PR Newswire | Aug 4, 2021 04:01PM EDT

08/04 15:01 CDT

LHC Group announces second quarter 2021 financial resultsMore than doubles acquired annual revenue target for 2021 LAFAYETTE, La., Aug. 4, 2021

LAFAYETTE, La., Aug. 4, 2021 /PRNewswire/ -- LHC Group, Inc. (NASDAQ: LHCG) announced its financial results for the quarter ended June 30, 2021.

Second Quarter 2021 Financial Results

* Net service revenue increased 12.0% to $545.9 million. * Net income attributable to LHC Group's common stockholders was $37.6 million, or $1.20 per diluted share. * Adjusted net income attributable to LHC Group's common stockholders was $50.9 million, or $1.62 adjusted earnings per diluted share. * Adjusted EBITDA was $73.6 million.

A reconciliation of all non-GAAP financial results in this release appears on pages 11-12.

Operational and Strategic Highlights

* LHC Group continues to be an industry leader in quality and patient satisfaction. Recent data provided in June 2021 by Strategic Healthcare Programs (SHP) shows that the company's overall home health quality star rating improved to 4.39 as compared to an overall home health quality star rating of 4.23 in the last published data from the Centers for Medicare and Medicaid Services (CMS) in October 2020. * Organic growth in home health admissions increased 16.4% in the second quarter of 2021 as compared to the second quarter of 2020 and increased sequentially by 1.0% in the second quarter of 2021 over the first quarter of 2021. * Medicare organic growth in home health admissions increased by 8.8% in the second quarter of 2021 compared with the same period in 2020 and increased sequentially by 1.2% in the second quarter of 2021 over the first quarter of 2021. * Non-Medicare episodic organic growth in home health admissions increased by 37.0% in the second quarter of 2021 compared with the same period in 2020 and increased by 4.0% sequentially over the first quarter of 2021. * Organic growth in hospice admissions increased 1.1% in the second quarter of 2021 as compared to the second quarter of 2020. * LHC Group's acquisition pipeline is currently over $400 million with over $300 million of the targets in exclusive discussions, which enabled the Company to increase its target for acquired revenue in 2021 to a range of $350 million to $500 million (compared with a range of $150 million to $200 million previously) and an expected incremental Adjusted EBITDA contribution in 2022 in a range of $35 million to $50 million. * Year-to-date, LHC Group has closed on or announced the acquisition of 26 hospice locations, three home health locations, and one HCBS location in 11 states representing annualized revenue of $161.7 million. * On July 7, 2021, LHC Group announced the formation of a strategic partnership to jointly develop and deliver an expanded service offering of advanced clinical care services in the home. This innovative, clinician-led, proprietary model will elevate in-home care and deliver higher acuity care in the home by harnessing the combined talent and experience of partner physicians and the nurses, therapists, and physician extenders at LHC Group as well as LHC Group's industry leading in-home patient care, proprietary data analytics capabilities, clinical modeling, and technologies. * On August 3, the Company closed on an expanded revolving credit facility totaling $800 million with lower borrowing costs and an accordion feature that increases the total borrowing capacity to $1.3 billion, an increase from the previous borrowing capacity of $700 million.

Commenting on the results, Keith G. Myers, LHC Group's Chairman and Chief Executive Officer, said, "Favorable industry tailwinds continue to propel at home care and LHC Group with strong bi-partisan support for the recently introduced Choose Home legislation, our recently announced partnership that provides the missing link that advanced home care programs have needed, and leading quality scores that are driving market share gains. Recent third-party polling data demonstrates an overwhelming preference by patients to be treated in the safety and comfort of their home or residence. We are seeing the same kind of demand from our hospital partners for SNF-at-home and hospital-at-home programs that started during the pandemic and has accelerated since our recent announcement to launch a comprehensive offering of clinicians covering all aspects of advanced clinical care services in the home later this year."

Revenues in the second quarter of 2021 increased 12.0% to $545.9 million, compared to $487.3 million in the second quarter of 2020. Net income attributable to LHC Group, Inc. totaled $37.6 million, or $1.20 per diluted share, compared to $44.7 million, or $1.43 per diluted share, in the second quarter of 2020. The Company recognized $36.8 million, $27.2 million net of tax, or $0.87 per diluted share, in government stimulus income during the second quarter of 2020 related to general distribution funds received from the provider relief fund established by the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. During November 2020, the Company announced it would return, or repay early, its share of provider relief fund distributions of approximately $93.3 million and approximately $317.9 million in Medicare accelerated payments. In the third quarter of 2020, the Company reversed the $44.4 million of government stimulus income that it recognized during the second quarter of 2020.

