Enhabit Home Health & Hospice Named in U.S. News & World Report’s 2024-2025 Best Companies to Work For

DALLAS–(BUSINESS WIRE)–Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced it was named as one of U.S. News & World Report’s 2024-2025 Best Companies to Work For in the South.

The U.S. News Best Companies Ratings are calculated through an evaluation of characteristics such as work-life balance, total rewards, flexibility and professional development opportunities. This year, the rankings consisted of 549 companies across the overall best company list, 24 industry lists and four regional lists.

The achievement of this award demonstrates Enhabit’s commitment to building an environment where employees feel valued and recognized for their talents and contributions. In addition to fostering an inclusive workplace, Enhabit supports its employees’ personal growth and helps them navigate their professional development.

“One of the most powerful things you can do inside an organization is value the role of each team member and make sure they get to do what they do best – and that’s a top priority at Enhabit,” Chief Human Resources Officer Tanya Marion said. “We are excited to receive this award as a testament to the positive, supportive culture we’ve built. When we invest in our people personally and professionally, we see the reflection in the high-quality, compassionate care they deliver for our patients and their loved ones.”

Enhabit is one of the largest Medicare-certified home health and hospice providers in the nation, with over 10,000 employees across its vast footprint. Enhabit provides flexible schedules, professional development opportunities, a competitive compensation and benefits package and access to advanced technology to assist employees in providing industry-leading care to patients and their loved ones.

To learn more about Enhabit and its care offerings, visit ehab.com. To learn more about joining the Enhabit team, visit careers.ehab.com.

About Enhabit Home Health & Hospice

Enhabit Home Health & Hospice (Enhabit, Inc.) is a leading national home health and hospice provider working to expand what’s possible for patient care in the home. Enhabit’s team of clinicians supports patients and their families where they are most comfortable, with a nationwide footprint spanning 255 home health locations and 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

Contacts

Erin Volbeda
[email protected]
972-338-5141

Enhabit Details Decisive Actions to Successfully Stabilize Business and Position Company for Value Creation 

 Files Definitive Proxy Materials and Mails Letter to Stockholders 

AREX’s Unqualified Slate of Nominees Risks Detracting from the Talent Currently on the Board 

Urges Stockholders to Vote “FOR” Only Enhabit’s Nine Nominees on the YELLOW Proxy Card 

DALLAS, June 10, 2024 – Enhabit, Inc. (NYSE: EHAB) (“Enhabit” or the “Company”), a leading home health and hospice provider, today announced that it has filed definitive proxy materials with the Securities and Exchange Commission in connection with its upcoming 2024 annual meeting of stockholders (the “2024 Annual Meeting”) scheduled for July 25, 2024. Stockholders of record as of the close of business on June 5, 2024, are entitled to vote at the 2024 Annual Meeting. 

In connection with the filing of its definitive proxy statement, Enhabit is mailing a letter to stockholders. Enhabit’s definitive proxy materials and other materials regarding the Board of Directors’ recommendation for the 2024 Annual Meeting can be found at investors.ehab.com. 

The full text of the letter follows: 

Dear Fellow Stockholder, 

 At our upcoming 2024 Annual Meeting of Stockholders (“Annual Meeting”), you will have an important decision to make about the future of Enhabit Home Health & Hospice (“Enhabit” or the “Company”) – whether our Board should be replaced and control of Enhabit handed to one of our stockholders, AREX Capital Management, LP (together with its affiliates, “AREX”). 

Your current Board unanimously believes the answer to this question is emphatically, no. Allow us to explain. Previously a subsidiary of Encompass Health Corporation (“Encompass”), Enhabit has been a public company for just seven full quarters. Neither our financial results nor our stock performance has satisfied expectations during this period and certainly have not met the standard your Board has set for Enhabit. This is due to a variety of factors, including the structure and condition of our Company at the time of the spin-off, as well as industry headwinds that were exacerbated due to our business mix. We also experienced a few operational missteps, which did not meet the high standards we have set for ourselves. 

But that is the past. Looking forward, the Company is focused on improving our execution in areas that we directly control beyond business mix and market conditions. As demonstrated by our financial performance at the end of 2023 and beginning of 2024, the Board and management team have taken the necessary steps to evolve Enhabit into a stronger, more resilient post-spin public company, well-positioned for growth, including: 

  • Standing up a public company despite challenging structural circumstances, including enhancing our standalone financial control environment; 
  • Executing a well-designed Board refreshment program that included the appointment of two new directors pursuant to an agreement with stockholders; 
  • Undertaking a comprehensive nine-month review process to evaluate all strategic alternatives for the Company, including a potential sale; and 
  • Most importantly, executing on its strategic plan to stabilize the business amidst significant industry headwinds. 

Despite our demonstrable progress and current trajectory, AREX has initiated a proxy contest to replace the majority of the Board with a seven-candidate slate that has largely outdated experience and numerous other flaws. Most prominently, none of the six independent candidates have any board experience at a NYSE- or NASDAQ-listed company. Furthermore, if AREX takes control of the Company, their stated intent is to institute a “Transformation Committee,” which will presumably operate as a shadow management team, to implement a yet-to-be-disclosed strategic plan – this is not the recipe for success. 

We have engaged with AREX extensively since our infancy as a public company and have accommodated their requests for discussions with both management and members of the Board. To date, AREX has not indicated any willingness to entertain a reasonable settlement offer that does not include delivering to AREX control of the Board. The Company remains open to a constructive resolution of the proxy contest in a manner that does not destabilize the business. 

AREX’s public statements contain numerous mischaracterizations, cherry-picked time periods and misleading assertions, which we will address in future communications. However, we wholeheartedly agree with AREX on the following: 

“The only thing that matters now is setting the Company on a path that will unlock Enhabit’s substantial value for all stockholders.” 

And we believe the current Board is the superior choice to do so. We urge you to protect the value of your investment by voting the YELLOW proxy card “FOR” ONLY Enhabit’s nine highly qualified nominees – Jeffrey W. Bolton, Tina L. Brown-Stevenson, Charles M. Elson, Erin P. Hoeflinger, Barbara A. Jacobsmeyer, Susan A. La Monica, Stuart M. McGuigan, Gregory S. Rush and Barry P. Schochet. 

ENHABIT’S BOARD AND MANAGEMENT TEAM HAVE NAVIGATED A CHALLENGING ENVIRONMENT AND STABILIZED THE BUSINESS 

Enhabit has faced a series of headwinds since it separated from Encompass in July 2022, which impacted the Company’s ability to accurately forecast its performance. 

