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CST: 17/08/2019 08:47:26   

Amedisys Reports Second Quarter 2019 Financial Results and Updates 2019 Guidance

16 Days ago

BATON ROUGE, La., July 31, 2019 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ: AMED) today reported its financial results for the three and six-month periods ended June 30, 2019.

Three Month Periods Ended June 30, 2019 and 2018

  • Net service revenue increased $81.4 million to $493.0 million compared to $411.6 million in 2018.
  • Net income attributable to Amedisys, Inc. of $33.7 million compared to $33.3 million in 2018.
  • Net income attributable to Amedisys, Inc. per diluted share of $1.02 compared to $0.98 in 2018.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $61.4 million compared to $49.7 million in 2018.
  • Adjusted net service revenue of $498.5 million compared to $413.3 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. of $39.9 million compared to $34.1 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $1.21 compared to $1.00 in 2018.

Six Month Periods Ended June 30, 2019 and 2018

  • Net service revenue increased $149.4 million to $960.3 million compared to $810.9 million in 2018.
  • Net income attributable to Amedisys, Inc. of $65.0 million compared to $60.5 million in 2018.
  • Net income attributable to Amedisys, Inc. per diluted share of $1.98 compared to $1.76 in 2018.

Adjusted Year to Date Results*

  • Adjusted EBITDA of $116.2 million compared to $91.4 million in 2018.
  • Adjusted net service revenue of $966.3 million compared to $812.6 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. of $76.3 million compared to $61.4 million in 2018.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $2.32 compared to $1.79 in 2018.

*   See pages 12 and 13 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am very proud of our second quarter results as we continue to best internal and external expectations. Most importantly and core to what we do, our growth allows us to bring clinical excellence to even more patients across home health, hospice and personal care. Providing our clinically distinct services to as many patients wherever they call home is why we get out of bed every morning and I am thankful to our team of over 21,000 employees for continuing to do all that you do to drive such impressive results and provide such incredible care.”

Updated 2019 Guidance

  • Net service revenue is anticipated to be in the range of $1.94 billion to $1.98 billion.
  • Adjusted EBITDA is anticipated to be in the range of $213 million to $216 million.
  • Adjusted diluted earnings per share is anticipated to be in the range of $4.05 to $4.12 based on an estimated 33.1 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made.

We urge caution in considering the current trends and 2019 guidance disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com.

Earnings Call and Webcast Information

Amedisys will host a conference call on Thursday, August 1, 2019, at 11:00 a.m. ET to discuss its second quarter results. To participate on the conference call, please call before 11:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through September 1, 2019 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13691942.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Non-GAAP Financial Measures

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measures as defined under SEC rules are as follows: (1) adjusted EBITDA, defined as net income attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items; (2) adjusted net service revenue, defined as net service revenue excluding certain items; (3) adjusted net income attributable to Amedisys, Inc., defined as net income attributable to Amedisys, Inc. excluding certain items; and (4) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. Management believes that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, are useful gauges of our current performance and are also included in internal management reporting. These non-GAAP financial measures should be considered in addition to, and not more meaningful than or as an alternative to the GAAP financial measures presented in this earnings release and the company’s financial statements. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

Additional information

Amedisys, Inc. (the “Company”) is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 3,000 hospitals and 65,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With more than 21,000 employees in 471 care centers within 38 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 376,000 patients and clients in need every year. For more information about the Company, please visit: www.amedisys.com.

