Toggle SGML Header (+)


Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February 27, 2019

Commission File Number: 0-24260

 

 

 

 

LOGO

AMEDISYS, INC.

(Exact Name of Registrant as specified in its Charter)

 

 

 

Delaware   11-3131700

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

3854 American Way, Suite A, Baton Rouge, LA 70816

(Address of principal executive offices, including zip code)

(225) 292-2031 or (800) 467-2662

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


SECTION 2 — FINANCIAL INFORMATION

 

ITEM 2.02.

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 27, 2019, Amedisys, Inc. (“we,” “us,” “our” or the “Company”) issued a press release announcing our financial results for the fourth quarter and year ended December 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information presented in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless we specifically state that the information is to be considered “filed” under the Exchange Act or specifically incorporate it by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

SECTION 7 – REGULATION FD

 

ITEM 7.01.

REGULATION FD DISCLOSURE

Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference.

In addition, a copy of the supplemental slides which will be discussed during the Company’s earnings call at 10:00 a.m. ET on Thursday, February 28, 2019 is attached to this report as Exhibit 99.2 and incorporated herein by reference.

The information presented in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, unless we specifically state that the information is to be considered “filed” under the Exchange Act or specifically incorporate it by reference in any filing under the Securities Act or the Exchange Act.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

 

ITEM 9.01.

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

 

99.1    Press release dated February 27, 2019 announcing the Company’s financial results for the fourth quarter and year ended December 31, 2018 (furnished only)
99.2    Supplemental slides provided in connection with the fourth quarter 2018 earnings call of the Company (furnished only)


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AMEDISYS, INC.
(Registrant)
By:  

/s/ Scott G. Ginn

  Scott G. Ginn
  Chief Financial Officer
  (Principal Financial Officer)

DATE: February 27, 2019

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

AMEDISYS REPORTS FOURTH QUARTER AND YEAR END 2018 FINANCIAL RESULTS

ISSUES 2019 GUIDANCE

BATON ROUGE, Louisiana (February 27, 2019) — Amedisys, Inc. (NASDAQ: AMED) today reported its financial results for the three month period and year ended December 31, 2018.

Three Month Periods Ended December 31, 2018 and 2017

 

   

Net service revenue increased $36.4 million to $434.4 million compared to $398.0 million in 2017 (1).

 

   

Net income attributable to Amedisys, Inc. of $27.5 million compared to net loss attributable to Amedisys, Inc. of $3.8 million in 2017.

 

   

Net income attributable to Amedisys, Inc. per diluted share of $0.84 per diluted share compared to net loss attributable to Amedisys, Inc. of $0.11 in 2017.

Adjusted Quarterly Results*

 

   

Adjusted EBITDA of $43.9 million compared to $37.1 million in 2017.

 

   

Adjusted net service revenue of $434.4 million compared to $398.0 million in 2017.

 

   

Adjusted net income attributable to Amedisys, Inc. of $29.8 million compared to $19.4 million in 2017.

 

   

Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.91 compared to $0.56 in 2017.

Years Ended December 31, 2018 and 2017

 

   

Net service revenue increased $151.3 million to $1,662.6 million compared to $1,511.3 million in 2017 (1).

 

   

Net income attributable to Amedisys, Inc. of $119.3 million compared to $30.3 million in 2017.

 

   

Net income attributable to Amedisys, Inc. per diluted share of $3.55 per diluted share compared to $0.88 in 2017.

Adjusted Year End Results*

 

   

Adjusted EBITDA of $180.6 million compared to $142.2 million in 2017.

 

   

Adjusted net service revenue of $1,664.3 million compared to $1,517.8 million in 2017.

 

   

Adjusted net income attributable to Amedisys, Inc. of $122.1 million compared to $75.9 million in 2017.

 

   

Adjusted net income attributable to Amedisys, Inc. per diluted share of $3.63 compared to $2.21 in 2017.

 

*

See pages 12 and 13 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

(1) 

Subsequent to our adoption of Accounting Standards Updates 2014-09 and 2015-14 on January 1, 2018, using the full retrospective method, amounts previously classified as provision for doubtful accounts are now classified as price concessions in determining the transaction price of our net service revenue.

 

1


Paul B. Kusserow, President and Chief Executive Officer stated, “Our fourth quarter results are a fitting cap to what has been by all accounts an incredible year for Amedisys. In 2018, we treated approximately 400,000 patients making more than 10 million visits across our three lines of business while continuing to execute and make excellent progress on our strategic pillars of clinical distinction, becoming the employer of choice, operational efficiency and growth. Providing our clinically distinct care to as many patients wherever they call home is, and will always be, our first priority and to that point, our home health and hospice quality measures continue to be at or near the top of the industry. After a year of rebuilding, our home health segment returned to growth and exceeded margin expectations. Hospice continued its stellar performance with another strong quarter and year of ADC growth and we continued to grow our personal care platform, completing two acquisitions during the year. Finally, thanks to our team of over 21,000 employees for continuing to do all that you do to drive such impressive results and provide such incredible care.”

2019 Guidance

 

   

Net service revenue is anticipated to be in the range of $1.94 billion to $1.98 billion.

 

   

Adjusted EBITDA is anticipated to be in the range of $205 million to $210 million.

 

   

Adjusted diluted earnings per share is anticipated to be in the range of $3.98 to $4.09 based on an estimated 33.1 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made.

We urge caution in considering the current trends and 2019 guidance disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com.

