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The following is the transcript of a conference call initially held on November 16, 2017. Audio playback
is available on the Investor page of Almost Family, Inc.s website.
LHC Group Conference Call
November 16, 2017
Corporate
Speakers:
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Eric Elliott; LHC Group, Inc.; VP of Finance
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William Yarmuth; Almost Family, Inc.; Chairman and CEO
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Keith Myers; LHC Group, Inc.; Chairman and CEO
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Joshua Proffitt; LHC Group, Inc.; Executive VP of Corporate Development, CFO, Treasurer
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C. Steven Guenthner; Almost Family, Inc.; President, Principal Financial Officer, Treasurer & Secretary
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Donald Stelly; LHC Group, Inc.; President and COO
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Participants:
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Brian Tanquilut; Jefferies, LLC; Analyst
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David MacDonald; SunTrust Robinson Humphrey, Inc.; Analyst
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Kevin Ellich; Craig-Hallum Capital Group, LLC; Analyst
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Joanna Gajuk; Bank of America; Analyst
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Benjamin Whitman Mayo; Robert W. Baird & Co. Incorporated; Analyst
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PRESENTATION
Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to LHC Group and Almost Family Merger Conference Call. (Operator
Instructions) As a reminder, todays conference call is being recorded for replay purposes. Its now my pleasure to turn the conference over to Mr. Eric Elliott. Sir, you may begin.
Eric Elliott: Thank you, [Banner]. Id like to welcome everyone to LHC Group, Almost Family merger transaction call. If you had not obtained a copy of
the release, along with a detailed presentation summarizing the terms and strategic rational of this transaction, you can find it on our websites, at lhcgroup.com and almostfamily.com.
In a moment, well hear from William Yarmuth, Chairman and Chief Executive Officer of Almost Family; Keith Myers, Chairman and Chief Executive Officer of
LHC Group. Also on the call today and available for Q&A Steve Guenthner, Don Stelly and Josh Proffitt. Wed like to remind everyone that certain statements and information on this call may be deemed to be forward-looking statements within
the meaning of the federal Private Securities Litigation Reform Act of 1995.
Forward-looking statements may include, but are not limited to, statements relating to the transaction, including
the timing of the transaction and anticipated benefits of the transaction; LHC Groups and Almost Familys objectives, claims and strategies; and all statements other than statements of historical facts and address activities, events or
developments that LHC Group and Almost Family intend, accept, project, believe or anticipate, will or may occur in the future.
Any forward-looking
statements in this call are made as of the date here and LHC Group and Almost Family undertake no duty to update or revise any such statements whether as a result of new information, future events or otherwise. Forward-looking statements are not
guarantees of future performance, whether actual results will conform to the expectations and predictions, subject to known and unknown risks and uncertainties.
Actual results could differ materially from those projected in forward-looking statements before the number of risk factors and uncertainties, which are
discussed in our annual and quarterly SEC filings. Almost Family and LHC Group show no obligation to update information provided on this call to reflect subsequent events.
In addition, todays press release and investor presentation includes important disclosures that applied to this call. It is also note that this call is
for informational purpose only and does not constitute an offer to sale or the solicitation of an offer to buy any securities or solicitations of any board for approval or respect to the proposed transactions between LHC Group and Almost Family, or
otherwise.
Nor shall there be any sale of securities in any jurisdictions in which such solicitation or sale would be unlawful prior to registration or
qualification on the securities laws of any jurisdiction. No offer security shall be made, except by means of perspectives meeting the requirements of Section 10 of the Securities Act of 1933 as amended.
Now, I am pleased to introduce the Chairman and CEO of Almost Family, William Yarmuth.
William Yarmuth: Thanks, Eric. I am extremely proud to be able to discuss the combination of two great healthcare providers. Having what is now Almost Family
and having lead it for the past 36 years, I can tell you how pride I am of what weve accomplished and where we are in our journey.
With over 350
offices, driving home health, hospice and personal care operations, with the unique exciting health care area, which was created to capitalize on opportunities related to our core businesses, we have grown to employ nearly 70,000 employees who make
peoples lives better every day, taking care of them in their homes.
Im also extremely proud of the relationship we created in our hospital
joint venture with Community Health Systems and to better understand the value and opportunity of creating strong partnerships with acute-care institutions. Weve done this with great people and a great management team.
So when you put it that way, you might say, why we are announcing this merger today. Although, I take great pride
in what weve done and where we are positioned, I believe the world of home health, personal care and hospice is evolving rapidly and is increasingly acceptance of the other key component to managing care is clear, its becoming more
complex and sophisticated, and continues to be one of the more competitive segment in health care.
Over the years, Ive watched and competed with
Keith and LHC Group as they venture down a very similar path to achieving great things, perceiving their developing strategies. Ive always compared Almost Familys success against LHCs over the years and what Keith and his
management team has built.
Earlier this year, when Keith and I began discussing where the world was going, as weve done so many times over our long
history, it became evident to both of us that, although our companies were each in a great place with strong balance sheet and both with the full plate of opportunities, there was another option.
Combining the two in the merger likely weve announced today, we created the largest independent of home health personal care and hospice services, in
the country with a combined management team having more experience and in my opinion, more skill than any other. Together, we could capitalize more efficiently and effectively on the opportunities each of us were pursuing individually.
And not only that the combination would be accretive to our combined shareholders and allow us to achieve synergies without compromising our opportunity. It
was the right thing to do at the right time.
Together our two companies will operate 781 branches in 36 days with over 31,000 employees. Combining
companies of occur not only very strong cultural fit, they also requires a level of shared vision and mission that forms the very core of our reason for being. Almost Family and LHC both exist to meet the needs of elderly patients and their families
who require
in-home
medical services, such as home health, hospice and personal care, with a passion for quality outcomes and patient satisfaction.
Collaboration is at the core of what we do every day. Honestly Keith envision to other companies with more in common coming together, in what they do, who
they serve, how they deliver those services and the passion they have for leading change in our health care system.
Proud is the theme in my comments. I
am proud of the accomplishment that Almost Family has achieved. I am very proud of where our organization is today. But Im extremely proud what the future holds for Almost Familys organization with the merger weve announced. I want
to extend my sincere appreciation to all of the employees of Almost Family and LHC for what they do every day in making peoples lives better.
I will now turn the microphone over to Keith, a leader who I have the utmost respect for and confidence in as our
two organizations become 1 and we move forward with the goal of adding value to the people we serve, our employees and their families our partners, and as always our investors. Keith?
