Net service revenue for the second quarter of 2010 increased 16% to $154.2 million as compared with the second quarter of 2009;
Diluted earnings per share for the second quarter of 2010 increased 19% to $0.68 as compared with the second quarter of 2009; and
Total new admissions for the second quarter of 2010 increased 14% as compared with the second quarter of 2009.
LAFAYETTE, La., Aug. 4, 2010 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health and hospice services, announced today its financial results for the three and six months ended June 30, 2010.
Financial Results for the Second Quarter
Net service revenue for the second quarter of 2010 increased 16.0% to $154.2 million compared with $133.0 million for the same period in 2009.
Days sales outstanding, or DSO, remained consistent at 45 days for the period ending June 30, 2010.
Net income attributable to LHC Group for the second quarter of 2010 totaled $12.4 million, an increase of 20.8%, compared with net income of $10.3 million for the same period in 2009.
Diluted earnings per share was $0.68 for the second quarter of 2010, an increase of 19.3%, compared with diluted EPS of $0.57 for the same period in 2009.
In commenting on the results, Keith G. Myers, President and Chief Executive Officer of LHC Group, said, "We are extremely pleased with our operating results in the first half of 2010. We have made significant investments in people and infrastructure over the past few years, and as a result, we are well prepared for the challenges and opportunities we face this year as well as those that lie ahead in years to come. We are committed to excellence in the areas of quality, ethics, and patient satisfaction, which build long-term value and matter most to the patients, families, and communities we serve, as well as to payors and referral sources."
Financial Results for the Six Months
Net service revenue for the six months ended June 30, 2010, increased 16.6% to $299.9 million compared with $257.2 million for the same period in 2009.
Net income attributable to LHC Group for the six months ended June 30, 2010, totaled $24.0 million, an increase of 12.5%, compared with net income of $21.3 million for the same period in 2009.
Diluted earnings per share was $1.32 for the six months ended June 30, 2010, an increase of 10.9%, compared with diluted EPS of $1.19 for the same period in 2009.
Guidance
The Company is reaffirming its full year 2010 guidance issued on April 28, 2010, for net service revenue of $615 million to $625 million and fully diluted earnings per share of $2.75 to $2.85. This guidance does not take into account the impact of any future acquisitions, if made, or de novo locations, if opened. This guidance also does not include any future legal or other expenses associated with responding to the Securities and Exchange Commission or Senate Finance Committee inquiries.
Conference Call
LHC Group will host a conference call on Thursday, August 5, 2010, at 11:00 a.m. Eastern time. The toll-free number to call for this interactive teleconference is (800) 677-1840 (international callers should call 973-890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, August 12, 2010, by dialing (800) 642-1687 (international callers should call 706-645-9291) and entering confirmation number 82942907.
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. 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. (www.LHCGroup.com) is a national provider of home health and hospice 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 post-acute healthcare services through home health and hospice locations 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, 2009, 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
(amounts in thousands, except share data)
(unaudited)
June 30, 2010
Dec. 31, 2009
ASSETS
Current assets:
Cash
$ 1,274
$ 394
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts
of $9,264 and $8,262, respectively
75,962
73,651
Other receivables
2,361
3,850
Amounts due from governmental entities
--
1,184
Total receivables, net
78,323
78,685
Deferred income taxes
5,865
4,370
Prepaid income taxes
4,528
3,131
Prepaid expenses and other current assets
8,073
8,798
Total current assets
98,063
95,378
Property, building and equipment, net of accumulated depreciation
of $11,701 and $15,031, respectively
24,219
21,361
Goodwill
149,546
139,474
Intangible assets, net
50,601
46,851
Other assets
8,769
3,169
Total assets
$ 331,198
$ 306,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities
$ 21,100
$ 20,873
Salaries, wages and benefits payable
25,707
22,521
Amounts due to governmental entities
3,208
3,208
Current portion of long-term debt
416
387
Total current liabilities
50,431
46,989
Deferred income taxes
14,160
12,475
Revolving credit facility
--
5,723
Long-term debt, less current portion
3,928
4,096
Other long-term obligations
1,550
1,567
Total liabilities
70,069
70,850
Noncontrolling interest- redeemable
13,683
13,823
Stockholders' equity:
Common stock – $0.01 par value: 40,000,000 shares authorized;
21,121,802 and 20,967,418 shares issued and 18,119,529 and
17,990,685 shares outstanding, respectively
181
179
Treasury stock – 3,002,273 and 2,976,733 shares at cost, respectively
(4,297)
(3,513)
Additional paid-in capital
88,210
86,310
Retained earnings
162,254
138,196
Total LHC Group, Inc. stockholders' equity
246,348
221,172
Noncontrolling interest- non-redeemable
1,098
388
Total equity
247,446
221,560
Total liabilities and equity
$ 331,198
$ 306,233
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2010
2009
2010
2009
Net service revenue
$ 154,235
$ 132,953
$ 299,915
$ 257,215
Cost of service revenue
79,482
66,954
154,125
128,979
Gross margin
74,753
65,999
145,790
128,236
Provision for bad debts
1,541
1,853
3,601
3,035
General and administrative expenses
49,545
43,547
95,175
82,226
Operating income
23,667
20,599
47,014
42,975
Interest expense
(25)
(39)
(50)
(98)
Non-operating income (loss)
593
84
622
(376)
Income from continuing operations before income taxes
and noncontrolling interest
24,235
20,644
47,586
42,501
Income tax expense
7,975
6,385
15,484
13,145
Income from continuing operations
16,260
14,259
32,102
29,356
Income (loss) from discontinued operations, net of income
tax expense (benefit) of $4, $(20), $4 and $(41), respectively
6
(31)
6
(65)
Net income
16,266
14,228
32,108
29,291
Less net income attributable to noncontrolling interest
3,873
3,966
8,091
7,948
Net income attributable to LHC Group, Inc.
