ 2,276 $ 2,297 $ 2,161
Total visits 765,315 551,724 2,177,786 1,560,617
Total Medicare visits 597,634 434,307 1,713,523 1,202,330
Average visits per
completed Medicare
episodes 15.1 14.4 14.5 14.1
Organic growth (2):
Net revenue 15.7% 12.4% 27.6% 14.8%
Net Medicare revenue 15.2% 16.8% 29.0% 18.0%
Total new admissions 15.3% (0.7%) 11.8% 4.2%
Medicare new
admissions 8.6% 5.7% 9.5% 11.8%
Average weekly
census 11.3% 11.5% 20.1% 8.2%
Average Medicare
weekly census 10.2% 19.4% 22.5% 14.6%
Medicare completed
episodes 13.3% 27.3% 24.4% 31.4%
Facility-based
Services:
Long-term Acute Care
Hospital locations 8 7 8 7
Acquired (1) 0 0 1 0
Patient days 13,043 10,930 37,904 34,262
Patient acuity mix 1.03 0.99 1.01 0.98
(1) Inclusive of both home health and hospice agencies.
(2) 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: LHC Group, Inc.
Eric Elliott, Vice President of Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com
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