Delaware | 001-41406 | 47-2409192 | ||||||
(State or other jurisdiction | (Commission | (IRS Employer | ||||||
of incorporation) | File Number) | Identification No.) |
☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.01 per share | EHAB | New York Stock Exchange |
Exhibit Number |
Description | |||||||
104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document |
ENHABIT, INC. | ||||||||
By: | /s/ Dylan C. Black | |||||||
Name: | Dylan C. Black | |||||||
Title: | General Counsel |
($ in millions, except per share data) | Q1 | '24 vs. '23 | ||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
Home health net service revenue | $ | 213.2 | $ | 215.8 | (1.2)% | |||||||||||||||
Hospice net service revenue | 49.2 | 49.3 | (0.2)% | |||||||||||||||||
Total net service revenue | $ | 262.4 | $ | 265.1 | (1.0)% | |||||||||||||||
% of revenue | % of revenue | |||||||||||||||||||
Cost of service | 51.1% | $ | 134.2 | 50.0% | $ | 132.6 | 1.2% | |||||||||||||
Gross margin | 48.9% | 128.2 | 50.0% | 132.5 | (3.2)% | |||||||||||||||
General and administrative expenses | 38.9% | 102.2 | 40.2% | 106.7 | (4.2)% | |||||||||||||||
Total operating expenses | 90.1% | $ | 236.4 | 90.3% | $ | 239.3 | (1.2)% | |||||||||||||
Net income attributable to noncontrolling interests | (0.7) | (0.5) | ||||||||||||||||||
Adjusted EBITDA | $ | 25.3 | $ | 25.3 | —% | |||||||||||||||
Adjusted EBITDA margin | 9.6% | 9.5% | ||||||||||||||||||
Net income attributable to Enhabit, Inc. | $ | 0.2 | $ | 2.7 | (92.6)% | |||||||||||||||
Reported diluted EPS | $ | 0.01 | $ | 0.05 | (80.0)% | |||||||||||||||
Adjusted EPS |
$ | 0.07 | $ | 0.09 | (22.2)% |
($ in millions) | Q1 | '24 vs. '23 | ||||||||||||
2024 | 2023 | |||||||||||||
Net service revenue: | ||||||||||||||
Medicare | 128.3 | 146.0 | (12.1)% | |||||||||||
Non-Medicare | 82.6 | 67.1 | 23.1% | |||||||||||
Private duty(1) |
2.3 | 2.7 | (14.8)% | |||||||||||
Home health net service revenue | 213.2 | 215.8 | (1.2)% | |||||||||||
Cost of service | 109.9 | 108.2 | 1.6% | |||||||||||
Gross margin | 48.5% | 49.9% | ||||||||||||
General and administrative expenses | 59.5 | 62.9 | (5.4)% | |||||||||||
Net income attributable to noncontrolling interests | 0.6 | 0.4 | 50.0% | |||||||||||
Adjusted EBITDA | $ | 43.2 | $ | 44.3 | (2.5)% | |||||||||
% Adj. EBITDA margin | 20.3% | 20.5% | ||||||||||||
Operational metrics (actual amounts) |
||||||||||||||
Medicare: | ||||||||||||||
Admissions | 25,944 | 29,285 | (11.4)% | |||||||||||
Recertifications | 17,652 | 19,938 | (11.5)% | |||||||||||
Completed episodes | 43,171 | 49,231 | (12.3)% | |||||||||||
Visits | 632,047 | 723,399 | (12.6)% | |||||||||||
Visits per episode | 14.6 | 14.7 | (0.7)% | |||||||||||
Revenue per episode | $ | 2,972 | $ | 2,966 | 0.2% | |||||||||
Non-Medicare: | ||||||||||||||
Admissions | 30,881 | 24,658 | 25.2% | |||||||||||
Recertifications | 13,489 | 11,840 | 13.9% | |||||||||||
Visits | 571,289 | 482,301 | 18.5% | |||||||||||
Total: | ||||||||||||||
Admissions | 56,825 | 53,943 | 5.3% | |||||||||||
Same-store total admissions growth | 5.0% | |||||||||||||
Recertifications | 31,141 | 31,778 | (2.0)% | |||||||||||
Same-store total recertifications growth | (2.4)% | |||||||||||||
Visits | 1,203,336 | 1,205,700 | (0.2)% | |||||||||||
Cost per visit | $ | 90 | $ | 88 | 2.3% |
($ in millions) | Q1 | '24 vs. '23 | ||||||||||||
2024 | 2023 | |||||||||||||
Net service revenue | $ | 49.2 | $ | 49.3 | (0.2)% | |||||||||
Cost of service | 24.3 | 24.4 | (0.4)% | |||||||||||
Gross margin | 50.6% | 50.5% | ||||||||||||
