LHC Group announces fourth quarter and full year 2021 financial results
Issues full year and first quarter 2022 guidance
LAFAYETTE, La., Feb.23, 2022 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter and year ended December 31, 2021.
Fourth Quarter 2021 Financial Results
- Net service revenue increased 9.6% to $583.4 million.
- Net income attributable to LHC Group's common stockholders was $15.7 million, or $0.50 per diluted share.
- Adjusted net income attributable to LHC Group's common stockholders was $39.4 million, or $1.26 adjusted earnings per diluted share.
- Adjusted EBITDA was $61.6 million.
Full Year 2021 Financial Results
- Net service revenue increased 7.6% to $2.220 billion.
- Net income attributable to LHC Group's common stockholders was $115.7 million, or $3.69 per diluted share.
- Adjusted net income attributable to LHC Group's common stockholders was $179.5 million, or $5.73 per diluted share.
- Adjusted EBITDA was $265.5 million.
A reconciliation of all non-GAAP financial results in this release appears on pages 11-12.
Operational and Strategic Highlights
- LHC Group's quality and patient satisfaction scores continue to exceed the national average as the Company remains a leader among industry peers.
- Average Home Health quality star ratings of 4.37 during the period of April 2021 through December 2021 according to Strategic Healthcare Partners, up from 4.10 for the period of July 2020 through March 2021 per the most recent CMS data.
- Organic growth in total home health admissions increased 3.8% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 5.5% in 2021 over 2020.
- Organic growth in non-Medicare episodic home health admissions increased by 18.1% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 21.9% in 2021 over 2020.
- Non-Medicare rates increased 4% in 2021 over 2020 and increased 17% over the last 5 years.
- Organic growth in hospice admissions decreased 6.2% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 0.5% in 2021 over 2020. Organic growth in hospice admissions are pacing to 8% to 10% for the first quarter of 2022 compared to the first quarter of 2021and 18% to 20% sequentially over the fourth quarter of 2021.
- Home Health average daily census of 86,228 in the fourth quarter of 2021 was 3.0% higher than 83,686 in the fourth quarter of 2020. For the year, Home Health average daily census of 84,734 was 5.8% higher in 2021 than 2020.
- Hospice average daily census of 7,024 in the fourth quarter of 2021 was 62.6% higher than 4,320 in the fourth quarter of 2020. For the year, Hospice average daily census of 5,405 was 24.4% higher in 2021 than 2020. The year-over-year growth was due to a net increase of 40 hospice locations added during 2021.
- The percentage of Home Health clinicians on quarantine due to COVID-19 went from a high of 6.5% in January 2022 down to 0.6% today which is the lowest quarantine level since July 2021.
- On November 2, 2021, LHC Group finalized the acquisition of selected home health, hospice, and therapy assets from HCA Healthcare and Brookdale Health Care Services venture that marks the entry into two new markets – Minnesota and New Mexico - and expands service areas in 20 states where the company already operates. The acquisition includes 47 total locations and LHC Group expects incremental annualized revenue from this acquisition of approximately $130 million.
- On December 6, 2021, LHC Group's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $250 million of its common stock. During the fourth quarter, the Company repurchased 634,869 shares of common stock for approximately $83.7 million.
Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "For perhaps the first time in our industry's existence, we believe there is a general consensus throughout the country for emphasizing the advantages of at-home care. The demand for at-home healthcare is as strong as ever with patients and families overwhelmingly preferring care in the home and senior advocates, Congress and policymakers increasingly recognizing the better outcomes and efficiency. As the proven partner to 435 leading hospitals and health systems, an extensive national footprint and very particular assets that can lead the transition to value-based care, we are embracing our mission, values and culture to lead this industry once again in 2022 and beyond."
Full Year 2022 and First Quarter 2022 Guidance
Full year 2022 net service revenue is expected to be in a range of $2.500 billion to $2.550 billion, adjusted earnings per diluted share is expected to be in a range of $5.60 to $6.00, and adjusted EBITDA, less non-controlling interest, is expected to be in a range of $270 million to $290 million.
For the first quarter ending March 31, 2022, net service revenue is expected to be $560 million to $580 million, adjusted earnings per diluted share is expected to be in a range of $1.00 to $1.10, and adjusted EBITDA, less non-controlling interest, is expected to be in a range of $50 million to $55 million.
