LHC Group announces fourth quarter and full year 2021 financial results

Rhea-AI Summary

LHC Group, Inc. (NASDAQ: LHCG) reported a 9.6% increase in net service revenue for Q4 2021, totaling $583.4 million. Net income for the quarter was $15.7 million ($0.50 per diluted share), with adjusted net income at $39.4 million ($1.26 per diluted share). Full-year revenue reached $2.220 billion, up 7.6%, with net income of $115.7 million ($3.69 per diluted share).

The company expects 2022 revenue between $2.500 billion and $2.550 billion, with adjusted earnings per diluted share projected at $5.60 to $6.00.

Positive

• Fourth quarter net service revenue rose by 9.6% to $583.4 million.
• Net income for Q4 2021 was $15.7 million, or $0.50 per diluted share.
• Adjusted EBITDA for the full year reached $265.5 million.
• Acquisition of assets from HCA Healthcare expected to generate $130 million in annual revenue.

Negative

• Hospice admissions decreased by 6.2% in Q4 2021 compared to the same period in 2020.
• Operating trends were affected by reduced capacity due to COVID-19 variants.

LAFAYETTE, La., Feb.23, 2022 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter and year ended December 31, 2021.

Fourth Quarter 2021 Financial Results

• Net service revenue increased 9.6% to $583.4 million.
• Net income attributable to LHC Group's common stockholders was $15.7 million, or $0.50 per diluted share.
• Adjusted net income attributable to LHC Group's common stockholders was $39.4 million, or $1.26 adjusted earnings per diluted share.
• Adjusted EBITDA was $61.6 million.

Full Year 2021 Financial Results

• Net service revenue increased 7.6% to $2.220 billion.
• Net income attributable to LHC Group's common stockholders was $115.7 million, or $3.69 per diluted share.
• Adjusted net income attributable to LHC Group's common stockholders was $179.5 million, or $5.73 per diluted share.
• Adjusted EBITDA was $265.5 million.

A reconciliation of all non-GAAP financial results in this release appears on pages 11-12.

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.
• Average Home Health quality star ratings of 4.37 during the period of April 2021 through December 2021 according to Strategic Healthcare Partners, up from 4.10 for the period of July 2020 through March 2021 per the most recent CMS data.
• Organic growth in total home health admissions increased 3.8% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 5.5% in 2021 over 2020.
• Organic growth in non-Medicare episodic home health admissions increased by 18.1% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 21.9% in 2021 over 2020.
• Non-Medicare rates increased 4% in 2021 over 2020 and increased 17% over the last 5 years.
• Organic growth in hospice admissions decreased 6.2% in the fourth quarter of 2021 compared with the same period in 2020 and increased by 0.5% in 2021 over 2020. Organic growth in hospice admissions are pacing to 8% to 10% for the first quarter of 2022 compared to the first quarter of 2021and 18% to 20% sequentially over the fourth quarter of 2021.
• Home Health average daily census of 86,228 in the fourth quarter of 2021 was 3.0% higher than 83,686 in the fourth quarter of 2020. For the year, Home Health average daily census of 84,734 was 5.8% higher in 2021 than 2020.
• Hospice average daily census of 7,024 in the fourth quarter of 2021 was 62.6% higher than 4,320 in the fourth quarter of 2020. For the year, Hospice average daily census of 5,405 was 24.4% higher in 2021 than 2020. The year-over-year growth was due to a net increase of 40 hospice locations added during 2021.
• The percentage of Home Health clinicians on quarantine due to COVID-19 went from a high of 6.5% in January 2022 down to 0.6% today which is the lowest quarantine level since July 2021.
• On November 2, 2021, LHC Group finalized the acquisition of selected home health, hospice, and therapy assets from HCA Healthcare and Brookdale Health Care Services venture that marks the entry into two new markets – Minnesota and New Mexico - and expands service areas in 20 states where the company already operates. The acquisition includes 47 total locations and LHC Group expects incremental annualized revenue from this acquisition of approximately $130 million.
• On December 6, 2021, LHC Group's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $250 million of its common stock. During the fourth quarter, the Company repurchased 634,869 shares of common stock for approximately $83.7 million.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "For perhaps the first time in our industry's existence, we believe there is a general consensus throughout the country for emphasizing the advantages of at-home care. The demand for at-home healthcare is as strong as ever with patients and families overwhelmingly preferring care in the home and senior advocates, Congress and policymakers increasingly recognizing the better outcomes and efficiency. As the proven partner to 435 leading hospitals and health systems, an extensive national footprint and very particular assets that can lead the transition to value-based care, we are embracing our mission, values and culture to lead this industry once again in 2022 and beyond."