Earnings Call and Webcast Information

Amedisys will host a conference call on Thursday, February 28, 2019, at 10:00 a.m. ET to discuss its fourth quarter and year end results. To participate on the conference call, please call before 10:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through March 28, 2019 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13687280.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Non-GAAP Financial Measures

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measures as defined under SEC rules are as follows: (1) adjusted EBITDA, defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items; (2) adjusted net service revenue, defined as net service revenue excluding certain items; (3) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (4) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. Management believes that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, are useful gauges of our current performance and are also included in internal management reporting. These non-GAAP financial measures should be considered in addition to, and not more meaningful than or as an alternative to the GAAP financial measures presented in this earnings release and the company’s financial statements. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

 

2


Additional information

Amedisys, Inc. (the “Company”) is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 3,000 hospitals and 65,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With more than 21,000 employees, in 472 care centers within 38 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 376,000 patients and clients in need every year. For more information about the Company, please visit: www.amedisys.com.

We use our website as a channel of distribution for important company information. Important information, including press releases, investor presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the healthcare industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to consistently provide high-quality care, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to comply with requirements stipulated in our corporate integrity agreement, our ability to realize the anticipated benefits of the acquisition of Compassionate Care Hospice, and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

 

Contact:    Investor Contact:   Media Contact:
   Amedisys, Inc.   Amedisys, Inc.
   Nick Muscato   Kendra Kimmons
   Vice President, Strategic Finance   Vice President, Marketing & Communications
   (855) 259-2046   (225) 299-3720
   IR@amedisys.com   kendra.kimmons@amedisys.com

 

3


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

 

     For the Three-Month
Period Ended December 31
    For the Year Ended
December 31
 
     2018     2017     2018     2017  
     (Unaudited)              

Net service revenue

   $ 434,378     $ 397,961     $ 1,662,578     $ 1,511,272  

Cost of service, excluding depreciation and amortization

     262,251       239,238       992,863       903,377  

General and administrative expenses:

        

Salaries and benefits

     84,309       79,406       316,522       305,938  

Non-cash compensation

     5,234       4,507       17,887       16,295  

Other

     42,778       39,757       166,897       159,980  

Depreciation and amortization

     3,379       3,984       13,261       17,123  

Asset impairment charge

     —         1,323       —         1,323  

Securities Class Action Lawsuit settlement, net

     —         —         —         28,712  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     397,951       368,215       1,507,430       1,432,748  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     36,427       29,746       155,148       78,524  

Other income (expense):

        

Interest income

     15       54       278       158  

Interest expense

     (1,536     (1,431     (7,370     (5,031

Equity in earnings from equity method investments

     1,231       232       7,692       3,381  

Miscellaneous, net

     458       487       3,240       3,769  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     168       (658     3,840       2,277  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     36,595       29,088       158,988       80,801  

Income tax expense

     (8,875     (32,794     (38,859     (50,118
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     27,720       (3,706     120,129       30,683  

Net income attributable to noncontrolling interests

     (259     (142     (783     (382
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Amedisys, Inc.

   $ 27,461     $ (3,848   $ 119,346     $ 30,301  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share:

        

Net income (loss) attributable to Amedisys, Inc. common stockholders

   $ 0.86     $ (0.11   $ 3.64     $ 0.90  

Weighted average shares outstanding

     31,916       33,898       32,791       33,704  

Diluted earnings per common share:

        

Net income (loss) attributable to Amedisys, Inc. common stockholders

   $ 0.84     $ (0.11   $ 3.55     $ 0.88  

Weighted average shares outstanding

     32,805       33,898       33,609       34,304  

 

4


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

 

     As of December 31,  
     2018     2017  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 20,229     $ 86,363  

Patient accounts receivable

     188,972       201,196  

Prepaid expenses

     7,568       7,329  

Other current assets

     7,349       16,268  
  

 

 

   

 

 

 

Total current assets

     224,118       311,156  

Property and equipment, net of accumulated depreciation of $95,472 and $146,814

     29,449       31,122  

Goodwill

     329,480       319,949  

Intangible assets, net of accumulated amortization of $33,050 and $30,610

     44,132       46,061  

Deferred income taxes

     35,794       56,064  

Other assets

     54,145       49,130  
  

 

 

   

 

 

 

Total assets

   $ 717,118     $ 813,482  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

Accounts payable

   $ 28,531     $ 25,384  

Payroll and employee benefits

     92,858       89,936  

Accrued expenses

     99,475       89,104  

Current portion of long-term obligations

     1,612       10,638  
  

 

 

   

 

 

 

Total current liabilities

     222,476       215,062  

Long-term obligations, less current portion

     5,775       78,203  

Other long-term obligations

     6,234       3,791  
  

 

 

   

 

 

 

Total liabilities

     234,485       297,056  
  

 

 

   

 

 

 

Equity:

    

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding

     —         —    

Common stock, $0.001 par value, 60,000,000 shares authorized; 36,252,280 and 35,747,134 shares issued; and 31,973,505 and 33,964,767 shares outstanding

     36       35  

Additional paid-in capital

     603,666       568,780  

Treasury stock at cost 4,278,775 and 1,782,367 shares of common stock

     (241,685     (53,713

Accumulated other comprehensive income

     15       15  

Retained earnings

     119,550       204  
  

 

 

   

 

 

 

Total Amedisys, Inc. stockholders’ equity

     481,582       515,321  

Noncontrolling interests

     1,051       1,105  
  

 

 

   

 

 

 

Total equity

     482,633       516,426  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 717,118     $ 813,482  
  

 

 

   

 

 

 

 

5


AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING

(Amounts in thousands, except statistical information)

 

     For the Three-Month
Period Ended December 31
    For the Year
Ended December 31
 
     2018     2017     2018     2017  
     (Unaudited)              

Cash Flows from Operating Activities:

        

Net income (loss)

   $ 27,720     $ (3,706   $ 120,129     $ 30,683  

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Depreciation and amortization

