LHC Group Announces Third Quarter 2013 Results

LHC Group Announces Third Quarter 2013 Results

LAFAYETTE, La., Nov. 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 nine months ended
September 30, 2013.

Financial Results for the Third Quarter

  *Net service revenue for the third quarter of 2013 was $164.7 million,
    compared with $158.9 million for the same period in 2012.
  *Net income attributable to LHC Group for the third quarter of 2013 was
    $5.3 million, compared with $6.3 million for the same period in 2012.
  *Diluted earnings per share was $0.31 for the third quarter of 2013,
    compared with $0.36 for the same period in 2012.

In commenting on the results, Keith G. Myers, LHC Group's chairman and CEO,
said, "As usual, through the first nine months of 2013, our dedicated
employees have once again exceeded expectations. Our ability to consistently
deliver high-quality care to the growing number of patients, families and
communities we serve is a testament to the collective talent, work ethic and
experience of the growing number of healthcare professionals who make up our
LHC Group family. Going forward, we expect the release of the final home
health reimbursement rule and rebasing to provide greater clarity surrounding
the long-term reimbursement environment. As a result, we believe a period of
significant consolidation in the industry will occur over the next several
years, and we are prepared to absorb this growth organically through a more
diversified and comprehensive post-acute strategy in existing markets and
through acquisitions and joint ventures in new markets. We have made
significant investments in people and infrastructure over the past several
years, and we are well positioned to efficiently and effectively deliver the
superior care and service expected by those we serve. We look to the future
with optimism and are prepared for the challenges and opportunities ahead."

Financial Results for the Nine Months

  *Net service revenue for the nine months ended September 30, 2013, was
    $493.0 million, compared with $475.7 million for the same period in 2012.
  *Net income attributable to LHC Group for the nine months ended September
    30, 2013, was $17.4 million, compared with $20.0 million for the same
    period in 2012.
  *Diluted earnings per share was $1.02 for the nine months ended September
    30, 2013, compared with $1.10 for the same period in 2012.

Guidance

The Company is reaffirming its full year 2013 guidance issued on August 7,
2013, for net service revenue of $660 million to $670million and fully
diluted earnings per share in the range of $1.25 to $1.35. 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, November 7, 2013, at 11 a.m.
Eastern time to discuss its third 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, November 14, 2013, by
dialing (855)859‑2056 (international callers should call (404) 537-3406) and
entering confirmation number 69132646. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Unaudited)
                                                                    
                                                           Sept. 30, Dec. 31,
                                                            2013      2012
ASSETS
Current assets:                                                      
Cash                                                        $443      $9,720
Receivables:                                                         
Patient accounts receivable, less allowance for             92,423    83,951
uncollectible accountsof $13,995and $11,863, respectively
Other receivables                                           746       589
Amounts due from governmental entities                      1,223     1,596
Total receivables, net                                      94,392    86,136
Deferred income taxes                                       11,098    7,671
Prepaid income taxes                                        3,125     7,436
Prepaid expenses                                            6,175     6,818
Other current assets                                        4,774     2,949
Total current assets                                        120,007   120,730
Property, building and equipment, net of accumulated        30,561    29,531
depreciation of $39,320 and $34,331, respectively
Goodwill                                                    194,893   169,150
Intangible assets, net of accumulated amortization of       63,199    62,042
$3,357 and $2,985, respectively
Other assets                                                5,373     5,441
Total assets                                                $414,033  $386,894
                                                                    
                                                                    
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                                 
Accounts payable and other accrued liabilities              $19,254   $14,897
Salaries, wages and benefits payable                        25,134    29,890
Self insurance reserve                                      6,868     5,444
Amounts due to governmental entities                        3,975     4,979
Total current liabilities                                   55,231    55,210
Deferred income taxes                                       29,036    25,129
Income tax payable                                          3,415     3,415
Revolving credit facility                                   24,000    19,500
Note payable                                                1,138     –
Total liabilities                                           112,820   103,254
Noncontrolling interest- redeemable                         11,467    11,426
Stockholders' equity:                                                
Common stock – $0.01 par value: 40,000,000 shares
authorized; 21,783,323 and 21,578,772 shares issued in 2013 218       216
and 2012, respectively
Treasury stock – 4,690,392 and 4,653,039 shares at cost,    (34,640)  (33,846)
respectively
Additional paid-in capital                                  102,761   100,619
Retained earnings                                           218,565   201,192
Total LHC Group, Inc. stockholders' equity                  286,904   268,181
Noncontrolling interest- non-redeemable                     2,842     4,033
Total equity                                                289,746   272,214
Total liabilities and stockholders' equity                  $414,033  $386,894

