Encompass Health reports results for third quarter 2024
Encompass Health reported strong Q3 2024 results with net operating revenue increasing 11.9% to $1,351.0 million. The growth was driven by an 8.8% increase in discharges, including 6.8% same-store growth, and a 2.5% rise in net patient revenue per discharge. Income per diluted share grew 25.9% to $1.07, while adjusted EBITDA increased 13.4% to $269.3 million. The company raised its full-year 2024 guidance, with net operating revenue now expected between $5,325 to $5,375 million and adjusted earnings per share projected at $4.19 to $4.33.
Encompass Health ha riportato risultati solidi per il terzo trimestre del 2024, con un fatturato netto operativo che è aumentato dell'11,9% a 1.351,0 milioni di dollari. La crescita è stata guidata da un incremento dell'8,8% nei ricoveri, inclusa una crescita del 6,8% negli stessi punti vendita, e un aumento del 2,5% del fatturato netto per paziente per ricovero. Il reddito per azione diluita è cresciuto del 25,9% a 1,07 dollari, mentre l'EBITDA rettificato è aumentato del 13,4% a 269,3 milioni di dollari. L'azienda ha alzato le previsioni annuali per il 2024, con un fatturato netto operativo ora atteso tra 5.325 e 5.375 milioni di dollari e utili rettificati per azione previsti tra 4,19 e 4,33 dollari.
Encompass Health informó resultados sólidos del tercer trimestre de 2024, con un ingreso operativo neto que aumentó un 11.9% a 1,351.0 millones de dólares. El crecimiento fue impulsado por un incremento del 8.8% en las altas, incluyendo un crecimiento del 6.8% en las mismas tiendas, y un aumento del 2.5% en el ingreso neto por paciente por alta. El ingreso por acción diluida creció un 25.9% a 1.07 dólares, mientras que el EBITDA ajustado aumentó un 13.4% a 269.3 millones de dólares. La compañía elevó su guía para todo el año 2024, con un ingreso operativo neto ahora esperado entre 5,325 y 5,375 millones de dólares y ganancias ajustadas por acción proyectadas entre 4.19 y 4.33 dólares.
Encompass Health는 2024년 3분기 강력한 실적을 보고했으며, 순 운영 수익이 11.9% 증가하여 13억 5,100만 달러에 달했습니다. 이러한 성장은 8.8%의 퇴원 증가에 의해 촉진되었으며, 여기에는 같은 매장 기준으로 6.8%의 성장이 포함되고, 퇴원당 순 환자 수익은 2.5% 증가했습니다. 희석주당 수익은 25.9% 증가하여 1.07달러에 도달했으며, 조정된 EBITDA는 13.4% 증가하여 2억 6,930만 달러에 이르렀습니다. 이 회사는 2024년 전체 연간 가이드를 상향 조정했으며, 순 운영 수익은 이제 53억 2,500만 달러에서 53억 7,500만 달러 사이로 예상되며, 조정된 주당 수익은 4.19달러에서 4.33달러로 예측됩니다.
Encompass Health a annoncé de solides résultats pour le troisième trimestre 2024, avec un chiffre d'affaires opérationnel net en hausse de 11,9% à 1.351,0 millions de dollars. Cette croissance a été tirée par une augmentation de 8,8% des sorties, dont 6,8% de croissance dans les mêmes magasins, et une hausse de 2,5% du revenu net par patient par sortie. Le revenu par action diluée a augmenté de 25,9% à 1,07 dollar, tandis que l'EBITDA ajusté a progressé de 13,4% à 269,3 millions de dollars. L'entreprise a rehaussé ses prévisions pour l'ensemble de l'année 2024, le chiffre d'affaires opérationnel net étant désormais attendu entre 5.325 et 5.375 millions de dollars, et le bénéfice ajusté par action projeté entre 4,19 et 4,33 dollars.
Encompass Health hat starke Ergebnisse für das dritte Quartal 2024 berichtet, mit einem Netto-Betriebsumsatz, der um 11,9% auf 1.351,0 Millionen Dollar gestiegen ist. Das Wachstum wurde durch einen Anstieg der Entlassungen um 8,8%, einschließlich eines Wachstums von 6,8% im gleichen Standort, und einen Anstieg des Netto-Patienteneinkommens pro Entlassung um 2,5% angekurbelt. Das Ergebnis je Aktie (verwässert) stieg um 25,9% auf 1,07 Dollar, während das adjustierte EBITDA um 13,4% auf 269,3 Millionen Dollar zulegte. Das Unternehmen hob seine Prognose für das gesamte Jahr 2024 an, wobei der Netto-Betriebsumsatz nun zwischen 5.325 und 5.375 Millionen Dollar erwartet wird und die adjustierten Gewinne pro Aktie auf 4,19 bis 4,33 Dollar geschätzt werden.
