DALLAS, August 23, 2023– Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice care provider, today announced that it has satisfied the conditions in its Tax Matters Agreement (“TMA”), dated June 30, 2022, with Encompass Health Corporation to conduct a review of strategic alternatives and has formally initiated such process. As part of this process, the board of directors will consider a wide range of options for the Company including, among other things, a potential sale, merger or other strategic transaction. Certain transactions involving the company remain subject to additional conditions in the TMA, including securing an additional tax opinion with respect to the specific transaction, satisfactory to Encompass Health in its sole and absolute discretion, that such proposed transaction would not jeopardize the tax-free treatment of the spin-off of Enhabit.
The Company issued the following statement:
“Enhabit is a leader in a valuable industry, providing a better way to care where patients prefer to receive their care. The Enhabit board and management team are aligned in their belief that the best way to enhance value for stockholders is to comprehensively review the Company’s strategic alternatives, including a potential sale of Enhabit. We will pursue the pathway that enhances value for our stockholders and ensures we can continue to deliver exceptional care to our patients.”
There can be no assurance the Company’s strategic alternatives process will result in Enhabit pursuing any particular transaction or other strategic outcome or that any such transaction will satisfy the remaining conditions in the TMA. The Company has not set a timetable for completion of this process, and it does not intend to disclose further developments unless and until it determines further disclosure is appropriate or necessary.
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Advisor
Goldman Sachs & Co. LLC is serving as financial advisor to Enhabit.
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 108 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, such as those relating to our initiation of a strategic alternatives review process focused on enhancing shareholder value, our consideration of potential strategic transactions, including a potential sale, merger or other strategic transaction, and other future events 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. 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, the outcome of our strategic alternatives review, the volatility and uncertainty in the capital markets for home health and hospice companies and the availability of financing to any potential strategic partner, the availability of suitable third parties with which to conduct any strategic transaction, our ability to satisfy the remaining conditions under the TMA, and if a definitive agreement for a transaction is signed with another party, whether the conditions to closing are satisfied, including any necessary regulatory or other approvals. Our Form 10-K and subsequent quarterly reports on Form 10-Q, each of which can be found on the Company’s website at http://investors.ehab.com and the SEC’s website at www.sec.gov, discuss other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in this press release. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this press release.
Announces Intent to Launch Strategic Alternatives Process Subject to Satisfaction of Conditions in Tax Matters Agreement
Company to host a conference call tomorrow, August 10, 2023 at 10 AM EDT
DALLAS, TX – August 9, 2023 – Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice care provider, today reported its results of operations for the second quarter ended June 30, 2023.
“During the second quarter, we negotiated ten new contracts with Medicare Advantage payors, increased our clinical staff with 203 net new full-time nursing hires, and continued to outperform the industry average with a 30-day hospital readmission rate that is 370 basis points better than the national average,” said Enhabit’s President and Chief Executive Officer, Barb Jacobsmeyer. “While we continue to make progress with our strategic initiatives, the pace of the progress has not been fast enough in 2023 to meet our initial guidance. We remain confident our teams’ relentless efforts to retain staff, manage costs, and deliver high-quality care will enhance our value long term.”
QUARTERLY PERFORMANCE – CONSOLIDATED
Net service revenue of $262.3 million
Net loss of $74.1 million
Adjusted EBITDA of $23.9 million
Loss per diluted share of $1.49
Adjusted earnings per share of $0.04
RECENT COMPANY HIGHLIGHTS
Negotiated ten new Medicare Advantage payor contracts in the second quarter
Shifted approximately 5% of previous non-episodic visits into non-episodic payor innovation contracts at improved per visit rates
Continued strong growth in home health Medicare Advantage admissions with non-episodic admissions up 38.0% driving total admission growth of 3.2% year over year
Continued recruiting success adding 203 net new full-time nursing hires in the second quarter
Opened two de novo home health locations in Montana in April and one hospice de novo location in Texas in May
Hospice cost per day stabilized sequentially
30-day hospitalization readmission rate is 370 basis points better than the national average
FINANCIAL RESULTS
Consolidated
The continued shift to more non-episodic admissions in home health and the resumption of sequestration reduced consolidated net service revenue and Adjusted EBITDA $10.5 million year over year.
Adjusted EBITDA decreased year over year primarily due to the continued shift to more non-episodic admissions in home health, incremental costs associated with being a stand-alone company, and the resumption of sequestration.
SEGMENT RESULTS
Home health
The year-over-year decrease in revenue was due primarily to the continued payor mix shift to more non-episodic admissions and the resumption of sequestration. Revenue per episode decreased year over year primarily due to the resumption of sequestration and patient mix.