                                                                
                                                                
LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share data)
(Unaudited)
                                                                
                                  Three Months Ended    Nine Months Ended
                                   September 30,         September 30,
                                  2013       2012       2013       2012
Net service revenue                $164,748   $158,926   $493,003   $475,742
Cost of service revenue            97,966     91,234     288,223    273,311
Gross margin                       66,782     67,692     204,780    202,431
Provision for bad debts            2,708      2,987      9,833      8,395
General and administrative         53,047     52,464     158,827    154,313
expenses
Other intangibles impairment       –          650        –          650
charge
Operating income                   11,027     11,591     36,120     39,073
Interest expense                  (430)      (405)      (1,555)    (972)
Non-operating income               54         94         184        108
Income before income taxes and     10,651     11,280     34,749     38,209
noncontrolling interest
Income tax expense                 3,782      3,388      12,236     12,706
Net income                         6,869      7,892      22,513     25,503
Less net income attributable to    1,572      1,556      5,140      5,463
noncontrolling interest
Net income attributable to LHC     $5,297     $6,336     $17,373    $20,040
Group, Inc.'s common stockholders
                                                                
Earnings per share – basic:                                      
Net income attributable to LHC     $0.31      $0.36      $1.02      $1.11
Group, Inc.'s common stockholders
                                                                
Earnings per share – diluted:                                    
Net income attributable to LHC     $0.31      $0.36      $1.02      $1.10
Group, Inc.'s common stockholders
                                                                
Weighted average shares                                          
outstanding:
Basic                              17,083,201 17,656,842 17,035,541 18,121,217
Diluted                            17,182,013 17,726,819 17,109,675 18,160,489

                                                                   
                                                                   
LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
                                                                   
                                                           Nine Months Ended
                                                            September 30,
                                                           2013     2012
Operating activities                                                
Net income                                                  $22,513  $25,503
Adjustments to reconcile net income to net cash providedby 
operating activities:
Depreciation and amortization expense                       5,958    5,801
Provision for bad debts                                     9,833    8,395
Stock based compensation expense                            2,879    3,398
Deferred income taxes                                       480      1,552
Loss on sale of assets                                      17       100
Other intangibles impairment change                         –        650
Changes in operating assets and liabilities, net of                 
acquisitions:
Receivables                                                 (18,462) (7,084)
Prepaid expenses and other assets                           (1,114)  2,247
Prepaid income taxes                                        4,262    13,960
Accounts payable and accrued expenses                       645      (6,597)
Net amounts due to/from governmental entities               (631)    135
Net cash provided by operating activities                  26,380   48,060
                                                                   
Investing activities                                                
Purchases of property, building, and equipment              (5,997)  (6,508)
Proceeds from sale of assets                                –        25
Cash paid for acquisitions, primarily goodwill and          (26,920) (6,764)
intangible assets
Net cash used in investing activities                      (32,917) (13,247)
                                                                   
Financing activities                                                
Proceeds from line of credit                                64,500   173,562
Payments on line of credit                                  (60,000) (183,297)
Proceeds from employee stock purchase plan                  570      587
Proceeds from debt issuance                                 1,138    –
Noncontrolling interest distributions                       (6,286)  (6,582)
Excess tax benefits from vesting of restricted stock        11       –
Redemption of treasury shares                               (794)    –
Purchase of additional controlling interest                 (1,879)  (126)
Payments on repurchase of common stock                      –        (19,017)
Sale of noncontrolling interest                             –        80
Net cash used in financing activities                       (2,740)  (34,793)
Change in cash                                              (9,277)  20
Cash at beginning of period                                 9,720    256
Cash at end of period                                       $443     $276
                                                                   
Supplemental disclosures of cash flow information                   
Interest paid                                               $1,523   $972
Income taxes paid                                           $18,123  $8,644

                                                                
                                                                
