The following is a summary of the Enhabit, Inc. (EHAB) Q4 2023 Earnings Call Transcript:
Financial Performance:
Enhabit Inc. reported consolidated net revenue of $260.6 million for Q4, indicating a 1% decline YoY.
Adjusted EBITDA amounted to $25.2 million, marking a 16.8% decrease compared to the previous year.
Home health segment saw a growth of 3.9% in total admissions year-over-year.
In the hospice segment, revenue increased by 7.8% YoY, with its adjusted EBITDA increasing by $6.1 million.
Cost management efforts resulted in flat YoY cost per visit in the home health segment, and a minor increase in cost per visit in the hospice segment.
The company ended the year with a leverage ratio of 5.4x and available liquidity of $61 million, having generated approximately $59 million in free cash flow.
2024 guidance anticipates net service revenue between $1,076 billion to $1.102 billion and adjusted EBITDA of $98 million to $110 million.
Business Progress:
Enhabit has been focusing on its value proposition for payers, shifting Medicare Advantage volumes into payer innovation agreements, and managed to control costs effectively.
Despite a slight drop in admissions, the hospice operations indicate potential growth, with a sequential increase of 1.3% over the third quarter in the average daily census.
Enhabit has managed to strategically increase its non-episodic visits in new payer innovation contracts markedly from 5% in Q1 to 25% in Q4.
Investments in IT infrastructure and talent acquisition have led to an increase in home office general and administrative expenses.
The company's strategic plans for 2024 include stabilizing traditional Medicare as a percentage of total home health revenue, progressing in its payer innovation strategy, and increasing utilization of clinical resources.
The company secured a new national advanced episodic model contract, bolstering access to home care for patients being discharged from institutional settings.
The company plans the opening of 10 new locations in 2024, along with the completion of regulatory approval for two locations awaited from 2023.
More details: Enhabit IR
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