LHC Group announces second quarter 2022 financial results
LAFAYETTE, La., Aug. 3, 2022 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended June 30, 2022.
Second Quarter 2022 Financial Results
- Net service revenue increased 5.5% to $576.2 million.
- Net income attributable to LHC Group's common stockholders was $10.6 million, or $0.35 per diluted share.
- Adjusted net income attributable to LHC Group's common stockholders was $29.8 million, or $0.98 adjusted earnings per diluted share.
- Adjusted EBITDA was $53.0 million.
A reconciliation of all non-GAAP financial results in this release appears on pages 9-10.
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.
- Home Health quality star ratings continue to improve from 4.20 in the April 2022 release to 4.25 in the July 2022 release and Home Health quality patient satisfaction ratings continue to improve from 3.83 in the April 2022 release to 4.01 in the July 2022 release.
- Organic growth in hospice admissions increased 5.5% in the second quarter of 2022 compared with the same period in 2021.
- On May 3, 2022, LHC Group announced that it has finalized a joint venture partnership for in-home services with Archbold Medical Center in Thomasville, Georgia.
The Company has posted supplemental financial information on the second quarter results, which can be found under Financial Results on the Company's Investor Relations page. In light of the pending acquisition of the Company by UnitedHealth Group Incorporated ("UNH"), LHC Group will not conduct a quarterly earnings call to discuss the second quarter results.
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 29,000 employees deliver home health, hospice, home- and community-based services, and facility-based care in 37 states and the District of Columbia – reaching 68 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 the timing or anticipated benefits of pending acquisition of the Company by UnitedHealth Group Incorporated. 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 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. These risks, uncertainties and other factors include, but are not limited to, those discussed and described in our most recent Annual Report on Form 10-K, including those risks described in Part I, Item 1A. Risk Factors thereof, and in other reports filed subsequently by us with the Securities and Exchange Commission and, with respect to the pending acquisition of the Company by UnitedHealth Group Incorporated, include, but are not limited to, those discussed in the proxy statement filed by the Company with the SEC on May 17, 2022. All forward-looking statements included in this document are based on information available to us on the date hereof, and the Company assumes no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
LHC GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) (Unaudited) | |||
June 30, 2022 | December 31, | ||
ASSETS | |||
Current assets: | |||
Cash | $ 27,400 | $ 9,809 | |
Receivables: | |||
Patient accounts receivable | 342,068 | 348,820 | |
Other receivables | 13,304 | 13,780 | |
Amounts due from governmental entities | 483 | — | |
Total receivables | 355,855 | 362,600 | |
Prepaid income taxes | 19,613 | 7,531 | |
Prepaid expenses | 20,556 | 28,401 | |
Other current assets | 36,166 | 24,801 | |
Total current assets | 459,590 | 433,142 | |
Property, building and equipment, net of accumulated depreciation of $106,541 and $98,394, respectively | 155,978 | 153,959 | |
Goodwill | 1,751,430 | 1,748,426 | |
Intangible assets, net of accumulated amortization of $21,902 and $19,152, respectively | 397,121 | 400,002 | |
Operating lease right of use asset | 109,925 | 113,399 | |
Other assets | 63,830 | 46,693 | |
