Recent Results Demonstrate Improving
Performance Despite Headwinds
Board Has Taken Decisive Actions in Light of
the Challenges Faced by Enhabit Since the Spin
Enhabit’s Proposed Board is Specifically
Designed to Possess Relevant Industry and Public Company Oversight
Expertise
AREX’s Proposal to Take Control of the Board is
Not in the Best Interests of Stockholders
Stockholders Urged to Vote FOR Enhabit’s
Director Nominees on the YELLOW Proxy Card
Enhabit, Inc. (NYSE: EHAB), a leading home health and hospice
provider, today announced that it has posted an investor
presentation today in connection with its Annual Meeting of
Stockholders (the “2024 Annual Meeting”) scheduled for July 25,
2024. Stockholders of record as of the close of business on June 5,
2024, are entitled to vote at the 2024 Annual Meeting. The
presentation can be found at
investors.ehab.com/2024-annual-meeting/.
The Enhabit Board of Directors issued the following
statement:
“The Enhabit Board and management team have
successfully stabilized the business in the face of substantial
industry and company-specific headwinds and positioned the Company
to unlock shareholder value. As we look to the future, Enhabit has
the right strategy and has nominated the right director candidates
to oversee our growth and value creation initiatives, with a
thoughtful combination of experience, industry knowledge and
diversity of skills. The Board has been almost wholly refreshed
since Enhabit’s separation from Encompass Health Corporation, with
nearly all independent director nominees having a tenure of less
than two years.
AREX Capital Management, LP, which just five
weeks ago was focused entirely on a sale of the Company as the only
viable path, is running a proxy contest to replace seven of the
eight independent directors and take control of the Board. AREX is
pursuing its contest at exactly the wrong time and with candidates
who are demonstrably inferior to the Company’s nominees in terms of
relevant industry experience, public company board experience,
complementary skill sets and career accomplishments. AREX has now
pivoted its arguments, publicly revealing on June 27, for the first
time, a superficial purported “operating plan” which reflects that
AREX and its nominees do not understand Enhabit’s issues and key
business drivers with sufficient depth.
As a result, AREX’s campaign threatens the
recent stabilization of the business. Enhabit’s nominees, by
contrast, are fit for purpose, highly engaged and focused on
driving our strategy and enhancing value for all stockholders.”
Highlights of Enhabit’s presentation include:
- Enhabit’s recent performance demonstrates significant
improvement in performance through key initiatives.
- The Company reported its second consecutive quarter of beating
adjusted EBITDA consensus estimates and reaffirmed its full-year
2024 guidance.
- In the most recent quarter, Enhabit reported strong growth in
Home Health admissions, with non-Medicare admissions up 25%,
driving total admissions growth of 5.3% year over year.
- In addition, 38% of non-Medicare visits are now in payor
innovation contracts at improved rates.
- In Hospice, Enhabit reported 5.6% sequential growth in Hospice
admissions in Q1 2024 earnings and disclosed sequential census
growth in hospice each month of 2024 from January to May.
- In Q1 2024, Enhabit’s full-time nursing candidate pool
increased over 30% year-over-year and resulted in the addition of
151 net new full-time nurses.
- Enhabit’s Board has taken decisive actions in light of
challenges faced since the spin-off from Encompass Health
Corporation.
- Enhabit’s Board has provided oversight and guidance for the
advancement of the Company’s payor innovation strategy to improve
Medicare Advantage rates and increase admissions to create a strong
platform for the future.
- The Board also formed a limited-time special technology
committee to redefine the Company’s go-forward IT infrastructure
and data / analytics strategy.
- The Board’s audit and finance committee have closely overseen
the development and enhancement of Enhabit’s finance organization
through a challenging operating environment
- The Board ran a comprehensive strategic review process that
lasted nine months and engaged 38 potential counterparties. Having
received no formal proposals, the Board unanimously determined to
conclude the strategic review, but remains open to considering all
potential paths to enhance stockholder value.
- Enhabit’s proposed Board is specifically designed to possess
relevant industry and public company oversight expertise.
- The experience of all of Enhabit’s director nominees is
directly relevant to the Company’s growth strategy and has been
indispensable in overseeing management’s execution of strategic
initiatives.
- Deliberate succession planning has resulted in a recently
refreshed board, with only one of the nine nominees having tenure
greater than two years.
- Nominees incorporate recent stockholder input, with two
directors appointed in connection with a March 2023 cooperation
agreement.
- AREX’s proposal to take control of the Board threatens to
destroy stockholder value.
