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LHC Group announces fourth quarter and full year 2020 financial results

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·18 min read
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Issues full year and first quarter 2021 guidance

LAFAYETTE, La., Feb. 25, 2021 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended December 31, 2020. Unless otherwise noted, all results are compared with the fourth quarter and year ended December 31, 2019.

LHC Group Logo (PRNewsfoto/LHC Group, Inc.)
LHC Group Logo (PRNewsfoto/LHC Group, Inc.)

Fourth Quarter 2020 Financial Results

  • Net service revenue was $532.3 million.

  • Net income attributable to LHC Group's common stockholders increased 39.3% to $30.4 million, or $0.97 per diluted share.

  • Adjusted net income attributable to LHC Group's common stockholders increased 23.0% to $44.2 million, or $1.40 adjusted earnings per diluted share. Adjusted results for the fourth quarter of 2020 exclude a pre-tax amount of $3.2 million in acquisition and de novo related expenses, $12.2 million in COVID-19 related costs and expenses for purchases of personal protective equipment (PPE), supplies, employee related costs and expenses and other categories of costs and expenses incurred in response to the pandemic and $4.0 million in costs, expenses and impairments related to agency closures or consolidations.

  • Adjusted EBITDA increased 28.3% to $68.4 million.

Full Year 2020 Financial Results

  • Net service revenue was $2.063 billion.

  • Net income attributable to LHC Group's common stockholders increased 16.6% to $111.6 million, or $3.56 per diluted share.

  • Adjusted net income attributable to LHC Group's common stockholders increased 12.9% to $157.3 million, or $5.01 per diluted share. Adjusted results for the full year 2020 exclude a pre-tax amount of $7.8 million in acquisition and de novo related expenses, $52.8 million in COVID-19 related costs and expenses noted above and $5.2 million in costs, expenses and impairments related to agency closures or consolidations.

  • Adjusted EBITDA increased 12.5% to $238.7 million.

A reconciliation of all non-GAAP financial results in this release appears on pages 12-13.

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.

  • Organic growth in home health admissions increased 2.2% in the fourth quarter of 2020 compared with the same period in 2019 and increased sequentially by 1.0% over the third quarter of 2020.

  • Continued strong sequential organic growth in home health Medicare revenue with a 4.6% sequential increase in the fourth quarter of 2020 following a 10.7% sequential increase in the third quarter of 2020.

  • Non-Medicare episodic organic growth in home health admissions increased by 28.7% in the fourth quarter of 2020 compared with the same period in 2019 and increased by 32.0% in 2020 over 2019.

  • Organic growth in hospice admissions increased 10.9% in the fourth quarter of 2020 compared with the same period in 2019 and increased by 4.6% sequentially over the third quarter of 2020.

  • On October 1, 2020, LHC Group finalized a joint venture with University Health Care System to enhance home health and hospice services in Georgia and South Carolina. The joint venture includes ten total locations and LHC Group expects incremental annualized revenue from this joint venture of approximately $8.3 million.

  • On October 1, 2020, LHC Group finalized a joint venture with Northeast Georgia Health System to share ownership of SunCrest Home Health in Gainesville, Georgia. LHC Group also closed on the purchase of Santa Rita Hospice in Aurora, Colorado, where it will operate under the At Home Hospice name in a shared space with LHC Group's home health provider in Aurora.

  • On November 1, 2020, LHC Group finalized an expansion of its joint venture with CHRISTUS Health with the addition of a hospice provider in San Marcos, Texas. LHC Group expects incremental annualized revenue from this joint venture of approximately $1.6 million.

  • On December 31, 2020, LHC Group finalized the purchase of Grace Hospice in Tulsa, Oklahoma and Valley Hospice and East Valley Palliative Care in Mesa, Arizona. The Company expects the purchase of Grace Hospice to produce approximately $12.1 million in annualized revenue. The Company expects the purchase of Valley Hospice and East Valley Palliative Care to produce approximately $4.8 million in annualized revenue.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "LHC Group plays an increasingly critical role in the nation's healthcare system with the last twelve months clearly demonstrating the importance of home as the most patient-preferred and cost-effective setting for care. The swift, comprehensive approach we took to the public health emergency caused by COVID-19 had a positive impact on the evolution of healthcare delivery models, helped to protect our employees and patients, boosted our organic growth trajectory and strengthened our value proposition to patients, partners and payors. Looking ahead to 2021 and beyond, we believe LHC Group has an unprecedented opportunity to lead our industry's transition to value-based care and address the growing needs of the population aged 65 and over that is expected to double by 2060."

