Company to host a conference call tomorrow,
November 7, 2024, at 10 a.m. EST
Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice
care provider, today reported its results of operations for the
third quarter ended September 30, 2024.
“Our continued progress in our strategies during the third
quarter resulted in Adjusted EBITDA growth year over year and
strong free cash flow generation that led to further debt
reduction,” said Enhabit’s President and Chief Executive Officer
Barb Jacobsmeyer. “The payor innovation strategy continues to
foster Medicare Advantage growth in our home health segment, and
average daily census continues to grow in our hospice segment.”
QUARTERLY PERFORMANCE - CONSOLIDATED
- Net service revenue of $253.6 million
- Net loss attributable to Enhabit, Inc. of $110.2 million
- Adjusted EBITDA of $24.5 million
- Loss per share of $2.20
- Adjusted earnings per share of $0.03
RECENT COMPANY HIGHLIGHTS
- Non-Medicare admissions increased 20.1%, driving total
admissions growth of 5.6% year over year
- 45% of non-Medicare visits are now in payor innovation
contracts at improved rates
- Home health cost per visit increased 1.1% year over year
- 30-day hospital readmission rate in home health is 23.3% better
than the national average
- Hospice average daily census increased 6.9% year over year
- Average daily census increased sequentially every month since
January
- Admissions increased 5.7% year over year
- Hospice cost per day flat year over year
- 53.2% better than the national average for hospice patient
visits in last days of life
- Consolidated Adjusted EBITDA grew to $24.5 million from $23.2
million, a 5.6% improvement year over year primarily due to home
office expense reductions and revenue growth in hospice
- Reduced bank debt by $10 million in the quarter
FINANCIAL RESULTS
Consolidated
($ in millions, except per share
data)
Q3
'24 vs. '23
2024
2023
Home health net service revenue
$
201.0
$
210.9
(4.7)%
Hospice net service revenue
52.6
47.4
11.0%
Total net service revenue
$
253.6
$
258.3
(1.8)%
% of revenue
% of revenue
Cost of service
51.9
%
$
131.7
51.9
%
$
134.0
(1.7)%
Gross margin
48.1
%
121.9
48.1
%
124.3
(1.9)%
General and administrative expenses
38.1
%
96.7
39.1
%
101.0
(4.3)%
Total operating expenses
90.1
%
$
228.4
91.0
%
$
235.0
(2.8)%
Other income
—
(0.1)
Net income attributable to noncontrolling
interests
0.7
0.2
Adjusted EBITDA
$
24.5
$
23.2
5.6%
Adjusted EBITDA margin
9.7%
9.0%
Impairment of goodwill
$
107.9
$
—
N/A
Net loss attributable to Enhabit,
Inc.
$
(110.2)
$
(2.4)
(4,491.7)%
Reported diluted EPS
$
(2.20)
$
(0.05)
(4,300.0)%
Adjusted EPS
$
0.03
$
0.03
—%
Consolidated Adjusted EBITDA grew 5.6% year over year primarily
due to home office expense reductions and revenue growth in
hospice.
Consolidated revenue decreased $4.7 million, or 1.8%, year over
year primarily due to lower Medicare volume as a result of lower
recertifications in the home health segment.
Our payor innovation strategy continues to foster Medicare
Advantage growth. 45% of non-Medicare visits are now in payor
innovation contracts at improved rates. Non-Medicare revenue per
visit increased from $140 in 2023 to $147 in 2024.