- Revenue growth of 11.9% to $1,351.0 million in Q3 2024
- Discharge growth of 8.8% with 6.8% same-store growth
- 25.9% increase in income per diluted share to $1.07
- 13.4% growth in Adjusted EBITDA to $269.3 million
- 24.4% increase in operating cash flows to $267.8 million
- Raised full-year 2024 guidance for revenue and earnings
- None.
Insights
The Q3 results demonstrate robust financial performance with significant growth across key metrics. Revenue increased
Most notably, the company has raised its full-year guidance, with adjusted earnings per share now expected between
The operational metrics reveal excellent execution in patient care delivery and capacity utilization. The
The company's ability to maintain operations during Hurricanes Helene and Milton while ensuring patient safety demonstrates robust emergency preparedness and operational resilience. This operational excellence, combined with expanding facility footprint, positions Encompass Health well for continued market leadership in inpatient rehabilitation services.
Increases full-year guidance
Summary results
Growth | |||||||
Q3 2024 | Q3 2023 | Dollars | Percent | ||||
(In Millions, Except Per Share Data) | |||||||
Net operating revenue | $ 1,351.0 | $ 1,206.9 | $ 144.1 | 11.9 % | |||
Income from continuing operations attributable to Encompass Health per diluted share | 1.07 | 0.85 | 0.22 | 25.9 % | |||
Adjusted earnings per share | 1.03 | 0.86 | 0.17 | 19.8 % | |||
Cash flows provided by operating activities | 267.8 | 215.2 | 52.6 | 24.4 % | |||
Adjusted EBITDA | 269.3 | 237.5 | 31.8 | 13.4 % | |||
Adjusted free cash flow | 189.7 | 149.3 | 40.4 | 27.1 % | |||
(Actual Amounts) | |||||||
Discharges | 62,715 | 57,665 | 8.8 % | ||||
Same-store discharge growth | 6.8 % | ||||||
Net patient revenue per discharge | $ 20,987 | $ 20,472 | 2.5 % | ||||
See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure.
- Revenue growth of
11.9% resulted primarily from discharge growth of8.8% , including same-store growth of6.8% . Net revenue per discharge grew2.5% . - Cash flows provided by operating activities increased
24.4% to$267.8 million - Adjusted EBITDA increased
13.4% , primarily from increased revenue.
"We are very pleased with our third quarter performance as strong discharge growth facilitated an increase of
"Our teams did an exemplary job managing through very challenging conditions posed by Hurricanes Helene and Milton, prioritizing patient safety and continuity of operations. We thank our employees for their resilience and dedication to providing the highest quality care for our patients."
2024 Guidance
The Company increased its full-year guidance as follows:
Full-Year 2024 Guidance | |||
Previous Guidance | Updated Guidance | ||
(In Millions, Except Per Share Data) | |||
Net operating revenue | |||
Adjusted EBITDA | |||
Adjusted earnings per share from continuing operations attributable to Encompass Health | |||
For considerations regarding the Company's 2024 guidance, see the supplemental information posted on the Company's website at http://investor.encompasshealth.com. See also the "Other information" section below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted earnings per share.
Earnings conference call and webcast
The Company will host an investor conference call at 10:00 a.m. Eastern Time on Tuesday, October 29, 2024 to discuss its results for the third quarter of 2024. For reference during the call, the Company will post certain supplemental information at http://investor.encompasshealth.com.
The conference call may be accessed by dialing 800 343-4849 and giving the conference ID EHCQ324. International callers should dial 203 518-9848 and give the same conference ID. Please call approximately ten minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available for on-line replay at http://investor.encompasshealth.com by clicking on an available link.
About Encompass Health
Encompass Health (NYSE: EHC) is the largest owner and operator of inpatient rehabilitation hospitals in
Other information
The information in this press release is summarized and should be read in conjunction with the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the "September 2024 Form 10-Q"), when filed, as well as the Company's Current Report on Form 8-K filed on October 28, 2024 (the "Q3 Earnings Form 8-K"), to which this press release is attached as Exhibit 99.1. In addition, the Company will post supplemental information today on its website at http://investor.encompasshealth.com for reference during its October 29, 2024 earnings call.