COVID-19 Update
The COVID-19 pandemic had an impact on our operations and financial results for the fourth quarter of 2020 with a continued impact expected in 2021, although to a lesser extent than what we have experienced to date. During the fourth quarter, we incurred $12.2 million ($8.6 million net of tax), or $0.27 per diluted share, in additional COVID-19 costs and expenses related to PPE, supplies, employee related costs and expenses, including, without limitation, bonuses, increased wages, and wage supplements for front line caregivers, and other categories of costs and expenses incurred in response to the pandemic. For the year ended December 31, 2020 we incurred $52.8 million ($38.6 million net of tax), or $1.23 per diluted share, in COVID-19 costs and expenses.

LHC Group has also implemented a number of cost containment initiatives, including eliminating non-essential travel and expenses and other measures. We continue to have strong access to capital with approximately $530 million of available liquidity from cash and our revolving credit facility net of the $411.3 million liability associated with the Medicare Accelerated and Advance Payments and Provider Relief Funds.

Since April 2020, we received funds totaling $318.0 million under the Medicare Accelerated and Advance Payment Program as provided for by the CARES Act. The accelerated Medicare payments are interest free and the program currently requires that the Centers for Medicare and Medicaid Services (CMS) recoup the accelerated payments beginning 12 months after receipt by the provider, by withholding 25% of future Medicare fee-for service payments for claims for 11 months and then withholding 50% of future Medicare fee-for service payments for claims for an additional six months. An interest rate of 4% will be assessed on any outstanding balances after 29 months from the date of the initial advance but we intend to repay the full amount before any interest will accrue. Cash flows from operations for the full year ended December 31, 2020 included $318.0 million of accelerated Medicare payments, all of which remains deferred on the balance sheet at December 31, 2020.

As of December 31, 2020, we have received funds totaling $93.3 million related to the Provider Relief Fund as provided for by the CARES Act. The full amount received was recorded as a short-term liability in government stimulus advance in our condensed consolidated balance sheet, but no funds were recognized in our condensed consolidated statements of income for the twelve months ended December 31, 2020. It is our intent to return the funds to the government.

COVID-19 Trends
Please refer to the supplemental information that can be found under Financial Results on the Company's Investor Relations page to access more detailed statistics on pre-COVID-19 and post-COVID-19 trends.

Full Year 2021 and First Quarter 2021 Guidance
Full year 2021 net service revenue is expected to be in a range of $2.2 billion to $2.26 billion, adjusted earnings per diluted share is expected to be in a range of $5.65 to $5.90, and EBITDA, less non-controlling interest, is expected to be in a range of $268 million to $280 million.

For the first quarter ending March 31, 2021, net service revenue is expected to be $515 million to $530 million, adjusted earnings per diluted share is expected to be in a range of $1.20 to $1.30, and EBITDA, less non-controlling interest, is expected to be in a range of $55 million to $60 million.

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 do not take into account the impact of future COVID-19 related costs and expenses. The Company is estimating COVID-19 related costs and expenses in the range of $20 million to $25 million in the full year of 2021 and $8 million to $12 million in the first quarter of 2021. 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.

Joshua L. Proffitt, LHC Group's President, added, "Our original intent for 2020 and all of the work we had accomplished beforehand was to exit the year with maximum velocity into 2021. While the shape of that trajectory was altered by the public health emergency, we have been able to generate sequential quarterly improvement in our organic admissions growth, census and number of unique physician referrals since the peak of the pandemic. This re-acceleration in our business to pre-pandemic levels was a direct result of the real-time demonstration of our value proposition, leading quality and patient satisfaction scores, extraordinary commitment from our employees and the contributions from our joint venture and co-location strategies. The high-quality growth we are generating from our differentiated strategy positions us very well to deliver for our patients, employees, partners and shareholders in 2021."

