Revises Full-Year Guidance
Company to host a conference call tomorrow,
November 8, 2023 at 10 AM EDT
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, 2023.
“In the midst of industry disruption associated with Medicare
reimbursement uncertainty, labor pressures and the shift to
Medicare Advantage, we continue to deliver on our mission of
providing exceptional care to our patients,” said Enhabit’s
President and Chief Executive Officer, Barb Jacobsmeyer. “We are
winning the war for labor as demonstrated by our recruitment of an
additional 166 net new nursing hires in the third quarter, and
payors are increasingly receptive to our value proposition given
our hospital readmission rates which are 20% better than the
national average. Some payors are recognizing the variation of
quality results within the industry and are willing to pay for
access to high-quality providers like Enhabit.”
QUARTERLY PERFORMANCE - CONSOLIDATED
- Net service revenue of $258.3 million
- Net loss attributable to Enhabit, Inc. of $2.4 million
- Adjusted EBITDA of $23.2 million
- Loss per share of $0.05
- Adjusted earnings per share of $0.03
RECENT COMPANY HIGHLIGHTS
- Continued strong growth in home health Medicare Advantage
admissions with non-episodic admissions up 33.5% driving total
admission growth of 1.6% year over year
- 11 new Medicare Advantage agreements negotiated in the third
quarter
- 22% of non-episodic visits are now in payor innovation
contracts at improved rates
- Continued recruiting success adding 166 net new full-time home
health nursing hires in the third quarter
- 30-day hospitalization readmission rate in home health is
approximately 20% better than the national average
- Approximately 44% better than the national average for hospice
patient visits in last days of life
- Hospice cost per day stabilized for the third consecutive
quarter
- Opened one hospice de novo location in Colorado in July
FINANCIAL RESULTS Consolidated
($ in millions, except per share
data)
Q3
'23 vs. '22
2023
2022
Home health net service revenue
$
210.9
$
216.3
(2.5) %
Hospice net service revenue
47.4
49.4
(4.0) %
Total net service revenue
$
258.3
$
265.7
(2.8) %
% of Revenue
% of Revenue
Cost of services
51.9 %
(134.0)
49.8 %
(132.3)
1.3 %
Gross margin
48.1 %
124.3
50.2 %
133.4
(6.8) %
General & administrative expenses
39.1 %
(101.0)
38.2 %
(101.4)
(0.4) %
Total operating expenses
91.0 %
(235.0)
88.0 %
(233.7)
0.6 %
Other income
0.1
—
Equity earnings / noncontrolling
interest
(0.2)
(0.3)
Adjusted EBITDA
$
23.2
$
31.7
(26.8) %
Adjusted EBITDA margin
9.0 %
11.9 %
Net (Loss) Income Attributable to
Enhabit, Inc.
$
(2.4)
$
8.6
(127.9) %
Reported Diluted EPS
$
(0.05)
$
0.17
(128.9) %
Adjusted Diluted EPS
$
0.03
$
0.19
(84.2) %
The continued shift to more non-episodic admissions in home
health impacted consolidated revenue and Adjusted EBITDA by
approximately $8 million, net of the impact from improved pricing
of payor innovation contracts.
SEGMENT RESULTS Home health
($ in millions)
Q3
'23 vs. '22
2023
2022
Net service revenue
$
210.9
$
216.3
(2.5)%
Cost of services
110.0
109.6
0.4%
Gross margin
47.8 %
49.3 %
General & administrative expenses
59.0
61.9
(4.7)%
Other income
(0.1)
—
Equity earnings / noncontrolling
interest
0.2
0.2
—%
Adjusted EBITDA
$
41.8
$
44.6
(6.3)%
% Adj. EBITDA margin
19.8 %
20.6 %
Operational metrics (Actual
Amounts)
Starts of care
Episodic admissions
31,490
35,487
(11.3)%
Non-episodic admissions
19,033
14,252
33.5%
Total admissions
50,523
49,739
1.6%
Episodic recertifications
23,290
25,821
(9.8)%
Non-episodic recertifications
9,442
6,541
44.4%
Total recertifications
32,732
32,362
1.1%
Total starts of care
83,255
82,101
1.4%
Completed episodes
53,484
60,396
(11.4)%
Revenue per episode
$
3,128
$
3,009
4.0%
Visits per episode
14.9
14.9
— %
Total visits
1,162,144
1,175,002
(1.1) %
Non-episodic visits
365,071
272,282
34.1 %
Cost per visit
$
93
$
92
1.1 %
The year-over-year decrease in revenue was due primarily to the
continued payor mix shift to more non-episodic admissions.