Total assets | $ 2,937,874 | $ 2,895,621 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable and other accrued liabilities | $ 124,222 | $ 98,118 | |
Salaries, wages, and benefits payable | 94,432 | 100,532 | |
Self-insurance reserves | 41,302 | 33,784 | |
Contract liabilities - deferred revenue | 8,222 | 106,489 | |
Current operating lease payable | 36,929 | 37,630 | |
Amounts due to governmental entities | 3,034 | 5,447 | |
Current liabilities - deferred employer payroll tax | 26,790 | 26,790 | |
Total current liabilities | 334,931 | 408,790 | |
Deferred income taxes | 80,691 | 70,026 | |
Income taxes payable | 7,754 | 7,320 | |
Revolving credit facility | 759,000 | 661,197 | |
Long-term operating lease liabilities | 75,971 | 78,688 | |
Total liabilities | 1,258,347 | 1,226,021 | |
Noncontrolling interest — redeemable | 17,210 | 17,501 | |
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; 36,703,550 and 36,549,524 | 367 | 365 | |
Treasury stock — 6,136,217 and 5,915,110 shares at cost, respectively | (194,390) | (164,790) | |
Additional paid-in capital | 990,247 | 979,642 | |
Retained earnings | 781,063 | 751,025 | |
Total LHC Group, Inc. stockholders' equity | 1,577,287 | 1,566,242 | |
Noncontrolling interest — non-redeemable | 85,030 | 85,857 | |
Total stockholders' equity | 1,662,317 | 1,652,099 | |
Total liabilities and stockholders' equity | $ 2,937,874 | $ 2,895,621 | |
LHC GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) (Unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net service revenue | $ 576,193 | $ 545,907 | $ 1,147,688 | $ 1,070,742 | |||
Cost of service revenue (excluding depreciation and amortization) | 353,933 | 317,872 | 704,321 | 628,144 | |||
Gross margin | 222,260 | 228,035 | 443,367 | 442,598 | |||
General and administrative expenses | 196,390 | 167,061 | 380,749 | 330,310 | |||
Impairment of intangibles and other | 842 | 760 | 2,071 | 937 | |||
Operating income | 25,028 | 60,214 | 60,547 | 111,351 | |||
Interest expense | (6,407) | (143) | (10,578) | (406) | |||
Income before income taxes and noncontrolling interest | 18,621 | 60,071 | 49,969 | 110,945 | |||
Income tax expense | 3,679 | 13,318 | 10,048 | 22,759 | |||
Net income | 14,942 | 46,753 | 39,921 | 88,186 | |||
Less net income attributable to noncontrolling interests | 4,358 | 9,110 | 9,883 | 15,884 | |||
Net income attributable to LHC Group, Inc.'s common stockholders | $ 10,584 | $ 37,643 | $ 30,038 | $ 72,302 | |||
Earnings per share: | |||||||
Basic | $ 0.35 | $ 1.21 | $ 0.98 | $ 2.32 | |||
Diluted | $ 0.35 | $ 1.20 | $ 0.98 | $ 2.30 | |||
Weighted average shares outstanding: | |||||||
Basic | 30,543 | 31,225 | 30,508 | 31,188 | |||
Diluted | 30,676 | 31,430 | 30,623 | 31,423 | |||
LHC GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) | |||||
Six Months Ended June 30, | |||||
2022 | 2021 | ||||
Operating activities: | |||||
Net income | $ | 39,921 | $ | 88,186 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization expense | 11,723 | 9,541 | |||
Amortization of operating lease right of use asset | 20,412 | 17,995 | |||
Stock-based compensation expense | 9,319 | 7,506 | |||
Deferred income taxes | 10,665 | 19,489 | |||
Loss on disposal of assets | 221 | 19 | |||
Impairment of intangibles and other | 2,071 | 937 | |||
Changes in operating assets and liabilities, net of acquisitions: | |||||
Receivables | 5,686 | (25,649) | |||
Prepaid expenses | 7,845 | (4,484) | |||
Other assets | (13,403) | 6,170 | |||
Prepaid income taxes | (12,083) | (13,739) | |||
Accounts payable and accrued expenses | 31,358 | (9,148) | |||
Salaries, wages, and benefits payable | 1,338 | (4,560) | |||
Contract liabilities - deferred revenue | (98,267) | (65,026) | |||
Operating lease liabilities | (20,286) | (17,962) | |||