Full Year 2022 and First Quarter 2022 Guidance

Full year 2022 net service revenue is expected to be in a range of $2.500 billion to $2.550 billion, adjusted earnings per diluted share is expected to be in a range of $5.60 to $6.00, and adjusted EBITDA, less non-controlling interest, is expected to be in a range of $270 million to $290 million.

For the first quarter ending March 31, 2022, net service revenue is expected to be $560 million to $580 million, adjusted earnings per diluted share is expected to be in a range of $1.00 to $1.10, and adjusted EBITDA, less non-controlling interest, is expected to be in a range of $50 million to $55 million.

Joshua L. Proffitt, LHC Group's President and Chief Operating Officer, added, "We have established a strong foundation for growth in 2022 with our leading quality and patient satisfaction scores, momentum in physician referrals, and underlying strength in our organic growth and M&A activity. While late fourth quarter and early first quarter operating trends were affected by reduced capacity to service the strong demand for our services due to COVID variants and labor availability, we expect to benefit in 2022 from recent stabilization in those trends and from our implementation of certain cost improvement initiatives and efficiencies. Additionally, we believe our continued focus on maintaining a disciplined approach to operations and capital allocation will accelerate our growth as the year progresses."

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 take into account the impact of future COVID-19 related costs and expenses. 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. 

Conference Call

LHC Group will host a conference call Thursday, February 24, 2022, at 9:00 a.m. Eastern time to discuss its fourth quarter 2021 results. The toll-free number to call for this interactive teleconference is (877) 407-9208 (international callers: (201) 493-6784). A telephonic replay of the conference call will be available through midnight on Thursday, March 3, 2022, by dialing (844) 512-2921 (international callers: (412) 317-6671) and entering confirmation number 13726712.

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 30,000 employees deliver home health, hospice, home and community based services, and facility-based care in 37 states and the District of Columbia – reaching 60 percent of the U.S. population aged 65 and older. Through Imperium Health, the company's ACO management and enablement company, LHC Group helps partners improve both savings and patient outcomes with a value-based approach. As the preferred joint venture partner for more than 400 leading U.S. hospitals and health systems, LHC Group works in cooperation with providers to customize each partnership and reach more patients and families with an effective and efficient model of care.

Forward-looking Statements

This press release contains "forward-looking statements" (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of the Company, or 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)
		As of December 31,
		2021		2020
ASSETS
Current assets:
Cash		$                     9,809		$                 286,569
Receivables:
Patient accounts receivable		348,820		301,209
Other receivables		13,780		11,522
Total receivables		362,600		312,731
Prepaid income taxes		7,531		—
Prepaid expenses		28,401		22,058
Other current assets		24,801		25,664
Total current assets		433,142		647,022
Property, building and equipment, net of accumulated depreciation of $98,394 and $82,721, respectively		153,959		138,366
Goodwill		1,748,426		1,259,147
Intangible assets, net of accumulated amortization of $19,152 and $17,659, respectively		400,002		315,355
Assets held for sale		—                         —		1,900
Operating lease right of use asset		113,399		100,046
Other assets		46,693		21,518
Total assets		$             2,895,621		$             2,483,354
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities		$                   98,118		$                   64,864
Salaries, wages and benefits payable		100,532		88,666
Self insurance reserves		33,784		35,103
Government stimulus advance		—                         —		93,257
Contract liabilities - deferred revenue		106,489		317,962
Current operating lease payable		37,630		32,676
Amounts due to governmental entities		5,447		1,516
Income taxes payable		—                         —		21,464
Current liabilities - deferred employer payroll tax		26,790		25,928
Total current liabilities		408,790		681,436
Deferred income taxes		70,026		47,237
Income taxes payable		7,320		6,203
Revolving credit facility		661,197		20,000
Other long term liabilities		—                         —		25,928
Operating lease payable		78,688		70,275
Total liabilities		1,226,021		851,079
Noncontrolling interest-redeemable		17,501		18,921
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; 36,549,524  and 36,355,497 shares issued, and 30,634,414 and 31,139,840 shares outstanding, respectively		365		364
Treasury stock – 5,915,110  and 5,215,657 shares at cost, respectively		(164,790)		(69,011)
Additional paid-in capital		979,642		962,120
Retained earnings		751,025		635,297
Total LHC Group, Inc. stockholders' equity		1,566,242		1,528,770
Noncontrolling interest – non-redeemable		85,857		84,584
Total stockholders' equity		1,652,099		1,613,354
Total liabilities and stockholders' equity		$             2,895,621		$             2,483,354