Joshua L. Proffitt, LHC Group's President and Chief Operating Officer, added, "We have established a strong foundation for growth in 2022 with our leading quality and patient satisfaction scores, momentum in physician referrals, and underlying strength in our organic growth and M&A activity. While late fourth quarter and early first quarter operating trends were affected by reduced capacity to service the strong demand for our services due to COVID variants and labor availability, we expect to benefit in 2022 from recent stabilization in those trends and from our implementation of certain cost improvement initiatives and efficiencies. Additionally, we believe our continued focus on maintaining a disciplined approach to operations and capital allocation will accelerate our growth as the year progresses."
The Company's guidance ranges reflect a number of assumptions that are subject to change based on uncertainties related to the impact of the COVID-19 pandemic. The Company's guidance ranges take into account the impact of future COVID-19 related costs and expenses. The Company's guidance ranges also do not take into account reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, location closures, if any, or future legal expenses, if necessary. Please refer to the supplemental information that can be found under Financial Results on the Company's Investor Relations page to access more detailed guidance assumptions.
Conference Call
LHC Group will host a conference call Thursday, February 24, 2022, at 9:00 a.m. Eastern time to discuss its fourth quarter 2021 results. The toll-free number to call for this interactive teleconference is (877) 407-9208 (international callers: (201) 493-6784). A telephonic replay of the conference call will be available through midnight on Thursday, March 3, 2022, by dialing (844) 512-2921 (international callers: (412) 317-6671) and entering confirmation number 13726712.
The Company has posted supplemental financial information on the fourth quarter results that it will reference during the conference call. The supplemental information can be found under Financial Results on the Company's Investor Relations page. A live webcast of LHC Group's conference call will be available under the Investor Relations section of the Company's website, www.LHCGroup.com. A one-year online replay will be available approximately one hour following the conclusion of the live broadcast.
About LHC Group, Inc.
LHC Group, Inc. is a national provider of in-home healthcare services and innovations for communities around the nation, offering quality, value-based healthcare to patients primarily within the comfort and privacy of their home or place of residence. The company's 30,000 employees deliver home health, hospice, home and community based services, and facility-based care in 37 states and the District of Columbia – reaching 60 percent of the U.S. population aged 65 and older. Through Imperium Health, the company's ACO management and enablement company, LHC Group helps partners improve both savings and patient outcomes with a value-based approach. As the preferred joint venture partner for more than 400 leading U.S. hospitals and health systems, LHC Group works in cooperation with providers to customize each partnership and reach more patients and families with an effective and efficient model of care.
Forward-looking Statements
This press release contains "forward-looking statements" (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of the Company, or anticipated benefits of the transaction. Words such as "anticipate," "expect," "project," "intend," "believe," "will," "estimates," "may," "could," "should" and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to: our 2020 revenue and earnings guidance, statements about the benefits of the acquisition, including anticipated earnings accretion, synergies and cost savings and the timing thereof; the Company's plans, objectives, expectations, projections and intentions; and other statements relating to the transaction that are not historical facts. Forward-looking statements are based on information currently available to the Company and involve estimates, expectations and projections. Investors are cautioned that all such forward-looking statements are subject to risks and uncertainties, and important factors could cause actual events or results to differ materially from those indicated by such forward-looking statements. With respect to the acquisition, these risks, uncertainties and factors include, but are not limited to: the risk that the businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the transaction may not be fully realized or may take longer to realize than expected; the diversion of management time on integration-related issues; and the risk that costs associated with the integration of the businesses are higher than anticipated. With respect to the Company's businesses, these risks, uncertainties and factors include, but are not limited to: changes in, or failure to comply with, existing government regulations that impact the Company's businesses; legislative proposals for healthcare reform; the impact of changes in future interpretations of fraud, anti-kickback, or other laws; changes in Medicare and Medicaid reimbursement levels; changes in laws and regulations with respect to Accountable Care Organizations; changes in the marketplace and regulatory environment for Health Risk Assessments; decrease in demand for the Company's services; the potential impact of the transaction on relationships with customers, joint venture and other partners, competitors, management and other employees, including the loss of significant contracts or reduction in revenues associated with major payor sources; ability of customers to pay for services; risks related to any current or future litigation proceedings; potential audits and investigations by government and regulatory agencies, including the impact of any negative publicity or litigation; the ability to attract new customers and retain existing customers in the manner anticipated; the ability to hire and retain key personnel; increased competition from other entities offering similar services as offered by the Company; reliance on and integration of information technology systems; ability to protect intellectual property rights; impact of security breaches, cyber-attacks or fraudulent activity on the Company's reputation; the risks associated with assumptions the parties make in connection with the parties' critical accounting estimates and legal proceedings; the risks associated with the Company's expansion strategy, the successful integration of recent acquisitions, and if necessary, the ability to relocate or restructure current facilities; and the potential impact of an economic downturn or effects of tax assessments or tax positions taken, risks related to goodwill and other intangible asset impairment, tax adjustments, anticipated tax rates, benefit or retirement plan costs, or other regulatory compliance costs.