- AREX’s demand for control of the Board jeopardizes the
stability that has been achieved by the Company and the continued
progress going forward.
- AREX’s slate recruitment appears to prioritize putting forth
nominees who can claim nexus to the Home Health and Hospice
industry, including for short periods of time and with low levels
of management authority.
- AREX’s selection of its slate, intention to institute a
“Transformation Committee” that presumably would function as a
shadow management team, and cursory operating plan reflect its lack
of understanding of the issues and the key drivers of Enhabit’s
business.
The Enhabit Board of Directors is committed to acting in the
best interests of stockholders and unanimously recommends that
stockholders vote the YELLOW proxy card “FOR” ONLY Enhabit’s nine
highly qualified nominees – Jeffrey W. Bolton, Tina L.
Brown-Stevenson, Charles M. Elson, Erin P. Hoeflinger, Barbara A.
Jacobsmeyer, Susan A. La Monica, Stuart M. McGuigan, Gregory S.
Rush and Barry P. Schochet.
If stockholders have questions or need
assistance voting their shares, please contact:
MacKenzie Partners, Inc.
Toll-Free: 1-800-322-2885
Or
Email: Enhabit@MacKenziePartners.com
About Enhabit Home Health & Hospice
Enhabit Home Health & Hospice (Enhabit, Inc.) is a leading
national home health and hospice provider working to expand what’s
possible for patient care in the home. Enhabit's team of clinicians
supports patients and their families where they are most
comfortable, with a nationwide footprint spanning 255 home health
locations and 112 hospice locations across 34 states. Enhabit
leverages advanced technology and compassionate teams to deliver
extraordinary patient care. For more information, visit
ehab.com.
Forward-Looking
Statements
Statements contained in this press release which are not
historical facts are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. All
forward-looking information speaks only as of the date hereof, and
Enhabit undertakes no duty to publicly update or revise such
forward-looking information, whether as a result of new
information, future events, or otherwise. Such forward-looking
statements are based upon current information and involve a number
of risks and uncertainties, many of which are beyond our control.
Actual events or results may differ materially from those
anticipated in these forward-looking statements as a result of a
variety of factors. While it is impossible to identify all such
factors, factors which could cause actual events or results to
differ materially from our present expectations include, but are
not limited to, our ability to execute on our strategic plans,
regulatory and other developments impacting the markets for our
services, changes in reimbursement rates, general economic
conditions, changes in the episodic versus non-episodic mix of our
payors, the case mix of our patients, and payment methodologies,
our ability to attract and retain key management personnel and
health care professionals, potential disruptions or breaches of our
or our vendors’, payors’, and other contract counterparties’
information systems, the outcome of litigation, our ability to
successfully complete and integrate de novo locations,
acquisitions, investments, and joint ventures, our ability to
successfully integrate technology in our operations, our ability to
control costs, particularly labor and employee benefit costs, and
impacts resulting from the announcement of the conclusion of the
strategic review process. Additional information regarding risks
and factors that could cause actual results to differ materially
from those expressed or implied by any forward-looking statement in
this press release are described in reports filed with the SEC,
including our Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q, copies of which are available on the
Company’s website at http://investors.ehab.com and free of charge
through the website maintained by the SEC at www.sec.gov. We urge
you to consider all of the risks, uncertainties and factors
identified above or discussed in such reports carefully in
evaluating the forward-looking statements in this press
release.
Important Additional Information and
Where to Find It
The Company has filed a definitive proxy statement on Schedule
14A and other documents with the SEC in connection with its
solicitation of proxies from the Company’s stockholders for the
Company’s 2024 annual meeting of stockholders. THE COMPANY’S
STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S
DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO), THE ACCOMPANYING YELLOW PROXY CARD, AND ALL OTHER
DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and stockholders may obtain a copy of the definitive proxy
statement, an accompanying YELLOW proxy card, any amendments or
supplements to the definitive proxy statement and other documents
filed by the Company with the SEC at no charge at the SEC’s website
at www.sec.gov. Copies will also be available at no charge by
clicking the “SEC Filings” link in the “Investors” section of the
Company’s website, http://investors.ehab.com, or by contacting
InvestorRelations@ehab.com as soon as reasonably practicable after
such materials are electronically filed with, or furnished to, the
SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240701469738/en/
Media contact Erin Volbeda media@ehab.com 972-338-5141
Investor relations contact Crissy Carlisle
investorrelations@ehab.com 469-860-6061
Enhabit (NYSE:EHAB)
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