Company Raises Revenue Guidance and Reaffirms EPS Guidance for Full-Year 2009 Third Quarter Highlights: * Net service revenue increases 35.2% to $132.5 million; * Net income attributable to LHC Group increases 22.4% to $9.8 million; and * Diluted earnings per share increases 20% to $0.54.
LAFAYETTE, La., Oct. 28, 2009 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), one of the largest providers of home health services in the United States, announced today its financial results for the third quarter and nine months ended September 30, 2009.
Financial Results for the Third Quarter * Net service revenue for the third quarter of 2009 increased 35.2% to $132.5 million compared with $98.0 million for the same period in 2008. * Home-based net service revenue for the third quarter of 2009 increased 38.1% to $116.7 million compared with $84.5 million for the same period in 2008. * Net income attributable to LHC Group for the third quarter of 2009 increased 22.4% to $9.8 million, or $0.54 per diluted share, compared with net income of $8.0 million, or $0.45 per diluted share, for the third quarter of 2008. * Days sales outstanding, or DSO, for the three months ended September 30, 2009, was 48 days as compared with 52 days for the same three-month period in 2008. Financial Results for the Nine Months * Net service revenue for the nine months ended September 30, 2009, increased 43.5% to $389.3 million compared with $271.2 million for the same period in 2008. * Home-based net service revenue for the nine months ended September 30, 2009, increased 49.9% to $343.7 million compared with $229.3 million for the same period in 2008. * Net income attributable to LHC Group for the nine months ended September 30, 2009, increased 58.2% to $31.2 million, or $1.73 per diluted share, compared with net income of $19.7 million, or $1.10 per diluted share, for the same period in 2008. Net income attributable to LHC Group for the nine months ended September 30, 2009, includes a $211,000 after tax loss from discontinued operations, which resulted in a $0.01 decrease in earnings per share.
In commenting on the results, Keith G. Myers, President and Chief Executive Officer of LHC Group, said, "I am extremely proud of the results produced by the entire LHC Group team during the third quarter. Despite the constantly changing health care reform news, our team remained focused on delivering quality patient care while producing outstanding financial results. Our team also implemented significant infrastructure initiatives in the areas of quality, technology and compliance that will prepare us for continued growth and position us to remain a leader in home care regardless of the outcome of health care reform."
Guidance
The Company is raising its previously stated guidance range issued on May 6, 2009, with respect to full-year net service revenue from the original range of $500 million to $510 million, to $515 million to $525 million. The Company is reaffirming guidance of fully diluted earnings per share in the range of $2.15 to $2.25. This guidance does not take into account the impact of any future acquisitions, if made, or de novo locations, if opened.
Conference Call
LHC Group will conduct a conference call on Thursday, October 29, 2009, beginning at 11:00 a.m. Eastern time. Speakers on the call will include key members of the LHC Group senior management team. The toll-free number to call for this interactive teleconference is (888) 523-1245 (international callers should call 719-325-2348). A telephonic replay of the conference call will be available through midnight on Friday, November 6, 2009, by dialing (888) 203-1112 (international callers should call 719-457-0820) and entering confirmation number 1242619.
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, or at www.opencompany.info. An online replay of the conference call will also be available on the Company's website for one year, beginning approximately an hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. (www.LHCGroup.com) is one of the largest providers of home health services in the United States providing quality cost effective healthcare services to patients within the comfort and privacy of their home or place of residence.
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, 2008, 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 (dollars in thousands, except share data) (unaudited) Sept. 30, Dec. 31, 2009 2008 -------- -------- ASSETS Current assets: Cash $ 2,508 $ 3,511 Receivables: Patient accounts receivable, less allowance for uncollectible accounts of $9,989 and $9,976, respectively 68,753 61,524 Other receivables 3,154 2,317 Amounts due from governmental entities 1,431 2,434 -------- -------- Total receivables, net 73,338 66,275 Deferred income taxes 5,413 4,959 Assets held for sale 450 -- Prepaid income taxes 4,147 -- Prepaid expenses and other current assets 6,404 6,464 -------- -------- Total current assets 92,260 81,209 Property, building and equipment, net 20,058 16,348 Goodwill 130,285 112,572 Intangible assets, net 38,125 