General and administrative expenses | 15.7 | 16.3 | (3.7)% | |||||||||||
Net income attributable to noncontrolling interests | 0.1 | 0.1 | —% | |||||||||||
Adjusted EBITDA | $ | 9.1 | $ | 8.5 | 7.1% | |||||||||
% Adj. EBITDA margin | 18.5% | 17.2% | ||||||||||||
Operational metrics (actual amounts) |
||||||||||||||
Total admissions | 3,032 | 3,122 | (2.9)% | |||||||||||
Same-store total admissions growth | (5.1)% | |||||||||||||
Patient days | 308,542 | 317,027 | (2.7)% | |||||||||||
Discharged average length of stay | 104 | 114 | (8.8)% | |||||||||||
Average daily census | 3,391 | 3,523 | (3.7)% | |||||||||||
Revenue per patient day | $ | 159 | $ | 156 | 1.9% | |||||||||
Cost per patient day | $ | 79 | $ | 77 | 2.6% |
($ in millions, except per share data) |
2024 Guidance | ||||
Net service revenue |
$1,076 to $1,102 | ||||
Adjusted EBITDA |
$98 to $110 | ||||
Adjusted EPS |
$0.12 to $0.43 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
($ in millions, except per share data) | |||||||||||
Net service revenue | $ | 262.4 | $ | 265.1 | |||||||
Cost of service, excluding depreciation and amortization | 134.2 | 132.6 | |||||||||
General and administrative expenses | 107.5 | 110.5 | |||||||||
Depreciation and amortization | 7.8 | 7.8 | |||||||||
Operating income | 12.9 | 14.2 | |||||||||
Interest expense and amortization of debt discounts and fees | 11.1 | 9.5 | |||||||||
Income before income taxes and noncontrolling interests | 1.8 | 4.7 | |||||||||
Income tax expense | 0.9 | 1.5 | |||||||||
Net income | 0.9 | 3.2 | |||||||||
Less: Net income attributable to noncontrolling interests | 0.7 | 0.5 | |||||||||
Net income attributable to Enhabit, Inc. | $ | 0.2 | $ | 2.7 | |||||||
Weighted average common shares outstanding: | |||||||||||
Basic | 50.1 | 49.8 | |||||||||
Diluted | 50.4 | 50.1 | |||||||||
Earnings per common share: | |||||||||||
Basic earnings per share attributable to Enhabit, Inc. common stockholders | $ | 0.01 | $ | 0.05 | |||||||
Diluted earnings per share attributable to Enhabit, Inc. common stockholders | $ | 0.01 | $ | 0.05 |
March 31, 2024 |
December 31, 2023 |
||||||||||
($ in millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 36.5 | $ | 27.4 | |||||||
Restricted cash | 2.9 | 2.4 | |||||||||
Accounts receivable, net of allowances | 174.3 | 164.7 | |||||||||
Prepaid expenses and other current assets | 12.4 | 15.6 | |||||||||
Total current assets | 226.1 | 210.1 | |||||||||
Property and equipment, net | 20.6 | 19.0 | |||||||||
Operating lease right-of-use assets | 57.0 | 57.5 | |||||||||
Goodwill | 1,061.7 | 1,061.7 | |||||||||
Intangible assets, net | 74.6 | 80.0 | |||||||||
Other long-term assets | 5.2 | 5.3 | |||||||||
Total assets | $ | 1,445.2 | $ | 1,433.6 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 22.8 | $ | 22.5 | |||||||
Current operating lease liabilities | 11.2 | 11.8 | |||||||||
Accounts payable | 9.0 | 7.6 | |||||||||
Accrued payroll | 49.1 | 38.5 | |||||||||
Refunds due patients and other third-party payors | 10.5 | 8.2 | |||||||||
Accrued medical insurance | 7.4 | 8.4 | |||||||||
Other current liabilities | 40.5 | 40.7 | |||||||||
Total current liabilities | 150.5 | 137.7 | |||||||||
Long-term debt, net of current portion | 526.7 | 530.1 | |||||||||
Long-term operating lease liabilities, net of current portion | 45.8 | 45.7 | |||||||||
Deferred income tax liabilities | 17.0 | 17.1 | |||||||||
Other long-term liabilities | 0.2 | 1.3 | |||||||||
Total liabilities | 740.2 | 731.9 | |||||||||
Redeemable noncontrolling interests | 5.0 | 5.0 | |||||||||
Stockholders’ equity: | |||||||||||