 

 

LHC GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data)
	Three Months Ended December 31, (unaudited)								Year Ended   December 31,
	2021				2020				2021				2020
Net service revenue	$	583,429			$	532,329			$	2,219,622			$	2,063,204
Cost of service revenue (excluding depreciation and amortization)	364,603				317,243				1,336,609				1,250,403
Gross margin	218,826				215,086				883,013				812,801
General and administrative expenses	189,681				162,944				696,435				632,847
Impairment of intangibles and other	-				1,227				937				1,849
Operating income	29,145				50,915				185,641				178,105
Interest expense	(2,797)				(89)				(4,338)				(4,129)
Income before income taxes and noncontrolling interest	26,348				50,826				181,303				173,976
Income tax expense	4,778				12,862				37,687				36,043
Net income	21,570				37,964				143,616				137,933
Less net income (loss) attributable to noncontrolling interests	5,878				7,584				27,888				26,337
Net income attributable to LHC Group, Inc.'s common stockholders	$	15,692			$	30,380			$	115,728			$	111,596
Earnings per share:
Basic	$	0.50			$	0.98			$	3.71			$	3.59
Diluted	$	0.50			$	0.97			$	3.69			$	3.56
Weighted average shares outstanding:
Basic	31,167				31,128				31,195				31,092
Diluted	31,317				31,443				31,397				31,366

 

 