We use our website as a channel of distribution for important company information. Important information, including press releases, investor presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, competition in the healthcare industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to consistently provide high-quality care, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to realize the anticipated benefits of the acquisition of Compassionate Care Hospice (“CCH”), our ability to comply with requirements stipulated in the CCH corporate integrity agreement, and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

Contact:   Investor Contact:   Media Contact:
    Amedisys, Inc.
Nick Muscato
Vice President, Strategic Finance
(855) 259-2046
IR@amedisys.com
  Amedisys, Inc.
Kendra Kimmons
Vice President, Marketing & Communications
(225) 299-3720
kendra.kimmons@amedisys.com

AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)

    For the Three-Month
Periods Ended June 30
    For the Six-Month
Periods Ended June 30
 
    2019     2018     2019     2018  
Net service revenue   $ 492,984     $ 411,603     $ 960,324     $ 810,865  
Cost of service, excluding depreciation and amortization     290,752       242,564       566,026       480,873  
General and administrative expenses:                                
Salaries and benefits     98,356       77,215       193,186       152,846  
Non-cash compensation     5,538       3,767       12,153       7,811  
Other     48,408       42,104       91,810       83,784  
Depreciation and amortization     5,179       3,125       8,074       6,718  
                                 
Operating expenses     448,233       368,775       871,249       732,032  
                                 
Operating income     44,751       42,828       89,075       78,833  
Other income (expense):                                
Interest income     20       114       44       234  
Interest expense     (4,332 )     (2,140 )     (7,681 )     (3,843 )
Equity in earnings from equity method investments     3,716       2,976       4,932       4,836  
Miscellaneous, net     193       359       429       960  
                                 
Total other (expense) income, net     (403 )     1,309       (2,276 )     2,187  
                                 
Income before income taxes     44,348       44,137       86,799       81,020  
Income tax expense     (10,308 )     (10,596 )     (21,186 )     (20,159 )
                                 
Net income     34,040       33,541       65,613       60,861  
Net income attributable to noncontrolling interests     (298 )     (192 )     (567 )     (353 )
                                 
Net income attributable to Amedisys, Inc.   $ 33,742     $ 33,349     $ 65,046     $ 60,508  
                                 
Basic earnings per common share:                                
Net income attributable to Amedisys, Inc. common stockholders   $ 1.05     $ 1.00     $ 2.03     $ 1.80  
Weighted average shares outstanding     32,075       33,439       32,038       33,705  
Diluted earnings per common share:                                
Net income attributable to Amedisys, Inc. common stockholders   $ 1.02     $ 0.98     $ 1.98     $ 1.76  
Weighted average shares outstanding     32,933       34,179       32,913       34,391  
                                 

AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

    June 30, 2019
(unaudited)
    December 31,
2018
 
ASSETS            
Current assets:                
Cash and cash equivalents   $ 13,902     $ 20,229  
Patient accounts receivable     239,674       188,972  
Prepaid expenses     8,957       7,568  
Other current assets     13,252       7,349  
                 
Total current assets     275,785       224,118  
Property and equipment, net of accumulated depreciation of $98,936 and $95,472     29,762       29,449  
Operating lease right of use assets     85,026        
Goodwill     664,822       329,480  
Intangible assets, net of accumulated amortization of $35,402 and $33,050     61,966       44,132  
Deferred income taxes     30,213       35,794  
Other assets     58,288       54,145  
                 
Total assets   $ 1,205,862     $ 717,118  
                 
LIABILITIES AND EQUITY            
Current liabilities:                
Accounts payable   $ 35,690     $ 28,531  
Payroll and employee benefits     111,660       92,858  
Accrued expenses     131,860       99,475  
Current portion of long-term obligations     7,610       1,612  
Current portion of operating lease liabilities     26,187        
                 
Total current liabilities     313,007       222,476  
Long-term obligations, less current portion     266,468       5,775  
Operating lease liabilities, less current portion     57,392        
Other long-term obligations     6,053       6,234  
                 
Total liabilities     642,920       234,485  
                 
Equity:                
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding            
Common stock, $0.001 par value, 60,000,000 shares authorized; 36,445,591 and 36,252,280 shares issued; and 32,130,184 and 31,973,505 shares outstanding     36       36  
Additional paid-in capital     623,309       603,666  
Treasury stock, at cost 4,315,407 and 4,278,775 shares of common stock     (246,175 )     (241,685 )
Accumulated other comprehensive income     15       15  
Retained earnings     184,596       119,550  
                 
