Company Quick10K Filing
Amedisys
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 33 $3,941
10-Q 2019-10-30 Quarter: 2019-09-30
10-Q 2019-08-01 Quarter: 2019-06-30
10-Q 2019-05-01 Quarter: 2019-03-31
10-K 2019-02-28 Annual: 2018-12-31
10-Q 2018-10-30 Quarter: 2018-09-30
10-Q 2018-08-01 Quarter: 2018-06-30
10-Q 2018-05-08 Quarter: 2018-03-31
10-K 2018-02-28 Annual: 2017-12-31
10-Q 2017-11-08 Quarter: 2017-09-30
10-Q 2017-07-27 Quarter: 2017-06-30
10-Q 2017-05-03 Quarter: 2017-03-31
10-K 2017-03-01 Annual: 2016-12-31
10-Q 2016-11-04 Quarter: 2016-09-30
10-Q 2016-08-03 Quarter: 2016-06-30
10-Q 2016-05-04 Quarter: 2016-03-31
10-K 2016-03-10 Annual: 2015-12-31
10-Q 2015-11-05 Quarter: 2015-09-30
10-Q 2015-07-29 Quarter: 2015-06-30
10-Q 2015-04-29 Quarter: 2015-03-31
10-K 2015-03-04 Annual: 2014-12-31
10-Q 2014-10-29 Quarter: 2014-09-30
10-Q 2014-07-30 Quarter: 2014-06-30
10-Q 2014-05-08 Quarter: 2014-03-31
10-K 2014-03-12 Annual: 2013-12-31
10-Q 2013-11-12 Quarter: 2013-09-30
10-Q 2013-07-31 Quarter: 2013-06-30
10-Q 2013-04-30 Quarter: 2013-03-31
10-Q 2012-11-06 Quarter: 2012-09-30
10-Q 2012-08-07 Quarter: 2012-06-30
10-Q 2012-05-09 Quarter: 2012-03-31
10-K 2012-02-28 Annual: 2011-12-31
10-Q 2011-11-01 Quarter: 2011-09-30
10-Q 2011-08-02 Quarter: 2011-06-30
10-Q 2011-04-26 Quarter: 2011-03-31
10-K 2011-02-22 Annual: 2010-12-31
10-Q 2010-10-26 Quarter: 2010-09-30
10-Q 2010-08-09 Quarter: 2010-06-30
10-Q 2010-04-27 Quarter: 2010-03-31
10-K 2010-02-23 Annual: 2009-12-31
8-K 2020-01-14 Regulation FD, Exhibits
8-K 2020-01-02 Regulation FD, Exhibits
8-K 2019-11-25 Regulation FD, Exhibits
8-K 2019-10-29 Earnings, Regulation FD, Earnings, Exhibits
8-K 2019-10-17
8-K 2019-07-31 Earnings, Regulation FD, Earnings, Exhibits
8-K 2019-07-25 Regulation FD, Exhibits
8-K 2019-06-07 Shareholder Vote
8-K 2019-04-30 Earnings, Regulation FD, Earnings, Exhibits
8-K 2019-04-01 Regulation FD, Exhibits
8-K 2019-02-27 Earnings, Regulation FD, Earnings, Exhibits
8-K 2019-02-25 Regulation FD, Exhibits
8-K 2019-02-19 Regulation FD, Exhibits
8-K 2019-02-12 Enter Agreement, Officers, Regulation FD, Exhibits
8-K 2019-02-01 Enter Agreement, M&A, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2019-01-08 Regulation FD, Exhibits
8-K 2018-10-29 Earnings, Regulation FD, Earnings, Exhibits
8-K 2018-10-09 Enter Agreement, Regulation FD, Exhibits
8-K 2018-10-03 Regulation FD, Exhibits
8-K 2018-09-27 Officers, Exhibits
8-K 2018-08-29 Regulation FD, Exhibits
8-K 2018-07-31 Earnings, Regulation FD, Earnings, Exhibits
8-K 2018-07-31 Regulation FD, Exhibits
8-K 2018-06-29 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2018-06-06 Officers, Shareholder Vote, Exhibits
8-K 2018-06-04 Enter Agreement, M&A, Regulation FD, Exhibits
8-K 2018-05-18 Enter Agreement
8-K 2018-05-07 Earnings, Regulation FD, Earnings, Exhibits
8-K 2018-04-20 Officers, Regulation FD, Exhibits
8-K 2018-02-27 Earnings, Officers, Regulation FD, Earnings, Exhibits
8-K 2018-01-10 Regulation FD, Exhibits
AMED 2019-09-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-3.2 amed-20193009xexx32.htm
EX-10.1 amed-20193009xexx101.htm
EX-31.1 amed-20193009xexx311.htm
EX-31.2 amed-20193009xexx312.htm
EX-32.1 amed-20193009xexx321.htm
EX-32.2 amed-20193009xexx322.htm

