LHC Group Announces Second Quarter 2018 Financial Results

LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the
three and six months ended June 30, 2018.

Financial Results for the Second Quarter of 2018

Operational and Strategic Highlights

Commenting on the results, Keith G. Myers, LHC Group’s Chairman and
Chief Executive Officer, said, “We are very pleased with our strong
growth for the second quarter and with the progress we are making in
post-merger integration of Almost Family locations as we deploy the same
company-wide commitment to quality, growth and efficiency that has led
to industry leading performance and to decades of experience in
partnering with hospitals and health systems. Our results to date
demonstrate that the integration is on track and that our overall growth
strategy is delivering on multiple fronts. The opportunities for growth
across all service lines are as strong as ever as we continue to
leverage our scale, clinical and operational expertise and national
in-home healthcare platform to deliver measurable value for partners,
payers and, most importantly, for the patients, families and communities
we are privileged to serve.”

Fiscal Year 2018 Guidance

The Company re-affirmed its guidance for fiscal year 2018 issued on May
2, 2018. Net service revenue is expected to be in a range of $1.81
billion to $1.86 billion, and adjusted earnings per diluted share is
expected to be in a range of $3.45 to $3.55. The guidance assumes the
following:

The Company’s guidance ranges do not take into account the impact of
future reimbursement changes, if any, future acquisitions, if made, de
novo locations, if opened, or future legal expenses, if necessary.
The adjusted earnings guidance for 2018 is presented on a non-GAAP
basis, as it does not include the impact of transaction related costs,
integration related expenses or other expenses related to the merger or
other acquisitions. Given the difficulty in predicting the future amount
and timing of merger related expenses, the Company cannot reasonably
provide a full reconciliation of its fiscal year 2018 adjusted earnings
per share guidance to GAAP earnings per share.

Commenting on the 2018 outlook, Joshua L. Proffitt, LHC Group’s Chief
Financial Officer, added, “The full year is unfolding much like we
anticipated with a combination of strong organic and adjusted earnings
growth driven by high quality service, realization of transaction
synergies and improved operations. We are pleased with the size and
quality of our acquisition pipeline and expect that we will build on the
pace we have set through the balance of the year as we continue to
demonstrate the value proposition we are uniquely positioned to deliver
with our national in-home healthcare platform.”

Conference Call

LHC Group will host a conference call on Thursday, August 2, 2018, at
11:00 a.m. Eastern time to discuss its second quarter 2018 results. The
toll-free number to call for this interactive teleconference is
(866) 393-1608 (international callers: (973) 890-8327). A telephonic
replay of the conference call will be available through midnight on
August 9, 2018, by dialing (855) 859-2056 (international callers: (404)
537-3406) and entering confirmation number 3998663.

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
following the conclusion of the live broadcast.

About LHC Group, Inc.

LHC
Group, Inc. is a national provider of in-home healthcare services
and innovations, providing quality, value-based healthcare to patients
primarily within the comfort and privacy of their home or place of
residence. LHC Group’s services cover a wide range of healthcare needs
for patients and families dealing with illness, injury, or chronic
conditions. The company’s approximately 30,000 employees deliver home
health, hospice, home and community based services, and facility-based
services from approximately 780 locations in communities in 37 states.
Through its healthcare innovations business, LHC Group drives increased
utilization of home healthcare and enhances patient and caregiver
engagement. LHC Group is the preferred in-home healthcare partner for 76
health systems, consisting of 337 leading hospitals around the country.