For the second quarter of 2021, adjusted net income attributable to LHC Group's common stockholders increased 32.0% to $50.9 million, or $1.62 per diluted share, compared to $38.6 million, or $1.23 per diluted share, in the second quarter of 2020. For the second quarter of 2021, Adjusted EBITDA increased 27.5% to $73.6 million, compared to $57.7 million in the second quarter of 2020. Adjusted net income attributable to LHC Group's common stockholders and Adjusted EBITDA are non-GAAP financial measures. A table providing reconciliation of these non-GAAP financial results is provided in this release on pages 11-12.

Full Year 2021 GuidanceThe Company affirmed its 2021 guidance for revenue and adjusted EBITDA, less non-controlling interest, of $2.215 billion to $2.265 billion and $290 million to $300 million, respectively, and raised its adjusted earnings per diluted share guidance to be in a range of $6.30 to $6.50 (compared with $6.20 to $6.40 previously).

Joshua L. Proffitt, LHC Group's President, added, "With the second quarter results in line with our expectations, we enter the back half of 2021 with increased confidence in our organic growth trajectory. Our total organic home health, Medicare and non-Medicare episodic admissions are all up year over year and sequentially while organic admissions, length of stay and average daily census are up year over year and census is up sequentially on improving length of stay in our hospice service line. We had previously anticipated this would be a record year for M&A transactions, and we have already exceeded those initial projections. Based on the breadth and depth of our pipeline, we have more than doubled our original target to $350 million to $500 million in acquired annual revenue in 2021 with a corresponding increase in Adjusted EBITDA that will accelerate next year's growth as well."

The Company's guidance ranges reflect a number of assumptions that are subject to change based on uncertainties related to the impact of the COVID-19 pandemic. The Company's guidance ranges do not take into account the impact of future COVID-19 related costs and expenses. The Company is estimating COVID-19 related costs and expenses in the range of $30 million to $35 million in the full year of 2021. The Company's guidance ranges also do not take into account reimbursement changes, if any, future acquisitions, if made, de novo locations, if opened, location closures, if any, or future legal expenses, if necessary. Please refer to the supplemental information that can be found under Financial Results on the Company's Investor Relations page to access more detailed guidance assumptions.

Conference CallLHC Group will host a conference call on Thursday, August 5, 2021, at 9:00 a.m. Eastern time to discuss its second quarter 2021 results. The toll-free number to call for this interactive teleconference is (888) 347-8204 (international callers: (412) 902-4249). A telephonic replay of the conference call will be available through midnight on Thursday, August 12, 2021, by dialing (877) 344-7529 (international callers: (412) 317-0088) and entering confirmation number 10158292.

The Company has posted supplemental financial information on the second quarter results that it will reference during the conference call. The supplemental information can be found under Quarterly Results on the Company's Investor Relations page. A live webcast of LHC Group's conference call will be available under the Investor Relations section of the Company's website, www.LHCGroup.com. A one-year online replay will be available approximately one hour following the conclusion of the live broadcast.

About LHC Group, Inc.LHC Group, Inc. is a national provider of in-home healthcare services and innovations for communities around the nation, offering quality, value-based healthcare to patients primarily within the comfort and privacy of their home or place of residence. The company's 30,000 employees deliver home health, hospice, home, and community-based services, and facility-based care in 35 states and the District of Columbia - reaching 60 percent of the U.S. population aged 65 and older. Through Imperium Health, the company's ACO management and enablement company, LHC Group helps partners improve both savings and patient outcomes with a value-based approach. As the preferred joint venture partner for over 400 leading U.S. hospitals and health systems, LHC Group works in cooperation with providers to customize each partnership and reach more patients and families with an effective and efficient model of care.