Total Amedisys, Inc. stockholders’ equity     561,781       481,582  
Noncontrolling interests     1,161       1,051  
                 
Total equity     562,942       482,633  
                 
Total liabilities and equity   $ 1,205,862     $ 717,118  
                 

AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING
(Amounts in thousands, except statistical information)
(Unaudited)

    For the Three-Month
Periods Ended June 30
    For the Six-Month
Periods Ended June 30
 
    2019     2018     2019     2018  
Cash Flows from Operating Activities:                                
Net income   $ 34,040     $ 33,541     $ 65,613     $ 60,861  
Adjustments to reconcile net income to net cash provided by operating activities:                                
Depreciation and amortization     5,179       3,125       8,074       6,718  
Non-cash compensation     5,538       3,767       12,153       7,811  
401(k) employer match     2,307       2,327       4,686       4,894  
Amortization and impairment of operating lease right of use assets     9,150             17,495        
Loss (gain) on disposal of property and equipment     2       87       (2 )     650  
Deferred income taxes     2,606       6,200       5,875       9,145  
Equity in earnings from equity method investments     (3,716 )     (2,976 )     (4,932 )     (4,836 )
Amortization of deferred debt issuance costs/debt discount     220       177       433       355  
Write off of deferred debt issuance costs           38             38  
Return on equity investment     117       1,579       842       2,204  
Changes in operating assets and liabilities, net of impact of acquisitions:                                
Patient accounts receivable     (1,832 )     (4,656 )     (24,165 )     3,604  
Other current assets     2,292       (4,698 )     (8,343 )     (11,680 )
Other assets     282       642       (56 )     688  
Accounts payable     1,665       5,146       (9,475 )     3,623  
Accrued expenses     10,424       6,355       29,262       4,548  
Other long-term obligations     (37 )     (1 )     (181 )     2,347  
Operating lease liabilities     (8,061 )           (16,200 )      
Operating lease right of use assets     (910 )           (1,754 )      
                                 
Net cash provided by operating activities     59,266       50,653       79,325       90,970  
                                 
Cash Flows from Investing Activities:                                
Proceeds from sale of deferred compensation plan assets     5       9       213       471  
Proceeds from the sale of property and equipment     81       6       146       11  
Investments in equity method investees     (90 )           (210 )      
Purchases of property and equipment     (1,495 )     (149 )     (2,693 )     (1,611 )
Acquisitions of businesses, net of cash acquired     (17,547 )     (1,824 )     (345,414 )     (4,074 )
                                 
Net cash used in investing activities     (19,046 )     (1,958 )     (347,958 )     (5,203 )
                                 
Cash Flows from Financing Activities:                                
Proceeds from issuance of stock upon exercise of stock options     987       2,484       1,343       2,609  
Proceeds from issuance of stock to employee stock purchase plan     752       560       1,534       1,157  
Shares withheld upon stock vesting     (1,802 )     (1,527 )     (4,490 )     (2,832 )
Noncontrolling interest distribution     (91 )     (322 )     (457 )     (350 )
Proceeds from borrowings under term loan                 175,000        
Proceeds from borrowings under revolving line of credit     23,000       127,500       184,500       127,500  
Repayments of borrowings under revolving line of credit     (58,000 )           (92,000 )      
Principal payments of long-term obligations     (1,718 )     (87,656 )     (2,277 )     (90,475 )
Debt issuance costs           (2,433 )     (847 )     (2,433 )
Purchase of company stock           (181,402 )           (181,402 )
                                 
Net cash (used in) provided by financing activities     (36,872 )     (142,796 )     262,306       (146,226 )
                                 
Net increase (decrease) in cash and cash equivalents     3,348       (94,101 )     (6,327 )     (60,459 )
Cash and cash equivalents at beginning of period     10,554       120,005       20,229       86,363  
                                 
Cash and cash equivalents at end of period   $ 13,902     $ 25,904     $ 13,902     $ 25,904  
                                 
Supplemental Disclosures of Cash Flow Information:                                
Cash paid for interest   $ 3,462     $ 1,015     $ 4,187     $ 2,080  
                                 
Cash paid for income taxes, net of refunds received   $ 7,445     $ 3,336     $ 7,849     $ 6,149  
                                 
Days revenue outstanding (1)     41.1       41.1       41.1       41.1  

(1) Our calculation of days revenue outstanding at June 30, 2019 and 2018 is derived by dividing our ending patient accounts receivable by our average daily patient revenue for the three month periods ended June 30, 2019 and 2018, respectively.

