Financial Performance - For the three months ended September 30, 2024, net service revenue was $253.6 million, a decrease of 1.8% compared to $258.3 million in the same period of 2023[95]. - The company reported a net loss attributable to Enhabit, Inc. of $110.2 million for the three months ended September 30, 2024, compared to a net loss of $2.4 million in the same period of 2023[95]. - Net loss for the three months ended September 30, 2024, was $(109.5) million, significantly higher than $(2.2) million in the same period of 2023[108]. - Total consolidated net service revenue for the nine months ended September 30, 2024, was $776.6 million, a decrease from $785.7 million in the same period of 2023[111]. - Adjusted EBITDA for the three months ended September 30, 2024, was $24.5 million, compared to $23.2 million for the same period in 2023, reflecting a growth of 5.6%[108]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $75.0 million, compared to $72.5 million for the same period in 2023, indicating a growth of 3.5%[109]. Goodwill Impairment - The company experienced a goodwill impairment charge of $107.9 million in the third quarter of 2024, compared to an impairment of $85.8 million in the same period of 2023[99]. - The company recorded an impairment charge of $107.9 million for the home health reporting unit during the three months ended September 30, 2024[137]. Revenue Segments - Home health segment net service revenue for the three months ended September 30, 2024, decreased to $201.0 million, down 4.7% from $210.9 million in the same period of 2023[116]. - Hospice segment net service revenue increased to $52.6 million for the three months ended September 30, 2024, up 10.9% from $47.4 million in the same period of 2023[111]. - Medicare accounted for 58.4% of home health segment revenue in the three months ended September 30, 2024, down from 66.9% in the same period of 2023[114]. - Non-Medicare revenue in the home health segment increased by 20.9% to $81.5 million for the three months ended September 30, 2024, compared to $67.4 million in the same period of 2023[116]. Expenses and Costs - General and administrative expenses decreased to 40.9% of net service revenue for the three months ended September 30, 2024, down from 42.1% in the same period of 2023[96]. - Interest expense for the three months ended September 30, 2024, was $10.8 million, a slight decrease from $10.9 million in the same period of 2023[100]. - The effective income tax rate for the three months ended September 30, 2024, was (0.6)%, primarily due to a valuation allowance of $12.0 million against deferred tax assets[102]. - Cost of service as a percentage of net service revenue for hospice decreased to 25.8% in Q3 2024 from 24.0% in Q3 2023[122]. Operational Metrics - The company operates 256 home health locations and 112 hospice locations across 34 states as of September 30, 2024[79]. - Medicare admissions decreased by 8.5% to 23,422 in Q3 2024 compared to Q3 2023, while non-Medicare admissions increased by 20.1% to 29,950[117]. - Total admissions for hospice increased by 5.7% to 3,046 in Q3 2024 compared to Q3 2023[122]. - Segment adjusted EBITDA for hospice increased by 29.9% to $10.0 million in Q3 2024 compared to Q3 2023, reflecting higher net service revenue[126]. Cash Flow and Capital Expenditures - Cash and cash equivalents increased to $45.7 million as of September 30, 2024, up from $27.4 million at the end of 2023[129]. - Net cash provided by operating activities increased to $55.3 million for the nine months ended September 30, 2024, compared to $45.5 million for the same period in 2023[130]. - Capital expenditures for the nine months ended September 30, 2024, were $3.2 million, compared to $3.6 million for the same period in 2023[135]. - The company expects to spend approximately $5 million to $7 million on capital expenditures in 2024[135]. Debt and Obligations - As of September 30, 2024, the total consolidated contractual obligations amount to $718.9 million, with long-term debt obligations accounting for $355.0 million[134]. - Interest on long-term debt as of September 30, 2024, is calculated at $115.6 million, with $38.5 million due in the current period[134]. - The company had $48.4 million available under its revolving credit facility as of September 30, 2024[129]. - Total purchase obligations amount to $6.6 million, primarily related to software licensing and support[134].

Third Quarter Earnings Call Supplemental Information November 7, 2024 Disclaimer Forward looking statements This quarterly presentation 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 reg ...

Core Viewpoint - Enhabit reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share, representing a -25% earnings surprise [1] - The company posted revenues of $253.6 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.09% [2] Financial Performance - Enhabit has surpassed consensus EPS estimates three times over the last four quarters [2] - Year-over-year revenue comparison shows a decline from $258.3 million to $253.6 million [2] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $272.56 million, and for the current fiscal year, it is $0.26 on revenues of $1.06 billion [7] Stock Performance - Enhabit shares have declined approximately 26.6% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Medical Services industry, to which Enhabit belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Enhabit's stock performance [5]