Forward-looking StatementsThis press release contains "forward-looking statements" (as defined in the Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of the Company, or anticipated benefits of the transaction. Words such as "anticipate," "expect," "project," "intend," "believe," "will," "estimates," "may," "could," "should" and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to: our 2021 revenue and earnings guidance, statements about the benefits of the acquisition, including anticipated earnings accretion, synergies and cost savings and the timing thereof; the Company's plans, objectives, expectations, projections and intentions; and other statements relating to the transaction that are not historical facts. Forward-looking statements are based on information currently available to the Company and involve estimates, expectations and projections. Investors are cautioned that all such forward-looking statements are subject to risks and uncertainties, and important factors could cause actual events or results to differ materially from those indicated by such forward-looking statements. With respect to the acquisition, these risks, uncertainties and factors include, but are not limited to: the risk that the businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the transaction may not be fully realized or may take longer to realize than expected; the diversion of management time on integration-related issues; and the risk that costs associated with the integration of the businesses are higher than anticipated. With respect to the Company's businesses, these risks, uncertainties and factors include, but are not limited to: changes in, or failure to comply with, existing government regulations that impact the Company's businesses; legislative proposals for healthcare reform; the impact of changes in future interpretations of fraud, anti-kickback, or other laws; changes in Medicare and Medicaid reimbursement levels; changes in laws and regulations with respect to Accountable Care Organizations; changes in the marketplace and regulatory environment for Health Risk Assessments; decrease in demand for the Company's services; the potential impact of the transaction on relationships with customers, joint venture and other partners, competitors, management and other employees, including the loss of significant contracts or reduction in revenues associated with major payor sources; ability of customers to pay for services; risks related to any current or future litigation proceedings; potential audits and investigations by government and regulatory agencies, including the impact of any negative publicity or litigation; the ability to attract new customers and retain existing customers in the manner anticipated; the ability to hire and retain key personnel; increased competition from other entities offering similar services as offered by the Company; reliance on and integration of information technology systems; ability to protect intellectual property rights; impact of security breaches, cyber-attacks or fraudulent activity on the Company's reputation; the risks associated with assumptions the parties make in connection with the parties' critical accounting estimates and legal proceedings; the risks associated with the Company's expansion strategy, the successful integration of recent acquisitions, and if necessary, the ability to relocate or restructure current facilities; and the potential impact of an economic downturn or effects of tax assessments or tax positions taken, risks related to goodwill and other intangible asset impairment, tax adjustments, anticipated tax rates, benefit or retirement plan costs, or other regulatory compliance costs.

Many of these risks, uncertainties and assumptions are beyond the Company's ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the information currently available to the Company on the date they are made, and the Company does not undertake any obligation to update publicly or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release. The Company does not give any assurance (1) that the Company will achieve its guidance or expectations, or (2) concerning any result or the timing thereof. All subsequent written and oral forward-looking statements concerning the transaction or other matters and attributable to the Company or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data) (Unaudited)



June 30, December 31, 2021 2020

ASSETS

Current assets:

Cash $112,108 $286,569

Receivables:

Patient accounts receivable 329,166 301,209

Other receivables 9,214 11,522

Amounts due from governmental entities 149 -

Total receivables 338,529 312,731

Prepaid income taxes 13,739 -

Prepaid expenses 26,542 22,058

Other current assets 18,749 25,664

Total current assets 509,667 647,022

Property, building and equipment, net of accumulated depreciation of $90,652 and $82,721, 145,314 138,366 respectively

Goodwill 1,259,726 1,259,147

Intangible assets, net of accumulated amortization313,638 315,355 of $18,261 and $17,659, respectively

Assets held for sale 1,900 1,900

Operating lease right of use asset 105,201 100,046

Other assets 31,679 21,518

Total assets $2,367,125$2,483,354

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and other accrued liabilities $56,888 $64,864

Salaries, wages, and benefits payable 88,030 88,666

Self-insurance reserves 31,140 35,103

Income tax payable - 21,464

Government stimulus advance - 93,257

Contract liabilities - deferred revenue 252,936 317,962

Current operating lease liabilities 33,081 32,676

Amounts due to governmental entities 1,608 1,516

Current liabilities - deferred employer payroll 25,928 25,928 tax

Total current liabilities 489,611 681,436

Deferred income taxes 66,726 47,237

Income taxes payable 6,625 6,203

Revolving credit facility - 20,000

Other long term liabilities 25,928 25,928

Long-term operating lease liabilities 74,993 70,275

Total 663,883 851,079 liabilities

Noncontrolling interest - redeemable 18,589 18,921

Commitments and contingencies

Stockholders' equity:

LHC Group, Inc. stockholders' equity:

Preferred stock - $0.01 par value; 5,000,000 - - shares authorized; none issued or outstanding

