Yahoo Finance Encompass Health Corp (EHC) Q1 2024 Earnings Call Transcript Highlights: Strong Performance and ...
Revenue Growth: 13.4% increase.
Adjusted EBITDA: Increased by 19.2% to $273 million.
Same-Store Sales Growth: 6.7%.
Net Preopening and Ramp-Up Costs: $1.8 million in Q1, down from $4.2 million in the previous year.
Adjusted Free Cash Flow: Increased 5.6% to $167.6 million.
Net Leverage: Decreased to 2.5x from 2.7x at year-end 2023.
2024 Revenue Guidance: Raised to $5.25 billion to $5.325 billion.
2024 Adjusted EBITDA Guidance: Raised to $1.03 billion to $1.065 billion.
2024 Adjusted EPS Guidance: Raised to $3.86 to $4.11.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide more details on the volume in the quarter and how it was affected by the leap year and Easter holiday? A: Douglas E. Coltharp (CFO) explained that the volume remained consistent throughout the quarter, with February benefiting from the extra leap year day and March from the Easter holiday falling on the last day of the quarter. Mark J. Tarr (CEO) added that the volume growth was consistent across all regions.
Q: How are Medicare Advantage rates and contracting affecting you, especially with the negative rate adjustments for next year? A: Douglas E. Coltharp (CFO) mentioned that about 90% of Medicare contracted revenues are on an episodic basis, with a payment differential of just over 3%. He indicated that annual increases tied to the Medicare fee-for-service rule should prevent adverse consequences from Medicare Advantage rate adjustments.
Q: What are the trends in SWB per FTE and opportunities for improvement? A: Douglas E. Coltharp (CFO) noted a 3.8% increase in SWB for the quarter, with expectations of higher growth in benefits for the rest of the year. Premium labor remains above pre-pandemic levels, but has stabilized. Mark J. Tarr (CEO) highlighted ongoing improvements in recruitment and retention, particularly in nursing and therapy.
Q: Can you provide more detail on de novo openings this year, including overall cadence and timing? A: Douglas E. Coltharp (CFO) shared that two de novos are expected to open in Q2, with the rest scheduled for Q3, and possibly one extending into Q4. He discussed the financial impacts of these openings compared to the previous year.
Q: How are you managing the guidance given the strong Q1 results? A: Douglas E. Coltharp (CFO) emphasized that while Q1 was ahead of internal expectations, annual guidance considers various factors including volume trends and labor cost dynamics. He explained the conservative guidance adjustment reflects both unexpected benefits in Q1 and cautious optimism for the rest of the year.
Q: What impact did the Change Healthcare cyber-attack have, and how did you manage the disruptions? A: Douglas E. Coltharp (CFO) detailed the implementation of internal and third-party solutions to maintain claims processing, minimizing the impact on cash flow. He highlighted the strategic decision to reduce dependency on any single vendor to enhance operational resilience.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