29,975 Other assets 2,620 3,296 -------- -------- Total assets $283,348 $243,400 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued liabilities $ 17,365 $ 15,422 Salaries, wages and benefits payable 25,626 16,400 Amounts due to governmental entities 3,211 6,023 Income taxes payable -- 10,682 Current portion of long-term debt and capital lease obligations 427 583 -------- -------- Total current liabilities 46,629 49,110 Deferred income taxes 8,614 5,718 Long-term debt, less current portion 4,180 4,483 Other long-term obligations 66 145 Stockholders' equity: LHC Group, Inc. stockholders' equity: Common stock - $0.01 par value: 40,000,000 shares authorized; 20,947,421 and 20,853,463 shares issued and 17,974,561 and 17,895,832 shares outstanding, respectively 179 179 Treasury stock - 2,972,860 and 2,957,631 shares at cost, respectively (3,402) (3,072) Additional paid-in capital 87,820 85,404 Retained earnings 125,530 94,310 -------- -------- Total LHC Group, Inc. stockholders' equity 210,127 176,821 -------- -------- Noncontrolling interest 13,732 7,123 -------- -------- Total equity 223,859 183,944 -------- -------- Total liabilities and stockholders' equity $283,348 $243,400 ======== ======== LHC GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except share and per share data) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------ 2009 2008 2009 2008 ----------- ----------- ----------- ----------- Net service revenue $ 132,491 $ 97,991 $ 389,300 $ 271,206 Cost of service revenue 69,242 47,207 197,723 133,103 ----------- ----------- ----------- ----------- Gross margin 63,249 50,784 191,577 138,103 Provision for bad debts 1,072 3,158 4,062 10,467 General and administrative expenses 43,790 31,237 126,000 87,897 ----------- ----------- ----------- ----------- Operating income 18,387 16,389 61,515 39,739 Interest expense (20) (132) (115) (365) Non-operating (loss) income 51 76 (337) 891 ----------- ----------- ----------- ----------- Income from continuing operations before income taxes and noncontrolling interest 18,418 16,333 61,063 40,265 Income tax expense 5,636 5,259 18,836 12,578 ----------- ----------- ----------- ----------- Income from continuing operations 12,782 11,074 42,227 27,687 Loss from discontinued operations (net of income tax benefit of $36, $18, $124 and $175, respectively) 57 30 211 513 ----------- ----------- ----------- ----------- Net income 12,725 11,044 42,016 27,174 Less net income attributable to noncontrolling interest 2,893 3,012 10,841 7,469 ----------- ----------- ----------- ----------- Net income attributable to LHC Group, Inc. 9,832 8,032 31,175 19,705 Redeemable noncontrolling interest (3) (29) 45 36 ----------- ----------- ----------- ----------- Net income available to LHC Group, Inc.'s common stockholders $ 9,829 $ 8,003 $ 31,220 $ 19,741 =========== =========== =========== =========== Earnings per share - basic: Income from continuing operations attributable to LHC Group, Inc. $ 0.55 $ 0.45 $ 1.75 $ 1.12 Loss from discontinued operations attributable to LHC Group, Inc. -- -- (0.01) (0.02) ----------- ----------- ----------- ----------- Net income attributable to LHC Group, Inc. 0.55 0.45 1.74 1.10 Redeemable noncontrolling interest -- -- -- -- ----------- ----------- ----------- ----------- Net income available to LHC Group, Inc.'s common stockholders $ 0.55 $ 0.45 $ 1.74 $ 1.10 =========== =========== =========== =========== Earnings per share - diluted: Income from continuing operations attributable to LHC Group, Inc. $ 0.54 $ 0.45 $ 1.74 $ 1.12 Loss from discontinued operations attributable to LHC Group, Inc. -- -- (0.01) (0.02) ----------- ----------- ----------- ----------- Net income attributable to LHC Group, Inc. 0.54 0.45 1.73 1.10 Redeemable noncontrolling interest -- -- -- -- ----------- ----------- ----------- ----------- Net income available to LHC Group, Inc.'s common stockholders $ 0.54 $ 0.45 $ 1.73 $ 1.10 =========== =========== =========== =========== Weighted average shares outstanding: Basic 17,971,352 17,881,228 17,951,986 17,843,869 Diluted 18,116,984 17,976,305 18,040,918 17,967,488 LHC GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited) Nine Months Ended September 30, ------------------ 2009 2008 -------- -------- Operating activities Net income $ 42,016 $ 27,174 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 3,494 2,730 Provision for bad debts 4,141 10,820 Stock-based compensation expense 1,755 1,380 Deferred income taxes 1,692 497 Loss on impairment of intangible assets 542 -- Gain on sale of assets -- (343) Changes in operating assets and liabilities, net of acquisitions: Receivables (12,208) 1,272 Prepaid expenses, income taxes and other assets (3,613) 859 Accounts payable and accrued expenses (1,225) 11,946 Net amounts due to/from governmental entities (1,810) 3,099 -------- -------- Net cash provided by operating activities 34,784 59,434 -------- -------- Investing activities Purchases of property, building, and equipment (6,124) (7,351) Purchase of certificate of deposit -- (522) Proceeds