  • Spinning out with levels of debt notably higher than many of Enhabit’s peers, which has inhibited its ability to make opportunistic acquisitions. 
  • A rapid acceleration of Medicare beneficiaries’ moving from Medicare to Medicare Advantage across the industry affected the Company more than its peer companies due to Enhabit’s relatively high mix of Medicare business and low number of Medicare Advantage payor contracts at favorable rates at the time of the spin, leading to a disproportionate decline in adjusted EBITDA as the mix of business normalized. 
  • High interest rate environment, which further limited Enhabit’s ability to be acquisitive and increased its cost of debt. 
  • Inflationary wage trends and labor market shortage, which created capacity constraints, limiting growth and increasing Enhabit’s cost per visit. 

Against this challenging backdrop, the Board and management team have executed a multi-faceted strategy in our home health and hospice businesses to strengthen Enhabit’s foundation, including: 

  • Stabilizing Medicare admissions as a percentage of total home health revenue. Enhabit’s traditional Medicare mix of home health revenue is at approximately 60% and now in line with peers. While we still have work to do in this area, we expect this to result in improved performance. For example, while year-over-year Medicare admissions declined 11.4% in the first quarter of 2024, we experienced a Medicare admission increase of 3.4% sequentially. 
  • Improving our Medicare Advantage rate. As we shift business to our payor innovation contracts, we are driving higher revenue per visit. We have driven steady increases in our non-Medicare revenue per visit, from approximately $136 in FY 2022, to approximately $140 in FY 2023, to approximately $145 in the first quarter of 2024. These improvements are a result of our payor innovation process, which began in the summer of 2022. Notably, in Q1 2023, only 6% of non-Medicare visits were covered by payor innovation contracts at improved rates. In Q1 2024, that figure was 38%. In addition, admissions in our historically lower paying contracts declined from 42% of total admissions in Q1 2023 to 29% in Q1 2024. 
  • Growing our payor network. Since the spin-off in July 2022, we have secured 64 new agreements, two of which are new national agreements. Our pipeline includes 30 potential new agreements, along with 28 historic agreements that are being re-negotiated. 
  • Increasing hospice admissions and census. We stabilized the clinical work force and are now focused on business development to drive admissions and census growth. Since the spin-off in July 2022, we have grown hospice revenue by approximately 3% and admissions by approximately 7%, outpacing our closest peer. 
  • Bolstering our talent pool. In 2023, we eliminated all hospice and home health nursing contract labor, which is traditionally more expensive driving lower overall profitability. In Q1 2024, Enhabit’s full-time nursing candidate pool increased over 30% year-over-year and resulted in the addition of 151 net new full-time nurses. 
  • Delivering consistently excellent care to our patients. Our success is a competitive advantage in negotiations with payors. In 2023: o Enhabit’s 30-day hospital readmission rate was 20.5% lower than the 2022 national average. 
    • Enhabit’s Quality of Patient Care star rating was 16.7% better than the national average. 
    • Enhabit is 52.3% better than the national average in hospice visits by a RN or medical social worker in two of the last three days of the patient’s life.

ENHABIT IS POISED TO DRIVE GROWTH AND VALUE CREATION 

With Enhabit on more solid footing, we can now leverage our business stability to drive growth. Our priorities include

Home Health. We are increasing clinical staffing, enhancing ability to accept new payors and aligning clinical resource utilization with patient needs. 

  • We continue to increase net full-time nursing and therapy headcount to support home health growth. 
  • Our payor innovation team is contracting with new payors. This positions us to accept more patients and be a preferred provider to referral sources. We have two new national payor agreements in place as of January 1, 2024, which positions us much better than we were at the beginning of 2023. 
  • We are utilizing analytics and clinical management software, such as Medalogix Pulse, to optimize our care plans without compromising our industry leading outcomes. 

Hospice. We are growing census through improved staffing capacity, increasing use of analytics to drive high-quality care and focusing on efficiencies in the referral to admission process. 

  • We have no capacity constraints in our hospice locations, enabling us to take referrals that our business development team sources for us. 
  • Enhabit has implemented a case management staffing model that continues to improve recruitment and retention of hospice staff while eliminating all contract nursing and staffing constraints. Now that we have sufficient clinical staffing, we are focused on recruiting additional business development team members to increase referrals. 
  • Enhabit has successfully reallocated certain hospice resources to form centralized admission departments. The sole focus of these departments is to improve our ability to respond quickly to referral sources. 
  • The Company also leverages both internally developed tools as well as third-party software to reduce our cost per visit, enhance our productivity and optimize the use of our nursing and therapy staff. 

De Novos. We are making investments through our de novo strategy focused on staffing and hiring the clinical team to build patient census and aim to achieve 10 de novo locations per year which will allow us to enter new markets. 

  • De novos present attractive economics, with an initial investment of approximately $250,000 to $350,000, allowing Enhabit to capitalize on growth opportunities in overlapping geographies. 
  • Enhabit’s operational and sales teams have been focused on ramping up referrals and admission growth in the eight existing de novo locations that opened in 2023. 
  • The Company added resources to our integration team to support our de novo strategy. 
  • We have opened three thus far in 2024. De novos that have reached their one-year anniversary are generally at or ahead of plan. 

People. Through our employee-first culture, we undertake significant efforts to ensure our clinical and support staff receive the education, training, support and recognition necessary to provide the highest quality care in the most cost-effective manner. 

  • With our demonstrated success in nursing hires, we can now turn some talent acquisition resources to recruiting additional therapists that will allow us to grow volumes. 
  • The success of our human capital management strategy is evidenced by acknowledgement in many industry and national workforce awards, including the  recently announced 2024 Top Workplaces USA award issued by Energage,1 and results from our employee engagement survey that show active engagement by employees beyond the national average. 

ENHABIT’S REFRESHED, HIGHLY QUALIFIED BOARD IS FIT FOR PURPOSE AND SUPERIOR TO THE AREX PROPOSED NOMINEES 

As Enhabit continues to mature as a public company, the Board is ensuring that it has the right mix of skills along with a balanced mix of tenures to help drive Enhabit’s next phase of growth. 

