LHC Group Announces Second Quarter 2013 Results

LHC Group Announces Second Quarter 2013 Results

Raises Guidance for Full Year 2013 to Range of $1.25 to $1.35 Per Fully
Diluted Share

LAFAYETTE, La., Aug. 7, 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 six months ended June 30, 2013.

Financial Results for the Second Quarter

  *Net service revenue for the second quarter of 2013 was $166.3 million,
    compared with $158.1 million for the same period in 2012.
  *Net income attributable to LHC Group for the second quarter of 2013 was
    $5.8 million, compared with $6.0 million in the prior year quarter.
  *Diluted earnings per share was $0.34 for the second quarter of 2013,
    compared with $0.32 for the same period in 2012.
  *Organic growth in new home health admissions in the second quarter of 2013
    was 4.4% compared with the same period in 2012.

In commenting on the results, Keith G. Myers, LHC Group's chairman and CEO,
said, "Our team's performance in the first half of 2013 has been outstanding.
Once again, the collective talent, work ethic and experience of the more than
8,500 healthcare professionals who make up our LHC Group family have proven to
be our greatest competitive advantage. Our people truly are our greatest
asset. Even as we continue to drive efficiencies throughout the organization,
our quality scores and total patient admissions are at all-time highs, and our
employee turnover rate has reached an all-time low. This underpins our
continued belief in our successful operating model and growth strategy. Our
company's proven ability to grow admissions while simultaneously improving
quality, retaining high-caliber employees and becoming more efficient in our
operations is the key to long-term success in today's healthcare environment."

Financial Results for the Six Months

  *Net service revenue for the six months ended June 30, 2013, was $328.3
    million, compared with $316.8 million for the same period in 2012.
  *Net income attributable to LHC Group for the six months ended June 30,
    2013, was $12.1 million, compared with $13.7 million for the same period
    in 2012.
  *Diluted earnings per share was $0.71 for the six months ended June 30,
    2013, compared with $0.74 for the same period in 2012.

Guidance

The Company is raising its full year 2013 fully diluted earnings per share
guidance issued on March 6, 2013, to the range of $1.25 to $1.35 from the
previous range of $1.10 to $1.30. The Company is also adjusting its full year
2013 net service revenue guidance to the range of $660 million to $670 million
from the previous range of $660 million to $680 million. This guidance
includes the impact of sequestration, as well as the impact on the fourth
quarter of 2013 from the proposed rule for the Medicare Home Health
Prospective Payment System for 2014. The guidance also includes the announced
acquisitions of the home health service lines of Addus HomeCare Corp. and
AseraCare Home Health. 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, August 8, 2013, at 11 a.m.
Eastern time to discuss its second quarter 2013 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, August 15, 2013, by
dialing (855) 859‑2056 (international callers should call (404) 537-3406) and
entering confirmation number 99399036. 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
community-based service agencies 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, 2012, 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)
                                                                    
                                                            June 30, Dec. 31,
                                                            2013     2012
                                                                    
ASSETS                                                               
Current assets:                                                      
Cash                                                         $7,046   $9,720
Receivables:                                                         
Patient accounts receivable, less allowance for              87,677   83,951
uncollectible accountsof $13,602and $11,863, respectively
Other receivables                                            575      589
Amounts due from governmental entities                       1,223    1,596
Total receivables, net                                       89,475   86,136
Deferred income taxes                                        9,898    7,671
Prepaid income taxes                                         3,912    7,436
Prepaid expenses                                             7,383    6,818
Other current assets                                         3,942    2,949
Total current assets                                         121,656  120,730
Property, building and equipment, net of accumulated         30,062   29,531
depreciation of $37,558 and $34,331, respectively
Goodwill                                                     190,258  169,150
Intangible assets, net of accumulated amortization of $3,263 63,535   62,042
and $2,985, respectively
Other assets                                                 9,877    5,441
Total assets                                                 $415,388 $386,894
                                                                    
LIABILITIES AND STOCKHOLDERS' EQUITY                                  
Current liabilities:                                                 
Accounts payable and other accrued liabilities               $20,249  $14,897
Salaries, wages and benefits payable                         31,676   29,890
Self insurance reserve                                       6,261    5,444
Amounts due to governmental entities                         4,174    4,979
Total current liabilities                                    62,360   55,210
Deferred income taxes                                        28,626   25,129
Income tax payable                                           3,415    3,415
Revolving credit facility                                    25,000   19,500
Note payable                                                 567      –
Total liabilities                                            119,968  103,254
Noncontrolling interest- redeemable                          11,826   11,426
Stockholders' equity:                                                
Common stock – $0.01 par value: 40,000,000 shares
authorized; 21,763,097 and 21,578,772 shares issued in 2013  217      216
and 2012, respectively
Treasury stock – 4,688,693 and 4,653,039 shares at cost,     (34,601) (33,846)
respectively
Additional paid-in capital                                   101,865  100,619
Retained earnings                                            213,268  201,192
Total LHC Group Inc. stockholders' equity                    280,749  268,181
Noncontrolling interest- non-redeemable                      2,845    4,033
Total equity                                                 283,594  272,214
Total liabilities and stockholders' equity                   $415,388 $386,894


LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except share and per share data)
(unaudited)
                                                                
                                  Three Months Ended    Six Months Ended
                                  June 30,              June 30,
                                  2013       2012       2013       2012
Net service revenue                $166,302   $158,055   $328,255   $316,816
Cost of service revenue            97,009     92,218     190,257    182,077
Gross margin                       69,293     65,837     137,998    134,739
Provision for bad debts            3,208      2,647      7,125      5,408
General and administrative         54,157     50,967     105,780    101,849
expenses
Operating income                   11,928     12,223     25,093     27,482
Interest expense                   (700)      (208)      (1,125)    (567)
Non-operating income (loss)        65         (51)       130        14
Income before income taxes and     11,293     11,964     24,098     26,929
noncontrolling interest
Income tax expense                 3,918      4,092      8,454      9,318
Net income                         7,375      7,872      15,644     17,611
Less net income attributable to    1,585      1,909      3,568      3,907
noncontrolling interest
Net income attributable to LHC     $5,790     $5,963     $12,076    $13,704
Group, Inc.'s common stockholders
                                                                
Earnings per share – basic:                                      
Net income attributable to LHC     $0.34      $0.32      $0.71      $0.75
Group, Inc.'s common stockholders
                                                                
Earnings per share – diluted:                                    
Net income attributable to LHC     $0.34      $0.32      $0.71      $0.74
Group, Inc.'s common stockholders
                                                                
Weighted average shares outstanding:                              
Basic                              17,055,619 18,385,783 17,011,306 18,357,362
Diluted                            17,127,017 18,423,258 17,088,463 18,396,453


LHC GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
                                                                    
                                                            Six Months Ended
                                                            June 30,
                                                            2013     2012
Operating activities                                                 
Net income                                                   $15,644  $17,611
Adjustments to reconcile net income to net cash provided by          
operating activities:
Depreciation and amortization expense                        3,830    3,836
Provision for bad debts                                      7,125    5,408
Stock based compensation expense                             1,895    2,387
Deferred income taxes                                        1,270    1,803
Loss on sale of assets                                       15       113
Changes in operating assets and liabilities, net of                  
acquisitions:
Receivables                                                  (10,837) (4,875)
Prepaid expenses and other assets                            (1,519)  2,090
Prepaid income taxes                                         3,479    10,802
Accounts payable and accrued expenses                        7,600    416
Net amounts due to/from governmental entities                (432)    132
Net cash provided by operating activities                    28,070   39,723
                                                                    
Investing activities                                                 
Purchases of property, building, and equipment               (3,569)  (3,314)
Proceeds from sale of assets                                 –        23
Cash paid for acquisitions, primarily goodwill and           (26,920) (1,700)
intangible assets and advanced payment on acquisitions
Net cash used in investing activities                        (30,489) (4,991)
                                                                    
Financing activities                                                 
Proceeds from line of credit                                 55,000   66,446
Payments on line of credit                                   (49,500) (92,957)
Proceeds from Employee stock purchase plan                   392      407
Proceeds from debt issuance                                  567      –
Noncontrolling interest distributions                        (4,352)  (4,452)
Excess tax benefits from vesting of restricted stock         11       –
Redemption of treasury shares                                (755)    –
Purchase of additional controlling interest                  (1,618)  (126)
Payments on repurchase of common stock                       –        (4,001)
Sale of noncontrolling interest                              –        80
Net cash provided by (used in) financing activities          (255)    (34,603)
Change in cash                                               (2,674)  129
Cash at beginning of period                                  9,720    256
Cash at end of period                                        $7,046   $385
                                                                    
Supplemental disclosures of cash flow information                    
Interest paid                                                $1,125   $567
Income taxes paid                                            $14,376  $8,203


LHC GROUP INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(amounts in thousands)
(unaudited)
                                                                            