Income taxes payable | 434 | (21,042) | |||
Net amounts due to/from governmental entities | 758 | (57) | |||
Net cash used in operating activities | (2,288) | (11,824) | |||
Investing activities: | |||||
Purchases of property, building and equipment | (11,138) | (15,619) | |||
Proceeds from sale of property, building and equipment | — | 150 | |||
Cash paid for acquisitions, net of cash acquired | (2,570) | (649) | |||
Proceeds from sale of an entity | — | 1,531 | |||
Minority interest investments | (15,100) | (10,100) | |||
Net cash used in investing activities | (28,808) | (24,687) | |||
Financing activities: | |||||
Proceeds from line of credit | 597,250 | — | |||
Payments on line of credit | (499,447) | (20,000) | |||
Government stimulus advance | — | (93,257) | |||
Proceeds from employee stock purchase plan | 1,233 | 1,222 | |||
Payments on repurchasing common stock | (34,565) | — | |||
Noncontrolling interest distributions | (11,541) | (13,332) | |||
Withholding taxes paid on stock-based compensation | (3,867) | (10,754) | |||
Purchase of additional controlling interest | (376) | (2,113) | |||
Sale of noncontrolling interest | — | 284 | |||
Net cash provided by (used in) financing activities | 48,687 | (137,950) | |||
Change in cash | 17,591 | (174,461) | |||
Cash at beginning of period | 9,809 | 286,569 | |||
Cash at end of period | $ | 27,400 | $ | 112,108 | |
Non-Cash Financing Activity: | |||||
Supplemental disclosures of cash flow information: | |||||
Interest paid | $ | 9,321 | $ | 1,322 | |
Income taxes paid | $ | 11,191 | $ | 38,103 | |
Non-Cash Operating Activity: | |||||
Operating right of use assets in exchange for lease obligations | $ | 18,633 | $ | 25,656 | |
Reduction to right of use assets and liabilities | $ | (1,695) | — | ||
Non-Cash Investing Activity: | |||||
Net working capital adjustment | $ | 1,440 | — | ||
Accrued capital expenditures | $ | 74 | $ | 1,108 | |
LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands) (Unaudited) | |||||||||||
Three Months Ended June 30, 2022 | |||||||||||
Home health | Hospice | Home and | Facility- | HCI | Total | ||||||
Net service revenue | $ 392,782 | $ 102,617 | $ 44,718 | $ 30,709 | $ 5,367 | $ 576,193 | |||||
Cost of service revenue (excluding depreciation and amortization) | 228,511 | 67,848 | 31,788 | 22,830 | 2,956 | 353,933 | |||||
General and administrative expenses | 134,623 | 33,423 | 12,444 | 12,211 | 3,689 | 196,390 | |||||
Impairment of intangibles and other | 481 | 361 | — | — | — | 842 | |||||
Operating income (loss) | 29,167 | 985 | 486 | (4,332) | (1,278) | 25,028 | |||||
Interest expense | (4,488) | (949) | (564) | (281) | (125) | (6,407) | |||||
Income (loss) before income taxes and noncontrolling interest | 24,679 | 36 | (78) | (4,613) | (1,403) | 18,621 | |||||
Income tax expense (benefit) | 6,565 | (160) | (1,413) | (960) | (353) | 3,679 | |||||
Net income (loss) | 18,114 | 196 | 1,335 | (3,653) | (1,050) | 14,942 | |||||
Less net income (loss) attributable to non controlling interests | 4,324 | 888 | (34) | (817) | (3) | 4,358 | |||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholder | $ 13,790 | $ (692) | $ 1,369 | $ (2,836) | $ (1,047) | $ 10,584 | |||||
Total assets | $ 1,746,161 | $ 807,100 | $ 240,481 | $ 80,617 | $ 63,515 | $ 2,937,874 | |||||
LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands) (Unaudited) | |||||||||||
Three Months Ended June 30, 2021 | |||||||||||
Home health | Hospice | Home and | Facility- | HCI | Total | ||||||
Net service revenue | $ 396,534 | $ 63,804 | $ 48,407 | $ 31,030 | $ 6,132 | $ 545,907 | |||||
Cost of service revenue (excluding depreciation and amortization) | 219,925 | 39,647 | 34,683 | 20,460 | 3,157 | 317,872 | |||||