Today, the Company’s Board consists of 13 directors, 12 of whom are independent directors, including five transitional directors who previously served on the Encompass board. The Company believes the historical knowledge of the business and public company board experience provided by the transitional directors was invaluable as we navigated obstacles and headwinds during our transition to a standalone public company. Most spin-off companies have legacy directors for this reason. As part of our well-designed, previously disclosed Board refreshment plan, four of the five transitional directors will step down from the Board at the Annual Meeting. 

Importantly, the skillsets and expertise of the Company’s directors up for re-election at the Annual Meeting are strongly aligned with the opportunities we see ahead. As AREX aptly highlighted, Charles Elson, the sole former Encompass director remaining on Enhabit’s Board, stated, “The skills-based composition of a corporate board is critically important to proper board function…a wide range of talents that are tailored to the business of the corporation is vital to effective management monitoring.”2 Mr. Elson had Enhabit’s Board in mind when he made this statement in August 2023. 

The eight independent Enhabit Board nominees include: 

  • Directors with ample experience serving on public company boards; 
  • Six directors who have overseen Enhabit through a period of instability and positioned the Company for growth and stockholder value creation; 
  • Two directors with executive-level expertise at two large payors that have distinct but complementary operations; this experience is invaluable as Enhabit’s payor innovation strategy continues to expand; 
  • A Chief Human Resources Officer for a publicly traded organization with nearly 20,000 employees whose perspective gained over ten years in this role pertains specifically to the Company’s efforts to improve recruitment and retention across our locations in the U.S., as well as to implement executive compensation programs designed to create value for stockholders, and broader human capital management objectives; 
  • A former Chief Administrative Officer and Chief Financial Officer in a leading health services company with over 20 years of leadership experience and strong accounting acumen that is necessary considering the Company’s recently enhanced financial controls; 
  • A director identified and selected by a stockholder of the Company that has a proven track record navigating industry cycles as a senior executive; 
  • A former Chief Information Officer at the U.S. Department of State, Johnson & Johnson and CVS Caremark with over three decades of Information Technology expertise, and a former Senior Vice President of Health System Analytics and Decision Support with significant experience in health system analytics and data, both of which have proved critical as we build out our analytics capabilities; 
    A Certified Public Accountant with more than 30 years of experience and significant M&A expertise gleaned from serving as Chief Financial Officer at two public companies prior to their respective sales to private equity; and 
    A renowned corporate governance expert (who has been quoted by AREX), with prior service as a director nominee of shareholder activists. 
  • 1 https://investors.ehab.com/news/news-details/2024/Enhabit-Home-Health–Hospice-Named-a-Winner-of-the-2024-Top-Workplaces-USA-Award/default.aspx 
  • 2 Elson, C. (2023, August 9). Editor’s Note: Planes, Trains and Corporate Governance. Directors & Boards.  

If elected, this Board, whose skillsets align greatly with the strategic initiatives of the Company, intends to oversee a management team poised to grow the business and enhance value for all stockholders. 

Compare this experience with the seven AREX proposed nominees and the vast disparity in quality is readily apparent: 

  • Seven nominees with only a combined four years of public company experience – one at a discount retail company that filed for bankruptcy and another at a holding company not registered with the SEC; 
  • Nominees whose healthcare experience is either tangential to home health and hospice operations and payor relationships, unproven because of short track records, or dated with limited relevance because of today’s Medicare Advantage marketplace dynamics; 
  • Candidates whose “payor” experience is at convenors (a third-party administrator working and coordinating with payors and providers), and not actually at payors; 
  • No candidates with extensive experience in leveraging analytics, which is a core initiative; 
  • No candidate with extensive experience in implementing executive compensation policies and programs, ESG initiatives, or IT/cybersecurity infrastructure; and 
  • Lack of candidates with the requisite accounting and internal control experience or compensation expertise to form properly functioning Audit and Human Capital Committees – qualities that are critical for any board to effectively oversee internal controls and communicate with auditors and design executive compensation plans to ensure alignment with management and stockholders. 

If elected, AREX intends to form a “Transformation Committee.” In addition to concerns about the AREX nominees’ experience and ability to effectively oversee the Company, we believe it will take months for them to get up to speed. 

ENHABIT’S INDEPENDENT BOARD OVERSAW A ROBUST STRATEGIC REVIEW PROCESS: THE BOARD HAS DEMONSTRATED THAT IT IS OPEN TO ALL OPPORTUNITIES TO MAXIMIZE STOCKHOLDER VALUE 

Your Board actively seeks and carefully evaluates stockholder input on an ongoing basis. To that end, at the urging of AREX and other stockholders, the Board oversaw a robust strategic review process which included a potential sale of the Company. The process involved 38 potential counterparties, including strategic buyers and financial sponsors – with certain parties expressing varying degrees of interest; however, due to a variety of factors (including macro and industry headwinds), none submitted formal offers despite the Board’s extensive efforts. 

The Board remains open to all opportunities to maximize stockholder value and will continue to take actions that best position Enhabit for the future, whether operating as a standalone entity or as part of a larger platform. 

PROTECT THE VALUE OF YOUR INVESTMENT IN ENHABIT: 

VOTE THE YELLOW PROXY CARD TODAY 

We strongly urge stockholders to vote for the entire slate of nine highly qualified and experienced Enhabit director nominees. Your vote is extremely important, no matter how many shares you own. Please use the enclosed YELLOW proxy card to vote ONLY FOR Enhabit’s nine nominees today. 

You can elect our nominees by signing, dating and returning the YELLOW proxy card in the postage-paid envelope included in your proxy materials. 

DISCARD the white proxy card you receive from AREX. If you mistakenly voted using the white proxy card, you may cancel that vote by simply voting again using Enhabit’s YELLOW proxy card – only your latest-dated vote will count. 

Thank you for your continued support of and investment in Enhabit. 

Sincerely, 

The Enhabit Board of Directors 

If you have questions or need assistance voting your shares, please contact: 

Mackenzie Partners, Inc.

Toll-Free: 1-800-322-2885 

Or 

Email: [email protected] 

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 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com. 

Forward-Looking Statements 

Statements contained in this press release which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All 

forward-looking information speaks 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 based upon current information and involve a number of risks and uncertainties, many of which are beyond our control. Actual events or results may differ materially from 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 our present expectations include, but are not limited to, our ability to execute on our strategic plans, regulatory and other developments impacting the markets for our services, changes in reimbursement rates, general economic conditions, changes in the episodic versus non-episodic mix of our payers, the case mix of our patients, and payment methodologies, our ability to attract and retain key management personnel and health care professionals, potential disruptions or breaches of our or our vendors’, payors’, and other contract counterparties’ information systems, the outcome of litigation, our ability to successfully complete and integrate de novo locations, acquisitions, investments, and joint ventures, our ability to successfully integrate technology in our operations, our ability to control costs, particularly labor and employee benefit costs, and impacts resulting from the announcement of the conclusion of the strategic review process. Additional information regarding 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 are described in reports filed with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which are available on the Company’s website at http://investors.ehab.com and free of charge through the website maintained by the SEC at www.sec.gov. 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. 