The financial data contained in the press release and supplemental information include non-GAAP financial measures, including the Company's adjusted earnings per share, leverage ratio, Adjusted EBITDA, and adjusted free cash flow. Reconciliations to their most comparable GAAP measure, except with regard to non-GAAP guidance, are included below or in the Q3 Earnings Form 8-K. Readers are encouraged to review the "Note Regarding Presentation of Non-GAAP Financial Measures" included in the Q3 Earnings Form 8-K which provides further explanation and disclosure regarding the Company's use of these non-GAAP financial measures.
Excluding net operating revenues, the Company does not provide guidance on a GAAP basis because it is unable to predict, with reasonable certainty, the future impact of items that are deemed to be outside the control of the Company or otherwise not indicative of its ongoing operating performance. Such items include government, class action, and related settlements; professional fees—accounting, tax, and legal; mark-to-market adjustments for stock appreciation rights; gains or losses related to hedging instruments; loss on early extinguishment of debt; adjustments to its income tax provision (such as valuation allowance adjustments and settlements of income tax claims); items related to corporate and facility restructurings; and certain other items the Company believes to be not indicative of its ongoing operations. These items cannot be reasonably predicted and will depend on several factors, including industry and market conditions, and could be material to the Company's results computed in accordance with GAAP.
However, the following reasonably estimable GAAP measures for 2024 would be included in a reconciliation for Adjusted EBITDA if the other reconciling GAAP measures could be reasonably predicted:
- Interest expense and amortization of debt discounts and fees - approximately
$140 million - Amortization of debt-related items - approximately
$10 million
The Q3 Earnings Form 8-K and, when filed, the September 2024 Form 10-Q can be found on the Company's website at http://investor.encompasshealth.com and the SEC's website at www.sec.gov.
Encompass Health Corporation and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(In Millions, Except Per Share Data) | |||||||
Net operating revenues | $ 1,351.0 | $ 1,206.9 | $ 3,968.2 | $ 3,554.4 | |||
Operating expenses: | |||||||
Salaries and benefits | 732.1 | 658.6 | 2,144.2 | 1,923.8 | |||
Other operating expenses | 202.4 | 183.7 | 596.2 | 534.3 | |||
Occupancy costs | 14.4 | 14.2 | 42.6 | 42.3 | |||
Supplies | 60.6 | 53.9 | 176.7 | 159.7 | |||
General and administrative expenses | 54.0 | 49.8 | 154.7 | 148.6 | |||
Depreciation and amortization | 78.4 | 67.3 | 221.6 | 203.8 | |||
Total operating expenses | 1,141.9 | 1,027.5 | 3,336.0 | 3,012.5 | |||
Loss on early extinguishment of debt | 0.4 | — | 0.4 | — | |||
Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||
Other income | (9.3) | (0.5) | (18.0) | (6.8) | |||
Equity in net income of nonconsolidated affiliates | (0.7) | (1.0) | (2.8) | (2.3) | |||
Income from continuing operations before income tax expense | 183.8 | 145.0 | 548.2 | 442.4 | |||
Provision for income tax expense | 36.0 | 30.3 | 112.6 | 95.0 | |||
Income from continuing operations | 147.8 | 114.7 | 435.6 | 347.4 | |||
Loss from discontinued operations, net of tax | (0.7) | (1.3) | (3.2) | (3.5) | |||
Net and comprehensive income | 147.1 | 113.4 | 432.4 | 343.9 | |||
Less: Net and comprehensive income attributable to noncontrolling interests | (38.9) | (28.1) | (97.6) | (79.5) | |||
Net and comprehensive income attributable to Encompass Health | $ 108.2 | $ 85.3 | $ 334.8 | $ 264.4 | |||
Weighted average common shares outstanding: | |||||||
Basic | 99.9 | 99.5 | 99.9 | 99.5 | |||
Diluted | 102.1 | 101.4 | 102.2 | 101.1 | |||
Earnings per common share: | |||||||
Basic earnings per share attributable to Encompass Health common shareholders: | |||||||
Continuing operations | $ 1.09 | $ 0.86 | $ 3.36 | $ 2.68 | |||
Discontinued operations | (0.01) | (0.01) | (0.03) | (0.04) | |||
Net income | $ 1.08 | $ 0.85 | $ 3.33 | $ 2.64 | |||
Diluted earnings per share attributable to Encompass Health common shareholders: | |||||||
