ENHABIT, INC. Second Quarter Earnings Call
Supplemental Information
August 9, 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. In addition, with respect to the Tax Matters Agreement ("TMA") and the potential launch of a strategic alternative process, these factors include, our ability to receive Encompass Health Corporation's approval to pursue a strategic transaction as required under the TMA and our ability to successfully pursue and complete a strategic transaction. 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
Results at a Glance | 4 |
Consolidated Results | 5-7 |
De Novos and Acquisitions | 8 |
Home Health Segment | 9-10 |
- Quality | 11 |
Hospice Segment | 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 |
Results at a Glance
Home health continued strong growth in Medicare Advantage admissions; new agreements added
Non-episodic admissions grew 38.0%, driving total admissions growth of 3.2% year over year.
Continued progress in payor innovation resulted in ten new Medicare Advantage agreements negotiated during Q2.
Continued high-quality outcomes; 30-day hospital readmission rate 370 basis points better than national average
Hospice growth in revenue
Admissions increased 0.1% year over year.
Cost per day stabilized sequentially.
Continued high-quality care; 250 basis points better than the national average for patient visits in the last days of life(1)
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 $10.5 million.
Shifted approximately 5% of previous non-episodic visits into non-episodic payor innovation contracts at improved per visit rates
$262.3M | $(1.49) |
Revenue | Reported Diluted EPS |
$23.9M | $0.04 |
Adjusted EBITDA | Adjusted Diluted EPS |
50,975 | 2,837 |
Home Health | Hospice |
Admissions | Admissions |
56,808 | 3,423 |
Home Health | Hospice Average |
Completed Episodes | Daily Census |
$2,913 | $156 |
Home Health | Hospice |
Revenue per | Revenue per |
Completed Episode | Day |
$91 | $77 |
Home Health | Hospice |
Cost per Visit | Cost per Day |
Enhabit Home Health & Hospice
(1) Medicare fee for service claims data for CY 2022, source Trella Health. 4
Reconciliations to GAAP provided on pages 35 to 37
Consolidated Results
($ in millions, except per share data) | Q2 | ||||
2023 | 2022 | '23 vs. '22 | |||
Home health net service revenue | $213.8 | $220.2 | (2.9)% | ||
Hospice net service revenue | $48.5 | $47.8 | 1.5 % | ||
Total net service revenue | $262.3 | $268.0 | (2.1)% | ||
% of Revenue | % of Revenue | ||||
Cost of services | 51.7 % | $(135.5) | 48.6 % | $(130.3) | 4.0% |
Gross margin | 48.3 % | $126.8 | 51.4 % | $137.7 | (7.9)% |
General & administrative expenses | 39.2 % | $(102.7) | 36.1 % | $(96.7) | 6.2% |
Operating expenses | 90.8% | $(238.2) | 84.7% | $(227.0) | 4.9% |
Other income | $(0.1) | $- | |||
Equity earnings / noncontrolling interest | $0.3 | $0.7 | |||
$23.9 | $40.3 | ||||
Adjusted EBITDA | (40.7)% | ||||
Adjusted EBITDA margin | 9.1 % | 15.0 % | |||
Reported Diluted EPS | $(1.49) | $0.41 | (467.7)% | ||
Adjusted EPS (see calculations on slides 31 and 32) | $0.04 | $0.47 | (91.5)% | ||
General & administrative expenses in the above table exclude: | |||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) | $2.6 | $4.1 | |||
Stock-based compensation | $2.6 | $1.2 | |||
Gain on disposal or impairment of assets | $(0.1) | $(0.4) | |||
Stock-based compensation included in overhead allocation | $- | $0.6 | |||
- Unusual or nonrecurring items in 2023 include costs associated with nonroutine litigation and shareholder activism; in 2022, they include costs associated with the strategic alternatives review.
Enhabit Home Health & Hospice | Reconciliations to GAAP provided on pages 35 to 37 | 5 |
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Enhabit Inc. published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 05:06:12 UTC.