SEGMENT RESULTS
Home Health
($ in millions)
Q3
'24 vs. '23
2024
2023
Net service revenue:
Medicare
$
117.3
$
141.0
(16.8)%
Non-Medicare
81.5
67.4
20.9%
Private duty(1)
2.2
2.5
(12.0)%
Home health net service revenue
201.0
210.9
(4.7)%
Cost of service
105.9
110.0
(3.7)%
Gross margin
47.3%
47.8%
General and administrative expenses
58.2
59.0
(1.4)%
Other income
—
(0.1)
(100.0)%
Net income attributable to noncontrolling
interests
0.4
0.2
100.0%
Adjusted EBITDA
$
36.5
$
41.8
(12.7)%
% Adj. EBITDA margin
18.2%
19.8%
Operational metrics (actual
amounts)
Medicare:
Admissions
23,422
25,585
(8.5)%
Recertifications
16,101
19,321
(16.7)%
Completed episodes
38,866
44,350
(12.4)%
Visits
561,525
660,380
(15.0)%
Visits per episode
14.4
14.9
(3.4)%
Revenue per episode
$
3,018
$
3,179
(5.1)%
Non-Medicare:
Admissions
29,950
24,938
20.1%
Recertifications
14,112
13,411
5.2%
Visits
552,815
501,764
10.2%
Total:
Admissions
53,372
50,523
5.6%
Same-store total admissions growth
5.5%
Recertifications
30,213
32,732
(7.7)%
Same-store total recertifications
growth
(7.8)%
Visits
1,114,340
1,162,144
(4.1)%
Visits per episode
14.1
14.9
(5.4)%
Cost per visit
$
94
$
93
1.1%
(1) Private duty represents long-term
comprehensive hourly nursing medical care.
Non-Medicare admissions increased 20.1%, driving total
admissions growth of 5.6% year over year. Revenue declined $9.9
million, or 4.7%, year over year primarily due to lower Medicare
volume as a result of lower recertifications. Revenue per episode
in Q3 2023 included a positive impact from changes in our estimated
recoverability of net service revenue, leading to a negative
year-over-year comparison in 2024.
Adjusted EBITDA decreased $5.3 million, or 12.7%, year over year
primarily due to the decrease in revenue. Cost per visit increased
1.1% year over year primarily due to the decrease in visits and
merit and market increases, partially offset by a reduction in
contract labor and favorable experience in workers' compensation
and group medical claims. Year-to-date cost per visit was flat year
over year. Visits per episode decreased 5.4% year over year to 14.1
primarily due to our continued focus on establishing a just right
plan of care for patients, ongoing clinician education, team
collaboration, and the thoughtful integration of predictive
analytics.
Hospice
($ in millions)
Q3
'24 vs. '23
2024
2023
Net service revenue
$
52.6
$
47.4
11.0%
Cost of service
25.8
24.0
7.5%
Gross margin
51.0%
49.4%
General and administrative expenses
16.5
15.7
5.1%
Net income attributable to noncontrolling
interests
0.3
—
N/A
Adjusted EBITDA
$
10.0
$
7.7
29.9%
% Adj. EBITDA margin
19.0%
16.2%
Operational metrics (actual
amounts)
Total admissions
3,046
2,882
5.7%
Same-store total admissions growth
4.1%
Patient days
333,247
311,719
6.9%
Discharged average length of
stay
100
107
(6.5)%
Average daily census
3,622
3,388
6.9%
Revenue per patient day
$
158
$
152
3.9%
Cost per patient day
$
77
$
77
—%
Revenue increased $5.2 million, or 11.0%, year over year due to
a 6.9% increase in patient days and increased Medicare
reimbursement rates. Admissions increased 5.7% year over year.
Revenue per day increased 3.9% year over year primarily due to
increased Medicare reimbursement rates. In the third quarter, the
Company accrued $1.4 million in Medicare Cap billing limitations
compared to $20 thousand in the third quarter of 2023.
Average daily census increased 6.9% year over year. Average
daily census increased sequentially every month since January
2024.
Adjusted EBITDA increased $2.3 million, or 29.9%, year over year
primarily due to increased revenue. Cost per day was flat year over
year.
GUIDANCE
Based on the impact of lower recertifications in the third
quarter and the impact from hurricanes in September and October,
the Company revised its guidance ranges for full-year 2024. The
Company updated its full-year 2024 guidance as follows:
($ in millions, except per share
data)
2024 Previous Guidance
2024 Updated Guidance
Net service revenue
$1,050 to $1,063
$1,031 to $1,046
Adjusted EBITDA
$100 to $106
$98 to $102
Adjusted EPS
$0.19 to $0.37
$0.19 to $0.29
For additional considerations regarding the Company’s 2024
guidance ranges, see the supplemental information posted on the
Company’s website at http://investors.ehab.com.
