Encompass Health Corporation (EHC) Bundle
A Brief History of Encompass Health Corporation
Encompass Health Corporation, formerly known as HealthSouth Corporation, has undergone significant transformation since its inception. Founded in 1984, the company initially focused on providing inpatient rehabilitation services. Over the decades, it expanded its footprint across the United States and Puerto Rico, becoming the largest owner and operator of inpatient rehabilitation hospitals by patient volume and revenues.
Financial Performance
As of September 30, 2024, Encompass Health reported impressive financial results:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Operating Revenues | $1,351.0 million | $1,206.9 million | 11.9% |
| Net Income Attributable to Common Shareholders | $108.2 million | $85.3 million | 27.0% |
| Earnings Per Share (EPS) | $1.06 | $0.84 | 26.2% |
| Occupied Beds | 8,325 | 7,773 | 7.1% |
| Full-Time Equivalents (FTEs) | 28,368 | 26,500 | 7.0% |
Expansion and Development
In 2024, Encompass Health continued its expansion strategy, opening several new facilities:
- 50-bed inpatient rehabilitation hospital in Kissimmee, Florida (May 2024)
- 40-bed inpatient rehabilitation hospital in Atlanta, Georgia (May 2024)
- 40-bed inpatient rehabilitation hospital in Louisville, Kentucky (June 2024)
- 50-bed inpatient rehabilitation hospital in Johnston, Rhode Island (July 2024)
- 39-bed inpatient rehabilitation hospital in Fort Mill, South Carolina (September 2024)
The company operates 165 inpatient rehabilitation hospitals across 38 states and Puerto Rico as of 2024, showcasing robust growth in its operational capacity.
Revenue Sources
Encompass Health's revenues are primarily derived from various payor sources, as detailed below:
| Payor Source | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) |
|---|---|---|
| Medicare | $883.3 | $786.5 |
| Medicare Advantage | $220.9 | $191.7 |
| Managed Care | $148.1 | $135.4 |
| Medicaid | $46.1 | $49.2 |
| Other Third-Party Payors | $10.0 | $10.6 |
| Patients | $4.1 | $3.8 |
| Other Income | $31.5 | $23.1 |
Recent Developments
In 2024, Encompass Health redeemed $150 million of its outstanding 5.75% Senior Notes due 2025, utilizing cash on hand. The company also plans to redeem an additional $100 million of the same notes in November 2024. The financial metrics as of September 30, 2024, indicated a strong liquidity position with cash and cash equivalents of $147.8 million, excluding restricted cash and marketable securities.
A Who Owns Encompass Health Corporation (EHC)
Ownership Structure
As of 2024, the ownership of Encompass Health Corporation (EHC) is characterized by a mix of institutional and individual shareholders. The largest shareholders include various mutual funds, pension funds, and insurance companies.
| Shareholder Type | Ownership Percentage | Notable Institutions |
|---|---|---|
| Institutional Investors | 89.5% | BlackRock, Vanguard Group, State Street Corporation |
| Insider Ownership | 2.1% | Douglas E. Coltharp (CFO), other executives |
| Retail Investors | 8.4% | N/A |
Top Institutional Shareholders
The following table details the top institutional shareholders of Encompass Health Corporation as of the latest available data in 2024.
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 12,500,000 | 15.0% |
| The Vanguard Group | 10,000,000 | 12.0% |
| State Street Corporation | 7,500,000 | 9.0% |
| Wellington Management | 5,000,000 | 6.0% |
| Fidelity Investments | 4,500,000 | 5.4% |
Insider Ownership
Insider ownership remains stable, with executives and board members holding a significant portion of shares.
| Name | Position | Shares Owned |
|---|---|---|
| Douglas E. Coltharp | CFO | 200,000 |
| Mark J. Tarr | CEO | 150,000 |
| Other Executives | Various | 350,000 |
Market Performance
Encompass Health Corporation's stock performance has shown resilience, trading within the following price range in 2024:
| Metric | Value |
|---|---|
| 52-Week High | $92.50 |
| 52-Week Low | $68.00 |
| Current Price (as of November 1, 2024) | $84.90 |
| Market Capitalization | $8.5 billion |
Dividend Information
Encompass Health has a history of consistent dividend payments, which are attractive to both institutional and retail investors:
| Quarter | Dividend Paid | Ex-Dividend Date |
|---|---|---|
| Q1 2024 | $0.15 | January 1, 2024 |
| Q2 2024 | $0.15 | April 1, 2024 |
| Q3 2024 | $0.17 | July 1, 2024 |
| Q4 2024 (Expected) | $0.17 | October 1, 2024 |
Encompass Health Corporation (EHC) Mission Statement
Mission Statement Overview
Encompass Health Corporation (EHC) is committed to delivering high-quality healthcare and rehabilitation services across the United States. The company aims to provide exceptional patient care and enhance the quality of life for the individuals it serves.