LHC GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands)
		For the year ended December 31,
		2021		2020
Operating activities:
Net income		$             143,616		$             137,933
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		20,917		21,249
Amortization and impairment of operating lease right of use asset		37,506		34,546
Stock-based compensation expense		15,868		14,347
Deferred income taxes		22,789		(13,261)
(Gain) Loss on disposal of assets		(1,134)		412
Impairment of intangibles and other		937		1,849
Changes in operating assets and liabilities, net of acquisitions:
Receivables		(35,361)		(16,561)
Prepaid expenses		(5,902)		(754)
Other assets		(11,015)		(3,169)
Prepaid income taxes		(7,531)		9,652
Accounts payable and accrued expenses		12,345		(22,506)
Salaries, wages, and benefits payable and self-insurance reserves		3,004		6,482
Other long term liabilities		(26,758)		51,856
Contract liabilities - deferred revenue		(211,473)		317,962
Operating lease payable		(37,360)		(34,226)
Income tax payable		(20,347)		23,800
Net amounts due to/from governmental entities		(433)		(364)
Net cash (used in) provided by operating activities		(100,332)		529,247
Investing activities:
Cash paid for acquisitions, net of cash acquired		(569,583)		(24,545)
Minority interest investments		(10,100)		—
Proceeds from sale of assets		3,350		7,920
Proceeds from sale of an entity		1,531		—
Purchases of property, building and equipment		(32,976)		(65,875)
Net cash used in investing activities		(607,778)		(82,500)
Financing activities:
Proceeds from line of credit		1,025,559		296,229
Payments on line of credit		(384,362)		(529,229)
Government stimulus advance		(93,257)		93,257
Proceeds from employee stock purchase plan		2,472		2,177
Payments on deferred financing fees		(3,556)		—
Payments on repurchasing common stock		(74,643)		—
Noncontrolling interest distributions		(28,857)		(24,837)
Purchase of additional controlling interest		(2,113)		(24,295)
Sale of noncontrolling interest		1,934		4,856
Withholding taxes paid on stock-based compensation		(11,827)		(10,008)
Net cash provided by (used in) financing activities		431,350		(191,850)
Change in cash		(276,760)		254,897
Cash at beginning of period		286,569		31,672
Cash at end of period		$                 9,809		$             286,569
Supplemental disclosures of cash flow information
Interest paid		$                 4,168		$                 5,011
Income taxes paid		$               43,728		$               16,830
Non-Cash Operating activity:
Operating right of use assets in exchange for lease obligations		41,364		43,047
Non-Cash Investing activity:
Accrued capital expenditures		417		2,922
Net working capital adjustment		890		—
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, 2021
	Home health				Hospice				Home and community-based				Facility-based				HCI				Total
Net service revenue	$	394,481			$	102,027			$	46,229			$	35,284			$	5,408			$	583,429
Cost of service revenue	238,548				65,047				33,911				23,910				3,187				364,603
Gross margin	155,933				36,980				12,318				11,374				2,221				218,826
General and administrative expenses	131,795				30,904				11,508				12,091				3,383				189,681
Impairment of intangibles and other	—				—				—				—				—				—
Operating income (loss)	24,138				6,076				810				(717)				(1,162)				29,145
Interest expense	(2,004)				(334)				(270)				(135)				(54)				(2,797)
Income (loss) before income taxes and noncontrolling interest	22,134				5,742				540				(852)				(1,216)				26,348
Income tax expense (benefit)	4,086				1,123				180				(270)				(341)				4,778
Net income (loss)	18,048				4,619				360				(582)				(875)				21,570
Less net income (loss) attributable to noncontrolling interests	4,554				989				26				313				(4)				5,878
Net income (loss) attributable to LHC Group, Inc.'s common stockholders	$	13,494			$	3,630			$	334			$	(895)			$	(871)			$	15,692

 

 

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)
		Year Ended December 31, 2021
		Home Health		Hospice		Home and Community-Based		Facility-Based		HCI		Total
Net service revenue		$    1,551,542		$ 311,218		$  189,561		$  132,098		$   35,203		$      2,219,622
Cost of service revenue (excluding depreciation and amortization)		901,685		194,895		137,852		89,270		12,907		1,336,609
General and administrative expenses		501,132		89,693		46,724		45,304		13,582		696,435
Impairment of intangibles and other		937		—		—		—		—		937
Operating income (loss)		147,788		26,630		4,985		(2,476)		8,714		185,641
Interest expense		(3,103)		(529)		(413)		(208)		(85)		(4,338)
Income (loss) before income taxes and noncontrolling interests		144,685		26,101		4,572		(2,684)		8,629		181,303
Income tax expense (benefit)		30,089		5,344		1,069		(919)		2,104		37,687
Net income (loss)		114,596		20,757		3,503		(1,765)		6,525		143,616
Less net income (loss) attributable to noncontrolling interests		22,060		4,297		467		1,105		(41)		27,888
Net income (loss) attributable to LHC Group, Inc.'s common stockholders		$         92,536		$  16,460		$      3,036		$   (2,870)		$      6,566		$         115,728
Total assets		$    1,719,403		$ 786,671		$  239,314		$  85,005		$   65,228		$      2,895,621

 

 