Adjusted EBITDA decreased year over year primarily due to the continued payor mix shift to more non-episodic admissions, the resumption of sequestration, and increased general and administrative expenses associated with new stores. Cost per visit increased year-over-year primarily due to increased contract labor, merit and market rate increases for clinical staff, and increased costs associated with employee group medical claims partially offset by improved clinical productivity.
Hospice
Net service revenue increased year over year primarily due to increased Medicare reimbursement rates.
Adjusted EBITDA decreased year over year primarily due to higher cost of services resulting from increased labor costs. Cost per day increased year over year primarily due to increased labor costs resulting from the implementation of the new case management model, including costs associated with dedicated on-call and triage nurses.
TAX MATTERS AGREEMENT
Enhabit also announced today that it is undertaking steps to attempt to satisfy the conditions in its Tax Matters Agreement (“TMA”), dated June 30, 2022, with Encompass Health Corporation relating to certain transactions involving the Company. The conditions in the TMA include securing a tax opinion of legal counsel, satisfactory to Encompass Health in its sole and absolute discretion, that the actions taken by Enhabit would not jeopardize the tax-free treatment of the spin-off of Enhabit.
Upon satisfaction of these conditions, the Enhabit board, with the assistance of independent advisors, intends to launch a strategic alternatives process. As part of any such process, the board expects it would consider a wide range of options for the company including, among other things, a potential sale, merger or other strategic transaction. There can be no assurance that the conditions in the TMA will be satisfied, that Enhabit will initiate such a process, or if launched, that a process would result in Enhabit pursuing a particular transaction or other strategic outcome.
GUIDANCE
The Company revised its full-year 2023 guidance as follows:
For additional considerations regarding the Company’s 2023 guidance ranges, see the supplemental information posted on the Company’s website at http://investors.ehab.com.
CONFERENCE CALL INFORMATION
The Company will host an investor conference call at 10 AM Eastern Time on August 10, 2023 to discuss its results for the second 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/923162031. 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 108 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 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, leverage ratios, 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.
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 reconciliations of non-GAAP financial measures
This press release contains the reconciliations of 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.
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. 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. In addition, with respect to the Tax Matters Agreement (TMA) and the potential launch of a strategic alternative process, these factors include, our ability to receive Encompass Health Corporation’s approval to pursue a strategic transaction as required under the TMA and our ability to successfully pursue and complete a strategic transaction, as discussed above. Our Form 10-K and subsequent quarterly reports on Form 10-Q, each of which can be found on the Company’s website at http://investors.ehab.com and the SEC’s website at www.sec.gov, discuss other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in this press release. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this press release.
DALLAS – July 27, 2023 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced it will report its results for the second quarter ended June 30, 2023, on Aug. 9, 2023, and host a webcast and conference call on Aug. 10, 2023. 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 108 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.
DALLAS – June 1, 2023 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced its participation in the Jefferies Healthcare Conference.
Enhabit’s President and Chief Executive Officer Barbara Jacobsmeyer and Chief Financial Officer Crissy Carlisle will participate in a fireside chat on Wednesday, June 7, 2023, at 1:30 p.m. ET. 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 253 home health locations and 107 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.
Announces new national payor agreement and two new convener agreements with national reach effective May 1, 2023
Company to host a conference call tomorrow, May 10, 2023 at 10 AM EDT
DALLAS, TX – May 9, 2023 – 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, 2023. “The first quarter was underscored by progress in two of our critical success factors for 2023.
Our sequential admissions growth for home health and hospice was possible due to our continued efforts in recruitment and retention of clinical staff and our payor innovation team negotiating a new national payor agreement and two convener agreements with national reach,” said Enhabit’s President and Chief Executive Officer, Barb Jacobsmeyer. “With our expansion of Medicare Advantage contracts and improved rates combined with reduced staffing capacity constraints, we expect to see improvements in our bottom line throughout 2023.”
QUARTERLY PERFORMANCE – CONSOLIDATED
• Net service revenue of $265.1 million
• Net income of $3.2 million
• Adjusted EBITDA of $25.3 million
• Earnings per diluted share of $0.05
• Adjusted earnings per diluted share of $0.09
RECENT COMPANY HIGHLIGHTS
• Executed new national agreement with Medicare Advantage payor plus two new agreements with conveners with national reach
• Continued strong growth in home health Medicare Advantage admissions with non-episodic admissions up 31.9% driving total admissions growth of 1.2% year over year
• Continued recruiting success adding 101 net new full-time nursing hires in the first quarter
• Further reduced staffing constrained hospice locations with continued implementation of case management model for nurses; hospice staffing constraints lowest in four quarters
• Acquired one home health location in Indiana and opened two de novo hospice locations in Texas in March
FINANCIAL RESULTS
Consolidated
The continued shift to more non-episodic admissions in home health and the resumption of sequestration reduced consolidated net service revenue and adjusted EBITDA approximately $10 million year over year.
