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Amedisys Reports Fourth Quarter and Year End 2019 Financial Results and Issues 2020 Guidance

Amedisys Reports Fourth Quarter and Year End 2019 Financial Results and Issues 2020 Guidance

BATON ROUGE, La., Feb. 18, 2020 (GLOBE NEWSWIRE) -- Amedisys, Inc. (AMED) today reported its financial results for the three month period and year ended December 31, 2019.

Three Month Periods Ended December 31, 2019 and 2018

  • Net service revenue increased $66.3 million to $500.7 million compared to $434.4 million in 2018.
  • Net income attributable to Amedisys, Inc. of $27.7 million compared to $27.5 million in 2018.
  • Net income attributable to Amedisys, Inc. per diluted share of $0.83 compared to $0.84 in 2018.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $52.2 million compared to $43.9 million in 2018.
  • Adjusted net service revenue of $500.7 million compared to $434.4 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. of $31.1 million compared to $29.8 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.94 compared to $0.91 in 2018.

Years Ended December 31, 2019 and 2018

  • Net service revenue increased $293.0 million to $1,955.6 million compared to $1,662.6 million in 2018.
  • Net income attributable to Amedisys, Inc. of $126.8 million compared to $119.3 million in 2018.
  • Net income attributable to Amedisys, Inc. per diluted share of $3.84 compared to $3.55 in 2018.

Adjusted Year End Results*

  • Adjusted EBITDA of $225.3 million compared to $180.6 million in 2018.
  • Adjusted net service revenue of $1,961.6 million compared to $1,664.3 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. of $145.2 million compared to $122.1 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $4.40 compared to $3.63 in 2018.

*   See pages 12-14 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, Chairman, President and Chief Executive Officer stated, “I am very proud of our fourth quarter and year end results as we continued our trend of outperformance this year. We have stayed true to our mission of providing clinically excellent care to our patients no matter where they call home, and it has once again translated into stellar financial results. None of this would be possible without the unwavering dedication of our over 21,000 employees, and I thank each and every one of you for your continued commitment to our patients. We are set up for a great 2020 as we navigate the waters of PDGM, and I look forward to another year of outperformance.”

2020 Guidance

  • Net service revenue is anticipated to be in the range of $2.115 billion to $2.160 billion.
  • Adjusted EBITDA is anticipated to be in the range of $250 million to $260 million.
  • Adjusted diluted earnings per share is anticipated to be in the range of $4.90 to $5.13 based on an estimated 33.4 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 2020 guidance disclosed in this press release. The home health, hospice and personal care industries are 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, 2019, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com.

Earnings Call and Webcast Information

Amedisys will host a conference call on Wednesday, February 19, 2020, at 11:00 a.m. ET to discuss its fourth quarter and year end 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 March 19, 2020 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13698548.

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 2,600 hospitals and 67,000 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 479 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 415,000 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,” “strategy,” “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 realize the anticipated benefits of the acquisition of Compassionate Care Hospice (“CCH”), our ability to comply with requirements stipulated in the CCH corporate integrity agreement, and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