Important Additional Information and Where to Find It 

The Company has filed a definitive proxy statement on Schedule 14A and other documents with the SEC in connection with its solicitation of proxies from the Company’s stockholders for the Company’s 2024 annual meeting of stockholders. THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING YELLOW PROXY CARD, AND ALL OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying YELLOW proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “SEC Filings” link in the “Investors” section of the Company’s website, http://investors.ehab.com, or by contacting [email protected] as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC. 

Investor relations contact 

Crissy Carlisle [email protected] 469-860-6061 

Media contact 

Erin Volbeda [email protected] 972-338-5141 

Enhabit Provides Additional Details on Robust Strategic Review Process

Files Preliminary Proxy Statement; Elaborates on AREX Capital Management’s Singular Focus in Demanding a Sale of the Company

DALLAS–(BUSINESS WIRE)–Enhabit, Inc. (NYSE: EHAB) (“Enhabit” or the “Company”) today announced that it has filed its preliminary proxy materials with the Securities and Exchange Commission (the “SEC”) in connection with its upcoming 2024 annual meeting of stockholders (the “2024 Annual Meeting”). The preliminary proxy statement is available on the Investor Relations section of the Enhabit website at investors.ehab.com.

The Company is filing a preliminary proxy statement because AREX Capital Management, LP (together with its affiliates and associates, “AREX”) has notified the Company that it intends to nominate seven candidates for election to the Company’s nine-member board at the 2024 Annual Meeting.

In connection with the filing, Enhabit provided additional information regarding its recently concluded strategic review process. Highlights include:

  • Enhabit, with the assistance of its financial advisor, Goldman Sachs, and its legal advisor, Sidley Austin, ran a comprehensive process that lasted approximately nine months. Goldman Sachs received full leeway to engage potential counterparties.
  • The process involved 38 potential counterparties, including strategic buyers and financial sponsors. Of those parties, 26 executed non-disclosure agreements and nine participated in management presentations.
  • Four parties, consisting of two financial sponsors and two strategic acquirors, provided initial indications of interest.
  • The parties expressed varying degrees of interest; however, none submitted formal offers despite the Company’s extensive efforts to facilitate diligence.
  • Significant headwinds impacted the strategic review process, including regulatory developments related to changes in Medicare Advantage rates and the antitrust landscape, a difficult healthcare operating environment, and persistently high interest rates.

The Board, which includes two directors appointed as part of a cooperation agreement with Cruiser Capital and Harbour Point Capital, was actively engaged throughout the strategic review process. The Enhabit Board of Directors and management team remain steadfast in their commitment to maximize value for stockholders and will continue to evaluate all opportunities to do so.

The eight independent directors who have been nominated for reelection to the Enhabit Board at the 2024 Annual Meeting issued the following statement:

“Enhabit’s strategic alternatives process was robust and included outreach to a significant number of potentially interested third parties. In addition, Enhabit issued a public announcement of the process to ensure that other potential counterparties would be aware of the process. After nine months and having received no actionable proposals, despite giving the most interested parties an abundance of time to submit such a proposal, the Board unanimously determined to conclude the strategic review. We remain confident the Company has taken the right steps to improve financial and operational results, enhance growth, and create significant value for all Enhabit stockholders. We are disappointed that AREX has initiated a proxy contest to take control of the Board in the wake of the extensive strategic review that they demanded.”

Summary of the Strategic Review Process

Stage 1: AREX Demands a Review of Strategic Alternatives

In May 2023, AREX sent a private letter to the Board urging a review of strategic alternatives, the immediate resignation of five directors who had previously served on the board of directors of Encompass Health Corporation (“Encompass”, and such directors, the “Transitional Directors”), and the immediate appointment of two director candidates proposed by AREX. In June 2023, AREX sent a second letter to the Board, which was publicly disclosed in a press release, in which AREX again demanded a strategic review process by the end of the year and the appointment of its two director candidates. AREX failed to acknowledge the appointment of the two new directors pursuant to the cooperation agreement with Cruiser Capital and Harbour Point Capital, including one with substantial experience in mergers and acquisitions, earlier in the year.

Stage 2: Company Initiates a Strategic Review

Prior to AREX’s private letter and public campaign, the Board had already contemplated a variety of options that would enhance stockholder value, including strategic transactions. The Board had considered the possibility of a strategic transaction with its financial advisor, Goldman Sachs, as early as the summer of 2022, in the initial months following the Company’s separation from Encompass. This workstream involved a review of market trends, a valuation workstream, and an assessment of the Company’s options for pursuing a strategic transaction given certain restrictions in the tax matters agreement with Encompass executed in connection with the Company’s spin-off (the “Tax Matters Agreement”). In particular, the Tax Matters Agreement prohibited the Company from undertaking any strategic transaction before the second anniversary of the Separation unless it received the advance approval of Encompass, and it also required the Company to indemnify Encompass and its stockholders from any tax liabilities, which could be substantial, if the Internal Revenue Service were to determine that the Separation no longer qualified as a tax-tree transaction.

The Board believed, as of early June 2023, that while a strategic review process would be an appropriate step to take in the medium-term, doing so in the coming months as demanded by AREX was not the appropriate course. As of that time, the Board and its advisors identified several significant market-wide and industry-wide factors that could limit the desire or ability for likely counterparties to make an offer for the Company. These factors included the broad transition of payor mix from Medicare to Medicare Advantage, the generally lower payment rates of Medicare Advantage, the high interest rate environment, inflationary wage trends, and labor market shortages.

Nevertheless, the Board continued to consider a strategic review throughout June, July and early August 2023, with the input of management and the Company’s financial and legal advisors. During this time, the Company and its outside legal counsel also thoroughly evaluated the Tax Matters Agreement.