Non-episodic admissions grew 33.5% in the quarter, driving total
admission growth of 1.6% year over year. Revenue per episode
increased year over year primarily due to changes in our estimated
recoverability of net service revenue.
Revenue and Adjusted EBITDA decreased $8 million in Q3 due to
the continued payor mix shift to more non-episodic admissions. Cost
per visit increased 1.1% year over year primarily due to merit and
market rate increases for clinical staff, partially offset by
improved nursing productivity.
Hospice
($ in millions)
Q3
'23 vs. '22
2023
2022
Net service revenue
$
47.4
$
49.4
(4.0)%
Cost of services
24.0
22.7
5.7%
Gross margin
49.4 %
54.0 %
General & administrative expenses
15.7
17.3
(9.2)%
Equity earnings / noncontrolling
interest
—
0.1
Adjusted EBITDA
$
7.7
$
9.3
(17.2)%
% Adj. EBITDA margin
16.2 %
18.8 %
Operational metrics (Actual
Amounts)
Total admissions
2,882
2,982
(3.4)%
Patient days
311,719
320,732
(2.8)%
Discharged average length of
stay
107
103
3.9%
Average daily census
3,388
3,486
(2.8)%
Revenue per day
$
152
$
154
(1.3)%
Cost per day
$
77
$
71
8.5%
Net service revenue decreased year over year primarily due to a
decrease in patient days.
Adjusted EBITDA decreased year over year primarily due to higher
cost of services resulting from increased labor costs. Cost per day
increased year over year primarily due to increased labor costs
resulting from the implementation of the new case management model,
including costs associated with dedicated on-call and triage
nurses.
CREDIT AGREEMENT AMENDMENT
On November 3, 2023, Enhabit entered into an amendment to its
credit agreement with its bank group. The amendment provided for
additional cushion to the Company’s financial covenants through
March 31, 2025. The amendment also included a permanent reduction
in the revolver commitment from $350 million to $220 million. The
Company expects to realize a reduction in commitment fees of $0.3
million per year as a result of the commitment reduction.
“The covenant levels requested and received were done out of an
abundance of caution as we continue to operate in an industry with
shifting dynamics in payor sources and reimbursement,” said
Enhabit’s Chief Financial Officer, Crissy Carlisle. “Given our cash
on hand and availability under our revolver, we believe we have
adequate liquidity to service our debt and fund operations.”
GUIDANCE
The Company revised its full-year 2023 guidance as follows:
($ in millions, except per
share data)
2023 Previous Guidance
2023 Revised Guidance
Net Service Revenue
$1,057 to $1,065
$1,044 to $1,048
Adjusted EBITDA
$100 to $107
$93 to $98
Adjusted EPS
$0.28 to $0.46
$0.09 to $0.31
For additional considerations regarding the Company’s 2023
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 AM
Eastern Time on November 8, 2023 to discuss its results for the
third quarter of 2023. 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/530971935. Following the call, a
replay will be available at Enhabit’s investor website.
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 255 home health
locations and 109 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 “Reconciliations of Non-GAAP Financial
Measures” for reconciliations of the non-GAAP financial measures to
the most directly comparable financial measures calculated and
presented in accordance with GAAP. 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,
2023
2022
2023
2022
($ in millions, except per
share data)
Net service revenue
$
258.3
$
265.7
$
785.7
$
808.0
Cost of service, excluding depreciation
and amortization
134.0
132.3
402.1
392.3
General and administrative expenses
108.8
107.5
327.1
310.4
Depreciation and amortization
7.7
8.0
23.2
24.7
Impairment of goodwill
—
—
85.8
—
Operating income (loss)
7.8
17.9
(52.5
)
80.6
Interest expense and amortization of debt
discounts and fees
10.9
6.2
30.7
6.3
Other (income) expense
(0.1
)
—
(0.2
)
—
(Loss) income before income taxes and
noncontrolling interests
(3.0
)
11.7
(83.0
)
74.3
Income tax (benefit) expense
(0.8
)
2.8
(9.9
)
17.9
Net (loss) income
(2.2
)
8.9
(73.1
)
56.4
Less: Net income attributable to
noncontrolling interests
0.2
0.3
1.0
1.6
Net (loss) income attributable to
Enhabit, Inc.