Conference Call
LHC Group will host a conference call on Friday, February 26, 2021, at 9:00 a.m. Eastern time to discuss its fourth quarter 2020 results. The toll-free number to call for this interactive teleconference is (877) 870-4263 (international callers: (412) 317-6011). A telephonic replay of the conference call will be available through midnight on Friday, March 5, 2021, by dialing (877) 344-7529 (international callers: (412) 317-0088) and entering confirmation number 10151937.

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 approximately 30,000 employees deliver home health, hospice, home and community based services, and facility-based care in 35 states and the District of Columbia – reaching 60 percent of the U.S. population aged 65 and older. As the preferred joint venture partner for almost 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(Unaudited)



For the Year Ended Dec. 31,


2020


2019

ASSETS




Current assets:




Cash

$

286,569



$

31,672


Receivables:




Patient accounts receivable

301,209



284,962


Other receivables

11,522



10,832


Total receivables

312,731



295,794


Prepaid income taxes



9,652


Prepaid expenses

22,058



21,304


Other current assets

25,664



21,852


Total current assets

647,022



380,274


Property, building and equipment, net of accumulated depreciation of $82,721 and $69,441, respectively

138,366



97,908


Goodwill

1,259,147



1,219,972


Intangible assets, net of accumulated amortization of $17,659 and $16,431, respectively

315,355



305,556


Assets held for sale

1,900



2,500


Operating lease right of use asset

100,046



95,452


Other assets

21,518



38,633


Total assets

$

2,483,354



$

2,140,295


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and other accrued liabilities

$

64,864



$

83,572


Salaries, wages, and benefits payable

88,666



85,631


Self-insurance reserves

35,103



31,188


Government stimulus advance

93,257




Contract liabilities – deferred revenue

317,962




Current operating lease liabilities

32,676



28,701


Amounts due to governmental entities

1,516



1,880


Income taxes payable

21,464




Current liabilities – deferred employer payroll tax

25,928




Total current liabilities

681,436



230,972


Deferred income taxes

47,237



60,498


Income taxes payable

6,203



3,867


Revolving credit facility

20,000



253,000


Other long term liabilities

25,928




Operating lease payable

70,275



69,556


Total liabilities

851,079



617,893


Noncontrolling interest – redeemable

18,921



15,151


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; 36,355,497 and 36,129,280 shares
issued, and 31,139,840 and 30,992,390 shares outstanding, respectively

364



361


Treasury stock – 5,215,657 and 5,136,890 shares at cost, respectively

(69,011)



(60,060)


Additional paid-in capital

962,120



949,321


Retained earnings

635,297



523,701


Total LHC Group, Inc. stockholders' equity

1,528,770



1,413,323


Noncontrolling interest – non-redeemable

84,584



93,928


Total stockholders' equity

1,613,354



1,507,251


Total liabilities and stockholders' equity

$

2,483,354



$

2,140,295


LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)



Three Months Ended
December 31,


Year Ended
December 31,


2020


2019


2020


2019

Net service revenue

$

532,329



$

531,315



$

2,063,204



$

2,080,241


Cost of service revenue (excluding depreciation and amortization)

317,243



343,267



1,250,403



1,324,887


Gross margin

215,086



188,048



812,801



755,354


General and administrative expenses

162,944



155,372



632,847



596,006


Impairment of intangibles and other

1,227



200



1,849



7,734


Operating income

50,915



32,476



178,105



151,614


Interest expense

(89)



(2,622)



(4,129)



(11,155)


Income before income taxes and noncontrolling interest

50,826



29,854



173,976



140,459


Income tax expense

12,862



3,942



36,043



26,607


Net income

37,964



25,912



137,933



113,852


Less net income (loss) attributable to noncontrolling interests

7,584



4,109



26,337



18,126


Net income attributable to LHC Group, Inc.'s common stockholders

$

30,380



$

21,803



$

111,596



$

95,726










Earnings per share:








Basic

$

0.98



$

0.70



$

3.59



$

3.09


Diluted

$

0.97



$

0.70



$

3.56



$

3.07


Weighted average shares outstanding:








Basic

31,128



30,978



31,092



30,933


Diluted

31,443



31,270



31,366



31,210


LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)




For the Year Ended December 31,



2020


2019

Operating activities:





