Gentiva Health Services, Inc. Q4 2008 Earnings Call Transcript

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Gentiva Health Services, Inc. (GTIV)

Q4 2008 Earnings Call

February 18, 2009 10:00 am ET

Executives

Stephen B. Paige -General Counsel

Ronald A. Malone - Chairman of the Board

H. Anthony Strange - President, Chief Executive Officer

John R. Potapchuk - Chief Financial Officer

Analysts

Whit Mayo - Robert W. Baird & Co.

Ralph Giacobbe - Credit Suisse

Newton Juhng - BB&T Capital Markets

Arthur Henderson - Jefferies & Company

Pito Chickering - Deutsche Bank Securities

John Ransom - Raymond James

Sheryl Skolnick - CRT Capital

David Macdonald - Suntrust Robinson Humphrey

Jeffrey Englander - Standard & Poor’s

Brian Tanquilut - Jeffries & Company

John Ransom - Raymond James

Presentation

Operator

Good morning ladies and gentlemen, I am Steve Paige, General Counsel of Gentiva Health Services. Welcome to the Gentiva Fourth Quarter 28008 Earnings Results Conference Call. Speaking on the call today are Ron Malone. Gentiva’s Chairman, Tony Strange, Chief Executive Officer and President and John Potapchuk, Chief Financial Officer.

We hope that each of you had a chance to review the company’s earnings report, which we released this morning. All statements made during this call relating to future results and events are forward-looking statements that are based on our current expectations. Actual results could differ materially from those projected in forward-looking statements because of a number of risk factors and uncertainties which are discussed in our annual and quarterly SEC filings and in the cautionary statements contained in our press release and on our website.

Our call today will be consistent with the SEC’s Regulation FD. We encourage participants to ask their questions during the call since we have certain limitations on comments that can be made in individual inquiries. Today’s call also conforms to Regulation G regarding the reconciliation to GAAP and non-AAP disclosure. As a result, we will not discuss non-GAAP financial measures on this call except for those set forth in our press release. You may access a replay of this call on our website for the next seven days. Transcripts of the call will be posted on our site within the next 36 hours and will be available for the next 12 months.

Following today’s prepared remarks we will open the call to questions. Please limit your initial comments to one question and one follow up, so that we can accommodate as many callers as possible in the allotted time.

Let me now turn the call over to Gentiva’s chairman, Ron Malone.

Ronald Malone

Good morning and thank you for joining us. Gentiva produced a very solid fourth quarter that wrapped up an outstanding year for our company. In addition to delivering excellent financial results, we completed and integrated three acquisitions that expanded our footprint in the core business. We grew our clinician base significantly while improving retention. We saw the continued growth of our leading specialty programs with the launch of two new services and the expansion of existing programs into many new markets. We divested our sales of the majority of the CareCentrix business and we significantly strengthened our balance sheet to support our future growth objectives. These achievements left Gentiva stronger and healthier than ever before as we entered 2009.

We are sharply focused on growing and improving our business. Our fourth quarter results, which represented our first full quarter since the closing of the CareCentrix transaction, illustrate the benefits of this focus.

I want to take the opportunity to thank all of our employees who have worked so hard to accomplish all of these key objectives. They continue to demonstrate a strong commitment, not only to performance, but also to delivering on our mission of improving the health and well-being of our patients and their families.

As you know we know we transitioned the CEO role to Tony Strange effective January 1. I have high expectations for Tony and his team as they continue to drive a vision of growth, excellence, and service to the patients and communities where Gentiva operates. During 2009 I will serve as Chairman and advocate for our patients and our industry, as we continue to drive the message to policy makers and regulatory leaders that home health is a key part of the solution to the nation’s healthcare challenges.

With that I would like to turn the call over to Tony.

Tony Strange

Thanks Ron and good morning everyone. I would like to take a moment to personally thank Ron for his support and guidance over the last couple of years and for his continued support in the role as chairman. I would also like to thank our entire board of directors for the confidence that they have displayed in me and the rest of the management team at Gentiva.

Over the past several weeks I have been asked on more than one occasion, as the new CEO of Gentiva, what change in direction can be expected. Based on our results over the last several years, including improved clinical outcomes, success in becoming the employer of choice and the continued growth and improved profitability in our Home Health business, the answer is clear. Our current direction is a good one, the stage has been set, and I believe that we are well positioned to accelerate our performance in 2009. With that, let’s turn our attention to our results.

Overall we delivered outstanding performance for the quarter as well as for the whole year. Our 2008 EPS exceeded the raise that we established at the beginning of last year. It is particularly worth noting that we did this in spite of the divestiture of CareCentrix late in Q3. Revenue for the fourth quarter totaled approximately $283 million, which represents a 19% growth rate excluding CareCentrix. Our reported EBITDA for Q4 was $30 million, which represents an increase of over 50% year-over-year excluding CareCentrix. Finally our adjusted net income was $0.44 for the quarter and $1.55 for the year, which is about $0.04 better than the high end of our most recent outlook.

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