     3,379       3,984       13,261       17,123  

Non-cash compensation

     5,234       4,507       17,887       16,295  

401(k) employer match

     2,042       2,207       8,976       8,754  

(Gain) loss on disposal of property and equipment

     (24     22       714       —    

Deferred income taxes

     5,355       34,950       20,271       52,178  

Equity in earnings from equity method investments

     (1,231     (232     (7,692     (3,381

Amortization of deferred debt issuance costs/debt discount

     201       180       797       735  

Return on equity investment

     1,785       665       6,158       5,321  

Asset impairment charge

     —         1,323       —         1,323  

Changes in operating assets and liabilities, net of impact of acquisitions:

        

Patient accounts receivable

     6,058       (23,826     12,224       (34,672

Other current assets

     8,711       956       8,679       (4,940

Other assets

     2,221       (547     2,947       (12,749

Accounts payable

     3,835       2,587       3,165       (2,843

Accrued expenses

     (1,234     9,259       13,524       31,843  

Other long-term obligations

     (19     (140     2,443       61  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     64,033       32,189       223,483       105,731  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flows from Investing Activities:

        

Proceeds from sale of deferred compensation plan assets

     152       —         715       622  

Proceeds from the sale of property and equipment

     3       131       54       249  

Purchases of property and equipment

     (874     (1,633     (6,558     (10,707

Investments in equity method investees

     (3,667     (40     (7,144     (476

Acquisitions of businesses, net of cash acquired

     (5,186     (9,587     (9,260     (33,715
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (9,572     (11,129     (22,193     (44,027
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Flows from Financing Activities:

        

Proceeds from issuance of stock upon exercise of stock options

     3,204       340       5,953       4,554  

Proceeds from issuance of stock to employee stock purchase plan

     642       584       2,429       2,382  

Shares withheld upon stock vesting

     (1,149     (485     (6,570     (6,939

Non-controlling interest distribution

     (560     —         (1,090     (216

Proceeds from borrowings under revolving line of credit

     10,500       —         138,000       —    

Repayments of borrowings under revolving line of credit

     (60,500     —         (130,500     —    

Principal payments of long-term obligations

     (379     (1,250     (91,450     (5,319

Debt issuance costs

     —         —         (2,433     —    

Purchase of company stock

     —         —         (181,402     —    

Repurchase of noncontrolling interest

     —         —         (361     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (48,242     (811     (267,424     (5,538
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     6,219       20,249       (66,134     56,166  

Cash and cash equivalents at beginning of period

     14,010       66,114       86,363       30,197  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 20,229     $ 86,363     $ 20,229     $ 86,363  
  

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Disclosures of Cash Flow Information:

        

Cash paid for interest

   $ 533     $ 509     $ 3,522     $ 2,697  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash paid for income taxes, net of refunds received

   $ 3,261     $ —       $ 14,278     $ 315  
  

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Disclosures of Non-Cash Financing Activities:

        

Note payable issued for software licenses

   $ —       $ —       $ 418     $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital leases

   $ 929     $ —       $ 2,936     $ —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Days revenue outstanding (1)

     38.0       44.0       38.0       44.0  

 

(1)

Our calculation of days revenue outstanding at December 31, 2018 and 2017 is derived by dividing our ending patient accounts receivable by our average daily patient revenue for the three month periods ended December 31, 2018 and 2017, respectively.

 

6


AMEDISYS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in millions, except statistical information)

(Unaudited)

Segment Information - Home Health

 

     For the Three-
Month Period
Ended December 31,
 
     2018     2017  

Financial Information (in  millions):

    

Medicare

   $ 211.5     $ 205.0  

Non-Medicare

     92.5       76.9  
  

 

 

   

 

 

 

Net service revenue

     304.0       281.9  

Cost of service

     189.4       174.9  
  

 

 

   

 

 

 

Gross margin

     114.6       107.0  

Asset impairment charge

     —         1.3  

Other operating expenses

     72.2       71.3  
  

 

 

   

 

 

 

Operating income

   $ 42.4     $ 34.4  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     3     2

Non-Medicare revenue

     20     24

Total admissions

     6     3

Total volume (2)

     6     7

Total Episodic admissions (3)

     5     2

Total Episodic volume (4)

     5     5

Key Statistical Data - Total (5):

    

Medicare:

    

Admissions

     47,864       46,421  

Recertifications

     28,555       27,896  
  

 

 

   

 

 

 

Total volume

     76,419       74,317  

Completed episodes

     75,497       73,037  

Visits

     1,328,025       1,273,435  

Average revenue per completed episode (6)

   $ 2,891     $ 2,858  

Visits per completed episode (7)

     17.7       17.6  

Non-Medicare:

    

Admissions

     30,092       27,421  

Recertifications

     14,874       12,415  
  

 

 

   

 

 

 

Total volume

     44,966       39,836  

Visits

     722,677       619,745  

Total (5):

    

Visiting Clinician Cost per Visit

   $ 84.27     $ 83.88  

Clinical Manager Cost per Visit

     8.09       8.49  
  

 

 

   

 

 

 

Total Cost per Visit

   $ 92.36     $ 92.37  

Visits

     2,050,702       1,893,180  

 

7


     For the Year
Ended December 31,
 
     2018     2017  

Financial Information (in  millions):

    

Medicare

   $ 830.8     $ 793.3  

Non-Medicare

     343.7       290.6  
  

 

 

   

 

 

 

Net service revenue

     1,174.5       1,083.9  

Cost of service

     722.1       670.9  
  

 

 

   

 

 

 

Gross margin

     452.4       413.0  

Asset impairment charge

     —         1.3  

Other operating expenses

     279.8       281.9  
  

 

 

   

 

 

 

Operating income

   $ 172.6     $ 129.8  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     6     (4 %) 

Non-Medicare revenue

     18     17

Total admissions

     5     2

Total volume (2)

     7     4

Total Episodic admissions (3)

     4     1

Total Episodic volume (4)

     5     3

Key Statistical Data - Total (5):