Keith Myers: Thank you, William, and good morning, everyone. This is indeed, an exciting day for all of us. Earlier this morning William and I held call with
our respective employees. We share with them our plans and vision for this merger and all of that we expect to accomplish together. I can tell you there was a lot of excitement on that call. Our teams understand what we can achieve together and how
we will be able to fill the gaps to create a national platform that can read our industrys transition to value-based reimbursement.
Weve also
received a number of calls from the existing and potential hospital joint venture partners who share our enthusiasm and look forward to seeing what challenges we can collectively solve for them.
While this is without question, the largest transaction LHC Group has ever been part of, the preparation, integration and on boarding is very similar to the
joint ventures with LifePoint, home health and others. And Ill start with a special type of corporate culture and service we developed in LHC Group since the early days of our founding.
Our goal is to leverage the wide ranging depth of experience and resources available at LHC and Almost Family, while maintaining a local field to the kind of
services provided by the at each locations. Health care is after all local, and both companies believe local health care brands are vital to the way we do business. This attitude has kept LHC Group firmly grounded in our heritage to provide the
customized level of care for the communities in which we operate.
Similar to Almost Family, we have developed
in-homed
assistance, integrating new employees in locations into our family of caregivers, as weve grown and expanded across the country. We will on that finely-tuned system in the coming weeks and
months, as we come together as one and well into the future, as we welcome future partners into our collective family.
You heard earlier while William
and his team thought this merger was a good idea, so what our LHC Groups reason for doing so. I think I would point back to a statement I made on of our most earnings call that there has never been a stronger commitment to home health, whether
its from government health care programs, managed care payers or hospitals and integrated health systems.
With that level of commitment and the
need for the industry to transition to value-based reimbursement and correlated care, there has never been a better time to accelerate the execution of our business model. Weve driven organic growth through relentless focus on quality and
patient satisfaction and on meeting the growing demand from our health care partners to coordinate post acute care in home health, hospice and committee-based savings, with the provider who shares their mission and vision for delivering patients
care with collaborative culture, so as Almost Family.
We have a proven track record of acquisitions and joint ventures, having completed 75 such partnerships in the
past 20 years. Almost Family has recently integrated its largest acquisition in the history of the company with Community Health Systems and has been noted amongst the partners for succeeding exactly where we have as well.
This merger presents a unique opportunity to bring to like minded and proven providers together to create the leading national post acute provider and joint
venture partner of choice. Weve outlined many compelling strategic reasons for this merger in our joint press release and accompanying presentation. But Id like to focus on a few for a moment here.
We firmly believe that the landscape for
in-home
health care providers is rapidly evolving with hospital and health
systems meeting to transition to a value-based patient-centered care model. In combining LHC Group and Almost Family, we will be the only national home health, hospice and personal care services provider that has a long proven track record of
successfully partnering with hospitals and health systems. We can now better support existing partners and serve many more potential partners.
The value
proposition we can bring to bear for these joint venture partners has greatly increased as well with this customized solution and the ability to collectively maintain established local brands. The range of services across the continuum of post acute
care is now unmatched on a national basis. In our minds and in the minds of our partners, we have become the provider and joint venture partner of choice for leading hospitals and health systems.
This merger will have a very real impact on our ability to drive additional organic growth. With an addition of Almost Familys personal care services
business, which is larger and more extensive than our community based services, we can leverage the deep expertise in this business across a larger base of home health locations.
Almost Family has the best practices, having begun this business 40 years ago, and there is a tremendous opportunity to drive higher volumes nationwode. And
with only 16 current hospice locations for Almost Family, we have a complimentary opportunity to grow our hospice business through greater collaboration in the existing markets and projects in new markets as we replicate on successful
co-location
strategy.
At LHC Group, we were already on a strong growth pace for organic growth and the addition of new
joint venture partners from acquired revenue. This merger is immediately accretive and we expect it to provide meaningful opportunities to generate growth in the future. As you can see from our release, the benefit is quite substantial post-merger,
with combined expected trailing
12-month
revenue of approximately $1.8 billion and adjusted EBITDA of $145 million.
Our strong balance sheet, both before and after this merger, will allow us to continue pursuing additional
acquisitions to fill in locations and markets complete joint ventures and grow complementary service lines. Post-transaction, we are projecting our combined gross leverage to be approximately 1.5x on a combined trailing
12-month
2017 adjusted EBITDA, and over $100 million of free cash flow.
In terms of the next steps of the
transaction, we remain committed to close the transaction in an expeditious manner and expect to close the transaction in the first half of 2018, subject, of course, to approval of the transaction by both companys shareholders, required
regulatory approval and other customary closing conditions.
Our collective teams will continue the hard work theyve already started to initiate the
integration effort and prepare to hit the ground running following the closing of the merger.
Through our LHC Group and Almost Family teams, thank you
for all that you do. Our clinical professionals for the high-quality patient care and exceptional service we provide to the patients family and communities, we were so blessed to care for, and to all LHC Group family members who provide
support and service to them every day. Because of all of you, LHC Group continues to be successful at fulfilling our mission to care for the elderly and
at-risk
populations in our service area.
This concludes our prepared remarks and were now ready to open the call for questions. Thank you.
QUESTIONS AND ANSWERS
Operator:
(Operator Instructions) And our first question will come from the line of Brian Tanquilut with Jefferies.
Brian Tanquilut: So I guess, Keith, my first
question is, this is a verythis is a big transaction. And as weve seen in the health care landscape, a lot of big deals stumble and face challenges. So as we sit here, I mean, where do you get the comfort and the confidence that this
will be different from a lot of challenge?
This would be a fairly smooth and seamless integration. And also how do you view the risk profile of the
company now that its combined with Almost Family?
Keith Myers: Certainly appropriate question to ask me. But you know that Im not a high-risk
guy and LHC Group is a pretty conservative company. So we dont approach this likely. Themy answer to the question, it starts for me with the relationship I have with William for a very long time and how well these two companies have
known each other for a very long time. Weve been competitors, but friendly competitors.
And Ive always noticed how similar the cultures where. I cant count the number of times that people
have come to us, asking us why these two companies hadnt come together before. And Ive Williams probably the same questions asked to him
time-to-time.
So the
Ive to start with the cultural fit, because in our business, this is a people business. And having
buy-end
and loyalty cultural alignment is paramount in my mind. And we can check that box very
easily.
The next thing that causes in my mind is large transactions do not turn the way the expected as leveraged. Were not doing this with
leverage. This is a stock transaction, where we are merging two companies together and we have very low leverage. And then the third part is the geographic footprint that we create.
There is almost no overlap in these two companies and its just amazing. Its almost as what weve done leverage on. So all of those things
just combined to bring the risk profile way down for me and get us across this line. Again, I cant think of another large transaction that would work for us.