Net income


$

137,933



$

113,852


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





Depreciation and amortization expense


21,249



18,254


Amortization and impairment of operating lease right of use asset


34,546



33,368


Stock-based compensation expense


14,347



9,646


Deferred income taxes


(13,261)



18,400


Loss on disposal of assets


412



802


Impairment of intangibles and other


1,849



7,734


Changes in operating assets and liabilities, net of acquisitions:





Receivables


(16,561)



(38,907)


Prepaid expenses


(754)



3,530


Other assets


(3,169)



(2,923)


Prepaid income taxes


9,652



(78)


Accounts payable and accrued expenses


(22,506)



(457)


Salaries, wages, and benefits payable and self-insurance reserves


6,482



(2,625)


Other long term liabilities


51,856




Contract liabilities - deferred revenue


317,962




Operating lease payable


(34,226)



(28,062)


Income tax payable


23,800



(431)


Net amounts due to/from governmental entities


(364)



(1,641)


Net cash provided by operating activities


529,247



130,462


Investing activities:





Cash paid for acquisitions, net of cash acquired


(24,545)



(74,293)


Proceeds from sale of assets


7,920




Purchases of property, building and equipment


(65,875)



(33,609)


Net cash used in investing activities


(82,500)



(107,902)


Financing activities:





Proceeds from line of credit


296,229



267,000


Payments on line of credit


(529,229)



(249,000)


Government stimulus advance


93,257




Proceeds from employee stock purchase plan


...

2,177



2,066


Payments on debt




(7,650)


Noncontrolling interest distributions


(24,837)



(24,082)


Purchase of additional controlling interest


(24,295)



(19,663)


Sale of noncontrolling interest


4,856



756


Withholding taxes paid on stock-based compensation


(10,008)



(10,687)


Exercise of options




1,009


Net cash (used in) provided by financing activities


(191,850)



(40,251)


Change in cash


254,897



(17,691)


Cash at beginning of period


31,672



49,363


Cash at end of period


$

286,569



$

31,672


Supplemental disclosures of cash flow information





Interest paid


$

5,011



$

11,015


Income taxes paid


$

16,830



$

10,109


Non-Cash Operating activity:





Operating right of use assets in exchange for lease obligations


43,047



129,290


Non-Cash Investing activity:





Accrued capital expenditures


2,922



2,729


Non-Cash Financing activity:





Contribution of noncontrolling interest


230





LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



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

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Three Months Ended December 31, 2019


Home health


Hospice


Home and
community-
based


Facility-
based


HCI


Total

Net service revenue

$

389,506



$

58,101



$ 50,845



$

27,418



$

5,445



$

531,315


Cost of service revenue

244,953



36,324



38,763



19,462



3,765



343,267


Gross margin

144,553



21,777



12,082



7,956



1,680



188,048


General and administrative expenses

115,161



16,023



11,021



10,348



2,819



155,372


Impairment of intangibles and other

180



20









200


Operating income (loss)

29,212



5,734



1,061



(2,392)



(1,139)



32,476


Interest expense

(1,843)



(293)



(255)



(154)



(77)



(2,622)


Income (loss) before income taxes and
noncontrolling interest

27,369



5,441



806



(2,546)



(1,216)



29,854


Income tax expense (benefit)

3,969



637



115



(501)



(278)



3,942


Net income (loss)

23,400



4,804



691



(2,045)



(938)



25,912


Less net income (loss) attributable to
noncontrolling interests

3,346



1,267



(149)



(344)



(11)



4,109


Net income (loss) attributable to LHC Group,
Inc.'s common stockholders

$

20,054



$

3,537



$

840



$

(1,701)



$

(927)



$

21,803





























LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)




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


848,663



150,675



150,378



85,827



14,860



1,250,403


Gross margin


615,116



93,131



44,206



42,751



17,597



812,801


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

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)




Year Ended December 31, 2019



Home health


Hospice


Home and
community-
based


Facility-
based


HCI


Total

Net service revenue


$

1,503,393



$

226,922



$

208,455



$

111,809



$

29,662



$

2,080,241


Cost of service revenue


939,035



140,177



157,817



73,274



14,584



1,324,887


Gross margin


564,358



86,745



50,638



38,535



15,078



755,354


General and administrative expenses


437,276



61,190



44,025



38,358



15,157



596,006


Impairment of intangibles and other


7,443



291









7,734


Operating income (loss)