Many of these risks, uncertainties and assumptions are beyond the Company's ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the information currently available to the Company on the date they are made, and the Company does not undertake any obligation to update publicly or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release. The Company does not give any assurance (1) that the Company will achieve its guidance or expectations, or (2) concerning any result or the timing thereof. All subsequent written and oral forward-looking statements concerning the transaction or other matters and attributable to the Company or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.
LHC GROUP, INC. AND SUBSIDIARIES | ||||
As of December 31, | ||||
2021 | 2020 | |||
ASSETS | ||||
Current assets: | ||||
Cash | $ 9,809 | $ 286,569 | ||
Receivables: | ||||
Patient accounts receivable | 348,820 | 301,209 | ||
Other receivables | 13,780 | 11,522 | ||
Total receivables | 362,600 | 312,731 | ||
Prepaid income taxes | 7,531 | — | ||
Prepaid expenses | 28,401 | 22,058 | ||
Other current assets | 24,801 | 25,664 | ||
Total current assets | 433,142 | 647,022 | ||
Property, building and equipment, net of accumulated depreciation of $98,394 and $82,721, respectively | 153,959 | 138,366 | ||
Goodwill | 1,748,426 | 1,259,147 | ||
Intangible assets, net of accumulated amortization of $19,152 and $17,659, respectively | 400,002 | 315,355 | ||
Assets held for sale | — — | 1,900 | ||
Operating lease right of use asset | 113,399 | 100,046 | ||
Other assets | 46,693 | 21,518 | ||
Total assets | $ 2,895,621 | $ 2,483,354 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable and other accrued liabilities | $ 98,118 | $ 64,864 | ||
Salaries, wages and benefits payable | 100,532 | 88,666 | ||
Self insurance reserves | 33,784 | 35,103 | ||
Government stimulus advance | — — | 93,257 | ||
Contract liabilities - deferred revenue | 106,489 | 317,962 | ||
Current operating lease payable | 37,630 | 32,676 | ||
Amounts due to governmental entities | 5,447 | 1,516 | ||
Income taxes payable | — — | 21,464 | ||
Current liabilities - deferred employer payroll tax | 26,790 | 25,928 | ||
Total current liabilities | 408,790 | 681,436 | ||
Deferred income taxes | 70,026 | 47,237 | ||
Income taxes payable | 7,320 | 6,203 | ||
Revolving credit facility | 661,197 | 20,000 | ||
Other long term liabilities | — — | 25,928 | ||
Operating lease payable | 78,688 | 70,275 | ||
Total liabilities | 1,226,021 | 851,079 | ||
Noncontrolling interest-redeemable | 17,501 | 18,921 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
LHC Group, Inc. stockholders' equity: | ||||
Preferred stock – $0.01 par value: 5,000,000 shares authorized; none issued or outstanding | — — | — | ||
Common stock – $0.01 par value: 60,000,000 shares authorized; 36,549,524 and 36,355,497 shares issued, and 30,634,414 and 31,139,840 shares outstanding, respectively | 365 | 364 | ||
Treasury stock – 5,915,110 and 5,215,657 shares at cost, respectively | (164,790) | (69,011) | ||
Additional paid-in capital | 979,642 | 962,120 | ||
Retained earnings | 751,025 | 635,297 | ||
Total LHC Group, Inc. stockholders' equity | 1,566,242 | 1,528,770 | ||
Noncontrolling interest – non-redeemable | 85,857 | 84,584 | ||
Total stockholders' equity | 1,652,099 | 1,613,354 | ||
Total liabilities and stockholders' equity | $ 2,895,621 | $ 2,483,354 | ||
LHC GROUP, INC. AND SUBSIDIARIES | |||||||||||||||
Three Months Ended (unaudited) | Year Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net service revenue | $ | 583,429 | $ | 532,329 | $ | 2,219,622 | $ | 2,063,204 | |||||||
Cost of service revenue (excluding depreciation and amortization) | 364,603 | 317,243 | 1,336,609 | 1,250,403 | |||||||||||
Gross margin | 218,826 | 215,086 | 883,013 | 812,801 | |||||||||||