from sale of assets -- 3,094 Cash paid for acquisitions, primarily goodwill and intangible assets (18,481) (40,039) -------- -------- Net cash used in investing activities (24,605) (44,818) -------- -------- Financing activities Proceeds from line of credit 20,605 32,851 Payments on line of credit (20,605) (32,851) Payment of deferred financing fees (263) (71) Proceeds from debt issuance -- 5,050 Principal payments on debt (412) (3,220) Payments on capital leases (74) (74) Excess tax benefits from vesting of restricted stock 98 34 Proceeds from employee stock purchase plan 457 385 Noncontrolling interest distributions (10,988) (6,724) -------- -------- Net cash used in financing activities (11,182) (4,620) -------- -------- Change in cash (1,003) 9,996 Cash at beginning of period 3,511 1,155 -------- -------- Cash at end of period $ 2,508 $ 11,151 ======== ======== Supplemental disclosures of cash flow information Interest paid $ 115 $ 356 ======== ======== Income taxes paid $ 31,828 $ 8,553 ======== ======== LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (dollars in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, 2009 September 30, 2009 ---------------------------- ---------------------------- Home- Facility- Home- Facility- Based Based Based Based Services Services Total Services Services Total -------- -------- -------- -------- -------- -------- Net service revenue $116,746 $ 15,745 $132,491 $343,702 $ 45,598 $389,300 Cost of service revenue 59,621 9,621 69,242 170,583 27,140 197,723 Provision for bad debts 1,232 (160) 1,072 4,068 (6) 4,062 General and admin- istrative expenses 39,258 4,532 43,790 114,124 11,876 126,000 -------- -------- -------- -------- -------- -------- Operating income 16,635 1,752 18,387 54,927 6,588 61,515 Interest expense (18) (2) (20) (104) (11) (115) Non -operating (loss) income 45 6 51 (365) 28 (337) -------- -------- -------- -------- -------- -------- Income from continuing operations before income taxes and noncon- trolling interest 16,662 1,756 18,418 54,458 6,605 61,063 Noncon- trolling interest 2,719 174 2,893 9,820 1,021 10,841 -------- -------- -------- -------- -------- -------- Income from continuing operations before income taxes 13,943 1,582 15,525 44,638 5,584 50,222 Total assets $256,942 $ 26,406 $283,348 $256,942 $ 26,406 $283,348 Three Months Ended Nine Months Ended September 30, 2008 September 30, 2008 ---------------------------- ---------------------------- Home- Facility- Home- Facility- Based Based Based Based Services Services Total Services Services Total -------- -------- -------- -------- -------- -------- Net service revenue $ 84,514 $ 13,477 $ 97,991 $229,296 $ 41,910 $271,206 Cost of service revenue 39,385 7,822 47,207 109,145 23,958 133,103 Provision for bad debts 2,759 399 3,158 9,090 1,377 10,467 General and admin- istrative expenses 28,227 3,010 31,237 77,508 10,389 87,897 -------- -------- -------- -------- -------- -------- Operating income 14,143 2,246 16,389 33,553 6,186 39,739 Interest expense (113) (19) (132) (276) (89) (365) Non- operating income 58 18 76 703 188 891 -------- -------- -------- -------- -------- -------- Income from continuing operations before income taxes and noncon- trolling interest 14,088 2,245 16,333 33,980 6,285 40,265 Noncon- trolling interest 2,754 258 3,012 6,471 1,239 7,710 -------- -------- -------- -------- -------- -------- Income from continuing operations before income taxes 11,334 1,987 13,321 27,509 5,046 32,555 Total assets $194,672 $ 21,893 $216,565 $194,672 $ 21,893 $216,565 LHC GROUP, INC. AND SUBSIDIARIES SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA (unaudited) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Key Data: Home Health locations 223 172 223 172 Hospice locations 21 13 21 13 Acquired (1) 3 6 11 27 De novo (1) 2 3 10 9 Home Nursing: Total new admissions 21,485 14,113 59,368 41,168 Medicare new admissions 14,927 10,482 41,890 30,309 Average weekly census 28,150 21,733 28,454 20,386 Average Medicare weekly census 22,486 17,810 22,868 16,410 Medicare completed episodes 39,678 30,082 118,048 85,179 Average Medicare case mix for completed Medicare episodes 1.27 1.27 1.27 1.26 Average reimbursement per completed Medicare episodes $ 2,318 $ 2,276 $ 2,297 $ 2,161 Total visits 765,315 551,724 2,177,786 1,560,617 Total Medicare visits 597,634 434,307 1,713,523 1,202,330 Average visits per completed Medicare episodes 15.1 14.4 14.5 14.1 Organic growth (2): Net revenue 15.7% 12.4% 27.6% 14.8% Net Medicare revenue 15.2% 16.8% 29.0% 18.0% Total new admissions 15.3% (0.7%) 11.8% 4.2% Medicare new admissions 8.6% 5.7% 9.5% 11.8% Average weekly census 11.3% 11.5% 20.1% 8.2% Average Medicare weekly census 10.2% 19.4% 22.5% 14.6% Medicare completed episodes 13.3% 27.3% 24.4% 31.4% Facility-based Services: Long-term Acute Care Hospital locations 8 7 8 7 Acquired (1) 0 0 1 0 Patient days 13,043 10,930 37,904 34,262 Patient acuity mix 1.03 0.99 1.01 0.98 (1) Inclusive of both home health and hospice agencies. (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.