                    Three Months Ended                 Six Months Ended
                    June 30, 2013                      June 30, 2013
                    Home-Based Facility-Based         Home-Based Facility-Based 
                    Services   Services       Total    Services   Services       Total
Net service revenue  $146,544   $19,758        $166,302 $288,531   $39,724        $328,255
Cost of service      86,252     10,757         97,009   167,842    22,415         190,257
revenue
Provision for bad    2,868      340            3,208    6,145      980            7,125
debts
General and
administrative       48,767     5,390          54,157   94,939     10,841         105,780
expenses
Operating income     8,657      3,271          11,928   19,605     5,488          25,093
Interest expense     (630)      (70)           (700)    (1,017)    (108)          (1,125)
Non-operatingincome 38         27             65       79         51             130
Income before income
taxes and            8,065      3,228          11,293   18,667     5,431          24,098
noncontrolling
interest
Income tax expense   3,553      365            3,918    7,640      814            8,454
Net income           4,512      2,863          7,375    11,027     4,617          15,644
Less net income
attributable to      1,216      369            1,585    2,815      753            3,568
noncontrolling
interest
Net income
attributable to LHC  $3,296     $2,494         $5,790   $8,212     $3,864         $12,076
Group Inc.'s common
stockholders
Total assets         $378,687   $36,701        $415,388 $378,687   $36,701        $415,388
                                                                            
                    Three Months Ended                 Six Months Ended
                    June 30, 2012                      June 30, 2012
                    Home-Based Facility-Based         Home-Based Facility-Based 
                    Services   Services       Total    Services   Services       Total
Net service revenue  $139,996   $18,059        $158,055 $279,591   $37,225        $316,816
Cost of service      80,707     11,511         92,218   159,768    22,309         182,077
revenue
Provision for bad    2,334      313            2,647    4,957      451            5,408
debts
General and
administrative       45,566     5,401          50,967   90,792     11,057         101,849
expenses
Operating income     11,389     834            12,223   24,074     3,408          27,482
Interest expense     (187)      (21)           (208)    (510)      (57)           (567)
Non-operating income (50)       (1)            (51)     3          11             14
(loss)
Income before income
taxes and            11,152     812            11,964   23,567     3,362          26,929
noncontrolling
interest
Income tax expense   3,697      395            4,092    8,428      890            9,318
Net income           7,455      417            7,872    15,139     2,472          17,611
Less net income
attributable to      1,826      83             1,909    3,518      389            3,907
noncontrolling
interest
Net income
attributable to LHC  $5,629     $334           $5,963   $11,621    $2,083         $13,704
Group Inc.'s common
stockholders
Total assets         $348,788   $34,568        $383,356 $348,788   $34,568        $383,356


LHC GROUP INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
                                                               
                            Three Months Ended       Six Months Ended
                            June 30,                 June 30,
                            2013         2012        2013         2012
Key Data:                                                       
Home-Based Services:                                            
Home Health                                                     
Locations                    251          244         251          244
Acquired                     0            0           19           0
De novo                      0            0           0            1
Total new admissions         30,796       26,498      61,010       54,194
Medicare new admissions      20,766       17,837      41,293       36,883
Average daily census         34,923       32,988      35,250       32,723
Average Medicare daily       26,375       24,858      26,619       24,720
census
Medicare completed and       44,579       42,480      87,387       83,767
billed episodes
Average Medicare case mix
for completed and billed     1.27         1.26        1.26         1.26
Medicare episodes
Average reimbursement per
completed and billed         $2,302       $2,352      $2,299       $2,350
Medicare episodes
Total visits                 914,690      896,322     1,774,188    1,794,699
Total Medicare visits        684,387      653,053     1,338,183    1,311,619
Average visits per completed 15.4         15.4        15.3         15.7
and billed Medicare episodes
Organic growth: ^(1)                                            
Net revenue                  -3.5%        -2.5%       -3.2%        -2.4%
Net Medicare revenue         -1.0%        -6.4%       -1.6%        -5.7%
Total new admissions         4.4%         6.3%        4.0%         6.0%
Medicare new admissions      4.7%         2.1%        3.9%         2.3%
Average daily census         -0.3%        -2.8%       1.0%         -4.1%
Average Medicare daily       0.0%         -5.1%       0.9%         -6.1%
census
Medicare completed and       0.4%         -4.6%       0.5%         -3.3%
billed episodes
                                                               
Hospice                                                         
Locations                    34           32          34           32
Acquired                     1            0           2            0
Admissions                   1,209        1,072       2,589        2,181
Average daily census         1,146        995         1,109        964
Patient days                 104,303      90,564      200,688      175,528
Average revenue per patient  $135         $138        $137         $138
day
                                                               
Facility-Based Services:                                        
Long-term Acute Care                                            
Locations                    9            9           9            9
Patient days                 15,283       15,822      31,401       32,013
Average revenue per patient  $1,203       $1,102      $1,198       $1,129
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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