AMEDISYS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in millions, except statistical information)
(Unaudited)

Segment Information - Home Health

    For the Three-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $ 219.1     $ 206.3  
Non-Medicare     99.5       85.2  
                 
Net service revenue     318.6       291.5  
Cost of service     187.8       176.5  
                 
Gross margin     130.8       115.0  
Other operating expenses     75.1       69.2  
                 
Operating income   $ 55.7     $ 45.8  
                 
Same Store Growth (1):                
Medicare revenue     6     6
Non-Medicare revenue     17     18
Total admissions     7     6
Total volume (2)     6     8
Total Episodic admissions (3)     6     5
Total Episodic volume (4)     4     6
Key Statistical Data - Total (5):                
Medicare:                
Admissions     48,870       47,058  
Recertifications     27,777       28,431  
                 
Total volume     76,647       75,489  
Completed episodes     76,302       74,776  
Visits     1,322,393       1,318,074  
Average revenue per completed episode (6)   $ 2,953     $ 2,874  
Visits per completed episode (7)     17.6       17.8  
Non-Medicare:                
Admissions     32,893       29,271  
Recertifications     15,584       13,891  
                 
Total volume     48,477       43,162  
Visits     774,093       690,548  
Total (5):                
Visiting Clinician Cost per Visit   $ 81.97     $ 80.07  
Clinical Manager Cost per Visit     7.65       7.76  
                 
Total Cost per Visit   $ 89.62     $ 87.83  
Visits     2,096,486       2,008,622  


    For the Six-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $ 432.5     $ 411.3  
Non-Medicare     196.2       164.3  
                 
Net service revenue     628.7       575.6  
Cost of service     373.5       350.9  
                 
Gross margin     255.2       224.7  
Other operating expenses     147.5       138.0  
                 
Operating income   $ 107.7     $ 86.7  
                 
Same Store Growth (1):                
Medicare revenue     5 %     5 %
Non-Medicare revenue     20 %     16 %
Total admissions     7 %     5 %
Total volume (2)     6 %     7 %
Total Episodic admissions (3)     5 %     4 %
Total Episodic volume (4)     4 %     6 %
Key Statistical Data - Total (5):                
Medicare:                
Admissions     99,190       96,513  
Recertifications     54,889       55,667  
                 
Total volume     154,079       152,180  
Completed episodes     150,280       147,612  
Visits     2,653,802       2,632,200  
Average revenue per completed episode (6)   $ 2,928     $ 2,833  
Visits per completed episode (7)     17.5       17.5  
Non-Medicare:                
Admissions     66,542       59,160  
Recertifications.     30,267       26,323  
                 
Total volume     96,809       85,483  
Visits     1,527,772       1,351,481  
Total (5):                
Visiting Clinician Cost per Visit   $ 81.51     $ 80.20  
Clinical Manager Cost per Visit     7.83       7.88  
                 
Total Cost per Visit   $ 89.34     $ 88.08  
Visits     4,181,574       3,983,681  

(1) Same store information represents the percent change in our Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume of the prior period.
(2) Total volume includes all admissions and recertifications.
(3) Total Episodic admissions includes admissions for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.
(4) Total Episodic volume includes admissions and recertifications for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.
(5) Total includes acquisitions and denovos.
(6) Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.
(7) Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

Segment Information - Hospice

    For the Three-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $ 145.8     $ 96.9  
Non-Medicare     7.4       4.5  
                 