    

Medicare:

    

Admissions

     190,748       190,132  

Recertifications

     112,773       106,774  
  

 

 

   

 

 

 

Total volume

     303,521       296,906  

Completed episodes

     296,223       290,227  

Visits

     5,261,315       5,067,436  

Average revenue per completed episode (6)

   $ 2,854     $ 2,823  

Visits per completed episode (7)

     17.6       17.3  

Non-Medicare:

    

Admissions

     118,577       107,665  

Recertifications

     55,736       46,364  
  

 

 

   

 

 

 

Total volume

     174,313       154,029  

Visits

     2,772,339       2,347,363  

Total (5):

    

Visiting Clinician Cost per Visit

   $ 81.88     $ 82.04  

Clinical Manager Cost per Visit

     8.01       8.44  
  

 

 

   

 

 

 

Total Cost per Visit

   $ 89.89     $ 90.48  

Visits

     8,033,654       7,414,799  

 

(1)

Same store information represents the percent increase (decrease) in our Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume of the prior period.

(2)

Total volume includes all admissions and recertifications.

(3)

Total Episodic admissions includes admissions for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

(4)

Total Episodic volume includes admissions and recertifications for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

(5)

Total includes acquisitions.

(6)

Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.

(7)

Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

 

8


Segment Information - Hospice

 

     For the Three-
Month Period

Ended December 31,
 
     2018     2017  

Financial Information (in  millions):

    

Medicare

   $ 103.5     $ 92.7  

Non-Medicare

     5.3       5.2  
  

 

 

   

 

 

 

Net service revenue

     108.8       97.9  

Cost of service

     56.8       50.6  
  

 

 

   

 

 

 

Gross margin

     52.0       47.3  

Other operating expenses

     23.2       20.8  
  

 

 

   

 

 

 

Operating income

   $ 28.8     $ 26.5  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     11     14

Non-Medicare revenue

     5     131

Hospice admissions

     12     8

Average daily census

     9     12

Key Statistical Data - Total (2):

    

Hospice admissions

     7,152       6,371  

Average daily census

     7,809       7,162  

Revenue per day, net

   $ 151.46     $ 148.62  

Cost of service per day

   $ 79.02     $ 76.81  

Average discharge length of stay

     103       96  

 

     For the Year
Ended December 31,
 
     2018     2017  

Financial Information (in  millions):

    

Medicare

   $ 390.2     $ 350.7  

Non-Medicare

     20.7       17.1  
  

 

 

   

 

 

 

Net service revenue

     410.9       367.8  

Cost of service

     212.0       187.5  
  

 

 

   

 

 

 

Gross margin

     198.9       180.3  

Other operating expenses

     85.7       77.5  
  

 

 

   

 

 

 

Operating income

   $ 113.2     $ 102.8  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     11     17

Non-Medicare revenue

     21     20

Hospice admissions

     8     11

Average daily census

     11     15

Key Statistical Data - Total (2):

    

Hospice admissions

     27,596       25,381  

Average daily census

     7,588       6,820  

Revenue per day, net

   $ 148.36     $ 147.75  

Cost of service per day

   $ 76.53     $ 75.31  

Average discharge length of stay

     100       93  

 

(1)

Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.

(2)

Total includes acquisitions.

 

9


Segment Information - Personal Care

 

     For the Three-
Month Period
Ended December 31,
 
     2018      2017  

Financial Information (in  millions):

     

Medicare

   $ —        $ —    

Non-Medicare

     21.6        18.1  
  

 

 

    

 

 

 

Net service revenue

     21.6        18.1  

Cost of service

     16.1        13.7  
  

 

 

    

 

 

 

Gross margin

     5.5        4.4  

Other operating expenses

     3.4        3.1  
  

 

 

    

 

 

 

Operating income

   $ 2.1      $ 1.3  
  

 

 

    

 

 

 

Key Statistical Data:

     

Billable hours

     890,696        782,140  

Clients served

     13,054        12,646  

Shifts

     406,119        365,360  

Revenue per hour

   $ 24.24      $ 23.07  

Revenue per shift

   $ 53.16      $ 49.39  

Hours per shift

     2.2        2.1  
     For the Year
Ended December 31,
 
     2018      2017  

Financial Information (in  millions):

     

Medicare

   $ —        $ —    

Non-Medicare

     77.2        59.6  
  

 

 

    

 

 

 

Net service revenue

     77.2        59.6  

Cost of service

     58.8        45.0  
  

 

 

    

 

 

 

Gross margin

     18.4        14.6  

Other operating expenses

     13.1        9.7  
  

 

 

    

 

 

 

Operating income

   $ 5.3      $ 4.9  
  

 

 

    

 

 

 

Key Statistical Data:

     

Billable hours

     3,248,304        2,604,794  

Clients served

     17,981        16,774  

Shifts

     1,468,541        1,195,511  

Revenue per hour

   $ 23.75      $ 22.86  

Revenue per shift

   $ 52.54      $ 49.80  

Hours per shift

     2.2        2.2  

 

10


Segment Information - Corporate

 

     For the Three-
Month Period
Ended December 31,
 
     2018      2017  

Financial Information (in  millions):

     

Other operating expenses

   $ 35.0      $ 29.6  

Depreciation and amortization

     1.9        2.9  
  

 

 

    

 

 

 

Total operating expenses

   $ 36.9      $ 32.5  
  

 

 

    

 

 

 
     For the Year
Ended December 31,
 
     2018      2017  

Financial Information (in  millions):

     

Other operating expenses

   $ 127.6      $ 117.8  

Depreciation and amortization

     8.4        12.5  
  

 

 

    

 

 

 

Total operating expenses before Securities Class Action Lawsuit settlement, net

     136.0        130.3  

Securities Class Action Lawsuit settlement, net

     —          28.7  
  

 

 

    

 

 

 

Total operating expenses

   $ 136.0      $ 159.0  
  

 

 

    

 

 

 

 

11


AMEDISYS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES

(Amounts in thousands)

(Unaudited)

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”):

 

    For the Three-
Month Period

Ended December 31,
    For the Year Ended
December 31,
 
    2018     2017     2018     2017  

Net income (loss) attributable to Amedisys, Inc.