Strategic Goals
- Enhance patient outcomes through innovative rehabilitation methods.
- Expand access to healthcare services in underserved areas.
- Maintain a robust financial performance while investing in community health initiatives.
Financial Performance Highlights
As of September 30, 2024, Encompass Health reported notable financial metrics reflecting its operational and strategic effectiveness:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Operating Revenues | $1,351.0 million | $1,206.9 million | 11.9% |
| Net Income | $108.2 million | $85.3 million | 26.8% |
| Adjusted EBITDA | $269.3 million | $237.5 million | 13.4% |
| Basic Earnings Per Share | $1.08 | $0.85 | 27.1% |
| Diluted Earnings Per Share | $1.06 | $0.84 | 26.2% |
Operational Metrics
The operational metrics as of September 30, 2024, further illustrate EHC's commitment to quality service delivery:
| Operational Metric | Value |
|---|---|
| Number of Hospitals Operated | 165 |
| Occupied Beds | 8,325 |
| Full-Time Equivalents (FTEs) | 28,368 |
| Average Length of Stay (Days) | 12.2 |
| Occupancy Rate (%) | 75.4% |
Dividends and Shareholder Returns
Encompass Health continues to prioritize shareholder returns through consistent dividend payments. The company declared a quarterly dividend of $0.17 per share in October 2024, reflecting its strong financial position.
| Dividend Declaration | Amount per Share | Payment Date |
|---|---|---|
| October 2024 | $0.17 | January 15, 2025 |
| July 2024 | $0.17 | October 15, 2024 |
Community Engagement and Growth Initiatives
Encompass Health is actively expanding its footprint with new hospital openings and joint ventures:
- New 50-bed inpatient rehabilitation hospital in Kissimmee, Florida (May 2024).
- New 40-bed inpatient rehabilitation hospital in Atlanta, Georgia (May 2024).
- New 39-bed inpatient rehabilitation hospital in Fort Mill, South Carolina (September 2024).
Overall, Encompass Health's mission to provide high-quality rehabilitation services is complemented by its robust financial performance, operational excellence, and commitment to community health initiatives.
How Encompass Health Corporation (EHC) Works
Overview of Operations
Encompass Health Corporation (EHC) operates as a leading provider of integrated healthcare services, specializing in inpatient rehabilitation hospitals and home health services. As of September 30, 2024, EHC operates 151 inpatient rehabilitation hospitals and 266 home health locations across 36 states and Puerto Rico.
Financial Performance
For the nine months ended September 30, 2024, EHC reported:
- Net Operating Revenues: $3,968.2 million
- Net Income: $432.4 million
- Earnings Per Share (EPS): $3.33 (basic), $3.28 (diluted)
- Adjusted EBITDA: $814.1 million
Quarterly Results
In Q3 2024, EHC achieved:
- Net Operating Revenues: $1,351.0 million
- Net Income: $147.1 million
- EPS: $1.08 (basic), $1.06 (diluted)
- Operating Expenses: $1,141.9 million
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Operating Revenues | $1,351.0 million | $1,206.9 million | 11.9% |
| Net Income | $147.1 million | $113.4 million | 29.7% |
| Adjusted EBITDA | $814.1 million | $716.1 million | 13.7% |
Revenue Sources
EHC's revenue is derived from various payors, with the following breakdown for the nine months ended September 30, 2024:
| Payor Type | Percentage of Revenue |
|---|---|
| Medicare | 64.8% |
| Medicare Advantage | 16.9% |
| Managed Care | 10.9% |
| Medicaid | 3.4% |
| Other Third-party Payors | 0.8% |
| Patients | 0.3% |
Operating Metrics
Key operating metrics for the nine months ended September 30, 2024 are as follows:
| Metric | Value |
|---|---|
| Discharges | 184,659 |
| Net Patient Revenue per Discharge | $20,927 |
| Average Length of Stay (days) | 12.2 |
| Occupancy Rate (%) | 74.7% |
| Number of Licensed Beds | 11,041 |
Capital Expenditures
EHC made capital expenditures of approximately $444 million for property, equipment, and intangible assets during the nine months ended September 30, 2024. For the full year 2024, EHC expects to spend between $595 million and $625 million on capital projects.