Developments during this period informed the Board’s decision to launch a strategic review. First, a strategic party in the healthcare industry approached the Company on an unsolicited basis to ask if the Company would consider a sale or running a process. Second, the Company’s outside legal counsel completed negotiations with Encompass regarding the Tax Matters Agreement and delivered an opinion that undertaking a strategic review would not cause the spin-off to fail to qualify as tax-free under applicable law. In addition, certain other stockholders continued to ask the Board to initiate a strategic review.

Ultimately, the Board concluded that, despite certain clear headwinds in the market, initiating a strategic review would serve the dual purposes of thoroughly exploring options to maximize stockholder value and satisfying investors that the Board was taking all reasonable measures to maximize stockholder value. Additionally, AREX’s mid-June press release, demanding that the Company commit to a strategic review, had already yielded negative effects traditionally associated with the announcement of a strategic review, such as industry rumors, which subsequently reduced the downside of publicly announcing the review.

When the Board announced its intent to launch the strategic review on August 9, 2023, the Board consisted of five Transitional Directors, five independent directors without prior service on the Encompass board of directors (each with a tenure of less than two years), two new directors appointed pursuant to the cooperation agreement with Cruiser Capital and Harbour Point Capital, and the CEO. The Company had previously disclosed that four of the five Transitional Directors would not stand for reelection to the Board at the 2024 Annual Meeting.

On August 14, 2023, AREX issued a public letter applauding the launch of the strategic review that it had demanded. AREX’s press release further implied that the Transitional Directors were entrenched and unwilling to run a full and fair process to sell Enhabit. These allegations ignored the Company’s prior disclosures that four of the five Transitional Directors would step off the Board in 2024, regardless of whether a sale occurred.

Starting in September 2023, Goldman Sachs made outbound calls to 38 parties, including 10 parties who contacted the Company in August in response to the Company’s announcement regarding the strategic review process. Of the 38 parties, 13 were strategic buyers and 25 were financial sponsors. 26 parties executed non-disclosure agreements and nine participated in management presentations in October 2023. Following management presentations, the Company provided parties with access to a virtual data room. Throughout October and into November, the Board, with the advice of Goldman Sachs, worked to identify the parties who were most likely to present a compelling offer. During this period, multiple potential counterparties noted the impact of elevated interest rates on the feasibility of a potential transaction.

Stage 3: Initial Indications of Interest and Diligence

In November 2023, four parties, consisting of two financial sponsors and two strategic acquirors, provided Goldman Sachs with initial indications of interest. The financial sponsors provided indicative valuation ranges of $11 to $12 per share. One strategic acquiror provided a valuation of $10 per share. The other strategic acquiror proposed all-stock consideration without providing a valuation.

The Board determined that the all-stock proposal from the second strategic acquiror did not present a credible proposal as the party had not provided a valuation, had not signed a non-disclosure agreement, and had not received any confidential information prior to the submission of its indication of interest.

The Company facilitated significant follow-up diligence from the other three parties, including hundreds of diligence requests.

Stage 4: Focused Engagement with Two Parties

In January 2024, the Company requested updated indications of interest by a specified date within the month, and requested that the parties also address a number of specific requirements, including commenting on a draft transaction document. Later in January, the remaining strategic acquiror submitted a letter confirming its interest, but did not include any information around a valuation or a clear path to signing a definitive agreement. One financial sponsor provided an updated indication of interest, which the Board viewed as not actionable due to concerns around the party’s ability to finance a transaction. The financial sponsor had contemplated financing to be provided by one of its portfolio companies. The second financial sponsor declined to provide a formal proposal as its strategic partner was not interested in pursuing the transaction.

The Company’s advisors continued engaging the remaining strategic acquiror over several months given the strategic acquiror’s continued expressions of interest in the Company. The strategic acquiror had referenced a desire to submit an updated offer after the announcement of the annual financial results, and despite repeated outreach from the Company’s financial advisors and the process remaining open through April to facilitate continued engagement, the strategic acquiror did not submit a formal offer. Discussions with the strategic acquiror had been gated by various milestones, such as the Company’s fourth-quarter earnings, the Company’s filing of its Form 10-K, and the final Medicare Advantage rate announcement on April 1, 2024. The strategic acquiror, along with its industry peers, also faced additional challenges which the Company believes hampered its ability to proceed with a transaction.

An additional strategic acquiror, which had not previously taken part in the Company’s process, approached Goldman Sachs in late March 2024. The acquiror expressed general interest in the process and indicated that it would follow with additional specificity about its bid and valuation after further review. Goldman Sachs urged the party to submit its indication of interest as soon as possible. The continuation of the Company’s process through April afforded reasonable additional time for the formulation of an indication of interest, but the acquiror did not continue its engagement.

During this period of engagement from November 2023 until May 2024, significant, well-recognized headwinds impacted the strategic review process. In addition to preexisting factors such as the interest rate environment, inflationary wage trends, labor shortages, and the increase in Medicare Advantage utilization in skilled home health services, the process was also impacted by new changes to rates in the Medicare Advantage market. On January 31, 2024, the Centers for Medicare & Medicaid Services (“CMS”) published an advance notice indicating that rates for Medicare Advantage were expected to decrease. On April 1, 2024, CMS released its 2025 rate announcement for Medicare Advantage, which finalized certain previously proposed policies. Unlike in prior years, the finalized rates were not revised upwards following the advance notice, further impacting the health services market and potential counterparties. The April announcement resulted in a broader decline in the median market capitalization of the managed care industry of approximately 6%, based on stock price performance of the Cigna Group, Centene Corporation, CVS Health, Elevance Health, Humana, Molina Healthcare and UnitedHealth Group from April 1 to April 2, 2024.

The strategic review process, as described above, was publicly announced, comprehensive, and deliberate, lasting nine months and involving 38 potential counterparties. On May 8, 2024, having received no formal proposals, the Company announced that the Board had unanimously determined to terminate the strategic review.

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 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

Forward-Looking Statements

Statements contained in this press release which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking information speaks 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 based upon current information and involve a number of risks and uncertainties, many of which are beyond our control. Actual events or results may differ materially from 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 our present expectations include, but are not limited to, our ability to execute on our strategic plans, regulatory and other developments impacting the markets for our services, changes in reimbursement rates, general economic conditions, changes in the episodic versus non-episodic mix of our payers, the case mix of our patients, and payment methodologies, our ability to attract and retain key management personnel and health care professionals, potential disruptions or breaches of our or our vendors’, payors’, and other contact counterparties’ information systems, the outcome of litigation, our ability to successfully complete and integrate de novo locations, acquisitions, investments, and joint ventures, our ability to successfully integrate technology in our operations, our ability to control costs, particularly labor and employee benefit costs, and impacts resulting from the announcement of the conclusion of the strategic review process. Additional information regarding 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 are described in reports filed with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which are available on the Company’s website at http://investors.ehab.com.

