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LHC Group Announces Fourth Quarter and Full-Year 2012 Results



LHC Group Announces Fourth Quarter and Full-Year 2012 Results

LAFAYETTE, La., March 6, 2013 (GLOBE NEWSWIRE) -- LHC Group Inc.
(Nasdaq:LHCG), a national provider of post-acute care services, today
announced its financial results for the three months and year ended December
31, 2012.

Financial Results for the Fourth Quarter

  * Net service revenue for the fourth quarter of 2012 was $161.8 million,
    compared with $157.7 million for the same period in 2011.
  * Net income attributable to LHC Group for the fourth quarter of 2012 was
    $7.4 million, compared with $7.2 million for the same period in 2011.
  * Diluted earnings per share was $0.43 for the fourth quarter of 2012,
    compared with $0.39 for the same period in 2011.
  * Organic growth in new home health admissions was 5.6% for the fourth
    quarter of 2012.

Financial Results for the Year

  * Net service revenue for the year ended December 31, 2012, was $637.6
    million, compared with $633.9 million for the same period in 2011.
  * Net income attributable to LHC Group for the year ended December 31, 2012,
    was $27.4 million, compared with a net loss attributable to LHC Group for
    year ended December 31, 2011, of $13.2 million, which included a $45
    million after-tax charge related to fees and legal expense associated with
    the third quarter 2011 settlement agreement with the government.
  * Diluted earnings per share was $1.53 for the year ended December 31, 2012,
    compared with a loss per share of $0.73, including the aforementioned
    third quarter 2011 settlement with the government, for the same period in
    2011.
  * Organic growth in new home health admissions was 5.1% for the year ended
    December 31, 2012.

In commenting on the results, Keith G. Myers, Chief Executive Officer of LHC
Group, said, "We are pleased with our operating results and the overall
performance of our company and our team in 2012. We ended the year with solid
momentum in both volume growth and cost containment, while going through a
strategic alternative process during the first half of the year and converting
to a new point-of-care software system. Most importantly, our team of
dedicated caregivers in communities throughout the country continues to
provide the highest quality of care, day in and day out, to the patients,
families and communities we serve. As we look ahead to the remainder of 2013
and beyond, we are well prepared and well positioned to continue increasing
shareholder value by focusing on efficiencies while capitalizing on the
opportunities we see ahead for both internal and external volume growth."

FY 2013 Guidance

Fiscal year net service revenue is expected to be in the range of $660 million
to $680 million, and fully diluted earnings per share are expected to be in
the range of $1.10 to $1.30. This guidance includes the negative impact of
sequestration, which is an approximate $8.5 million reduction in Medicare
revenue and $0.30 reduction in fully diluted earnings per share for the nine
month period of April 1 to December 31, 2013. This guidance assumes that
sequestration will affect the reimbursement on Medicare patients whose service
dates end on and after April 1. This guidance also includes the impact of the
recently announced acquisition of the home health service line of Addus
HomeCare Corp. This guidance, however, does not take into account the impact
of other future reimbursement changes, if any, future acquisitions or share
repurchases, if made, de novo locations, if opened, or future legal expenses,
if necessary.

Conference Call

LHC Group will host a conference call Thursday, March 7, 2013, at 11 a.m.
Eastern time to discuss its fourth quarter and year-end 2012 results. The
toll-free number to call for this interactive teleconference is (866) 393-1608
(international callers should call 973-890-8327). A telephonic replay of the
conference call will be available through midnight on Thursday, March 14,
2013, by dialing (855) 859‑2056 (international callers should call
404-537-3406) and entering confirmation number 89678158. A live broadcast of
LHC Group's conference call will be available under the Investor Relations
section of the company's website, www.LHCgroup.com. A one-year online replay
will be available approximately an hour after the conclusion of the live
broadcast.

About LHC Group Inc.

LHC Group Inc. is a national provider of post-acute care, providing quality,
cost-effective health care to patients within the comfort and privacy of their
home or place of residence. LHC Group provides a comprehensive array of
post-acute healthcare services through home health, hospice and private duty
locations in its home-based division and long-term acute care hospitals in its
facility-based division.