Brian Tanquilut: Got it. And then I guess, for Keith, again, or maybe Steve, as we think about synergies, you laid out a synergy plan $25 million. How
real and easily attainable are those synergies? And how are you thinking about potential revenue synergies down the road, especially, as we think about your innovation business and personal care?
Keith Myers: Let me take advantage of your questions or sort of answer that whole differently around who we are as a team here together because Im going
to kick this question to Josh, because he and Jeff, our Chief Accounting Officer, they did that work and they are in a better place to explain to you the confidence level that we have in that work. I will say that any upside synergies, revenue
synergies, cross-selling opportunities, strategic development opportunities, those are all sort of in the future.
So there is nothing in this
$25 million around that. And Im going to defer to my new best friend, Josh, over here to take that $25 million.
Joshua Proffitt: Yes,
great. Thanks, Steve, and thanks for the question, Brian. I want to echo what Steve was alluding to, which is just the amount of collaboration and report that has not only gone into the transaction, but that has really been developed through the
synergy exercise. Myself, Steve, Eric, Jeff, working together and coming together as a team, well before this day was announced.
And I couldnt be
more excited about that. I want to also just echo the confidence that we have in the $25 million being cost synergy only. I would maybe go so far even to say that, that would be a conservative number, but you all know as well enough to now that
we are going to be conservative. We do have a detailed plan around how to execute that and to continue to kind of work on that together.
But there are no level synergies in that number. Its an overhead, I would say, public company calls things
that you would expect and the upside synergies that Steve alluded to, I think that everybody in this room is pretty excited.
Brian Tanquilut: Got it. And
then the last question from me. As I think about the growth, so Keith, obviously, you have done a really good job driving very heathy organic growth and a William and Steve has done the same thing and with that M&A and JV. So how does this
change given that youre going through integration?
I know you have an unlevered balance sheet and you alluded to that in your prepared remarks. But
how should we be thinking about the growth profile of the combined company, 6 months, 12 months and longer than that out?
Keith Myers: Well, Ill go
first and ask Steve to join with me here. So I dont see this having certainly no negative effect, or perhaps even accelerating the growth profile. Our balance sheet is clean. The volume of inbound calls and interest that were getting
from hospital and health system partners, in particular, continues to increase. So I dont see anything that would curtail that. Were really excited about the new growth opportunities. And Stephen is going to take that.
C. Steven Guenthner: Sure. So here is how we think about it or I think about it, that this, we talked for a long time in our investor conferences and
discussions around trajectory and continuing that trajectory, both companies have been on pretty amazing trajectories. And so this is continuing the trajectory. So if you just think about or kindly be the bigger factor stronger. So we are delivering
the balance sheet.
This is going to be a straightforward integration. I dont want to get too far ahead of ourselves, but weve already
integrated the home health agencies of Almost Family into home care home base, which is the same platform as we used in LHC. So we are just that much further ahead. We are going to ultimately integrate personal care operations into the platform that
Almost Family uses. So thats going to go pretty well.
Weve got great deal of experience doing that. So I think were going to grow
better and faster. Id rather ask to do his together, because I think we can grow better, faster, lower risk, higher return profile doing this together than possibly doing separately.
Operator: And our next question will come from David MacDonald with SunTrust.
David MacDonald: William and Keith, can you just talk about, I mean, Keith, weve heard you talk about hospitals increasingly wanting to have you guys
take over candidly post acute for them? How much better is the combined company going to be positioned in terms of, not only a broader geographic footprint, but also a broader service offering? And if you can just talk about that briefly? And also
how much better the combined company is positioned for value-based care?
Keith Myers: Yes. Dave, I dont know if you didnt answered the question in the question. No, I mean,
but seriously lets start with from I went back, in terms of managed care, we are to get the attention of the larger managed care payers. You have to have footprint and be able to deliver enough value to have a real seat at the table, and you
have to haveyou have to cover their population density areas.
So far us, filling in a lot of those holes here is very important for the 2 companies
combined. For LHC, we didnt have the state in Florida. We cant really have a meaningful conversation if we cant cover the State of Florida. So thats a tick up for us. In terms of the one thing that you didnt
mention and I want to bring out is the depth and experience of the management team. So as if the company grows and began to scale, we on more of these hospitals and health systems, its pretty easy to put on the street at the ground level.
What gets harder is, these hospitals and health systems dont have any real experience in the post acute side and they bring us in because we are good
managers. You have to have enough management team that experienced to do that exceptionally well. You cant go in and get the relationship and then provide a substandard level service and survive there and all. We have an LHC Group.
Weve always been very proud of the fact that were able to say that every hospital or health system thats ever done business with us is on
our reference list. And I want to make sure that we can always do that. And today, with the team that obviously around the table, I have no doubt in my mind that we can do that for many years to come. We just guarantee that. So did I leave anything
out?
David MacDonald: No. Just one other quick
follow-up
question I would have is, look, Keith, you guys
specifically have seen a pretty nice uptick in not only the frequency, but the size of the joint venture activity since announcing LifePoint. How big handle affect you think the combined company get of the fact that you not have two of the major
public hospital systems kind of under one banner here?
Keith Myers: In our experienceour experience has been flooded. When we had larger systems,
we justin accelerate in down into the pipeline robustness youre getting that, but the way...
William Yarmuth: This is William. Since we did
our transaction community last year, our phones have been ringing and theres been a lot more inbound interest in our organization from hospitals. I know youve done with the community. Were thinking about it. We are interested in
that area. And so weve seen a significant increase in the amount of interest. And Im sure that has of LHC Group.
So thats becoming a
morethats becoming a pretty good model that people are looking at from acute care institutional side from my perspective. Relative to some of the other things, in terms of internal growth, weve got huge opportunities now from the
Almost
Family perspective to begin to implement things that we and new markets, whether its personal care, so theres a lot of internal growth.
And then coming back to the other way, because we are relatively small hospice providers. Now we can leverage the
expertise that LHC has in the hospice market and bringing into markets that we have historically not done hospice in. So I think, just putting the two companies together is going to be sort of create a real valuable internal growth engine that we
should be able to do and do pretty efficiently, because one of the nice things about that integrationI have two more points and I will share that.
But one of the nice things that integration and listen into Bryans question, we dontwe are locally branded, we are locally branded
organization, so as LHC. So in the marketplaces where your providing care, they dont really care about Almost Family, they might care, but Im not sure they dont do that. They dont care about Almost Familys name, they
care about the people that are out there, providing the care in the community and the relationship they have there. That doesnt get disrupted through the integration of this operation.