Important Additional Information and Where to Find It

The Company intends to file a proxy statement on Schedule 14A, an accompanying YELLOW proxy card, and other relevant documents with the SEC in connection with such solicitation of proxies from the Company’s stockholders for the Company’s 2024 annual meeting of stockholders. THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING YELLOW PROXY CARD, AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying YELLOW proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “SEC Filings” link in the “Investors” section of the Company’s website, http://investors.ehab.com, or by contacting [email protected] as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

Participants in the Solicitation

The Company, its directors, certain of its officers, and other employees may be deemed to be “participants” (as defined in Section 14(a) of the Exchange Act of 1934, as amended) in the solicitation of proxies from the Company’s stockholders in connection with matters to be considered at the Company’s 2024 annual meeting of stockholders.

Information about the names of the Company’s directors and officers, their respective interests in the Company by security holdings or otherwise, and their respective compensation is set forth in the sections entitled “Election of Directors,” “Compensation of Directors,” “Executive Compensation,” and “Security Ownership of Certain Beneficial Owners and Management” of the Company’s Proxy Statement on Schedule 14A in connection with the 2023 annual meeting of stockholders, filed with the SEC on May 19, 2023 (available here) and the Company’s 10-K/A, filed with the SEC on April 26, 2024 (available here). To the extent the security holdings of directors and executive officers have changed since the amounts described in these filings, such changes are set forth on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC, which can be found at no charge at the SEC’s website at www.sec.gov. Updated information regarding the identity of potential participants and their direct or indirect interests, by security holdings or otherwise, in the Company will be set forth in the Company’s Proxy Statement on Schedule 14A for the 2024 annual meeting of stockholders and other relevant documents to be filed with the SEC, if and when they become available. These documents will be available free of charge as described above.

Contacts

Investor relations contact


Crissy Carlisle
[email protected]
469-860-6061

Media contact


Erin Volbeda
[email protected]
972-338-5141

Enhabit Announces Participation in Upcoming Goldman Sachs 45th Annual Global Healthcare Conference

DALLAS – May 21, 2024 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced its participation in the Goldman Sachs 45th Annual Global Healthcare Conference.

Enhabit’s President and Chief Executive Officer Barbara Jacobsmeyer and Chief Financial Officer Crissy Carlisle will participate in a fireside chat on Tuesday, June 11, at 10 a.m. EDT. The fireside chat will be webcast live and available for replay at https://investors.ehab.com.  

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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 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

Investor relations contact

Crissy Carlisle [email protected] 469-860-6061

Media contact

Erin Volbeda [email protected] 972-338-5141

Enhabit Announces Participation in Upcoming Leerink Partners Healthcare Crossroads Conference 2024

DALLAS – May 20, 2024 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced its participation in the Leerink Partners Healthcare Crossroads Conference 2024.

Enhabit’s President and Chief Executive Officer Barbara Jacobsmeyer and Chief Financial Officer Crissy Carlisle will participate in a fireside chat on Wednesday, May 29, at 10 a.m. CDT. The fireside chat will be webcast live and available for replay at https://investors.ehab.com.  

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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 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

Investor relations contact

Crissy Carlisle [email protected] 469-860-6061

Media contact

Erin Volbeda [email protected] 972-338-5141

Enhabit Concludes Review of Strategic Alternatives

Continues to Execute on Operating Plan; Commences Planned Board Transition

DALLAS–(BUSINESS WIRE)– Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice provider, today announced Enhabit’s Board of Directors (the “Board”) has concluded the Company’s strategic review process, announced in August 2023, which was overseen by the Board with assistance from its financial and legal advisors, Goldman Sachs and Sidley Austin, respectively. After evaluating a full range of strategic alternatives, including a potential sale, merger or other transaction, the Board unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company is in the best interests of the Company and its shareholders at this time.

The Company and its advisors ran a thorough strategic review process that concentrated on a merger or acquisition of the Company. The Board directed the Company’s financial advisor to identify potential strategic partners and financial sponsors that might be interested in an acquisition of or strategic combination with the Company. In addition to inbound inquiries, outreach was conducted to a comprehensive range of strategic and financial counterparties. The Company executed Non-Disclosure Agreements with a broad number of counterparties and received indications of interest from a variety of counterparties.

There was serious interest based on parties’ engagement in the process; however, the Company did not receive any formal proposals for a transaction. “We believe macro headwinds including, among other things, uncertain regulatory developments including Medicare reimbursement policies throughout the healthcare industry and an evolving antitrust landscape, a difficult healthcare operating environment, and persistently high interest rates ultimately stifled possibilities for a transaction that would enhance shareholder value,” said Chairperson of the Board Leo Higdon. “Considering this, and other strategic alternatives reviewed with advisors during the review process, the Board determined the best way to enhance shareholder value at this time is to continue to operate as a stand-alone business. The Board looks forward to working with the management team to lead the Company’s execution on its operating plan. The Board remains committed to enhancing value for all shareholders and will continue to be open to and evaluate all opportunities to do so.”

The Board and management team remain focused on the Company’s financial and operating results. “With the strategic alternatives review process concluded, the management team is focused on operating Enhabit’s core businesses,” said President and Chief Executive Officer Barbara Jacobsmeyer. “Our momentum exiting 2023 and through the first quarter of 2024, in which we hired additional frontline clinicians, negotiated more and better home health payor contracts, and controlled G&A expenses, instills excitement in our strategy and team, and we are confident we are taking the right steps to drive future growth to increase shareholder value.”

Confirms Previously Disclosed Board Transition

Today, the Company’s Board consists of 13 directors, 12 of whom are independent directors, including five legacy independent directors who previously served on Encompass Health Corporation’s (“Encompass”) board of directors prior to the Company’s separation from Encompass in July 2022. The Company believes service by the legacy Encompass directors on a transitional basis over the past two years was invaluable to the public company transition of the new company. In addition to their historical knowledge of the business and public company board experience, their leadership in recruiting directors with diverse skill sets and wide-ranging experience will benefit the Company going forward. As previously disclosed, including in the Company’s proxy statement for last year’s 2023 annual meeting of shareholders, the Nominating & Corporate Governance Committee of the Board is committed to an orderly transition of four of the five legacy Encompass board members by this year’s 2024 annual shareholder meeting, which will result in a board size of nine directors. The four legacy directors who will not stand for election are Leo I. Higdon, Yvonne M. Curl, John E. Maupin, Jr., and L. Edward Shaw, Jr.

