Enhabit(US:EHAB)2025-05-08 20:23Financial Performance - Net service revenue for Q1 2025 was $259.9 million, a slight decrease of 0.9% from $262.4 million in Q1 2024[13] - Operating income increased to $15.9 million in Q1 2025, up 23.3% from $12.9 million in Q1 2024[13] - Net income attributable to Enhabit, Inc. was $17.8 million in Q1 2025, compared to $0.2 million in Q1 2024, representing a significant increase[13] - Earnings per share (EPS) for Q1 2025 was $0.35, compared to $0.01 in Q1 2024, reflecting a substantial improvement[13] - For the three months ended March 31, 2025, total net service revenue was $259.9 million, a decrease of 0.9% compared to $262.4 million for the same period in 2024[34] - Medicare revenue for the three months ended March 31, 2025, was $171.4 million, down 3.1% from $176.8 million in 2024[34] - Home Health segment net service revenue was $200.6 million for Q1 2025, down from $213.2 million in Q1 2024, a decrease of 5.9%[68] - Hospice segment net service revenue increased to $59.3 million in Q1 2025, compared to $49.2 million in Q1 2024, reflecting a growth of 20.4%[68] - Total segment adjusted EBITDA for Q1 2025 was $53.3 million, slightly up from $52.3 million in Q1 2024, indicating a growth of 1.9%[68] - Adjusted EBITDA for the three months ended March 31, 2025, increased to $26.6 million from $25.3 million in the prior period[98] Assets and Liabilities - Total assets as of March 31, 2025, were $1,235.9 million, a slight increase from $1,226.0 million as of December 31, 2024[17] - Total liabilities decreased to $662.6 million as of March 31, 2025, down from $672.1 million as of December 31, 2024[17] - Long-term debt as of March 31, 2025, was $489.8 million, a decrease from $515.4 million as of December 31, 2024[44] - The carrying amount of long-term debt under the Term Loan A Facility was $343.1 million as of March 31, 2025[57] - The Company has a $400.0 million term loan A facility and a $350.0 million revolving credit facility, both maturing in June 2027[46] Cash Flow - Cash and cash equivalents increased to $39.5 million in Q1 2025 from $28.4 million in Q4 2024[17] - The company reported a net cash provided by operating activities of $17.9 million for Q1 2025, compared to $17.3 million in Q1 2024[23] - The company had $39.5 million in cash and cash equivalents as of March 31, 2025, up from $28.4 million as of December 31, 2024[116] - Net cash provided by operating activities increased to $17.9 million for the three months ended March 31, 2025, compared to $17.3 million for the same period in 2024[118] Debt and Credit Facilities - Enhabit amended its credit facilities on June 27, 2023, increasing the maximum permitted total net leverage ratio to 5.25 to 1.00 for certain quarters in 2023[49] - The Company amended the Credit Facilities on November 3, 2023, increasing the maximum permitted Total Net Leverage Ratio to 6.75 to 1.00 for the quarters ended December 31, 2023, and March 31, 2024[51] - Enhabit was in compliance with the financial covenants under the Credit Facilities as of March 31, 2025, and forecasted results indicate continued compliance for one year from that date[54] - The interest rate on amounts drawn under the Term Loan A Facility and the Revolving Credit Facility was 6.9% as of March 31, 2025[56] - Enhabit reduced its Total Net Leverage Ratio below the 4.50 times to 1.00 requirement, allowing for improved pricing under the Credit Agreement and operational flexibility[79] Operational Overview - Enhabit, Inc. operates in 34 states, focusing on Medicare-certified skilled home health and hospice services[26] - The company operates 251 home health agencies and 113 hospice provider locations as of March 31, 2025, with a concentration in the southern half of the United States[67] - Enhabit completed its separation from Encompass on July 1, 2022, becoming an independent public company listed under the symbol "EHAB" on the New York Stock Exchange[27] Tax and Legal Matters - The effective income tax rates for the three months ended March 31, 2025, and 2024, were 28.7% and 50.0%, respectively[58] - The effective income tax rate decreased to 28.7% in 2025 from 50.0% in 2024, primarily due to a lower unfavorable rate impact from stock-based compensation[93] - The company is involved in various legal actions and regulatory audits, but does not believe any pending legal proceedings are material to its business[133] - The company may be subject to undisclosed qui tam lawsuits under the False Claims Act, which could involve significant monetary damages[134] Future Outlook - Medicare reimbursement rates are expected to increase by 2.4% for fiscal year 2026, which may positively impact the company's revenue[82] - The company plans to close four additional Home Health and three Hospice branches by the end of Q2 2025, based on performance evaluations[80] Miscellaneous - The Company does not expect the adoption of new accounting standards to have a material impact on its consolidated financial statements[37] - There were no changes in internal control over financial reporting that materially affected the company's financial reporting during the quarter ended March 31, 2025[130] - The company has not disclosed any new products or technologies in this report[132] - There are no updates on market expansion or acquisition strategies mentioned in the report[132] - During the quarter ended March 31, 2025, the company repurchased a total of 167,705 shares of common stock at an average price of $8.10 per share[136]