  $   27,461     $ (3,848   $ 119,346     $ 30,301  

Add:

       

Income tax expense

    8,875           32,794       38,859       50,118  

Interest expense, net

    1,521       1,377       7,092       4,873  

Depreciation and amortization

    3,379       3,984       13,261       17,123  

Certain items (1)

    3,124       24,414       3,739       61,429  

Interest component of certain items (1)

    (451     (168     (1,731     (263

Tax component of certain items (1)

    —         (21,424     —         (21,424
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (2) (6)

  $ 43,909     $ 37,129     $ 180,566     $ 142,157  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Service Revenue Reconciliation:

 

    For the Three-
Month Period
Ended December 31,
    For the Year Ended
December 31,
 
    2018     2017     2018     2017  

Net service revenue

  $ 434,378     $ 397,961     $ 1,662,578     $ 1,511,272  

Add:

       

Certain items (1)

    —         —         1,687       6,506  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net service revenue (3) (6)

  $ 434,378     $ 397,961     $ 1,664,265     $ 1,517,778  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Attributable to Amedisys, Inc Reconciliation:

 

    For the Three-
Month Period
Ended December 31,
    For the Year Ended
December 31,
 
          2018                 2017                 2018                 2017        

Net income (loss) attributable to Amedisys, Inc.

  $ 27,461     $ (3,848   $ 119,346     $ 30,301  

Add:

       

Certain items (1)

    2,312       23,233       2,767       45,627  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income attributable to Amedisys, Inc. (4) (6)

  $ 29,773     $ 19,385     $ 122,113     $ 75,928  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:

 

    For the Three-
Month Period
Ended December 31,
    For the Year Ended
December 31,
 
    2018     2017     2018     2017  

Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share

  $ 0.84     $ (0.11   $ 3.55     $ 0.88  

Add:

       

Certain items (1)

    0.07       0.67       0.08       1.33  
 

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (5) (6)

  $ 0.91     $ 0.56     $ 3.63     $ 2.21  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

The following details the certain items for the three month periods and years ended December 31, 2018 and 2017:

 

12


Certain Items:

 

     For the Three-Month Period
Ended December 31, 2018
    For the Year Ended
December 31, 2018
 
     (Income) Expense     (Income) Expense  

Certain Items Impacting Net Service Revenue:

    

Florida self-audit (pre-acquisition)

   $ —       $ 1,687  

Certain Items Impacting Operating Expenses:

    

Acquisition costs

     1,025       2,757  

Legal fees - non-routine

     56       1,465  

Indemnity receivable adjustment

     2,143       2,143  

Certain Items Impacting Total Other Income (Expense):

    

Legal settlements

     —         (1,437

Miscellaneous, other (income) expense, net

     (100     (2,876
  

 

 

   

 

 

 

Total

   $ 3,124     $ 3,739  
  

 

 

   

 

 

 

Net of tax

   $ 2,312     $ 2,767  
  

 

 

   

 

 

 

Diluted EPS

   $ 0.07     $ 0.08  
  

 

 

   

 

 

 

 

     For the Three-Month Period
Ended December 31, 2017
     For the Year Ended
December 31, 2017
 
     (Income) Expense      (Income) Expense  

Certain Items Impacting Net Service Revenue:

     

Florida ZPIC audit

   $ —        $ 6,506  

Certain Items Impacting Operating Expenses:

     

Acquisition costs

     48        1,025  

Legal fees - non-routine

     358        1,768  

Securities Class Action Lawsuit settlement, net

     —          28,712  

Restructuring activity

     648        2,318  

Data center relocation

     —          940  

Asset impairment

     1,323        1,323  

Certain Items Impacting Total Other Income (Expense):

     

Legal settlements

     —          (2,014

Miscellaneous, other (income) expense, net

     613        (573

Certain Items Impacting Income Tax Expense:

     

Remeasurement of deferred tax assets and liabilities

     21,424        21,424  
  

 

 

    

 

 

 

Total

   $ 24,414      $ 61,429  
  

 

 

    

 

 

 

Net of tax

   $ 23,233      $ 45,627  
  

 

 

    

 

 

 

Diluted EPS

   $ 0.67      $ 1.33  
  

 

 

    

 

 

 

 

(2)

Adjusted EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items as described in footnote 1.

(3)

Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 1.

(4)

Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.

(5)

Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in footnote 1.

(6)

Adjusted EBITDA, adjusted net service revenue, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes or other measures calculated in accordance with GAAP. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.

 

13

(Back To Top)

Section 3: EX-99.2 (EX-99.2)

EX-99.2

Slide 1

Amedisys Fourth Quarter and Full Year 2018 Earnings Call Supplemental Slides February 28th, 2019 Exhibit 99.2


Slide 2

This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions about our business that are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those described in this presentation. You should not rely on forward-looking statements as a prediction of future events. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward-looking statements are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Amedisys internet website http://www.amedisys.com or by contacting the Amedisys Investor Relations department at (225) 292-2031. We disclaim any obligation to update any forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based except as required by law. www.amedisys.com NASDAQ: AMED We encourage everyone to visit the Investors Section of our website at www.amedisys.com, where we have posted additional important information such as press releases, profiles concerning our business and clinical operations and control processes, and SEC filings. Forward-looking statements