Adjusted EBITDA decreased year over year primarily due to the continued shift to more non-episodic admissions in home health, the resumption of sequestration, and increased general and administrative expenses. General and administrative expenses were higher year over year primarily due to an increase in employee group medical claims, approximately $2 million of incremental costs associated with being a stand-alone company, vendor rebates received in the first quarter of 2022, and improved back office staffing in the field.
SEGMENT RESULTS
Home health
The year-over-year decrease in revenue was due primarily to the continued payor mix shift to more non-episodic admissions and the resumption of sequestration. Revenue per episode decreased year over year primarily due to the resumption of sequestration and the timing of completed episodes partially offset by a 0.7% increase in Medicare reimbursement rates.
Adjusted EBITDA decreased year over year primarily due to lower revenue and increased general and administrative expenses. General and administrative expenses increased primarily due to an increase in employee group medical claims, vendor rebates received in the first quarter of 2022, and improved back office staffing in the field. Cost per visit increased year over year primarily due to merit and market rate increases for clinical staff, increased contract labor, and increased costs associated with employee group medical claims partially offset by improved clinical productivity.
Hospice
Net service revenue was relatively flat to the prior year as the decline in average daily census and resumption of sequestration was offset by increased Medicare reimbursement rates. Admissions decreased 3.8% year over year but increased 7.1% sequentially. Revenue per day increased year over year primarily due to increased Medicare reimbursement rates partially offset by the resumption of sequestration and patient mix.
Adjusted EBITDA decreased year over year primarily due to higher cost of services resulting from increased labor costs. Cost per day increased year over year primarily due to increased labor costs related to the implementation of the new case management model, including costs associated with dedicated on-call and triage nurses, increased contract labor, and an increase in employee group medical claims.
GUIDANCE
The Company reaffirmed its full-year 2023 guidance as follows:
For additional considerations regarding the Company’s 2023 guidance ranges, see the supplemental information posted on the Company’s website at http://investors.ehab.com. 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 May 10, 2023 to discuss its results for the first 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 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 (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 253 home health locations and 107 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 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. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, reconciliation of our 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.
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 Form 10K and subsequent quarterly reports on Form 10-Q, each of which can be found on the Company’s website at http://investors.ehab.com and the SEC’s website at www.sec.gov, discuss other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in this press release. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this press release.
DALLAS – April 20, 2023 – 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, 2023, on May 9, 2023, and host a webcast and conference call on May 10, 2023. 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 at the web address provided above.
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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 253 home health locations and 107 hospice locations across 34 states. Enhabit leverages advanced technology and compassionate teams to deliver extraordinary patient care. For more information, visit ehab.com.
DALLAS, April 13, 2023 – Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice provider, today announced it has been awarded the Age-Friendly Care at Home Certification from Community Health Accreditation Partner (CHAP). Enhabit is the first home health provider to receive the CHAP certification for its home health agencies in Petersburg, Virginia, and Clermont, Florida.
The CHAP certification program brings Age-Friendly Health Systems, an initiative of The John A. Hartford Foundation (JAHF) and the Institute for Healthcare Improvement (IHI) in partnership with the American Hospital Association (AHA) and the Catholic Health Association of the United States (CHA), to home health and hospice settings. The movement has been shown to reduce cost of care, improve clinical retention and satisfaction, and improve patient outcomes.
“We are proud to be at the forefront of bringing the Age-Friendly Health Systems movement to home-based care,” Enhabit Executive Vice President of Clinical Excellence and Strategy Bud Langham said. “While we’ve always focused on delivering evidence-based, patient-centered care, this movement provides a clear framework on how to incorporate these elements into our standards of care in a way that benefits our patients, clinicians, referral sources and payors.”
CHAP certification demonstrates that Enhabit meets the industry’s highest nationally recognized standards for age-friendly care. The rigorous evaluation by CHAP focuses on providing a set of four evidence-based elements established by the Age-Friendly Health System movement known as the 4Ms: What Matters, Medication, Mentation and Mobility.
“Enhabit has played an instrumental role in helping us bring the 4M Framework to the home setting,” CHAP Chief Operating Officer Teresa Harbour said. “As part of our Volunteer Advisory Group, the Enhabit team helped us develop the certification program along with educational tools and resources. We look forward to continuing to work together to ensure older adults receive care that focuses on what matters to them.”