General and administrative expenses | 189,681 | 162,944 | 696,435 | 632,847 | |||||||||||
Impairment of intangibles and other | - | 1,227 | 937 | 1,849 | |||||||||||
Operating income | 29,145 | 50,915 | 185,641 | 178,105 | |||||||||||
Interest expense | (2,797) | (89) | (4,338) | (4,129) | |||||||||||
Income before income taxes and noncontrolling interest | 26,348 | 50,826 | 181,303 | 173,976 | |||||||||||
Income tax expense | 4,778 | 12,862 | 37,687 | 36,043 | |||||||||||
Net income | 21,570 | 37,964 | 143,616 | 137,933 | |||||||||||
Less net income (loss) attributable to noncontrolling interests | 5,878 | 7,584 | 27,888 | 26,337 | |||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 15,692 | $ | 30,380 | $ | 115,728 | $ | 111,596 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.50 | $ | 0.98 | $ | 3.71 | $ | 3.59 | |||||||
Diluted | $ | 0.50 | $ | 0.97 | $ | 3.69 | $ | 3.56 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 31,167 | 31,128 | 31,195 | 31,092 | |||||||||||
Diluted | 31,317 | 31,443 | 31,397 | 31,366 | |||||||||||
LHC GROUP, INC. AND SUBSIDIARIES | ||||
For the year ended December 31, | ||||
2021 | 2020 | |||
Operating activities: | ||||
Net income | $ 143,616 | $ 137,933 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 20,917 | 21,249 | ||
Amortization and impairment of operating lease right of use asset | 37,506 | 34,546 | ||
Stock-based compensation expense | 15,868 | 14,347 | ||
Deferred income taxes | 22,789 | (13,261) | ||
(Gain) Loss on disposal of assets | (1,134) | 412 | ||
Impairment of intangibles and other | 937 | 1,849 | ||
Changes in operating assets and liabilities, net of acquisitions: | ||||
Receivables | (35,361) | (16,561) | ||
Prepaid expenses | (5,902) | (754) | ||
Other assets | (11,015) | (3,169) | ||
Prepaid income taxes | (7,531) | 9,652 | ||
Accounts payable and accrued expenses | 12,345 | (22,506) | ||
Salaries, wages, and benefits payable and self-insurance reserves | 3,004 | 6,482 | ||
Other long term liabilities | (26,758) | 51,856 | ||
Contract liabilities - deferred revenue | (211,473) | 317,962 | ||
Operating lease payable | (37,360) | (34,226) | ||
Income tax payable | (20,347) | 23,800 | ||
Net amounts due to/from governmental entities | (433) | (364) | ||
Net cash (used in) provided by operating activities | (100,332) | 529,247 | ||
Investing activities: | ||||
Cash paid for acquisitions, net of cash acquired | (569,583) | (24,545) | ||
Minority interest investments | (10,100) | — | ||
Proceeds from sale of assets | 3,350 | 7,920 | ||
Proceeds from sale of an entity | 1,531 | — | ||
Purchases of property, building and equipment | (32,976) | (65,875) | ||
Net cash used in investing activities | (607,778) | (82,500) | ||
Financing activities: | ||||
Proceeds from line of credit | 1,025,559 | 296,229 | ||
Payments on line of credit | (384,362) | (529,229) | ||
Government stimulus advance | (93,257) | 93,257 | ||
Proceeds from employee stock purchase plan | 2,472 | 2,177 | ||
Payments on deferred financing fees | (3,556) | — | ||
Payments on repurchasing common stock | (74,643) | — | ||
Noncontrolling interest distributions | (28,857) | (24,837) | ||
Purchase of additional controlling interest | (2,113) | (24,295) | ||
Sale of noncontrolling interest | 1,934 | 4,856 | ||
Withholding taxes paid on stock-based compensation | (11,827) | (10,008) | ||
Net cash provided by (used in) financing activities | 431,350 | (191,850) | ||
Change in cash | (276,760) | 254,897 | ||
Cash at beginning of period | 286,569 | 31,672 | ||
Cash at end of period | $ 9,809 | $ 286,569 | ||
Supplemental disclosures of cash flow information | ||||
Interest paid | $ 4,168 | $ 5,011 | ||
Income taxes paid | $ 43,728 | $ 16,830 | ||
Non-Cash Operating activity: | ||||
Operating right of use assets in exchange for lease obligations | 41,364 | 43,047 | ||
