Amedisys reports fourth-quarter loss; treasurer leaves company

Amedisys Inc., one of the country’s largest home health companies, reported a fourth-quarter loss of $9.6 million, or 30 cents per share, compared with a $106.8 million loss, or $3.52 per share, a year ago.

The Baton Rouge company also reported Thomas Dolan, senior vice president of finance and treasurer, had left the company. Last month, William Borne, the company’s founder, chairman and chief executive officer, resigned.

For the year, Amedisys lost $96.2 million, or $3.08 per share, compared with an $83.6 million loss, or $2.79 per share, in 2012.

“We are going to call a spade a spade: (Amedisys) has failed in virtually every regard in 2013 to meet expectations and safeguard the intrinsic value of the company, in our view,” said Sheryl Skolnick, managing director at CRT Capital.

Brian Tanquilut, an analyst with Jefferies & Co., said despite steps Amedisys has taken, the company obviously still has some weak points.

While revenue was a little better than expected, the same-store revenue, patient admissions and recertifications remain under pressure, and those things have affected profit during the past year, he said.

“This is clearly a turnaround story at this point,” said Tanquilut, whose employer makes a market in Amedisys securities.

In 2014, Amedisys is looking at a new CEO, lower home health payments from the federal government and closing more money-losing agencies.

Amedisys closed 26 locations in the fourth quarter and probably isn’t done, he said.

Amedisys provides home health and hospice care to about 360,000 patients each year, with operations in 37 states, Puerto Rico and Washington, D.C.

Skolnick issued her blistering report minutes before Amedisys ended its Wednesday conference call with investors and stock analysts.

The only thing that has saved shareholders from disaster, Skolnick said, is that KKR Asset Management has propped up Amedisys’ stock.

In 2013, KKR began amassing a stake in Amedisys as an activist shareholder. KKR now controls close to 15 percent of Amedisys shares. KKR’s intervention has helped boost the price of Amedisys shares.

In August, Amedisys shares jumped 22 percent on the day KKR revealed it had acquired an 8.5 percent stake in the home health and hospice company.

Skolnick reiterated a sell recommendation for Amedisys.

She also criticized the company for taking questions from only three analysts before ending the conference call.

Interim Chief Executive Officer Ronald Laborde said an unexpected increase in employee health care costs contributed to the lower fourth-quarter results. Amedisys also had higher costs per visit in its home-health segment.

“Tom’s departure … was completely independent of anything that’s going on here, any other changes,” Laborde said of Dolan, the company’s treasurer.

Laborde told analysts and investors that the rest of Amedisys’ top management is pretty stable.

The search for a new CEO is in the beginning stages, and Amedisys’ board wants to make sure it makes the right choice, Laborde said.

Despite the poor report, Amedisys shares rose in the first few hours of trading before settling at $15.42, down 24 cents.

Amedisys’ share price has fallen more than 11 percent in the past two weeks.

On Feb. 27, three days after the resignation of Borne, the founder, chairman and CEO, Amedisys closed at $17.42. But those gains proved short-lived.

Amedisys beat analysts’ revenue expectations for the fourth quarter and met them for the year. But the company’s results fell short of the 1-cent loss analysts had forecast for the quarter and 30 cents per share for the year.

Stock analysts surveyed by Thomason Reuters had projected revenue of $295 million for the fourth quarter and $1.25 billion for the year.

Amedisys reported fourth-quarter revenue at $303.5 million, compared with $351.6 million a year ago. For 2013, Amedisys’ revenue was $1.25 billion, down from $1.4 billion in 2012.

Amedisys reported its results on an adjusted basis were much closer to analysts’ forecasts.

In the fourth quarter, those results excluded losses on paper that included writing down goodwill, which can include the value of the company’s brand, as well as the costs related to selling, consolidating and closing care centers.

For the year, those results excluded the $150 million set aside to settle a U.S. Department of Justice investigation into Amedisys’ Medicare billing practices.

The investigation began in 2010 following an article in The Wall Street Journal that questioned whether home health companies were doing unnecessary visits to trigger thousands in Medicare bonus payments. Amedisys has admitted no wrongdoing but said it was settling to avoid a lengthy legal battle.

The 2012 adjusted results excluded a $162 million paper loss for goodwill and other intangible assets.

Without those expenses, Amedisys’ fourth-quarter loss was $1.7 million, or 5 cents per share, compared with earnings of $7.7 million, or 25 cents per share, a year ago. For the year, Amedisys had earnings of $8.6 million, or 27 cents per share, compared with $34.8 million, or $1.15 per share, in 2012.

Tanquilut said he has a hold rating on Amedisys for three reasons:

The stock isn’t cheap at $15-plus. Analysts expect 2014 per-share earnings around 4 cents or 5 cents. On a price-to-earnings basis that’s very expensive.

Amedisys has consistently missed Wall Street’s projections.

The company may face incremental rate cuts because Congress is still looking for money. While the target on home nursing’s back is smaller, the industry is still viewed as a likely funding source.