There is no disruption that we should see there and were obviously emphasizing that with our employees in the field. No change go out, keep doing the
business. You operate in the name which your are proud of. Your individual brand. We are proud of that name too. Gohave had it, go build the business, and when there is overlap, we already have that in each of our business. We have markets in
which we have multiple brands operating in the same market.
So I think the disruption that you might experience in a different kind of integration is not
athat you might think two companies coming together is very minimal, minimized in this process and one that I think we are both highly confident we can get through it in a least disrupted, I wanted to make sure that I got it right, the least
disruptive way possible. Another thing that I just wanted to mention, because it with the hospital stuff is, in our health care innovation area, we have HCL enable in the company.
One of the things weve seen over the years is whole lot more interest with the hospitals, wanting to get and create and establish their own in their
marketplaces. When we have
75-plus
hospitals that are out there, that are probably thinking about this. There is probably going to be a whole lot of pipeline and opportunity to build relationships in those
markets, with their positions, with all that activity. And I think thats is going to be another growth engine.
Although, we have not proved it yet,
Im still highly confident that when you build that network with a partner hospital, youll get the home health benefit is going to a newer benefit of the provider that you have the relationship with. And so, we now havethis is
whole bucket of opportunities for our ACO enabled in the company to work with that process.
So I think there is a whole lot of puzzle piecing that were putting together or putting these together that
keeps company and what we have done and how weve operated together and I think culturally, we are extremely in line. We are organized in a very similar way. And each kind of with our development, we have done a little bit in a different path.
So weve created opportunities that would come together, its kind of build and cross fertilize those markets. So thats why Im
excited about. Thats why I want to get to sense and enthusiasm in a wise. But thats why they will feel so strongly, this is a really, really a good thing.
Operator: And our next question will come from line of Kevin Ellich with Craig-Hallum.
Kevin Ellich: Lots been talked about already, but just one of the other background, Keith and William. I guess, how long does it take to get to put the deal
together? And then maybe to Steve, have you guys already the integration plans? Or is that still kind of a work in progress?
Keith Myers: Sobut
its not likeits not as though we didnt know each other, we have to get to know each other. William, I guess, starting. We justwere talking just normal course, several times a year, especially when there are any
significant events going on in the industry. Weve been doing that for many years. And I guess, what left with this transaction was a conversation we had in the summary.
William Yarmuth: Yes, in the summary.
Keith Myers: Yes. We
were really talking about the proposed rules from CMS and how we thought about that and how we might work to getachieve a good outcome during the common period. And then through those conversations, we just started acting some of it and one
thing led to another. But really it wasnt that we have to learn anything about Almost Family or get to know, William, it is a very natural conversation. William?
William Yarmuth: Yes. From my perspective, I think that the history is exactly as Keith described it. But certainly, the preliminary rule that came out kind
of was creating a pretty disruptive like cloud over the industry because thats begin to talk about that. But as we talked about it and howthe world, the government can do some pretty disruptive stuff to us, and we have all lived to it.
So Keith and I have lived through a whole lot of changes in reimbursement that we head to adapt to, as in dealing with it.
This was a pretty significant
one that were facing. In those conversations, we kind of talk over the years in different times, this is the right time. We should put our companies together. Whos going to do this, whos doing that, all the rest of that. We kind of
got down the road in our conversation, which is like, its now our time that makes sense. And as I thought about it for our company I said, all the things we talked about on our call, stronger combined management is really important you should
kind of had to deal with the system, the industry were in.
The opportunities that both of us had are very important. The leverage that we would get, this cross-selling
opportunity and it just sort of came together and I think we probably on sort ofand my mind is like, okay, well lets figure out what the right answer is. If it makes sense, lets do that. Lets bring our teams together. And you
know what, you got to get rid of the weakest link. So Ill stand off on the sideline for a little bit.
Keith Myers: Yes.
William Yarmuth: Its truly not a leadership issue. I have tremendous confidence in Keith is a leader and hes built a great company. And I am happy
to be part of it in the role that I play. But whats best for the company and whats best for the people that areits all about our employees, all about the people we care for, all about the best management team to be obtained
to leave this organization. And I think we made all the right decisions in what weve done in the combination.
So it probably took in my head, may
be a week, I dont think about it for few days and then take long to, lets see if we can make it work. Then, that took a little longer. But the decision from me to do it were sort to make all the sense in the world the right thing to do
and a great play, lets go do it, because the longer it takes to do it, than the opportunity weve lost. So thats why I was being side of that.
Keith Myers: Kevin, do you want me to comment on integration?
Kevin Ellich: No. I did want to comment on integrations team and I also wanted to give you kudos for making the first time in the call for the timely lesson.
Keith Myers: Somebody give him the microphone. I will promise I wont try to steal the mic. I want to comment, I am not going to get away with that
part. What works for us, is he is part of this thing. Part of what lowers the risk in this, is hes part of this thing.
William Yarmuth: Absolutely.
Keith Myers: Soand I dont really want to point out all the shareholders and analysts, nobodys walking away from here with a check,
everybody is staying in. All our equity is staying in. Were on this team to make this thing happen. It goes way past the people that are on this call. There is a lot of people down below this call, other areas in the company that people are
excited, theyre committed. Weve been making the rounds today here in this home office and everybody reads the headline says, Hey, the headquarters going to be in Lafayette.
Well, we are making our rounds today. So a lot of people in this building are excited about what were going to do here. So part of the integration,
Im going to ask one of my best friends, Josh to talk aboutneed to hear this voice as well. But a part of this integration is, were also going to grow the business rapidly. Its going to be a lot of opportunities and
peopleimportant update for everybody herehome health and...
C. Steven Guenthner: We do have a little bit of background noise and I apologize for that. Its on somebody
elses but just to touch on that, were about to combine management team together weve done many, many transactions and integrations. And even so were humble and smart enough to go outside and look at the third party things and
take things differently. So we are engaging that.
But Steve made a really good point that I want to reiterate. Although a company, when we have to go out
and integrate, it starts with the platform. With Almost Family being our home care home base now, that is such heavy lifting out of the way and we can concentrate on some of that clinical programs and some of the operational new launches that we
think combined is going to enhance both products and the throughput between service lines.
So, yes, weve got work to do, of course, between now and
the closing. But we think our plan is methodical and we think we have oversight from the third party that is going to make this unprecedented integration and we look back just couple of months and were going to give you a little more
information on that.
Operator: And our next question will come from the line of Joanna Gajuk with Bank of America.
Joanna Gajuk: So on the synergies, I dont know whether I understand, but did you talk about the timing of when you expect the $25 million cost
synergies to be achieved? Should I assume that its almost immediately achieved?