CONFERENCE CALL INFORMATION
The Company will host an investor conference call at 10 a.m. EST
on November 7, 2024 to discuss its results for the third quarter of
2024. To access the live call by phone, dial toll-free (888)
660-6150 or international (929) 203-0843; the conference ID is
5248158. A simultaneous webcast of the call, along with
supplemental information, may be accessed by visiting
https://events.q4inc.com/attendee/164004764. Following the call, a
replay will be available on the Company’s website at
http://investors.ehab.com.
ABOUT ENHABIT HOME HEALTH & HOSPICE
Enhabit Home Health & Hospice (Enhabit, Inc.) is a leading
national home health and hospice provider working to expand what's
possible for patient care in the home. Enhabit’s team of clinicians
supports patients and their families where they are most
comfortable, with a nationwide footprint spanning 256 home health
locations and 112 hospice locations across 34 states. Enhabit
leverages advanced technology and compassionate teams to deliver
extraordinary patient care. For more information, visit
ehab.com.
OTHER INFORMATION
Note regarding presentation and reconciliation of non-GAAP
financial measures
The financial data contained in this press release and
supplemental information includes non-GAAP (generally accepted
accounting principles (GAAP)) financial measures as defined in
Regulation G under the Securities Exchange Act of 1934, including
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EPS, and Adjusted
free cash flow. See “Supplemental Non-GAAP Information” for
reconciliations of the non-GAAP financial measures to the most
directly comparable financial measures calculated and presented in
accordance with GAAP. Additionally, our Form 10-Q for the three and
nine months ended September 30, 2024, provides further information
regarding “unusual or nonrecurring items that are not typical of
ongoing operations,” a reconciliation item in our Adjusted EBITDA
calculation. Such non-GAAP financial measures exclude significant
components in understanding and assessing financial performance and
should therefore not be considered superior to, as a substitute for
or alternative to the GAAP financial measures presented in this
press release. The non-GAAP financial measures in the press release
may differ from similar measures used by other companies.
The Company is unable to reconcile the guidance for Adjusted
EBITDA and Adjusted EPS to their corresponding GAAP measures
without unreasonable effort due to the inherent difficulty in
predicting, with reasonable certainty, the future impact of items
that are outside the control of the Company or otherwise
non-indicative of its ongoing operating performance. Accordingly,
the Company relies on the exception provided by Item 10(e)(1)(i)(B)
of Regulation S-K. Such items include, but are not limited to,
gains or losses related to hedging instruments; loss on early
extinguishment of debt; adjustments to its income tax provision
(such as valuation allowance adjustments and settlements of income
tax claims); and items related to corporate and facility
restructurings. For the same reasons, the Company is unable to
address the probable significance of the unavailable
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, Inc. and
Subsidiaries Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
($ in millions, except per
share data)
Net service revenue
$
253.6
$
258.3
$
776.6
$
785.7
Cost of service, excluding depreciation
and amortization
131.7
134.0
397.7
402.1
General and administrative expenses
103.8
108.8
321.3
327.1
Depreciation and amortization
8.2
7.7
23.6
23.2
Impairment of goodwill
107.9
—
107.9
85.8
Operating (loss) income
(98.0
)
7.8
(73.9
)
(52.5
)
Interest expense and amortization of debt
discounts and fees
10.8
10.9
32.8
30.7
Other income
—
(0.1
)
—
(0.2
)
Loss before income taxes and
noncontrolling interests
(108.8
)
(3.0
)
(106.7
)
(83.0
)
Income tax (benefit) expense
0.7
(0.8
)
1.5
(9.9
)
Net loss
(109.5
)
(2.2
)
(108.2
)
(73.1
)
Less: Net income attributable to
noncontrolling interests
0.7
0.2
2.0
1.0
Net loss attributable to Enhabit,
Inc.
