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Amedisys Reports Record Third Quarter Revenue and Earnings
Date:10/30/2007

Company Again Raises 2007 Revenue and EPS Guidance; Provides Preliminary

2008 Guidance

Amedisys to Host Conference Call Today at 10:00 AM ET

BATON ROUGE, La., Oct 30 /PRNewswire-FirstCall/ -- Amedisys, Inc. (Nasdaq: AMED) ("Amedisys" or "the Company"), one of America's leading home health nursing companies, today reported its financial results for the third quarter ended September 30, 2007:

Three-Month Periods Ended September 30, 2007 and 2006

-- Net service revenue was $180.9 million, up 32.0% compared to $137.0

million reported for the third quarter of 2006.

-- Net income was $20.2 million or $0.77 per diluted share, inclusive of

$4.2 million related to Alliance* or $0.16 per diluted share.

Excluding the Alliance gain, net income was $16.0 million, up 51.6%

compared to $10.6 million for the third quarter of 2006, with diluted

earnings per share of $0.61 for the third quarter of 2007, up 27.1%

from $0.48 per diluted share for the third quarter of 2006.

-- Diluted weighted average number of shares outstanding approximated

26.3 million compared to 21.9 million in the third quarter of 2006.

-- Earnings before interest, taxes, depreciation and amortization

("EBITDA"), excluding Alliance was $29.5 million, up 44.5% compared to

$20.4 million during the third quarter of 2006.

Nine-Month Periods Ended September 30, 2007 and 2006

-- Net service revenue was $503.9 million, up 26.9% compared to $397.1

million reported for 2006.

-- Net income was $48.4 million or $1.85 per diluted share, inclusive of

$4.2 million r - -

Common stock, $0.001 par value,

60,000,000 and 30,000,000

shares authorized at September

30, 2007 and December 31, 2006,

respectively; 26,299,050 and

25,902,210 shares issued at

September 30, 2007 and December

31, 2006, respectively; and

26,193,932 and 25,798,723 shares

outstanding at September 30,

2007 and December 31, 2006,

respectively 26 26

Additional paid-in capital 291,706 279,553

Treasury stock at cost, 105,118

and 103,487 shares of common

stock held at September 30, 2007

and December 31, 2006, respectively (437) (379)

Accumulated other comprehensive loss (3) -

Retained earnings 132,855 84,807

Total stockholders' equity 424,147 364,007

Total liabilities and stockholders'

equity $564,727 $463,756

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Amounts in thousands, except per share data)

(Unaudited)

For the three-month For the nine-month

periods ended periods ended

September 30, September 30,

2007 2006 2007 2006

Net service revenue $180,910 $137,041 $503,948 $397,138

Cost of service,

excluding depreciation

and amortization 79,300 59,877 220,991 172,311

General and

administrative expenses:

Salaries and benefits 43,238 32,389 123,709 98,559

Non-cash compensation 828 797 2,359 1,990

Other 27,955 23,326 76,796 70,367

Depreciation and

amortization 3,853 2,487 9,624 7,337

Operating expenses 155,174 118,876 433,479 350,564

Operating income 25,736 18,165 70,469 46,574

Other income (expense):

Interest income 965 209 3,120 635

Interest expense (209) (873) (476) (3,119)

Equity in

earnings/(losses)

of unconsolidated

joint ventures (43) - (43) -

Alliance 4,212 - 4,212 -

Miscellaneous, net (64) (247) (711) (142)

Total other income

(expense) 4,861 (911) 6,102 (2,626)

Income before income

taxes and minority

interest 30,597 17,254 76,571 43,948

Income tax expense (10,391) (6,695) (28,183) (17,052)

Minority interests 10 - 10 -

Net income $20,216 $10,559 $48,398 $26,896

Net income per common

share:

Basic $0.78 $0.49 $1.88 $1.26

Diluted $0.77 $0.48 $1.85 $1.23

Weighted average shares

outstanding:

Basic 25,899 21,468 25,768 21,308

Diluted 26,332 21,928 26,192 21,779

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

For the nine-month

periods ended

September 30,

2007 2006

Cash Flows from Operating Activities:

Net income $48,398 $26,896

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization 9,624 7,337

Provision for doubtful accounts 9,032 7,747

Non-cash compensation expense 2,359 1,990

401(k) employer match expense 4,627 5,199

Loss on disposal of property and equipment 301 459

Deferred income taxes 3,755 8,745

Minority interests (10) -

Equity in earnings/(losses) of unconsolidated

joint ventures 43 -

Alliance (4,212) -

Amortization of deferred debt issuance costs - 362

Changes in assets and liabilities, net of

impact of acquisitions

(Increase) in patient accounts receivable (19,442) (21,102)

