Amedisys Inc (AMED)

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Amedisys, Inc. (AMED)

Q3 2008 Earnings Call

October 28, 2008, 10:00 am ET


Kevin LeBlanc – Director of Investor Relations

Bill Borne – Chairman and Chief Executive Officer

Dale Redman – Chief Financial Officer

Larry Graham – President and Chief Operating Officer


John Ransom – Raymond James

Art Anderson – Jefferies and Co.

Kevin Elledge – RBC Capital

Darrin Lerrich – Deutsche Bank

Derrick Dagnan – Avondale Partners

Newton Juhng – BB&T Capital Markets

Eric Gommel – Stifel Nicolaus & Company, Inc.

Whit Mayo – Robert W. Baird & Company



Good day and welcome to the Amedisys third quarter 2008 earnings conference call. Today’s conference is being recorded.

At this time I would like to turn the conference over to Mr. Kevin LeBlanc. Please go ahead, sir.

Kevin LeBlanc

Thanks. Good morning and thank you for joining us today for Amedisys investor conference call to discuss this morning’s third quarter 2008 earnings announcement and related matters.

By now you should receive a copy of our earnings press release. If you did not receive the press release you may access it on Investor Relations page on our website at

Joining me on today’s call from Amedisys are Bill Borne, Chairman and Chief Executive Officer, Larry Graham, President and Chief Operating Officer, and Dell Redman, Chief Financial Officer. Also speaking today will be Alice Ann Schwartz, Chief Information Officer and Senior Vice President for Clinical Operations and Jeffrey Jeter, Chief Compliance Officer.

Before we get started with our call, I’d like to remind everyone that any statements made on this conference call today or in our press releases that express a belief, expectation, or intent as well as those that are not historical facts are considered forward-looking statements and are protected under the Safe Harbor of the Private Securities Litigation Reform Act.

These forward-looking statements are based on information available to Amedisys today, and the company assumes no obligation to update these statements as circumstances change. These forward-looking statements may involve a number of risks and uncertainties which may cause the company’s results to differ materially from such statements. These risks and uncertainties include factors detailed in our SEC filings including our forms 10-K and 10-Q.

Also, the company urges caution in considering any current trends or guidance that may be discussed on this conference call. The home health and hospice industry is highly competitive, and trends and guidance are subject to numerous factors, risks, and influences which are described in the company’s reports and registration statements filed with the SEC. The company disclaims any obligations to update information on trends or targets other than in its periodic filings with the SEC. In addition, as required by SEC Regulation G, a reconciliation of any non-GAAP measures mentioned during our call today to the most comparable GAAP measures will be available on our website at on the Investor Relations page under the link Press Releases.

Thank you. Now I’ll turn the call over to Bill Borne. Please go ahead, Mr. Borne.

Bill Borne

Thank you Kevin and good morning. First, let me welcome each of you to this call. We appreciate the opportunity to update you regarding the company’s performance for the quarter and share our vision for Amedisys.

Today’s call will be a little different in past calls. As Kevin mentioned, we will have two additional speakers. Alice Ann Schwartz will be speaking today to provide more detail on our clinical approach and result to caring file patients. In addition, Jeffrey Jeter will be providing an overview of our compliance program.

High clinical care is the top priority in compliance essential to everything we do as a company. We like investors to fully understand our commitment to both of these components of being a healthcare provider and we believe today’s call is a great form to provide that information.

Amedisys is a leader in disposing detail information. In our effort to even be more transparent, we have changed the format of today’s call to provide a comprehensive detailed review of our process and controls as it relates to our clinical population and compliance program.

The narrative thought of this call will end approximately one hour and then we will take questions. We

will file an 8-K posing this narrative for your review as necessary.

As background, Alice Ann is our Chief Information Officer and Senior Vice President of Clinical Operations and she has been with Amedisys for 11 years. Prior to joining the company, she was employed as a nurse in the acute care-trauma and cardiovascular surgery intensive care unit at John Hopkins Hospital and Adam Crowley Shock Trauma Center. In the industry she has published an out coming proven matter and has engrained many clinical measurements within our organization.

Jeffrey Jeter has been with Amedisys since 2001 and brings the background of prosecuting health care fraud and nursing home abuse as an assistant attorney general for the state of Louisiana Department of Justice.

Both Alice Ann and Jeffrey have brought a tremendous amount of value to the company and have been an integral part of growth and success of Amedisys over the years. We’re very proud of both them and welcome this opportunity for them to share their knowledge and insight with our investing public.

We had outstanding results for the third quarter recording net revenue of 322 million and adjusted earnings per share of $0.89. This represents growth of 78% and 46% respectively over the third quarter of ’07.

For the nine-month period, we have revenue of 847 million and adjusted earnings per share of $2.33. This represents growth of 68% and 38% respectively over the first nine months of ’07. Based on this performance and our expectations for the remainder of the year, we had increased guidance for ’08.

During the quarter, we opened seven new home health agencies. As a result of the noble growth and acquisitions in previous quarters, we ended the quarter with 461 home health locations, a 150 more agencies than the third quarter of ’07. In addition, we owned 44 hospice agencies at the end of the third quarter of ’08, 17 more hospice agencies than the prior year.

Subsequent to quarter end we closed on two acquisitions that added seven home health and one hospice agency in four states. In addition, we opened a start-up in New Mexico last week, which is a new state for us. With these additional agencies, we have increased the number the states that we are now servicing to 37.

Frequently we hear that our country is headed for a health care crisis. Over the next decade if no significant changes are implemented, we will see a continued erosion of the Medicare Trust Fund. Currently, 12% of all Medicare beneficiaries account for 69% of Medicare spending. The time is now to develop ways to control future spending.

There are several legislative initiatives that are currently being considered to help better manage healthcare resources utilized by the chronic pro-morbid population. Amedisys and a coalition of leaders from the home health industry are at the forefront of this effort.

Amedisys will continue to benefit from favorable demographic trends for the foreseeable future. But more in just riding this wave, we want to position the company to address the care management needs of this aging demographic and thus maximize our growth opportunities. That is why delivering high quality, cost effective care to elderly patients with multiple chronic conditions is our (inaudible 00:13:16) with the nationwide footprint, a highly skilled and compassionate team of commissions, best practices, care management programs and a best-in-class technology platform, our focus at Amedisys is to be a key part of the solution to the healthcare crisis in our country.

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