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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): April 30, 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 April 30, 2019, Amedisys, Inc. (“we,” “us,” “our” or the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2019. 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 11:00 a.m. ET on Wednesday, May 1, 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 April 30, 2019 announcing the Company’s financial results for the first quarter ended March 31, 2019 (furnished only)
99.2    Supplemental slides provided in connection with the first quarter 2019 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: April 30, 2019

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

AMEDISYS REPORTS FIRST QUARTER 2019 FINANCIAL RESULTS

AND REAFFIRMS 2019 GUIDANCE

BATON ROUGE, Louisiana (April 30, 2019) — Amedisys, Inc. (NASDAQ: AMED) today reported its financial results for the three-month period ended March 31, 2019.

Three Month Periods Ended March 31, 2019 and 2018

 

   

Net service revenue increased $68.0 million to $467.3 million compared to $399.3 million in 2018.

 

   

Net income attributable to Amedisys, Inc. of $31.3 million compared to $27.2 million in 2018.

 

   

Net income attributable to Amedisys, Inc. per diluted share of $0.95 per diluted share compared to $0.79 in 2018.

Adjusted Quarterly Results*

 

   

Adjusted EBITDA of $54.9 million compared to $41.7 million in 2018.

 

   

Adjusted net service revenue of $467.8 million compared to $399.3 million in 2018.

 

   

Adjusted net income attributable to Amedisys, Inc. of $36.4 million compared to $27.3 million in 2018.

 

   

Adjusted net income attributable to Amedisys, Inc. per diluted share of $1.11 compared to $0.79 in 2018.

 

*

See pages 10 and 11 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am very proud of our first quarter results as we continue our momentum into 2019. Most importantly and core to what we do, our clinical quality metrics continue to be at, or near, the top of the industry in both home health and hospice. Providing our clinically distinct care to as many patients wherever they call home is and will always be our mission. 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.

 

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Earnings Call and Webcast Information

Amedisys will host a conference call on Wednesday, May 1, 2019, at 11:00 a.m. ET to discuss its first quarter results. To participate on the conference call, please call before 11:00 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 June 1, 2019 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13689585

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 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 attributable to Amedisys, Inc. excluding certain items; and (4) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income 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.

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 471 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 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, 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, 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.

 

2


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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

 

     For the Three-Month
Periods Ended March 31
 
     2019     2018  

Net service revenue

   $ 467,340     $ 399,262  

Cost of service, excluding depreciation and amortization

     275,274       238,309  

General and administrative expenses:

    

Salaries and benefits

     94,830       75,631  

Non-cash compensation

     6,615       4,044  

Other

     43,402       41,680  

Depreciation and amortization

     2,895       3,593  
  

 

 

   

 

 

 

Operating expenses

     423,016       363,257  
  

 

 

   

 

 

 

Operating income

     44,324       36,005  

Other income (expense):

    

Interest income

     24       120  

Interest expense

     (3,349     (1,703

Equity in earnings from equity method investments

     1,216       1,860  

Miscellaneous, net

     236       601  
  

 

 

   

 

 

 

Total other (expense) income, net

     (1,873     878  
  

 

 

   

 

 

 

Income before income taxes

     42,451       36,883  

Income tax expense

     (10,878     (9,563
  

 

 

   

 

 

 

Net income

     31,573       27,320  

Net income attributable to noncontrolling interests

     (269     (161
  

 

 

   

 

 

 

Net income attributable to Amedisys, Inc.

   $ 31,304     $ 27,159  
  

 

 

   

 

 

 

Basic earnings per common share:

    

Net income attributable to Amedisys, Inc. common stockholders

   $ 0.98     $ 0.80  

Weighted average shares outstanding

     32,001       33,971  

Diluted earnings per common share:

    

Net income attributable to Amedisys, Inc. common stockholders

   $ 0.95     $ 0.79  

Weighted average shares outstanding

     32,893       34,592  

 

4


AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

 

     March 31, 2019
(unaudited)
    December 31,
2018
 
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 10,554     $ 20,229  

Patient accounts receivable

     236,437       188,972  

Prepaid expenses

     10,792       7,568  

Other current assets

     13,948       7,349  
  

 

