Exhibit 99.1
CORRECTION—Enhabit, Inc.
DALLAS, Texas, April 14, 2023 —This press release corrects a prior version published on February 14, 2023 and is updated to revise the Company’s previously disclosed financial results for the period ended December 31, 2022. The corrected release reads:
Enhabit Reports Fourth Quarter Results and Issues Full-Year 2023 Guidance
Company to host a conference call tomorrow, Feb. 15, 2023 at 10 AM EST
DALLAS, TX – Feb. 14, 2022 – Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice care provider, today reported its results of operations for the fourth quarter ended December 31, 2022.
“Significant changes were required in 2022 to lead important strategies for our future success,” said Enhabit’s President and Chief Executive Officer, Barb Jacobsmeyer. “The expansion of our human resource and talent acquisitions teams, the establishment of our payor innovation team, and strategic changes to management and our staffing model in hospice are all making notable progress. We have also taken steps to align our operational and sales teams into a regional structure to drive success clinically and operationally at a local level. While we face numerous headwinds in 2023, we remain confident in the long-term prospects for Enhabit.”
SUMMARY PERFORMANCE - CONSOLIDATED
•Net service revenue of $263.2 million, declined 4.7% from Q4’21
•Net loss of $(94.7) million, declined 417.8% from Q4’21
•Adjusted EBITDA of $30.3 million, down 38.2% from Q4’21
•Loss per diluted share of $(1.91)
•Adjusted earnings per diluted share of $0.17
RECENT COMPANY HIGHLIGHTS
•Home health continues to have strong growth in Medicare Advantage with nine new negotiated agreements added during the fourth quarter.
•Strategic changes in hospice continue to provide positive momentum with average daily census growing sequentially during the fourth quarter.
•Nursing labor showing signs of improvement with a 19% year-over-year increase in our full-time nursing applicant pool.
•Completed three acquisitions and opened one home health de novo location in the fourth quarter, adding five hospice locations and two home health locations to our portfolio.
1
FINANCIAL RESULTS
Consolidated
| Q4 | '22 vs. '21 | |||||||||||||||||||
| ($ in millions, except per share data) | 2022 | 2021 | ||||||||||||||||||
| Home health net service revenue | $ | 215.8 | $ | 224.0 | (3.7)% | |||||||||||||||
| Hospice net service revenue | 47.4 | 52.1 | (9.0)% | |||||||||||||||||
| Total net service revenue | $ | 263.2 | $ | 276.1 | (4.7)% | |||||||||||||||
| % of Revenue | % of Revenue | |||||||||||||||||||
| Cost of services | 50.6% | $ | (133.3) | 46.5% | $ | (128.5) | 3.7% | |||||||||||||
| Gross margin | 49.4% | $ | 129.9 | 53.5% | $ | 147.6 | (12.0)% | |||||||||||||
| Impairment of goodwill | (41.4)% | $ | (109.0) | —% | $ | — | —% | |||||||||||||
| Administrative & general expenses | 38.0% | (100.0) | 35.6% | (98.2) | 1.8% | |||||||||||||||
| Operating expenses | 130.1% | $ | (342.3) | 82.1% | $ | (226.7) | 51.0% | |||||||||||||
| Equity earnings / noncontrolling interests | 0.5 | 0.4 | ||||||||||||||||||
| Adjusted EBITDA | $ | 30.3 | $ | 49.0 | (38.2)% | |||||||||||||||
| Adjusted EBITDA margin | 11.5% | 17.7% | ||||||||||||||||||
| Adjusted EPS | $ | 0.17 | $ | 0.59 | (71.2)% | |||||||||||||||
Adjustments to accounts receivable reserves, the continued shift to more non-episodic patients in home health and the resumption of sequestration combined to decrease consolidated revenue. The impact of these items were offset by an approximate $5 million audit recovery related to a prior year home health medical claims review and an increase in hospice Medicare reimbursements rates effective October 1, 2022.
Adjusted EBITDA decreased primarily due to the revenue items discussed above, higher cost of services and incremental costs associated with being a stand-alone company. Cost of services were higher due to increased labor costs and costs associated with fleet and mileage reimbursement. Increased labor costs primarily resulted from a $4.3 million increase in employee group medical claims year over year.
