Amedisys(AMED) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements present the company's financial position, results of operations, and cash flows for the periods ended June 30, 2025 Condensed Consolidated Balance Sheets Total assets grew to $2.22 billion as of June 30, 2025, driven by increased cash and equity, while total liabilities slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $662,198 | $632,083 | | Total Assets | $2,215,385 | $2,138,714 | | Total Current Liabilities | $488,361 | $514,392 | | Total Liabilities | $940,482 | $958,749 | | Total Equity | $1,274,903 | $1,179,965 | Condensed Consolidated Income Statements Net income for H1 2025 surged due to a significant gain on an equity investment, despite higher merger-related expenses impacting Q2 2025 results Income Statement Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Service Revenue | $621,861 | $591,187 | $1,216,642 | $1,162,601 | | Operating Income | $45,578 | $52,214 | $88,937 | $83,833 | | Merger-related expenses | $26,277 | $11,901 | $43,046 | $32,568 | | Net Income Attributable to Amedisys | $28,084 | $32,301 | $89,096 | $46,701 | | Diluted EPS | $0.84 | $0.98 | $2.68 | $1.42 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased to $63.5 million for H1 2025, driven by higher net income and favorable changes in working capital Cash Flow Summary for the Six-Month Periods Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $63,524 | $45,764 | | Net cash used in investing activities | ($2,295) | ($4,639) | | Net cash used in financing activities | ($27,167) | ($22,630) | | Net increase in cash | $34,062 | $18,495 | | Cash at end of period | $337,304 | $157,358 | Notes to Financial Statements The notes provide critical context on Medicare reliance, the pending UnitedHealth Group merger, a significant equity investment gain, and other contingencies - The company derives approximately 68% of its consolidated net service revenue from Medicare for the six-month period ended June 30, 2025[19] - Amedisys is in a pending merger with UnitedHealth Group, which is being challenged by a DOJ lawsuit, with a trial tentatively set for October 2025[74][75][77] - In Q1 2025, the company recognized a $48.1 million gain from a transaction involving its equity method investment, Medalogix[68] Net Service Revenue by Segment (Six Months Ended June 30, 2025) | Segment | Net Service Revenue (in millions) | % of Total | | :--- | :--- | :--- | | Home Health | $775.5 | 63.7% | | Hospice | $421.1 | 34.6% | | High Acuity Care | $20.0 | 1.6% | | Total | $1,216.6 | 100.0% | Management's Discussion and Analysis (MD&A) Management discusses revenue growth driven by volume and rates, the pending UnitedHealth merger, proposed CMS rule changes, and the company's sufficient liquidity - Excluding merger-related expenses, consolidated operating income for H1 2025 increased by $15 million year-over-year, driven by rate increases and volume growth, but partially offset by wage increases and a shift in home health payor mix[153] - CMS has proposed a 6.4% decrease in payments to home health providers for CY 2026, which the company is actively lobbying against[131] - The company's liquidity position is strong, with $337.3 million in cash and cash equivalents and $508.0 million in availability under its Revolving Credit Facility as of June 30, 2025[182] - Days revenue outstanding (DRO) improved to 40.9 days at June 30, 2025, a significant decrease from 52.1 days at June 30, 2024, which was impacted by the Change Healthcare outage[183] Results of Operations Consolidated net service revenue for H1 2025 grew 4.6% to $1.22 billion, with growth across all segments driven by increased volume and favorable rates Segment Operating Income (Loss) for Six-Month Periods (in millions) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Home Health | $129.6 | $127.9 | | Hospice | $103.4 | $96.8 | | High Acuity Care | ($7.2) | ($9.0) | - Home Health same-store total volume grew 6% in H1 2025, while average Medicare revenue per completed episode increased to $3,034 from $3,017[158][161] - Hospice same-store average daily census grew 1% in H1 2025, and revenue per day increased to $179.73 from $172.96 year-over-year[164][166] Liquidity and Capital Resources Operating cash flow improved to $63.5 million in H1 2025, reflecting recovery from the prior year's Change Healthcare cybersecurity incident - The Change Healthcare cybersecurity incident in early 2024 delayed non-Medicare claim submissions, reducing operating cash flow in that period[180] - On April 17, 2025, the company entered into the Fourth Amendment to its Credit Agreement, extending the maturity date to July 30, 2027[187] Patient Accounts Receivable Aging at June 30, 2025 (in millions) | Payor | 0-90 Days | 91-180 Days | 181-365 Days | Total | | :--- | :--- | :--- | :--- | :--- | | Medicare | $174.6 | $6.8 | $0.9 | $182.3 | | Other | $101.3 | $9.8 | $2.1 | $113.2 | | Total | $275.9 | $16.6 | $3.0 | $295.5 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuation on its $338.1 million of variable-rate debt - A hypothetical 1.0% increase in interest rates would cause the company's annual interest expense to increase by approximately $3.4 million, assuming no principal repayments[193] Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Based on an evaluation as of June 30, 2025, the principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective at a reasonable assurance level[196] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially impacted, or are reasonably likely to materially impact, internal controls[197] PART II. OTHER INFORMATION Legal Proceedings This section cross-references notes detailing the pending DOJ merger litigation and other routine legal actions - For information on legal proceedings, the report refers to Note 4 (Mergers and Acquisitions) and Note 7 (Commitments and Contingencies)[200] Risk Factors The company reports no material changes to the risk factors disclosed in its 2024 Annual Report on Form 10-K - The company directs stakeholders to the Risk Factors section of its 2024 Annual Report on Form 10-K, indicating no new material risks have been identified in the current quarter[201] Unregistered Sales of Equity Securities and Use of Proceeds The company acquired 32,857 shares in Q2 2025 from employees to satisfy tax obligations on vested stock awards Common Stock Purchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 593 | $92.84 | | May 2025 | 21,850 | $96.00 | | June 2025 | 10,414 | $94.95 | | Total | 32,857 | $95.61 | Other Information The Chief Accounting Officer adopted a Rule 10b5-1 trading plan for the potential sale of up to 4,774 shares - Chief Accounting Officer Allyson Guidroz adopted a 10b5-1 trading plan for the sale of up to 4,774 shares, with the first possible trade on August 18, 2025[205] Exhibits This section lists all filed exhibits, including the amended credit agreement and required CEO/CFO certifications - Key exhibits filed include the Fourth Amendment to the Amended and Restated Credit Agreement, and CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[207]