Non-Cash Investing activity: | ||||
Accrued capital expenditures | 417 | 2,922 | ||
Net working capital adjustment | 890 | — | ||
Non-Cash Financing activity: | ||||
Contribution of noncontrolling interest | — | 230 | ||
LHC GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
Three Months Ended December 31, 2021 | |||||||||||||||||||||||
Home health | Hospice | Home and community-based | Facility-based | HCI | Total | ||||||||||||||||||
Net service revenue | $ | 394,481 | $ | 102,027 | $ | 46,229 | $ | 35,284 | $ | 5,408 | $ | 583,429 | |||||||||||
Cost of service revenue | 238,548 | 65,047 | 33,911 | 23,910 | 3,187 | 364,603 | |||||||||||||||||
Gross margin | 155,933 | 36,980 | 12,318 | 11,374 | 2,221 | 218,826 | |||||||||||||||||
General and administrative expenses | 131,795 | 30,904 | 11,508 | 12,091 | 3,383 | 189,681 | |||||||||||||||||
Impairment of intangibles and other | — | — | — | — | — | — | |||||||||||||||||
Operating income (loss) | 24,138 | 6,076 | 810 | (717) | (1,162) | 29,145 | |||||||||||||||||
Interest expense | (2,004) | (334) | (270) | (135) | (54) | (2,797) | |||||||||||||||||
Income (loss) before income taxes and noncontrolling interest | 22,134 | 5,742 | 540 | (852) | (1,216) | 26,348 | |||||||||||||||||
Income tax expense (benefit) | 4,086 | 1,123 | 180 | (270) | (341) | 4,778 | |||||||||||||||||
Net income (loss) | 18,048 | 4,619 | 360 | (582) | (875) | 21,570 | |||||||||||||||||
Less net income (loss) attributable to noncontrolling interests | 4,554 | 989 | 26 | 313 | (4) | 5,878 | |||||||||||||||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ | 13,494 | $ | 3,630 | $ | 334 | $ | (895) | $ | (871) | $ | 15,692 | |||||||||||
LHC GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
Three Months Ended December 31, 2020 | |||||||||||||||||||||||
Home health | Hospice | Home and community-based | Facility-based | HCI | Total | ||||||||||||||||||
Net service revenue | $ | 382,636 | $ | 62,419 | $ | 50,058 | $ | 31,914 | $ | 5,302 | $ | 532,329 | |||||||||||
Cost of service revenue | 217,554 | 38,190 | 36,514 | 21,487 | 3,498 | 317,243 | |||||||||||||||||
Gross margin | 165,082 | 24,229 | 13,544 | 10,427 | 1,804 | 215,086 | |||||||||||||||||
General and administrative expenses | 119,544 | 16,894 | 11,923 | 11,451 | 3,132 | 162,944 | |||||||||||||||||
Impairment of intangibles and other | 1,227 | — | — | — | — | 1,227 | |||||||||||||||||
Operating income (loss) | 44,311 | 7,335 | 1,621 | (1,024) | (1,328) | 50,915 | |||||||||||||||||
Interest expense | (52) | (18) | (8) | (9) | (2) | (89) | |||||||||||||||||
Income (loss) before income taxes and noncontrolling interest | 44,259 | 7,317 | 1,613 | (1,033) | (1,330) | 50,826 | |||||||||||||||||
Income tax expense (benefit) | 10,936 | 1,631 | 301 | 76 | (82) | 12,862 | |||||||||||||||||
Net income (loss) | 33,323 | 5,686 | 1,312 | (1,109) | (1,248) | 37,964 | |||||||||||||||||
Less net income (loss) attributable to noncontrolling interests | 6,154 | 1,370 | 104 | (35) | (9) | 7,584 | |||||||||||||||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ | 27,169 | $ | 4,316 | $ | 1,208 | $ | (1,074) | $ | (1,239) | $ | 30,380 | |||||||||||
LHC GROUP, INC. AND SUBSIDIARIES | ||||||||||||
Year Ended December 31, 2021 | ||||||||||||
Home Health | Hospice | Home and Community-Based | Facility-Based | HCI | Total | |||||||
Net service revenue | $ 1,551,542 | $ 311,218 | $ 189,561 | $ 132,098 | $ 35,203 | $ 2,219,622 | ||||||
Cost of service revenue (excluding depreciation and amortization) | 901,685 | 194,895 | 137,852 | 89,270 | 12,907 | 1,336,609 | ||||||
General and administrative expenses | 501,132 | 89,693 | 46,724 | 45,304 | 13,582 | 696,435 | ||||||
Impairment of intangibles and other | 937 | — | — | — | — | 937 | ||||||
Operating income (loss) | 147,788 | 26,630 | 4,985 | (2,476) | 8,714 | 185,641 | ||||||
