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Article Excerpt
PARTICIPANTS
. Kevin LeBlanc, Amedisys, Inc., IR . Bill Borne, Amedisys, Inc., CEO and Chairman . Dale Redman, Amedisys, Inc., CFO . Larry Graham, Amedisys, Inc., President and COO . Art Henderson, Jefferies & Company, Analyst . Whit Mayo, Robert W. Baird, Analyst . Kevin Ellich, RBC Capital Markets, Analyst . John Ransom, Raymond James, Analyst . Newton Juhng, BB&T Capital Markets, Analyst . David MacDonald, SunTrust, Analyst . Tony Perkins, First Analysis, Analyst . Ralph Giacobbe, Credit Suisse, Analyst
OVERVIEW
AMED reported full-year 2008 net revenue of $1,187m and net income of $86.7m or $3.22 per share. 4Q08 net revenue was $340m and net income was $26.3m or $0.97 per share. Co. expects 2009 net service revenue to be $1,425-1,475m and diluted EPS to be $4.10-4.30.
FINANCIAL DATA
A. Key Data From Call 1. Full-year 2008 net revenue = $1,187m. 2. 4Q08 net revenue = $340m. 3. Full-year 2008 net income = $86.7m. 4. 4Q08 net income = $26.3m. 5. Full-year 2008 EPS = $3.22. 6. Full-year 2008 adjusted EPS = $3.31. 7. 4Q08 EPS = $0.97. 8. 4Q08 adjusted EPS = $0.98. 9. 2008 GM = 52.6%. 10. 2008 CapEx = $28m. 11. At 12/31/08 DSO on net basis = 47.2. 12. 4Q08 DSO = 54.4. 13. Began 2008 with $56m in cash on balance sheet. 14. Year-end 2008 outstanding debt = $329m. 15. Expected 2009 net service revenue (excluding effects of any future acquisitions) = $1,425-1,475m. 16. Expected 2009 diluted EPS (excluding effects of any future acquisitions) = $4.10-4.30.
PRESENTATION SUMMARY
S1. 4Q08 & Full-Year 2008 Results (B.B.) 1. Highlights: 1. Had another year of outstanding results. 2. Reported 4Q08 net revenue of $340m and adjusted EPS of $0.98. 1. Growth of 75% and 56% respectively over 4Q07. 3. Full-year net revenue, $1,187m and adjusted EPS, $3.31. 1. Up from $697m and $2.32 per diluted share in 2007 net of Alliance gain. 2. Growth of 70% and 43% respectively. 2. 2008 Accomplishments: 1. Completed six acquisitions adding: 1. 131 home health locations. 2. 14 hospice locations. 3. Over $365m in annualized revenue. 2. Started 35 new home health and five new hospice agencies over course of year. 3. Now operates in 37 states, Washington DC and Puerto Rico. 4. Continued roll-out of Specialty Division. 5. Concluded largest acquisition and completed integration in six months. 6. Arranged new $500m unsecured credit facility and an initial draw of $395m in connection with TLC acquisition. 7. Successfully adjusted clinical care coordination platform for new payment system. 8. Through cash flow from operations, reduced debt incurred with TLC acquisition by $87m or 22%. 9. During 4Q08, opened 15 new home health agencies. 10. As a result of de novo vote and acquisitions in previous quarters, ended 2008 with: 1. 480 home health locations. 2. 155 more agencies in 4Q07. 3. One new hospice agency in 4Q08. 11. As a result of de novo growth and acquisitions in previous quarters, ended 2008 with 48 hospice agencies, 19 more than previous year. 3. 2009 Accomplishments: 1. 2009 YTD, had closed on one acquisition that added two home health agencies in Arizona and announced that Co. has signed a purchase agreement for three home health agencies and one hospice agency located in Arkansas. 1. Expects to close it in March. 4. Focus: 1. Mission is to provide services as needed to target population. 2. Focus is to care for complex patients, providing appropriate care for their condition. 3. Clinical metrics are reflective of needs of patients, including such considerations as acuity, research and visits per episode, which will vary and will not always been in alignment with typical trends expected by financial markets for its targets. 1. Trends are referencing patient needs and not free market trends. 2. From clinical perspective, there is no correlation between the two, and care is prioritized towards needs of patients and not driving financial performance trends. 4. Focus is to leverage core competency infrastructure and position Co. to care for most complex of Medicare population. 5. One will witness trends that are indicative of Co.'s mission and focus. 1. An example, such as increased visits per patient episode, which is more indicative of increased acuity, a clinical metric, is not necessarily a negative financial metric indicating higher direct costs. 2. As patients' conditions vary and care is patient-specific, an investor can expect to see constant variation in clinical care metrics and not fixed trends. 3. Today, 133m people, almost half of all Americans, live with a chronic condition. 1. Anticipated to increase by an additional 20m people over next 11 years. 6. In Medicare population, avg. beneficiary sees seven different positions and fills upwards of 20 prescriptions in a year. 1. 96% of Medicare program spending is consumed by chronic diseases and two-thirds are spent on beneficiaries who have five or more chronic conditions. 2. A typical AMED patient is approx. 80-85 years of age, who has multiple chronic conditions and on an avg. of 13 medications. 7. AMED is positioning its organization to be a solution to problems identified by re-examination by new administration as a: 1. Scalable. 2. High-quality. 3. Evidence-based provider for an ever-growing chronically ill elderly population. 8. System is designed to deliver cost-effective care to most complex product and costly patient population in comfort of their own home. 1. Model combines existing home care infrastructure, which includes: 1. Comprehensive in-home assessments. 2. Patient-centric plan of care development. 3. Multi-disciplinary in-home care delivery. 4. Coordinated chronic-care management. 5. In-home, end-of-life care. 2. This infrastructure, combined with advanced information and communication technologies and clinical capabilities, will allow Co. to provide intensive home-based health care. 9. There are several initiatives currently evolving that will allow Co. to capitalize on its position in market. 10. Believes political and administrative environment is ready and is in need of...
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