LHC GROUP, INC. AND SUBSIDIARIES SEGMENT INFORMATION (Amounts in thousands)
		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 (excluding depreciation and amortization)		848,663		150,675		150,378		85,827		14,860		1,250,403
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 SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA (Unaudited)
		Three Months Ended December 31,											Twelve Months Ended December 31,
Key Data:		2021					2020						2021					2020
Home Health Services:
Locations		557					537						557					537
Acquired		25					4						27					13
De novo		—					—						—					1
Divested/consolidated		—					(16)						(7)					(30)
Total new admissions		111,141					104,440						436,637					410,408
Medicare new admissions		51,983					54,968						213,913					221,300
Average daily census		86,228					83,686						84,995					80,112
Average Medicare daily census		43,325					47,219						44,342					46,311
Medicare completed and billed episodes		84,242					89,824						339,065					350,239
Average Medicare case mix for completed and billed Medicare episodes		1.01					1.01						1.02					1.02
Average reimbursement per Medicare episode (1)		$	2,860				$	2,840					$	2,868				$	2,795
Total visits		2,222,050					2,100,914						8,544,552					8,282,047
Total Medicare visits		1,091,125					1,141,298						4,307,968					4,615,612
Average visits per Medicare episodes		13.0					12.7						12.7					13.2
Organic growth: (2)
Net revenue		0.6		%			(0.1)		%				6.0		%			(4.8)		%
Net Medicare revenue		(8.5)		%			(5.0)		%				(1.3)		%			(9.7)		%
Total new admissions		3.8		%			2.2		%				5.5		%			1.6		%
Medicare new admissions		(7.2)		%			(6.0)		%				(3.7)		%			(7.4)		%
Average daily census		0.7		%			4.9		%				5.8		%			1.5		%
Average Medicare daily census		(10.6)		%			(5.4)		%				(4.6)		%			(8.2)		%
Medicare completed and billed episodes		(7.7)		%			(7.9)		%				(2.4)		%			(8.0)		%
Hospice Services:
Locations		170					120						170					120
Acquired		16					3						49					6
De novo		—					6						1					6
Divested/consolidated		(1)					—						(3)					(2)
Admissions		7,516					5,336						24,400					20,342
Average daily census		7,024					4,320						5,408					4,345
Patient days		646,231					397,456						1,972,643					1,590,322
Average revenue per patient day		$	161.87				$	157.55					$	161.09				$	155.33
Organic growth: (2)
Total new admissions		(6.2)		%			10.9		%				0.5		%			6.4		%
Home and Community-Based Services:
Locations (3)		136					124						136					124
Acquired		6					—						1					4
De novo		—					3						13					16
Divested/consolidated		—					(1)						(2)					(3)
Average daily census		12,281					14,021						13,159					14,365
Billable hours		1,779,058					1,884,411						7,376,187					7,734,517
Revenue per billable hour		$	26.22				$	27.33					$	25.91				$	26.22
Facility-Based Services:
Long-term Acute Care
Locations		12					12						12					12
Acquired		—					—						—					—
Divested/consolidated		—					(1)						—					(1)
Patient days		22,443					21,836						86,524					89,930
Average revenue per patient day		$	1,423				$	1,407					$	1,459				$	1,373
Average Daily Census		244					237						237					246

(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,
		2021				2020				2021				2020
Net income attributable to LHC Group, Inc.'s common stockholders		$	15,692			$	30,380			$	115,728			$	111,596
Add (net of tax):
Acquisition, de novo and legal expenses (1)		7,385				2,284				17,737				5,629
Closures/relocations/consolidations (2)		302				2,856				1,850				3,722
COVID-19 impact:
PPE, supplies and other expenses (3)		10,860				8,641				38,001				38,608
CARES Act tax benefit (4)		—				—				—				(2,210)
ERP implementation (5)		601				—				1,827				—
Hurricane Ida (6)		—				—				844				—
Gain on sale of asset (7)		—				—				(951)				—
Cost improvement initiatives (8)		4,498				—				4,498				—
Adjusted net income attributable to LHC Group, Inc.'s common stockholders		$	39,338			$	44,161			$	179,534			$	157,345
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,
		2021				2019				2021				2019
Net income attributable to LHC Group, Inc.'s common stockholders		$	0.50			$	0.97			$	3.69			$	3.56
Add (net of tax):
Acquisition, de novo and legal expenses (1)		0.24				0.07				0.57				0.17
Closures/relocations/consolidations (2)		0.01				0.09				0.06				0.12
COVID-19 impact:
PPE, supplies and other expenses (3)		0.35				0.27				1.22				1.23
CARES Act tax benefit (4)		—				—				—				(0.07)
ERP implementation (5)		0.02				—				0.05				—
Hurricane Ida (6)		—				—				0.03				—
Gain on sale of asset (7)		—				—				(0.03)				—
Cost improvement initiatives (8)		0.14				—				0.14				—
Adjusted net income attributable to LHC Group, Inc.'s common stockholders		$	1.26			$	1.40			$	5.73			$	5.01