12,393
10,262
24,017
21,343
Redeemable noncontrolling interest
--
20
41
49
Net income attributable to LHC Group, Inc.'s common stockholders
$ 12,393
$ 10,282
$ 24,058
$ 21,392
Earnings per share – basic:
Income from continuing operations attributable to LHC Group, Inc.
$ 0.68
$ 0.57
$ 1.33
$ 1.19
Loss from discontinued operations attributable to LHC Group, Inc.
--
--
--
--
Net income attributable to LHC Group, Inc.
0.68
0.57
1.33
1.19
Redeemable noncontrolling interest
--
--
--
--
Net income attributable to LHC Group, Inc.'s common stockholders
$ 0.68
$ 0.57
$ 1.33
$ 1.19
Earnings per share – diluted:
Income from continuing operations attributable to LHC Group, Inc.
$ 0.68
$ 0.57
$ 1.32
$ 1.19
Loss from discontinued operations attributable to LHC Group, Inc.
--
--
--
--
Net income attributable to LHC Group, Inc.
0.68
0.57
1.32
1.19
Redeemable noncontrolling interest
--
--
--
--
Net income attributable to LHC Group, Inc.'s common stockholders
$ 0.68
$ 0.57
$ 1.32
$ 1.19
Weighted average shares outstanding:
Basic
18,118,197
17,959,823
18,080,077
17,942,119
Diluted
18,236,380
18,030,373
18,200,066
17,992,331
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Six Months Ended June 30,
2010
2009
Operating activities
Net income
$ 32,108
$ 29,291
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense
3,377
2,286
Provision for bad debts
3,601
3,035
Stock-based compensation expense
1,859
1,101
Deferred income taxes
190
1,256
Loss on impairment of intangible assets
--
543
Changes in operating assets and liabilities, net of acquisitions:
Receivables
(5,206)
(8,605)
Prepaid expenses and other assets
2,650
(5,057)
Prepaid income taxes
(1,398)
(10,683)
Accounts payable and accrued expenses
4,265
7,836
Net cash provided by operating activities
41,446
21,003
Investing activities
Purchases of property, building, and equipment
(5,713)
(3,741)
Cash paid for acquisitions, primarily goodwill, intangible assets
and advance payment on acquisitions
(20,215)
(12,176)
Net cash used in investing activities
(25,928)
(15,917)
Financing activities
Proceeds from line of credit
9,023
18,134
Payments on line of credit
(14,745)
(18,134)
Payment of deferred financing fees
--
(260)
Principal payments on debt
(171)
(240)
Payments on capital leases
(14)
(65)
Excess tax benefits from vesting of restricted stock
632
95
Proceeds from employee stock purchase plan
374
275
Purchase of additional controlling interest
(1,914)
--
Noncontrolling interest distributions
(7,823)
(7,179)
Net cash used in financing activities
(14,638)
(7,374)
Change in cash
880
(2,288)
Cash at beginning of period
394
3,511
Cash at end of period
$ 1,274
$ 1,223
Supplemental disclosures of cash flow information
Interest paid
$ 50
$ 98
Income taxes paid
$ 16,137
$ 26,040
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(amounts in thousands)
(unaudited)
Three Months Ended June 30, 2010
Six Months Ended June 30, 2010
Home-Based Services
Facility-Based Services
Total
Home-Based Services
Facility-Based Services
Total
Net service revenue
$ 136,554
$ 17,681
$ 154,235
$ 265,232
$ 34,683
$ 299,915
Cost of service revenue
69,501
9,981
79,482
134,123
20,002
154,125
Provision for bad debts
1,337
204
1,541
3,292
309
3,601
General and administrative expenses
45,341
4,204
49,545
86,834
8,341
95,175
Operating income
20,375
3,292
23,667
40,983
6,031
47,014
Interest expense
(22)
(3)
(25)
(45)
(5)
(50)
Non-operating income (loss)
583
10
593
625
(3)
622
Income from continuing operations before income taxes and noncontrolling interest
20,936
3,299
24,235
41,563
6,023
47,586
Income tax expense
7,221
754
7,975
13,979
1,505
15,484
Income from continuing operations
13,715
2,545
16,260
27,584
4,518
32,102
Noncontrolling interest
3,417
456
3,873
7,184
907
8,091
Gain from discontinued operations
--
6
6
--
6
6
Net income attributable to
LHC Group, Inc.