Certain matters discussed in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements about the company's future financial performance
and the strength of the company's operations. Such forward-looking statements
may be identified by words such as "continue," "expect," and similar
expressions. Forward-looking statements involve a number of risks and
uncertainties that may cause actual results to differ materially from those
expressed or implied by such forward-looking statements, including changes in
reimbursement, changes in government regulations, changes in LHC Group's
relationships with referral sources, increased competition for LHC Group's
services, increased competition for joint venture and acquisition candidates,
changes in the interpretation of government regulations, and other risks set
forth in Item 1A. Risk Factors in LHC Group's Annual Report on Form 10-K for
the year ended December 31, 2011, filed with the Securities and Exchange
Commission. LHC Group undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

                                       

LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(unaudited)
                                                           Dec. 31,  Dec. 31,
                                                           2012      2011
ASSETS
Current assets:                                                       
Cash                                                       $ 9,720   $ 256
Receivables:                                                          
Patient accounts receivable, less allowance for
uncollectible accounts  of $11,863  and $10,692,           83,951    91,183
respectively
Other receivables                                          589       1,636
Amounts due from governmental entities                     1,596     315
Total receivables, net                                     86,136    93,134
Deferred income taxes                                      7,671     7,269
Prepaid income taxes                                       7,436     26,667
Prepaid expenses                                           6,818     6,576
Other current assets                                       2,949     4,363
Total current assets                                       120,730   138,265
Property, building and equipment, net of accumulated       29,531    28,182
depreciation of $34,331 and $28,073, respectively
Goodwill                                                   169,150   164,731
Intangible assets, net of accumulated amortization of      62,042    59,389
$2,985 and $2,325, respectively
Other assets                                               5,441     5,809
Total assets                                               $ 386,894 $ 396,376
                                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                                  
Accounts payable and other accrued liabilities             $ 14,897  $ 23,119
Salaries, wages and benefits payable                       29,890    25,571
Self insurance payable                                     5,444     5,612
Amounts due to governmental entities                       4,979     3,234
Total current liabilities                                  55,210    57,536
Deferred income taxes                                      25,129    22,523
Income tax payable                                         3,415     3,415
Revolving credit facility                                  19,500    34,820
Total liabilities                                          103,254   118,294
Noncontrolling interest- redeemable                        11,426    11,348
Stockholders' equity:                                                 
Common stock – $0.01 par value: 40,000,000 shares
authorized; 21,578,772 and 21,374,264 shares issued and    216       183
16,925,733 and 18,298,659 shares outstanding, respectively
Treasury stock – 4,653,039 and 3,075,605 shares at cost,   (33,846)  (6,216)
respectively
Additional paid-in capital                                 100,619   95,964
Retained earnings                                          201,192   173,752
Total LHC Group Inc. stockholders' equity                  268,181   263,683
Noncontrolling interest- non-redeemable                    4,033     3,051
Total equity                                               272,214   266,734
Total liabilities and stockholders' equity                 $ 386,894 $ 396,376

                                       

LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (amounts in thousands, except share and per share data)
(unaudited)
                                   Three Months Ended    Year Ended
                                   December 31,          December 31,
                                   2012       2011       2012       2011
Net service revenue                $ 161,827  $  157,676 $ 637,569  $ 633,872
Cost of service revenue            92,441     89,359     365,752    352,346
Gross margin                       69,386     68,317     271,817    281,526
Provision for bad debts            3,480      3,417      11,875     12,320
General and administrative         50,674     50,737     205,637    210,588
expenses
Settlement with government         –          –          –          65,000
agencies
Operating income (loss)            15,232     14,163     54,305     (6,382)
Interest expense                   (578)      (511)      (1,550)    (1,018)
Gain (loss) on the sale of assets  (5)        54         (105)      59
and entities
Non-operating income               81         154        289        1,722
Income (loss) from continuing
operations before income taxes and 14,730     13,860     52,939     (5,619)
noncontrolling interest
Income tax expense (benefit)       4,805      4,452      17,511     (1,968)
Net income (loss) from continuing  9,925      9,408      35,428     (3,651)
operations
Less net income attributable       2,525      2,174      7,988      9,593
to noncontrolling interest
Net income (loss) attributable
to LHC Group, Inc.'s common        $ 7,400    $ 7,234    $ 27,440   $ (13,244)
stockholders
                                                                     