Continuing operations | $ 1.07 | $ 0.85 | $ 3.31 | $ 2.65 | |||
Discontinued operations | (0.01) | (0.01) | (0.03) | (0.03) | |||
Net income | $ 1.06 | $ 0.84 | $ 3.28 | $ 2.62 | |||
Amounts attributable to Encompass Health common shareholders: | |||||||
Income from continuing operations | $ 108.9 | $ 86.6 | $ 338.0 | $ 267.9 | |||
Loss from discontinued operations, net of tax | (0.7) | (1.3) | (3.2) | (3.5) | |||
Net income attributable to Encompass Health | $ 108.2 | $ 85.3 | $ 334.8 | $ 264.4 | |||
Encompass Health Corporation and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | |||
September 30, | December 31, | ||
(In Millions) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 147.8 | $ 69.1 | |
Restricted cash | 51.1 | 35.1 | |
Accounts receivable | 576.4 | 611.6 | |
Other current assets | 158.6 | 126.0 | |
Total current assets | 933.9 | 841.8 | |
Property and equipment, net | 3,523.7 | 3,301.0 | |
Operating lease right-of-use assets | 209.7 | 208.5 | |
Goodwill | 1,284.0 | 1,281.3 | |
Intangible assets, net | 296.2 | 278.2 | |
Other long-term assets | 210.9 | 191.6 | |
Total assets | $ 6,458.4 | $ 6,102.4 | |
Liabilities and Shareholders' Equity | |||
Current liabilities: | |||
Current portion of long-term debt | $ 233.0 | $ 24.8 | |
Current operating lease liabilities | 26.5 | 24.1 | |
Accounts payable | 170.3 | 170.0 | |
Accrued expenses and other current liabilities | 467.6 | 437.5 | |
Total current liabilities | 897.4 | 656.4 | |
Long-term debt, net of current portion | 2,344.5 | 2,687.8 | |
Long-term operating lease liabilities | 195.5 | 196.1 | |
Deferred income tax liabilities | 97.1 | 87.0 | |
Other long-term liabilities | 198.3 | 177.9 | |
Total liabilities | 3,732.8 | 3,805.2 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 56.5 | 42.0 | |
Shareholders' equity: | |||
Encompass Health shareholders' equity | 1,959.8 | 1,647.5 | |
Noncontrolling interests | 709.3 | 607.7 | |
Total shareholders' equity | 2,669.1 | 2,255.2 | |
Total liabilities and shareholders' equity | $ 6,458.4 | $ 6,102.4 | |
Encompass Health Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Nine Months Ended | |||
2024 | 2023 | ||
(In Millions) | |||
Cash flows from operating activities: | |||
Net income | $ 432.4 | $ 343.9 | |
Loss from discontinued operations, net of tax | 3.2 | 3.5 | |
Adjustments to reconcile net income to net cash provided by operating activities— | |||
Depreciation and amortization | 221.6 | 203.8 | |
Stock-based compensation | 35.8 | 37.2 | |
Deferred tax expense (benefit) | 2.1 | (2.9) | |
Other, net | 13.5 | 10.0 | |
Change in assets and liabilities, net of acquisitions— | |||
Accounts receivable | 29.1 | 20.7 | |
Other assets | (43.3) | (4.1) | |
Accounts payable | 1.4 | (0.2) | |
Accrued payroll | (2.6) | 24.1 | |
Accrued interest payable | (19.2) | (19.1) | |
Other liabilities | 53.7 | 37.5 | |
Net cash used in operating activities of discontinued operations | (3.7) | (4.6) | |
Total adjustments | 288.4 | 302.4 | |
Net cash provided by operating activities | 724.0 | 649.8 | |
Cash flows from investing activities: | |||
Purchases of property, equipment, and intangible assets | (443.8) | (371.4) | |
Purchase of restricted investments | (20.0) | (21.1) | |
Proceeds from sale of restricted investments | 17.9 | 7.0 | |
Other, net | (3.7) | (9.2) | |
Net cash used in investing activities | (449.6) | (394.7) | |
Cash flows from financing activities: | |||
Principal borrowings on notes | 15.0 | 20.0 | |
Principal payments on debt, including pre-payments | (153.4) | (6.3) | |
Borrowings on revolving credit facility | 50.0 | 60.0 | |
Payments on revolving credit facility | (50.0) | (115.0) | |
Principal payments under finance lease obligations | (16.2) | (35.9) | |
Taxes paid on behalf of employees for shares withheld | (12.1) | (8.1) | |
Contributions from noncontrolling interests of consolidated affiliates | 139.7 | 54.7 | |
Dividends paid on common stock | (45.8) | (45.5) | |
Distributions paid to noncontrolling interests of consolidated affiliates | (85.5) | (91.9) | |
Repurchases of common stock, including fees and expenses | (23.6) | — | |
Other, net | 2.2 | 0.7 | |