119,639



25,264



6,613



177



(79)



151,614


Interest expense


(7,762)



(1,269)



(1,112)



(678)



(334)



(11,155)


Income (loss) before income taxes and
noncontrolling interests


111,877



23,995



5,501



(501)



(413)



140,459


Income tax expense (benefit)


21,147



4,353



1,394



(204)



(83)



26,607


Net income (loss)


90,730



19,642



4,107



(297)



(330)



113,852


Less net income (loss) attributable to
noncontrolling interests


14,651



3,979



(906)



435



(33)



18,126


Net income (loss) attributable to LHC Group,
Inc.'s common stockholders


$

76,079



$

15,663



$

5,013



$

(732)



$

(297)



$

95,726


Total assets


$

1,486,012



$

244,105



$

249,524



$

91,337



$

69,317



$

2,140,295


LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)




Three Months Ended

December 31,


Twelve Months Ended

December 31,

Key Data:


2020


2019


2020


2019










Home Health Services:









Locations


537



553



537



553


Acquired


4



2



13



16


De novo






1



4


Divested/consolidated


(16)



(4)



(30)



(22)


Total new admissions


104,440



100,445



410,408



389,459


Medicare new admissions


54,968



58,216



221,300



232,007


Average daily census


83,686



78,380



80,112



77,025


Average Medicare daily census


47,219



49,108



46,311



49,341


Medicare completed and billed episodes


89,824



96,065



350,239



372,816


Average Medicare case mix for completed and billed Medicare
episodes


1.01



1.08



1.02



1.09


Average reimbursement per Medicare episode (1)


$

2,840



$

2,795



$

2,795



$

2,837


Total visits


2,100,914



2,581,022



8,282,047



10,283,251


Total Medicare visits


1,355,403



1,640,023



5,445,515



6,688,321


Average visits per Medicare episodes


12.7



17.1



13.2



17.9


Organic growth: (2)









Net revenue


(0.1)

%


4.2

%


(4.8)

%


6.5

%

Net Medicare revenue


(5.0)

%


3.2

%


(9.7)

%


3.4

%

Total new admissions


2.2

%


10.3

%


1.6

%


9.1

%

Medicare new admissions


(6.0)

%


4.2

%


(7.4)

%


2.9

%

Average daily census


4.9

%


5.2

%


1.5

%


5.1

%

Average Medicare daily census


(5.4)

%


0.1

%


(8.2)

%


0.0

%

Medicare completed and billed episodes


(7.9)

%


2.3

%


(8.0)

%


1.3

%










Hospice Services:









Locations


120



110



120



110


Acquired


3



3



6



8


De novo


6





6




Divested/consolidated




(1)



(2)



(6)


Admissions


5,454



4,768



20,460



18,515


Average daily census


4,320



4,238



4,333



4,062


Patient days


397,456



389,926



1,590,322



1,483,146


Average revenue per patient day


$

157.55



$

151.82



$

155.33



$

152.87


Organic growth: (2)









Total new admissions


10.9

%


4.6

%


6.4

%


5.6

%










Home and Community-Based Services:









Locations (3)


124



107



124



107


Acquired




2



4



2


De novo


3





16



24


Divested/consolidated


(1)





(3)




Average daily census


14,021



13,896



14,365



13,910


Billable hours


1,884,411



2,111,816



7,734,517



8,907,461


Revenue per billable hour


$

27.33



$

24.96



$

26.22



$

24.06











Facility-Based Services:









Long-term Acute Care









Locations


12



13



12



13


Acquired




1





1


Divested/consolidated


(1)





(1)




Patient days


21,836



20,313



89,930



78,837


Average revenue per patient day


$

1,407



$

1,287



$

1,373



$

1,304


Average Daily Census


237



221



246



216




(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.