Amedisys Earnings 2019-09-30

AMED 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
CHE 5,769 1,094 476 1,837 573 201 286 5,851 31% 20.5 18%
TDOC 4,519 1,565 563 493 332 -108 -59 4,078 67% -68.7 -7%
AMED 3,941 1,206 643 0 0 125 185 4,205 22.8 10%
USPH 1,538 557 193 473 109 54 77 1,570 23% 20.4 10%
ADUS 1,001 409 119 566 153 19 37 984 27% 26.9 5%
CIVI 636 1,100 927 1,613 327 12 158 1,277 20% 8.1 1%
CCM 476 4,585 2,312 0 0 0 0 191 0%
DPLO 448 1,315 1,016 5,278 339 -472 -337 901 6% -2.7 -36%
RAD 371 10,530 9,494 21,624 4,634 -603 203 3,785 21% 18.6 -6%
PETS 321 145 21 276 87 31 40 237 32% 6.0 21%

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549 
 
FORM 10-Q
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 0-24260 
 
image0.jpg
AMEDISYS, INC.
(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
 
Delaware
 
11-3131700
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
3854 American Way, Suite A, Baton Rouge, LA 70816
(Address of principal executive offices, including zip code)
(225) 292-2031 or (800) 467-2662
(Registrant’s telephone number, including area code)
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.001 per share
 
AMED
 
The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 
 
 
 
 
 
 
Large accelerated filer
 
  
Accelerated filer
 
 
 
 
 
Non-accelerated filer
 
  
Smaller reporting company
 
 
 
 
 
Emerging growth company
 
  
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No  
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, is as follows: Common stock, $0.001 par value, 32,255,257 shares outstanding as of October 25, 2019.
 





TABLE OF CONTENTS
 
 
 
;;;
 
PART I.
 
ITEM 1.
 
 
 
 
 
ITEM 2.
ITEM 3
ITEM 4.
 
 
 
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.





SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
When included in this Quarterly Report on Form 10-Q, or in other documents that we file with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, competition in the healthcare industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to consistently provide high-quality care, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to realize the anticipated benefits of the acquisition of Compassionate Care Hospice ("CCH"), our ability to comply with requirements stipulated in the CCH corporate integrity agreement, and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law. For a discussion of some of the factors discussed above as well as additional factors, see our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019, particularly, Part I, Item 1A - Risk Factors therein, which are incorporated herein by reference and Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Additional risk factors may also be described in reports that we file from time to time with the SEC.
Available Information
Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website. In addition, we make available on the Investor Relations subpage of our website (under the link “SEC filings”), free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as reasonably practicable after we electronically file or furnish such reports with the SEC. Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Quality of Care, Compliance and Ethics and Nominating and Corporate Governance Committees of our Board are also available on the Investor Relations subpage of our website (under the link “Governance”). Reference to our website does not constitute incorporation by reference of the information contained on the website and should not be considered part of this document. Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov.

1



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

September 30, 2019
(unaudited)
 
December 31, 2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
20,757

 
$
20,229

Patient accounts receivable
254,703

 
188,972

Prepaid expenses
10,601

 
7,568

Other current assets
13,458

 
7,349

Total current assets
299,519

 
224,118

Property and equipment, net of accumulated depreciation of $101,446 and $95,472
29,969

 
29,449

Operating lease right of use assets
84,124

 

Goodwill
660,472

 
329,480

Intangible assets, net of accumulated amortization of $36,799 and $33,050
66,468

 
44,132

Deferred income taxes
17,568

 
35,794

Other assets
54,260

 
54,145

Total assets
$
1,212,380

 
$
717,118

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
35,901

 
$
28,531

Payroll and employee benefits
115,899

 
92,858

Accrued expenses
127,111

 
99,475

Current portion of long-term obligations
8,959

 
1,612

Current portion of operating lease liabilities
26,783

 