General and administrative expenses | 123,245 | 18,114 | 11,923 | 10,906 | 2,873 | 167,061 | |||||
Impairment of intangibles and other | 760 | — | — | — | — | 760 | |||||
Operating income (loss) | 52,604 | 6,043 | 1,801 | (336) | 102 | 60,214 | |||||
Interest expense | (106) | (20) | (10) | (5) | (2) | (143) | |||||
Income (loss) before income taxes and noncontrolling interest | 52,498 | 6,023 | 1,791 | (341) | 100 | 60,071 | |||||
Income tax expense (benefit) | 11,706 | 1,280 | 470 | (152) | 14 | 13,318 | |||||
Net income (loss) | 40,792 | 4,743 | 1,321 | (189) | 86 | 46,753 | |||||
Less net income (loss) attributable to noncontrolling interests | 7,500 | 1,208 | 85 | 322 | (5) | 9,110 | |||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholders | $ 33,292 | $ 3,535 | $ 1,236 | $ (511) | $ 91 | $ 37,643 | |||||
Total assets | $ 1,681,871 | $ 288,985 | $ 245,071 | $ 85,520 | $ 65,678 | $ 2,367,125 | |||||
LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands) (Unaudited) | |||||||||||
Six months ended June 30, 2022 | |||||||||||
Home health | Hospice | Home and | Facility- | HCI | Total | ||||||
Net service revenue | $ 780,674 | $ 204,523 | $ 89,058 | $ 62,848 | $ 10,585 | $ 1,147,688 | |||||
Cost of service revenue (excluding depreciation and amortization) | 456,718 | 133,913 | 60,743 | 47,035 | 5,912 | 704,321 | |||||
General and administrative expenses | 261,430 | 64,768 | 23,862 | 23,639 | 7,050 | 380,749 | |||||
Impairment of intangibles and other | 930 | 1,087 | 54 | — | — | 2,071 | |||||
Operating income (loss) | 61,596 | 4,755 | 4,399 | (7,826) | (2,377) | 60,547 | |||||
Interest expense | (7,458) | (1,447) | (977) | (489) | (207) | (10,578) | |||||
Income (loss) before income taxes and noncontrolling interest | 54,138 | 3,308 | 3,422 | (8,315) | (2,584) | 49,969 | |||||
Income tax expense (benefit) | 11,334 | 436 | 845 | (1,922) | (645) | 10,048 | |||||
Net income (loss) | 42,804 | 2,872 | 2,577 | (6,393) | (1,939) | 39,921 | |||||
Less net income (loss) attributable to non controlling interests | 8,920 | 1,568 | 51 | (646) | (10) | 9,883 | |||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholder | $ 33,884 | $ 1,304 | $ 2,526 | $ (5,747) | $ (1,929) | $ 30,038 | |||||
LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands) (Unaudited) | |||||||||||
Six months ended June 30, 2021 | |||||||||||
Home health | Hospice | Home and | Facility- | HCI | Total | ||||||
Net service revenue | $ 770,362 | $ 126,538 | $ 97,532 | $ 64,399 | $ 11,911 | $ 1,070,742 | |||||
Cost of service revenue (excluding depreciation and amortization) | 432,298 | 78,217 | 69,555 | 41,635 | 6,439 | 628,144 | |||||
General and administrative expenses | 242,642 | 36,241 | 23,452 | 22,163 | 5,812 | 330,310 | |||||
Impairment of intangibles and other | 937 | — | — | — | — | 937 | |||||
Operating income (loss) | 94,485 | 12,080 | 4,525 | 601 | (340) | 111,351 | |||||
Interest expense | (288) | (56) | (34) | (19) | (9) | (406) | |||||
Income (loss) before income taxes and noncontrolling interest | 94,197 | 12,024 | 4,491 | 582 | (349) | 110,945 | |||||
Income tax expense (benefit) | 19,596 | 2,347 | 988 | (95) | (77) | 22,759 | |||||
Net income (loss) | 74,601 | 9,677 | 3,503 | 677 | (272) | 88,186 | |||||
Less net income (loss) attributable to non controlling interests | 12,349 | 2,223 | 364 | 979 | (31) | 15,884 | |||||
Net income (loss) attributable to LHC Group, Inc.'s common stockholder | $ 62,252 | $ 7,454 | $ 3,139 | $ (302) | $ (241) | $ 72,302 | |||||
LHC GROUP, INC. AND SUBSIDIARIES SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA (Unaudited) | ||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
Key Data: | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Home Health Services: | ||||||||||||||||||||||||
