Encompass Health (US:EHC)2024-08-06 20:34Financial Performance - Encompass Health reported a net income of $114.1 million for the three months ended June 30, 2024, compared to $91.4 million for the same period in the previous year, representing a year-over-year increase of approximately 25%[18]. - Basic earnings per share attributable to Encompass Health common shareholders from continuing operations was $1.14 for the current quarter, up from $0.92 in the prior year, reflecting a growth of approximately 24%[18]. - Net income for the six months ended June 30, 2024, was $282.3 million, compared to $226.2 million for the same period in 2023, representing a 24.9% increase[22]. - Net operating revenues for the three months ended June 30, 2024, were $1,301.2 million, an increase of 9.6% compared to $1,187.1 million for the same period in 2023[29]. - Medicare revenues increased to $841.6 million for the three months ended June 30, 2024, up from $763.2 million in the prior year, representing a growth of 10.3%[29]. - The diluted earnings per share for the six months ended June 30, 2024, is $2.22, compared to $1.77 for the same period in 2023, indicating an increase of approximately 25.4%[49]. Assets and Liabilities - Total current assets increased to $938.1 million as of June 30, 2024, compared to $841.8 million at the end of the previous year, marking an increase of about 11.5%[19]. - Total assets reached $6.3887 billion as of June 30, 2024, compared to $6.1024 billion at the end of 2023, indicating a growth of approximately 4.7%[19]. - Current liabilities rose to $694.5 million, up from $656.4 million, reflecting an increase of about 5.8%[19]. - Long-term debt, net of current portion, was reported at $2.6841 billion, slightly down from $2.6878 billion, showing a marginal decrease[19]. - The carrying amount of long-term debt as of June 30, 2024, is $1.588 billion, with estimated fair values of $1.588 billion[45]. Cash Flow and Dividends - Total cash provided by operating activities for the six months ended June 30, 2024, was $456.2 million, up from $434.6 million in the prior year[24]. - The company declared dividends of $0.15 per share, totaling approximately $15.4 million for the quarter[20]. - The company declared dividends of $0.30 per share, totaling $30.8 million for the six months ended June 30, 2024[22]. - The total balance of cash, cash equivalents, and restricted cash at the end of the period was $182.1 million, compared to $154.0 million at the end of June 30, 2023[26]. - Encompass Health's cash and cash equivalents increased to $154.4 million, up from $69.1 million, representing a significant increase of approximately 123%[19]. Operational Highlights - The company operates 163 inpatient rehabilitation hospitals across 37 states and Puerto Rico as of June 30, 2024[27]. - Stock-based compensation for the six months ended June 30, 2024, was $22.9 million, slightly down from $23.5 million in the same period of 2023[24]. - The company reported a loss from discontinued operations of $2.5 million for the six months ended June 30, 2024[24]. - The company repurchased common stock totaling $16.8 million during the six months ended June 30, 2024[24]. Risks and Compliance - The company experienced competitive pressures in the healthcare industry, which could adversely affect revenues and profitability[12]. - Regulatory changes and compliance costs continue to pose risks that may impact financial results and operational efficiency[10]. - The provision for income tax expense for the six months ended June 30, 2024, is $76.6 million, compared to $64.7 million for the same period in 2023, reflecting an increase of approximately 18.4%[47]. Investments and Joint Ventures - The company expects to record a post-tax gain of approximately $23 million from the expansion of its joint venture with Piedmont Healthcare, which will increase capital in excess of par value[31]. - A joint venture with the University of Maryland Rehabilitation Institute resulted in a $26.3 million contribution for a 50% ownership interest in a 60-bed hospital effective July 1, 2023[32]. - Capital contributions from consolidated affiliates amounted to $36.6 million for the six months ended June 30, 2024[22]. Accounting and Fair Value - The company is evaluating the impact of new accounting standards issued by the FASB, including ASU 2023-07 and ASU 2023-09, which may affect future financial disclosures[33][34]. - As of June 30, 2024, the fair value of equity securities is $117.3 million, with $4.0 million from Level 1 inputs and $113.3 million from Level 2 inputs[42]. - The fair value of redeemable noncontrolling interests as of June 30, 2024, is $48.6 million[42]. - The total assets of consolidated variable interest entities as of June 30, 2024, were $204.1 million, a decrease from $207.7 million at the end of 2023[36]. - The company consolidated eight variable interest entities with ownership percentages ranging from 50.0% to 75.0% as of June 30, 2024[35].