$
(110.2
)
$
(2.4
)
$
(110.2
)
$
(74.1
)
Weighted average common shares
outstanding:
Basic
50.2
49.9
50.2
49.8
Diluted
50.2
49.9
50.2
49.8
Loss per common share:
Basic loss per share attributable to
Enhabit, Inc. common stockholders
$
(2.20
)
$
(0.05
)
$
(2.20
)
$
(1.48
)
Diluted loss per share attributable to
Enhabit, Inc. common stockholders
$
(2.20
)
$
(0.05
)
$
(2.20
)
$
(1.48
)
Enhabit, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited)
September 30,
2024
December 31,
2023
($ in millions)
Assets
Current assets:
Cash and cash equivalents
$
45.7
$
27.4
Restricted cash
1.7
2.4
Accounts receivable, net of allowances
150.9
164.7
Prepaid expenses and other current
assets
9.9
15.6
Total current assets
208.2
210.1
Property and equipment, net
19.4
19.0
Operating lease right-of-use assets
54.3
57.5
Goodwill
953.8
1,061.7
Intangible assets, net
63.9
80.0
Other long-term assets
4.7
5.3
Total assets
$
1,304.3
$
1,433.6
Liabilities and stockholders’
equity
Current liabilities:
Current portion of long-term debt
$
23.0
$
22.5
Current operating lease liabilities
11.7
11.8
Accounts payable
9.9
7.6
Accrued payroll
47.1
38.5
Refunds due patients and other third-party
payors
4.1
8.2
Accrued medical insurance
8.5
8.4
Other current liabilities
38.6
40.7
Total current liabilities
142.9
137.7
Long-term debt, net of current portion
502.9
530.1
Long-term operating lease liabilities, net
of current portion
43.4
45.7
Deferred income tax liabilities
17.1
17.1
Other long-term liabilities
0.1
1.3
Total liabilities
706.4
731.9
Redeemable noncontrolling interests
5.0
5.0
Stockholders’ equity:
Total Enhabit, Inc. stockholders’
equity
566.1
669.7
Noncontrolling interests
26.8
27.0
Total stockholders’ equity
592.9
696.7
Total liabilities and stockholders’
equity
$
1,304.3
$
1,433.6
Enhabit, Inc. and
Subsidiaries Condensed Consolidated Statements of Cash
Flows (Unaudited)
Nine Months Ended September
30,
2024
2023
($ in millions)
Cash flows from operating
activities:
Net loss
$
(108.2
)
$
(73.1
)
Adjustments to reconcile net loss to net
cash provided by operating activities—
Depreciation and amortization
23.6
23.2
Amortization of debt related costs
1.1
1.0
Impairment of goodwill
107.9
85.8
Stock-based compensation
7.8
7.2
Deferred income taxes
0.1
(13.1
)
Other
(0.7
)
0.7
Changes in assets and liabilities, net of
acquisitions—
Accounts receivable, net of allowances
13.8
(17.8
)
Prepaid expenses and other assets
5.9
19.9
Accounts payable
2.3
2.2
Accrued payroll
8.6
13.1
Other liabilities
(6.9
)
(3.6
)
Net cash provided by operating
activities
55.3
45.5
Cash flows from investing
activities:
Acquisition of businesses, net of cash
acquired
—
(2.8
)
Purchases of property and equipment,
including capitalized software costs
(3.2
)
(3.6
)
Other
1.1
0.6
Net cash used in investing
activities
(2.1
)
(5.8
)
Cash flows from financing
activities:
Principal payments on term loan
facility
(15.0
)
(15.0
)
Principal payments on revolving credit
facility
(15.0
)
(10.0
)
Principal payments under finance lease
obligations
—
—
Debt issuance costs
—
(1.1
)
Distributions paid to noncontrolling
interests of consolidated affiliates
(2.2
)
(2.5
)
Other
(3.4
)
(3.1
)
Net cash used in financing
activities
(35.6
)
(31.7
)
Increase in cash, cash equivalents, and
restricted cash
17.6
8.0
Cash, cash equivalents, and restricted
cash at beginning of period
29.8
27.2
Cash, cash equivalents, and restricted
cash at end of period
$
47.4
$
35.2
Enhabit, Inc. and
Subsidiaries Supplemental Non-GAAP Information
(Unaudited)
Reconciliation of Diluted
Earnings Per Share to Adjusted Earnings Per Share
Three Months Ended September
30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Diluted earnings per share, as
reported
$
(2.20
)
$
(0.05
)
$
(2.20
)
$
(1.48
)
Adjustments, net of tax:
Impairment of goodwill
1.93
—
1.93
1.50
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
0.05
0.07
0.18
0.14
Income tax adjustments(2)
0.24
—
0.25
0.01
Adjusted earnings per share
$
0.03
$
0.03
$
0.17
$
0.16
(1)
Unusual or nonrecurring items in the three
months ended September 30, 2024 include costs associated with
shareholder activism and restructuring activities and severance;
the nine months ended September 30, 2024 include costs associated
with shareholder activism, the strategic review process and
nonroutine litigation; in the three months ended September 30,
2023, they include nonroutine litigation, and the strategic review
process; the nine months ended September 30, 2023 also include
shareholder activism.
