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Amedisys Inc. (AMED)
Q2 2018 Earnings Conference Call
August 1, 2018 11:00 ET
Nick Muscato - Vice President, Strategic Finance
Paul Kusserow - President and Chief Executive Officer
Scott Ginn - Chief Financial Officer
Chris Gerard - Chief Operating Officer
Dave Kemmerly - General Counsel and Senior Vice President, Government Affairs
Brian Tanquilut - Jefferies
Matt Larew - William Blair
David MacDonald - SunTrust
Kevin Ellich - Craig-Hallum
Frank Morgan - RBC
Joanna Gajuk - Bank of America/Merrill Lynch
Matthew Gillmor - Robert W. Baird
Previous Statements by AMED
» Amedisys' (AMED) CEO Paul Kusserow on Q1 2018 Results - Earnings Call Transcript
» Amedisys' (AMED) CEO Paul Kusserow on Q4 2017 Results - Earnings Call Transcript
» Amedisys' (AMED) CEO Paul Kusserow on Q3 2017 Results - Earnings Call Transcript
Thank you, operator and welcome to the Amedisys investor conference call to discuss the results of the second quarter ended June 30, 2018. A copy of our press release, supplemental slides, and related Form 8-K filings with the SEC are available on the Investor Relations page of our website.
Speaking today on today’s call from Amedisys will be Paul Kusserow, President and Chief Executive Officer and Scott Ginn, Chief Financial Officer. Also joining us are Chris Gerard, Chief Operating Officer and Dave Kemmerly, General Counsel and Senior Vice President of Government Affairs.
Before we get started with our call, I would like to remind everyone that statements made on this conference call today may constitute forward-looking statements and are protected under the Safe Harbor of Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Amedisys today. The company assumes no obligation to update information provided on this call to reflect subsequent events other than as required under applicable securities laws. These forward-looking statements may involve a number of risks and uncertainties, which may cause the company’s results or actual outcomes to differ materially from such statements. These risks and uncertainties include factors detailed in our SEC filings, including our Forms 10-K, 10-Q, and 8-K. 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 also be available in our Forms 10-K, 10-Q, and 8-K.
Thank you. And now, I will turn the call over to Amedisys’ CEO, Paul Kusserow.
Thanks, Nick and welcome to the Amedisys second quarter 2018 earnings call. It has been another very strong quarter for Amedisys and we are extremely pleased with our results, the progress we have made and the progress we are continuing to make. First, I want to thank all of my colleagues at Amedisys over 18,000 strong who delivered these great results. As I keep saying, we are nothing, but people and our people keep raising the bar, which drives our ultimate goal, taking care of our employees and providing better care for our patients wherever they call home.
Now, for the second quarter results. For the quarter, we generated $413 million in adjusted revenue, up 10% year-over-year, adjusted EBITDA of $50 million, up 38% year-over-year, and adjusted earnings per share of $1, up 61% year-over-year. During the quarter, we were able to accretively buyback 7.1% of our common stock from our partners at KKR. We doubled our borrowing capacity by over $250 million to $550 million. And we saw another quarter of strong growth in all three lines of business. I am also happy to announce that our continued outperformance has led us to increase our full year guidance ranges to better reflect how we see the rest of the year shaping up. Scott will discuss the details of our revised guidance later, but by any measure this is a performance our employees and shareholders should feel good about and be very proud of.
Now, let’s review how we are doing in our four strategic areas of focus, starting with clinical excellence and distinction. Once again, our unwavering focus on clinical quality has paid dividends as our October 2018 STARs score preview puts us at an average of 4.41 stars, up from 4.38 in the July preview. We now have 73 care centers rated at 5 stars, with 94% of our overall portfolio rated at 4 stars or better. This is now the 13th straight quarter of sequential improvement in stars. I would like to acknowledge all of our clinicians who were constantly providing outstanding care and always trying to best our already impressive results.
Great care equals great business and our focus on clinical quality also continues to generate financial returns as our performance in the home health value-based purchasing, VBP pilot indicates. For the second quarter, we have received approximately $250,000 in bonus payments from CMS. This year is the first year of bonus payments and the CMS pilot is limited to nine states, seven of which we have operations in. As the percentage of payments in VBP grows from 3% to 8% by 2022, we will see meaningful revenue upside from our continued industry leading quality performance. Again we hope CMS will use VBP more widely as a way to continually drive quality and reward quality players in our industry. For our hospice business, the Hospice Compare May 2018 release of quality metrics shows Amedisys outperforming the national average in all seven measurement categories. We are very pleased with these results and expect to see more of the same when the updated metrics are released in August.
Moving on to employer of choice, we surpassed our goal of hiring 800 home health BD employees ending the second quarter with 808 employees and have now increased our BD headcount for five consecutive quarters. As we have consistently stated, equally as important as hiring is retaining the talent we bring in. To that point, we have improved our full-time voluntary turnover, again ending the second quarter at 18.1%. I am very pleased with our efforts here, but believe we still have room for further improvement especially within our key nursing workforce. Again, we are a people business and retaining our people underpins many of our strategic priorities, such as readmission reductions and continued industry leading quality scores, further reducing turnover will be a theme we will continue to focus on for the remainder of 2018 and beyond.