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

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


 
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
         
  For the Three-Month
Period Ended December 31

  For the Year Ended
December 31
  2019   2018   2019   2018
               
  (Unaudited)    
Net service revenue $ 500,678     $ 434,378     $ 1,955,633     $ 1,662,578  
Cost of service, excluding depreciation and amortization   295,603       262,251       1,150,337       992,863  
General and administrative expenses:                              
Salaries and benefits   101,325       84,309       394,452       316,522  
Non-cash compensation   6,589       5,234       25,040       17,887  
Other   48,150       42,778       188,434       166,897  
Depreciation and amortization   5,988       3,379       18,428       13,261  
Asset impairment charge   1,470             1,470        
Operating expenses   459,125       397,951       1,778,161       1,507,430  
Operating income   41,553       36,427       177,472       155,148  
Other income (expense):                              
Interest income   19       15       78       278  
Interest expense   (3,056 )     (1,536 )     (14,515 )     (7,370 )
Equity in earnings from equity method investments   1,218       1,231       5,338       7,692  
Miscellaneous, net   (367 )     458       2,037       3,240  
Total other (expense) income, net   (2,186 )     168       (7,062 )     3,840  
Income before income taxes   39,367       36,595       170,410       158,988  
Income tax expense   (11,398 )     (8,875 )     (42,503 )     (38,859 )
Net income   27,969       27,720       127,907       120,129  
Net income attributable to noncontrolling interests   (314 )     (259 )     (1,074 )     (783 )
Net income attributable to Amedisys, Inc. $ 27,655     $ 27,461     $ 126,833     $ 119,346  
Basic earnings per common share:                              
Net income attributable to Amedisys, Inc. common stockholders $ 0.86     $ 0.86     $ 3.95     $ 3.64  
Weighted average shares outstanding   32,278       31,916       32,142       32,791  
Diluted earnings per common share:                              
Net income attributable to Amedisys, Inc. common stockholders $ 0.83     $ 0.84     $ 3.84     $ 3.55  
Weighted average shares outstanding   33,123       32,805       32,990       33,609  
                               


 
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
     
  As of December 31,
  2019   2018
ASSETS              
Current assets:              
Cash and cash equivalents $ 30,294     $ 20,229  
Restricted cash   66,196        
Patient accounts receivable   237,596       188,972  
Prepaid expenses   8,243       7,568  
Other current assets   8,225       7,349  
Total current assets   350,554       224,118  
Property and equipment, net of accumulated depreciation of $96,137 and $95,472   28,113       29,449  
Operating lease right of use assets   84,791        
Goodwill   658,500       329,480  
Intangible assets, net of accumulated amortization of $7,044 and $693   64,748       44,132  
Deferred income taxes   21,427       35,794  
Other assets   54,612       54,145  
Total assets $ 1,262,745     $ 717,118  
               
LIABILITIES AND EQUITY              
Current liabilities:              
Accounts payable $ 31,259     $ 28,531  
Payroll and employee benefits   120,877       92,858  
Accrued expenses   137,111       99,475  
Current portion of long-term obligations   9,927       1,612  
Current portion of operating lease liabilities   27,769        
Total current liabilities   326,943       222,476  
Long-term obligations, less current portion   232,256       5,775  
Operating lease liabilities, less current portion   56,128        
Other long-term obligations   5,905       6,234  
Total liabilities   621,232       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; 36,638,021 and 36,252,280 shares issued; and 32,284,051 and 31,973,505 shares outstanding   37       36  
Additional paid-in capital   645,256       603,666  
Treasury stock at cost 4,353,970 and 4,278,775 shares of common stock   (251,241 )     (241,685 )
Accumulated other comprehensive income   15       15  
Retained earnings   246,383       119,550  
Total Amedisys, Inc. stockholders’ equity   640,450       481,582  
Noncontrolling interests   1,063       1,051  
Total equity   641,513       482,633  
Total liabilities and equity $ 1,262,745     $ 717,118  
               


 
AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING
(Amounts in thousands, except statistical information)
       
