Amedisys(AMED) - 2025 Q1 - Quarterly Report

Financial Performance - For the three-month period ended March 31, 2025, net service revenue increased to $594.8 million, up from$571.4 million in the same period of 2024, representing a year-over-year growth of approximately 4.4%[126] - Operating income for the same period rose to $43.4 million, an increase of$12 million compared to $31.6 million in 2024[126] - The gross margin improved slightly to 43.8$61.0 million, compared to $14.4 million in the prior year, marking a growth of over 323$15 million to $379.2 million, driven by a 5$62.3 million, up from $60.8 million, primarily due to volume growth and increased Medicare reimbursement[130][131] - The hospice segment's net service revenue increased by$5 million to $206.2 million, with Medicare revenue growing by 4$9.4 million from $6.4 million[142][144] Expenses and Costs - Amedisys incurred$17 million in merger-related expenses for the three-month period ended March 31, 2025, down from $21 million in the same period of 2024[126] - General and administrative expenses for the corporate segment decreased by$6 million year-over-year to $63.5 million, including a$4 million reduction in merger-related expenses[147][148] - Cash used in operating activities was $3.7 million, a slight improvement from$6.5 million in the prior year, impacted by accounts payable and accrued expenses[149] - Cash used in investing activities totaled $1.4 million, down from$3.1 million, primarily for property and equipment purchases[150] - Cash used in financing activities increased to $13.3 million from$8.6 million, mainly due to repayment of borrowings[151] Legal and Regulatory Matters - The proposed merger with UnitedHealth Group is currently facing legal challenges, with a trial tentatively set to begin on October 27, 2025[116] - The Centers for Medicare and Medicaid Services (CMS) estimated a 2.9% increase in hospice payments for fiscal year 2025, effective October 1, 2024[123] - CMS also projected a 0.5% increase in payments to home health providers for the Calendar Year 2025[125] Cash and Debt Management - Cash and cash equivalents as of March 31, 2025, totaled $284.9 million, with$508.0 million available under the $550.0 million Revolving Credit Facility[154] - The company has no outstanding borrowings under the$550.0 million Revolving Credit Facility as of March 31, 2025, with a weighted average interest rate of 6.0% for the Amended Term Loan Facility[162] - A 1.0% change in interest rates would result in an approximate $3.4 million annual change in interest expense, based on$343.8 million of outstanding debt subject to interest rate fluctuations[166] - The Fourth Amendment to the Credit Agreement extended the maturity date of the Credit Facility from July 30, 2026, to July 30, 2027[160] Operational Challenges - The company experienced a cybersecurity incident affecting Change Healthcare, which delayed claim submissions but had minimal impact on Medicare claims[153] - The company expects continued operating losses in the high acuity care segment but anticipates improvements as it leverages its operating structure[143] - Inflation has materially impacted operations, particularly in labor and healthcare costs, with expectations for continued effects in 2025[164] Accounts Receivable - Patient accounts receivable increased by $24 million from December 31, 2024, with cash collection as a percentage of revenue at 97$319.6 million, compared to $296.1 million at December 31, 2024[158]