BIRMINGHAM, Ala., April 27, 2017 /PRNewswire/ -- HealthSouth Corporation (NYSE: HLS), one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based post-acute services, today reported its results of operations for the first quarter ended March 31, 2017.
“We were pleased with the first quarter results which were driven by solid operating performance in both segments,” said Mark Tarr, President and Chief Executive Officer of HealthSouth. “We continue to execute on our strategic priorities including communicating the HealthSouth value proposition to patients, caregivers, referral sources, and payors, discussing risk sharing strategies with acute care hospitals, launching our TeamWorks initiative designed to extrapolate clinical collaboration best practices across all our overlap markets, and using data analytics to improve patient outcomes. In addition, a robust development pipeline in both segments accompanies it all.”
Consolidated Results
Growth | |||||||||||
Q1 2017 | Q1 2016 | Dollars | Percent | ||||||||
(In Millions, Except per Share Data) | |||||||||||
Net operating revenues | $ | 974.8 | $ | 909.8 | $ | 65.0 | 7.1% | ||||
Income from continuing operations attributable to | 0.70 | 0.61 | 0.09 | 14.8% | |||||||
Adjusted earnings per share | 0.70 | 0.61 | 0.09 | 14.8% | |||||||
Cash flows provided by operating activities | 180.8 | 169.6 | 11.2 | 6.6% | |||||||
Adjusted EBITDA | 200.8 | 192.1 | 8.7 | 4.5% | |||||||
Adjusted free cash flow | 147.5 | 139.4 | 8.1 | 5.8% | |||||||
Revenue growth was driven by pricing and volume growth in the inpatient rehabilitation segment and volume growth in the home health and hospice segment.
The increase in income from continuing operations attributable to HealthSouth per diluted share and adjusted earnings per share resulted primarily from increased Adjusted EBITDA. Both earnings per share amounts also included the impact of a lower effective tax rate year over year, higher stock-based compensation expense, lower interest expense resulting from the redemptions of the Company’s 7.75% Senior Notes due 2022 in 2016, higher depreciation and amortization due to acquisitions and capital investments, and a lower share count resulting from share repurchases. The Company benefited from a lower tax rate due to windfall tax benefits from vesting of share-based compensation and certain federal and state income tax settlements.
Growth in cash flows provided by operating activities, Adjusted EBITDA, and adjusted free cash flow resulted primarily from revenue growth.
See attached supplemental information for calculations of non-GAAP measures and reconciliations to their most comparable GAAP measure.
Inpatient Rehabilitation Segment Results
Growth | ||||||||||||||
Q1 2017 | Q1 2016 | Dollars | Percent | |||||||||||
Net operating revenues: | (In Millions) | |||||||||||||
Inpatient | $ | 766.2 | $ | 719.4 | $ | 46.8 | 6.5 | % | ||||||
Outpatient and other | 26.3 | 29.8 | (3.5) | (11.7) | % | |||||||||
Total segment revenue | $ | 792.5 | $ | 749.2 | $ | 43.3 | 5.8 | % | ||||||
(Actual Amounts) | ||||||||||||||
Discharges | 42,259 | 41,098 | 1,161 | 2.8 | % | |||||||||
Same-store discharge growth | 1.6 | % | ||||||||||||
Net patient revenue per discharge | $ | 18,131 | $ | 17,505 | $ | 626 | 3.6 | % | ||||||
(In Millions) | ||||||||||||||
Adjusted EBITDA | $ | 205.4 | $ | 196.9 | $ | 8.5 | 4.3 | % | ||||||
- Revenue - Revenue growth resulted from an increase in net patient revenue per discharge and volume growth. Growth in net patient revenue per discharge resulted primarily from patient mix (higher percentage of stroke and neurological patients). Same-store discharge growth of 2.8% in the first quarter of 2016 included approximately 80 to 100 basis points due to leap year. Discharge growth from new stores resulted from the Company’s joint ventures in Hot Springs, Arkansas (February 2016), Bryan, Texas (August 2016), and Broken Arrow, Oklahoma (August 2016), as well as a wholly owned hospital in Modesto, California (October 2016).
The decrease in outpatient and other revenues was primarily due to the closure of six outpatient programs in the latter half of 2016.
Adjusted EBITDA - The increase in Adjusted EBITDA for the inpatient rehabilitation segment resulted primarily from revenue growth. Salaries and benefits increased as a percent of net operating revenues primarily due to an increase in full-time equivalents.
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