Financial Performance - Net service revenue for Q3 2024 was $253.6 million, a decrease of 1.8% from $258.3 million in Q3 2023[4] - Adjusted EBITDA increased to $24.5 million, reflecting a 5.6% improvement year over year from $23.2 million[5] - Adjusted EPS remained flat at $0.03 compared to Q3 2023[5] - The company reported a net loss attributable to Enhabit, Inc. of $110.2 million, a significant increase from a loss of $2.4 million in Q3 2023[5] - The company reported a net loss of $109.5 million for the three months ended September 30, 2024, compared to a net loss of $2.2 million for the same period in 2023[18] - The impairment of goodwill was $107.9 million for the three months ended September 30, 2024, compared to $0 for the same period in 2023[18] - Net loss attributable to Enhabit, Inc. for Q3 2024 was $110.2 million, with a diluted EPS of $(2.20), compared to a net loss of $2.4 million and diluted EPS of $(0.05) in Q3 2023[24] - The company recorded an impairment of goodwill amounting to $107.9 million in Q3 2024, which significantly impacted the overall financial results[23] - Net loss for the three months ended September 30, 2024, was $109.5 million, compared to a loss of $2.2 million for the same period in 2023[27] Revenue Breakdown - Medicare net service revenue decreased by 16.8% to $117.3 million, while non-Medicare revenue increased by 20.9% to $81.5 million[7] - Hospice net service revenue grew by 11.0% to $52.6 million, driven by increased patient days and Medicare reimbursement rates[10] - Non-Medicare admissions rose by 20.1%, contributing to total admissions growth of 5.6% year over year[3] - Net service revenue for the three months ended September 30, 2024, was $253.6 million, a decrease of 1.1% from $258.3 million for the same period in 2023[18] Cash Flow and Debt Management - The company reduced bank debt by $10 million during the quarter[3] - The company reported net cash provided by operating activities of $55.3 million for the nine months ended September 30, 2024, compared to $45.5 million for the same period in 2023[20] - Net cash provided by operating activities for the three months ended September 30, 2024, was $28.4 million, significantly higher than $6.3 million in the same period of 2023[30] - Adjusted free cash flow for the three months ended September 30, 2024, was $30.3 million, compared to $8.6 million for the same period in 2023[30] Assets and Liabilities - Total assets decreased to $1,304.3 million as of September 30, 2024, from $1,433.6 million as of December 31, 2023[19] - Total liabilities decreased to $706.4 million as of September 30, 2024, from $731.9 million as of December 31, 2023[19] - Cash and cash equivalents increased to $45.7 million as of September 30, 2024, from $27.4 million as of December 31, 2023[19] Operational Metrics - Average daily census in the hospice segment increased by 6.9% year over year, with sequential growth every month since January 2024[11] - Same-store comparisons are used to explain changes in performance metrics, calculated based on home health and hospice locations open throughout both the current and prior periods[17] - Adjusted EBITDA for the three months ended September 30, 2024, was $24.5 million, up from $23.2 million in the prior year[27] - Adjusted EBITDA for the nine months ended September 30, 2024, was $75.0 million, consistent with the same period in 2023[25] Unusual Items and Adjustments - Unusual or nonrecurring items in Q3 2024 included costs associated with shareholder activism and restructuring activities, totaling $3.6 million[23] - The company incurred impairment of goodwill amounting to $107.9 million for the three months ended September 30, 2024[27] - The total interest expense and amortization of debt discounts and fees for the nine months ended September 30, 2024, was $32.8 million, compared to $30.7 million in the same period of 2023[26] Future Outlook - The company anticipates continued focus on strategic growth opportunities and managing costs effectively in the upcoming quarters[33] - The company revised its full-year 2024 guidance for net service revenue to a range of $1,031 million to $1,046 million[12] - The company is unable to reconcile guidance for Adjusted EBITDA and Adjusted EPS to GAAP measures due to the inherent difficulty in predicting future impacts of certain items[16] Shareholder Impact - Diluted shares outstanding increased from 50.1 million in Q3 2023 to 50.8 million in Q3 2024, indicating a slight dilution[24] - The company experienced a significant increase in stock-based compensation, which amounted to $3.8 million in Q3 2024, compared to $3.1 million in Q3 2023[24] - The adjusted diluted EPS for Q3 2024 was $0.03, a slight improvement from $0.03 in Q3 2023, despite the overall net loss[24]