Joshua Proffitt: Yes, Joanna. This is Josh. I can start off by
taking that one. SoI mean, based on just the time line of the transaction in general, we are anticipating it to happen in the first half of next year. And as you would imagine, the lions share, the balance of the synergies will be able to
achieve fairly early on post closing.
But there will be some staging to do that. There will be, as you would expect, probably in the first 6 to 12
months, some cost to achieve some of those synergies. So I wouldnt bake the full $25 million in two days one by any stretch. But I would tell you that weve got of confidence that weve got a plan to execute that, and that it
will be immediately accretive day 1 and that by 2019, youre going to really start seeing most of those synergies realized.
Joanna Gajuk: All right.
So we should think about exiting 2018 at this level do you think?
Keith Myers: I would say that, maybe second quarter mid 19, well be at this
level, and hopefully exiting 2018, but, again, as we dont want to overpromise.
Joanna Gajuk: Right.
Keith Myers: And it all depends on the time line when the transaction closes, and how we
phase-in
some of the plans.
Joanna Gajuk: And then I guess, youve highlighted a couple of terms on the cost
synergy. And there you would expect additional synergies in terms of revenues. So should we think about that? Would you give yourself time to first integrate in terms of the cost synergies? Or you would try to create this revenue synergies to also
in the first year of the merger?
Keith Myers: I would definitely say, were going to be planning for some of those synergies even before the
transaction closes. And were already working on combined plans and ideas, and initiatives. Youve heard some of those even spoken about here on this call, this morning.
So I wouldnt say, were going to try and knock down the cost synergies and then shift focus to the revenue synergies. All weve done is score
the cost synergies. Steve, do you want to add anything to that?
C. Steven Guenthner: Yes. I think the path that Josh is talking about is exactly the
right path relative to conservatism and financial expectations. Plug those numbers into your model. We will show you the revenue synergies when we bring them to you, to promise and putting them in here up front.
But let me just startat the start, which is when you bring this quality management team together, that allows people to focus on make a little bit more
narrowly on what they do best, our ability to improve underperforming assets is going to go up pretty dramatically here. And most of the improving and underperforming assets is around revenue and its around focus.
And so as we bring this focus and increase intensity to our business, I think were going to have all kinds of revenue synergies, I just put them in
model until we update.
Joanna Gajuk: Right. I agree with that. But then did I hear right, but I guess before in terms of the strong organic growth that
LHC Group experienced a little less long time? Then youve said something along the line that you would expect this growth to continue at this level if not accelerated.
Thats what youre referring to in terms of the improvement you expect and kind of the revenue synergies are flowing into those numbers. And then
how be or driving the growthorganic growth rate?
Keith Myers: This is Keith. So when I was talking about the growth, I thought we were talking
about the pipeline, the hospital joint venture acquisition growth and that growth. But, Don, maybe you want to speak organically?
Donald Stelly: This is Don. On both companies, weve had tremendous success with internal organic growth.
And a lot of questions have been coming around is we have transformative deal and in history, those kind of deals not do very well and our view is, because many people count on that inner steel of volume runs and scored that, we need to say this
going to come, but we are not less and you got to put that in box.
But I can assure with the footprint that they have and we have, when we get to go out
and into Lenovo and collocate service domains, that upside is going to be unprecedented in both companys history, and yet, another reason that we decide that was a very compelling pact forward. So, Steve is right. I would put that into models
and certainly, when we issue our individual and collective guidance later on, youll incorporate that as the plan comes to fruition.
Joanna Gajuk:
Right. Thats make sense. And also in terms of the timing of this announcement, obviously, you guys discussed this for a while and it seems like may be the model proposal for some sort of, call it for the discussion to about the route. But how
do you feel about where we spent currently? I mean, obviously now CMS seems to have decided to postpone the implementation of what they propose and I guess, execution, there is going to be another version that might come out.
So is that how do you kind of think about it in terms of what CMS might or Congress might decide to do with the reimbursement that having a largest more
diversified position to do better under this model? Or also on the other hand, are you worried that what conference CMS is much different somewhat the original proposal?
Thats the reason why you doing the merger still any kind of color in terms of how you decided to go there in terms of the merger given the reimbursement
and the groupings thats being proposed?
Keith Myers: Yes. So let me apologize. This is maybe the way that I described how we got together, lead you
to assume that the proposed rule, I think the reimbursement related to do anything with this conversation. It was just a matter of William and I, both being on the phone talking about this, and calls us to revisit a conversation we had many times
before whether or not now might be the time to talk about these companies together, but they were mutually exclusive.
But with regard to reimbursement, I
believe what happened with CMS is not a postponement of what was proposed, but a withdrawal and recognition, because of a lot of the work that we did in the process of educating them and providing them with real data that gave them reason to believe
that maybe this model is not what well thought out. I will ask Steve to jump in in a minute because he did a lot of work with me as well.
But I think
they withdrew it and said we have an industry thats more sophisticated than it was a decade ago. And its willing to come to the table with us and work on reforms that would not lead to unintended consequences, most significantly, the
movement of patients back into higher cost settings such as and to anyway discourage the momentum we have in moving patients downstream to home health.
And I think thats was resonated within, not only with CMS, but with many supporters on, 49 senators and I
think 176 members of Congress that signed on to the letters in our support. Thats what I think it was. And before I turn it over to Steve, Id also say that, a joint presentation that our teams were doing for this industry work, several
of usSteve had presented data for one group that was asking a lot of questions about the shift of patients back intoa movement of patients back from home health and into CMS.
And Steve showed them how just a 5% shift with patients moving from home health to back to CMS, whats resulted in additional spending that will strive
what they thought they would be saving in the room. Steve?
C. Steven Guenthner: So, Joanna, I think just to reiterate, there is so much about all of
this, thats connected to why this merger makes sense. There is so many ways that this all comes together, and it makes sense. But this is not cause and effect that says, oh there was an HHGM proposal, we better go merge two companies.
And in this discussion, in this territory, what home health is all about and how we can help to shape and influence policy, reinforces two really critical
points and that is we have to be larger to be moreafforded to be able to be more sophisticated, to have exercise to be more credible, and it was exceptionally proven that our two companies, in particular, spoke at the same wise while we were
there.
We were saying the same things at the same time and show our ability to more effectively collaborate and influence. Policy became clear and the
mirror image of that become clear, which is these are two companies that thinks so much alike that we can be a lot better at this if we do it together. So just take it kind of right there and see what other quotients you have.
