LAFAYETTE, La., Aug. 6, 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 and six months ended June 30, 2014.

Financial Results for the Second Quarter

  • Net service revenue for the second quarter of 2014 was $188.9 million, compared with $166.3 million for the same period in 2013.
  • Net income attributable to LHC Group for the second quarter of 2014 was $6.1 million, compared with $5.8 million for the same period in 2013.
  • Diluted earnings per share was $0.35 for the second quarter of 2014, compared with $0.34 for the same period in 2013.

Commenting on the results, Keith G. Myers, LHC Group's chairman and CEO, said, "We are very pleased with our financial performance during the second quarter of 2014 and with our continued ability to execute our long-term growth strategy. Over the last 18 months, we have executed 10 transactions, including the recently announced definitive asset purchase agreement with Life Care Home Health, Inc. that is anticipated to close on September 1. These transactions, with a total purchase price of $101.5 million in cash, consisted of 81 locations in 21 states and represented $151.1 million in aggregate trailing twelve month revenues at the time of acquisition. As we look ahead to the remainder of 2014 and beyond, we are well positioned to continue increasing shareholder value by focusing on growing revenue and improving efficiencies in our existing locations, while capitalizing on opportunities to expand our geographical footprint in home health, hospice and community-based services. I would like to congratulate and thank our entire team for their unwavering commitment to excellence and for consistently delivering the highest quality of care to the growing number of patients, families and communities we serve."

Financial Results for the Six Months

  • Net service revenue for the six months ended June 30, 2014, was $352.5 million, compared with $328.3 million for the same period in 2013.
  • Net income attributable to LHC Group for the six months ended June 30, 2014, was $10.1 million, compared with $12.1 million for the same period in 2013.
  • Diluted earnings per share was $0.59 for the six months ended June 30, 2014, compared with $0.71 for the same period in 2013.

Guidance

The Company is raising its full-year 2014 guidance for net service revenue, which was issued on March 5, 2014, in the range of $700 million to $720 million, to a range of $720 million to $730 million. The Company is also raising the lower end of its range for fully diluted earnings per share from $1.15 to $1.35 to a range of $1.25 to $1.35. This guidance includes the negative impact from the Medicare Home Health Prospective Payment System 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. This guidance does not take into account the impact from LHC Group's recently announced pending acquisition of the assets of Life Care Home Health, Inc., 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 7, 2014, at 11 a.m. Eastern time to discuss its second 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, August 14, 2014, by dialing (855) 859‑2056 (international callers should call (404) 537-3406) and entering confirmation number 66312151. 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)
     
 June 30,Dec. 31,
 20142013
     
ASSETS    
Current assets:    
Cash $12,027 $14,014
Receivables:    
Patient accounts receivable, less allowance for uncollectible accounts of $16,176 and $14,334, respectively 98,932 88,964
Other receivables 2,361 608
Amounts due from governmental entities 990 1,234
Total receivables, net 102,283 90,806
Deferred income taxes 9,817 9,251
Prepaid income taxes 3,497 4,069
Prepaid expenses 8,657 6,966
Other current assets 4,137 4,449
Receivable due from insurance carrier 7,850 –
Total current assets 148,268 129,555
Property, building and equipment, net of accumulated depreciation of $44,258 and $40,935, respectively 32,929 31,052
Goodwill 229,462 194,893
Intangible assets, net of accumulated amortization of $5,461 and $4,518, respectively 83,973 62,184
Other assets 2,993 4,542
Total assets $497,625 $422,226
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable and other accrued liabilities $18,718 $17,217
Salaries, wages and benefits payable 37,648 31,927
Self-insurance reserve 6,610 5,862
Current portion of long-term debt 225 249
Amounts due to governmental entities 3,746 4,391
Legal settlement payable 7,850 –
Total current liabilities 74,797 59,646
Deferred income taxes 30,470 29,060
Income tax payable 3,415 3,415
Revolving credit facility 69,000 22,000
Long-term debt, less current portion 896 963
Total liabilities 178,578 115,084
Noncontrolling interest- redeemable 11,263 11,258
Stockholders' equity:    
Common stock – $0.01 par value: 40,000,000 shares authorized; 21,983,432 and 21,801,634 shares issued in 2014 and 2013, respectively 219 218
Treasury stock – 4,730,511 and 4,693,647 shares at cost, respectively (35,565) (34,715)
Additional paid-in capital 106,549 103,972
Retained earnings 233,663 223,534
 Total LHC Group, Inc. stockholders' equity 304,866 293,009
Noncontrolling interest- non-redeemable 2,918 2,875
 Total equity 307,784 295,884
 Total liabilities and stockholders' equity $497,625 $422,226
 
LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share data)
(Unaudited)
         
 Three Months EndedSix Months Ended 
 June 30,June 30,
 2014201320142013
Net service revenue $188,867 $166,302 $352,548 $328,255
Cost of service revenue 111,527 97,009 208,861 190,257
Gross margin 77,340 69,293 143,687 137,998
Provision for bad debts 4,363 3,208 7,725 7,125
General and administrative expenses 59,614 54,157 114,226 105,780
Operating income 13,363 11,928 21,736 25,093
Interest expense  (830) (700) (1,218) (1,125)
Non-operating income (loss) (109) 65 (76) 130
Income before income taxes and noncontrolling interest 12,424 11,293 20,442 24,098
Income tax expense 4,352 3,918 7,275 8,454
Net income 8,072 7,375 13,167 15,644
Less net income attributable to noncontrolling interests 2,011 1,585 3,038 3,568
Net income attributable to LHC Group, Inc.'s common stockholders $6,061 $5,790 $10,129 $12,076
         
Earnings per share – basic and diluted:        
Net income attributable to LHC Group, Inc.'s common stockholders $0.35 $0.34 $0.59 $0.71
         
Weighted average shares outstanding:        
Basic 17,233,264 17,055,619 17,190,070 17,011,306
Diluted 17,277,224 17,127,017 17,268,556 17,088,463
 
 
LHC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
     
 Six Months Ended
 June 30,
 20142013
Operating activities    
Net income $13,167 $15,644
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization expense 4,413 3,830
Provision for bad debts 7,725 7,125
Stock based compensation expense 2,069 1,895
Deferred income taxes 844 1,270
Gain on sale of assets 144 15
Changes in operating assets and liabilities, net of acquisitions:  
Receivables (8,625) (10,837)
Prepaid expenses and other assets (301) (1,519)
Prepaid income taxes 512 3,479
Accounts payable and accrued expenses 4,249 7,600
Net amounts due to/from governmental entities (401) (432)
Net cash provided by operating activities  23,796 28,070
     
Investing activities    
Purchases of property, building and equipment (3,419) (3,569)
Cash paid for acquisitions, primarily goodwill and intangible assets (65,103) (26,920)
Net cash used in investing activities  (68,522) (30,489)
     
Financing activities    
Proceeds from line of credit 68,000 55,000
Payments on line of credit (21,000) (49,500)
Proceeds from employee stock purchase plan 391 392
Proceeds from debt issuance – 567
Payments on debt (91) –
Noncontrolling interest distributions (3,122) (4,352)
Payment of deferred financing fees (799) –
Excess tax benefits from vesting of restricted stock 112 11
Redemption of treasury shares (850) (755)
Purchase of additional noncontrolling interest (95) (1,618)
Sale of noncontrolling interest 193 –
Net cash provided by (used in) financing activities 42,739 (255)
Change in cash (1,987) (2,674)
Cash at beginning of period 14,014 9,720
Cash at end of period $12,027 $7,046
     
Supplemental disclosures of cash flow information    
Interest paid $1,177 $1,125
Income taxes paid $6,064 $14,376
 
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in thousands)
(Unaudited)
         
 Three Months Ended June 30, 2014
 Home--  Facility--  
 BasedHospice--Based  
 ServicesServicesServicesTotal
Net service revenue $154,260 $17,068 $17,539 $188,867
Cost of service revenue 90,223 10,151 11,153 111,527
Provision for bad debts 4,068 93 202 4,363
General and administrative expenses 49,612 4,791 5,211 59,614
Operating income 10,357 2,033 973 13,363
Interest expense (664) (83) (83) (830)
Non-operating income (loss) (114) 2 3 (109)
Income before income taxes and noncontrolling interest 9,579 1,952 893 12,424
Income tax expense 3,436 530 386 4,352
Net income 6,143 1,422 507 8,072
Less net income attributable to noncontrolling interests 1,537 335 139 2,011
Net income attributable to LHC Group, Inc.'s common stockholders $4,606 $1,087 $368 $6,061
Total assets $425,254 $35,530 $36,841 $497,625
         
 Three Months Ended June 30, 2013
 Home--      
 BasedHospice--Facility-Based  
 ServicesServicesServicesTotal
Net service revenue $132,638 $13,906 $19,758 $166,302
Cost of service revenue 77,624 8,628 10,757 97,009
Provision for bad debts 2,657 211 340 3,208
General and administrative expenses 44,624 4,143 5,390 54,157
Operating income 7,733 924 3,271 11,928
Interest expense (567) (63) (70) (700)
Non-operating income 35 3 27 65
Income before income taxes and noncontrolling interest 7,201 864 3,228 11,293
Income tax expense 3,140 413 365 3,918
Net income 4,061 451 2,863 7,375
Less net income attributable to noncontrolling interests 973 243 369 1,585
Net income attributable to LHC Group, Inc.'s common stockholders $3,088 $208 $2,494 $5,790
Total assets $351,657 $27,030 $36,701 $415,388
 