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 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

Contacts

Investor relations contact

Crissy Carlisle [email protected] 469-860-6061

Media contact

Erin Volbeda [email protected] 972-338-5141

Enhabit Reports First Quarter 2024 Financial Results

DALLAS–(BUSINESS WIRE)– Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice care provider, today reported its results of operations for the first quarter ended March 31, 2024.

“Our momentum exiting 2023 and through the first quarter of 2024 instills confidence and excitement in our strategy and team,” said Enhabit’s President and Chief Executive Officer Barb Jacobsmeyer. “Our strong start to 2024 is a result of our team’s continued focus on our operational strategies. Additional frontline clinicians, more and better home health payor contracts and controlling general and administrative expenses were the key drivers of our performance in the first quarter and resulted in sustained consolidated Adjusted EBITDA of $25.3 million in both the first quarter of 2024 and 2023. We are confident we are taking the right steps to drive future growth.”

QUARTERLY PERFORMANCE – CONSOLIDATED

  • Net service revenue of $262.4 million
  • Net income attributable to Enhabit, Inc. of $0.2 million
  • Adjusted EBITDA of $25.3 million
  • Earnings per share of $0.01
  • Adjusted earnings per share of $0.07

RECENT COMPANY HIGHLIGHTS

  • Strong growth in home health Medicare Advantage admissions with non-Medicare admissions up 25.2%, driving total admission growth of 5.3% year over year38% of non-Medicare visits are now in payor innovation contracts at improved rates
  • Continued recruiting success adding 151 net new full-time nursing hires in the first quarter
  • 30-day hospitalization readmission rate in home health is 20.5% better than the national average
  • 5.6% sequential growth in hospice admissions
  • 53.2% better than the national average for hospice patient visits in last days of life
  • General and administrative expense declined year over year
  • Opened two hospice de novo locations in Texas in March 

FINANCIAL RESULTS

Consolidated

The strategy to increase admissions in payor innovation contracts lessened the impact of mix shift contributing to sustained consolidated Adjusted EBITDA of $25.3 million in both periods presented. The shift to more non-Medicare admissions in home health impacted consolidated revenue and Adjusted EBITDA by approximately $6 million partially offset by approximately $4 million in pricing improvement.

SEGMENT RESULTS

Home Health

Revenue declined year over year primarily due to the payor mix shift to more non-Medicare admissions(approximately $6 million) partially offset by improved pricing (approximately $4 million).

Adjusted EBITDA decreased year over year primarily due to the payor mix shift to more non-Medicare admissions and increased cost of service, offset by a reduction in general and administrative expenses. Cost per visit increased 2.3% year over year primarily due to merit and market rate increases. General and administrative expenses declined year over year primarily due to a new organizational structure implemented in the first quarter of 2023 to align the Company’s sales and operations teams.

Hospice

Net service revenue decreased year over year as increased Medicare reimbursement rates were offset by adecrease in patient days.

Adjusted EBITDA increased year over year primarily due to a decrease in general and administrative expenses.Cost per day increased 2.6% year over year primarily due to a decrease in patient days. General andadministrative expenses declined year over year primarily due to the restructuring of hospice back office staffingin the third quarter of 2023.

GUIDANCE

The Company reaffirmed its full-year 2024 guidance as follows: 

For additional considerations regarding the Company’s 2024 guidance ranges, see the supplemental information posted on the Company’s website at http://investors.ehab.com.

CONFERENCE CALL INFORMATION

The Company will host an investor conference call at 10 a.m. EDT on May 9, 2024, to discuss its results for the first quarter of 2024. To access the live call by phone, dial toll-free (888) 660-6150 or international (929) 203-0843; the conference ID is 5248158. A simultaneous webcast of the call, along with supplemental information, may be accessed by visiting https://events.q4inc.com/attendee/834974223. Following the call, a replay will be available on the Company’s website at http://investors.ehab.com.

ABOUT ENHABIT HOME HEALTH & HOSPICE

Enhabit Home Health & Hospice (Enhabit, Inc.) is a leading national home health and hospice provider working to expand what’s possible for patient care in the home. Enhabit’s team of clinicians supports patients and their families where they are most comfortable, with a nationwide footprint spanning 255 home health locations and 112 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.

OTHER INFORMATION

Note regarding presentation and reconciliation of non-GAAP financial measures

The financial data contained in this press release and supplemental information includes non-GAAP (generally accepted accounting principles (GAAP)) financial measures as defined in Regulation G under the Securities Exchange Act of 1934, including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EPS, and Adjusted free cash flow. See “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. Additionally, our Form 10-Q for the three months ended March 31, 2024, provide further information regarding “unusual or nonrecurring items that are not typical of ongoing operations,” are conciliation item in our Adjusted EBITDA calculation. Such non-GAAP financial measures exclude significant components in understanding and assessing financial performance and should therefore not be considered superior to, as a substitute for or alternative to the GAAP financial measures presented in this press release. Thenon-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. 

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, many of which are beyond our control. 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; changes in the episodic versus non-episodic mix of our payors, the case mix of our patients, and payment methodologies; our ability to attract and retain key management personnel and health care professionals; potential disruptions or breaches of our or our vendors’,payors’, and other contract counterparties’ information systems; the outcome of litigation; our ability to successfully complete and integrate de novo locations, acquisitions, investments, and joint ventures; our ability to successfully integrate technology in our operations; our ability to control costs, particularly labor and employee benefit costs; and impacts resulting from the announcement of the conclusion of the strategic review process. Additional information regarding 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 are described in reports filed with the SEC, including our annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which are available on the Company’s website at http://investors.ehab.com.

Contacts

Investor relations contact

Crissy Carlisle [email protected] 469-860-6061

Media contact

Erin Volbeda [email protected] 972-338-5141

Enhabit Home Health & Hospice Announces Date of 2024 First Quarter Earnings Call

DALLAS – April 10, 2024 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced it will report its results for the first quarter ended March 31, 2024, on May 8, 2024, and host a webcast and conference call on May 9, 2024. Individuals who would like to participate in the conference call webcast should join 15 minutes before the scheduled start time.