Decrease in other current assets 4,189 926

Decrease in other assets 1,458 756

(Decrease) in accounts payable (1,215) (17,290)

Increase in accrued expenses 22,811 7,135

Increase in other long-term obligations 260 472

(Decrease) in obligations due Medicare (216) (3,244)

Net cash provided by operating activities 81,762 26,388

Cash Flows from Investing Activities:

Proceeds from sales and maturities of

short-term investments 89,000 50

Sale of deferred compensation plan assets 698 -

Proceeds from the sale of property and

equipment 3,091 -

Deposits into restricted cash (1,136) -

Purchase of deferred compensation plan

assets (1,955) -

Purchases of property and equipment (23,087) (20,419)

Acquisitions of businesses, net of cash

acquired (79,154) (10,312)

Purchases of short-term investments (89,000) -

Net cash (used in) investing activities (101,543) (30,681)

Cash Flows from Financing Activities:

Proceeds from issuance of stock upon

exercise of stock options 2,138 2,505

Proceeds from issuance of stock to employee

stock purchase plan 1,896 1,465

Tax benefit from stock option exercises 1,134 1,127

Proceeds from short-term revolving line of

credit - 10,000

Principal payments of short-term revolving

line of credit - (10,000)

Principal payments of long-term obligations (3,016) (8,180)

Net cash provided by (used in)

financing activities 2,152 (3,083)

Net (decrease) in cash and cash equivalents (17,629) (7,376)

Cash and cash equivalents at beginning of

period 84,221 17,231

Cash and cash equivalents at end of period $66,592 $9,855

Supplemental Disclosures of Cash Flow

Information:

Cash paid for interest $260 $3,038

Cash paid for 2005 payroll taxes under

Hurricane Relief Act extended deadlines $- $18,773

Cash paid for income taxes, net of refunds

received $17,455 $2,870

Supplemental Disclosures of Non-Cash

Financing and Investing Activities:

Notes payable issued for acquisitions $15,892 $2,520

Notes payable issued for software

licenses $5,501 $-

AMEDISYS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL STATEMENTS

(Amounts in thousands)

For the three-month For the nine-month

periods ended periods ended

September 30, September 30,

2007 2006 2007 2006

Net income $20,216 $10,559 $48,398 $26,896

Less:

Alliance (1) (4,212) - (4,212) -

Add:

Provision for income

taxes 10,391 6,695 28,183 17,052

Interest (income)

expense, net (756) 664 (2,644) 2,484

Depreciation and

amortization 3,853 2,487 9,624 7,337

Earnings before

interest, income

taxes, depreciation

and amortization

("EBITDA") (2) $29,492 $20,405 $79,349 $53,769

(1) Alliance Home Health, Inc. ("Alliance"), a wholly owned subsidiary of

the Company filed for Chapter 7 federal bankruptcy protection in

September 2000. That case is now concluded. As a result, the

remaining $4.2 million liabilities of Alliance were extinguished and

the Company is not liable for any of these obligations. The discharge

of the liabilities was a non-taxable event.

(2) EBITDA is defined as net income before provision for income taxes,

net interest expense, and depreciation and amortization. EBITDA

should not be considered as an alternative to, or more meaningful

than, income before income taxes, cash flow from operating

activities, or other traditional indicators of operating performance.

This calculation of EBITDA may not be comparable to a similarly

titled measure reported by other companies, since not all companies

calculate this non-GAAP measure in the same manner.

elated to Alliance or $0.16 per diluted share. Excluding

the Alliance gain, net income was $44.2 million, up 64.3% compared to

$26.9 million for 2006, with diluted earnings per share of $1.69 for

the nine-month period ended September 30, 2007, up 37.4% from $1.23

per diluted share for 2006.

-- Diluted weighted average number of shares outstanding approximated

26.2 million compared to 21.8 million in 2006.

-- EBITDA, excluding Alliance was $79.3 million, up 47.6% compared to

$53.8 million during 2006.

"Our third quarter results were very strong, as we set record revenue and earnings," said William F. Borne, Chief Executive Officer of Amedisys. "Our strategic objective is to be the leading provider of high-quality, low-cost home health services in the market. Our results show that we are succeeding in our objective by continuing to grow both our home health and hospice businesses. With our recently announced $100 million unsecured revolving credit agreement, $250 million shelf registration and over $70 million in cash, we have expanded our financial flexibility to take advantage of future growth opportunities through acquisitions and de novo start-ups."

-- See footnote 1 on page 9 for explanation of Alliance.