Total current liabilities
314,653

 
222,476

Long-term obligations, less current portion
231,641

 
5,775

Operating lease liabilities, less current portion
56,619

 

Other long-term obligations
6,002

 
6,234

Total liabilities
608,915

 
234,485

Commitments and Contingencies—Note 6

 
 
Equity:
 
 
 
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding

 

Common stock, $0.001 par value, 60,000,000 shares authorized; 36,599,273 and 36,252,280 shares issued; and 32,246,575 and 31,973,505 shares outstanding
37

 
36

Additional paid-in capital
634,854

 
603,666

Treasury stock, at cost 4,352,698 and 4,278,775 shares of common stock
(251,070
)
 
(241,685
)
Accumulated other comprehensive income
15

 
15

Retained earnings
218,728

 
119,550

Total Amedisys, Inc. stockholders’ equity
602,564

 
481,582

Noncontrolling interests
901

 
1,051

Total equity
603,465

 
482,633

Total liabilities and equity
$
1,212,380

 
$
717,118

The accompanying notes are an integral part of these condensed consolidated financial statements.

2



AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 
 
For the Three-Month 
Periods Ended September 30
 
For the Nine-Month 
Periods Ended September 30
 
2019
 
2018
 
2019
 
2018
Net service revenue
$
494,631

 
$
417,335

 
$
1,454,955

 
$
1,228,200

Cost of service, excluding depreciation and amortization
288,708

 
249,739

 
854,734

 
730,612

General and administrative expenses:
 
 
 
 
 
 
 
Salaries and benefits
99,941

 
79,367

 
293,127

 
232,213

Non-cash compensation
6,298

 
4,842

 
18,451

 
12,653

Other
48,474

 
40,335

 
140,284

 
124,119

Depreciation and amortization
4,366

 
3,164

 
12,440

 
9,882

Operating expenses
447,787

 
377,447

 
1,319,036

 
1,109,479

Operating income
46,844

 
39,888

 
135,919

 
118,721

Other income (expense):
 
 
 
 
 
 
 
Interest income
15

 
29

 
59

 
263

Interest expense
(3,778
)
 
(1,991
)
 
(11,459
)
 
(5,834
)
Equity in (losses) earnings from equity method investments
(812
)
 
1,625

 
4,120

 
6,461

Miscellaneous, net
1,975

 
1,822

 
2,404

 
2,782

Total other (expense) income, net
(2,600
)
 
1,485

 
(4,876
)
 
3,672

Income before income taxes
44,244

 
41,373

 
131,043

 
122,393

Income tax expense
(9,919
)
 
(9,825
)
 
(31,105
)
 
(29,984
)
Net income
34,325

 
31,548

 
99,938

 
92,409

Net income attributable to noncontrolling interests
(193
)
 
(171
)
 
(760
)
 
(524
)
Net income attributable to Amedisys, Inc.
$
34,132

 
$
31,377

 
$
99,178

 
$
91,885

Basic earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Amedisys, Inc. common stockholders
$
1.06

 
$
0.99

 
$
3.09

 
$
2.78

Weighted average shares outstanding
32,211

 
31,815

 
32,096

 
33,075

Diluted earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Amedisys, Inc. common stockholders
$
1.03

 
$
0.96

 
$
3.01

 
$
2.71

Weighted average shares outstanding
33,002

 
32,691

 
32,944

 
33,852

The accompanying notes are an integral part of these condensed consolidated financial statements.