2
SEGMENT RESULTS
Home health
| Q4 | '22 vs. '21 | |||||||||||||
| ($ in millions) | 2022 | 2021 | ||||||||||||
| Net service revenue | $ | 215.8 | $ | 224.0 | (3.7)% | |||||||||
| Cost of services | 109.0 | 106.4 | 2.4% | |||||||||||
| Gross margin | 49.5% | 52.5% | ||||||||||||
| Adjusted EBITDA | $ | 47.2 | $ | 59.6 | (20.8)% | |||||||||
| % Adj. EBITDA margin | 21.9% | 26.6% | ||||||||||||
| Operational metrics (Actual Amounts) | ||||||||||||||
| Starts of care | ||||||||||||||
| Episodic admissions | 34,572 | 37,908 | (8.8)% | |||||||||||
| Non-episodic admissions | 15,476 | 12,909 | 19.9% | |||||||||||
| Total admissions | 50,048 | 50,817 | (1.5)% | |||||||||||
| Same-store total admissions growth | (3.1)% | |||||||||||||
| Episodic recertifications | 25,279 | 27,273 | (7.3)% | |||||||||||
| Non-episodic recertifications | 7,104 | 5,348 | 32.8% | |||||||||||
| Total recertifications | 32,383 | 32,621 | (0.7)% | |||||||||||
| Same-store total recertifications growth | (1.3)% | |||||||||||||
| Total starts of care | 82,431 | 83,438 | (1.2)% | |||||||||||
| Completed episodes | 60,250 | 64,242 | (6.2)% | |||||||||||
| Revenue per episode | $ | 2,958 | $ | 3,010 | (1.7)% | |||||||||
| Visits per episode | 14.3 | 15.1 | (5.3)% | |||||||||||
| Total visits | 1,159,420 | 1,219,906 | (5.0)% | |||||||||||
| Non-episodic visits | 297,350 | 246,777 | 20.5% | |||||||||||
| Cost per visit | $ | 92 | $ | 86 | 7.0% | |||||||||
Total admissions decreased primarily due to a reduction in episodic admissions partially offset by continued growth in non-episodic admissions. Revenue per episode decreased year over year primarily due to the resumption of sequestration, timing of completed episodes, and adjustments to accounts receivable reserves partially offset by an increase in Medicare reimbursement rates and an approximate $5 million audit recovery related to a prior year medical claims review.
Adjusted EBITDA decreased year over year primarily due to lower revenue and higher cost of services associated with labor and increased costs associated with fleet and mileage reimbursement. Increased labor costs primarily resulted from a $2.8 million increase in employee group medical claims.
3
Hospice
| Q4 | '22 vs. '21 | |||||||||||||
| ($ in millions) | 2022 | 2021 | ||||||||||||
| Net service revenue | $ | 47.4 | $ | 52.1 | (9.0)% | |||||||||
| Cost of services | 24.3 | 22.1 | 10.0% | |||||||||||
| Gross margin | 48.7% | 57.6% | ||||||||||||
| Adjusted EBITDA | $ | 5.6 | $ | 15.2 | (63.2)% | |||||||||
| % Adj. EBITDA margin | 11.8% | 29.2% | ||||||||||||
| Operational metrics (Actual Amounts) | ||||||||||||||
| Total admissions | 2,915 | 3,223 | (9.6)% | |||||||||||
| Same-store total admissions growth | (13.5)% | |||||||||||||
| Patient days | 330,102 | 334,011 | (1.2)% | |||||||||||
| Discharged average length of stay | 110 | 106 | 3.8% | |||||||||||
| Average daily census | 3,588 | 3,631 | (1.2)% | |||||||||||
| Revenue per day | $ | 144 | $ | 156 | (7.7)% | |||||||||
| Cost per day | $ | 74 | $ | 66 | 12.1% | |||||||||
Revenue per day decreased 7.7% year over year primarily due to adjustments to accounts receivable reserves and the resumption of sequestration partially offset by an increase in Medicare reimbursement rates. Average daily census increased sequentially from the third quarter of 2022 primarily due to improvements in staffing capacity.
Adjusted EBITDA decreased year over year primarily due to increased labor costs and costs associated with fleet and mileage reimbursement. Increased labor costs primarily resulted from lower clinical productivity associated with nurses in orientation, increased use of contract labor, and a $0.5 million increase in employee group medical claims.