(2)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation and the effect of a valuation allowance recorded
against a portion of our deferred tax assets.
Reconciliation of Adjusted
EBITDA to Adjusted Earnings Per Share
Three Months Ended September
30,
2024
Adjustments
As Reported
Impairment of Goodwill
Unusual or Nonrecurring Items
That are Not Typical of Ongoing Operations
Income tax
Adjustments(3)
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
24.5
$
—
$
—
$
—
$
24.5
Interest expense and amortization of debt
discounts and fees
(10.8
)
—
—
—
(10.8
)
Depreciation and amortization
(8.2
)
—
—
—
(8.2
)
Gain on disposal of assets
0.3
—
—
—
0.3
Impairment of goodwill
(107.9
)
107.9
—
—
—
Stock-based compensation
(3.8
)
—
—
—
(3.8
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(3.6
)
—
3.6
—
—
(Loss) income before income
taxes
(109.5
)
107.9
3.6
—
2.0
Income tax benefit (expense)
(0.7
)
(11.0
)
(1.0
)
12.2
(0.5
)
Net (loss) income attributable to
Enhabit, Inc.
$
(110.2
)
$
96.9
$
2.6
$
12.2
$
1.5
Diluted EPS
$
(2.20
)
$
1.93
$
0.05
$
0.24
$
0.03
Diluted shares
50.2
50.8
(1)
Reconciliation to GAAP provided below.
(2)
Unusual or nonrecurring items in Q3 2024
include costs associated with shareholder activism and
restructuring activities and severance.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation and the effect of a valuation allowance recorded
against a portion of our deferred tax assets.
(4)
Adjusted diluted EPS may not sum due to
rounding.
Reconciliation of Adjusted
EBITDA to Adjusted Earnings Per Share
Three Months Ended September
30,
2023
Adjustments
As Reported
Impairment of Goodwill
Unusual or Nonrecurring Items
That are Not Typical of Ongoing Operations
Income Tax
Adjustments(3)
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
23.2
$
—
$
—
$
—
$
23.2
Interest expense and amortization of debt
discounts and fees
(10.9
)
—
—
—
(10.9
)
Depreciation and amortization
(7.7
)
—
—
—
(7.7
)
Gain on disposal of assets
0.2
—
—
—
0.2
Stock-based compensation
(3.1
)
—
—
—
(3.1
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(4.9
)
—
4.9
—
—
(Loss) income before income
taxes
(3.2
)
—
4.9
—
1.7
Income tax benefit (expense)
0.8
—
(1.3
)
0.1
(0.4
)
Net (loss) income attributable to
Enhabit, Inc.
$
(2.4
)
$
—
$
3.6
$
0.1
$
1.3
Diluted EPS
$
(0.05
)
$
—
$
0.07
$
—
$
0.03
Diluted shares
50.1
50.1
(1)
Reconciliation to GAAP provided below.
(2)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, and the
strategic review process.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation.
(4)
Adjusted diluted EPS may not sum due to
rounding.
Reconciliation of Adjusted
EBITDA to Adjusted Earnings Per Share
Nine Months Ended September
30,
2024
Adjustments
As Reported
Impairment of Goodwill
Unusual or Nonrecurring Items
That are Not Typical of Ongoing Operations
Income Tax
Adjustments(3)
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
75.0
$
—
$
—
$
—
$
75.0
Interest expense and amortization of debt
discounts and fees
(32.8
)
—
—
—
(32.8
)
Depreciation and amortization
(23.6
)
—
—
—
(23.6
)
Gain on disposal of assets
0.5
—
—
—
0.5
Impairment of goodwill
(107.9
)
107.9
—
—
—
Stock-based compensation
(7.8
)
—
—
—
(7.8
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(12.1
)
—
12.1
—
—
Income before income taxes
(108.7
)
107.9
12.1
—
11.3
Income tax expense
(1.5
)
(11.0
)
(3.2
)
12.8
(2.9
)
Net income attributable to Enhabit,
Inc.