3



AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands, except common stock shares)
(Unaudited)
 
For the Three-Months Ended September 30, 2019
 
Total
 
Common Stock
 
Additional
Paid-in
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive Income
 
Retained
Earnings
 
Noncontrolling
Interests
Shares
 
Amount
 
Balance, June 30, 2019
$
562,942

 
36,445,591

 
$
36

 
$
623,309

 
$
(246,175
)
 
$
15

 
$
184,596

 
$
1,161

Issuance of stock – employee stock purchase plan
850

 
8,230

 

 
850

 

 

 

 

Issuance of stock – 401(k) plan
2,353

 
19,381

 

 
2,353

 

 

 

 

Issuance/(cancellation) of non-vested stock

 
88,334

 
1

 
(1
)
 

 

 

 

Exercise of stock options
2,045

 
37,737

 

 
2,045

 

 

 

 

Non-cash compensation
6,298

 

 

 
6,298

 

 

 

 

Surrendered shares
(4,895
)
 

 

 

 
(4,895
)
 

 

 

Noncontrolling interest distribution
(453
)
 

 

 

 

 

 

 
(453
)
Net income
34,325

 

 

 

 

 

 
34,132

 
193

Balance, September 30, 2019
$
603,465

 
36,599,273

 
$
37


$
634,854

 
$
(251,070
)
 
$
15

 
$
218,728

 
$
901

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three-Months Ended September 30, 2018
 
Total
 
Common Stock
 
Additional
Paid-in
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive Income
 
Retained
Earnings
 
Noncontrolling
Interests
 
Shares
 
Amount
 
Balance, June 30, 2018
$
409,061

 
36,044,177

 
$
36

 
$
585,137

 
$
(237,947
)
 
$
15

 
$
60,712

 
$
1,108

Issuance of stock – employee stock purchase plan
630

 
8,673

 

 
630

 

 

 

 

Issuance of stock – 401(k) plan
2,404

 
28,123

 

 
2,404

 

 

 

 

Issuance/(cancellation) of non-vested stock

 
63,098

 

 

 

 

 

 

Exercise of stock options
140

 
2,578

 

 
140

 

 

 

 

Non-cash compensation
4,842

 

 

 
4,842

 

 

 

 

Surrendered shares
(2,589
)
 

 

 

 
(2,589
)
 

 

 

Noncontrolling interest distribution
(180
)
 

 

 

 

 

 

 
(180
)
Repurchase of noncontrolling interest
(361
)
 

 

 
(614
)
 

 

 

 
253

Net income
31,548

 

 

 

 

 

 
31,377

 
171

Balance, September 30, 2018
$
445,495

 
36,146,649

 
$
36

 
$
592,539

 
$
(240,536
)
 
$
15

 
$
92,089

 
$
1,352

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Nine-Months Ended September 30, 2019
 
Total
 
Common Stock
 
Additional
Paid-in
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive Income
 
Retained
Earnings
 
Noncontrolling
Interests
 
Shares
 
Amount
 
Balance, December 31, 2018
$
482,633

 
36,252,280

 
$
36

 
$
603,666

 
$
(241,685
)
 
$
15

 
$
119,550

 
$
1,051

Issuance of stock – employee stock purchase plan
2,384

 
23,267

 

 
2,384

 

 

 

 

Issuance of stock – 401(k) plan
6,966

 
57,783

 

 
6,966

 

 

 

 

Issuance/(cancellation) of non-vested stock

 
185,515

 
1

 
(1
)
 

 

 

 

Exercise of stock options
3,388

 
80,428

 

 
3,388

 

 

 

 

Non-cash compensation
18,451

 

 

 
18,451

 

 

 

 

Surrendered shares
(9,385
)
 

 

 

 
(9,385
)
 

 

 

Noncontrolling interest distribution
(910
)
 

 

 

 

 

 

 
(910
)
Net income
99,938

 

 

 

 

 

 
99,178

 
760

Balance, September 30, 2019
$
603,465

 
36,599,273

 
$
37


$
634,854

 
$
(251,070
)
 
$
15

 
$
218,728

 
$
901

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Nine-Months Ended September 30, 2018
 
Total
 
Common Stock
 
Additional
Paid-in
Capital
 
Treasury
Stock
 
Accumulated
Other
Comprehensive Income
 
Retained
Earnings
 
Noncontrolling
Interests
 
Shares
 
Amount
 
Balance, December 31, 2017
$
516,426

 
35,747,134

 
$
35

 
$
568,780

 
$
(53,713
)
 
$
15

 
$
204

 
$
1,105

Issuance of stock – employee stock purchase plan
1,787

 
32,909

 

 
1,787

 

 

 

 

Issuance of stock – 401(k) plan
7,185

 
113,082

 

 
7,185

 

 

 

 