4
GUIDANCE
The Company is providing full-year 2023 guidance as follows:
| Full-year 2023 | Guidance | |||||||
| Net Service Revenue | between $1,110 and $1,140 million | |||||||
| Adjusted EBITDA | between $125 and $140 million | |||||||
| Adjusted EPS | between $0.50 and $0.89 | |||||||
For additional considerations regarding the Company’s 2023 guidance ranges, see the supplemental information provided in the quarterly earnings slide deck posted on the Company’s website at http://investors.ehab.com. See also “Other Information” below for an explanation of why the Company does not provide guidance for comparable GAAP measures for Adjusted EBITDA and adjusted EPS.
CONFERENCE CALL INFORMATION
The Company will host an investor conference call at 10 AM Eastern Time on Feb. 15, 2023 to discuss its results for the fourth quarter of 2022. 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 http://investors.ehab.com. Following the call, a replay will be available at the same location.
ABOUT ENHABIT HOME HEALTH & HOSPICE
Enhabit Home Health & Hospice 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 252 home health locations and 105 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.
5
OTHER INFORMATION
Note regarding presentation of non-GAAP financial measures
The financial data contained in the press release and supplemental information includes non-GAAP financial measures as defined in Regulation G under the Securities Exchange Act of 1934, including Adjusted EBITDA, Adjusted EBITDA margin, leverage ratios, adjusted EPS, and adjusted free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are presented on the attached schedules.
However, in reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, reconciliation of its guidance of Adjusted EBITDA and adjusted EPS to their corresponding GAAP measures is not provided because the Company is unable to provide such reconciliation, 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. 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.
6
Enhabit, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
| Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In Millions, Except Per Share Data) | |||||||||||||||||||||||
| Net service revenue | $ | 263.2 | $ | 276.1 | $ | 1,071.1 | $ | 1,106.6 | |||||||||||||||
| Cost of service (excluding depreciation and amortization) | 133.3 | 128.5 | 525.6 | 513.9 | |||||||||||||||||||
| Gross margin | 129.9 | 147.6 | 545.5 | 592.7 | |||||||||||||||||||
| General and administrative expenses | 104.6 | 103.1 | 414.9 | 412.9 | |||||||||||||||||||
| Depreciation and amortization | 8.3 | 9.0 | 33.0 | 36.9 | |||||||||||||||||||
| Impairment of goodwill | 109.0 | — | 109.0 | — | |||||||||||||||||||
| Operating (loss) income | (92.0) | 35.5 | (11.4) | 142.9 | |||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | 8.7 | 0.1 | 15.0 | 0.3 | |||||||||||||||||||
| Equity in net income of nonconsolidated affiliates | — | (0.1) | — | (0.6) | |||||||||||||||||||
| Other income | (0.9) | (3.2) | (0.9) | (4.8) | |||||||||||||||||||
| (Loss) income before income taxes and noncontrolling interests | (99.8) | 38.7 | (25.5) | 148.0 | |||||||||||||||||||
| Income tax (benefit) expense | (5.1) | 8.9 | 12.8 | 35.1 | |||||||||||||||||||
| Net (loss) income | (94.7) | 29.8 | (38.3) | 112.9 | |||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 0.5 | 0.5 | 2.1 | 1.8 | |||||||||||||||||||
| Net (loss) income attributable to Enhabit, Inc. | $ | (95.2) | $ | 29.3 | $ | (40.4) | $ | 111.1 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 49.7 | 49.6 | 49.7 | 49.6 | |||||||||||||||||||
| Diluted | 49.8 | 49.6 | 49.7 | 49.6 | |||||||||||||||||||
| (Loss) earnings per common share: | |||||||||||||||||||||||