 

 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (Amounts in thousands) (Unaudited)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Net income attributable to LHC Group, Inc.'s common stockholders		$	15,692			$	30,380			$	115,728			$	111,596
Add:
Income tax expense		4,778				12,862				37,687				36,043
Interest expense, net		2,797				89				4,338				4,129
Depreciation and amortization		6,018				5,648				20,917				21,249
Adjustment items (1)		32,281				19,392				86,805				65,731
Adjusted EBITDA		$	61,566			$	68,371			$	265,475			$	238,748
1. Adjustment items (pre-tax):
Acquisition, de novo and legal expenses (1)		10,082				3,214				24,154				7,770
Closures/relocation/consolidations (2)		412				4,019				2,510				5,193
COVID-19 PPE, supplies and other expenses (3)		14,826				12,159				51,661				52,768
ERP implementation (5)		820				—				2,485				—
Hurricane Ida (6)		—				—				1,150				—
Gain on sale of asset (7)		—				—				(1,296)				—
Cost improvement initiatives (8)		6,141				—				6,141				—
Total adjustments		$	32,281			$	19,392			$	86,805			$	65,731

1.	Expenses and other costs associated with recently announced or completed acquisitions, de novos and legal expenses ($10.1 million and $24.2 million pre-tax in the three months and year ended December 31, 2021, respectively; $3.2 million and $7.8 million pre-tax in the three months and year ended December 31, 2020, respectively).
2.	Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($0.4 million and $2.5 million pre-tax in the three months and year ended December 31, 2021, respectively; $4.0 million and $5.2 million in the three months and year ended December 31, 2020, respectively).
3.	COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies, wage adjustments and employee healthcare costs ($14.8 million and $51.7 million pre-tax in the three months and year ended December 31, 2021, respectively; $12.2 million and $52.8 million pre-tax in the three months and year ended December 31, 2021, respectively).
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 and other costs associated with the implementation of an Enterprise Resource Planning software ($0.8 million and $2.5 million pre-tax in the three months and year ended December 31, 2021, respectively).
6.	Direct recovery costs associated with Hurricane Ida ($1.2 million pre-tax).
7.	As of December 31, 2020, the Company's assets held for sale was $1.9 million, which consisted of one hospice facility in Knoxville, Tennessee.  The Company sold the property during the third quarter of 2021 for $3.2 million.
8.	Expenses associated from cost improvement initiatives implemented in the fourth quarter of 2021, which consisted of contract terminations and general and administrative cost reductions ($6.1 million pre-tax).

 

 

Contact:	Eric Elliott
	Senior Vice President of Finance
	(337) 233-1307
	eric.elliott@lhcgroup.com

 

 

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SOURCE LHC Group, Inc.

FAQ

What were LHC Group's Q4 2021 financial results?

LHC Group reported a 9.6% increase in net service revenue, totaling $583.4 million, with a net income of $15.7 million.

What is LHC Group's guidance for 2022?

The company expects net service revenue to be between $2.500 billion and $2.550 billion, with adjusted earnings per share between $5.60 and $6.00.

How did LHC Group perform in 2021 overall?

LHC Group achieved a 7.6% increase in full-year net service revenue, reaching $2.220 billion and net income of $115.7 million.

What impact did COVID-19 have on LHC Group's operations?

COVID-19 variants reduced the company's capacity to service demand, affecting late Q4 and early Q1 operational trends.