Joanna Gajuk: Sure. I just want to clarify and hear it from you in terms of your look forward and the context of your merger. The last question I had on the
personal care business, right. So I guess, thats more for the LHC group, I guess, they were from a speaker in personal care, but at the same time this business has had a lot of issues with state reimbursement, labor cost, and whatnot.
And I guess, obviously, in the prepared remarks, you kind of talked about cross-selling and growing all these registered home health cost and personal care.
So I just wanted to hear on that business, given kind of the issues that isnt highlighting on that front?
William Yarmuth: Sure. This is William. I
think that our view of personal care is, personal care is an essential to part of the delivery model. And its becoming more and more attractive to different people that manage care and payers, all players. And then Keith mentioned that, he
thought that, for an example, given the managed care providers that the combination allowed the combined companies to have to offer services across Florida, which are very important.
And we see managed care organizations thinking about personal care as a way for them to manage theirthe
insurer that they are covering, as a very strong upside. And obviously, as you become a provider, that can offer more services to a managed care organization across either uniquely specific geography or across a bigger platform, youre going to
be able to work with them, relative to the issues that youre talking about, obviously, some of its management.
Weve talked about that in our
personal care business. And weve changed the management of it. We are seeing some positive response to that. Thats important. It is a little bit different in personal care, because you might have three states to go up or three states to
go down. That is quite I use the word simple, but it is as clear as the federal government decides we are going to give you a rate increase or give you a rate cut or change the regulation.
So one of the complexities of personal care is to be able to deal with the different changes across different states and have an operational model that can
support that. And we are very confident. Weve been doing that for a long time. We can. We think personal care is going to continue to grow as a big part of the delivery, reimbursement system and the delivery model.
And once again, from our standpoint to be able to do it in an additional state where we are not operating that we probably would not have gone and operated or
look for acquisition without our visiting business. Now weve got fresh territory beginning to development opportunities.
Operator: (Operator
Instructions) And our next question will come from the line of Whit Mayo with Robert W Baird.
Whit Mayo: I guess, wanted to play maybe devils
advocate a little bit and just think of the risk of the transaction. And then there has to be some vulnerabilities created from this merger where you need to be wrong. Im just trying to kind of take the other side and there has to be something
to worry about.
I hear all the optimism and the excitement. And I share all of that, that as well. What are some of the risk that we need to be
considering as we become auditor of the integration?
William Yarmuth: I will take a start on that and Ill ask everyone to join in. There isas
Keith was saying earlier, there is three problems that really happen with large merger, this integration risk. And we hopefully weve beat that one up pretty good. There is social issues. Im here to tell you, we dont have any. In
this group, in this room, we are good to go. We had minimal overlap at the branch level, so we do not have much social issues there.
Theres just not many places that you could have that sort of thing and I can promise you that these
management teams are like-minded and leverage. And theyre just flat in thethis is a
de-lever
for both companies. So I guess, when we you start thinking about risk, the risk relative to put in this
business into together as opposed there could be some adverse reactions from joint venture partners and most of those are local operations.
And we just
dont see that coming at all. So I guess, youd almost have to pivot back to sort of general risks around that reimbursement sort of things. And then maybe you would have to pivot to what we said earlier, which is gives this gives us the
ability to move faster. This gives us the ability to grow faster at what we would perceive to be a lower risk. It gives us better access to capital, lower cost capital.
So I guess, you could try to really just kind of clutching can I come up with anything here? I guess you could say, well, maybe this is going to enable these
guys to go out and do something stupid and look, hey, were growing faster. Now, if had to pick up two management teams in America, we all have to by now, but were not going to and do something stupid, by growing faster, it would have be
these two management teams. Im sorry. I know we areI am trying to answer your question, but I cant come up with a thing.
Donald Stelly:
This is Don. I would tell you, we are not looking through rose-colored glasses. We do the heavy lifting and a lot of work to do to continue on this path of success. But you know what, that was individual as management teams so the merger changes,
nothing there. Then we have execution just going to blocking and tackling. Im not trying to be boastful, I just wouldnt bet against us. We got too good of a track record. Collectively, we feel pretty good about it.
Whit Mayo: I would echo that. I feel like Almost Family historically has been more decentralized in terms of the structure or the organization compared to
LHC? And one, I guess, maybe Steve and, do you think that the characterization? And how will the divisional structure, the accountability, how does it work? Because if Im expanded control, and just what changes in terms of like reporting
structure of the organization?
William Yarmuth: I might challenge the pedicure, I might challenge the beginning that says we were, because I think about
that and now Id like to see better and have talked to Keith a little bit more, less about government relations, more about operational stuff and how they think about the business. I think we are way more like than were different. We
think about managements scale in a very similar way around revenue.
So we kind of talk about the same amount of business at a regional manager or
division President might be able to handle. And I was actually prettyI wouldnt go to shop and I was surprised that the way we think about building our operational structure was very similar. So we are alwaysI thinkif you
think about us being decentralized, Ive always used this term of local market autonomy. And I think that gives you the decentralized concept.
Its really not, its really about youve got a local brands and local markets and they need to
penetrate the market based on their brand and expertise. But structurally and we both and I think weve been learnt more in the home care home-based, there is processes that are very similar. There is staffing models that are exactly the same,
and then we start rolling out the management structure, you start seeing the expanded controls that are very similar.
So I think its basically
plugging in very similar kinds of line management spend that are way more different, I just think. And I had to be honest with you, I had that problem internally with local market autonomy, because people think thats way more
decentralized than I really wanted to be.
Keith Myers: You wanted...
William Yarmuth: As they get a little confused about that. Sometimes you have to reel them back in and say wait a second. Let me
re-explain
what I meant by that, because maybe my words are being misconstrued. So Id really think we are very similar in terms of the organizational structure and line management spend.
Keith Myers: This is Keith. If I can, let me jump in on that and have few words. I want to echo something Steve said earlier. William is not going away. I
want to add to risk profiles. If William werent staying here and connected with this deal, we wouldnt done it. So thats another very important component and its true. I told you that from day one.
But when we talk about centralized versus decentralized, I dontI think were both companies are decentralized in terms of local branding and giving
of our local leaders a certain amountan adequate amount of autonomy to run their business as they need to in their local markets. What we do from a centralized view is to monitor through data, how those offices are performing and to provide
them analytics that help them make better decisions and to see a level.
And thats whatthats been the magic for us. When I think of a
business, we use a word centralized. Itsit implies to some people of permission giving that goes on between the field office and the home office. That doesnt happen really, that doesnt happen at all with Almost Family.
So I think itswe structured as William said, when youre on a home care home-based and youre running that platform, youre
structured and their processes that everybody has to follow up. And another great thing here that everybody is now on that same platform.