Net service revenue     153.2       101.4  
Cost of service     87.3       51.7  
                 
Gross margin     65.9       49.7  
Other operating expenses     35.3       20.6  
                 
Operating income   $ 30.6     $ 29.1  
                 
Same Store Growth (1):                
Medicare revenue     1 %     13 %
Hospice admissions     7 %     7 %
Average daily census     5 %     12 %
Key Statistical Data - Total (2):                
Hospice admissions     10,430       6,746  
Average daily census     11,427       7,554  
Revenue per day, net   $ 147.27     $ 147.58  
Cost of service per day   $ 83.96     $ 75.20  
Average discharge length of stay     98       97  


    For the Six-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $ 276.5     $ 188.7  
Non-Medicare     13.7       10.0  
                 
Net service revenue     290.2       198.7  
Cost of service     161.4       101.8  
                 
Gross margin     128.8       96.9  
Other operating expenses     64.7       40.8  
                 
Operating income   $ 64.1     $ 56.1  
                 
Same Store Growth (1):                
Medicare revenue     5     12
Hospice admissions     6     6
Average daily census     7     12
Key Statistical Data - Total (2):                
Hospice admissions     20,141       13,679  
Average daily census     10,709       7,385  
Revenue per day, net   $ 149.72     $ 148.66  
Cost of service per day   $ 83.25     $ 76.15  
Average discharge length of stay     98       97  

(1) Same store information represents the percent change in our Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare revenue, Hospice admissions or average daily census of the prior period.
(2) Total includes acquisitions and denovos.

Segment Information - Personal Care

    For the Three-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $ —      $ —   
Non-Medicare     21.2       18.7  
                 
Net service revenue     21.2       18.7  
Cost of service     15.6       14.4  
                 
Gross margin     5.6       4.3  
Other operating expenses     3.2       3.3  
                 
Operating income   $ 2.4     $ 1.0  
                 
Key Statistical Data - Total (1):                
Billable hours     848,245       797,228  
Clients served     12,962       12,683  
Shifts      382,287        356,874  
Revenue per hour   $ 25.01     $ 23.48  
Revenue per shift   $ 55.49     $ 52.45  
Hours per shift     2.2       2.2  


    For the Six-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Medicare   $     $  
Non-Medicare     41.4       36.6  
                 
Net service revenue     41.4       36.6  
Cost of service     31.1       28.2  
                 
Gross margin     10.3       8.4  
Other operating expenses     6.4       6.6  
                 
Operating income   $ 3.9     $ 1.8  
                 
Key Statistical Data - Total (1):                
Billable hours     1,681,862       1,547,181  
Clients served     14,687       14,350  
Shifts     758,469       705,040  
Revenue per hour   $ 24.60     $ 23.66  
Revenue per shift   $ 54.56     $ 51.91  
Hours per shift     2.2       2.2  

(1) Total includes acquisitions.

Segment Information - Corporate

    For the Three-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Other operating expenses   $ 40.2     $ 31.1  
Depreciation and amortization     3.7       2.0  
                 
Total operating expenses   $ 43.9     $ 33.1  
                 


    For the Six-
Month Periods
Ended June 30,
 
    2019     2018  
Financial Information (in millions):                
Other operating expenses   $ 81.5     $ 61.3  
Depreciation and amortization     5.1       4.5  
                 
Total operating expenses   $ 86.6     $ 65.8  
                 

AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
(Amounts in thousands)
(Unaudited)

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”):

    For the Three-
Month Period 
Ended June 30,
    For the Six-
Month Period
Ended June 30,
 
    2019     2018     2019     2018  
Net income attributable to Amedisys, Inc.   $ 33,742     $ 33,349     $ 65,046     $ 60,508  
Add:                                
Income tax expense     10,308       10,596       21,186       20,159  
Interest expense, net     4,312       2,026       7,637       3,609  
Depreciation and amortization     5,179       3,125       8,074       6,718  
Certain items (1)     8,257       1,035       15,171       1,224  
Interest component of certain items (1)     (446     (446     (887     (829
                                 