Locations | 543 | 531 | 543 | 531 | ||||||||||||||||||||
Total new admissions | 107,268 | 109,082 | 220,390 | 217,004 | ||||||||||||||||||||
Episodic new admissions | 66,419 | 68,738 | 134,573 | 136,130 | ||||||||||||||||||||
Average daily census | 84,320 | 85,554 | 84,833 | 84,745 | ||||||||||||||||||||
Average episodic daily census | 53,415 | 55,706 | 53,191 | 55,152 | ||||||||||||||||||||
Completed episodes | 104,053 | 105,393 | 204,580 | 207,129 | ||||||||||||||||||||
Average reimbursement per completed episodes | $2,878 | $2,882 | $2,906 | $2,869 | ||||||||||||||||||||
Total visits | 2,089,747 | 2,151,665 | 4,207,819 | 4,209,298 | ||||||||||||||||||||
Total episodic visits | 1,286,584 | 1,352,608 | 2,573,685 | 2,641,261 | ||||||||||||||||||||
Average visits per episodes | 12.4 | 12.8 | 12.6 | 12.8 | ||||||||||||||||||||
Organic growth: (1) | ||||||||||||||||||||||||
Revenue | -3.4 | % | 16.4 | % | -1.5 | % | 9.4 | % | ||||||||||||||||
Episodic revenue | -4.2 | % | 14.8 | % | -3.0 | % | 8.0 | % | ||||||||||||||||
Total new admissions | -4.3 | % | 16.4 | % | -1.4 | % | 7.3 | % | ||||||||||||||||
Episodic new admissions | -6.3 | % | 13.4 | % | -4.4 | % | 4.6 | % | ||||||||||||||||
Average daily census | -3.5 | % | 10.3 | % | -2.2 | % | 10.2 | % | ||||||||||||||||
Average episodic daily census | -6.4 | % | 5.7 | % | -5.7 | % | 4.5 | % | ||||||||||||||||
Completed episodes | -3.7 | % | 11.0 | % | -3.5 | % | 5.5 | % | ||||||||||||||||
Hospice Services: | ||||||||||||||||||||||||
Locations | 169 | 120 | 169 | 120 | ||||||||||||||||||||
Admissions | 7,370 | 4,967 | 15,746 | 10,418 | ||||||||||||||||||||
Average daily census | 7,123 | 4,454 | 7,093 | 4,433 | ||||||||||||||||||||
Patient days | 648,216 | 405,339 | 1,284,037 | 802,313 | ||||||||||||||||||||
Average revenue per patient day | $ | 160.97 | $ | 158.54 | $ | 161.99 | $ | 160.19 | ||||||||||||||||
Organic growth: (1) | ||||||||||||||||||||||||
Total new admissions | 5.5 | % | 1.1 | % | 7.1 | % | 4.7 | % | ||||||||||||||||
Home and Community-Based Services: | ||||||||||||||||||||||||
Locations | 135 | 135 | 135 | 133 | ||||||||||||||||||||
Average daily census | 11,598 | 13,514 | 11,864 | 13,613 | ||||||||||||||||||||
Billable hours | 1,694,994 | 1,878,138 | 3,368,686 | 3,779,419 | ||||||||||||||||||||
Revenue per billable hour | $ | 27.22 | $ | 25.88 | $ | 27.19 | $ | 25.96 | ||||||||||||||||
Facility-Based Services: | ||||||||||||||||||||||||
Long-term Acute Care | ||||||||||||||||||||||||
Locations | 12 | 12 | 12 | 12 | ||||||||||||||||||||
Average revenue per patient day | $ | 1,479 | $ | 1,517 | $ | 1,463 | $ | 1,517 | ||||||||||||||||
Patient days | 17,550 | 20,199 | 38,063 | 41,359 | ||||||||||||||||||||
(1) 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. | ||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. (Amounts in thousands) (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 10,584 | $ | 37,643 | $ | 30,038 | $ | 72,302 | ||||||||
Add (net of tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 6,771 | 3,477 | 9,790 | 3,477 | ||||||||||||
Closures/relocations/consolidations (2) | 3,010 | 1,048 | 5,142 | 1,179 | ||||||||||||
COVID-19 impact: | ||||||||||||||||
PPE, supplies and other expenses (3) | — | 7,999 | — | 16,851 | ||||||||||||
ERP implementation (4) | 2,446 | 728 | 4,138 | 728 | ||||||||||||
Cost improvement initiatives (5) | 6,562 | — | 10,204 | — | ||||||||||||
Cost report and contract settlements (6) | 465 | — | 3,963 | — | ||||||||||||
Adjusted net income attributable to LHC Group, Inc.'s common stockholders | $ | 29,838 | $ | 50,895 | $ | 63,275 | $ | 94,537 | ||||||||
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 0.35 | $ | 1.20 | $ | 0.98 | $ | 2.30 | ||||||||