Whit Mayo: And
maybe Steve one last one on the topic of home-based. Where you are on the conversion? And maybe what your cost per visit when it looks like the day where you think you need to go? I guess, I am just trying to think through what the efficiency
opportunities are that you have in front of you?
And I know that Don has clearly nailed the playbook in time and time again and having his knowledge and
experience to go forward and utilize the tool, is it helpful? I guess, I am justjust trying to maybe think through what the opportunity is going forward?
Keith Myers: Yes, Whit. I think in our case through our consolidation efforts, weve reached a point where we brought community on. We sought of tipped
that half way mark already, with that being on the home care home-based. So for us, bringing the legacy operations over has been most of that work has been.
And this product is in use in so many companies, in so many places, producing the same kind of results just about everywhere that its that we are highly
confident as those agencies complete their work, that those synergies will be realized, they are being realized. And now, Im going to defer to the expert in the room, Mr. Stelly, to tell you going to continue to play through, because he
does have more expertise with this than we do.
Donald Stelly: Thanks, Stephen. And then I will keep it short and simple where we are today and where they
are in the conversion, there is no way, but up, and thats based on the experience that we have. What Im not prepared to say is, I dont know their individual provider baselines. So what were going to do is, we are going to
huddle up.
We are going to look at where they are. Were looking to our modeling. We are going to overlay it and were going to see it
line-by-line,
upside down we will let you know what thats going to be once we score it. But honestly we are not prepared to do that. So I think I will give you false
information other than we know this collectively. Steve, everybody in the room, we believe there is tremendous upside for this.
William Yarmuth: So with
relative to pro forma, business pro forma used the LTM September to $25 million synergy, none of the upside in that. So you have it.
Operator: And
our next question will come from the line of Brian Tanquilut with Jefferies. And Im showing no further questions in the queue. Its my pleasure to turn the conference back over to Mr. William Yarmuth and Keith Myers for closing
comments and remarks. Gentlemen?
Keith Myers: Ill go first and thenso, thanks everyone for dialing in today. Thanks for your questions. And
as always, if you have any
follow-up
questions, we will make ourselves available in.
William Yarmuth: I
appreciate the opportunity to have a moment with all of the investors that are on the call and the analysts, and weve always been sort of either on the back or criticized for having gone. But it was great, and I can only say that enthusiastic
I am about all of the things that were announcing today and the opportunities we have, and thanks for the opportunity to speak with you.
Keith
Myers: But youre not leaving.
William Yarmuth: No. Thank you.
Keith Myers: Thank you.
Operator: Ladies and gentlemen, thank
you for your participation on todays conference. This does conclude program. You may all disconnect. Everybody have a wonderful day.
Almost Family Employee Merger Announcement Call
William Yarmuth: Good morning everybody. This is William Yarmuth. I hope you all are well.
Thank you so much for taking time out of your busy day to talk with me this morning. I wanted to share some very exciting news for our organization and all of
our individual brands of future. And thats around the fact that we announced that we today were going to merge with LHC Group- another very, very, and Im sure you all know, a very, very large and very, very successful home care and
hospice company and theyre also in the in LTAC business.
But you know, we think of them in our world as one of our people that as an organization
we have always looked
to-
to say how do we measure ourselves as an organization and our success in the world, and theres a lot of providers, but the one that I chose to, in my life, with this company and
as long as theyve been around weve been enough alike and Ive known Keith Myers, their CEO, for a number of years and I kind of say, you know, if I measure myself against one company it would be LHC. And we compete with them in some
markets but not a lot, so weve both gone down a path of developing our companies, building them in similar ways, but different ways.
Over the last
six or seven months, Keith and I have been talking about, you know, does it make sense and would it make sense for us to put our companies together?
And we did that because we all know that the home healthcare, hospice and personal care industry and world is changing pretty dramatically and you sometimes
decide that its best to do it by yourself and you sometimes decide its best to do it together. In order to do it together, we want to do it in a way where we philosophically agree with the way other people do business and what
theyre thinking about and their focus on making lives better, which has sort of been a constant theme in our world.
And as Ive known Keith
over the years and Ive gotten to know their management team they philosophically aligned with us. Our cultures are very similar.
And bigger
were better, bigger were stronger. Weve got great management teams on both sides. Were going to put the best of our management teams together and were going to create the preeminent management team for home healthcare,
hospice and personal care that exists in the country.
In my, from my perspective thats really what I thought was exciting. Two very successful
companies, with great opportunities, coming together. Combining to create a great management team and with great operations, you know, not to be too sophomoric, if you will, we can conquer the world. That can happen and we can make that happen, and
I know that everybody at the senior level of both organizations is committed to make that happen.
Now for everybody in the field, the nice thing about it
in the in our operations throughout the country is its like no change. We all, both LHC and Almost Family, operate under multiple brands. We will come together under the LHC name, but well be Almost Family.
As you know, when you know, that each brand that all of you operate under, you take such pride in, which I know you do. Thats not going to change today,
tomorrow, next week or next year.
So, if Im sentimental about this, its because I take so much pride in what you do and in your name, the
names you operate under, because I know thats what you take pride in. So, what were going to do through this combination- well put our companies together. Were going to be the best that we
can be. Were going to take the best of all of the different things that we do. We will be the largest joint venture provider of home healthcare services to in the country, with north of 75
partnerships with hospitals. For those of you in the home health world, I know each of you would love to have a hospital joint venture in any one of your markets because, as Ive heard people talk about well, I cant get business
because the hospital wont give it to me.
Im just telling you internally, its a great thing. And I think we will have great
opportunities going forward. So feel good, feel proud.
This is a good thing for our organization. I think its a good thing for LHCs
organization. I think its good for both of us. Thats our message.
Its important that when you go out into the field today, if you hear
anything about this, I would love for you to stand up and say I just heard from Bill and this is a good thing and I believe him because it is.
And most importantly I wanted you to hear that from me. I want you to hear my enthusiasm, and I am very enthusiastic about this deal and about our
combination. Im very enthusiastic about the company were going to become and enthusiastic about the opportunities that are going to be created by combining these two companies that would not exist for either us if we stood alone.
Its good day for Almost Family. Its good day for all of our wonderful brands and all the people that take care of the people that we serve. And
please view it that way. I know sometimes people dont view things that way, but Im just telling you this is a good thing.
Well share a
whole lot of information as we go forward, but most importantly I just wanted you to hear from me how enthusiastic and excited I am about this and we can move forward.