Net cash used in financing activities | (179.7) | (167.3) | |
Increase in cash, cash equivalents, and restricted cash | 94.7 | 87.8 | |
Cash, cash equivalents, and restricted cash at beginning of period | 104.2 | 53.4 | |
Cash, cash equivalents, and restricted cash at end of period | $ 198.9 | $ 141.2 | |
Nine Months Ended | |||
2024 | 2023 | ||
(In Millions) | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||
Cash and cash equivalents at beginning of period | $ 69.1 | $ 21.8 | |
Restricted cash at beginning of period | 35.1 | 31.6 | |
Cash, cash equivalents, and restricted cash at beginning of period | $ 104.2 | $ 53.4 | |
Cash and cash equivalents at end of period | $ 147.8 | $ 99.7 | |
Restricted cash at end of period | 51.1 | 41.5 | |
Cash, cash equivalents, and restricted cash at end of period | $ 198.9 | $ 141.2 | |
Encompass Health Corporation and Subsidiaries Supplemental Information Earnings Per Share | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(In Millions, Except Per Share Data) | |||||||
Adjusted EBITDA | $ 269.3 | $ 237.5 | $ 814.1 | $ 716.1 | |||
Depreciation and amortization | (78.4) | (67.3) | (221.6) | (203.8) | |||
Interest expense and amortization of debt discounts and fees | (34.9) | (35.9) | (104.4) | (108.6) | |||
Stock-based compensation | (12.9) | (13.7) | (35.8) | (37.2) | |||
Loss on disposal or impairment of assets | (0.6) | (2.2) | (11.3) | (3.7) | |||
142.5 | 118.4 | 441.0 | 362.8 | ||||
Items not indicative of ongoing operating performance: | |||||||
Loss on early extinguishment of debt | (0.4) | — | (0.4) | — | |||
State regulatory change impact on noncontrolling interests | — | — | — | 2.2 | |||
Change in fair market value of equity securities | 2.8 | (1.5) | 2.7 | (2.1) | |||
Asset impairment impact on noncontrolling interests | — | — | 7.3 | — | |||
Pre-tax income | 144.9 | 116.9 | 450.6 | 362.9 | |||
Income tax expense | (36.0) | (30.3) | (112.6) | (95.0) | |||
Income from continuing operations (1) | $ 108.9 | $ 86.6 | $ 338.0 | $ 267.9 | |||
Basic shares | 99.9 | 99.5 | 99.9 | 99.5 | |||
Diluted shares | 102.1 | 101.4 | 102.2 | 101.1 | |||
Basic earnings per share (1) | $ 1.09 | $ 0.86 | $ 3.36 | $ 2.68 | |||
Diluted earnings per share (1) | $ 1.07 | $ 0.85 | $ 3.31 | $ 2.65 | |||
(1) Income from continuing operations attributable to Encompass Health |
Encompass Health Corporation and Subsidiaries Supplemental Information Adjusted Earnings Per Share | |||||||
Q3 | 9 Months | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Earnings per share, as reported | $ 1.07 | $ 0.85 | $ 3.31 | $ 2.65 | |||
Adjustments, net of tax: | |||||||
Asset impairment impact | — | — | 0.02 | — | |||
Income tax adjustments | (0.02) | — | (0.05) | — | |||
State regulatory change impact | — | — | — | 0.03 | |||
Change in fair market value of equity securities | (0.02) | 0.01 | (0.02) | 0.02 | |||
Adjusted earnings per share* | $ 1.03 | $ 0.86 | $ 3.26 | $ 2.69 | |||
* Adjusted EPS may not sum due to rounding. |
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(In Millions) | |||||||
Net cash provided by operating activities | $ 267.8 | $ 215.2 | $ 724.0 | $ 649.8 | |||
Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||
Gain (loss) on sale of investments, excluding impairments | 4.6 | (2.7) | 5.8 | (0.9) | |||
Equity in net income of nonconsolidated affiliates | 0.7 | 1.0 | 2.8 | 2.3 | |||
Net income attributable to noncontrolling interests in continuing operations | (38.9) | (28.1) | (97.6) | (79.5) | |||
Amortization of debt-related items | (2.4) | (2.4) | (7.3) | (7.1) | |||
Distributions from nonconsolidated affiliates | (1.1) | (0.4) | (3.1) | (0.6) | |||
Current portion of income tax expense | 38.1 | 33.5 | 110.5 | 97.9 | |||
Change in assets and liabilities | (32.5) | (17.5) | (19.1) | (58.9) | |||
Cash used in operating activities of discontinued operations | 1.0 | 1.7 | 3.7 | 4.6 | |||
State regulatory change impact on noncontrolling interests | — | — | — | (2.2) | |||
Asset impairment impact on noncontrolling interests | — | — | (7.3) | — | |||
Change in fair market value of equity securities | (2.8) | 1.5 | (2.7) | 2.1 | |||
Other | (0.1) | (0.2) | — | — | |||
Adjusted EBITDA | $ 269.3 | $ 237.5 | $ 814.1 | $ 716.1 | |||
