Enhabit Reports Third Quarter 2024 Financial Results

Enhabit Staff on November 6, 2024

DALLAS–(BUSINESS WIRE)–Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice care provider, today reported its results of operations for the third quarter ended September 30, 2024.

“Our continued progress in our strategies during the third quarter resulted in Adjusted EBITDA growth year over year and strong free cash flow generation that led to further debt reduction,” said Enhabit’s President and Chief Executive Officer Barb Jacobsmeyer. “The payor innovation strategy continues to foster Medicare Advantage growth in our home health segment, and average daily census continues to grow in our hospice segment.”

QUARTERLY PERFORMANCE – CONSOLIDATED

  • Net service revenue of $253.6 million
  • Net loss attributable to Enhabit, Inc. of $110.2 million
  • Adjusted EBITDA of $24.5 million
  • Loss per share of $2.20
  • Adjusted earnings per share of $0.03

RECENT COMPANY HIGHLIGHTS

  • Non-Medicare admissions increased 20.1%, driving total admissions growth of 5.6% year over year
    • 45% of non-Medicare visits are now in payor innovation contracts at improved rates
  • Home health cost per visit increased 1.1% year over year
  • 30-day hospital readmission rate in home health is 23.3% better than the national average
  • Hospice average daily census increased 6.9% year over year
    • Average daily census increased sequentially every month since January
    • Admissions increased 5.7% year over year
  • Hospice cost per day flat year over year
  • 53.2% better than the national average for hospice patient visits in last days of life
  • Consolidated Adjusted EBITDA grew to $24.5 million from $23.2 million, a 5.6% improvement year over year primarily due to home office expense reductions and revenue growth in hospice
  • Reduced bank debt by $10 million in the quarter

FINANCIAL RESULTS

Consolidated

Consolidated Adjusted EBITDA grew 5.6% year over year primarily due to home office expense reductions and revenue growth in hospice.

Consolidated revenue decreased $4.7 million, or 1.8%, year over year primarily due to lower Medicare volume as a result of lower recertifications in the home health segment.

Our payor innovation strategy continues to foster Medicare Advantage growth. 45% of non-Medicare visits are now in payor innovation contracts at improved rates. Non-Medicare revenue per visit increased from $140 in 2023 to $147 in 2024.

SEGMENT RESULTS

Home Health

Non-Medicare admissions increased 20.1%, driving total admissions growth of 5.6% year over year. Revenue declined $9.9 million, or 4.7%, year over year primarily due to lower Medicare volume as a result of lower recertifications. Revenue per episode in Q3 2023 included a positive impact from changes in our estimated recoverability of net service revenue, leading to a negative year-over-year comparison in 2024.

Adjusted EBITDA decreased $5.3 million, or 12.7%, year over year primarily due to the decrease in revenue. Cost per visit increased 1.1% year over year primarily due to the decrease in visits and merit and market increases, partially offset by a reduction in contract labor and favorable experience in workers’ compensation and group medical claims. Year-to-date cost per visit was flat year over year. Visits per episode decreased 5.4% year over year to 14.1 primarily due to our continued focus on establishing a just right plan of care for patients, ongoing clinician education, team collaboration, and the thoughtful integration of predictive analytics.

Hospice

Revenue increased $5.2 million, or 11.0%, year over year due to a 6.9% increase in patient days and increased Medicare reimbursement rates. Admissions increased 5.7% year over year. Revenue per day increased 3.9% year over year primarily due to increased Medicare reimbursement rates. In the third quarter, the Company accrued $1.4 million in Medicare Cap billing limitations compared to $20 thousand in the third quarter of 2023.

Average daily census increased 6.9% year over year. Average daily census increased sequentially every month since January 2024.

Adjusted EBITDA increased $2.3 million, or 29.9%, year over year primarily due to increased revenue. Cost per day was flat year over year.

GUIDANCE

Based on the impact of lower recertifications in the third quarter and the impact from hurricanes in September and October, the Company revised its guidance ranges for full-year 2024. The Company updated 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. EST on November 7, 2024 to discuss its results for the third 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/164004764. 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 256home 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 “Supplemental Non-GAAP Information” 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 and nine months ended September 30, 2024, provides further information regarding “unusual or nonrecurring items that are not typical of ongoing operations,” a reconciliation 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. 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.

FORWARD-LOOKING STATEMENTS

This press release contains historical information, as well as forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that involve known and unknown risks and relate to, among other things, future events, projections, financial guidance, legislative or regulatory developments, strategy or growth opportunities, our future financial performance, our projected business results, or our projected capital expenditures. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, the reader can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “targets,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Any forward-looking statement speaks only as of the date of this release, and the Company 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 the results 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 the Company 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; the impact of Hurricanes Helene and Milton on our operations; and our ability to control costs, particularly labor and employee benefit costs. Our Annual Report on Form 10-K for the year ended December 31, 2023 dated March 15, 2024, which can be found on the Company’s website at http://investors.ehab.com, discusses these and 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.

Contacts

Investor relations contact


Jobie Williams
[email protected]
469-860-6061

Media contact


Erin Volbeda
[email protected]
972-338-5141