First Quarter Earnings Call
Supplemental Information
May 10, 2023
Disclaimer
Forward looking statements
Statements contained in this presentation which are not historical facts, such as those relating to future events, projections, financial guidance, legislative or regulatory developments, strategy or growth opportunities, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Enhabit 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 Enhabit include, but are not limited to, our ability to execute on our strategic plans, regulatory and other developments impacting the markets for our services, changes in reimbursement rates, general economic conditions, our ability to attract and retain key management personnel and healthcare professionals, potential disruptions or breaches of our or our vendors' information systems, the outcome of litigation, our ability to successfully complete and integrate de novo developments, acquisitions, investments, and joint ventures, and our ability to control costs, particularly labor and employee benefit costs. Our annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, which will be filed with the SEC, discuss other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in this presentation. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this presentation.
Note regarding presentation of non-GAAP financial measures
This presentation includes certain "non-GAAP financial measures" as defined in Regulation G under the Securities Exchange Act of 1934, including adjusted EBITDA, leverage ratios, adjusted earnings per share, and adjusted free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are presented at the end of this presentation. Our Form 8-K, furnished as of the date of this presentation with the SEC, provides further explanation and disclosure regarding Enhabit's use of non-GAAP financial measures and should be read in conjunction with this supplemental information.
Note regarding presentation of same-store comparisons
The Company uses "same-store" comparisons to explain the changes in certain performance metrics and line items within its financial statements. Same-store comparisons are calculated based on home health and hospice locations open throughout both the full current period and the immediately prior period presented. These comparisons include the financial results of market consolidation transactions in existing markets, as it is difficult to determine, with precision, the incremental impact of these transactions on the Company's results of operations.
Enhabit Home Health & Hospice | 2 |
Contents
Overview of Quarterly Results and Strategic Commentary | 4 |
Consolidated | 5-7 |
De Novos and Acquisitions | 8 |
Home Health | 9-10 |
- Quality | 11 |
Hospice | 12-13 |
Consolidated Adjusted EBITDA | 14 |
Debt, Liquidity and Adjusted Free Cash Flow | 15-16 |
Guidance | 17-20 |
Appendix, Including Company Overview & Reconciliations to GAAP | 21-32 |
Quarterly Results at a Glance
Home health continued strong growth in Medicare Advantage admissions; new agreements added
Non-episodic admissions grew 31.9%, driving total admissions growth of 1.2% year over year.
Nine new Medicare Advantage agreements negotiated during Q1, including one national payor agreement and two national convener agreements. All agreements effective
May 1, 2023.
Hospice sequential growth in admissions; continued improvement in staffing
7.1% sequential increase in hospice admissions
Continued improvement in staffing; number of staffing constrained locations is lowest in four quarters
The continued home health payor mix shift and resumption of sequestration impacted revenue and adjusted
EBITDA.
The home health payor mix shift and resumption of sequestration reduced consolidated net service revenue and adjusted EBITDA approximately $10 million.
Home health cost per visit increased 2.3% year over year.
Incremental costs associated with being a stand-alone company approximated $2 million.
$265.1M | $0.05 |
Revenue | Reported EPS |
$25.3M | $0.09 |
Adjusted EBITDA | Adjusted EPS |
53,943 | 3,122 |
Home Health Total | Hospice Admissions |
Admissions | |
57,827 | 3,523 |
Home Health | Hospice Average |
Completed Episodes | Daily Census |
$2,943 | $155 |
Home Health | Hospice Revenue |
Revenue per | per Day |
Completed Episode | |
$88 | $77 |
Home Health Cost | Hospice |
per Visit | Cost per Day |
Enhabit Home Health & Hospice | Reconciliations to GAAP provided on pages 28 to 32 | 4 |
Consolidated Results
($ in millions, except per share data) | Q1 | |||||
2023 | 2022 | '23 vs. '22 | ||||
Home health net service revenue | $215.8 | $224.9 | (4.0)% | |||
Hospice net service revenue | $49.3 | $49.4 | (0.2)% | |||
Total net service revenue | $265.1 | $274.3 | (3.4)% | |||
% of Revenue | % of Revenue | |||||
Cost of services | 50.0 % | $(132.6) | 47.3 % | $(129.7) | 2.2% | |
Gross margin | 50.0 % | $132.5 | 52.7 % | $144.6 | (8.4)% | |
General & administrative expenses | 40.2 % | $(106.7) | 35.3 % | $(96.9) | 10.1% | |
Operating expenses | 90.2% | $(239.3) | 82.6% | $(226.6) | 5.6% | |
Equity in net income of nonconsolidated affiliates | $0.0 | $0.0 | ||||
Noncontrolling interests | $0.5 | $0.6 | ||||
Adjusted EBITDA | $25.3 | $47.0 | (46.2)% | |||
Adjusted EBITDA margin | 9.5 % | 17.1 % | ||||
Reported EPS | $0.05 | $0.53 | (90.5)% | |||
Adjusted EPS (see calculations on slides 28 and 29) | $0.09 | $0.56 | (83.9)% | |||
In arriving at Adjusted EBITDA, the following were excluded: | ||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) | $2.3 | $2.0 | ||||
Stock compensation expense | $1.5 | $1.3 | ||||
Stock compensation expense included in overhead allocation | $0.0 | $0.5 | ||||
Gain on disposal or impairment of assets | $0.0 | $(0.1) |
- Unusual or nonrecurring items include costs associated with the strategic alternatives review, shareholder activism defense, and non-routine litigation.
Enhabit Home Health & Hospice | Reconciliations to GAAP provided on pages 28 to 32 | 5 |
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Enhabit Inc. published this content on 10 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2023 00:11:09 UTC.