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share | |||||||||
For the Three Months Ended September 30, 2024 | |||||||||
Adjustments | |||||||||
As | Loss on Early | Income Tax | Change in Fair | As | |||||
(In Millions, Except Per Share Amounts) | |||||||||
Adjusted EBITDA* | $ 269.3 | $ — | $ — | $ — | $ 269.3 | ||||
Depreciation and amortization | (78.4) | — | — | — | (78.4) | ||||
Interest expense and amortization of debt discounts and fees | (34.9) | — | — | — | (34.9) | ||||
Stock-based compensation | (12.9) | — | — | — | (12.9) | ||||
Loss on disposal or impairment of assets | (0.6) | — | — | — | (0.6) | ||||
Loss on early extinguishment of debt | (0.4) | 0.4 | — | — | — | ||||
Change in fair market value of equity securities | 2.8 | — | — | (2.8) | — | ||||
Income from continuing operations before income tax expense | 144.9 | 0.4 | — | (2.8) | 142.5 | ||||
Provision for income tax expense | (36.0) | (0.1) | (2.1) | 0.7 | (37.5) | ||||
Income from continuing operations attributable to Encompass Health | $ 108.9 | $ 0.3 | $ (2.1) | $ (2.1) | $ 105.0 | ||||
Diluted earnings per share from continuing operations** | $ 1.07 | $ — | $ (0.02) | $ (0.02) | $ 1.03 | ||||
Diluted shares used in calculation | 102.1 | ||||||||
* See reconciliation of net income to Adjusted EBITDA. |
** Adjusted EPS may not sum across due to rounding. |
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share | |||||||
For the Three Months Ended September 30, 2023 | |||||||
Adjustments | |||||||
As | Income Tax | Change in Fair | As | ||||
(In Millions, Except Per Share Amounts) | |||||||
Adjusted EBITDA* | $ 237.5 | $ — | $ — | $ 237.5 | |||
Depreciation and amortization | (67.3) | — | — | (67.3) | |||
Interest expense and amortization of debt discounts and fees | (35.9) | — | — | (35.9) | |||
Stock-based compensation | (13.7) | — | — | (13.7) | |||
Loss on disposal or impairment of assets | (2.2) | — | — | (2.2) | |||
Change in fair market value of equity securities | (1.5) | — | 1.5 | — | |||
Income from continuing operations before income tax expense | 116.9 | — | 1.5 | 118.4 | |||
Provision for income tax expense | (30.3) | (0.5) | (0.3) | (31.1) | |||
Income from continuing operations attributable to Encompass Health | $ 86.6 | $ (0.5) | $ 1.2 | $ 87.3 | |||
Diluted earnings per share from continuing operations** | $ 0.85 | $ — | $ 0.01 | $ 0.86 | |||
Diluted shares used in calculation | 101.4 | ||||||
* See reconciliation of net income to Adjusted EBITDA. |
** Adjusted EPS may not sum across due to rounding. |
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share | |||||||||||
For the Nine Months Ended September 30, 2024 | |||||||||||
Adjustments | |||||||||||
As | Asset | Loss on Early | Income Tax | Change in Fair | As | ||||||
(In Millions, Except Per Share Amounts) | |||||||||||
Adjusted EBITDA* | $ 814.1 | $ — | $ — | $ — | $ — | $ 814.1 | |||||
Depreciation and amortization | (221.6) | — | — | — | — | (221.6) | |||||
Interest expense and amortization of debt discounts and fees | (104.4) | — | — | — | — | (104.4) | |||||
Stock-based compensation | (35.8) | — | — | — | — | (35.8) | |||||
Loss on disposal or impairment of assets | (11.3) | 10.4 | — | — | — | (0.9) | |||||
Loss on early extinguishment of debt | (0.4) | — | 0.4 | — | — | — | |||||
Change in fair market value of equity securities | 2.7 | — | — | — | (2.7) | — | |||||
Asset impairment impact on noncontrolling interests | 7.3 | (7.3) | — | — | — | — | |||||
Income from continuing operations before income tax expense | 450.6 | 3.1 | 0.4 | — | (2.7) | 451.4 | |||||
Provision for income tax expense | (112.6) | (1.3) | (0.1) | (5.1) | 0.7 | (118.4) | |||||
Income from continuing operations attributable to Encompass Health | $ 338.0 | $ 1.8 | $ 0.3 | $ (5.1) | $ (2.0) | $ 333.0 | |||||
Diluted earnings per share from continuing operations** | $ 3.31 | $ 0.02 | $ — | $ (0.05) | $ (0.02) | $ 3.26 | |||||
Diluted shares used in calculation | 102.2 | ||||||||||
* See reconciliation of net income to Adjusted EBITDA. |
** Adjusted EPS may not sum across due to rounding. |
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Income from Continuing Operations Attributable to Encompass Health per Diluted Share to Adjusted Earnings Per Share | |||||||||