Common stock - $0.01 par value; 60,000,000 shares authorized; 36,525,831 and 36,355,497 shares 365 364 issued, and 31,252,929 and 31,139,840 shares outstanding, respectively

Treasury stock - 5,272,902 and 5,215,657 shares (79,765) (69,011) at cost, respectively

Additional paid-in capital 969,897 962,120

Retained earnings 707,599 635,297

Total LHC Group, Inc. stockholders' equity 1,598,096 1,528,770

Noncontrolling interest - non-redeemable 86,557 84,584

Total stockholders' equity 1,684,653 1,613,354

Total liabilities and stockholders' equity $2,367,125$2,483,354

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)



Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Net service revenue $545,907$487,320$1,070,742$1,000,191

Cost of service revenue (excluding depreciation 317,872 306,712 628,144 627,914 and amortization)

Gross margin 228,035 180,608 442,598 372,277

General and administrative167,061 150,574 330,310 308,440 expenses

Impairment of intangibles 760 600 937 600 and other

Government stimulus income- (44,435) - (44,435)

Operating income 60,214 73,869 111,351 107,672

Interest expense (143) (841) (406) (3,609)

Income before income taxes and noncontrolling 60,071 73,028 110,945 104,063 interest

Income tax expense 13,318 15,227 22,759 18,586

Net income 46,753 57,801 88,186 85,477

Less net income attributable to 9,110 13,109 15,884 18,761 noncontrolling interests

Net income attributable to LHC Group, Inc.'s common $37,643 $44,692 $72,302 $66,716 stockholders



Earnings per share:

Basic $1.21 $1.44 $2.32 $2.15

Diluted $1.20 $1.43 $2.30 $2.13

Weighted average shares outstanding:

Basic 31,225 31,104 31,188 31,060

Diluted 31,430 31,324 31,423 31,301

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)



Six Months Ended June 30,

2021 2020

Operating activities:

Net income $88,186 $85,477

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense 9,541 10,385

Amortization of operating lease right of use asset 17,995 17,090

Stock-based compensation expense 7,506 6,943

Deferred income taxes 19,489 10,461

Loss on disposal of assets 19 154

Impairment of intangibles and other 937 600

Changes in operating assets and liabilities, net of acquisitions:

Receivables (25,649) (38,186)

Prepaid expenses (4,484) (2,436)

Other assets 6,170 (4,169)

Prepaid income taxes (13,739) 3,322

Accounts payable and accrued expenses (9,148) (16,354)

Salaries, wages, and benefits payable (4,560) 3,850

Government stimulus advance - 44,273

Contract liabilities - deferred revenue (65,026) 310,712

Other long term liabilities - 17,818

Operating lease liabilities (17,962) (16,876)

Income taxes payable (21,042) 2,506

Net amounts due to/from governmental entities (57) 306

Net cash provided by (used in) operating activities (11,824) 435,876

Investing activities:

Purchases of property, building and equipment (15,619) (40,944)

Proceeds from sale of property, building and 150 7,142 equipment

Cash received (paid) for acquisitions (649) 3,125

Proceeds from sale of an entity 1,531 -

Investments (10,100)

Net cash used in investing activities (24,687) (30,677)

Financing activities:

Proceeds from line of credit - 256,230

Payments on line of credit (20,000) (479,230)

Government stimulus advance (93,257) -

Proceeds from employee stock purchase plan 1,222 1,107

Noncontrolling interest distributions (13,332) (10,267)

Withholding taxes paid on stock-based compensation (10,754) (8,602)

Purchase of additional controlling interest (2,113) (23,575)

Exercise of vested awards and stock options - 218

Sale of noncontrolling interest 284 -

Net cash (used in) provided by financing activities (137,950)(264,119)

Change in cash (174,461)141,080

Cash at beginning of period 286,569 31,672

Cash at end of period $112,108$172,752

Supplemental disclosures of cash flow information:

Interest paid $1,322 $4,083

Income taxes paid $38,103 $2,375

Non-Cash Operating Activity:

Operating right of use assets in exchange for lease $25,656 $18,690 obligations

Non-Cash Investing Activity:

Accrued capital expenditures $1,108 $2,348

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Three Months Ended June 30, 2021

Home and Facility- Home health Hospice community-based HCI Total services services based services services