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
                                                                
                      Three Months Ended          Nine Months Ended
                       September 30, 2013          September 30, 2013
                       Home-    Facility-          Home-    Facility-
                      Based    Based     Total    Based    Based     Total
                       Services Services           Services Services
Net service revenue    $146,910 $17,838   $164,748 $435,441 $57,562   $493,003
Cost of service        87,082   10,884    97,966   254,924  33,299    288,223
revenue
Provision for bad      2,651    57        2,708    8,796    1,037     9,833
debts
General and
administrative         47,969   5,078     53,047   142,908  15,919    158,827
expenses
Operating income       9,208    1,819     11,027   28,813   7,307     36,120
Interest expense       (387)    (43)      (430)    (1,404)  (151)     (1,555)
Non-operating income   36       18        54       115      69        184
Income before income
taxes and              8,857    1,794     10,651   27,524   7,225     34,749
noncontrolling
interest
Income tax expense     3,422    360       3,782    11,062   1,174     12,236
Net income             5,435    1,434     6,869    16,462   6,051     22,513
Less net income
attributable to        1,279    293       1,572    4,094    1,046     5,140
noncontrolling
interest
Net income
attributable to LHC    $4,156   $1,141    $5,297   $12,368  $5,005    $17,373
Group, Inc.'s common
stockholders
                                                                
Total assets           $379,340 $34,693   $414,033 $379,340 $34,693   $414,033
                                                                
                      Three Months Ended          Nine Months Ended
                       September 30, 2012          September 30, 2012
                       Home-    Facility-          Home-    Facility-
                      Based    Based     Total    Based    Based     Total
                       Services Services           Services Services
Net service revenue    $140,256 $18,670   $158,926 $419,847 $55,895   $475,742
Cost of service        80,579   10,655    91,234   240,347  32,964    273,311
revenue
Provision for bad      2,669    318       2,987    7,626    769       8,395
debts
General and
administrative         47,110   5,354     52,464   137,902  16,411    154,313
expenses
Other intangibles      250      400       650      250      400       650
impairment charge
Operating income       9,648    1,943     11,591   33,722   5,351     39,073
Interest expense       (364)    (41)      (405)    (874)    (98)      (972)
Non-operating income   74       20        94       77       31        108
Income before income
taxes and              9,358    1,922     11,280   32,925   5,284     38,209
noncontrolling
interest
Income tax expense     3,213    175       3,388    11,641   1,065     12,706
Net income             6,145    1,747     7,892    21,284   4,219     25,503
Less net income
attributable to        1,308    248       1,556    4,826    637       5,463
noncontrolling
interest
Net income
attributable to LHC    $4,837   $1,499    $6,336   $16,458  $3,582    $20,040
Group, Inc.'s common
stockholders
                                                                
Total assets           $352,941 $34,557   $387,498 $352,941 $34,557   $387,498

                                                               
                                                               
LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(Unaudited)
                                                               
                            Three Months Ended        Nine Months Ended
                             September 30,             September 30,
                            2013         2012         2013        2012
Key Data:                                                       
Home-Based Services:                                            
Home Health                                                     
Locations                    255          238          255         238
Acquired                    4            2            23          2
De novo                      0            1            0           1
Total new admissions         30,221       27,301       92,260      81,495
Medicare new admissions      21,078       18,415       63,311      55,298
Average daily census         33,527       32,605       34,506      32,764
Average Medicare daily       25,505       24,279       26,109      24,618
census
Medicare completed and       45,804       41,699       133,803     125,466
billed episodes
Average Medicare case mix
for completed and billed     1.28         1.25         1.27        1.25
Medicare episodes
Average reimbursement per
completed and billed         $2,339       $2,337       $2,315      $2,337
Medicare episodes
Total visits                 908,718      883,257      2,682,906   2,677,956
Total Medicare visits        686,295      637,310      2,024,478   1,948,929
Average visits per completed 15.0         15.3         15.1        15.5
and billed Medicare episodes
Organic growth: ^(1)                                            
Net revenue                  -2.4%        1.7%         -2.9%       -1.1%
Net Medicare revenue         1.5%         -1.9%        -0.6%       -4.5%
Total new admissions         1.0%         3.0%         3.0%        5.0%
Medicare new admissions     3.7%         -1.8%        3.7%        0.9%
Average daily census         -2.4%        3.2%         -1.0%       -1.4%
Average Medicare daily       -0.7%        0.3%         -0.2%       -4.1%
census
Medicare completed and       3.8%         0.7%         1.2%        -2.0%
billed episodes
                                                               
Hospice                                                         
Locations                    34           32           34          32
Acquired                    0            0            2           0
Admissions                   1,252        1,117        3,736       3,298
Average daily census         1,144        1,021        1,121       984
Patient days                 105,274      93,972       305,962     269,500
Average revenue per patient  $135         $138         $136        $138
day
                                                               
Facility-Based Services:                                        
Long-term Acute Care                                           
Locations                   9            9            9           9
Patient days                 15,321       15,335       46,722      47,348
Average revenue per patient  $1,118       $1,172       $1,172      $1,143
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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