Slide 3

A Look Back FY 2018 Accomplishments (as compared to FY 2017 unless otherwise noted) Employer of Choice Reduced total voluntary turnover from 22.0% to 19.8% Successfully executed upon our Business Development strategy, exceeding 800 BD headcount (up from 759 as of 12/31/17) Outperformed industry benchmarks on engagement - scoring 75 on overall satisfaction Clinical Distinction Improved Quality of Patient Care star score from 4.22 to 4.40 (Jan Preview) Outperformed industry on all hospice item set (HIS) quality metrics Invested in predictive analytics company Medalogix Operational Excellence and Efficiency Grew EBITDA from $142.2M to $180.6M, an increase of 27% Expanded consolidated EBITDA margin 140 bps to 10.8% G&A as a percent of revenue decreased from 30.8% to 29.7% Increased free cash flow from $95M in 2017 to $214M in 2018 Reduced DSO 6 days to 38 days Driving Growth Organic Total admissions +5% vs. +2% Total volume growth of 7% vs. 4% Grew Hospice ADC by +11% Inorganic Signed Compassionate Care Hospice deal (closed in 2019) Closed 2 personal care deals Launched de novo process (7-9 planned for 2019)


Slide 4

Our Key Areas of Focus Strategic areas of focus for Q4 2018 and beyond Home Health*: Total same store admission +6%. Total same store volume +6%. Total same store Medicare admits +3% Hospice: Admissions +12%, ADC +9% Personal Care: Double digit growth in billable hours / quarter +14% (including acquisitions) 1 Organic Growth Quality: Amedisys April 2019 STARS score of 4.28 reflects CMS change in measurement (added Improvement in Mgmt. of Oral Meds while removing Drug Education) 53 Amedisys care centers rated at 5-Stars in the April’19 Preview Hospice quality – outperforming industry average in all hospice item set (HIS) categories Continued focus on 30-Day and 60-Day ACH rate reduction 3 Clinical Initiatives Productivity driving continued CPV control (visiting clinician CPV up only $0.39 year over year, in spite of $1.15 cpv impact from annual raises) Focusing on optimizing RN / LPN & PT / PTA staffing ratios 4 Capacity and Productivity Closed Compassionate Care Hospice acquisition 2/1/19 10.7x net purchase price multiple 7.8x fully synergized Signed definitive agreement to acquire RoseRock Healthcare on 2/14/19 200 ADC Hospice in Tulsa, OK Expected closing: 4/1/19 Tuck-in pipeline remains full Targeting increased de novo activity in 2019 (7-9 planned) 5 M&A 2 Recruiting / Retention Targeting industry leading employee retention amongst all employee categories –Full time voluntary turnover currently at 16.8% Focus on reduction of clinical turnover with heavy focus on RN’s Continued improvement on engagement - overall satisfaction score of 75 (currently above industry average) *Note: Home Health same store volume is defined as admissions plus recertifications 2019 Home Health industry impact per Proposed Rule +2.2%; AMED home health specific impact +1.2% AMED hospice specific impact +1.6% (effective 10/1/18) Working with CMS and Congress to address “behavioral assumptions” language in PDGM Three bills introduced aimed at mitigating “behavioral assumptions” 6 Regulatory


Slide 5

Highlights and Summary Financial Results (Adjusted): 4Q 2018(1) Home Health total same store volume +6%, total same store admissions +6%. Hospice same store admissions +12%. Personal Care +14% billable hours Amedisys Consolidated Revenue Growth: +9% EBITDA: $44M (+18%) EBITDA Margin: 10% (+80 bps) EPS: $0.91 (+63%) 4Q’18 Net debt: $(9.3)M Net Leverage ratio: -0.1x CFFO: $64.0M (FY $223.5M) Free cash flow (4): $62.8M DSO: 38.0 (vs. Q4’17 of 44.0 and Q3’18 of 40.6) Balance Sheet & Cash Flow 4Q’18 Same Store Volume (2): Total: +6% Episodic (3): +5% Same Store Admissions: Total: +6% Episodic (3): +5% Other Statistics: Revenue per Episode: $2,891 (+$33) Total Cost per Visit: $92.36 (flat) Medicare Recert Rate: 37.8% (40) bps Home Health Growth Metrics (5): Billable hours/quarter: +14% Clients served: +3% Personal Care Same Store Volume: Admissions: +12% ADC: +9% Other Statistics: Revenue per Day: $151.46 (+1.9%) Cost per day: +2.9% Hospice 4Q’18 4Q’18 4Q’18 Adjusted Financial Results(1) 4Q’18 The financial results for the three-month periods and years ended December 31, 2017 and December 31, 2018 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Same Store volume – Includes admissions and recertifications. Episodic admissions and volume – Includes Medicare and non-Medicare payors that bill on a 60-day episode of care basis. Free cash flow defined as cash flow from operations less routine capital expenditures and required debt repayments. Includes acquisitions.


Slide 6

Our revenue sources: 4Q18 Medicare FFS: Paid episodically over a 60 day episode Private Episodic: MA and Commercial plans who pay us over a 60 day episode. Generally at rates ~90% – 100% of Medicare Per Visit: Managed care, Medicaid and private payors reimbursing us per visit provided Hospice Per Day Reimbursement: Routine Care: Patient at home with symptoms controlled – 97% of the Hospice care AMED provides Continuous Care: Patient at home with uncontrolled symptoms Inpatient Care: Patient in facility with uncontrolled symptoms Respite Care: Patient at facility with symptoms controlled Home Health: 323 care centers; 34 states & DC Hospice: 84 care centers; 22 states Personal Care: 12 care centers; 3 states Total AMED: 419 care centers; 34 states and D.C. Post acquisition of Compassionate Care Hospice Hospice: 137 care centers; 33 states Total AMED: 472 care centers; 38 states and D.C.