Net service $396,534 $63,804 $48,407 $31,030 $6,132 $545,907 revenue

Cost of service revenue (excluding 219,925 39,647 34,683 20,460 3,157 317,872 depreciation and amortization)

General and administrative123,245 18,114 11,923 10,906 2,873 167,061 expenses

Impairment of intangibles 760 - - - - 760 and other

Operating 52,604 6,043 1,801 (336) 102 60,214 income (loss)

Interest (106) (20) (10) (5) (2) (143) expense

Income (loss) before income taxes and 52,498 6,023 1,791 (341) 100 60,071 noncontrolling interest

Income tax expense 11,706 1,280 470 (152) 14 13,318 (benefit)

Net income 40,792 4,743 1,321 (189) 86 46,753 (loss)

Less net income (loss) attributable 7,500 1,208 85 322 (5) 9,110 to non controlling interests

Net income (loss) attributable $33,292 $3,535 $1,236 $(511) $91 $37,643 to LHC Group, Inc.'s common stockholder

Total assets $1,681,871$288,985$245,071$85,520 $65,678$2,367,125





Three Months Ended June 30, 2020

Home and Facility- Home health Hospice community-based HCI Total services services based services services

Net service $339,872 $61,055 $47,675 $33,639 $5,079 $487,320 revenue

Cost of service revenue (excluding 205,146 37,271 38,747 21,785 3,763 306,712 depreciation and amortization)

General and administrative110,209 16,266 11,124 10,165 2,810 150,574 expenses

Impairment of intangibles - 600 - - - 600 and other

Government stimulus (35,019) (4,731) (2,865) (1,656) (164) (44,435) income

Operating 59,536 11,649 669 3,345 (1,330) 73,869 income (loss)

Interest (594) (97) (79) (47) (24) (841) expense

Income (loss) before income taxes and 58,942 11,552 590 3,298 (1,354) 73,028 noncontrolling interest

Income tax expense 12,807 2,439 (12) 373 (380) 15,227 (benefit)

Net income 46,135 9,113 602 2,925 (974) 57,801 (loss)

Less net income (loss) attributable 9,922 2,164 33 997 (7) 13,109 to non controlling interests

Net income (loss) attributable $36,213 $6,949 $569 $1,928 $(967) $44,692 to LHC Group, Inc.'s common stockholder

Total assets $1,656,022$268,771$259,742$101,258$71,306$2,357,099

LHC GROUP, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Amounts in thousands)

(Unaudited)



Six Months Ended June 30, 2021

Home and Facility- Home healthHospice community-based HCI Total services services based services services

Net service $ 770,362$126,538$ 97,532$64,399$11,911 $1,070,742revenue

Cost of service revenue (excluding 432,298 78,217 69,555 41,635 6,439 628,144 depreciation and amortization)

General and administrative242,642 36,241 23,452 22,163 5,812 330,310 expenses

Impairment of intangibles 937 - - - - 937 and other

Operating 94,485 12,080 4,525 601 (340) 111,351 income (loss)

Interest (288) (56) (34) (19) (9) (406) expense

Income (loss) before income taxes and 94,197 12,024 4,491 582 (349) 110,945 noncontrolling interest

Income tax expense 19,596 2,347 988 (95) (77) 22,759 (benefit)

Net income 74,601 9,677 3,503 677 (272) 88,186 (loss)

Less net income (loss) attributable 12,349 2,223 364 979 (31) 15,884 to non controlling interests

Net income (loss) attributable $ 62,252 $7,454 $ 3,139 $(302) $(241) $72,302 to LHC Group, Inc.'s common stockholder





Six Months Ended June 30, 2020

Home and Facility- Home healthHospice community-based HCI Total services services based services services

Net service $ 707,693$121,586$ 96,139$63,320$11,453 $1,000,191revenue

Cost of service revenue (excluding 425,586 75,305 77,200 42,127 7,696 627,914 depreciation and amortization)

General and administrative226,232 32,892 22,583 20,545 6,188 308,440 expenses

Impairment of intangibles - 600 - - - 600 and other

Government stimulus (35,019) (4,731) (2,865) (1,656) (164) (44,435) income

Operating 90,894 17,520 (779) 2,304 (2,267) 107,672 income (loss)

Interest (2,494) (400) (345) (266) (104) (3,609) expense

Income (loss) before income taxes and 88,400 17,120 (1,124) 2,038 (2,371) 104,063 noncontrolling interest