The Company urges caution in considering its current trends and the 2007 and 2008 guidance disclosed in this press release. The home health and hospice industry is highly competitive, and trends and guidance are subject to numerous factors, risks and influences, some of which are discussed in the cautionary language at the end of this press release and others that are described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and subsequent Quarterly Reports on Form 10-Q which can be found on the Securities and Exchange Commission's website, sec.gov, and the Company's website, amedisys.com. The Company disclaims any obligations to update disclosed information on trends or targets other than in its periodic filings with the Securities and Exchange Commission

Updated 2007 Guidance

-- Net service revenue is anticipated to be in the range of $675 million

to $690 million, excluding the effects of future acquisitions, if they

are made.

-- Diluted earnings per share are expected to be in the range of $2.25 to

$2.30 based on an estimated 26.3 million shares outstanding, excluding

the $4.2 million or $0.16 per diluted share gain related to Alliance

and also excluding the effects of future acquisitions, if they are

made.

Preliminary 2008 Guidance **

-- Net service revenue is anticipated to be in the range of $800 million

to $825 million, excluding the effects of any future acquisitions, if

they are made.

-- Diluted earnings per share are expected to be in the range of $2.50 to

$2.60 based on an estimated 26.7 million shares outstanding, also

excluding the effects of any future acquisitions, if they are made.

** The guidance for 2008 includes our estimate of the effects of the final rule issued by the Centers for Medicare and Medicaid Services ("CMS") to redefine and update the Home Health PPS for calendar year 2008 ("final rule"), which was issued on August 22, 2007. The final rule included changes in the base rate calculation and case mix adjustment model, implementation of refinement to the payment system and imposed new quality of care data collection requirements, among other requirements. CMS also included a 3.0% increase to Medicare home health rates ("market basket increase") for calendar year 2008 as its suggestion to the United States Congress ("Congress") for its final review and approval.

Since April 27, 2007, when CMS first issued its Notice of Proposed Rulemaking regarding the Home Health PPS Refinement and Rate Update for Calendar Year 2008, we have worked to estimate the net impact of the CMS rule changes on our Medicare net service revenue for calendar year 2008. In order to make such an estimate and to prepare for this new payment system, we have made and continue to make changes to our systems necessary to implement the final rule. Our process has included modeling and testing our historical episode data with the inclusion of these changes. During this modeling process, we have benefited from the system wide roll-out of our Point of Care system, which has enabled our clinical assessment data to become more consistent when compared to a pure paper environment. While our programming, modeling and testing of the required changes is not complete, we have preliminarily estimated that implementation of the final rule will reduce our Medicare net service revenue for calendar year 2008 by approximately 1.0%. We have built into this estimate assumptions regarding various factors, which include, but are not limited to, changes to the final rule as currently written, changes to the proposed 3.0% market basket increase, future changes to our systems resulting from our continuing programming, modeling and testing process, differences in case mix used for the estimate and the actual case mix experienced in 2008, and various other contributing factors. Therefore, our estimate of the net impact of the final rule is subject to change. Likewise, our 2008 guidance is provisional, and we may update our guidance to account for subsequent changes in our estimate of the impact of the CMS final rule, or otherwise.

The following table provides some key statistical information related to the three and nine-month periods ended September 30, 2007 and 2006, respectively:

For the three-month For the nine-month

periods ended periods ended

September 30, September 30,

2007 2006 2007 2006

General

Number of home health

agencies 311 249 311 249

Number of hospice

agencies 27 13 27 13

Number of managed agencies

operated through joint

ventures:

Home Health agencies 4 - 4 -

Hospice agencies 2 - 2 -

Number of agencies opened

through acquisition (1) 21 1 39 14

Number of agencies opened

as start-up locations (1) 7 15 30 28

Days revenue

outstanding (2) 49.3 58.4 49.3 58.4

Internal growth rate (3) 11% 12% 13% 15%

Total visits (4) 1,102,913 878,386 3,124,096 2,533,298

Home Health

Medicare

admissions (5) 30,274 26,276 88,867 77,560

Episodic-based

admissions (6) 32,672 27,261 95,647 80,121

Completed

episodes (7) 52,698 44,181 151,859 126,214

Revenue per

episode (8) $2,679 $2,627 $2,666 $2,642

Medicare visits

per episode (9) 16.9 16.6 16.7 16.9

(1) Inclusive of both home health and hospice agencies.

(2) Due to the Company's significant acquisitions and its internal

growth, the calculation for days revenue outstanding is derived by

dividing the ending gross accounts receivable, net of contractual

allowances, at September 30, 2007 and September 30, 2006 by the

average daily net patient revenue for the three-month periods ended

September 30, 2007 and September 30, 2006, respectively.

(3) Internal growth rate is calculated as the percentage increase in

total episodic-based admissions of base and start-up agencies in the

current period, as compared to admissions of total episodic-based

admissions from the prior period.