$
(2.4
)
$
8.6
$
(74.1
)
$
54.8
Weighted average common shares
outstanding:
Basic
49.9
49.6
49.8
49.6
Diluted
49.9
49.7
49.8
49.7
(Loss) earnings per common
share:
Basic (loss) earnings per share
attributable to Enhabit, Inc. common stockholders
$
(0.05
)
$
0.17
$
(1.48
)
$
1.10
Diluted (loss) earnings per share
attributable to Enhabit, Inc. common stockholders
$
(0.05
)
$
0.17
$
(1.48
)
$
1.10
Enhabit, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Unaudited)
September 30,
2023
December 31,
2022
($ in millions)
Assets
Current assets:
Cash and cash equivalents
$
31.6
$
22.9
Restricted cash
3.6
4.3
Accounts receivable
167.8
149.6
Income tax receivable
2.7
11.4
Prepaid expenses and other current
assets
12.1
23.6
Total current assets
217.8
211.8
Property and equipment, net
20.1
20.4
Operating lease right-of-use assets
60.0
42.0
Goodwill
1,061.7
1,144.8
Intangible assets, net
85.9
102.6
Other long-term assets
5.4
5.2
Total assets
$
1,450.9
$
1,526.8
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of long-term debt
$
22.6
$
23.1
Current operating lease liabilities
12.7
14.0
Accounts payable
6.0
3.8
Accrued payroll
48.6
35.5
Refunds due patients and other third-party
payors
7.8
8.3
Accrued medical insurance
8.4
7.5
Other current liabilities
36.9
40.7
Total current liabilities
143.0
132.9
Long-term debt, net of current portion
535.8
560.0
Long-term operating lease liabilities
47.0
28.1
Deferred income tax liabilities
16.3
28.6
Other long-term liabilities
—
1.9
742.1
751.5
Commitments and contingencies
Redeemable noncontrolling interests
5.0
5.2
Stockholders’ equity:
Enhabit, Inc. stockholders’ equity
676.6
741.7
Noncontrolling interests
27.2
28.4
Total stockholders’ equity
703.8
770.1
Total liabilities and stockholders’
equity
$
1,450.9
$
1,526.8
Enhabit, Inc. and
Subsidiaries
Condensed Consolidated Cash
Flows
(Unaudited)
Nine Months Ended
September 30,
2023
2022
($ in millions)
Cash flows from operating
activities:
Net (loss) income
$
(73.1
)
$
56.4
Adjustments to reconcile net (loss) income
to net cash provided by operating activities—
Depreciation and amortization
23.2
24.7
Amortization of debt related costs
1.0
0.3
Impairment of goodwill
85.8
—
Stock-based compensation
7.2
7.1
Deferred tax benefit
(13.1
)
(2.5
)
Other, net
0.7
—
Changes in assets and liabilities, net of
acquisitions—
Accounts receivable
(17.8
)
16.4
Prepaid expenses and other assets
19.9
(22.5
)
Accounts payable
2.2
(0.2
)
Accrued payroll
13.1
(3.3
)
Other liabilities
(3.6
)
(0.4
)
Net cash provided by operating
activities
45.5
76.0
Cash flows from investing
activities:
Acquisition of businesses, net of cash
acquired
(2.8
)
—
Purchases of property and equipment
(3.1
)
(5.3
)
Additions to capitalized software
costs
(0.5
)
—
Other, net
0.6
1.2
Net cash used in investing
activities
(5.8
)
(4.1
)
Cash flows from financing
activities:
Principal borrowings on term loan
—
400.0
Principal payments on term loan
(15.0
)
(5.0
)
Principal payments on debt
—
(0.4
)
Borrowings on revolving credit
facility
—
170.0
Payments on revolving credit facility
(10.0
)
—
Principal payments under finance lease
obligations
(2.6
)
(3.6
)
Debt issuance costs
(1.1
)
—
Distributions paid to noncontrolling