Income tax expense 16,096 3,047 (218) 174 (513) 18,586 (benefit)

Net income 72,304 14,073 (906) 1,864 (1,858) 85,477 (loss)

Less net income (loss) attributable 14,528 3,131 (122) 1,240 (16) 18,761 to non controlling interests

Net income (loss) attributable $ 57,776 $10,942 $ (784) $624 $(1,842)$66,716 to LHC Group, Inc.'s common stockholder

LHC GROUP, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED KEY STATISTICAL AND FINANCIAL DATA

(Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

Key Data: 2021 2020 2021 2020

Home Health Services:

Locations 531 553 531 553

Acquired 1 - 1 6

De novo - - - -

Divested/consolidated (1) (3) (4) (6)

Total new admissions 109,082 93,482 217,004 201,664

Medicare new admissions 54,990 50,545 109,403 110,425

Average daily census 85,554 77,530 84,745 77,254

Average Medicare daily 45,134 44,811 45,186 45,453census

Medicare completed and 85,663 81,218 170,273 171,445billed episodes

Average Medicare case mixfor completed and billed 1.02 0.99 1.02 1.02Medicare episodes

Average reimbursement percompleted and billed $ 2,899 $ 2,771 $ 2,881 $ 2,785Medicare episodes

Total visits 2,151,665 1,963,924 4,209,298 4,099,715

Total Medicare visits 1,091,779 1,088,026 2,153,757 2,324,737

Average visits per completed 12.7 13.4 12.6 13.6and billed Medicare episodes

Organic growth: ^(1)

Net revenue 16.4 % (12.7) % 9.4 % (7.7) %

Net Medicare revenue 10.3 % (18.6) % 3.2 % (12.6) %

Total new admissions 16.4 % (4.7) % 7.3 % 1.1 %

Medicare new admissions 8.8 % (14.3) % -0.9 % (8.3) %

Average daily census 10.3 % (2.4) % 10.2 % (2.0) %

Average Medicare daily 0.9 % (12.3) % 0.0 % (10.9) %census

Medicare completed and 6.2 % (16.9) % 0.5 % (10.3) %billed episodes

Hospice Services:

Locations 120 112 120 112

Acquired 2 - 2 3

De novo - - 1 -

Divested/consolidated (2) - (2) (1)

Admissions 4,967 4,869 10,418 9,929

Average daily census 4,454 4,377 4,433 4,333

Patient days 405,339 398,283 802,313 788,652

Average revenue per patient $ 158.54 $ 153.86 $ 160.19 $ 154.00day

Organic growth: ^(1)

Total new admissions 1.1 % 1.8 % 4.7 % 0.9 %

Home and Community-BasedServices:

Locations ^(2) 133 111 133 111

Acquired 1 - 1 4

De novo 3 - 7 -

Divested/consolidated - - - -

Average daily census 13,514 14,333 13,625 14,358

Billable hours 1,878,138 1,921,900 3,779,419 3,907,500

Revenue per billable hour $ 25.88 $ 25.95 $ 25.96 $ 25.64

Facility-Based Services:

Long-term Acute Care

Locations 12 13 12 13

Acquired - - - -

Divested/consolidated - - - -

Patient days 20,199 23,658 41,359 43,819

Average revenue per patient $ 1,517 $ 1,385 $ 1,517 $ 1,371day

Average Daily Census 222 260 229 241



(1)Organic growth is calculated as the sum of same store plus de novo for the period divided by total from the same period in the prior year.

The number of locations for HCBS has been updated to not only include the(2)physical standalone locations but also the locations that are part of a home health provider.

RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO LHC GROUP, INC.

(Amounts in thousands)

(Unaudited)

Three Months Six Months Ended June 30, Ended June 30,

2021 2020 2021 2020

Net income attributable to LHC $ 37,643 $ 44,692 $ 72,302 $ 66,716Group, Inc.'s common stockholders

Add (net of tax):

Acquisition, de novo and legal 3,477 410 3,477 1,516expenses ^(1)

Closures/relocations/consolidations 1,048 523 1,179 866^(2)

COVID-19 impact:

PPE, supplies and other expenses ^ 7,999 20,170 16,851 22,278(3)

CARES Act tax benefit ^(4) - - - (2,210)

Provider Relief Fund (PRF) ^(5) - (32,882) - (32,882)