Issuance/(cancellation) of non-vested stock

 
169,811

 
1

 
(1
)
 

 

 

 

Exercise of stock options
2,749

 
83,713

 

 
2,749

 

 

 

 

Non-cash compensation
12,653

 

 

 
12,653

 

 

 

 

Surrendered shares
(5,421
)
 

 

 

 
(5,421
)
 

 

 

Shares repurchased
(181,402
)
 

 

 

 
(181,402
)
 

 

 

Noncontrolling interest distribution
(530
)
 

 

 

 

 

 

 
(530
)
Repurchase of noncontrolling interest
(361
)
 

 

 
(614
)
 

 

 

 
253

Net income
92,409

 

 

 

 

 

 
91,885

 
524

Balance, September 30, 2018
$
445,495

 
36,146,649

 
$
36

 
$
592,539

 
$
(240,536
)
 
$
15

 
$
92,089

 
$
1,352

The accompanying notes are an integral part of these condensed consolidated financial statements.

4



AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 
For the Nine-Month 
Periods Ended September 30
 
2019
 
2018
Cash Flows from Operating Activities:
 
 
 
Net income
$
99,938

 
$
92,409

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
12,440

 
9,882

Non-cash compensation
18,451

 
12,653

401(k) employer match
7,545

 
6,934

Amortization and impairment of operating lease right of use assets
27,014

 

Loss on disposal of property and equipment
6

 
738

Deferred income taxes
17,798

 
14,916

Equity in earnings from equity method investments
(4,120
)
 
(6,461
)
Amortization of deferred debt issuance costs/debt discount
653

 
596

Return on equity investment
3,727

 
4,373

Changes in operating assets and liabilities, net of impact of acquisitions:
 
 
 
Patient accounts receivable
(39,469
)
 
6,166

Other current assets
(10,194
)
 
(32
)
Other assets
202

 
726

Accounts payable
(8,145
)
 
(670
)
Accrued expenses
27,903

 
14,758

Other long-term obligations
(231
)
 
2,462

Operating lease liabilities
(24,116
)
 

Operating lease right of use assets
(2,622
)
 

Net cash provided by operating activities
126,780

 
159,450

Cash Flows from Investing Activities:
 
 
 
Proceeds from sale of deferred compensation plan assets
287

 
563

Proceeds from the sale of property and equipment
158

 
51

Investments in equity method investees
(210
)
 
(3,477
)
Purchases of property and equipment
(6,337
)
 
(5,684
)
Acquisitions of businesses, net of cash acquired
(345,460
)
 
(4,074
)
Net cash used in investing activities
(351,562
)
 
(12,621
)
Cash Flows from Financing Activities:
 
 
 
Proceeds from issuance of stock upon exercise of stock options
3,388

 
2,749

Proceeds from issuance of stock to employee stock purchase plan
2,384

 
1,787

Shares withheld upon stock vesting
(9,385
)
 
(5,421
)
Noncontrolling interest distribution
(910
)
 
(530
)
Proceeds from borrowings under term loan
175,000

 

Proceeds from borrowings under revolving line of credit
192,500

 
127,500

Repayments of borrowings under revolving line of credit
(133,000
)
 
(70,000
)
Principal payments of long-term obligations
(3,820
)
 
(91,071
)
Debt issuance costs
(847
)
 
(2,433
)
Purchase of company stock

 
(181,402
)
Repurchase of noncontrolling interest

 
(361
)
Net cash provided by (used in) financing activities
225,310

 
(219,182
)
Net increase (decrease) in cash and cash equivalents
528

 
(72,353
)
Cash and cash equivalents at beginning of period
20,229

 
86,363

Cash and cash equivalents at end of period
$
20,757

 
$
14,010

Supplemental Disclosures of Cash Flow Information:
 
 
 
Cash paid for interest
$
7,756

 
$
2,989

Cash paid for income taxes, net of refunds received
$
17,656

 
$
11,017

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)