interests of consolidated affiliates
(2.5
)
—
Contributions from Encompass
—
59.8
Distributions to Encompass
—
(654.9
)
Contributions from noncontrolling
interests of consolidated affiliates
—
7.4
Other
(0.5
)
(5.3
)
Net cash used in financing
activities
(31.7
)
(32.0
)
Increase in cash, cash equivalents, and
restricted cash
8.0
39.9
Cash, cash equivalents, and restricted
cash at beginning of year
27.2
8.0
Cash, cash equivalents, and restricted
cash at end of period
$
35.2
$
47.9
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Diluted
Earnings Per Share to
Adjusted Diluted Earnings Per
Share
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Diluted earnings per share, as
reported
$
(0.05)
$
0.17
$
(1.48)
$
1.10
Adjustments, net of tax:
Impairment of goodwill
—
—
1.50
—
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
0.07
0.02
0.14
0.11
Income tax adjustments(2)
—
—
0.01
—
Adjusted diluted earnings per
share(3)
$
0.03
$
0.19
$
0.16
$
1.21
(1)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism; in Q3 2022, they include
one-time standalone transition costs; in YTD 2022, they include
one-time standalone transition costs and costs due to Encompass
strategic review.
(2)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation.
(3)
Adjusted EPS may not sum due to
rounding.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Adjusted
EBITDA to
Adjusted Diluted Earnings Per
Share
Three Months Ended September
30,
2023
Adjustments
As Reported
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 & fees
(10.9)
—
—
(10.9)
Depreciation and amortization
(7.7)
—
—
(7.7)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(4.9)
4.9
—
—
Stock-based compensation
(3.1)
—
—
(3.1)
Gain on disposal or impairment of
assets
0.2
—
—
0.2
Net (loss) income before income taxes,
including noncontrolling interests
(3.2)
4.9
—
1.7
Income tax benefit (expense)
0.8
(1.3)
0.1
(0.4)
Net (loss) income attributable to
Enhabit
$
(2.4)
$
3.6
$
0.1
$
1.3
Diluted earnings per share(4)
$
(0.05)
$
0.07
$
—
$
0.03
Diluted shares
49.9
49.9
(1)
Reconciliation to GAAP provided on page
14.
(2)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation.
(4)
Diluted EPS may not sum due to
rounding.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Adjusted
EBITDA to
Adjusted Diluted Earnings Per
Share
Three Months Ended September
30,
2022
Adjustments
As Reported
Unusual or
nonrecurring
items that are
not typical of
ongoing
operations
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
31.7
$
—
$
31.7
Depreciation and amortization
(8.0
)
—
(8.0
)
Interest expense and amortization of debt
discounts & fees
(6.2
)
—
(6.2
)
Stock-based compensation
(4.5
)
—
(4.5
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(0.9
)
0.9
—
Loss on disposal or impairment of
assets
(0.7
)
—
(0.7
)
Income before income tax
expense
11.4
0.9
12.3
Provision for income tax expense
(2.8
)
(0.1
)
(2.9
)
Net income attributable to
Enhabit
$
8.6
$
0.8
$
9.4
Adjusted diluted earnings per
share(3)
$
0.17
$
0.02
$
0.19
Diluted shares used in
calculation
49.7
49.7
(1)
Reconciliation to GAAP provided on page
14.
(2)
Unusual or nonrecurring items include
one-time standalone transition costs.
