Enhabit reports growth and debt reduction in Q2 preliminary results

DALLAS - Enhabit Home Health & Hospice, a prominent home health and hospice provider, disclosed its unaudited preliminary financial outcomes for the second quarter ending June 30, 2024. According to the report, Enhabit anticipates an Adjusted EBITDA of $24.5 million to $25.0 million for the quarter.

The company, which operates under the ticker NYSE:EHAB, revealed a $15 million reduction in bank debt, including a $10 million repayment on its revolving credit facility. Additionally, Enhabit has seen a shift in its non-Medicare visits, with 43% now under payor innovation contracts at improved rates, up from 38% in the first quarter.

Barb Jacobsmeyer, President and CEO of Enhabit, expressed satisfaction with the company's performance, noting a 6.4% year-over-year increase in home health admissions driven by non-Medicare admissions.

Jacobsmeyer also highlighted efficient visit management and growth capacity in the home health segment, as well as a fifth consecutive month of growth in the average daily census for the hospice segment in June.

The company's focus on cost management was evident, with home health cost per visit coming in better than expected and hospice cost per day decreasing as census numbers grew. Jacobsmeyer emphasized that the second quarter is set to be the third consecutive quarter of business stabilization and a step towards profitable growth for Enhabit.

Enhabit's preliminary results are still subject to final adjustments and the completion of financial close procedures. The company plans to report its actual second quarter 2024 financial results on August 6, 2024, followed by a webcast and conference call on August 7, 2024.

Investors are reminded that these preliminary results are based on a press release statement and that actual results may differ upon finalization. Enhabit's management uses Adjusted EBITDA, a non-GAAP financial measure, to compare operating performance consistently across periods by excluding items not indicative of operating performance. However, Adjusted EBITDA should not be viewed as a substitute for GAAP financial measures.

In other recent news, Enhabit, Inc. has been the subject of significant developments. The company received support from Institutional Shareholder Services (ISS) for most of its director nominees ahead of the Annual Meeting of Stockholders.

Enhabit's positive performance in the last two quarters and its responsiveness to investor input were highlighted by the ISS report. However, Enhabit disagreed with the ISS recommendation concerning three of its directors, emphasizing their value in finance, healthcare, and human resources.

AREX Capital Management, a significant shareholder in Enhabit, has expressed dissatisfaction with the company's direction and performance, proposing seven new directors to Enhabit's board.

AREX believes these nominees possess the necessary industry experience to guide Enhabit towards operational improvements. Conversely, Enhabit contends that AREX's nominees lack the relevant experience needed to address current industry-specific issues.

Enhabit has reported a strong start to 2024, attributing its performance to an increase in frontline clinicians, improved home health payer contracts, and controlled general and administrative expenses, despite a slight dip in consolidated net revenue.

Furthermore, the company concluded a nine-month strategic review without receiving any formal offers, despite engagement with multiple potential buyers. These are the recent developments shaping the course of Enhabit, Inc.

InvestingPro Insights

As Enhabit Home Health & Hospice (NYSE:EHAB) continues to navigate its path toward sustainable growth, the real-time financial metrics provided by InvestingPro offer a deeper look into the company's current market standing. With a market capitalization of $475.48 million, Enhabit is positioned in the marketplace as a mid-sized player in the healthcare sector. Despite recent operational improvements, the company's P/E ratio stands at -5.53, reflecting investor sentiment about its past profitability challenges.

However, the InvestingPro Tips suggest a brighter horizon for Enhabit. Analysts anticipate that net income will grow this year, a significant turnaround considering the company has not been profitable over the last twelve months. This expected return to profitability is also echoed by the prediction that Enhabit will be profitable within this fiscal year, which aligns with the company's own emphasis on business stabilization and a step towards profitable growth.

It's important to note that Enhabit does not currently pay a dividend, a decision that may be influenced by its focus on reducing debt and investing in growth. For investors looking for more comprehensive analysis and additional InvestingPro Tips, there are 3 additional tips available on the platform for Enhabit, which can be accessed at Investing.com/pro/EHAB. To take advantage of the full suite of features, including these valuable tips, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

With the next earnings date slated for August 6, 2024, investors will be keen to see whether the company's efforts to manage costs and improve payor contracts will reflect positively in their financial results. The InvestingPro Fair Value estimate of $8.34, slightly below the analyst target fair value of $8.75, provides a benchmark for investors to consider when evaluating the company's stock potential.

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