1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS
Amedisys, Inc., a Delaware corporation, (together with its consolidated subsidiaries, referred to herein as “Amedisys,” “we,” “us,” or “our”) is a multi-state provider of home health, hospice and personal care services with approximately 74% of our revenue derived from Medicare for the three and nine-month periods ended September 30, 2019 and approximately 73% and 74% of our revenue derived from Medicare for the three and nine-month periods ended September 30, 2018, respectively. As of September 30, 2019, we owned and operated 321 Medicare-certified home health care centers, 137 Medicare-certified hospice care centers and 12 personal-care care centers in 38 states within the United States and the District of Columbia.
Basis of Presentation
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of the results of our operations for the entire year and have not been audited by our independent auditors.
This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019 (the “Form 10-K”), which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by SEC rules and regulations.
Recently Adopted Accounting Pronouncements
On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842); ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; and ASU 2018-11, Targeted Improvements (collectively, "Topic 842") using a modified retrospective transition approach, which requires the new standards to be applied to all leases existing at the date of initial application. Under Topic 842, lessees are required to recognize a lease liability and right-of-use asset ("ROU asset") for all leases with a term greater than twelve months and to disclose key information about leasing arrangements. Additionally, leases will be classified as either financing or operating; the classification will determine the pattern of expense recognition and classification within the statement of operations.
We are using the standards' effective date as our date of initial application. Consequently, our financial information was not updated and the disclosures required under the new standard are not provided for dates and periods prior to January 1, 2019.
The new standard provides several optional practical expedients that can be adopted at transition. We have elected the "package of practical expedients" which allows us to not reassess our prior conclusions regarding lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us.
The most significant effects related to this adoption relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and fleet operating leases; and (2) significant new disclosures about our leasing activities. Upon adoption, we recognized approximately $80 million in additional operating lease liabilities with corresponding ROU assets of approximately the same amount.
The new standard also provides practical expedients for an entity's ongoing accounting. We have elected the practical expedient that allows us to not separate lease and non-lease components for all of our leases. We are applying the short-term lease recognition exemption to certain information technology leases; therefore, we did not recognize ROU assets and lease liabilities for these leases.
Use of Estimates
Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

6


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




Principles of Consolidation
These unaudited condensed consolidated financial statements include the accounts of Amedisys, Inc. and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying unaudited condensed consolidated financial statements, and business combinations accounted for as purchases have been included in our unaudited condensed consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below.
Investments
We consolidate investments when the entity is a variable interest entity and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our condensed consolidated financial statements.
We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a variable interest entity in which we are the primary beneficiary. The book value of investments that we account for under the equity method of accounting was $35.4 million and $35.1 million as of September 30, 2019 and December 31, 2018, respectively, and is reflected in other assets within our condensed consolidated balance sheets.
We account for investments in entities in which we have less than a 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
We account for revenue from contracts with customers in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (collectively, "ASC 606"), and as such, we recognize revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. The Company's cost of obtaining contracts is not material.

Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the optional exemption provided by ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by estimates for explicit and implicit price concessions. Explicit price concessions include contractual adjustments provided to patients and third-party payors. Implicit price concessions include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from payment reviews and adjustments arising from our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change.

Explicit price concessions are recorded for the difference between our standard rates and the contractual rates to be realized from patients, third party payors and others for services provided.

Implicit price concessions are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession represents

7


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. The Company assesses its ability to collect for the healthcare services provided at the time of patient admission based on the Company's verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare represents approximately 74% of the Company's consolidated net service revenue for the three and nine-month periods ended September 30, 2019 and approximately 73% and 74% of our consolidated net service revenue for the three and nine-month periods ended September 30, 2018, respectively.

Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and payment reviews. We determine our estimates for price concessions related to payment reviews based on our historical experience and success rates in the claim appeals and adjudication process. Revenue is recorded at amounts we estimate to be realizable for services provided.

We determine our estimates for implicit price concessions related to our inability to obtain appropriate billing documentation, authorizations, or face-to-face documentation based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims.

Revenue by payor class as a percentage of total net service revenue is as follows:
 
For the Three-Month Periods Ended September 30
 
For the Nine-Month
Periods Ended September 30
 
2019
 
2018
 
2019
 
2018
Home Health:
 
 
 
 
 
 
 
     Medicare
43
%
 
50
%
 
44
%
 
51
%
     Non-Medicare - Episodic-based
9
%
 
9
%
 
9
%
 
8
%
     Non-Medicare - Non-episodic based
11
%
 
12
%
 
12
%
 
12
%
Hospice (1):
 
 
 
 
 
 
 
     Medicare
31
%
 
23
%
 
30
%
 
23
%
     Non-Medicare
2
%
 
1
%
 
1
%
 
1
%
Personal Care
4
%
 
5
%
 
4
%
 
5
%
 
100
%
 
100
%
 
100
%
 
100
%
(1) Acquired Compassionate Care Hospice on February 1, 2019 and RoseRock Healthcare on April 1, 2019.