$
(110.2
)
$
96.9
$
8.9
$
12.8
$
8.4
Diluted EPS
$
(2.20
)
$
1.93
$
0.18
$
0.25
$
0.17
Diluted shares
50.2
50.4
(1)
Reconciliation to GAAP provided below.
(2)
Unusual or nonrecurring items in 2024
include costs associated with shareholder activism, the strategic
review process, and nonroutine litigation.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation and the effect of a valuation allowance recorded
against a portion of our deferred tax assets.
(4)
Adjusted diluted EPS may not sum due to
rounding.
Reconciliation of Adjusted
EBITDA to Adjusted Earnings Per Share
Nine Months Ended September
30,
2023
Adjustments
As Reported
Impairment of Goodwill
Unusual or Nonrecurring Items
That are Not Typical of Ongoing Operations
Income Tax
Adjustments(3)
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
72.5
$
—
$
—
$
—
$
72.5
Interest expense and amortization of debt
discounts and fees
(30.7
)
—
—
—
(30.7
)
Depreciation and amortization
(23.2
)
—
—
—
(23.2
)
Gain on disposal of assets
0.2
—
—
—
0.2
Impairment of goodwill
(85.8
)
85.8
—
—
—
Stock-based compensation
(7.2
)
—
—
—
(7.2
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(9.8
)
—
9.8
—
—
(Loss) income before income
taxes
(84.0
)
85.8
9.8
—
11.6
Income tax benefit (expense)
9.9
(11.1
)
(2.9
)
0.6
(3.5
)
Net (loss) income attributable to
Enhabit, Inc.
$
(74.1
)
$
74.7
$
6.9
$
0.6
$
8.1
Diluted EPS
$
(1.48
)
$
1.50
$
0.14
$
0.01
$
0.16
Diluted shares
49.9
49.9
(1)
Reconciliation to GAAP provided below.
(2)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, shareholder
activism, and the strategic review process.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation.
(4)
Adjusted diluted EPS may not sum due to rounding.
Reconciliation of Net Loss to
Adjusted EBITDA
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
($ in millions)
Net loss
$
(109.5
)
$
(2.2
)
$
(108.2
)
$
(73.1
)
Interest expense and amortization of debt
discounts and fees
10.8
10.9
32.8
30.7
Income tax (benefit) expense
0.7
(0.8
)
1.5
(9.9
)
Depreciation and amortization
8.2
7.7
23.6
23.2
Gains on disposal of assets
(0.3
)
(0.2
)
(0.5
)
(0.2
)
Impairment of goodwill
107.9
—
107.9
85.8
Stock-based compensation
3.8
3.1
7.8
7.2
Net income attributable to noncontrolling
interests
(0.7
)
(0.2
)
(2.0
)
(1.0
)
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
3.6
4.9
12.1
9.8
Adjusted EBITDA
$
24.5
$
23.2
$
75.0
$
72.5
(1)
Unusual or nonrecurring items in the three
months ended September 30, 2024 include costs associated with
shareholder activism and restructuring activities and severance;
the nine months ended September 30, 2024 include costs associated
with shareholder activism, the strategic review process and
nonroutine litigation; in the three months ended September 30,
2023, they include nonroutine litigation, and the strategic review
process; the nine months ended September 30, 2023 also include
shareholder activism.
Reconciliation of Net Cash
Provided by Operating Activities to Adjusted EBITDA
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
($ in millions)
Net cash provided by operating
activities
$
28.4
$
6.3
$
55.3
$
45.5
Interest expense, excluding amortization
of debt discounts and fees
10.4
10.7
31.7
30.3
Current portion of income tax expense
(0.5
)
1.3
1.4
3.2
Change in assets and liabilities,
excluding derivative instrument
(16.7
)
—
(23.6
)
(15.0
)
Net income attributable to noncontrolling
interests
(0.7
)
(0.2
)
(2.0
)
(1.0
)
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
3.6
4.9
12.1
9.8
Other
—
0.2
0.1
(0.3
)
Adjusted EBITDA
$
24.5
$
23.2
$
75.0
$
72.5
(1)
Unusual or nonrecurring items in
the three months ended September 30, 2024 include costs associated
with shareholder activism and restructuring activities and
severance; the nine months ended September 30, 2024 include costs
associated with shareholder activism, the strategic review process
and nonroutine litigation; in the three months ended September 30,
2023, they include nonroutine litigation, and the strategic review
process; the nine months ended September 30, 2023 also include
shareholder activism.