| Basic (loss) earnings per share attributable to Enhabit, Inc. common stockholders | $ | (1.92) | $ | 0.59 | $ | (0.81) | $ | 2.24 | |||||||||||||||
| Diluted (loss) earnings per share attributable to Enhabit, Inc. common stockholders | $ | (1.91) | $ | 0.59 | $ | (0.81) | $ | 2.24 | |||||||||||||||
7
Enhabit, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
| December 31, 2022 | December 31, 2021 | ||||||||||
| (In Millions) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 22.9 | $ | 5.4 | |||||||
| Restricted cash | 4.3 | 2.6 | |||||||||
| Accounts receivable | 149.6 | 164.5 | |||||||||
| Income tax receivable | 11.4 | — | |||||||||
| Prepaid expenses and other current assets | 23.6 | 6.3 | |||||||||
| Total current assets | 211.8 | 178.8 | |||||||||
| Property and equipment, net | 20.4 | 20.4 | |||||||||
| Operating lease right-of-use assets | 42.0 | 48.4 | |||||||||
| Goodwill | 1,144.8 | 1,189.0 | |||||||||
| Intangible assets, net | 102.6 | 259.1 | |||||||||
| Other long-term assets | 5.2 | 24.3 | |||||||||
| Total assets | $ | 1,526.8 | $ | 1,720.0 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 23.1 | $ | 5.0 | |||||||
| Current operating lease liabilities | 14.0 | 14.9 | |||||||||
| Accounts payable | 3.8 | 3.5 | |||||||||
| Accrued payroll | 35.5 | 66.4 | |||||||||
| Refunds due patients and other third-party payors | 8.3 | 9.4 | |||||||||
| Income tax payable | — | 4.2 | |||||||||
| Accrued medical insurance | 7.5 | 8.3 | |||||||||
| Other current liabilities | 40.7 | 24.8 | |||||||||
| Total current liabilities | 132.9 | 136.5 | |||||||||
| Long-term debt, net of current portion | 560.0 | 3.5 | |||||||||
| Long-term operating lease liabilities | 28.1 | 33.5 | |||||||||
| Deferred income tax liabilities | 28.6 | 63.2 | |||||||||
| Other long-term liabilities | 1.9 | — | |||||||||
| 751.5 | 236.7 | ||||||||||
| Commitments and contingencies | |||||||||||
| Redeemable noncontrolling interests | 5.2 | 5.0 | |||||||||
| Stockholders’ equity: | |||||||||||
| Enhabit, Inc. stockholders’ equity: | 741.7 | 1,470.0 | |||||||||
| Noncontrolling interests | 28.4 | 8.3 | |||||||||
| Total stockholders’ equity | 770.1 | 1,478.3 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,526.8 | $ | 1,720.0 | |||||||
8
Enhabit, Inc. and Subsidiaries
Condensed Consolidated Cash Flows
(Unaudited)
| For the Year Ended December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (In Millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net (loss) income | $ | (38.3) | $ | 112.9 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities— | |||||||||||
| Depreciation and amortization | 33.0 | 36.9 | |||||||||
| Amortization of debt related costs | 0.6 | — | |||||||||
| Impairment of goodwill | 109.0 | — | |||||||||
| Equity in net income of nonconsolidated affiliates | — | (0.6) | |||||||||
| Distributions from nonconsolidated affiliates | — | 0.3 | |||||||||
| Stock-based compensation | 9.2 | 3.6 | |||||||||
| Deferred tax expense | (4.3) | 8.6 | |||||||||
| Other, net | 0.1 | (5.6) | |||||||||
| Changes in assets and liabilities, net of acquisitions— | |||||||||||
| Accounts receivable | 21.6 | (24.8) | |||||||||
| Prepaid expenses and other assets | (27.5) | (0.1) | |||||||||
| Accounts payable | 0.2 | (0.7) | |||||||||
| Accrued payroll | (31.0) | (7.7) | |||||||||
| Other liabilities | 7.5 | 0.5 | |||||||||
| Net cash provided by operating activities | 80.1 | 123.3 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Acquisition of businesses, net of cash acquired | (36.3) | (117.5) | |||||||||
| Purchases of property and equipment | (7.1) | (4.3) | |||||||||
| Other, net | 1.1 | 2.6 | |||||||||
| Net cash used in investing activities | (42.3) | (119.2) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Principal borrowings on term loan | 400.0 | — | |||||||||