Slide 7

Home Health and Hospice Segment (Adjusted) – 4Q 2018(1) Medicare FFS growth +3.2% Revenue per Episode up +$33 Recert rate down 40 bps; +130 bps FY CPV flat in Q4’18 EBITDA as a % percentage of revenue: +110bps Q4; +190 bps FY’18 Home Health Highlights Same store average daily census (ADC) up 9% in 4Q Net revenue per day +1.9% in 4Q Three providers over cap as of Q4’18: ~$0.4M liability for 2019 cap year Total cap expense for 2018: $1.1M Hospice Highlights The financial results for the three-month periods and years ended December 31, 2017 and December 31, 2018 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Segment EBITDA does not include any corporate G&A expenses. Same store admissions and volume exclude 7 closed and consolidated care centers in FL during 2017. Home health total volume growth strong (+6%); Hospice continues strong ADC growth (+9%)


Slide 8

General & Administrative Expenses – Adjusted (1,2) Notes: Year over year total G&A as a percentage of revenue decreased 110 basis points Home Health segment G&A: 140 bps decrease as % of revenue Hospice segment G&A: 20 bps increase as % of revenue Personal Care segment G&A: 240 bps decrease as % of revenue Corporate G&A: Percent of total revenue flat versus prior year Total G&A sequential increase driven by planned wage increases and anticipated health insurance increases The financial results for the three-month periods ended December 31, 2017, March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Adjusted G&A expenses do not include depreciation and amortization. Impact of G&A cost control materializing as operational efficiencies are realized; Adding investments to Hospice segment


Slide 9

Industry Leading Quality Scores Note: Top Competitor Avg weighted by CCN count and include LHC, Kindred, AFAM, HLS and BKD Metric OCT 18 Release JAN 19 Release APR 19 PREVIEW Quality of Patient Care 4.43 4.40 4.28 Entities at 4+ Stars 94% 94% 86% Metric JUL 18 Release OCT 18 Release JAN 19 Release Patient Satisfaction Star 3.96 3.66 3.75 Performance Over Industry +7% +5% +6% Quality of Patient Care (QPC) Patient Satisfaction (PS) Amedisys maintains a 4-Star average in the Apr 2019 HHC preview with 86% of our providers at 4+ Stars and 53% at 4.5+ Stars 29 Amedisys providers (representing 53 care centers) rated at 5-Stars in the Apr HHC 2019 preview In April 19 Preview for QPC, new measure introduced: Improvement in Management of Oral Meds AMED received ~$1M in bonus payments related to Value Based Purchasing (VBP) YTD through 4Q’18


Slide 10

Hospice Quality: Amedisys Hospice Continues to Move Towards Best-in-Class Hospice Quality


Slide 11

Components 4Q’17 3Q’18 4Q’18 YoY Variance Detail Mitigation Plan Salaries $61.80 $61.93 $62.79 $0.99 YoY increase due to planned wage increases offset by volume growth and increased productivity Staffing mix optimization, productivity and scheduling improvement initiatives in place helped us overcome planned salary increases Contractors $2.93 $3.35 $3.38 $0.45 YoY increased demand due to increasing volumes Focused efforts on filling positions with full-time clinicians Benefits $12.35 $11.14 $11.60 ($0.75) YoY reduction driven by decrease in workers comp expense. Sequential increase driven by seasonality of health insurance claims Focus on cost containment and spend optimization with specific focus on high cost claims Transportation & Supplies $6.80 $6.36 $6.50 ($0.30) YoY decrease primarily due to supplies costs More effective medical supply contracting cost initiatives are underway *Visiting Clinician CPV $83.88 $82.78 $84.27 $0.39 Clinical Managers $8.49 $8.18 $8.09 ($0.40) Fixed cost associated with non-visiting clinicians Unit cost reduced as volume increases Total CPV $92.37 $90.96 $ 92.36 ($0.01) Operational Excellence: Home Health Cost Per Visit (CPV) Total CPV impacted by planned wage increases *Note: Direct comparison with industry competitors CPV calculation $83.88 $82.78 $84.27


Slide 12

Driving Top Line Growth All three lines of business continue to grow. Hospice delivers another quarter of ADC growth and Home Health total same store volume continues to trend in the mid-single digits Home Health Total Same Store Volume* Hospice ADC Personal Care Total Hours / Quarter *Total Home Health Same Store Volumes exclude 7 closed and consolidated care centers in Florida in 2017 Volume *Includes impact of Intercity (10/2/17), East Tennessee (5/1/18) and Bring Care Home (10/1/18) acquisitions


Slide 13

Amedisys to acquire compassionate care hospice Deal Summary Overview Metrics Integration Amedisys closes on its acquisition of Compassionate Care Hospice 100% stock purchase Compassionate Care Hospice: Founded in 1993 100% founder owned Average Daily Census: 3,300 Revenue: $188M Adj. EBITDA: $27M (TTM May’18) Care Centers: 53 FTE’s: ~2,300 States: 24 Proforma for acquisitions, AMED becomes the 3rd largest hospice provider in America Adds 11 new states to AMED hospice organization $340M gross price (12.6x) $290M net price (10.7x) Net of $50M dollar for dollar payment related to tax asset and working capital Synergized Multiple: 7.8x ~$10M in synergies Overlap: Minimal overlap ~10% of ADC Balance sheet remains very flexible for continued inorganic growth opportunities: Initial leverage ratio: ~1.6x Proforma company will have significant cash generation Conversion to HCHB to begin March 1 and projected to take ~180 days Expect to see integration and HCHB implementation disruption during 1Q’19 and 2Q’19 impacting census and costs AMED will invest in the business during 2019 to grow low ADC care centers and expand margin in large care centers Adding sales resources to accelerate growth in 2H’19 and 2020 Retention packages for key employees Care center staffing model and regional infrastructure Expect significant margin improvement throughout 2020 2021 expect margin profile similar to AMED hospice


Slide 14

Debt and Liquidity Metrics Our debt levels remain very low at (0.1)x net leverage. Pro forma for Compassionate Care Hospice, our leverage still remains low at ~1.6x net leverage Net debt defined as total debt outstanding ($10.9M) less cash balance ($20.2M). Leverage ratio (net) is defined as net debt divided by last twelve months adjusted EBITDA ($181M); Pro Forma for CCH ($208M). Liquidity defined as the sum of cash balance and available revolving line of credit.