Interest expense | (3,103) | (529) | (413) | (208) | (85) | (4,338) | ||||||
Income (loss) before income taxes and noncontrolling interests | 144,685 | 26,101 | 4,572 | (2,684) | 8,629 | 181,303 | ||||||
Income tax expense (benefit) | 30,089 | 5,344 | 1,069 | (919) | 2,104 | 37,687 | ||||||
Net income (loss) | 114,596 | 20,757 | 3,503 | (1,765) | 6,525 | 143,616 | ||||||
Less net income (loss) attributable to noncontrolling interests | 22,060 | 4,297 | 467 | 1,105 | (41) | 27,888 | ||||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ 92,536 | $ 16,460 | $ 3,036 | $ (2,870) | $ 6,566 | $ 115,728 | ||||||
Total assets | $ 1,719,403 | $ 786,671 | $ 239,314 | $ 85,005 | $ 65,228 | $ 2,895,621 | ||||||
LHC GROUP, INC. AND SUBSIDIARIES | ||||||||||||
Year Ended December 31, 2020 | ||||||||||||
Home Health | Hospice | Home and Community-Based | Facility-Based | HCI | Total | |||||||
Net service revenue | $ 1,463,779 | $ 243,806 | $ 194,584 | $ 128,578 | $ 32,457 | $ 2,063,204 | ||||||
Cost of service revenue (excluding depreciation and amortization) | 848,663 | 150,675 | 150,378 | 85,827 | 14,860 | 1,250,403 | ||||||
General and administrative expenses | 464,568 | 66,454 | 45,443 | 43,435 | 12,947 | 632,847 | ||||||
Impairment of intangibles and other | 1,249 | 600 | — | — | — | 1,849 | ||||||
Operating income (loss) | 149,299 | 26,077 | (1,237) | (684) | 4,650 | 178,105 | ||||||
Interest expense | (2,856) | (469) | (390) | (297) | (117) | (4,129) | ||||||
Income (loss) before income taxes and noncontrolling interests | 146,443 | 25,608 | (1,627) | (981) | 4,533 | 173,976 | ||||||
Income tax expense (benefit) | 30,435 | 4,925 | (357) | (185) | 1,225 | 36,043 | ||||||
Net income (loss) | 116,008 | 20,683 | (1,270) | (796) | 3,308 | 137,933 | ||||||
Less net income (loss) attributable to noncontrolling interests | 20,525 | 4,822 | (171) | 1,193 | (32) | 26,337 | ||||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ 95,483 | $ 15,861 | $ (1,099) | $ (1,989) | $ 3,340 | $ 111,596 | ||||||
Total assets | $ 1,741,044 | $ 301,475 | $ 263,708 | $ 103,401 | $ 73,726 | $ 2,483,354 | ||||||
LHC GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
Key Data: | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Home Health Services: | |||||||||||||||||||||||
Locations | 557 | 537 | 557 | 537 | |||||||||||||||||||
Acquired | 25 | 4 | 27 | 13 | |||||||||||||||||||
De novo | — | — | — | 1 | |||||||||||||||||||
Divested/consolidated | — | (16) | (7) | (30) | |||||||||||||||||||
Total new admissions | 111,141 | 104,440 | 436,637 | 410,408 | |||||||||||||||||||
Medicare new admissions | 51,983 | 54,968 | 213,913 | 221,300 | |||||||||||||||||||
Average daily census | 86,228 | 83,686 | 84,995 | 80,112 | |||||||||||||||||||
Average Medicare daily census | 43,325 | 47,219 | 44,342 | 46,311 | |||||||||||||||||||
Medicare completed and billed episodes | 84,242 | 89,824 | 339,065 | 350,239 | |||||||||||||||||||
Average Medicare case mix for completed and billed Medicare episodes | 1.01 | 1.01 | 1.02 | 1.02 | |||||||||||||||||||
Average reimbursement per Medicare episode (1) | $ | 2,860 | $ | 2,840 | $ | 2,868 | $ | 2,795 | |||||||||||||||
Total visits | 2,222,050 | 2,100,914 | 8,544,552 | 8,282,047 | |||||||||||||||||||
Total Medicare visits | 1,091,125 | 1,141,298 | 4,307,968 | 4,615,612 | |||||||||||||||||||
Average visits per Medicare episodes | 13.0 | 12.7 | 12.7 | 13.2 | |||||||||||||||||||
Organic growth: (2) | |||||||||||||||||||||||
Net revenue | 0.6 | % | (0.1) | % | 6.0 | % | (4.8) | % | |||||||||||||||
Net Medicare revenue | (8.5) | % | (5.0) | % | (1.3) | % | (9.7) | % | |||||||||||||||
Total new admissions | 3.8 | % | 2.2 | % | 5.5 | % | 1.6 | % | |||||||||||||||
Medicare new admissions | (7.2) | % | (6.0) | % | (3.7) | % | (7.4) | % | |||||||||||||||
Average daily census | 0.7 | % | 4.9 | % | 5.8 | % | 1.5 | % | |||||||||||||||
