updated 5/4/2011 5:16:36 PM ET 2011-05-04T21:16:36

Highlights:

  • Net service revenue was $161.8 million for the first quarter of 2011;
  • Diluted earnings per share was $0.42 for the first quarter of 2011;
  • Organic growth in total new admissions was 11.8% for the first quarter of 2011; and
  • Company reaffirms FY 2011 guidance.

LAFAYETTE, La., May 4, 2011 (GLOBE NEWSWIRE) -- LHC Group, Inc. (Nasdaq:LHCG), a national provider of home health and hospice services, announced today its financial results for the three months ended March 31, 2011.

Financial Results for the First Quarter

  • Net service revenue for the first quarter of 2011 increased to $161.8 million compared with $145.2 million for the same period in 2010.
  • Days sales outstanding, or DSO, for the three months ended March 31, 2011, was 45 days.
  • Net income attributable to LHC Group for the first quarter of 2011 decreased to $7.7 million compared with $11.7 million for the same period in 2010.
  • Diluted earnings per share decreased to $0.42 for the first quarter of 2011 compared with $0.64 for the same period in 2010.

In commenting on the results, Keith G. Myers, Chief Executive Officer of LHC Group, said, "I am very proud of our team for their outstanding performance in the first quarter, as we adapted to a 5.2% reimbursement cut and prepared for the face to face requirements and the new therapy rules that went into effect on April 1st. In spite of the reimbursement and regulatory challenges we faced in the quarter, we continued to improve quality outcomes and gain market share, as evidenced by our double digit organic admissions growth. I have never been more proud of our team's ability to successfully navigate change, while at the same time continuing to fulfill our commitment to providing the highest quality care to the growing number of patients, families and communities we are privileged to serve."

Guidance

The Company reaffirms its guidance issued on March 2, 2011, of net revenue in the range of $660 million to $670 million and fully diluted earnings per share in the range of $2.15 to $2.25. This guidance does not take into account the impact of any future acquisitions or share repurchases, if made, or de novo locations, if opened, or future reimbursement changes, if any.

Conference Call

LHC Group will host a conference call on Thursday, May 5, 2011, at 11:00 a.m. Eastern time to discuss its first quarter 2011 results. The toll-free number to call for this interactive teleconference is (866) 393-1608 (international callers should call 973-890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, May 12, 2011, by dialing (800) 642-1687 (international callers should call 706-645-9291) and entering confirmation number 44146917. A live broadcast 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 an hour following the conclusion of the live broadcast.

About LHC Group, Inc.

LHC Group, Inc. is a national provider of home health and hospice services, providing quality, cost-effective healthcare to patients within the comfort and privacy of their home or place of residence. LHC Group provides a comprehensive array of post-acute healthcare services through home health, hospice and private duty locations in its home-based division and long-term acute care hospitals in its facility-based division.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's future financial performance and the strength of the Company's operations. Such forward-looking statements may be identified by words such as "continue," "expect," and similar expressions. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including changes in reimbursement, changes in government regulations, changes in LHC Group's relationships with referral sources, increased competition for LHC Group's services, increased competition for joint venture and acquisition candidates, changes in the interpretation of government regulations, and other risks set forth in Item 1A. Risk Factors in LHC Group's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission. LHC Group undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
(unaudited)
     
  March 31, 2011 Dec. 31, 2010
     
ASSETS    
     
Current assets:    
Cash $388 $288
Receivables:    
Patient accounts receivable, less allowance for uncollectible accounts of $8,735 and $9,769, respectively 80,412 80,055
Other receivables 2,669 5,094
Amounts due from governmental entities 877 429
Total receivables, net 83,958 85,578
Deferred income taxes 6,130 5,941
Prepaid income taxes 9,663 5,326
Prepaid expenses and other current assets 9,531 10,015
Total current assets 109,670 107,148
Property, building and equipment, net of accumulated depreciation of $17,053 and $15,329, respectively 28,633 26,862
Goodwill 162,804 157,338
Intangible assets, net of accumulated amortization of $1,722 and $1,499, respectively 57,752 54,051
Advance payment on acquisitions 2,622 6,947
Other assets 5,781 4,959
Total assets $367,262 $357,305
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable and other accrued liabilities $17,115 $21,017
Salaries, wages and benefits payable 30,964 27,289
Amounts due to governmental entities 3,159 3,159
Total current liabilities 51,238 51,465
Deferred income taxes 19,657 16,817
Total liabilities 70,895 68,282
Noncontrolling interest- redeemable 12,148 13,535
Stockholders' equity:    
Common stock – $0.01 par value: 40,000,000 shares authorized; 21,320,226 and 21,180,286 shares issued and 18,276,438 and 18,172,022 shares outstanding, respectively 183 181
Treasury stock – 3,043,788 and 3,008,264 shares at cost, respectively (5,499) (4,453)
Additional paid-in capital 92,508 91,017
Retained earnings 194,690 186,996
Total LHC Group, Inc. stockholders' equity 281,882 273,741
Noncontrolling interest- non-redeemable 2,337 1,747
Total equity 284,219 275,488
Total liabilities and equity $367,262 $357,305
 
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 (amounts in thousands, except share and per share data)
(unaudited)
     
  Three Months Ended

March 31,
  2011 2010
Net service revenue $161,783 $145,161
Cost of service revenue 88,956 73,988
Gross margin 72,827 71,173
Provision for bad debts 2,562 2,059
General and administrative expenses 55,040 45,767
Operating income 15,225 23,347
Interest expense  (94) (24)
Non-operating income  172 29
Income before income taxes and noncontrolling interest 15,303 23,352
Income tax expense 5,161 7,510
Net income 10,142 15,842
Less net income attributable to noncontrolling interest 2,448 4,218
Net income attributable to LHC Group, Inc. 7,694 11,624
Redeemable noncontrolling interest 41
Net income attributable to LHC Group, Inc.'s common stockholders $7,694 $11,665
     