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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 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.
About Community Health Accreditation Partner (CHAP)CHAP is an independent, nonprofit organization accrediting providers of home and community-based care. Founded in 1965, CHAP was first to recognize the need for and value of home and community-based care standards and accreditation. As a Centers for Medicare & Medicaid Services (CMS)–approved accrediting organization, CHAP surveys organizations providing home health, hospice, and home medical equipment services to establish if Medicare Conditions of Participation and DMEPOS Quality Standard are met and recommend certification to CMS. CHAP’s purpose is to partner with organizations nationwide to advance quality in the delivery of care and services in the home and community.
Board Appointments Support the Company’s Previously Announced Board Transition Plan
DALLAS – March 30, 2023 – Enhabit, Inc. (NYSE: EHAB) (“Enhabit” or the “Company”), a leading national home health and hospice provider, today announced an agreement with Cruiser Capital Advisors LLC (“Cruiser”) and Harbour Point Capital Management LP (“Harbour Point” ), which collectively own approximately 4.7% of the outstanding shares of Enhabit’s common stock, pursuant to which Enhabit has appointed Stuart McGuigan and Barry Schochet to its board of directors, effective immediately. With these appointments the Company’s board will expand temporarily to 13 directors.
As Enhabit previously disclosed in May 2022 ahead of the completion of its separation from Encompass Health Corporation (“Encompass Health”), five of its board members previously served on the board of directors of Encompass Health and remain on Enhabit’s board on a transitional basis to assist Enhabit’s start up as a public company, leveraging their knowledge of the business and experience as public company directors (the “Transition Plan”). The appointments of Mr. McGuigan and Mr. Schochet support the advancement of the Company’s Transition Plan. The board reemphasizes its commitment to an orderly transition whereby at least four of the five transitional Encompass Health board members will step down from the board at or before the 2024 annual meeting of stockholders.
In conjunction with the appointment of the two directors, the Company has entered into a cooperation agreement with Cruiser and Harbour Point Capital (together, the “Investor Group”). In addition to the director appointments, the cooperation agreement provides that the Investor Group will support the board’s full slate of directors at the annual meeting and will abide by customary standstill, voting and other provisions. The complete agreement will be filed on Form 8-K with the U.S. Securities and Exchange Commission.
“We are pleased to strengthen the Enhabit board with the additions of Stuart and Barry as new independent directors,” said Leo I. Higdon Jr., Chairman of the Enhabit board. “With Enhabit still in its first full year operating as a public company, we believe today’s announcement underscores our board refreshment efforts. Stuart brings over 30 years of information and technology experience with successful Chief Information Officer roles at a variety of organizations where technology and data analytics were critical to their success. Barry is a highly accomplished healthcare industry executive and investor with more than three decades of experience. We look forward to working together as we continue to focus on meeting the needs of our patients and enhancing stockholder value.”
“With technology playing an increasingly important role in successfully delivering high-quality, cost-effective care, I look forward to working closely with the board and management team toward our shared goal of driving value for Enhabit,” said Mr. McGuigan.
“I am honored to be joining the Enhabit board,” said Mr. Schochet. “Enhabit has a diverse portfolio, a strong pipeline and a talented team in place today and is well positioned to deliver superior, cost-effective care where patients most prefer it: in their homes. I am excited for the opportunity to help the Company advance its objectives for growth and value creation.”
Keith Rosenbloom, Managing Member of Cruiser Capital Advisors, said, “We believe Enhabit’s intrinsic value is underappreciated, and it has the potential to generate tremendous returns for investors – particularly given the level of consolidation activity in the industry. As shareholders we appreciate the constructive engagement we have had with the Enhabit leadership team and Board and are pleased the Company is strengthening its Board with these two additions. We view today’s announcement as a positive development for all Enhabit stockholders.”
Goldman Sachs & Co. LLC is serving as financial advisor to Enhabit, Sidley Austin LLP is serving as legal advisor to Enhabit and Foley & Lardner LLP is serving as legal advisor to the Investor Group.
About Stuart McGuigan
Stuart McGuigan currently serves as a Senior Advisor at McKinsey & Company. Prior to this position, he served as Chief Information Officer (CIO) of the U.S. Department of State. As CIO, he established technology strategic direction and provided oversight for $2.4 billion of technology programs across the Department. McGuigan joined the Department of State from Johnson & Johnson, where he was responsible for global Information Technology strategy and operations for an organization with 130,000 employees at over 170 overseas and domestic locations. Prior to Johnson & Johnson, McGuigan served as Senior Vice President and CIO of CVS Caremark, Senior Vice President and CIO of Liberty Mutual and Senior Vice President of Information Services for Medco Health Solutions. McGuigan currently serves as a director of Posit PBC and M2GEN.