Average Medicare daily census | (10.6) | % | (5.4) | % | (4.6) | % | (8.2) | % | |||||||||||||||
Medicare completed and billed episodes | (7.7) | % | (7.9) | % | (2.4) | % | (8.0) | % | |||||||||||||||
Hospice Services: | |||||||||||||||||||||||
Locations | 170 | 120 | 170 | 120 | |||||||||||||||||||
Acquired | 16 | 3 | 49 | 6 | |||||||||||||||||||
De novo | — | 6 | 1 | 6 | |||||||||||||||||||
Divested/consolidated | (1) | — | (3) | (2) | |||||||||||||||||||
Admissions | 7,516 | 5,336 | 24,400 | 20,342 | |||||||||||||||||||
Average daily census | 7,024 | 4,320 | 5,408 | 4,345 | |||||||||||||||||||
Patient days | 646,231 | 397,456 | 1,972,643 | 1,590,322 | |||||||||||||||||||
Average revenue per patient day | $ | 161.87 | $ | 157.55 | $ | 161.09 | $ | 155.33 | |||||||||||||||
Organic growth: (2) | |||||||||||||||||||||||
Total new admissions | (6.2) | % | 10.9 | % | 0.5 | % | 6.4 | % | |||||||||||||||
Home and Community-Based Services: | |||||||||||||||||||||||
Locations (3) | 136 | 124 | 136 | 124 | |||||||||||||||||||
Acquired | 6 | — | 1 | 4 | |||||||||||||||||||
De novo | — | 3 | 13 | 16 | |||||||||||||||||||
Divested/consolidated | — | (1) | (2) | (3) | |||||||||||||||||||
Average daily census | 12,281 | 14,021 | 13,159 | 14,365 | |||||||||||||||||||
Billable hours | 1,779,058 | 1,884,411 | 7,376,187 | 7,734,517 | |||||||||||||||||||
Revenue per billable hour | $ | 26.22 | $ | 27.33 | $ | 25.91 | $ | 26.22 | |||||||||||||||
Facility-Based Services: | |||||||||||||||||||||||
Long-term Acute Care | |||||||||||||||||||||||
Locations | 12 | 12 | 12 | 12 | |||||||||||||||||||
Acquired | — | — | — | — | |||||||||||||||||||
Divested/consolidated | — | (1) | — | (1) | |||||||||||||||||||
Patient days | 22,443 | 21,836 | 86,524 | 89,930 | |||||||||||||||||||
Average revenue per patient day | $ | 1,423 | $ | 1,407 | $ | 1,459 | $ | 1,373 | |||||||||||||||
Average Daily Census | 244 | 237 | 237 | 246 | |||||||||||||||||||
(1) | Prior year Medicare revenue per episode calculation was previously based on standard Medicare episodes. This calculation has been modified to include LUPAs and Outliers in order to achieve a proper comparison to current year under PDGM. |
(2) | Organic growth is calculated as the sum of same store plus de novo for the period divided by total from the same period in the prior year. |
(3) | The number of locations for HCBS has been updated to not only include the physical standalone locations but also the locations that are part of a home health provider. |
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 15,692 | $ | 30,380 | $ | 115,728 | $ | 111,596 | ||||||||
Add (net of tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 7,385 | 2,284 | 17,737 | 5,629 | ||||||||||||
Closures/relocations/consolidations (2) | 302 | 2,856 | 1,850 | 3,722 | ||||||||||||
COVID-19 impact: | ||||||||||||||||
PPE, supplies and other expenses (3) | 10,860 | 8,641 | 38,001 | 38,608 | ||||||||||||
CARES Act tax benefit (4) | — | — | — | (2,210) | ||||||||||||
ERP implementation (5) | 601 | — | 1,827 | — | ||||||||||||
Hurricane Ida (6) | — | — | 844 | — | ||||||||||||
Gain on sale of asset (7) | — | — | (951) | — | ||||||||||||
Cost improvement initiatives (8) | 4,498 | — | 4,498 | — | ||||||||||||
Adjusted net income attributable to LHC Group, Inc.'s common stockholders | $ | 39,338 | $ | 44,161 | $ | 179,534 | $ | 157,345 | ||||||||
RECONCILIATION OF ADJUSTED NET INCOME | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
2021 | 2019 | 2021 | 2019 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 0.50 | $ | 0.97 | $ | 3.69 | $ | 3.56 | ||||||||
Add (net of tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 0.24 | 0.07 | 0.57 | 0.17 | ||||||||||||
Closures/relocations/consolidations (2) | 0.01 | 0.09 | 0.06 | 0.12 | ||||||||||||