A link to the webcast of the conference call and online replay can be found on Enhabit’s investor website.

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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 110 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.  

Investor relations contact

Crissy Carlisle [email protected] 469-860-6061

Media contact

Erin Volbeda [email protected] 972-338-5141

Enhabit Home Health & Hospice Named a Winner of the 2024 Top Workplaces USA Award  

DALLAS – March 20, 2024 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced it has earned the 2024 Top Workplaces USA award issued by Energage.

The Top Workplaces program has a 15-year history of surveying more than 20 million employees and recognizing top organizations across 60 markets. Winners of the Top Workplaces USA award are chosen based solely on employee feedback gathered through an employee engagement survey issued by Energage. Results are calculated by comparing the survey’s research-based statements, including 15 culture drivers that are proven to predict high performance against industry benchmarks.

This award highlights Enhabit’s continued focus on building an innovative and collaborative company culture, which has been a priority for Chief Human Resources Officer Tanya Marion since she came to Enhabit in January 2022.

“At Enhabit, we care about fostering a culture that puts our community first – including patients, their loved ones and all of our compassionate employees,” she said. “We are thrilled to have received this award as a result of the welcoming and inclusive culture we’ve built. When our employees love what they do and feel invested in our promise of providing A Better Way to Care®, it helps us to better serve our patients and their families – which is our ultimate purpose.”

Enhabit is one of the largest Medicare-certified home health and hospice providers in the nation, with over 10,000 employees across its vast footprint. Enhabit provides flexible schedules, professional development opportunities, a competitive compensation and benefits package and access to advanced technology to assist employees in providing industry-leading care to patients and their loved ones. 

To learn more about Enhabit and its care offerings, visit ehab.com. To learn more about joining the Enhabit team, visit careers.ehab.com.  

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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 110 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com

Media contact  

Erin Volbeda  [email protected]   972-338-5141  

Enhabit Reports Fourth Quarter Results and Issues Full-Year 2024 Guidance

Company to host a conference call tomorrow, March 7, 2024, at 10 A.M. EST

DALLAS–(BUSINESS WIRE)– 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, 2023.

“Persistent focus on our Company’s strategies drove our positive fourth quarter results,” said Enhabit’s President and Chief Executive Officer Barb Jacobsmeyer. “Payor innovation success, including the finalization of another new national contract, continued success with our people strategy and strong performance in our quality outcomes are but a few of our high points for the end of 2023 and our start to 2024. We are excited about our future and our ability to meet the growing demand for home health and hospice services.”

SUMMARY PERFORMANCE – CONSOLIDATED

  • Net service revenue of $260.6 million
  • Net loss attributable to Enhabit, Inc. of $6.4 million
  • Adjusted EBITDA of $25.2 million
  • Loss per share of $0.13
  • Adjusted earnings per share of $0.06

RECENT COMPANY HIGHLIGHTS

  • Strong growth in home health Medicare Advantage admissions with non-episodic admissions up 34.2% driving total admission growth of 3.9% year over year
  • Continued payor innovation progress with 11 new Medicare Advantage agreements negotiated during the fourth quarter
    • Added one new national advanced episodic agreement effective January 1, 2024
    • 25% of non-episodic visits now in payor innovation contracts at improved rates
  • Home health cost per visit flat year over year
  • 30-day hospitalization readmission rate in home health 20.5% better than national average
  • Sequential growth in hospice average daily census
  • Hospice cost per day decreased to $76 after stabilizing at $77 for the prior three quarters
  • 53.2% better than the national average for hospice patient visits in the last days of life
  • Continued success in recruitment and retention with a 21.5% increase in full-time nursing candidate pool year over year resulting in 119 net new full-time home health nursing hires in the fourth quarter
  • Opened one home health and one hospice de novo location in the fourth quarter

FINANCIAL RESULTS

Consolidated

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

The year-over-year decrease in revenue and Adjusted EBITDA was due primarily to the continued payor mix shift to more non-episodic admissions (approximately $8 million).

Non-episodic admissions grew 34.2% in the quarter, driving total admission growth of 3.9% year over year. Revenue per episode decreased year over year primarily due to patient mix. Cost per visit remained flat year over year as the reduction in nursing contract labor offset the impact of merit and market increases.

Hospice

Net service revenue increased year over year primarily due to an increase in revenue per day. Revenue per day increased primarily due to changes in our estimated recoverability of net service revenue and increased Medicare reimbursement rates.

Adjusted EBITDA increased year over year primarily due to increased revenue per day and a reduction in general and administrative expenses. Cost per day increased year over year primarily due to increased labor costs resulting from the implementation of the new case management staffing model, including costs associated with dedicated on-call and triage nurses. General and administrative expenses decreased year over year primarily due to reduced headcount at hospice branch locations resulting from implementation of the case management staffing model.

GUIDANCE

The Company is providing full-year 2024 guidance as follows:

For additional considerations regarding the Company’s 2024 guidance ranges, see the supplemental information posted on the Company’s website at http://investors.ehab.com.

CONFERENCE CALL INFORMATION

The Company will host an investor conference call at 10 a.m. EST on March 7, 2024, to discuss its results for the fourth 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/272381846. 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 110 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.

(1) Reconciliation to GAAP provided below.

(2) Unusual or nonrecurring items in Q4 2023 include costs associated with nonroutine litigation, the strategic review process and restructuring activities.

(3) Income tax adjustments include revisions to the estimates of tax balances as of the Separation date and the effect of permanent book-tax differences attributable to stock-based compensation.

(4) Diluted EPS may not sum due to rounding.

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, many of which are beyond our control. 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; changes in the episodic versus non-episodic mix of our payors, the case mix of our patients, and payment methodologies; our ability to attract and retain key management personnel and healthcare professionals; potential disruptions or breaches of our or our vendors’, payors’, and other contract counterparties’ information systems; the outcome of litigation; our ability to successfully complete and integrate de novo locations, acquisitions, investments, and joint ventures; our ability to successfully integrate technology in our operations; our ability to control costs, particularly labor and employee benefit costs; and factors that affect the timing and options in our strategic review and, following our strategic review, consummating a strategic transaction on attractive terms or at all. Additional information regarding 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 are described in reports filed with the SEC, including our annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, copies of which are available on the Company’s website at http://investors.ehab.com.

CONTACTS

Investor Relations Contact

Crissy Carlisle [email protected] 469-860-6061

Media Contact

Erin Volbeda [email protected] 972-338-5141