For the Nine Months Ended September 30, 2023 | |||||||||
Adjustments | |||||||||
As | State | Income Tax | Change in | As | |||||
(In Millions, Except Per Share Amounts) | |||||||||
Adjusted EBITDA* | $ 716.1 | $ — | $ — | $ — | $ 716.1 | ||||
Depreciation and amortization | (203.8) | 6.1 | — | — | (197.7) | ||||
Interest expense and amortization of debt discounts and fees | (108.6) | — | — | — | (108.6) | ||||
Stock-based compensation | (37.2) | — | — | — | (37.2) | ||||
Loss on disposal or impairment of assets | (3.7) | — | — | — | (3.7) | ||||
State regulatory change impact on noncontrolling interests | 2.2 | (2.2) | — | — | — | ||||
Change in fair market value of equity securities | (2.1) | — | — | 2.1 | — | ||||
Income from continuing operations before income tax expense | 362.9 | 3.9 | — | 2.1 | 368.9 | ||||
Provision for income tax expense | (95.0) | (1.0) | (0.1) | (0.5) | (96.6) | ||||
Income from continuing operations attributable to Encompass Health | $ 267.9 | $ 2.9 | $ (0.1) | $ 1.6 | $ 272.3 | ||||
Diluted earnings per share from continuing operations** | $ 2.65 | $ 0.03 | $ — | $ 0.02 | $ 2.69 | ||||
Diluted shares used in calculation | 101.1 | ||||||||
* See reconciliation of net income to Adjusted EBITDA. |
** Adjusted EPS may not sum across due to rounding. |
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Net Income to Adjusted EBITDA | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(In Millions) | |||||||
Net income | $ 147.1 | $ 113.4 | $ 432.4 | $ 343.9 | |||
Loss from discontinued operations, net of tax, attributable to Encompass Health | 0.7 | 1.3 | 3.2 | 3.5 | |||
Net income attributable to noncontrolling interests included in continuing operations | (38.9) | (28.1) | (97.6) | (79.5) | |||
Provision for income tax expense | 36.0 | 30.3 | 112.6 | 95.0 | |||
Interest expense and amortization of debt discounts and fees | 34.9 | 35.9 | 104.4 | 108.6 | |||
Depreciation and amortization | 78.4 | 67.3 | 221.6 | 203.8 | |||
Loss on early extinguishment of debt | 0.4 | — | 0.4 | — | |||
Loss on disposal or impairment of assets | 0.6 | 2.2 | 11.3 | 3.7 | |||
Stock-based compensation | 12.9 | 13.7 | 35.8 | 37.2 | |||
State regulatory change impact on noncontrolling interests | — | — | — | (2.2) | |||
Change in fair market value of equity securities | (2.8) | 1.5 | (2.7) | 2.1 | |||
Asset impairment impact on noncontrolling interests | — | — | (7.3) | — | |||
Adjusted EBITDA | $ 269.3 | $ 237.5 | $ 814.1 | $ 716.1 | |||
Encompass Health Corporation and Subsidiaries Supplemental Information Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(In Millions) | |||||||
Net cash provided by operating activities | $ 267.8 | $ 215.2 | $ 724.0 | $ 649.8 | |||
Impact of discontinued operations | 1.0 | 1.7 | 3.7 | 4.6 | |||
Net cash provided by operating activities of continuing operations | 268.8 | 216.9 | 727.7 | 654.4 | |||
Capital expenditures for maintenance | (46.2) | (35.3) | (133.8) | (129.8) | |||
Distributions paid to noncontrolling interests of consolidated affiliates | (33.0) | (32.5) | (85.5) | (91.9) | |||
Items not indicative of ongoing operating performance: | |||||||
Transaction costs and related liabilities | 0.1 | 0.2 | (8.6) | (0.5) | |||
Adjusted free cash flow | $ 189.7 | $ 149.3 | $ 499.8 | $ 432.2 | |||
For the three months ended September 30, 2024, net cash used in investing activities was
For the three months ended September 30, 2023, net cash used in investing activities was
For the nine months ended September 30, 2024, net cash used in investing activities was
For the nine months ended September 30, 2023, net cash used in investing activities was
Encompass Health Corporation and Subsidiaries
Forward-Looking Statements