Slide 15

Cash Flow Statement Highlights (1) $62.8M in free cash flow for the quarter; $223.5M in cash flow from operations for the year up ~$118M from 2017 Free cash flow defined as cash flow from operations less routine capital expenditures and required debt repayments.


Slide 16

Income Statement Adjustments (1) The financial results for the three-month periods ended March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018, and year ended December 31, 2018 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period.


Slide 17

2019 Guidance


Slide 18

Amedisys 2019 Preliminary Guidance Targeting ~16% - 19% growth in revenue, ~13% - 16% growth in EBITDA and ~10% - 13% growth in EPS 2018 Actual Performance 2019 Guidance Revenue Adjusted EBITDA $180.6M $1.66B Adjusted Earnings per Share $3.63 $205M - $210M $1.94B - $1.98B $3.98 – $4.09


Slide 1

Amedisys 2019 Guidance Considerations Amedisys Consolidated Tax rate ~26% Cash tax rate ~17% Diluted share count ~33.1 million shares Capital Expenditures ~$8-$10 million Salary increase ~2% - 3% Benefits increase ~12% (8% growth / headcount, 4% pricing / claims costs) Overall ~$6 million investment in business development resources Excludes future acquisitions and related integration costs Home Health Personal Care Hospice Total same store admission growth ~5% Focus on business development staffing strategy ~$3 million (Y/Y increase) Continue focus on Quality of Care (Stars and Acute Care Hospitalization rates) Continued positive progress on underperforming care centers Total same store admission growth ~7% Addition of business development resources to maintain organic growth ~ $3 million Includes contribution of CCH acquisition of ~$12M-$14M Decline in exit rate TTM ($25M vs. $27M) ADC Disruption of ~100 (~3%) Total billable hours growth ~13% Employer Medical Assistance Contribution (EMAC) ~$1 million Project solid revenue and earnings growth while investing in our people and the business to prepare for PDGM and beyond. Executing inorganic growth strategy and ramping up de novos 2019 Investments Total Investments in business of ~$7M IT Security – Investments in IT security enhancements for web, ID, data and e-mail protection etc. Pay Practice Redesign – Incentivizing our clinical staff to work at the top of their license (right people, doing the right visits) Staffing Model Redesign – Optimizing our care centers and field infrastructure to maximize operational efficiency PDGM Resources – Investments in teams, projects, processes needed to thrive in PDGM De Novos – 7 to 9 de novos planned for 2019


Slide 20

Compassionate Care Hospice (CCH) EBITDA Improvement HCHB disruption and investments in the business will impact EBITDA in 2019. EBITDA margin in 2020 and beyond will reflect legacy Amedisys hospice margin and growth trajectory Category Description ADC Disruption Negative impact on ADC as HCHB is installed. Expect ADC to recover in 3Q’19 Investment Investments needed in regional infrastructure and BD staff to grow low ADC care centers and improve margin in large ADC care centers. Current CCH EBITDA margin approximately half of legacy AMED and growth rate ~20% of AMED ADC growth Synergies and Other Efficiencies Cost savings, duplicative contract optimization and sunset of current IT system; cannot begin to pull costs out until HCHB is installed. Realize 100% of run rate synergies of ~$10M in 2H’2020 Planned disruption from HCHB implementation of ~100 ADC BD staff & regional infrastructure needed to grow low ADC care centers and improve margin Assuming no revenue growth and EBITDA margin equal to AMED legacy hospice margin, CCH can contribute ~$50M+ in EBITDA ~$24M - $26M of total 2020 EBITDA driven by recovery from ADC disruption and realization of synergies ~$10M of 2020 EBITDA driven by ADC growth and margin expansion ~$34 - $36


Slide 21

Reimbursement Outlook 2019 Reimbursement Impact for Home Health and Hospice Home Health Hospice 2019 Market Basket Update 3.0% Productivity Adjustment (0.8)0 Estimated Industry Impact +2.2% Estimated AMED-Specific Impact +1.2% 2019* Market Basket Update 2.9% Productivity / Other Adjustment (1.1) Estimated Industry Impact +1.8% Estimated AMED-Specific Impact +1.6% Note: +2.2% industry impact compared to +1.2% AMED specific impact ~($8M) *Hospice rate increase effective October 1, 2018


Slide 22

EBITDA Seasonality: As Reported Q1 Q2 Q3 Q4 Drivers of Seasonality Weather disruption Lower RPE (LUPA) Payroll tax reset Short Month (Feb.) Lower Hospice ADC & Higher Salary Cost per Day Highest Completed Episodes Stronger revenue per episode (RPE) Incremental holiday vs. 1H High PTO Lower Volumes Health Insurance Increases Raises Incremental holiday vs. 1H Health Insurance Increases Better Volumes Raises


Slide 23

EBITDA Seasonality: Excluding Health Insurance and Workers Compensation Q1 Q2 Q3 Q4 Drivers of Seasonality Weather disruption Lower RPE (LUPA) Payroll tax reset Short Month (Feb.) Lower Hospice ADC & Higher Salary Cost per Day Highest Completed Episodes Stronger revenue per episode (RPE) Incremental holiday vs. 1H High PTO Lower Volumes Health Insurance Increases Raises Incremental holiday vs. 1H Health Insurance Increases Better Volumes Raises

(Back To Top)