LHC Group, Inc. (LHCG) has reported an 8.72 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $9.62 million, or $0.54 a share in the quarter, compared with $8.84 million, or $0.50 a share for the same period last year. Revenue during the quarter grew 13.07 percent to $230.80 million from $204.12 million in the previous year period. Gross margin for the quarter contracted 180 basis points over the previous year period to 38.98 percent. Total expenses were 91.53 percent of quarterly revenues, up from 91.33 percent for the same period last year. That has resulted in a contraction of 20 basis points in operating margin to 8.47 percent.
Operating income for the quarter was $19.55 million, compared with $17.69 million in the previous year period.
Commenting on the announcement, Keith G. Myers, LHC Group's chairman and chief executive officer, said, "LHC Group produced another solid quarter, highlighted by strong growth in total admissions and organic home health admissions. In addition to higher admission volume, our home health admissions continued to increase in acuity, driving a 4.8% increase in average Medicare reimbursement and contributing to 5.4% organic growth in home health net service revenue."
For financial year 2016, LHC Group, Inc. expects revenue to be in the range of $910 million to $920 million. It projects diluted earnings per share to be in the range of $2.05 to $2.08 for the same period.
Operating cash flow improves
LHC Group, Inc. has generated cash of $57.84 million from operating activities during the nine month period, up 12.06 percent or $6.22 million, when compared with the last year period. The company has spent $34.64 million cash to meet investing activities during the nine month period as against cash outgo of $15.76 million in the last year period.
The company has spent $12.83 million cash to carry out financing activities during the nine month period as against cash inflow of $25.34 million in the last year period.
Cash and cash equivalents stood at $16.52 million as on Sep. 30, 2016, down 73.24 percent or $45.21 million from $61.73 million on Sep. 30, 2015.
Working capital drops significantly
LHC Group, Inc. has witnessed a decline in the working capital over the last year. It stood at $72.51 million as at Sep. 30, 2016, down 45.76 percent or $61.17 million from $133.68 million on Sep. 30, 2015. Current ratio was at 1.83 as on Sep. 30, 2016, down from 2.85 on Sep. 30, 2015.
Days sales outstanding went down to 45 days for the quarter compared with 48 days for the same period last year.
Debt remains almost stable
Total debt of LHC Group, Inc. remained almost stable for the quarter at $92.63 million, when compared with the last year period. Total debt was 15.10 percent of total assets as on Sep. 30, 2016, compared with 16.32 percent on Sep. 30, 2015. Debt to equity ratio was at 0.24 as on Sep. 30, 2016, down from 0.27 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 23.96 for the quarter from 40.76 for the same period last year.
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