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Amounts in thousands)
(Unaudited)
         
 Six Months Ended June 30, 2014
 Home--  Facility--  
 BasedHospice--Based  
 ServicesServicesServicesTotal
Net service revenue $282,940 $32,290 $37,318 $352,548
Cost of service revenue 166,667 19,048 23,146 208,861
Provision for bad debts 6,722 198 805 7,725
General and administrative expenses 94,156 9,238 10,832 114,226
Operating income 15,395 3,806 2,535 21,736
Interest expense (974) (122) (122) (1,218)
Non-operating income (loss) (87) 5 6 (76)
Income before income taxes and noncontrolling interest 14,334 3,689 2,419 20,442
Income tax expense 5,729 876 670 7,275
Net income 8,605 2,813 1,749 13,167
Less net income attributable to noncontrolling interests 2,144 536 358 3,038
Net income attributable to LHC Group, Inc.'s common stockholders $6,461 $2,277 $1,391 $10,129
Total assets $425,254 $35,530 $36,841 $497,625
         
 Six Months Ended June 30, 2013
 Home--  Facility--  
 BasedHospice--Based  
 ServicesServicesServicesTotal
Net service revenue $261,714 $26,817 $39,724 $328,255
Cost of service revenue 151,159 16,683 22,415 190,257
Provision for bad debts 5,676 469 980 7,125
General and administrative expenses 87,046 7,893 10,841 105,780
Operating income 17,833 1,772 5,488 25,093
Interest expense (920) (97) (108) (1,125)
Non-operating income 61 18 51 130
Income before income taxes and noncontrolling interest 16,974 1,693 5,431 24,098
Income tax expense 6,965 675 814 8,454
Net income 10,009 1,018 4,617 15,644
Less net income attributable to noncontrolling interests 2,340 475 753 3,568
Net income attributable to LHC Group, Inc.'s common stockholders $7,669 $543 $3,864 $12,076
Total assets $351,657 $27,030 $36,701 $415,388
 
LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(Unaudited)
         
 Three Months Ended Six Months Ended 
 June 30,  June 30,    
 2014201320142013
Key Data:        
Home-Based Services:        
Home Health        
Locations 277 251 277 251
Acquired  24 0 26 19
De novo 0 0 0 0
Total new admissions 33,869 30,868 64,754 61,229
Medicare new admissions 22,986 20,769 44,121 41,350
Average daily census 36,528 34,695 34,783 34,935
Average Medicare daily census 27,129 26,232 26,056 26,418
Medicare completed and billed episodes 47,142 45,191 89,577 87,999
Average Medicare case mix for completed and billed Medicare episodes(1) 0.99 1.27 0.98 1.26
Average reimbursement per completed and billed Medicare episodes $2,392 $2,309 $2,374 $2,327
Total visits 992,637 914,690 1,900,083 1,774,188
Total Medicare visits 740,809 684,387 1,422,332 1,338,183
Average visits per completed and billed Medicare episodes 15.7 15.1 15.9 15.2
Organic growth:(2)        
Net revenue 2.1% -3.5% -1.4% -3.2%
Net Medicare revenue 0.3% -1.0% -2.5% -1.6%
Total new admissions -0.1% 4.4% -2.3% 4.0%
Medicare new admissions  2.1% 4.7% -1.0% 3.9%
Average daily census -3.8% -0.3% -10.0% 1.0%
Average Medicare daily census -3.8% 0.0% -10.3% 0.9%
Medicare completed and billed episodes -3.2% 0.4% -4.1% 0.5%
         
Community-Based Services:        
Locations 13 4 13 4
Acquired  5 0 6 0
De novo 0 0 1 0
Average daily census 851 433 697 417
Billable hours 277,215 38,131 317,932 76,526
Revenue per billable hour $30 $21 $29 $20
         
Hospice-Based Services:        
Locations 37 34 37 34
Acquired  4 1 5 2
Admissions 1,426 1,209 2,658 2,484
Average daily census 1,371 1,146 1,298 1,109
Patient days 124,744 104,303 234,787 200,688
Average revenue per patient day $137 $133 $138 $134
         
Facility-Based Services:        
Long-term Acute Care         
Locations  8 9 8 9
Patient days 14,939 15,283 31,401 31,401
Average revenue per patient day $1,124 $1,203 $1,140 $1,198
         
(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

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