Earnings per share – basic and diluted:    
Income attributable to LHC Group, Inc. $0.42 $0.64
Redeemable noncontrolling interest
Net income attributable to LHC Group, Inc.'s common stockholders $0.42 $0.64
     
Weighted average shares outstanding:    
Basic 18,215,831 18,041,563
Diluted 18,351,637 18,179,013
 
LHC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
     
  Three Months Ended

March 31,
  2011 2010
Operating activities    
Net income $10,142 $15,842
Adjustments to reconcile net income to net cash  provided by operating activities:    
Depreciation and amortization expense 2,017 1,534
Provision for bad debts 2,562 2,059
Stock-based compensation expense 1,010 942
Deferred income taxes 2,651 (210)
Changes in operating assets and liabilities, net of acquisitions:  
Receivables (1,540) (1,000)
Prepaid expenses and other assets 6,615 1,946
Income taxes payable (4,337) 5,268
Accounts payable and accrued expenses (335) 6,116
Net amounts due to/from governmental entities (448) 273
Net cash provided by operating activities  18,337 32,770
     
Investing activities    
Purchases of property, building, and equipment (3,493) (1,770)
Cash paid for acquisitions, primarily goodwill and intangible assets and advance payment on acquisitions (10,892) (5,479)
Net cash used in investing activities  (14,385) (7,249)
     
Financing activities    
Proceeds from line of credit 36,935 9,022
Payments on line of credit (36,935) (14,745)
Principal payments on debt (84)
Payments on capital leases (10) (7)
Excess tax benefits from vesting of restricted stock 319 614
Proceeds from employee stock purchase plan 231 189
Purchase of additional controlling interest (252)
Noncontrolling interest distributions (4,140) (3,648)
Net cash used in financing activities (3,852) (8,659)
Change in cash 100 16,862
Cash at beginning of period 288 394
Cash at end of period $388 $17,256
     
Supplemental disclosures of cash flow information  
Interest paid $94 $24
Income taxes paid $6,556 $1,912
 
LHC GROUP, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(amounts in thousands)
(unaudited)
       
  Three Months Ended

March 31, 2011
   
  Home-Based

Services
Facility-Based

Services
Total
Net service revenue $141,801 $19,982 $161,783
Cost of service revenue 77,089 11,867 88,956
Provision for bad debts 2,408 154 2,562
General and administrative expenses 50,063 4,977 55,040
Operating income 12,241 2,984 15,225
Interest expense (85) (9) (94)
Non-operating income 150 22 172
Income before income taxes and noncontrolling interest 12,306 2,997 15,303
Income tax expense 4,678 483 5,161
Noncontrolling interest 2,095 353 2,448
Net income attributable to LHC Group, Inc. $5,533 $2,161 $7,694
       
Total assets $331,539 $35,723 $367,262
       
       
  Three Months Ended

March 31, 2010
   
  Home-Based

Services
Facility-Based

Services
Total
Net service revenue $127,957 $17,204 $145,161
Cost of service revenue 63,901 10,087 73,988
Provision for bad debts 1,955 104 2,059
General and administrative expenses 41,492 4,275 45,767
Operating income 20,609 2,738 23,347
Interest expense (22) (2) (24)
Non-operating income (loss), including gain on sale of assets 41 (12) 29
Income before income taxes and noncontrolling interest 20,628 2,724 23,352
Income tax expense 6,759 751 7,510
Noncontrolling interest 3,766 452 4,218
Net income attributable to LHC Group, Inc. $10,103 $1,521 $11,624
       
Total assets $295,640 $27,460 $323,100
 
LHC GROUP, INC. AND SUBSIDIARIES
SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA
(unaudited)
     
  Three Months Ended

March 31,
  2011 2010
Key Data:    
Home-Based Services:    
Home Health    
Locations 259 233
Acquired  3 4
De novo 7 2
Total new admissions 26,194 21,805
Medicare new admissions 18,589 16,152
Average weekly census 34,466 30,721
Average Medicare weekly census 26,570 24,640
Medicare completed and billed episodes 42,066 38,736
Average Medicare case mix for completed and billed Medicare episodes 1.26 1.27
Average reimbursement per completed and billed Medicare episodes $2,383 $2,481
Total visits 879,935 786,457
Total Medicare visits 666,185 617,367
Average visits per completed and billed Medicare episodes 15.8 15.9
Organic growth (1):    
Net revenue 4.5% 8.6%
Net Medicare revenue 2.3% 8.4%
Total new admissions 11.8% 9.8%
Medicare new admissions  8.5% 13.4%
Average weekly census 7.1% 1.6%
Average Medicare weekly census 3.6% 2.7%
Medicare completed and billed episodes 4.3% 6.3%
     
Hospice    
Locations 29 22
Acquired  5 1
Admissions 919 665
Average Daily Census 833 561
Patient Days 75,001 50,471
Average revenue per patient day $139 $138
     
Facility-Based Services:    
Long-term Acute Care     
Locations  9 8
Patient days 15,333 13,872
Patient acuity mix  1.01 0.98
Average revenue per patient day $1,208 $1,142
     
(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.


CONTACT: Eric Elliott
         Vice President of Investor Relations
         (337) 233-1307
         eric.elliott@lhcgroup.com

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