 

   

 

 

 

Total current assets

     271,731       224,118  

Property and equipment, net of accumulated depreciation of $96,892 and $95,472

     29,716       29,449  

Operating lease right of use assets

     83,064       —    

Goodwill

     649,514       329,480  

Intangible assets, net of accumulated amortization of $33,166 and $33,050

     62,801       44,132  

Deferred income taxes

     32,525       35,794  

Other assets

     54,888       54,145  
  

 

 

   

 

 

 

Total assets

   $ 1,184,239     $ 717,118  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

Accounts payable

   $ 32,797     $ 28,531  

Payroll and employee benefits

     111,312       92,858  

Accrued expenses

     121,716       99,475  

Current portion of long-term obligations

     6,038       1,612  

Current portion of operating lease liabilities

     25,514       —    
  

 

 

   

 

 

 

Total current liabilities

     297,377       222,476  

Long-term obligations, less current portion

     303,733       5,775  

Operating lease liabilities, less current portion

     55,840       —    

Other long-term obligations

     6,089       6,234  
  

 

 

   

 

 

 

Total liabilities

     663,039       234,485  
  

 

 

   

 

 

 

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; 36,337,743 and 36,252,280 shares issued; and 32,037,667 and 31,973,505 shares outstanding

     36       36  

Additional paid-in capital

     613,714       603,666  

Treasury stock, at cost 4,300,076 and 4,278,775 shares of common stock

     (244,373     (241,685

Accumulated other comprehensive income

     15       15  

Retained earnings

     150,854       119,550  
  

 

 

   

 

 

 

Total Amedisys, Inc. stockholders’ equity

     520,246       481,582  

Noncontrolling interests

     954       1,051  
  

 

 

   

 

 

 

Total equity

     521,200       482,633  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,184,239     $ 717,118  
  

 

 

   

 

 

 

 

5


AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING

(Amounts in thousands, except statistical information)

(Unaudited)

 

     For the Three-Month
Periods Ended March 31
 
     2019     2018  

Cash Flows from Operating Activities:

    

Net income

   $ 31,573     $ 27,320  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     2,895       3,593  

Non-cash compensation

     6,615       4,044  

401(k) employer match

     2,379       2,567  

Amortization and impairment of operating lease right of use assets

     8,345       —    

(Gain) loss on disposal of property and equipment

     (4     563  

Deferred income taxes

     3,269       2,945  

Equity in earnings from equity method investments

     (1,216     (1,860

Amortization of deferred debt issuance costs/debt discount

     213       178  

Return on equity investment

     725       625  

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

    

Patient accounts receivable

     (22,333     8,260  

Other current assets

     (10,635     (6,982

Other assets

     (338     46  

Accounts payable

     (11,140     (1,523

Accrued expenses

     18,838       (1,807

Other long-term obligations

     (144     2,348  

Operating lease liabilities

     (8,139     —    

Operating lease right of use assets

     (844     —    
  

 

 

   

 

 

 

Net cash provided by operating activities

     20,059       40,317  
  

 

 

   

 

 

 

Cash Flows from Investing Activities:

    

Proceeds from sale of deferred compensation plan assets

     208       462  

Proceeds from the sale of property and equipment

     65       5  

Investments in equity method investees

     (120     —    

Purchases of property and equipment

     (1,198     (1,462

Acquisitions of businesses, net of cash acquired

     (327,867     (2,250
  

 

 

   

 

 

 

Net cash used in investing activities

     (328,912     (3,245
  

 

 

   

 

 

 

Cash Flows from Financing Activities:

    

Proceeds from issuance of stock upon exercise of stock options

     356       125  

Proceeds from issuance of stock to employee stock purchase plan

     782       597  

Shares withheld upon stock vesting

     (2,688     (1,305

Noncontrolling interest distribution

     (366     (28

Proceeds from borrowings under term loan

     175,000       —    

Proceeds from borrowings under revolving line of credit

     161,500       —    

Repayments of borrowings under revolving line of credit

     (34,000     —    

Principal payments of long-term obligations

     (559     (2,819

Debt issuance costs

     (847     —    
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     299,178       (3,430
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (9,675     33,642  