| Principal payments on debt | (10.0) | — | |||||||||
| Borrowings on revolving credit facility | 190.0 | — | |||||||||
| Principal payments under finance lease obligations | (5.0) | (7.2) | |||||||||
| Debt issuance costs | (4.7) | — | |||||||||
| Contributions from Encompass | 59.8 | 126.4 | |||||||||
| Distributions to Encompass | (654.9) | (154.1) | |||||||||
| Contributions from noncontrolling interests of consolidated affiliates | 7.4 | — | |||||||||
| Other | (1.2) | (1.2) | |||||||||
| Net cash used in financing activities | (18.6) | (36.1) | |||||||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 19.2 | (32.0) | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | 8.0 | 40.0 | |||||||||
| Cash, cash equivalents, and restricted cash at end of year | $ | 27.2 | $ | 8.0 | |||||||
9
Enhabit, Inc. and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q4 | Full Year | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Earnings per share, as reported | $ | (1.91) | $ | 0.59 | $ | (0.81) | $ | 2.24 | |||||||||||||||
| Adjustments, net of tax: | |||||||||||||||||||||||
| Transaction costs and gain on consolidation | 0.05 | — | 0.14 | 0.13 | |||||||||||||||||||
| Income tax adjustments | 0.12 | — | 0.12 | (0.01) | |||||||||||||||||||
| Impairment of goodwill | 1.91 | — | 1.91 | — | |||||||||||||||||||
| Adjusted earnings per share* | $ | 0.17 | $ | 0.59 | $ | 1.36 | $ | 2.36 | |||||||||||||||
* Adjusted EPS may not sum due to rounding.
10
Enhabit, Inc. and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q4 QTD | |||||||||||||||||||||||||||||
| 2022 | |||||||||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||
| As Reported | Impairment of Goodwill | Transaction Costs | Income Tax Adjustments | As Adjusted | |||||||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | 30.3 | $ | — | $ | — | $ | — | $ | 30.3 | |||||||||||||||||||
| Depreciation and amortization | (8.3) | — | — | — | (8.3) | ||||||||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | (8.7) | — | — | — | (8.7) | ||||||||||||||||||||||||
| Impairment of goodwill | (109.0) | 109.0 | — | — | — | ||||||||||||||||||||||||
| Stock-based compensation | (2.1) | — | — | — | (2.1) | ||||||||||||||||||||||||
| Transaction costs | (2.5) | — | 2.5 | — | — | ||||||||||||||||||||||||
| Income before income tax expense | (100.3) | 109.0 | 2.5 | — | 11.2 | ||||||||||||||||||||||||
| Provision for income tax expense | 5.1 | (0.6) | 6.2 | (3.0) | |||||||||||||||||||||||||
| Net (loss) income attributable to Enhabit | $ | (95.2) | $ | 95.3 | $ | 1.9 | $ | 6.2 | $ | 8.2 | |||||||||||||||||||
| Diluted earnings per share** | $ | (1.91) | $ | 1.91 | $ | 0.05 | $ | 0.12 | $ | 0.17 | |||||||||||||||||||
| Diluted shares used in calculation | 49.8 | ||||||||||||||||||||||||||||
* Reconciliation to GAAP provided on page 15
** Diluted EPS may not sum due to rounding
11
Enhabit, Inc. and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q4 QTD | |||||||||||||||||
| 2021 | |||||||||||||||||
| Adjustments | |||||||||||||||||
| As Reported | Transaction Costs and Gain on Consolidation | As Adjusted | |||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||
| Adjusted EBITDA* | $ | 49.0 | $ | — | $ | 49.0 | |||||||||||
| Depreciation and amortization | (9.0) | — | (9.0) | ||||||||||||||
| Interest expense and amortization of debt discounts and fees | (0.1) | — | (0.1) | ||||||||||||||
| Gain on disposal of assets | 0.4 | — | 0.4 | ||||||||||||||
| Stock-based compensation | (1.5) | — | (1.5) | ||||||||||||||
| Stock-based compensation included in overhead allocation | (0.8) | — | (0.8) | ||||||||||||||
| Transaction costs | (3.0) | 3.0 | — | ||||||||||||||
| Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | 3.2 | (3.2) | — | ||||||||||||||
| Income before income tax expense | 38.2 | (0.2) | 38.0 | ||||||||||||||
| Provision for income tax expense | (8.9) | — | (8.9) | ||||||||||||||
| Net income attributable to Enhabit | $ | 29.3 | $ | (0.2) | $ | 29.1 | |||||||||||
| Diluted earnings per share** | $ | 0.59 | $ | — | $ | 0.59 | |||||||||||
| Diluted shares used in calculation | 49.6 | ||||||||||||||||
* Reconciliation to GAAP provided on page 15
** Diluted EPS may not sum due to rounding
12
Enhabit, Inc. and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q4 YTD | |||||||||||||||||||||||||||||
| 2022 | |||||||||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||||||||
| As Reported | Impairment of Goodwill | Transaction Costs | Income Tax Adjustments | As Adjusted | |||||||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||||||||
| Adjusted EBITDA* | $ | 149.3 | $ | — | $ | — | $ | — | $ | 149.3 | |||||||||||||||||||
| Depreciation and amortization | (33.0) | — | — | — | (33.0) | ||||||||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | (15.0) | — | — | — | (15.0) | ||||||||||||||||||||||||
| Impairment of goodwill | (109.0) | 109.0 | — | — | — | ||||||||||||||||||||||||
| loss on disposal of assets | (0.1) | — | — | — | (0.1) | ||||||||||||||||||||||||
| Stock-based compensation | (9.2) | — | — | — | (9.2) | ||||||||||||||||||||||||
| Stock-based compensation included in overhead allocation | (1.1) | — | — | — | (1.1) | ||||||||||||||||||||||||
| Transaction costs | (9.5) | — | 9.5 | — | — | ||||||||||||||||||||||||
| Income before income tax expense | (27.6) | 109.0 | 9.5 | — | 90.9 | ||||||||||||||||||||||||
| Provision for income tax expense | (12.8) | (13.7) | (2.4) | 6.2 | (22.7) | ||||||||||||||||||||||||
| Net (loss) income attributable to Enhabit | $ | (40.4) | $ | 95.3 | $ | 7.1 | $ | 6.2 | $ | 68.2 | |||||||||||||||||||
| Diluted earnings per share** | $ | (0.81) | $ | 1.91 | $ | 0.14 | $ | 0.12 | $ | 1.36 | |||||||||||||||||||
| Diluted shares used in calculation | 49.7 | ||||||||||||||||||||||||||||
* Reconciliation to GAAP provided on page 15
** Diluted EPS may not sum due to rounding
13
Enhabit, Inc. and Subsidiaries
Supplemental Information
Adjusted Earnings Per Share
| Q4 YTD | |||||||||||||||||||||||
| 2021 | |||||||||||||||||||||||
| Adjustments | |||||||||||||||||||||||
| As Reported | Transaction Costs and Gain on Consolidation | Income Tax Adjustments | As Adjusted | ||||||||||||||||||||
| (In Millions, Except Per Share Amounts) | |||||||||||||||||||||||
| Adjusted EBITDA* | $ | 197.2 | $ | — | $ | — | $ | 197.2 | |||||||||||||||
| Depreciation and amortization | (36.9) | — | — | (36.9) | |||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | (0.3) | — | — | (0.3) | |||||||||||||||||||
| Gain on disposal of assets | 0.8 | — | — | 0.8 | |||||||||||||||||||
| Stock-based compensation | (3.6) | — | — | (3.6) | |||||||||||||||||||
| Stock-based compensation included in overhead allocation | (2.3) | — | — | (2.3) | |||||||||||||||||||
| Transaction costs | (11.9) | 11.9 | — | — | |||||||||||||||||||
| Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | 3.2 | (3.2) | — | — | |||||||||||||||||||
| Income before income tax expense | 146.2 | 8.7 | — | 154.9 | |||||||||||||||||||
| Provision for income tax expense | (35.1) | (2.2) | (0.3) | (37.6) | |||||||||||||||||||
| Net income attributable to Enhabit | $ | 111.1 | $ | 6.5 | $ | (0.3) | $ | 117.3 | |||||||||||||||
| Diluted earnings per share** | $ | 2.24 | $ | 0.13 | $ | (0.01) | $ | 2.36 | |||||||||||||||
| Diluted shares used in calculation | 49.6 | ||||||||||||||||||||||
* Reconciliation to GAAP provided on page 15
** Diluted EPS may not sum due to rounding
14