Adjusted EBITDA (2) (6)   $ 61,352     $ 49,685     $ 116,227     $ 91,389  
                                 

Adjusted Net Service Revenue Reconciliation:

    For the Three-
Month Period 
Ended June 30,
    For the Six-
Month Period 
Ended June 30,
 
    2019     2018     2019     2018  
Net service revenue   $ 492,984     $ 411,603     $ 960,324     $ 810,865  
Add:                                
Certain items (1)     5,515       1,687       5,993       1,687  
                                 
Adjusted net service revenue (3) (6)   $ 498,499     $ 413,290     $ 966,317     $ 812,552  
                                 

Adjusted Net Income Attributable to Amedisys, Inc Reconciliation:

    For the Three-
Month Period 
Ended June 30,
    For the Six-
Month Period 
Ended June 30,
 
    2019     2018     2019     2018  
Net income attributable to Amedisys, Inc.   $ 33,742     $ 33,349     $ 65,046     $ 60,508  
Add:                                
Certain items (1)     6,110       766       11,226       906  
                                 
Adjusted net income attributable to Amedisys, Inc. (4) (6)   $ 39,852     $ 34,115     $ 76,272     $ 61,414  
                                 

Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:

    For the Three-
Month Period
Ended June 30,
    For the Six-
Month Period
Ended June 30,
 
    2019     2018     2019     2018  
Net income attributable to Amedisys, Inc. common stockholders per diluted share   $ 1.02     $ 0.98     $ 1.98     $ 1.76  
Add:                                
Certain items (1)     0.19       0.02       0.34       0.03  
                                 
Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (5) (6).   $ 1.21     $ 1.00     $ 2.32     $ 1.79  
                                 

(1) The following details the certain items for the three and six-month periods ended June 30, 2019 and 2018:

Certain Items:

    For the Three-
Month Period 
Ended
June 30, 2019
    For the Six-
Month Period
Ended
June 30, 2019
 
    (Income)
Expense
    (Income)
Expense
 
Certain Items Impacting Net Service Revenue:                
Contingency accrual   $ 5,523     $ 6,541  
Planned closures (7)     (8 )     (548 )
Certain Items Impacting Cost of Service:                
Planned closures (7)     313       1,157  
Certain Items Impacting Operating Expenses:                
Planned closures (7)     69       157  
Acquisition costs     4,494       10,252  
Legal fees - non-routine     108       (24 )
Certain Items Impacting Total Other Income (Expense):                
Miscellaneous, other (income) expense, net     (2,242 )     (2,364 )
                 
Total   $ 8,257     $ 15,171  
                 
Net of tax   $ 6,110     $ 11,226  
                 
Diluted EPS   $ 0.19     $ 0.34  
                 
     
    For the Three-
Month Period 
Ended
June 30, 2018
    For the Six-
Month Period
Ended
June 30, 2018
 
    (Income)
Expense
    (Income)
Expense
 
Certain Items Impacting Net Service Revenue:                
Florida self-audit (pre-acquisition)   $ 1,687     $ 1,687  
Certain Items Impacting Operating Expenses:                
Acquisition costs     440       875  
Legal fees - non-routine     543       1,105  
Certain Items Impacting Total Other Income (Expense):                
Miscellaneous, other (income) expense, net     (1,635 )     (2,443 )
                 
Total   $ 1,035     $ 1,224  
                 
Net of tax   $ 766     $ 906  
                 
Diluted EPS   $ 0.02     $ 0.03  
                 

(2) Adjusted EBITDA is defined as net income attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items as described in footnote 1.
(3) Adjusted net service revenue is defined as net service revenue excluding certain items as described in footnote 1.
(4) Adjusted net income attributable to Amedisys, Inc. is defined as net income attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.
(5) Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in footnote 1.
(6) Adjusted EBITDA, adjusted net service revenue, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes or other measures calculated in accordance with GAAP. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.
(7) Planned closures consist of in-patient units acquired from Compassionate Care Hospice whose operations ceased in April 2019.

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