(Amounts in thousands)

(Unaudited)




Three Months Ended
December 31,

Twelve Months Ended
December 31,



2020


2019


2020


2019

Net income attributable to LHC Group, Inc.'s common stockholders


$

30,380



$

21,803



$

111,596



$

95,726


Add (net of tax):









Acquisition and de novo expenses (1)


2,284



5,303



5,629



25,766


Closures/relocations/consolidations (2)


2,856



1,108



3,722



5,830


COVID-19 impact:













Supplies and wage expenses (3)


8,641





38,608




CARES Act tax benefit (4)






(2,210)




Operation realignment and PDGM implementation cost (5)




5,032





5,032


Dispute settlements (6)




2,671





2,671


Provider moratorium impairment (7)








4,332


Adjusted net income attributable to LHC Group, Inc.'s
common stockholders


$

44,161



$

35,917



$

157,345



$

139,357


RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE

(Amounts in thousands)

(Unaudited)




Three Months Ended
December 31,

Twelve Months Ended
December 31,



2020


2019


2020


2019

Net income attributable to LHC Group, Inc.'s common stockholders


$

0.97



$

0.70



$

3.56



$

3.07


Add (net of tax):









Acquisition and de novo expenses (1)


0.07



0.17



0.17



0.83


Closures/relocations/consolidations (2)


0.09



0.04



0.12



0.19


COVID-19 impact:













Supplies and wage expenses (3)


0.27





1.23




CARES Act tax benefit (4)






(0.07)




Operation realignment and PDGM implementation cost (5)




0.16





0.16


Dispute settlements (6)




0.08





0.08


Provider moratorium impairment (7)








0.14


Adjusted net income attributable to LHC Group, Inc.'s
common stockholders


$

1.40



$

1.15



$

5.01



$

4.47


RECONCILIATION OF EBITDA AND ADJUSTED EBITDA

(Amounts in thousands)

(Unaudited)




Three Months Ended
December 31,

Twelve Months Ended
December 31,



2020


2019


2020


2019

Net income attributable to LHC Group, Inc.'s common stockholders


$

30,380



$

21,803



$

111,596



$

95,726


Add:









Income tax expense


12,862



3,942



36,043



26,607


Interest expense, net


89



2,622



4,129



11,156


Depreciation and amortization


5,648



5,442



21,249



18,254


Adjustment items (1)


19,392



19,522



65,731



60,363


Adjusted EBITDA


$

68,371



$

53,331



$

238,748



$

212,106




















1. Adjustment items (pre-tax):









Acquisition and de novo expenses (1)


3,214



7,335



7,770



35,640


Closures/relocation/consolidations (2)


4,019



1,532



5,193



8,068


COVID-19 PPE, supplies and wages (3)


12,159





52,768




Operation realignment and PDGM implementation cost (5)




6,960





6,960


Dispute settlements (6)




3,695





3,695


Provider moratorium impairment (7)








6,000


Total adjustments


$

19,392



$

19,522



$

65,731



$

60,363





















1.

Expenses and other costs associated with diligence or completed acquisitions and de novos. ($3.2 million pre-tax in the three months ended December 31, 2020 and $7.8 million pre-tax in the twelve months ended December 31, 2020).

2.

Loss on the sale of an asset, impairment and other expenses associated with a closure or consolidation ($4.0 million in the three months ended December 31, 2020 and $5.2 million pre-tax in the twelve months ended December 31, 2020).

3.

COVID-19 related expenses for purchases of personal protective equipment ("PPE"), supplies and employee benefit expenses including, without limitation, bonuses and increased wages, wage supplements and PTO replenishments for front line caregivers. ($12.2 million pre-tax in the three months ended December 31, 2020 and $52.8 million pre-tax in the twelve months ended December 31, 2020).

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, severance payments and other expenses and costs associated with a realignment of our home health divisions and PDGM preparedness, software implementation and training cost ($6.9 million pre-tax in the three months and twelve months ended December 31, 2019).

6.

In the fourth quarter of 2019, the Company settled disputed contractual payments ($3.7 million pre-tax).

7.

During the first quarter of 2019, the Company recorded $6.0 million of moratoria fair value impairment as a result of the Centers for Medicare and Medicaid Services ("CMS") action to remove all federal moratoria with regard to Medicare provider enrollment. In assigning fair value acquired in acquisitions as required by ASC 805, Business Combinations, the Company had assigned fair value to Certificates of need or license moratoria, as applicable, in certain states.

Contact:

Eric Elliott


Senior Vice President of Finance


(337) 233-1307


eric.elliott@lhcgroup.com

Cision
Cision

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SOURCE LHC Group, Inc.