COVID-19 impact: | ||||||||||||||||
PPE, supplies and other expenses (3) | 0.35 | 0.27 | 1.22 | 1.23 | ||||||||||||
CARES Act tax benefit (4) | — | — | — | (0.07) | ||||||||||||
ERP implementation (5) | 0.02 | — | 0.05 | — | ||||||||||||
Hurricane Ida (6) | — | — | 0.03 | — | ||||||||||||
Gain on sale of asset (7) | — | — | (0.03) | — | ||||||||||||
Cost improvement initiatives (8) | 0.14 | — | 0.14 | — | ||||||||||||
Adjusted net income attributable to LHC Group, Inc.'s common stockholders | $ | 1.26 | $ | 1.40 | $ | 5.73 | $ | 5.01 | ||||||||
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 15,692 | $ | 30,380 | $ | 115,728 | $ | 111,596 | ||||||||
Add: | ||||||||||||||||
Income tax expense | 4,778 | 12,862 | 37,687 | 36,043 | ||||||||||||
Interest expense, net | 2,797 | 89 | 4,338 | 4,129 | ||||||||||||
Depreciation and amortization | 6,018 | 5,648 | 20,917 | 21,249 | ||||||||||||
Adjustment items (1) | 32,281 | 19,392 | 86,805 | 65,731 | ||||||||||||
Adjusted EBITDA | $ | 61,566 | $ | 68,371 | $ | 265,475 | $ | 238,748 | ||||||||
1. Adjustment items (pre-tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 10,082 | 3,214 | 24,154 | 7,770 | ||||||||||||
Closures/relocation/consolidations (2) | 412 | 4,019 | 2,510 | 5,193 | ||||||||||||
COVID-19 PPE, supplies and other expenses (3) | 14,826 | 12,159 | 51,661 | 52,768 | ||||||||||||
ERP implementation (5) | 820 | — | 2,485 | — | ||||||||||||
Hurricane Ida (6) | — | — | 1,150 | — | ||||||||||||
Gain on sale of asset (7) | — | — | (1,296) | — | ||||||||||||
Cost improvement initiatives (8) | 6,141 | — | 6,141 | — | ||||||||||||
Total adjustments | $ | 32,281 | $ | 19,392 | $ | 86,805 | $ | 65,731 | ||||||||
1. | Expenses and other costs associated with recently announced or completed acquisitions, de novos and legal expenses ($10.1 million and $24.2 million pre-tax in the three months and year ended December 31, 2021, respectively; $3.2 million and $7.8 million pre-tax in the three months and year ended December 31, 2020, respectively). |
2. | Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($0.4 million and $2.5 million pre-tax in the three months and year ended December 31, 2021, respectively; $4.0 million and $5.2 million in the three months and year ended December 31, 2020, respectively). |
3. | COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies, wage adjustments and employee healthcare costs ($14.8 million and $51.7 million pre-tax in the three months and year ended December 31, 2021, respectively; $12.2 million and $52.8 million pre-tax in the three months and year ended December 31, 2021, respectively). |
4. | Tax benefit related to new legislation in the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") which lifts certain tax deduction limitations and eliminates 80% of taxable income limitations for Net Operating Losses ("NOL"), which we are now able to fully utilize NOLs associated with Almost Family prior to the merger. |
5. | Expenses and other costs associated with the implementation of an Enterprise Resource Planning software ($0.8 million and $2.5 million pre-tax in the three months and year ended December 31, 2021, respectively). |
6. | Direct recovery costs associated with Hurricane Ida ($1.2 million pre-tax). |
7. | As of December 31, 2020, the Company's assets held for sale was $1.9 million, which consisted of one hospice facility in Knoxville, Tennessee. The Company sold the property during the third quarter of 2021 for $3.2 million. |
8. | Expenses associated from cost improvement initiatives implemented in the fourth quarter of 2021, which consisted of contract terminations and general and administrative cost reductions ($6.1 million pre-tax). |
Contact: | Eric Elliott |
Senior Vice President of Finance | |
(337) 233-1307 | |
SOURCE LHC Group, Inc.
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