Overview of Vanguard's Transaction - Vanguard Group Inc executed a significant transaction on September 30, 2024, reducing its holdings in Enhabit Inc by 626,911 shares, bringing its total stake to 2,976,480 shares [1] Insight into Vanguard Group Inc - Founded in 1975, Vanguard has become a global leader in low-cost mutual funds and ETFs, emphasizing a client-owned structure that benefits investors [2] Enhabit Inc at a Glance - Enhabit Inc operates in the healthcare sector, providing home health and hospice services across the U.S. The company has faced financial challenges, with a current market capitalization of approximately $376.119 million and a stock price of $7.48, down from its IPO [4] Impact of Vanguard's Stock Reduction - The reduction in Enhabit shares by Vanguard indicates a potential reassessment of confidence in Enhabit's financial health and market position, marking a strategic adjustment rather than a reactionary decision [5] Market and Performance Analysis of Enhabit Inc - Enhabit's stock has declined over 70% since its IPO, with a year-to-date drop of 26.38%. The company's GF Score of 25/100 and Piotroski F-Score of 4 suggest operational struggles, influencing Vanguard's decision to decrease holdings [6] Strategic Rationale Behind the Reduction - Vanguard's decision to reduce its position in Enhabit may stem from ongoing financial performance issues and a bleak market outlook for the healthcare provider, aligning with a broader risk management strategy [7] Future Prospects for Enhabit Inc - Enhabit aims to improve its core home health and hospice services but must address financial health and market strategy to reverse negative stock performance trends [8] Conclusion - Vanguard's reduction in Enhabit shares highlights a strategic shift that could have broader implications for both entities, with market conditions and company performances influencing future investment decisions [9]

Financial Data and Key Metrics Changes - Consolidated net revenue for Q2 2024 was $260.6 million, down $1.7 million or 0.6% year-over-year [13] - Consolidated adjusted EBITDA increased by $1.3 million or 5.4% year-over-year to $25.2 million [13] - Home Health segment revenue declined by $3.6 million or 1.7% primarily due to lower Medicare recertification [13] - Hospice segment revenue increased by $1.9 million or 3.9% year-over-year due to increased Medicare reimbursement rates [14] - Cost per visit in Home Health decreased by 2.2% year-over-year, contributing to adjusted EBITDA growth [13] Business Line Data and Key Metrics Changes - Home Health segment saw total admissions growth of 6.4% year-over-year, driven by a 25.2% increase in non-Medicare admissions [13] - The percentage of non-Medicare visits in payer innovation contracts rose from 6% in Q1 2023 to 43% in Q2 2024 [7] - Hospice average daily census grew 2.7% year-over-year, with sequential growth each month since January 2024 [14] Market Data and Key Metrics Changes - The leverage ratio decreased to 5.1x, down from 5.4x at year-end 2023, indicating improved financial stability [15] - Available liquidity was approximately $72 million, including $29 million in cash [15] Company Strategy and Development Direction - The company is focusing on payer innovation strategies to improve revenue and admissions, particularly in non-Medicare segments [7] - A commitment to advocacy efforts against proposed cuts in home health payments is emphasized, with ongoing engagement with trade associations [6] - The company plans to continue opening new locations as part of its de novo strategy, targeting 10 new openings per year [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth potential, citing demographic trends and the cost-effectiveness of home care [17] - The company anticipates mid to high single-digit growth in home health admissions and hospice volumes over the next three years [17] - Management acknowledged challenges in Medicare fee-for-service admissions but is implementing strategies to improve performance [19][33] Other Important Information - The CFO announced plans to step down, with gratitude expressed for her contributions to the company [12] - The company has successfully eliminated contract labor, which is expected to enhance productivity and reduce costs [11] Q&A Session Summary Question: How is the company strategizing to turn Medicare fee-for-service admissions around? - The strategy focuses on building payer innovation and contracts, with a third of branches showing growth in fee-for-service business [19] Question: How much room is there to drive down cost per visit? - The company is working on productivity and optimization, with the elimination of contract labor expected to yield full benefits by January 2025 [21] Question: What is the impact of the United contract termination on revenue? - The termination is not expected to significantly impact guidance as the company has been in negotiations and has other agreements in place [32] Question: What actions are being taken to grow the Medicare business? - The company is analyzing referral sources and adjusting strategies based on payer mix shifts to improve Medicare volumes [33] Question: What is the same-store census growth for Hospice? - Same-store average daily census growth was reported at 1.2% positive [34]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-41406 ___________________ Enhabit, Inc. (Exact name of registrant as specified in its charter) Delaware 47-2409192 (State or other jurisdiction of incorp ...

Second Quarter Earnings Call Supplemental Information August 7, 2024 Disclaimer Forward looking statements Statements contained in this presentation 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 ...

Enhabit (EHAB) came out with quarterly earnings of $0.07 per share, beating the Zacks Consensus Estimate of $0.06 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 16.67%. A quarter ago, it was expected that this provider of home health and hospice services would post earnings of $0.05 per share when it actually produced earnings of $0.07, delivering a surprise of 40%. Over the last ...

Exhibit 99.1 Enhabit Reports Second Quarter 2024 Financial Results Company to host a conference call tomorrow, August 7, 2024, at 10 a.m. EDT DALLAS, TX – August 6, 2024 – 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, 2024. "The second quarter marked our third sequential quarter demonstrating the success of our strategies," said Enhabit's President and Chief Executive Officer Barb Jacobsmeyer. "In o ...