Total Enhabit, Inc. stockholders’ equity | 672.3 | 669.7 | |||||||||
Noncontrolling interests | 27.7 | 27.0 | |||||||||
Total stockholders’ equity | 700.0 | 696.7 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,445.2 | $ | 1,433.6 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
($ in millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 0.9 | $ | 3.2 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
Depreciation and amortization | 7.8 | 7.8 | |||||||||
Amortization of debt related costs | 0.4 | 0.3 | |||||||||
Stock-based compensation | 1.8 | 1.5 | |||||||||
Deferred tax (benefit) expense | (0.5) | 0.3 | |||||||||
Other |
(0.3) | — | |||||||||
Changes in assets and liabilities, net of acquisitions— | |||||||||||
Accounts receivable, net of allowances | (9.7) | (6.7) | |||||||||
Prepaid expenses and other assets | 3.7 | 18.1 | |||||||||
Accounts payable | 1.4 | 2.3 | |||||||||
Accrued payroll | 10.7 | 12.2 | |||||||||
Other liabilities | 1.1 | (9.4) | |||||||||
Net cash provided by operating activities | 17.3 | 29.6 | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of businesses, net of cash acquired | — | (2.8) | |||||||||
Purchases of property and equipment, including capitalized software costs | (1.8) | (0.6) | |||||||||
Other | 0.7 | 0.2 | |||||||||
Net cash used in investing activities | (1.1) | (3.2) | |||||||||
Cash flows from financing activities: | |||||||||||
Principal payments on debt | (5.0) | (5.0) | |||||||||
Payments on revolving credit facility | — | (5.0) | |||||||||
Principal payments under finance lease obligations | (1.0) | (1.0) | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | (2.5) | |||||||||
Other | (0.6) | (0.5) | |||||||||
Net cash used in financing activities | (6.6) | (14.0) | |||||||||
Increase in cash, cash equivalents, and restricted cash | 9.6 | 12.4 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of year | 29.8 | 27.2 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 39.4 | $ | 39.6 | |||||||
Reconciliation of Diluted Earnings Per Share to Adjusted Earnings Per Share | |||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Diluted earnings per share, as reported | $ | 0.01 | $ | 0.05 | |||||||
Adjustments, net of tax: | |||||||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) |
0.06 | 0.03 | |||||||||
Income tax adjustments(2) |
0.01 | 0.01 | |||||||||
Adjusted earnings per share(3) |
$ | 0.07 | $ | 0.09 |
Reconciliation of Adjusted EBITDA to Adjusted Earnings Per Share | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | |||||||||||||||||||||||
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) |
$ | 25.3 | $ | — | $ | — | $ | 25.3 | |||||||||||||||
Interest expense and amortization of debt discounts and fees | (11.1) | — | — | (11.1) | |||||||||||||||||||
Depreciation and amortization | (7.8) | — | — | (7.8) | |||||||||||||||||||
Unusual or nonrecurring items that are not typical of ongoing operations(2) |
(3.7) | 3.7 | — | — | |||||||||||||||||||
Stock-based compensation | (1.8) | — | — | (1.8) | |||||||||||||||||||
Gain on disposal or impairment of assets | 0.2 | — | — | 0.2 | |||||||||||||||||||
Income before income taxes | 1.1 | 3.7 | — | 4.8 | |||||||||||||||||||
Income tax expense | (0.9) | (0.9) | 0.6 | (1.2) | |||||||||||||||||||
Net income attributable to Enhabit, Inc. | $ | 0.2 | $ | 2.8 | $ | 0.6 | $ | 3.6 | |||||||||||||||
Diluted EPS(4) |
$ | 0.01 | $ | 0.06 | $ | 0.01 | $ | 0.07 | |||||||||||||||
Diluted shares | 50.4 | 50.4 |