(4) Total visits are the number of times during the period that our

registered nurses, licensed practical nurses, physical therapists,

speech therapists, occupational therapists, medical social workers

and home health aides visit all eligible patients in their residence.

(5) Medicare admissions are defined as the number of patients admitted to

our agencies during the period for the first 60-day episode of care

where payment for services is anticipated to be reimbursed by

Medicare.

(6) Episodic-based admissions are defined as the number of patients

admitted to our agencies during the period for the first 60-day

episode of care where payors reimburse the Company for services

provided on an episodic-basis, which include Medicare and other

insurance carriers, including HMO Advantage programs.

(7) Completed episodes are the number of Medicare patients that have

either reached the end of their 60-day eligibility period or

terminated their service before the 60-day eligibility period has

lapsed.

(8) Revenue per episode is the average revenue earned for each completed

episode of care.

(9) Medicare visits per episode is calculated by dividing the total

number of Medicare visits on completed episodes in the period by the

total number of Medicare episodes completed in the period.

Earnings Call and Webcast Information

To participate in the conference call, please dial 800-683-1525 (Domestic) or 973-872-3197 (International) a few minutes before 10:00 a.m. ET on Tuesday, October 30, 2007. A replay of the conference call will be available from 12:00 p.m. ET on October 30, 2007 until 12:00 p.m. ET on November 6, 2007. The replay dial in number is 877-519-4471 (Domestic) or 973-341-3080 (International). The replay pin number is 9363587.

The call will also be available on the Internet live and for seven days thereafter at the following web address: http://www.videonewswire.com/event.asp?id=43333

Amedisys, Inc. is headquartered in Baton Rouge, Louisiana. Its common stock trades on the NASDAQ Global Select Market under the symbol "AMED".

Additional information on the Company can be found at:

http://www.amedisys.com

Non-GAAP Financial Measure

This press release includes the following non-GAAP financial measure as defined under Securities and Exchange Commission ("SEC") rules: EBITDA, defined as net income before provision for income taxes, net interest expense and depreciation and amortization. In accordance with SEC rules, the Company has provided herein a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure. Management believes that EBITDA is a useful gauge of the Company's performance and because EBITDA is a common measure used by other companies in our industry EBITDA can be utilized to assess the performance of the Company in comparison to such other companies.

Forward-Looking Statements

When included in this press release, the words "believes", "belief", "expects", "plans", "anticipates", "intends", "projects", "estimates", "may", "might", "would", and analogous expressions are intended to identify forward- looking statements. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to: general economic and business conditions, changes in or failure to comply with existing regulations or the inability to comply with new government regulations on a timely basis, changes in Medicare and other medical reimbursement levels, adverse changes in federal and state laws relating to the health care industry, demographic changes, availability and terms of capital, ability to attract and retain qualified personnel, ongoing development and success of new start-ups, changes in estimates and judgments associated with critical accounting policies and business disruption due to natural disasters or acts of terrorism, and various other matters, many of which are beyond our control. These forward-looking statements speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to release publicly any updates or any changes in our expectations with regard thereto or any changes in events, conditions or circumstances on which any such forward looking statement is based.

Contacts: Amedisys, Inc.

Kevin LeBlanc Thomas J. Dolan

Director of Investor Senior Vice President - Finance

Relations

(225) 292 - 2031 (225) 292 - 2031

kleblanc@amedisys.com tdolan@amedisys.com

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

September 30, 2007

(unaudited) December 31, 2006

ASSETS

Current assets:

Cash and cash equivalents $66,592 84,221

Restricted cash 5,933 4,797

Patient accounts receivable, net 86,553 74,929

Prepaid expenses 4,956 4,133

Other current assets 5,847 11,125

Total current assets 169,881 179,205

Property and equipment, net 66,709 52,960

Goodwill 307,375 213,032

Intangible assets, net 13,891 12,733

Other assets, net 6,871 5,826

Total assets $564,727 $463,756

LIABILITIES AND STOCKHOLDERS'

EQUITY

Current liabilities:

Accounts payable $14,370 $14,339

Accrued expenses 66,286 46,587

Obligations due Medicare 2,811 6,139

Current portion of long-term

obligations 10,356 3,223

Current portion of deferred

income taxes 13,344 11,630

Total current liabilities 107,167 81,918

Long-term obligations, less

current portion 13,325 2,114

Deferred income taxes 13,221 10,781

Other long-term obligations 6,036 4,936

Total liabilities 139,749 99,749

Minority interests 831 -

Stockholders' equity:

Preferred stock, $0.001 par

value, 5,000,000 shares

authorized; none issued or

outstanding
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SOURCE Amedisys, Inc.
Copyright©2007 PR Newswire.
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