Enhabit, Inc. and Subsidiaries
Supplemental Information
Reconciliation of Net Income to Adjusted EBITDA
| Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In Millions) | |||||||||||||||||||||||
| Net (Loss) Income | $ | (94.7) | $ | 29.8 | $ | (38.3) | $ | 112.9 | |||||||||||||||
| Income tax expense | (5.1) | 8.9 | 12.8 | 35.1 | |||||||||||||||||||
| Interest expense and amortization of debt discounts and fees | 8.7 | 0.1 | 15.0 | 0.3 | |||||||||||||||||||
| Depreciation and amortization | 8.3 | 9.0 | 33.0 | 36.9 | |||||||||||||||||||
| Impairment of goodwill | 109.0 | — | 109.0 | — | |||||||||||||||||||
| (Gain) loss on disposal of assets | — | (0.4) | 0.1 | (0.8) | |||||||||||||||||||
| Stock-based compensation | 2.1 | 1.5 | 9.2 | 3.6 | |||||||||||||||||||
| Stock-based compensation included in overhead allocation | — | 0.8 | 1.1 | 2.3 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | (0.5) | (0.5) | (2.1) | (1.8) | |||||||||||||||||||
| Transaction costs | 2.5 | 3.0 | 9.5 | 11.9 | |||||||||||||||||||
| Gain on consolidation of joint venture formerly accounted for under the equity method of accounting | — | (3.2) | — | (3.2) | |||||||||||||||||||
| Adjusted EBITDA | $ | 30.3 | $ | 49.0 | $ | 149.3 | $ | 197.2 | |||||||||||||||
15
Enhabit, Inc. and Subsidiaries
Supplemental Information
Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
| Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In Millions) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 4.1 | $ | 23.1 | $ | 80.1 | $ | 123.3 | |||||||||||||||
| Interest expense and amortization of debt discounts and fees | 8.7 | 0.1 | 15.0 | 0.3 | |||||||||||||||||||
| Equity in net income of nonconsolidated affiliates | — | 0.1 | — | 0.6 | |||||||||||||||||||
| Net income attributable to noncontrolling interests in continuing operations | (0.5) | (0.5) | (2.1) | (1.8) | |||||||||||||||||||
| Distributions from nonconsolidated affiliates | — | (0.1) | — | (0.3) | |||||||||||||||||||
| Current portion of income tax expense | (3.3) | 1.1 | 17.1 | 26.5 | |||||||||||||||||||
| Change in assets and liabilities | 19.2 | 21.7 | 29.2 | 32.8 | |||||||||||||||||||
| Transaction costs | 2.5 | 3.0 | 9.5 | 11.9 | |||||||||||||||||||
| Stock-based compensation included in overhead allocation | — | 0.8 | 1.1 | 2.3 | |||||||||||||||||||
| Other | (0.4) | (0.3) | (0.6) | 1.6 | |||||||||||||||||||
| Adjusted EBITDA | $ | 30.3 | $ | 49.0 | $ | 149.3 | $ | 197.2 | |||||||||||||||
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
| Q4 | Full Year | ||||||||||||||||||||||
| ($ in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net cash provided by operating activities | $ | 4.1 | $ | 23.1 | $ | 80.1 | $ | 123.3 | |||||||||||||||
| Capital expenditures for maintenance | (1.4) | (0.5) | (4.5) | (5.4) | |||||||||||||||||||
| Distributions paid to noncontrolling interests of consolidated affiliates | (0.3) | (0.2) | (1.2) | (1.8) | |||||||||||||||||||
| Items non-indicative of ongoing operating performance: | |||||||||||||||||||||||
| Stock-based compensation included in overhead allocation | — | 0.8 | 1.1 | 2.3 | |||||||||||||||||||
| Transaction costs and related assumed liabilities | 1.8 | 6.4 | 8.8 | 11.9 | |||||||||||||||||||
| Adjusted free cash flow | $ | 4.2 | $ | 29.6 | $ | 84.3 | $ | 130.3 | |||||||||||||||
16
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, and our ability to control costs, particularly labor and employee benefit costs. Our annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, each of which will be available 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.
Investor Relations Contact
Mark Brewer
Mark.Brewer@ehab.com
469-860-6061
Media Contact
Erin Volbeda
media@ehab.com
972-338-5141
17
