Decreased Volumes Lead to Decreased Revenues for Encompass Health

The Birmingham, Alabama-based post-acute care provider's inpatient rehabilitation segment discharges fell 10.7% year-over-year and home health and hospice segment admissions fell almost 8%.

Encompass Health experienced patient volume declines in Q2 2020 due to the coronavirus disease 2019 (COVID-19) pandemic, resulting in decreased revenues, according to its latest earnings report released Monday afternoon.

The Birmingham, Alabama-based post-acute care provider recorded net operating revenues of just over $1 billion, down 5.4% year-over-year, along with an adjusted EBITDA decline of nearly 36%.

Inpatient rehabilitation segment discharges fell 10.7% year-over-year and home health and hospice segment admissions fell almost 8%. Net operating revenues per segment dropped 5.7% and 4.4%, respectively. 

Related: Encompass Health Withdraws 2020 Guidance as COVID-19 Impacts Performance

By the end of Q2, Encompass had nearly $420 million in cash and more than $960 million available under its $1 billion revolving credit facility. 

C-suite perspective:

"Our patient volumes in both business segments have substantially rebounded from the low point experienced in April," Mark Tarr, CEO of Encompass, said in a statement. "We believe we have implemented plans across our organization to address the significant ongoing challenges presented by the COVID-19 pandemic. We remain confident in the intermediate and long-term growth prospects for our Company based on the increasing demand for the services we provide to an aging population."

In a positive sign, Encompass' adjusted free cash flow for Q2 was $168.2 million, up 18.3% compared to Q2 2019, and cash flows provided by operating activities rose 53% to $222.3 million.

Related: Quarterly Financials Up, Yearly Financials Down for Encompass

Encompass also paid a quarterly cash dividend of $0.28 per share in July.

For complete financial information, review Encompass Health's filing with the Securities and Exchange Commission.