Reconciliation of Net Cash
Provided by Operating Activities to Adjusted Free Cash Flow
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
($ in millions)
Net cash provided by operating
activities
$
28.4
$
6.3
$
55.3
$
45.5
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
3.6
4.9
12.1
9.8
Capital expenditures for maintenance
(0.7
)
(1.9
)
(3.2
)
(3.6
)
Other working capital adjustments
(1.0
)
(0.7
)
(2.7
)
(1.7
)
Distributions paid to noncontrolling
interests of consolidated affiliates
—
—
(2.2
)
(2.5
)
Adjusted free cash flow
$
30.3
$
8.6
$
59.3
$
47.5
(1)
Unusual or nonrecurring items in the three
months ended September 30, 2024 include costs associated with
shareholder activism and restructuring activities and severance;
the nine months ended September 30, 2024 include costs associated
with shareholder activism, the strategic review process and
nonroutine litigation; in the three months ended September 30,
2023, they include nonroutine litigation, and the strategic review
process; the nine months ended September 30, 2023 also include
shareholder activism.
Reconciliation of Gross Margin
to Adjusted EBITDA Margin
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Gross margin as a percentage of
revenue
48.1
%
48.1
%
48.8
%
48.8
%
General and administrative expenses
(40.9
)%
(42.1
)%
(41.4
)%
(41.6
)%
Stock-based compensation
1.5
%
1.2
%
1.0
%
0.9
%
Noncontrolling interests
(0.3
)%
(0.1
)%
(0.3
)%
(0.1
)%
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
1.4
%
1.9
%
1.6
%
1.2
%
Adjusted EBITDA margin
9.7
%
9.0
%
9.6
%
9.2
%
(1)
Unusual or nonrecurring items in the three
months ended September 30, 2024 include costs associated with
shareholder activism and restructuring activities and severance;
the nine months ended September 30, 2024 include costs associated
with shareholder activism, the strategic review process and
nonroutine litigation; in the three months ended September 30,
2023, they include nonroutine litigation, and the strategic review
process; the nine months ended September 30, 2023 also include
shareholder activism.
FORWARD-LOOKING STATEMENTS
This press release contains historical information, as well as
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”))
that involve known and unknown risks and relate to, among other
things, future events, projections, financial guidance, legislative
or regulatory developments, strategy or growth opportunities, our
future financial performance, our projected business results, or
our projected capital expenditures. All statements other than
statements of historical fact are, or may be deemed to be,
forward-looking statements. In some cases, the reader can identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “could,” “expects,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “targets,” “potential,” or “continue” or
the negative of these terms or other comparable terminology. Any
forward-looking statement speaks only as of the date of this
release, and the Company 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, many of which are
beyond our control. Actual events or results may differ materially
from the results 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 the Company
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; changes in the episodic versus non-episodic
mix of our payors, the case mix of our patients, and payment
methodologies; our ability to attract and retain key management
personnel and healthcare professionals; potential disruptions or
breaches of our or our vendors’, payors’, and other contract
counterparties’ information systems; the outcome of litigation; our
ability to successfully complete and integrate de novo locations,
acquisitions, investments, and joint ventures; the impact of
Hurricanes Helene and Milton on our operations; and our ability to
control costs, particularly labor and employee benefit costs. Our
Annual Report on Form 10-K for the year ended December 31, 2023
dated March 15, 2024, which can be found on the Company’s website
at http://investors.ehab.com, discusses these and other risks and
factors that could cause actual results to differ materially from
those expressed or implied by any forward-looking statement in this
press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106425463/en/
Investor relations contact Jobie Williams
investorrelations@ehab.com 469-860-6061
Media contact Erin Volbeda media@ehab.com
972-338-5141
Enhabit (NYSE:EHAB)
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