LHC Group Announces First Quarter 2014 Results

LHC Group Announces First Quarter 2014 Results

Affirms Established 2014 Financial Guidance

LAFAYETTE, La., May 7, 2014 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG),
a national provider of home health, hospice and comprehensive post-acute
healthcare services, today announced its financial results for the three
months ended March 31, 2014.

Financial Results for the First Quarter

  *Net service revenue for the first quarter of 2014 was $163.7 million,
    compared with $162.0 million for the same period in 2013.
  *Net income attributable to LHC Group for the first quarter of 2014 was
    $4.1 million, compared with $6.3 million for the same period in 2013.
  *Diluted earnings per share was $0.24 for the first quarter of 2014, which
    includes a negative $0.05 impact from weather related closures, as
    compared with $0.37 for the same period in 2013.

In commenting on the results, Keith G. Myers, LHC Group's chairman and CEO,
said, "We had a challenging start to 2014, as severe winter weather impacted
over 48% of our agencies and accounted for a decline in same-store volume for
the first quarter. However, our team did an outstanding job under the
circumstances, and we ended the first quarter with strong momentum, which has
continued into the second quarter. We are making significant progress on
integrating our previously announced acquisition of Deaconess HomeCare and Elk
Valley Health Services and are excited about additional opportunities in our
pipeline. As we look ahead to the remainder of 2014 and beyond, we are well
prepared and well positioned to continue improving our operating results by
controlling cost and capitalizing on the opportunities we see ahead for both
internal and external volume growth."

FY 2014 Guidance

The Company is reaffirming its full year 2014 guidance issued on March 5,
2014, for net service revenue in the range of $700 million to $720 million and
fully diluted earnings per share in the range of $1.15 to $1.35. This guidance
includes the negative impact from the Medicare Home Health Prospective Payment
System for 2014 (estimated to be an approximate $0.17 reduction in fully
diluted earnings per share for 2014) and the positive impact of the recently
closed acquisition of the home health, hospice and community-based services
operations of Deaconess HomeCare and Elk Valley Health Services (estimated to
be accretive to fully diluted earnings per share for 2014 of between
approximately $0.05 and $0.10). 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, May 8, 2014, at 11 a.m.
Eastern time to discuss its first quarter 2014 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, May 15, 2014, by dialing
(855) 859‑2056 (international callers should call (404) 537-3406) and entering
confirmation number 25729418. 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 healthcare services,
providing quality, cost-effective healthcare to patients within the comfort
and privacy of their home or place of residence. LHC Group provides a
comprehensive array of healthcare services through home health, hospice and
community‑based services agencies in its home-based and hospice-based
divisions 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, 2013, 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)
                                                                   
                                                          March 31, Dec. 31,
                                                           2014      2013
ASSETS
Current assets:                                                     
Cash                                                       $3,395   $14,014
Receivables:                                                        
Patient accounts receivable, less allowance for
uncollectible accounts of $14,819 and $14,334,            84,470    88,964
respectively
Other receivables                                          730       608
Amounts due from governmental entities                     1,166     1,234
Total receivables, net                                     86,366    90,806
Deferred income taxes                                      9,655     9,251
Prepaid income taxes                                       3,821     4,069
Prepaid expenses                                           7,361     6,966
Other current assets                                       4,186     4,449
Total current assets                                       114,784   129,555
Property, building and equipment, net of accumulated       31,273    31,052
depreciation of $42,475 and $40,935, respectively
Goodwill                                                   196,358   194,893
Intangible assets, net of accumulated amortization of      62,047    62,184
$4,985 and $4,518, respectively
Other assets                                               63,638    4,542
Total assets                                               $468,100 $422,226
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                                
Accounts payable and other accrued liabilities             $17,587  $17,217
Salaries, wages and benefits payable                       24,521    31,927
Self-insurance reserve                                     6,502     5,862
Current portion of long-term debt                          222       249
Amounts due to governmental entities                       3,664     4,391
Total current liabilities                                  52,496    59,646
Deferred income taxes                                      29,859    29,060
Income tax payable                                         3,415     3,415
Revolving credit facility                                  70,000    22,000
Long-term debt, less current portion                       953       963
Total liabilities                                          156,723   115,084
Noncontrolling interest- redeemable                        10,797    11,258
Stockholders' equity:                                               
Common stock – $0.01 par value: 40,000,000 shares
authorized; 21,949,411 and 21,801,634 shares issued in     219       218
2014 and 2013, respectively
Treasury stock – 4,724,491 and 4,693,647 shares at cost,   (35,442)  (34,715)
respectively
Additional paid-in capital                                 105,476   103,972
Retained earnings                                          227,602   223,534
Total LHC Group, Inc. stockholders' equity                 297,855   293,009
Noncontrolling interest- non-redeemable                    2,725     2,875
Total equity                                               300,580   295,884
Total liabilities and stockholders' equity                 $468,100 $422,226