Add (net of tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 0.22 | 0.11 | 0.32 | 0.11 | ||||||||||||
Closures/relocations/consolidations (2) | 0.10 | 0.03 | 0.17 | 0.04 | ||||||||||||
COVID-19 impact: | ||||||||||||||||
PPE, supplies and other expenses (3) | — | 0.26 | — | 0.54 | ||||||||||||
ERP implementation (4) | 0.08 | 0.02 | 0.14 | 0.02 | ||||||||||||
Cost improvement initiatives (5) | 0.21 | — | 0.33 | — | ||||||||||||
Cost report and contract settlements (6) | 0.02 | — | 0.13 | — | ||||||||||||
Adjusted net income attributable to LHC Group, Inc.'s common stockholders | $ | 0.98 | $ | 1.62 | $ | 2.07 | $ | 3.01 | ||||||||
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (Amounts in thousands) (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ | 10,584 | $ | 37,643 | $ | 30,038 | $ | 72,302 | ||||||||
Add: | ||||||||||||||||
Income tax expense | 3,679 | 13,318 | 10,048 | 22,759 | ||||||||||||
Interest expense, net | 6,407 | 143 | 10,578 | 406 | ||||||||||||
Depreciation and amortization | 6,106 | 4,542 | 11,723 | 9,541 | ||||||||||||
Adjustment items (*) | 26,233 | 17,942 | 45,137 | 30,109 | ||||||||||||
Adjusted EBITDA | $ | 53,009 | $ | 73,588 | $ | 107,524 | $ | 135,117 | ||||||||
* Adjustment items (pre-tax): | ||||||||||||||||
Acquisition, de novo and legal expenses (1) | 9,226 | 4,708 | 13,307 | 4,708 | ||||||||||||
Closures/relocation/consolidations (2) | 4,101 | 1,419 | 6,983 | 1,596 | ||||||||||||
COVID-19 PPE, supplies and other expenses (3) | — | 10,829 | — | 22,819 | ||||||||||||
ERP implementation (4) | 3,332 | 986 | 5,619 | 986 | ||||||||||||
Cost improvement initiatives (5) | 8,941 | — | 13,865 | — | ||||||||||||
Cost report and contract settlements (6) | 633 | — | 5,363 | — | ||||||||||||
Total adjustments | $ | 26,233 | $ | 17,942 | $ | 45,137 | $ | 30,109 | ||||||||
- Expenses and other costs associated with recently announced or completed acquisitions, de novos and the pending acquisition by UnitedHealth Group. ($9.2 million pre-tax in the three months ended June 30, 2022 and $13.3 million pre-tax in the six months ended June 30, 2022; $4.7 million pre-tax in the three and six months ended June 30, 2021).
- Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($4.1 million pre-tax in the three months ended June 30, 2022 and $7.0 million in the six months ended June 30, 2022; $1.4 million pre-tax in the three months ended June 30, 2021 and $1.6 million in the six months ended June 30, 2021).
- COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies and wage adjustments (No adjustments were made in the three months and six months ended June 30, 2022; $10.8 million pre-tax in the three months ended June 30, 2021 and $22.8 million pre-tax in the six months ended June 30, 2021).
- Expenses and other costs associated with the implementation of an Enterprise Resource Planning software ($3.3 million pre-tax in the three months ended June 30, 2022 and $5.6 million pre-tax in the six months ended June 30, 2022; $1.0 million pre-tax in the three and six months ended June 30, 2021).
- Expenses associated with cost improvement initiatives implemented in the first and second quarters of 2022, which consisted of contract terminations and general and administrative cost reductions ($8.9 million pre-tax in the three months ended June 30, 2022 and $13.9 million pre-tax in the six months ended June 30, 2022).
- Expenses associated with a 2004 cost report settlement along with other disputed contract settlements ($0.6 million pre-tax in the three months ended June 30, 2022 and $5.4 million pre-tax in the six months ended June 30, 2022).
Contact: | Eric Elliott |
Senior Vice President of Finance | |
(337) 233-1307 | |
SOURCE LHC Group, Inc.
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