Forward-looking Statements

This press release contains “forward-looking statements” (as defined in
the Securities Litigation Reform Act of 1995) regarding, among other
things, future events or the future financial performance of the
Company, or anticipated benefits of the transaction. Words such as
“anticipate,” “expect,” “project,” “intend,” “believe,” “will,”
“estimates,” “may,” “could,” “should” and words and terms of similar
substance used in connection with any discussion of future plans,
actions or events identify forward-looking statements. Forward-looking
statements contained in this press release include, but are not limited
to: our 2018 revenue and earnings guidance, statements about the
benefits of the merger, including anticipated earnings accretion,
synergies and cost savings and the timing thereof; the Company’s plans,
objectives, expectations, projections and intentions; and other
statements relating to the transaction that are not historical facts.
Forward-looking statements are based on information currently available
to the Company and involve estimates, expectations and projections.
Investors are cautioned that all such forward-looking statements are
subject to risks and uncertainties, and important factors could cause
actual events or results to differ materially from those indicated by
such forward-looking statements. With respect to the merger, these
risks, uncertainties and factors include, but are not limited to: the
risk that the businesses will not be integrated successfully; the risk
that the cost savings, synergies and growth from the transaction may not
be fully realized or may take longer to realize than expected; the
diversion of management time on integration-related issues; and the risk
that costs associated with the integration of the businesses are higher
than anticipated. With respect to the Company’s businesses, these risks,
uncertainties and factors include, but are not limited to: changes in,
or failure to comply with, existing government regulations that impact
the Company’s businesses; legislative proposals for healthcare reform;
the impact of changes in future interpretations of fraud, anti-kickback,
or other laws; changes in Medicare and Medicaid reimbursement levels;
changes in laws and regulations with respect to Accountable Care
Organizations; changes in the marketplace and regulatory environment for
Health Risk Assessments; decrease in demand for the Company’s services;
the potential impact of the transaction on relationships with customers,
joint venture and other partners, competitors, management and other
employees, including the loss of significant contracts or reduction in
revenues associated with major payor sources; ability of customers to
pay for services; risks related to any current or future litigation
proceedings; potential audits and investigations by government and
regulatory agencies, including the impact of any negative publicity or
litigation; the ability to attract new customers and retain existing
customers in the manner anticipated; the ability to hire and retain key
personnel; increased competition from other entities offering similar
services as offered by the Company; reliance on and integration of
information technology systems; ability to protect intellectual property
rights; impact of security breaches, cyber-attacks or fraudulent
activity on the Company’s reputation; the risks associated with
assumptions the parties make in connection with the parties’ critical
accounting estimates and legal proceedings; the risks associated with
the Company’s expansion strategy, the successful integration of recent
acquisitions, and if necessary, the ability to relocate or restructure
current facilities; and the potential impact of an economic downturn or
effects of tax assessments or tax positions taken, risks related to
goodwill and other intangible asset impairment, tax adjustments,
anticipated tax rates, benefit or retirement plan costs, or other
regulatory compliance costs.

Many of these risks, uncertainties and assumptions are beyond the
Company’s ability to control or predict. Because of these risks,
uncertainties and assumptions, you should not place undue reliance on
these forward-looking statements. Furthermore, forward-looking
statements speak only as of the information currently available to the
Company on the date they are made, and the Company does not undertake
any obligation to update publicly or revise any forward-looking
statements to reflect events or circumstances that may arise after the
date of this press release. The Company does not give any assurance
(1) that the Company will achieve its guidance or expectations, or
(2) concerning any result or the timing thereof. All subsequent written
and oral forward-looking statements concerning the transaction or other
matters and attributable to the Company or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements above.

LHC GROUP, INC. AND SUBSIDIARIES,

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

2018

2017

17,300

350,436

Property, building and equipment, net of accumulated depreciation
of $49,173 and $43,565, respectively

1,881,670

76,800

220,005

Income taxes payable

500,143

Preferred stock – $0.01 par value: 5,000,000 shares authorized;
none issued or outstanding

Common stock – $0.01 par value; 60,000,000 and 40,000,000 shares
authorized in 2018 and 2017, respectively; 35,592,424 and
22,640,046 shares issued in 2018 and 2017, respectively

1,881,670

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share and per share data)

(Unaudited)

June 30,

June 30,

Income before income taxes and noncontrolling interest

Less net income attributable to noncontrolling interests

 

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

June 30,

(6,521

8,729

Cash acquired from business combination, net of cash paid

13,086

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)

HomeHealthServices

HospiceServices

Home andCommunity-BasedServices

Facility-BasedServices

Net income (loss) attributable to LHC Group, Inc.’s common
stockholders

1,306,773

189,447

255,456

66,665

63,329

1,881,670

HomeHealthServices

HospiceServices

Home andCommunity-BasedServices

Facility-BasedServices

Net income (loss) attributable to LHC Group, Inc.’s common
stockholders

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION (Continued)

(Amounts in thousands)

(Unaudited)

HomeHealthServices

HospiceServices

Home andCommunity-BasedServices

Facility-BasedServices

Net income (loss) attributable to LHC Group, Inc.’s common
stockholders

HomeHealthServices

HospiceServices

Home andCommunity-BasedServices

Facility-BasedServices

Net income attributable to LHC Group, Inc.’s common stockholders

LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)

June 30,

June 30,

Average Medicare case mix for completed and billed Medicare
episodes

Average reimbursement per completed and billed Medicare episodes

Average visits per completed and billed Medicare episodes

Long-term Acute Care

LHC GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF REVENUE AFTER ADOPTION OF ASU 2014-09

(Amounts in thousands, Unaudited)

RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC.

(Amounts in thousands, Unaudited)

Adjusted net income attributable to LHC Group, Inc.’s common
stockholders

RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE

(Unaudited)

Adjusted net income attributable to LHC Group, Inc.’s common
stockholders

Expenses associated with the closure, relocation or consolidation
of four home health agencies and two long-term acute care
hospitals. Costs include $1.5 million for intangibles impairment
and lease termination charges ($3.5 million pre-tax).

View source version on businesswire.com: https://www.businesswire.com/news/home/20180801006057/en/

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