                                      



LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share data)
(Unaudited)
                                                        
                                                        Three Months Ended
                                                         March 31,
                                                        2014       2013
Net service revenue                                      $163,681  $161,953
Cost of service revenue                                  97,334     93,248
Gross margin                                             66,347     68,705
Provision for bad debts                                  3,362      3,917
General and administrative expenses                      54,612     51,623
Operating income                                         8,373      13,165
Interest expense                                        (388)      (425)
Non-operating income                                     33         65
Income before income taxes and noncontrolling interest   8,018      12,805
Income tax expense                                       2,923      4,536
Net Income                                               5,095      8,269
Less net income attributable to noncontrolling interests 1,027      1,983
Net income attributable to LHC Group, Inc.'s common      $4,068    $6,286
stockholders
                                                                  
Earnings per share – basic and diluted:                            
Net income attributable to LHC Group, Inc.'s common      $0.24     $0.37
stockholders
                                                                  
Weighted average shares outstanding:                               
Basic                                                    17,148,043 16,966,525
Diluted                                                  17,268,716 17,073,543

                                      



LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
                                                           
                                                           Three Months Ended
                                                            March 31,
                                                           2014      2013
Operating activities                                                 
Net income                                                  $5,095   $8,269
Adjustments to reconcile net income to net cash provided by          
operating activities:
Depreciation and amortization expense                       2,125     1,830
Provision for bad debts                                     3,362     3,917
Stock based compensation expense                            1,048     888
Deferred income taxes                                       395       846
Loss on sale of assets                                      –         14
Changes in operating assets and liabilities, net of                  
acquisitions:
Receivables                                                 956       (1,237)
Prepaid expenses and other assets                           (39)      (664)
Prepaid income taxes                                        248       3,703
Accounts payable and accrued expenses                       (6,428)   (3,178)
Net amounts due to/from governmental entities               (659)     (319)
Net cash provided by operating activities                   6,103     14,069
                                                                    
Investing activities                                                 
Cash paid for acquisitions, primarily goodwill and          (61,159)  (19,655)
intangible assets and advance payments on acquisitions
Purchases of property, building and equipment               (1,520)   (1,151)
Net cash used in investing activities                       (62,679)  (20,806)
                                                                    
Financing activities                                                 
Proceeds from line of credit                                60,000    41,500
Payments on line of credit                                  (12,000)  (38,004)
Proceeds from employee stock purchase plan                  184       179
Proceeds from debt issuance                                 –         201
Payments on debt issuance                                   (37)      –
Noncontrolling interest distributions                       (1,768)   (2,509)
Excess tax benefits from vesting of restricted stock        112       11
Redemption of treasury shares                               (727)     (607)
Purchase of noncontrolling interest                         –         (350)
Sale of noncontrolling interest                             193       –
Net cash provided by financing activities                   45,957    421
Change in cash                                              (10,619)  (6,316)
Cash at beginning of period                                 14,014    9,720
Cash at end of period                                       $3,395   $3,404
                                                                    
Supplemental disclosures of cash flow information                    
Interest paid                                               $370     $425
Income taxes paid                                           $2,413   $10,337

                                      



LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
                            
                            Three Months Ended
                             March 31, 2014
                            Home-Based Hospice-Based Facility-Based Total
                             Services   Services      Services
Net service revenue          $128,680  $15,222      $19,779       $163,681
Cost of service revenue      76,444     8,897         11,993         97,334
Provision for bad debts      2,654      105           603            3,362
General and administrative   44,544     4,447         5,621          54,612
expenses
Operating income             5,038      1,773         1,562          8,373
Interest expense             (310)      (39)          (39)           (388)
Non-operating income         27         3             3              33
Income before income taxes   4,755      1,737         1,526          8,018
and noncontrolling interest
Income tax expense           2,293      346           284            2,923
Net income                   2,462      1,391         1,242          5,095
Less net income attributable 607        201           219            1,027
to noncontrolling interest
Net income attributable to
LHC Group, Inc.'s common     $1,855    $1,190       $1,023        $4,068
stockholders
                                                                 
Total assets                 $402,455  $28,919      $36,726       $468,100

                                      

                            Three Months Ended
                             March 31, 2013
                            Home-Based Hospice-Based Facility-Based Total
                             Services   Services      Services
Net service revenue          $129,076  $12,911      $19,966       $ 161,953
Cost of service revenue      73,535     8,055         11,658         93,248
Provision for bad debts      3,019      258           640            3,917
General and administrative   42,422     3,750         5,451          51,623
expenses
Operating income             10,100     848           2,217          13,165
Interest expense             (353)      (34)          (38)           (425)
Non-operating income         26         15            24             65
Income before income taxes   9,773      829           2,203          12,805
and noncontrolling interest
Income tax expense           3,825      262           449            4,536
Net income                   5,948      567           1,754          8,269
Less net income attributable 1,367      232           384            1,983
to noncontrolling interest
Net income attributable to
LHC Group, Inc.'s common     $4,581    $335         $1,370        $6,286
stockholders
                                                                 
Total assets                 $335,541  $22,600      $36,766       $394,907




LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(Unaudited)
                                       
                                       Three Months Ended March 31,
                                       2014                2013
Key Data:                                                  
Home-Based Services:                                       
Home Health                                                
Locations                               267                 251
Acquired                                2                   19
De novo                                 1                   0
Total new admissions                    30,885              30,361
Medicare new admissions                 21,135              20,581
Average daily census                    33,023              35,175
Average Medicare daily census           24,965              26,603
Medicare completed and billed episodes  42,435              42,808
Average Medicare case mix for completed 0.98                1.26
and billed Medicare episodes^(1)
Average reimbursement per completed and $2,355             $2,297
billed Medicare episodes
Total visits                            907,446             859,498
Total Medicare visits                   681,523             653,796
Average visits per completed and billed 16.1                15.3
Medicare episodes
Organic growth:^(2)                                        
Net revenue                             -5.1%               -2.9%
Net Medicare revenue                    -5.4%               -2.1%
Total new admissions                    -4.6%               4.0%
Medicare new admissions                -4.2%               3.3%
Average daily census                    -11.4%              0.5%
Average Medicare daily census           -11.7%              0.1%
Medicare completed and billed episodes  -5.2%               0.6%
                                                          
Hospice-Based Services:                                    
Locations                               33                  33
Acquired                                1                   1
Admissions                              1,232               1,275
Average daily census                    1,223               1,071
Patient days                            110,043             96,385
Average revenue per patient day         $138               $134
                                                          
Facility-Based Services:                                   
Long-term Acute Care                                       
Locations                               8                   9
Patient days                            16,462              16,118
Average revenue per patient day         $1,154             $1,194
                                                          
^(1) The Centers for Medicare and Medicaid Services (CMS) updated the
Medicare Home Health Prospective Payment System effective January 1, 2014,
which reduced the average case-mix weight for 2014 from 1.3464 to 1.0000.To
offset the effect of resetting the case mix average to 1.000, CMS upwardly
adjusted the national, standardized 60-day episode payment rate by the same
factor that it used to decrease the weights from $2,137.73 in 2013 to
$2,869.27 in 2014.
^(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: Eric Elliott
         Investor Relations
         (337) 233-1307
         eric.elliott@lhcgroup.com

LHC Group Logo
 
Press spacebar to pause and continue. Press esc to stop.