Home Health Revenue Recognition
Medicare Revenue
Net service revenue is recorded under the Medicare prospective payment system (“PPS”) based on an established Federal Medicare home health episode payment rate, that is subject to adjustment based on certain variables, including, but not limited to (a) an outlier payment if our patient’s care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits was four or fewer; (c) a partial payment if a patient transferred to another provider or we admitted a patient transferring from another provider before completing the episode; (d) a payment adjustment based upon the level of therapy services required (with various incremental adjustments made for additional visits, with larger payment increases associated with the sixth, fourteenth and twentieth visit thresholds); (e) the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (f) changes in the base episode payments established by the Medicare Program; and (g) adjustments to the base episode payments for case mix and geographic wages. Medicare rates are based on the severity of the patient's condition, service needs and goals, and other factors relating to the cost of providing services and supplies, bundled into an episode of care, not to exceed 60 days. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed.
The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave their home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services, and receive treatment under a plan of care established and periodically reviewed by a physician. All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprised of the delivery of a series of distinct

8


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, the Company accounts for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. Expected Medicare revenue per episode is recognized based on a pro-rated service output method, utilizing our historical average length of episode prior to discharge.
The base episode payment can be adjusted based on each patient's health including clinical condition, functional abilities and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. In addition, we make adjustments to Medicare revenue if we find we are unable to obtain appropriate billing documentation, authorizations or face-to-face documentation. We estimate the impact of such adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered as an estimated price concession and a corresponding reduction to patient accounts receivable.
A portion of reimbursement from each Medicare episode is billed near the start of each episode, and cash is typically received before all services are rendered. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the company's average percentage of days complete on episodes as of the end of the year. As of September 30, 2019, the difference between the cash received from Medicare for a request for anticipated payment (“RAP”) on episodes in progress and the associated estimated revenue was recorded to accrued expenses within our condensed consolidated balance sheets.
Non-Medicare Revenue
Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs; however, these rates can vary based upon the negotiated terms which generally range from 90% to 100% of Medicare rates.
Non-episodic based Revenue. Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. Explicit price concessions are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make adjustments to non-episodic revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.
Hospice Revenue Recognition
Hospice Medicare Revenue
Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounted for 98% and 99% of our gross Medicare hospice service revenue for the three and nine-month periods ended September 30, 2019, respectively, and 98% and 97% of our gross Medicare hospice service revenue for the three and nine-month periods ended September 30, 2018, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse (“RN”) or medical social worker (“MSW”) for patients in a routine level of care.
The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.
We make adjustments to Medicare revenue for implicit price concessions, which include our inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered.
Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in accrued expenses within our condensed consolidated balance

9


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




sheet. Beginning for the cap year ending October 31, 2017, providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of September 30, 2019, we have recorded $5.3 million in accrued expenses for estimated amounts due back to Medicare for the Federal cap years ended October 31, 2013 through September 30, 2019; approximately $1.9 million of this amount is related to the cap liability acquired as part of the Compassionate Care Hospice ("CCH") acquisition. As of December 31, 2018, we had recorded $1.7 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2013 through September 30, 2019.

Hospice Non-Medicare Revenue
Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Explicit price concessions are recorded for the difference between our standard rates and the contractual rates to be realized from patients, third party payors and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make adjustments to non-Medicare revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price.
Personal Care Revenue Recognition
Personal Care Revenue
We generate net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that is either contractual or fixed by legislation. Net service revenue is recognized at the time services are rendered based on gross charges for the services provided, reduced by estimates for price concessions. We receive payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors include the following elder service agencies: Aging Services Access Points (ASAPs), Senior Care Options (SCOs), Program of All-Inclusive Care for the Elderly (PACE) and the Veterans Administration (VA).
Patient Accounts Receivable
We report accounts receivable from services rendered at their estimated transaction price, which includes price concessions based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. As of September 30, 2019, there is no single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables. Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible. We believe the collectibility risk associated with our Medicare accounts, which represent 59% and 56% of our patient accounts receivable at September 30, 2019 and December 31, 2018, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor.
We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.
Medicare Home Health
For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We submit a RAP for 60% of our estimated payment for the initial episode at the start of care or 50% of the estimated payment for any subsequent episodes of care contiguous with the first episode for a particular patient. The full amount of the episode is billed after the episode has been completed (“final billed”). The RAP received for that particular episode is then deducted from our final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAPs received for that episode will be recouped by Medicare from any other claims in process for that particular provider number. The RAP and final claim must then be resubmitted.

