AMED Notes:

10/20/08 – IBD Article

• Growing by acquiring customers

• 325 nursing offices, 29 hospices in 30 states

• Sept bought 6 home care centers which had annual sales of $32 million

• March, paid $395 mil for TLC Healthcare Services

10/28/08 – EPS Release

• Net service revenue $321.6 mil up 77.7%

• EPS $0.87 up 13% (adjusted 0.89 versus 0.61 or 45.9% increase)

• Long-term debt $328.7 mil – up sharply from 37.5 mil end of 2007

11/20/08 – re-affirm guidance

• 2008 revenue still expected at $1.15 bil to $1.175 bil

• EPS Expected at $3.20-3.25

• DSO’s improving and expect further reductions

1/6/09 – 2009 Guidance

• Expect Rev $1.425-1.476 billion – excluding future acquisitions

• EPS Expcted at $4.10-4.30 – also ex future acquisitions

CSFB Report 1/6/09

• Mid-point of EPS range came in 10% above expectations

• CSFB increasingly concerned about government reimbursement plans

• Impressive internal revenue growth of 26% through Q3 2008

• Pricing trends have been strong but may be unsustainable.

Raymond James 1/13/09 – Strong Buy

• Focuses largely on medicare patients – favorable reimbursement economics and growing patient base

• Management dos not believe 5.5% reimbursement reduction will be enacted (medPAC)

• TLC acquisition largely integrated

  • TLC margins from 22% to AMED average 33%

  • Equates to $40 mil in operating profit

  • RAJA estimates $1.50 per share accretive for 2010 vs. $0.40 when initially announced

  • Facing investor skepticism and focus on DSO

• Company has collected 98% of all bills and 99.5% of all medicare revenue

• Acquisition pipeline remains robust

• Company receives well below industry average referrals from hospitals and higher than average referrals from physicians – strong case mix – more acute, higher revenue.

RBC Note – 2/27/09

-          Home health companies down on concerns of reimbursement resulting from obama budget

-          Home health accounts for small portion of medicare budget

-          Cost of home care is cheaper than nursing homes or hospital

-          AMED has strong compliance system which should help with favorable Medicare treatment

-          Potential to evolve to comprehensive chronic care provider – staf of 800 sales reps tomeet with physicians and hospitals

 

RBC Note 4/29/09

-          EPS $0.99 versus estimate of $0.95 (consensus of $0.97)

-          Revenue $341.8 mil up 60.4% (3.7 mil lower than consensus)

-          13% price increase due to specialty programs rollout

-          Lower G&A and interest expense helped profitability

-          Company guiding internatl growth of 15% - could increase as AMED rolls out specialty programs in acquired TLC locations

-          Finished Q1 with 25.6 mil cash and 154.4 mil AR

o        DSO decreased by 6.4 days to 40.4 days

o        $155 mil available under revolving credit facility

-          Spent $7.5 mil on acquisitions during quarter

-          160 start up locations in various stages of opening.