$ 10,298
$ 2,095
$ 12,393
$ 20,400
$ 3,617
$ 24,017
Total assets
$ 296,462
$ 34,736
$ 331,198
$ 296,462
$ 34,736
$ 331,198
Three Months Ended June 30, 2009
Six Months Ended June 30, 2009
Home-Based Services
Facility-Based Services
Total
Home-Based Services
Facility-Based Services
Total
Net service revenue
$ 118,343
$ 14,610
$ 132,953
$ 227,691
$ 29,524
$ 257,215
Cost of service revenue
57,957
8,997
66,954
111,543
17,436
128,979
Provision for bad debts
1,853
--
1,853
2,881
154
3,035
General and administrative expenses
40,192
3,355
43,547
75,105
7,121
82,226
Operating income
18,341
2,258
20,599
38,162
4,813
42,975
Interest expense
(34)
(5)
(39)
(86)
(12)
(98)
Non-operating income (loss)
64
20
84
(410)
34
(376)
Income from continuing operations before income taxes and noncontrolling interest
18,371
2,273
20,644
37,666
4,835
42,501
Income tax expense
5,729
656
6,385
11,794
1,351
13,145
Income from continuing operations
12,642
1,617
14,259
25,872
3,484
29,356
Noncontrolling interest
3,603
363
3,966
7,101
847
7,948
Gain from discontinued operations
--
31
31
--
65
65
Net income attributable to
LHC Group, Inc.
$ 9,039
$ 1,223
$ 10,262
$ 18,771
$ 2,572
$ 21,343
Total assets
$ 245,503
$ 24,094
$ 269,597
$ 245,503
$ 24,094
$ 269,597
LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2010
2009
2010
2009
Key Data:
Home-Based Services:
Home Health locations
235
220
235
220
Hospice locations
21
21
21
21
Acquired (1)
1
6
5
9
De novo(1)
3
7
5
9
Home Health:
Total new admissions
22,540
19,779
44,345
37,883
Medicare new admissions
16,374
14,721
32,526
26,963
Average weekly census
31,345
29,182
31,033
28,508
Average Medicare weekly census
24,951
23,592
24,795
22,978
Medicare completed and billed episodes
40,509
37,410
79,245
71,531
Average Medicare case mix for completed and billed Medicare episodes
1.28
1.26
1.27
1.26
Average reimbursement per completed and billed Medicare episodes
$ 2,505
$ 2,422
$ 2,493
$ 2,425
Total visits
834,350
733,777
1,620,807
1,412,471
Total Medicare visits
647,541
581,669
1,264,908
1,115,889
Average visits per completed and billed Medicare episodes
16.0
15.5
16.0
15.6
Organic growth (2):
Net revenue
6.9%
24.5%
8.2%
27.7%
Net Medicare revenue
6.2%
26.7%
7.6%
29.9%
Total new admissions
3.0%
5.0%
6.1%
5.8%
Medicare new admissions
2.3%
8.6%
11.1%
2.7%
Average weekly census
-0.5%
18.4%
1.0%
20.4%
Average Medicare weekly census
-1.0%
20.7%
1.2%
24.4%
Medicare completed and billed episodes
1.7%
19.9%
4.1%
22.0%
Facility-Based Services:
Long-term Acute Care Hospital locations
9
8
9
8
Acquired (1)
1
1
1
1
Patient days
14,071
12,880
27,943
24,861
Patient acuity mix
1.0575
0.9795
1.0189
0.9954
(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.
CONTACT: LHC Group, Inc.
Eric Elliott, Vice President of Investor Relations
(337) 233-1307
eric.elliott@lhcgroup.com