Earnings per share – basic:                                          
Net income (loss) attributable
to LHC Group, Inc.'s common        $ 0.43     $ 0.40     $ 1.54     $ (0.73)
stockholders
                                                                     
Earnings per share – diluted:                                        
Net income (loss) attributable
to LHC Group, Inc.'s common        $ 0.43     $ 0.39     $ 1.53     $ (0.73)
stockholders
                                                                     
Weighted average shares                                              
outstanding:
Basic                              17,056,611 18,296,062 17,853,321 18,265,118
Diluted                            17,155,909 18,353,505 17,899,195 18,265,118

                                       

LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
                                                           Year Ended
                                                           December 31,
                                                           2012      2011
                                                                      
Operating activities                                                  
Net income (loss)                                          $ 35,428  $ (3,651)
Adjustments to reconcile net income to net cash provided              
by (used in) operating activities:
Depreciation and amortization expense                      7,806     7,521
Provision for bad debts                                    11,875    12,320
Stock based compensation expense                           4,390     4,092
Deferred income taxes                                      2,204     4,378
Loss on sale of assets                                     105       –
Other intangibles impairment change                        650       –
Changes in operating assets and liabilities, net of                   
acquisitions:
Receivables                                                (4,497)   (21,024)
Prepaid expenses, other assets                             1,780     6,247
Prepaid income taxes                                       18,855    (17,926)
Accounts payable and accrued expenses                      (4,288)   4,478
Net amounts due to/from governmental entities              464       189
Net cash provided by (used in) operating activities        74,772    (3,376)
                                                                      
Investing activities                                                  
Purchases of property, building, and equipment             (8,415)   (11,680)
Proceeds from sale of assets                               33        –
Cash paid for acquisitions, primarily goodwill and         (6,758)   (7,945)
intangible assets and advance payment on acquisitions
Net cash used in investing activities                      (15,140)  (19,625)
                                                                      
Financing activities                                                  
Proceeds from line of credit                               188,561   142,995
Payments on line of credit                                 (203,881) (108,175)
Payments on capital leases                                 –         (14)
Excess tax benefits from vesting of restricted stock       –         320
Proceeds from issuance of common stock under Employee      783       860
Stock Purchase Plan
Noncontrolling interest distributions                      (8,444)   (11,857)
Purchase of additional controlling interest                (309)     (891)
Sale of noncontrolling interest                            80        308
Repurchase of common stock                                 (26,958)  (577)
Net cash (used in) provided by financing activities        (50,168)  22,969
Change in cash                                             9,464     (32)
Cash at beginning of period                                256       288
Cash at end of period                                      $ 9,720   $ 256
                                                                      
Supplemental disclosures of cash flow information                     
Interest paid                                              $ 1,550   $ 1,018
Income taxes paid                                          $ 8,645   $ 11,363

                                       

LHC GROUP INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(amounts in thousands)
(unaudited)
               Three Months Ended                  Year Ended
               December 31, 2012                   December 31, 2012
               Home-Based Facility-Based Total     Home-Based Facility-Based Total
               Services   Services                 Services   Services
Net service    $ 143,894  $ 17,933       $ 161,827 $ 563,741  $ 73,828       $ 637,569
revenue
Cost of
service        81,842     10,599         92,441    322,189    43,563         365,752
revenue
Provision for  2,967      513            3,480     10,593     1,282          11,875
bad debts
General and
administrative 45,573     5,101          50,674    184,125    21,512         205,637
expenses
Operating      13,512     1,720          15,232    46,834     7,471          54,305
income
Interest       (482)      (96)           (578)     (1,356)    (194)          (1,550)
expense
Non-operating
income,
including gain 56         20             76        133        51             184
on sale of
assets
Income before
income taxes
and            13,086     1,644          14,730    45,611     7,328          52,939
noncontrolling
interest
Income tax     3,979      826            4,805     15,457     2,054          17,511
expense
Net income     9,107      818            9,925     30,154     5,274          35,428
Noncontrolling 2,138      387            2,525     6,964      1,024          7,988
interest
Net income
attributable   $ 6,969    $ 431          $ 7,400   $ 23,190   $ 4,250        $ 27,440
to LHC Group
Inc.
Total assets   $ 349,740  $ 37,154       $ 386,894 $ 349,740  $ 37,154       $ 386,894
                                                    