Cash and cash equivalents at beginning of period

     20,229       86,363  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 10,554     $ 120,005  
  

 

 

   

 

 

 

Supplemental Disclosures of Cash Flow Information:

    

Cash paid for interest

   $ 725     $ 1,065  
  

 

 

   

 

 

 

Cash paid for income taxes, net of refunds received

   $ 404     $ 2,813  
  

 

 

   

 

 

 

Days revenue outstanding (1)

     41.2       41.4  

 

(1)

Our calculation of days revenue outstanding at March 31, 2019 and 2018 is derived by dividing our ending patient accounts receivable by our average daily patient revenue for the three month periods ended March 31, 2019 and 2018, respectively.

 

6


AMEDISYS, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in millions, except statistical information)

(Unaudited)

Segment Information - Home Health

 

     For the Three-
Month Periods
Ended March 31,
 
     2019     2018  

Financial Information (in millions):

    

Medicare

   $ 213.4     $ 205.0  

Non-Medicare

     96.7       79.1  
  

 

 

   

 

 

 

Net service revenue

     310.1       284.1  

Cost of service

     185.7       174.4  
  

 

 

   

 

 

 

Gross margin

     124.4       109.7  

Other operating expenses

     72.4       68.8  
  

 

 

   

 

 

 

Operating income

   $ 52.0     $ 40.9  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     4     5

Non-Medicare revenue

     22     14

Total admissions

     6     4

Total volume (2)

     6     7

Total Episodic admissions (3)

     4     3

Total Episodic volume (4)

     3     6

Key Statistical Data - Total (5):

    

Medicare:

    

Admissions

     50,320       49,455  

Recertifications

     27,112       27,236  
  

 

 

   

 

 

 

Total volume

     77,432       76,691  

Completed episodes

     73,978       72,836  

Visits

     1,331,409       1,314,126  

Average revenue per completed episode (6)

   $ 2,902     $ 2,792  

Visits per completed episode (7)

     17.4       17.2  

Non-Medicare:

    

Admissions

     33,649       29,889  

Recertifications

     14,683       12,432  
  

 

 

   

 

 

 

Total volume

     48,332       42,321  

Visits

     753,679       660,933  

Total (5):

    

Visiting Clinician Cost per Visit

   $ 81.05     $ 80.34  

Clinical Manager Cost per Visit

     8.01       7.99  
  

 

 

   

 

 

 

Total Cost per Visit

   $ 89.06     $ 88.33  

Visits

     2,085,088       1,975,059  

 

(1)

Same store information represents the percent change 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.

 

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(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 and denovos.

(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.

Segment Information - Hospice

 

     For the Three-
Month Periods
Ended March 31,
 
     2019     2018  

Financial Information (in millions):

    

Medicare

   $ 130.7     $ 91.8  

Non-Medicare

     6.3       5.5  
  

 

 

   

 

 

 

Net service revenue

     137.0       97.3  

Cost of service

     74.1       50.1  
  

 

 

   

 

 

 

Gross margin

     62.9       47.2  

Other operating expenses

     29.4       20.2  
  

 

 

   

 

 

 

Operating income

   $ 33.5     $ 27.0  
  

 

 

   

 

 

 

Same Store Growth (1):

    

Medicare revenue

     9     12

Hospice admissions

     5     5

Average daily census

     8     12

Key Statistical Data - Total (2):

    

Hospice admissions

     9,711       6,933  

Average daily census

     9,982       7,214  

Revenue per day, net

   $   152.56     $   149.80  

Cost of service per day

   $ 82.43     $ 77.17  

Average discharge length of stay

     98       97  

 

(1)

Same store information represents the percent change in our Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare revenue, Hospice admissions or average daily census of the prior period.

(2)

Total includes acquisitions and denovos.