I do want you to know Steve Guenthner is here. Hes been my partner for many, many, years in this and I wanted to give him the opportunity to share his
thoughts with you and then well open the floor for questions.
Steve Guenthner: Thank you. Good morning everyone.
You know, as Williams gone through the evolution of this business over the last
35-40
years, weve done a
lot together, but weve done a lot with a lot of folks. And hopefully most of those folks are on this call.
We have built a lot of this business as
a consolidator. And most of you on this call probably came into the family of Almost Family providers through a business combination. We do those because we recognize the need for size and sophistication. The work that we do for Americas
seniors is critical to the health care system, its critical to the American public and we have to have size and sophistication to do that.
Substantially, all of the health care in America for seniors is funded by government programs. That means we have to have a significant government advocacy
program- those things are expensive to have effect in the United States Congress. You have to be big. You have to be meaningful. You cant show up with a single agency and expect influence policy. So, part of helping We the People
satisfy our commitment to provide health care services for We the seniors, our parents, we have to have size.
This is not the end of
anything. This is the next chapter in a pretty amazing book. William is going to continue to be a part of this in his role as a consultant and an advisor to the senior management team.
Im absolutely thrilled to have been offered a key position on Keiths management team as the Chief
Strategy Officer, where Ill get to have an awful lot of fun doing a lot of the things that weve enjoyed doing. Im particularly thrilled Todd Lyles is going to be a part of that with us. We believe Jeff Reibel is going to have an
ongoing role. There is going to be lots and lots of roles offered to folks.
We have approximately 17000 employees in this company. For 99 percent,
literally 99 percent, you just go on doing your job, taking care of patients, doing the things that you do. Its absolutely critical that you continue to do those things.
For the other 1 percent, well heres the good news, weve all been through this before. And we will work through this, were going to
continue to grow. Youve heard me talk in front of employee groups and certainly in investor presentations about continuing the trajectory that weve been on for these many years.
When I came to the company I think we had eight branches. With this deal, well have eight hundred. Were going to continue this, and its not
like were done now, were going to keep going. And so, to do that we are going to need creativity, were going to need innovation and were going to need to continue to influence policy. And we need all you guys doing what you
do to keep this business working for us.
The deal is expected to close sometime in the spring, so we get a pretty good long runway to work through
things. Both companies have robust development plans during that time frame to continue to grow. So, this is this is nothing but good stuff for all of us.
Look, we thank you guys for being a part of the team and your commitment to get us through close. This deal, we will continue to operate this as businesses as
a stand-alone business until we get through shareholder approvals, regulatory approvals etc. And then well have some transition work, so a long, long, runway while we work out the best ways to do this and a whole lot of opportunities for
everybody. William, thank you.
William Yarmuth: Thank you Steve. So, well just kind of end the call quickly and open it up for questions, but I
just want to leave you with this thought- you know, our role, our goal and our mission is to make peoples lives better when we take care of them every day.
You all do that. Everybody plays their own role in that whole ultimate goal. And when we stick to that focus and we stick to what were about, and you
dont get in this business unless you really care about people, then well get more patients. And we should all strive take the best care of the patients that we care for and do it in a way that they welcome and relish the care that they
get and that should drive us to take more care take care more patients.
So, what we try to preach in our world every day is if you take good care of the
patients you serve you will get more patients. If you take more, better care of the next set of patients, youll get more patients. And if you believe youre the best and if you believe you are the provider of choice, then youll
prove it by the actions you take every day.
That has nothing to do with corporate organization. It has nothing to do with any of that. Its about
taking care of people. So, lets just think about that.
Both companies, LHC and us, live for that. Live for that purpose. So, we are commonly aligned in that way. We
feel it in our heart and soul. I know Keith, himself and Ginger his wife who started the company- they started it together, and the management team believes that more than any company that I have ever met with, and any management team that I have
ever dealt with.
So, youre going to get
you know, as much as you might want to get rid of me, Im not sure youre going to be able
to get rid of me all that quickly!
Im going to be here to watch and make sure that we do all the right things that weve done over the past 40
years in our career. And that we continue to do that and that we work side by side with the LHC team and the LHC organization to make as many peoples lives better as we can.
And together we can do a lot more of that than we can by ourselves. And you know at times you have to realize that, and its a good day. So, take it that
way.
Thank you for your time well open the call for questions
and-
Ive got a little note here- that
says no questions, so, thank you for no questions.
Aside: No,were not taking any questions.
William Yarmuth: Oh, thats it. The operator said we were. Im sorry! See, I dont know much of anything so Ive just ruined the whole
purpose of the call by, you know, being whatever.
So thank you for no questions but remember this is a good day! Were all about the people we care
for. We want to make peoples lives better. You all are great at doing it. Lets just go out there and make sure that the people we care for today and we care for tomorrow are well taken care of. So thank you for your time and have a great
day.
Operator: And that concludes this event. Thank you for joining.
Additional Information And Where To Find It
The proposed transaction between LHC Group and the Company will be submitted to the respective stockholders of LHC Group and the Company for their
consideration. LHC Group will file with the SEC a registration statement on Form
S-4
that will include a joint proxy statement of LHC Group and the Company that also constitutes a prospectus of LHC Group. LHC
Group and the Company will deliver the joint proxy statement/prospectus to their respective stockholders as required by applicable law. LHC Group and the Company also plan to file other documents with the SEC regarding the proposed transaction. This
report is not a substitute for any prospectus, proxy statement or any other document which LHC Group or the Company may file with the SEC in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF LHC GROUP AND THE
COMPANY ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LHC
GROUP, THE COMPANY, THE PROPOSED TRANSACTION AND RELATED MATTERS
. Investors and stockholders will be able to obtain free copies of the joint proxy statement/prospectus and other documents containing important information about LHC Group and the
Company, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. LHC Group and the Company make available free of charge at www.lhcgroup.com and www.almostfamily.com, respectively (in the
Investor or Investor Relations section, as applicable), copies of materials they file with, or furnish to, the SEC.
Participants In The Merger Solicitation
LHC Group, the
Company, and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the stockholders of LHC Group and the Company in connection
with the proposed transaction. Information about the directors and executive officers of LHC Group is set forth in its proxy statement for its 2017 annual meeting of stockholders, which was filed with the SEC on April 28, 2017. Information
about the directors and executive officers of the Company is set forth in its proxy statement for its 2017 annual meeting of stockholders, which was filed with the SEC on April 7, 2017. These documents can be obtained free of charge from the
sources indicated above. Other information regarding those persons who are, under the rules of the SEC, participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be
contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
No Offer or
Solicitation
This report is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval with respect to the proposed transaction between LHC Group and the Company or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
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