Mr. McGuigan holds Master of Science and Master of Philosophy degrees in the Cognitive Science program at Yale University and has a Bachelor of Arts degree in psychology from Fairfield University.
About Barry Schochet
Barry Schochet serves as a Healthcare Operating Partner at CIC Partners, an investment firm with an investment record spanning more than 30 years and representing greater than $1 billion in aggregate realized proceeds. Prior to his current role at CIC Partners, Mr. Schochet served as the President and CEO of BPS Health Ventures, a healthcare consulting and investment firm. In addition, Mr. Schochet served as Vice Chairman and a number of other senior executive positions, including President of the Hospital Division, at Tenet Healthcare (NYSE: THC) and predecessor National Medical Enterprises from 1979-2004. During his tenure, Tenet reached revenues of over $13 billion. Mr. Schochet has previously served as a director for several health care companies, including Omnicare (NYSE:OCR), until it was acquired by CVS (NYSE: CVS), and Agiliti (NYSE: AGTI). Mr. Schochet currently serves as a director of BroadJump LLC and as an advisor to Rendina Health Care Real Estate.
Mr. Schochet holds Master of Hospital Administration degree from George Washington University and a Bachelor of Arts degree in zoology from the University of Maine.
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 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.
Additional Information
The Company intends to file a proxy statement on Schedule 14A, an accompanying proxy card and other relevant documents with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies from the Company’s stockholders for the Company’s 2023 annual meeting of stockholders. STOCKHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) 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 Company’s definitive proxy statement, an accompanying proxy card, any amendments or supplements thereto and other documents filed by the Company with the SEC when they become available at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge in the “SEC Filings” subsection of the Company’s Investor Relations website at http://investors.ehab.com or by contacting the Company’s Investor Relations Department at [email protected], as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.
Certain Information Regarding Participants to the Solicitation
The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company’s stockholders in connection with matters to be considered at the Company’s 2023 annual meeting of stockholders. Information regarding the direct and indirect interests, by security holdings or otherwise, of the Company’s directors and executive officers is included in the Company’s Information Statement, a copy of which is filed as Exhibit 99.1 and incorporated by reference in the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2022. Changes to the direct or indirect interests of the Company’s directors and executive officers are set forth in SEC filings on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4. These documents are available free of charge as described above.
Forward-Looking Statements
Statements contained in this press release which are not historical facts, such as those relating to future events, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Enhabit undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Investors should consult further disclosures and risk factors included in our Form 10 Registration Statement dated June 14, 2022 and subsequent quarterly reports on Form 10-Q, each of which can be found on the Company’s website at http://investors.ehab.com and the SEC’s website at www.sec.gov.
DALLAS – Feb. 23, 2022 – Enhabit, Inc. (NYSE: EHAB), a leading national home health and hospice provider, today announced its participation in two upcoming investor conferences.
Enhabit’s President and Chief Executive Officer Barbara Jacobsmeyer and Chief Financial Officer Crissy Carlisle will participate in fireside chats at the following events:
in New York on Wednesday, March 1st, 2023, at 12:30 pm ET
Oppenheimer’s 33rd Annual Healthcare Conference (virtual) on Tuesday, March 14th, 2023, at 12:40 pm ET
The fireside chats will be webcast live and available for replay at https://investors.ehab.com under the events and presentations link.
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About 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 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.
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 $275.1 million, declined 0.4% from Q4’21
• Net income of $8.2 million, declined 72.5% from Q4’21
• Adjusted EBITDA of $40.3 million, down 17.8% from Q4’21
• Earnings per diluted share of $0.15
• Adjusted earnings per diluted share of $0.32
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.
FINANCIAL RESULTS
Consolidated
The continued shift to more non-episodic patients in home health and the resumption of sequestration combined to decrease consolidated revenue approximately $11 million. The impact of these items were offset by an approximate $5 million audit recovery related to a prior year home health medical claims review, improved collections experience related to Medicaid in hospice, 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.
SEGMENT RESULTS
Home health
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 and timing of completed episodes 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.
Hospice
Revenue per day increased 5.8% year over year primarily due to an increase in Medicare reimbursement rates and improved collections experience related to Medicaid in hospice partially offset by the resumption of sequestration. 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.
GUIDANCE
The Company is providing full-year 2023 guidance as follows:
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.
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.
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.