 

8


Segment Information - Personal Care

 

     For the Three-
Month Periods
Ended March 31,
 
     2019      2018  

Financial Information (in millions):

     

Medicare

   $ —        $ —    

Non-Medicare

     20.2        17.9  
  

 

 

    

 

 

 

Net service revenue

     20.2        17.9  

Cost of service

     15.5        13.8  
  

 

 

    

 

 

 

Gross margin

     4.7        4.1  

Other operating expenses

     3.2        3.3  
  

 

 

    

 

 

 

Operating income

   $ 1.5      $ 0.8  
  

 

 

    

 

 

 

Key Statistical Data (1):

     

Billable hours

     833,617        749,953  

Clients served

     12,801        12,536  

Shifts

     376,182        348,166  

Revenue per hour

   $ 24.19      $ 23.85  

Revenue per shift

   $ 53.60      $ 51.36  

Hours per shift

     2.2        2.2  

 

(1)

Total includes acquisitions.

Segment Information - Corporate

 

     For the Three-
Month Periods
Ended March 31,
 
     2019      2018  

Financial Information (in millions):

     

Other operating expenses

   $       41.3      $       30.2  

Depreciation and amortization

     1.4        2.5  
  

 

 

    

 

 

 

Total operating expenses

   $ 42.7      $ 32.7  
  

 

 

    

 

 

 

 

9


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 March 31,
 
     2019      2018  

Net income attributable to Amedisys, Inc.

   $ 31,304      $ 27,159  

Add:

     

Income tax expense

     10,878        9,563  

Interest expense, net

     3,325        1,583  

Depreciation and amortization

     2,895        3,593  

Certain items (1)

     6,914        188  

Interest component of certain items (1)

     (441      (383
  

 

 

    

 

 

 

Adjusted EBITDA (2) (6)

   $   54,875      $   41,703  
  

 

 

    

 

 

 

Adjusted Net Service Revenue Reconciliation:

 

     For the Three-
Month Period
Ended March 31,
 
     2019      2018  

Net service revenue

   $ 467,340      $ 399,262  

Add:

     

Certain items (1)

     478        —    
  

 

 

    

 

 

 

Adjusted net service revenue (3) (6)

   $   467,818      $   399,262  
  

 

 

    

 

 

 

Adjusted Net Income Attributable to Amedisys, Inc Reconciliation:

 

     For the Three-
Month Period
Ended March 31,
 
     2019      2018  

Net income attributable to Amedisys, Inc.

   $ 31,304      $ 27,159  

Add:

     

Certain items (1)

     5,141        139  
  

 

 

    

 

 

 

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

   $   36,445      $   27,298  
  

 

 

    

 

 

 

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

 

     For the Three-
Month Period
Ended March 31,
 
         2019              2018      

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

   $ 0.95      $ 0.79  

Add:

     

Certain items (1)

     0.16        —    
  

 

 

    

 

 

 

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

   $ 1.11      $ 0.79  
  

 

 

    

 

 

 

 

10


(1)

The following details the certain items for the three month periods ended March 31, 2019 and 2018:

Certain Items:

 

     For the Three-Month Period
Ended March 31, 2019
     For the Three-Month Period
Ended March 31, 2018
 
     (Income) Expense      (Income) Expense  

Certain Items Impacting Net Service Revenue:

     

Contingency accrual

   $ 1,018      $ —    

Planned closures (7)

     (540      —    

Certain Items Impacting Cost of Service:

     

Planned closures (7)

     844        —    

Certain Items Impacting Operating Expenses:

     

Planned closures (7)

     88        —    

Acquisition costs

     5,758        435  

Legal fees - non-routine

     (132      562  

Certain Items Impacting Total Other Income (Expense):

     

Miscellaneous, other (income) expense, net

     (122      (809
  

 

 

    

 

 

 

Total

   $ 6,914      $ 188  
  

 

 

    

 

 

 

Net of tax

   $ 5,141      $ 139  
  

 

 

    

 

 

 

Diluted EPS

   $ 0.16      $ —    
  

 

 

    

 

 

 

 

(2)

Adjusted EBITDA is defined as net income 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 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 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 measure 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.