               Three Months Ended                  Year Ended
               December 31, 2011                   December 31, 2011
               Home-Based Facility-Based Total     Home-Based Facility-Based Total
               Services   Services                 Services   Services
Net service    $ 139,167  $ 18,509       $ 157,676 $ 557,901  $ 75,971       $ 633,872
revenue
Cost of
service        78,591     10,768         89,359    307,744    44,602         352,346
revenue
Provision for  3,178      239            3,417     11,680     640            12,320
bad debts
General and
administrative 45,222     5,515          50,737    190,264    20,324         210,588
expenses
Settlement
with           –          –              –         65,000     –              65,000
government
agencies
Operating      12,176     1,987          14,163    (16,787)   10,405         (6,382)
income (loss)
Interest       (458)      (53)           (511)     (914)      (104)          (1,018)
expense
Non-operating
income,
including gain 129        79             208       1,645      136            1,781
on sale of
assets
Income (loss)
before income
taxes and      11,847     2,013          13,860    (16,056)   10,437         (5,619)
noncontrolling
interest
Income tax
expense        3,710      742            4,452     (4,201)    2,233          (1,968)
(benefit)
Net income     8,137      1,271          9,408     (11,855)   8,204          (3,651)
(loss)
Noncontrolling 2,000      174            2,174     8,404      1,189          9,593
interest
Net income
(loss)                                                                       $
attributable   $ 6,137    $ 1,097        $ 7,234   $ (20,259) $ 7,015        (13,244)
to LHC Group
Inc.
Total assets   $ 360,340  $ 36,036       $ 396,376 $ 360,340  $ 36,036       $ 396,376

                                       

LHC GROUP INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
                               Three Months Ended      Year Ended
                               December 31,            December 31,
                               2012        2011        2012        2011
Key Data:                                                           
Home-Based Services:                                                
Home Health                                                         
Locations                      232         247         232         247
Acquired                       1           0           3           5
De novo                        0           3           0           6
Total new admissions           27,443      25,410      108,938     102,326
Medicare new admissions        18,665      17,803      73,963      72,260
Average daily census           33,103      31,692      32,834      32,165
Average Medicare daily census  24,765      24,301      24,639      24,899
Medicare completed and billed  41,563      41,391      167,029     169,189
episodes
Average Medicare case mix for
completed and billed Medicare  1.27        1.26        1.25        1.25
episodes
Average reimbursement per
completed and billed Medicare  $ 2,374     $ 2,383     $ 2,336     $ 2,357
episodes
Total visits                   902,275     845,709     3,580,231   3,471,752
Total Medicare visits          660,289     624,682     2,609,218   2,602,347
Average visits per completed   15.9        15.1        16.0        15.4
and billed Medicare episodes
Organic growth ^(1):                                                
Net revenue                    1.3%        -7.9%       -0.5%       -2.5%
Net Medicare revenue           -1.3%       -8.6%       -3.7%       -4.3%
Total new admissions           5.6%        0.9%        5.1%        7.5%
Medicare new admissions        3.3%        1.0%        1.5%        5.4%
Average daily census           3.3%        -8.6%       1.6%        -2.3%
Average Medicare daily census  1.2%        -9.5%       -1.3%       -4.1%
Medicare completed and billed  -0.5%       -9.0%       -1.6%       -0.1%
episodes
                                                                    
Hospice                                                             
Locations                      32          32          32          32
Acquired                       0           0           0           8
Admissions                     1,126       972         4,424       3,997
Average Daily Census           1,037       905         1,000       897
Patient Days                   95,374      83,233      364,874     327,313
Average revenue per patient    $ 139       $ 137       $ 138       $ 136
day
                                                                    
Facility-Based Services:                                            
Long-term Acute Care                                                
Locations                      9           9           9           9
Patient days                   15,552      15,953      62,900      61,939
Patient acuity mix             0.99        1.03        1.00        1.03
Average revenue per patient    $ 1,173     $ 1,129     $ 1,151     $ 1,168
day
 
^(1) Organic growth is calculated as the sum of same store plus de novo for
the period divided by total from the same period in the prior year.

CONTACT: Eric Elliott
         Investor Relations
         (337) 233-1307
         eric.elliott@lhcgroup.com

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