Reconciliation of Adjusted EBITDA to Adjusted Earnings Per Share | |||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||
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) |
$ | 25.3 | $ | — | $ | — | $ | 25.3 | |||||||||||||||||||||
Depreciation and amortization | (7.8) | — | — | (7.8) | |||||||||||||||||||||||||
Interest expense and amortization of debt discounts and fees | (9.5) | — | — | (9.5) | |||||||||||||||||||||||||
Stock-based compensation | (1.5) | — | — | (1.5) | |||||||||||||||||||||||||
Unusual or nonrecurring items that are not typical of ongoing operations(2) |
(2.3) | 2.3 | — | — | |||||||||||||||||||||||||
Income before income taxes | 4.2 | 2.3 | — | 6.5 | |||||||||||||||||||||||||
Income tax expense | (1.5) | (0.6) | 0.4 | (1.7) | |||||||||||||||||||||||||
Net income attributable to Enhabit, Inc. | $ | 2.7 | $ | 1.7 | $ | 0.4 | $ | 4.8 | |||||||||||||||||||||
Diluted EPS(4) |
$ | 0.05 | $ | 0.03 | $ | 0.01 | $ | 0.09 | |||||||||||||||||||||
Diluted shares | 50.1 | 50.1 |
Reconciliation of Net Income to Adjusted EBITDA | |||||||||||
Three Months Ended March 31, |
|||||||||||
2024 | 2023 | ||||||||||
($ in millions) | |||||||||||
Net income | $ | 0.9 | $ | 3.2 | |||||||
Income tax expense | 0.9 | 1.5 | |||||||||
Interest expense and amortization of debt discounts and fees | 11.1 | 9.5 | |||||||||
Depreciation and amortization | 7.8 | 7.8 | |||||||||
Gain on disposal or impairment of assets | (0.2) | — | |||||||||
Stock-based compensation | 1.8 | 1.5 | |||||||||
Net income attributable to noncontrolling interests | (0.7) | (0.5) | |||||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) |
3.7 | 2.3 | |||||||||
Adjusted EBITDA | $ | 25.3 | $ | 25.3 |
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA |
|||||||||||
Three Months Ended March 31, |
|||||||||||
2024 | 2023 | ||||||||||
($ in millions) | |||||||||||
Net cash provided by operating activities | $ | 17.3 | $ | 29.6 | |||||||
Current portion of income tax expense | 1.4 | 1.2 | |||||||||
Interest expense, excluding amortization of debt discounts and fees | 10.7 | 9.5 | |||||||||
Change in assets and liabilities, excluding derivative instrument | (7.2) | (16.5) | |||||||||
Net income attributable to noncontrolling interests | (0.7) | (0.5) | |||||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) |
3.7 | 2.3 | |||||||||
Other | 0.1 | (0.3) | |||||||||
Adjusted EBITDA | $ | 25.3 | $ | 25.3 |
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow | |||||||||||
Three Months Ended March 31, |
|||||||||||
2024 | 2023 | ||||||||||
($ in millions) | |||||||||||
Net cash provided by operating activities | $ | 17.3 | $ | 29.6 | |||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) |
3.7 | 2.3 | |||||||||
Capital expenditures for maintenance | (1.8) | (0.6) | |||||||||
Other working capital adjustments | (0.6) | (0.5) | |||||||||
Distributions paid to noncontrolling interests of consolidated affiliates | — | (2.5) | |||||||||
Adjusted free cash flow | $ | 18.6 | $ | 28.3 |
Reconciliation of Gross Margin to Adjusted EBITDA Margin | |||||||||||
Three Months Ended March 31, |
|||||||||||
2024 | 2023 | ||||||||||
Gross margin as a percentage of revenue | 48.9 | % | 50.0 | % | |||||||
General and administrative expenses | (41.0) | % | (41.7) | % | |||||||
Unusual or nonrecurring items that are not typical of ongoing operations(1) |
1.4 | % | 0.9 | % | |||||||
Stock-based compensation | 0.7 | % | 0.5 | % | |||||||
Noncontrolling interests | (0.3) | % | (0.2) | % | |||||||
Gain on disposal or impairment of assets | (0.1) | % | — | % | |||||||
Adjusted EBITDA margin | 9.6 | % | 9.5 | % |