(7)

Planned closures consist of in-patient units acquired from Compassionate Care Hospice whose operations ceased in April 2019.

 

11

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Section 3: EX-99.2 (EX-99.2)

EX-99.2

Slide 1

Amedisys First Quarter 2019 Earnings Call Supplemental Slides May 1st, 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

Our Key Areas of Focus Strategic areas of focus for 2019 Home Health*: Total same store admissions +6%. Total same store volume +6%. Total same store Medicare admits +2% Hospice: Admissions +5%, ADC +8% Personal Care: Double digit growth in billable hours / quarter +11% (including acquisitions) 1 Organic Growth Quality: Amedisys July 2019 STARS score of 4.27 reflects CMS change in measurement (added Improvement in Mgmt. of Oral Meds while removing Drug Education) 52 Amedisys care centers rated at 5-Stars in the July’19 Preview Hospice quality – outperforming industry average in all hospice item set (HIS) categories ~$364K in bonus payments related to Value Based Purchasing (VBP) in 1Q’19 3 Clinical Initiatives Productivity driving continued CPV control (visiting clinician CPV up $0.71 year over year, in spite of $1.20 cpv impact from annual raises) Focusing on optimizing RN / LPN & PT / PTA staffing ratios. Every 1% change ~$450K 4 Capacity and Productivity Closed acquisition of Rose Rock Healthcare on 4/1/19 200 ADC Hospice in Tulsa, OK 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 Focus on reduction of clinical turnover with heavy focus on RN’s and “quick quits” *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% Working with CMS and Congress to address “behavioral assumptions” language in PDGM Proposed 2020 Hospice Rule released 4/19. Industry update of +2.7% 6 Regulatory


Slide 4

Highlights and Summary Financial Results (Adjusted): 1Q 2019(1) Home Health total same store volume +6%, total same store admissions +6%. Hospice same store admissions +5%. Personal Care +11% billable hours Amedisys Consolidated Revenue Growth: +17% EBITDA: $55M (+32%) EBITDA Margin: 12% (+130 bps) EPS: $1.11 (+41%) 1Q’19 Net debt: $303.3M Net Leverage ratio: 1.6x CFFO: $20.1M Free cash flow (4): $18.3M DSO: 41.2 (vs. Q4’18 of 38.0) Balance Sheet & Cash Flow 1Q’19 Same Store Volume (2): Total: +6% Episodic (3): +3% Same Store Admissions: Total: +6% Episodic (3): +4% Other Statistics: Revenue per Episode: $2,902 (+$110) Total Cost per Visit: $89.06 (+0.8%) Medicare Recert Rate: 36.6% (-80 bps) Home Health Growth Metrics (5): Billable hours/quarter: +11% Clients served: +2% Personal Care Same Store Volume: Admissions: +5% ADC: +8% Other Statistics: Revenue per Day: $152.56 (+1.8%) Cost per day: +6.8% Hospice 1Q’19 1Q’19 1Q’19 Adjusted Financial Results(1) 1Q’19 The financial results for the three-month periods ended March 31, 2018 and March 31, 2019 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 5

Our revenue sources: 1Q19 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 – 98% of the Hospice care AMED provides, in line with overall hospice industry provision of care 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: 321 care centers; 34 states & DC Hospice: 138 care centers; 33 states Personal Care: 12 care centers; 3 states Total AMED: 471 care centers; 38 states and D.C.


Slide 6

Home Health and Hospice Segment (Adjusted) – 1Q 2019(1) Medicare FFS growth +2% Revenue per Episode up +$110 Recert rate down 80 bps Y/Y CPV up $0.73 EBITDA as a % percentage of revenue: +250 bps 1Q Home Health Highlights Same store average daily census (ADC) up 8% in 1Q Net revenue per day +1.8% in 1Q ~$0.7M liability for 2019 cap year CCH revenue contribution: $31.5M in 1Q Total CCH EBITDA contribution net of corporate: $4.2M in 1Q Hospice Highlights The financial results for the three-month periods ended March 31, 2018 and March 31, 2019 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. Pre-Corporate EBITDA does not include any corporate G&A expenses. Home health total volume growth strong (+6%); Hospice continues strong ADC growth (+8%)