  For the Three-Month
Period Ended December 31

  For the Year Ended
December 31
  2019   2018   2019   2018
               
  (Unaudited)              
Cash Flows from Operating Activities:        
Net income $ 27,969     $ 27,720     $ 127,907     $ 120,129  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization   5,988       3,379       18,428       13,261  
Non-cash compensation   6,589       5,234       25,040       17,887  
401(k) employer match   2,964       2,042       10,509       8,976  
Amortization and impairment of operating lease right of use assets   8,891             35,905        
Loss (gain) on disposal of property and equipment   135       (24 )     141       714  
Deferred income taxes   (4,332 )     5,355       13,466       20,271  
Equity in earnings from equity method investments   (1,218 )     (1,231 )     (5,338 )     (7,692 )
Amortization of deferred debt issuance costs/debt discount   220       201       873       797  
Return on equity investment   1,228       1,785       4,955       6,158  
Asset impairment charge   1,470             1,470        
Changes in operating assets and liabilities, net of impact of acquisitions:        
Patient accounts receivable   15,323       6,058       (24,146 )     12,224  
Other current assets   7,512       8,711       (2,682 )     8,679  
Other assets   630       2,221       832       2,947  
Accounts payable   (3,184 )     3,835       (11,329 )     3,165  
Accrued expenses   14,193       (1,234 )     42,096       13,524  
Other long-term obligations   (98 )     (19 )     (329 )     2,443  
Operating lease liabilities   (8,179 )           (32,295 )      
Operating lease right of use assets   (881 )           (3,503 )      
Net cash provided by operating activities   75,220       64,033       202,000       223,483  
Cash Flows from Investing Activities:                              
Proceeds from sale of deferred compensation plan assets   161       152       448       715  
Proceeds from the sale of property and equipment   4       3       162       54  
Purchases of property and equipment   (1,551 )     (874 )     (7,888 )     (6,558 )
Investments in equity method investees         (3,667 )     (210 )     (7,144 )
Acquisitions of businesses, net of cash acquired         (5,186 )     (345,460 )     (9,260 )
Net cash used in investing activities   (1,386 )     (9,572 )     (352,948 )     (22,193 )
Cash Flows from Financing Activities:                              
Proceeds from issuance of stock upon exercise of stock options   223       3,204       3,611       5,953  
Proceeds from issuance of stock to employee stock purchase plan   803       642       3,187       2,429  
Shares withheld upon stock vesting   (171 )     (1,149 )     (9,556 )     (6,570 )
Non-controlling interest distribution   (152 )     (560 )     (1,062 )     (1,090 )
Proceeds from borrowings under term loan               175,000        
Proceeds from borrowings under revolving line of credit   70,000       10,500       262,500       138,000  
Repayments of borrowings under revolving line of credit   (67,000 )     (60,500 )     (200,000 )     (130,500 )
Principal payments of long-term obligations   (1,804 )     (379 )     (5,624 )     (91,450 )
Debt issuance costs               (847 )     (2,433 )
Purchase of company stock                     (181,402 )
Repurchase of noncontrolling interest                     (361 )
Net cash provided by (used in) financing activities   1,899       (48,242 )     227,209       (267,424 )
Net increase (decrease) in cash, cash equivalents and restricted cash   75,733       6,219       76,261       (66,134 )
Cash, cash equivalents and restricted cash at beginning of period   20,757       14,010       20,229       86,363  
Cash, cash equivalents and restricted cash at end of period $ 96,490     $ 20,229     $ 96,490     $ 20,229  
Supplemental Disclosures of Cash Flow Information:                              
Cash paid for interest $ 1,872     $ 533     $ 9,628     $ 3,522  
Cash paid for income taxes, net of refunds received $ 11,866     $ 3,261     $ 29,522     $ 14,278  
Supplemental Disclosures of Non-Cash Financing Activities:                              
Note payable issued for software licenses $     $     $     $ 418  
Days revenue outstanding (1)   40.9       38.0       40.9       38.0  
                               

(1) Our calculation of days revenue outstanding at December 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 December 31, 2019 and 2018, respectively.

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AMEDISYS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in millions, except statistical information)
(Unaudited)
     
Segment Information - Home Health    
  For the
Three-Month Period
Ended December 31,
  2019   2018
       
Financial Information (in millions):    
Medicare $ 215.2     $ 211.5  
Non-Medicare   101.0       92.5  
Net service revenue   316.2       304.0  
Cost of service   191.7       189.4  
Gross margin   124.5       114.6  
Asset impairment charge   1.5        
Other operating expenses   77.4       72.2  
Operating income $ 45.6     $ 42.4  
Same Store Growth (1):              
Medicare revenue   2