(3)
Adjusted diluted EPS may not sum due to
rounding.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Adjusted
EBITDA to
Adjusted Diluted 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
Impairment of goodwill
(85.8
)
85.8
—
—
—
Interest expense and amortization of debt
discounts & fees
(30.7
)
—
—
—
(30.7
)
Depreciation and amortization
(23.2
)
—
—
—
(23.2
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(9.8
)
—
9.8
—
—
Stock-based compensation
(7.2
)
—
—
—
(7.2
)
Gain on disposal or impairment of
assets
0.2
—
—
—
0.2
Net (loss) income before income taxes,
including noncontrolling interests
(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
$
(74.1
)
$
74.7
$
6.9
$
0.6
$
8.1
Diluted earnings per share(4)
$
(1.48
)
$
1.50
$
0.14
$
0.01
$
0.16
Diluted shares
49.8
49.8
(1)
Reconciliation to GAAP provided on page
14.
(2)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism.
(3)
Income tax adjustments include the effect
of permanent book-tax differences attributable to stock-based
compensation.
(4)
Diluted EPS may not sum due to
rounding.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Adjusted
EBITDA to
Adjusted Diluted Earnings Per
Share
Nine Months Ended September
30,
2022
Adjustments
As Reported
Unusual or
nonrecurring
items that are
not typical of
ongoing
operations
As Adjusted
($ in millions, except per
share data)
Adjusted EBITDA(1)
$
119.0
$
—
$
119.0
Depreciation and amortization
(24.7
)
—
(24.7
)
Stock-based compensation
(7.1
)
—
(7.1
)
Unusual or nonrecurring items that are not
typical of ongoing operations(2)
(7.0
)
7.0
—
Interest expense and amortization of debt
discounts and fees
(6.3
)
—
(6.3
)
Stock-based compensation included in
overhead allocation
(1.1
)
—
(1.1
)
Loss on disposal or impairment of
assets
(0.1
)
—
(0.1
)
Income before income tax
expense
72.7
7.0
79.7
Provision for income tax expense
(17.9
)
(1.6
)
(19.5
)
Net income attributable to
Enhabit
$
54.8
$
5.4
$
60.2
Adjusted diluted earnings per
share(3)
$
1.10
$
0.11
$
1.21
Diluted shares used in
calculation
49.7
49.7
(1)
Reconciliation to GAAP provided on page
14.
(2)
Unusual or nonrecurring items in 2022
include one-time standalone transition costs and costs due to
Encompass strategic review.
(3)
Adjusted diluted EPS may not sum due to
rounding.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Net Income
to Adjusted EBITDA
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
($ in millions)
Net (loss) income
$
(2.2
)
$
8.9
$
(73.1
)
$
56.4
Interest expense and amortization of debt
discounts and fees
10.9
6.2
30.7
6.3
Depreciation and amortization
7.7
8.0
23.2
24.7
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
4.9
0.9
9.8
7.0
Stock-based compensation
3.1
4.5
7.2
7.1
Income tax (benefit) expense
(0.8
)
2.8
(9.9
)
17.9
Net income attributable to noncontrolling
interests
(0.2
)
(0.3
)
(1.0
)
(1.6
)
(Gain) loss on disposal or impairment of
assets
(0.2
)
0.7
(0.2
)
0.1
Impairment of goodwill
—
—
85.8
—
Stock-based compensation included in
overhead allocation
—
—
—
1.1
Adjusted EBITDA
$
23.2
$
31.7
$
72.5
$
119.0
(1)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism; in Q3 2022, they include
one-time standalone transition costs; in YTD 2022, they include
one-time standalone transition costs and costs due to Encompass
strategic review.