Slide 7

General & Administrative Expenses – Adjusted (1,2) Notes: Year over year total G&A as a percentage of revenue decreased 50 basis points Home Health segment G&A: 100 bps decrease as % of revenue Hospice segment G&A: 60 bps increase as % of revenue – including $6.6M from acquisition of CCH Personal Care segment G&A: 240 bps decrease as % of revenue Corporate G&A: 30 bps increase as a % of revenue – including $1.4M from acquisition of CCH Total G&A as a percentage of revenue flat sequentially The financial results for the three-month periods ended March 31, 2018, June 30, 2018, September 30, 2018, December 31, 2018 and March 31, 2019 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 8

Industry Leading Quality Scores Note: Top Competitor Avg weighted by CCN count and include LHC, Kindred, AFAM, HLS and BKD Metric JAN 19 Release APR 19 PREVIEW JUL 19 PREVIEW Quality of Patient Care 4.40 4.28 4.27 Entities at 4+ Stars 94% 86% 85% 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 July 2019 HHC preview with 85% of our providers at 4+ Stars and 55% at 4.5+ Stars 27 Amedisys providers (representing 52 care centers) rated at 5-Stars in the July HHC 2019 preview In April 19 Preview for QPC, new measure introduced: Improvement in Management of Oral Meds AMED recorded ~$364K in bonus payments related to Value Based Purchasing (VBP) in 1Q’19


Slide 9

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


Slide 10

Components 1Q’18 4Q’18 1Q’19 YoY Variance Detail Mitigation Plan Salaries $60.93 $62.79 $61.54 $0.61 YoY increase due to planned wage increases, partially offset by volume growth and productivity Staffing mix optimization, productivity and scheduling improvement initiatives in place helped us overcome planned salary increases Contractors $2.93 $3.38 $3.08 $0.15 YoY increased demand due to increasing volumes Focused efforts on filling positions with full-time clinicians Benefits $9.84 $11.60 $10.30 $0.46 YoY increase driven by health insurance expense. Sequential decrease driven by seasonality of health insurance claims Focus on cost containment and spend optimization with specific focus on high cost claims Transportation & Supplies $6.64 $6.50 $6.13 ($0.51) YoY decrease primarily due to supplies costs More effective medical supply contracting cost initiatives are underway *Visiting Clinician CPV $80.34 $84.27 $81.05 $0.71 Clinical Managers $7.99 $8.09 $8.01 $0.02 Fixed cost associated with non-visiting clinicians Unit cost reduced as volume increases Total CPV $88.33 $92.36 $89.06 $0.73 Operational Excellence: Home Health Cost Per Visit (CPV) Total CPV impacted by planned wage increases *Note: Direct comparison with industry competitors CPV calculation $80.34 $84.27 $81.05


Slide 11

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 Volume Hospice ADC Personal Care Total Hours / Quarter *Includes impact of East Tennessee (5/1/18) and Bring Care Home (10/1/18) acquisitions


Slide 12

Debt and Liquidity Metrics ~1.6x net leverage post Compassionate Care Hospice acquisition Net debt defined as total debt outstanding ($313.9M) less cash balance ($10.6M). Leverage ratio (net) is defined as net debt divided by last twelve months adjusted EBITDA ($193.7M). Liquidity defined as the sum of cash balance and available revolving line of credit.


Slide 13

Cash Flow Statement Highlights (1) Cash flow from operations impacted by a slight slowdown in collections and additional costs related to the CCH acquisition Free cash flow defined as cash flow from operations less routine capital expenditures and required debt repayments.


Slide 14

Income Statement Adjustments (1) The financial results for the three-month periods ended March 31, 2018, June 30, 2018, September 30, 2018, December 31, 2018 and March 31, 2019 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. Planned closures consist of in-patient units acquired from Compassionate Care Hospice whose operations ceased in April 2019.


Slide 15

2019 Guidance


Slide 16

Reaffirming 2019 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 17

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 18

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 19

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 20

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 21

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

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