Statements contained in this press release and the supplemental information which are not historical facts, such as those relating to the business, strategy, outlook, growth targets and guidance considerations, dividend strategies, effective income tax rates, cost trends, legislative and regulatory developments or their impacts, financial guidance, ability to return value to shareholders, projected capital expenditures, acquisition opportunities, development projects, addressable market size, other balance sheet and cash flow plans, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, an infectious disease outbreak, including the speed, depth, geographic reach and duration of its spread, which could decrease our patient volumes and revenues and lead to staffing and supply shortages and associated cost increases; Encompass Health's infectious disease prevention and control efforts; the demand for Encompass Health's services, including based on any downturns in the economy, consumer confidence, or the capital markets; the price of Encompass Health's common stock as it affects Encompass Health's willingness and ability to repurchase shares and the financial and accounting effects of any repurchases; any adverse outcome of various lawsuits, claims, and legal or regulatory proceedings involving Encompass Health, including any matters related to yet undiscovered issues, if any, in acquired operations; Encompass Health's ability to attract and retain key management personnel; any adverse effects on Encompass Health's stock price resulting from the integration of acquired operations; potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's or its vendors' or partners' information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information or inability to provide patient care because of system unavailability as well as unforeseen issues, if any, related to integration of acquired systems; the ability to successfully integrate acquired operations, including realization of anticipated tax benefits, revenues, and cost savings, minimizing the negative impact on margins arising from the changes in staffing and other operating practices, and avoidance of unforeseen exposure to liabilities; Encompass Health's ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures consistent with its growth strategy; Encompass Health's ability to realize construction cost savings from prefabrication of hospitals; increases in Medicare audit activity, including increased use of sampling and extrapolation, resulting in additional unpaid reimbursement claims and an increase in the backlog of appealed claims denials; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; changes in the regulation of the healthcare industry at either or both of the federal and state levels, including as part of national healthcare reform and deficit reduction and Encompass Health's ability to adapt operations to those changes, including in connection with the CMS inpatient rehabilitation review choice demonstration project; competitive pressures in the healthcare industry and Encompass Health's response thereto; Encompass Health's ability to obtain and retain favorable arrangements with third-party payors; Encompass Health's ability to control costs, particularly labor and employee benefit costs, including group medical expenses; adverse effects resulting from coverage determinations made by Medicare Administrative Contractors regarding its Medicare reimbursement claims and lengthening delays in Encompass Health's ability to recover improperly denied claims through the administrative appeals process on a timely basis; Encompass Health's ability to adapt to changes in the healthcare delivery system, including value-based purchasing and involvement in coordinated care initiatives or programs that may arise with its referral sources; Encompass Health's ability to attract and retain nurses, therapists, and other healthcare professionals in a highly competitive environment with often severe staffing shortages, which may be worsened by infectious disease outbreaks, and the impact on Encompass Health's labor expenses from potential union activity, staffing shortages, and competitive compensation practices; general conditions in the economy and capital markets, including any instability or uncertainty related to armed conflict or an act of terrorism, governmental impasse over approval of
Media Contact
Polly Manuel, 205 969-4532
polly.manuel@encompasshealth.com
Investor Relations Contact
Mark Miller, 205 970-5860
mark.miller@encompasshealth.com
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SOURCE Encompass Health Corp.
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