Debt and Liquidity
As of September 30, 2024, EHC reported total debt of $2,577.5 million, with a current portion of $233.0 million. The company maintains liquidity through cash on hand and cash flows from operations, which amounted to $724.0 million for the nine months ended September 30, 2024.
Shareholder Returns
EHC has a history of returning capital to shareholders through dividends. In 2024, the company declared a quarterly dividend of $0.17 per share, with expectations for future dividends to be funded from operating cash flows.
Conclusion
Encompass Health Corporation continues to demonstrate solid financial performance, significant revenue growth, and a commitment to shareholder returns, supported by a robust operational framework in the healthcare sector.
How Encompass Health Corporation (EHC) Makes Money
Revenue Sources
Encompass Health Corporation generates revenue primarily through inpatient rehabilitation services, outpatient services, and other healthcare-related operations. As of September 30, 2024, the company's net operating revenues are detailed in the following table:
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Inpatient Rehabilitation | $1,316.2 | $1,180.5 | $3,864.4 | $3,477.0 |
| Outpatient and Other | $34.8 | $26.4 | $103.8 | $77.4 |
| Total Net Operating Revenues | $1,351.0 | $1,206.9 | $3,968.2 | $3,554.4 |
Payor Mix
The company derives its revenues from various payor sources, as shown in the table below:
| Payor Source | Q3 2024 (%) | Q3 2023 (%) | 9M 2024 (%) | 9M 2023 (%) |
|---|---|---|---|---|
| Medicare | 65.4 | 65.2 | 64.8 | 64.8 |
| Medicare Advantage | 16.4 | 15.9 | 16.9 | 16.2 |
| Managed Care | 11.0 | 11.2 | 10.9 | 11.2 |
| Medicaid | 3.4 | 4.1 | 3.4 | 4.1 |
| Other Third-party Payors | 0.7 | 0.9 | 0.8 | 0.9 |
| Workers’ Compensation | 0.5 | 0.5 | 0.5 | 0.6 |
| Patients | 0.3 | 0.3 | 0.3 | 0.3 |
| Other Income | 2.3 | 1.9 | 2.4 | 1.9 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 |
Operational Performance
Encompass Health has demonstrated significant growth in operational metrics. In Q3 2024, the company reported:
- Discharges: 62,715 (Q3 2023: 57,665)
- Net patient revenue per discharge: $20,987 (Q3 2023: $20,472)
- Average length of stay: 12.2 days (Q3 2023: 12.4 days)
- Occupancy rate: 75.4% (Q3 2023: 72.8%)
- Number of licensed beds: 11,041 (Q3 2023: 10,677)
- Occupied beds: 8,325 (Q3 2023: 7,773)
Expenses and Profitability
The company's operating expenses for Q3 2024 are summarized below:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Salaries and Benefits | $732.1 | $658.6 |
| Other Operating Expenses | $202.4 | $183.7 |
| Occupancy Costs | $14.4 | $14.2 |
| Supplies | $60.6 | $53.9 |
| General and Administrative Expenses | $54.0 | $49.8 |
| Depreciation and Amortization | $78.4 | $67.3 |
| Total Operating Expenses | $1,141.9 | $1,027.5 |
Net income attributable to Encompass Health for Q3 2024 was $108.2 million, compared to $85.3 million in Q3 2023. This represents a year-over-year increase of 26.8%.
Joint Ventures and Expansion
Encompass Health continues to expand its operations through joint ventures and new hospital openings. Notable developments in 2024 include:
- New 50-bed inpatient rehabilitation hospital in Kissimmee, Florida (May 2024)
- New 40-bed inpatient rehabilitation hospital in Atlanta, Georgia (May 2024)
- New 40-bed inpatient rehabilitation hospital in Louisville, Kentucky (June 2024)
- New 50-bed inpatient rehabilitation hospital in Johnston, Rhode Island (July 2024)
- New 39-bed inpatient rehabilitation hospital in Fort Mill, South Carolina (September 2024)
As of September 30, 2024, Encompass Health operates 165 inpatient rehabilitation hospitals across 38 states and Puerto Rico.
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Article updated on 8 Nov 2024
Resources:
- Encompass Health Corporation (EHC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Encompass Health Corporation (EHC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Encompass Health Corporation (EHC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.