Reconciliation of Net Cash
Provided by Operating Activities to Adjusted EBITDA
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
($ in millions)
Net cash provided by operating
activities
$
6.3
$
1.0
$
45.5
$
76.0
Interest expense, excluding amortization
of debt discounts and fees
10.7
6.2
30.3
6.3
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
4.9
0.9
9.8
7.0
Current portion of income tax expense
1.3
3.9
3.2
20.4
Net income attributable to noncontrolling
interests in continuing operations
(0.2
)
(0.3
)
(1.0
)
(1.6
)
Other
0.2
(0.3
)
(0.3
)
(0.2
)
Change in assets and liabilities,
excluding derivative instruments
—
20.3
(15.0
)
10.0
Stock-based compensation included in
overhead allocation
—
—
—
1.1
Adjusted EBITDA
$
23.2
$
31.7
$
72.5
$
119.0
(1)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism; in Q3 2022, they include
one-time standalone transition costs; in YTD 2022, they include
one-time standalone transition costs and costs due to Encompass
strategic review.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Net Cash
Provided by Operating Activities to
Adjusted Free Cash
Flow
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
($ in millions)
Net cash provided by operating
activities
$
6.3
$
1.0
$
45.5
$
76.0
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
4.9
0.9
9.8
7.0
Capital expenditures for maintenance
(1.9
)
(0.5
)
(3.6
)
(3.1
)
Other working capital adjustments
(0.7
)
0.9
(1.7
)
—
Distributions paid to noncontrolling
interests of consolidated affiliates
—
(0.2
)
(2.5
)
(0.9
)
Stock-based compensation included in
overhead allocation
—
—
—
1.1
Adjusted free cash flow
$
8.6
$
2.1
$
47.5
$
80.1
(1)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism; in Q3 2022, they include
one-time standalone transition costs; in YTD 2022, they include
one-time standalone transition costs and costs due to Encompass
strategic review.
Enhabit, Inc. and
Subsidiaries
Supplemental
Information
Reconciliation of Gross Margin
to Adjusted EBITDA Margin
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Gross margin as a percentage of
revenue
48.1
%
50.2
%
48.8
%
51.4
%
General and administrative expenses
(42.1
)%
(40.5
)%
(41.6
)%
(38.4
)%
Unusual or nonrecurring items that are not
typical of ongoing operations(1)
1.9
%
0.3
%
1.2
%
0.9
%
Stock-based compensation
1.2
%
1.7
%
0.9
%
1.0
%
Noncontrolling interests
(0.1
)%
—
%
(0.1
)%
(0.2
)%
(Gain) loss on disposal or impairment of
assets
—
%
0.2
%
—
%
—
%
Adjusted EBITDA Margin
9.0
%
11.9
%
9.2
%
14.7
%
(1)
Unusual or nonrecurring items in 2023
include costs associated with nonroutine litigation, restructuring
activities, and shareholder activism; in Q3 2022, they include
one-time standalone transition costs; in YTD 2022, they include
one-time standalone transition costs and costs due to Encompass
strategic review.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not
historical facts, such as those relating to future events,
projections, financial guidance, legislative or regulatory
developments, strategy or growth opportunities, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All such estimates, projections, and
forward-looking information speak only as of the date hereof, and
Enhabit undertakes no duty to publicly update or revise such
forward-looking information, whether as a result of new
information, future events, or otherwise. Such forward-looking
statements are necessarily estimates based upon current information
and involve a number of risks and uncertainties. Actual events or
results may differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors.
While it is impossible to identify all such factors, factors which
could cause actual events or results to differ materially from
those estimated by Enhabit include, but are not limited to, our
ability to execute on our strategic plans, regulatory and other
developments impacting the markets for our services, changes in
reimbursement rates, general economic conditions, our ability to
attract and retain key management personnel and healthcare
professionals, potential disruptions or breaches of our or our
vendors’ information systems, the outcome of litigation, our
ability to successfully complete and integrate de novo
developments, acquisitions, investments, and joint ventures, our
ability to control costs, particularly labor and employee benefit
costs, and that our review of strategic alternatives will result in
our pursuing any strategic transaction, or that we will
successfully consummate any particular strategic transaction on
attractive terms or at all. Our annual reports on Form 10-K and
quarterly reports on Form 10-Q, each of which can be found on the
Company’s website at http://investors.ehab.com and the SEC’s
website at www.sec.gov, discuss other risks and factors that could
cause actual results to differ materially from those expressed or
implied by any forward-looking statement in this press release. We
urge you to consider all of the risks, uncertainties and factors
identified above or discussed in such reports carefully in
evaluating the forward-looking statements in this press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107945184/en/
Investor Relations Contact Jordan Loyd
InvestorRelations@ehab.com 469-860-6061
Media Contact Erin Volbeda Media@ehab.com
972-338-5141
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