NCI associated with PRF ^(6) - 5,643 - 5,643

ERP implementation ^(7) 728 - 728 -

Adjusted net income attributable toLHC Group, Inc.'s common $ 50,895 $ 38,556 $ 94,537 $ 61,927stockholders

RECONCILIATION OF ADJUSTED NET INCOME

ATTRIBUTABLE TO LHC GROUP, INC. PER DILUTED SHARE

(Amounts in thousands)

(Unaudited)

Three Months Six Months Ended June 30, Ended June 30,

2021 2020 2021 2020

Net income attributable to LHC Group, Inc.'s $ 1.20 $ 1.43 $ 2.30 $ 2.13common stockholders

Add (net of tax):

Acquisition, de novo and legal expenses ^(1) 0.11 0.01 0.11 0.05

Closures/relocations/consolidations ^(2) 0.03 0.02 0.04 0.03

COVID-19 impact:

PPE, supplies and other expenses ^(3) 0.26 0.64 0.54 0.71

CARES Act tax benefit ^(4) - - - (0.07)

Provider Relief Fund (PRF) ^(5) - (1.05) - (1.05)

NCI associated with PRF ^(6) - 0.18 - 0.18

ERP implementation ^(7) 0.02 - 0.02 -

Adjusted net income attributable to LHC Group, $ 1.62 $ 1.23 $ 3.01 $ 1.98Inc.'s common stockholders

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA

(Amounts in thousands)

(Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Net income attributable to LHC $ 37,643 $ 44,692 $ 72,302 $ 66,716Group, Inc.'s common stockholders

Add:

Income tax expense 13,318 15,227 22,759 18,586

Interest expense, net 143 841 406 3,609

Depreciation and amortization 4,542 5,252 9,541 10,385

Adjustment items ^(1) 17,942 (8,292) 30,109 (3,436)

Adjusted EBITDA $ 73,588 $ 57,720 $ 135,117 $ 95,860

1. Adjustment items (pre-tax):

Acquisition, de novo and legal 4,708 554 4,708 2,064expenses ^(1)

Closures/relocation/ 1,419 706 1,596 1,174consolidations ^(2)

COVID-19 PPE, supplies and other 10,829 27,257 22,819 30,135expenses ^(3)

Provider Relief Fund (PRF) ^(5) - (44,435) - (44,435)

NCI associated with PRF ^(6) - 7,626 - 7,626

ERP implementation ^(7) 986 986

Total adjustments $ 17,942 $ (8,292) $ 30,109 $ (3,436)



Expenses and other costs associated with recently announced or completed acquisitions, de novos and legal expenses ($4.7 million pre-tax in the 1.three and six months ended June 30, 2021; $0.5 million pre-tax in the three months ended June 30, 2020 and $2.1 million pre-tax in the six months ended June 30, 2020).

Loss on the sale of an asset and other expenses associated with a closure or consolidation, including impairment ($1.4 million pre-tax in the three 2.months ended June 30, 2021 and $1.6 million in the six months ended June 30, 2021; ($0.7 million pre-tax in the three months ended June 30, 2020 and $1.2 million pre-tax in the six months ended June 30, 2020).

COVID-19 related expenses for purchases of personal protective equipment (PPE), supplies and wage adjustments ($10.8 million pre-tax in the three 3.months ended June 30, 2021 and $22.8 million pre-tax in the three months ended June 30, 2020; ($27.3 million pre-tax in the three months ended June 30, 2020 and $30.1 million pre-tax in the six months ended June 30, 2020).

Tax benefit related to new legislation in the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") which lifts certain tax deduction 4.limitations and eliminates 80% of taxable income limitations for Net Operating Losses ("NOL"), which we are now able to fully utilize NOLs associated with Almost Family prior to the merger.

Government stimulus income recognized during the second quarter of 2020 5.related to general distribution funds received from the Provider Relief Fund ($44.4 million pre-tax in the three and six months ended June 30, 2020).

Non-controlling interest distributed to our Joint Venture partners in 6.association with the Government stimulus income recognized during the second quarter of 2020 ($7.6 million pre-tax in the three months ended June 30, 2020).

Expenses and other costs associated with the implementation of an 7.Enterprise Resource Planning software ($1.0 million pre-tax in the second quarter and first half of 2020).

Contact:Eric Elliott

Senior Vice President of Finance

(337) 233-1307

eric.elliott@lhcgroup.com

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SOURCE LHC Group, Inc.