10


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




Medicare Hospice
For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.
Non-Medicare Home Health, Hospice and Personal Care
For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.
Debt Issuance Costs
During the nine-month period ended September 30, 2019, we recorded $0.8 million in deferred debt issuance costs as a reduction to long-term obligations, less current portion in our condensed consolidated balance sheet in connection with our entry into the Amended Credit Agreement (See Note 5 - Long-Term Obligations). As of September 30, 2019 and December 31, 2018, we had unamortized debt issuance costs of $3.7 million and $3.5 million, respectively, recorded as long-term obligations, less current portion in our condensed consolidated balance sheet. We amortize deferred debt issuance costs related to our long-term obligations over the term of the obligation through interest expense, unless the debt is extinguished, in which case unamortized balances are immediately expensed. We amortized $0.2 million and $0.6 million in deferred debt issuance during the three and nine-month periods ended September 30, 2019, respectively. The unamortized debt issuance costs of $3.7 million will be amortized over a weighted-average amortization period of 4.3 years.
Fair Value of Financial Instruments
The following details our financial instruments where the carrying value and the fair value differ (amounts in millions):
 
Fair Value at Reporting Date Using
Financial Instrument
Carrying Value as of
September 30, 2019
 
Quoted Prices in Active
Markets for Identical
Items
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable Inputs
(Level 3)
Long-term obligations
$
240.6

 
$

 
$
236.0

 
$



The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value.

11


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




Weighted-Average Shares Outstanding
Net income per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The following table sets forth, for the periods indicated, shares used in our computation of the weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):
 
For the Three-
Month Periods
Ended September 30,
 
For the Nine-
Month Periods
Ended September 30,
 
2019
 
2018
 
2019
 
2018
Weighted average number of shares outstanding - basic
32,211

 
31,815

 
32,096

 
33,075

Effect of dilutive securities:
 
 
 
 
 
 
 
Stock options
532

 
561

 
543

 
464

Non-vested stock and stock units
259

 
315

 
305

 
313

Weighted average number of shares outstanding - diluted
33,002

 
32,691

 
32,944

 
33,852

Anti-dilutive securities
133

 
51

 
154

 
76


Business Combinations
We account for acquisitions using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Acquisitions are accounted for as purchases and are included in our condensed consolidated financial statements from their respective acquisition dates. Assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets.

 
3. ACQUISITIONS
We complete acquisitions from time to time in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health, hospice and personal care services. The purchase price paid for acquisitions is negotiated through arm’s length transactions, with consideration based on our analysis of, among other things, comparable acquisitions and expected cash flows. Acquisitions are accounted for as purchases and are included in our condensed consolidated financial statements from their respective acquisition dates. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of the acquisitions to our overall corporate strategy. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets for significant acquisitions. The preliminary purchase price allocation is adjusted, as necessary, up to one year after the acquisition closing date if management obtains more information regarding asset valuations and liabilities assumed.
On February 1, 2019, we acquired Compassionate Care Hospice ("CCH"), a national hospice care provider headquartered in New Jersey, for a purchase price of $327.9 million, net of cash acquired of $6.7 million.
The Company is in the process of finalizing its valuation of the assets acquired and liabilities assumed. During the three-month period ended September 30, 2019, we recorded measurement period adjustments based on changes to management's estimates and assumptions related to the assets acquired and liabilities assumed. Based on the Company's preliminary valuation, the total estimated consideration of $327.9 million has been allocated to assets acquired and liabilities assumed as of the acquisition date as follows (amounts in millions):

12


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




 
Amount
Patient accounts receivable
$
26.3<