ehab-20260331

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


o			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: 001-41406

___________________

Enhabit, Inc.

(Exact name of registrant as specified in its charter)


Delaware			47-2409192
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

6688 N. Central Expressway, Suite 1300, Dallas, Texas			75206
(Address of principal executive offices)			(Zip Code)

(214) 239-6500

(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 $0.01 per share	EHAB	New York Stock Exchange

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 o

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 o

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.

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ☒

As of May 4, 2026, the registrant had 51,225,606 shares of its common stock, par value $0.01 per share, outstanding.

ENHABIT, INC.

FORM 10-Q

TABLE OF CONTENTS

Page

Cautionary Note Regarding Forward-Looking Statements

Part I

Financial Information

Item 1

Financial Statements (Unaudited)

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Cash Flows

Notes to Condensed Consolidated 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

Unregistered Sales of Equity Securities and Use of Proceeds

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains historical information, as well as forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that involve known and unknown risks and relate to, among other things, future events, projections, financial guidance, legislative or regulatory developments, strategy or growth opportunities, our future financial performance, our projected business results, or our projected capital expenditures. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, the reader can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “targets,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Any forward-looking statement speaks only as of the date of this report, and the Company 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 necessarily estimates 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 the results 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 those estimated by the Company include, but are not limited to, disruption from the proposed Merger (as defined herein) with patient, payor, provider, referral source, supplier or management and employee relationships; the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement (as defined herein) or the inability to complete the proposed transaction on the anticipated terms and timetable; the risk that certain state regulatory approvals for the proposed Merger are delayed, are not obtained or are obtained subject to conditions that are not anticipated; the failure of the conditions to the proposed Merger to be satisfied; the costs related to the proposed transaction; the diversion of management time on Merger-related issues; the risk that termination fees may be payable by us in the event that the Merger Agreement is terminated under certain circumstances; reputational risk related to the proposed Merger; the risk of litigation or regulatory action related to the proposed Merger; 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 payers, the case mix of our patients, and payment methodologies; our ability to attract and retain key management personnel and healthcare professionals; potential disruptions or breaches of our or our vendors’, payers’, and other contract counterparties’ information systems; the outcome of litigation; quality performance and ratings; our ability to successfully complete and integrate de novo locations, acquisitions, investments, and joint ventures; our ability to successfully integrate technology in our operations; and our ability to control costs, particularly labor and employee benefit costs. Our Annual Report on Form 10-K for the year ended December 31, 2025 filed March 5, 2026, which can be found on the Company’s website at http://investors.ehab.com, discusses these and other risks and factors that could cause actual results to differ materially from those expressed or implied by any forward-looking statement in this report.

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

ENHABIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)


	Three Months Ended March 31,
(in millions, except per share data)	2026		2025
Net service revenue	$	264.8	$	259.9
Cost of service, excluding depreciation and amortization	134.2		130.2

General and administrative expenses	96.7		107.5
Depreciation and amortization	4.6		6.3


Operating income (loss)	29.3		15.9
Interest income	3.8		—
Interest expense and amortization of debt discounts and fees	10.0		9.4

Other (income) expenses	0.1		(19.3)
Income (loss) before income taxes and noncontrolling interests	23.0		25.8
Provision for (benefit from) income taxes	3.1		7.4
Net income (loss)	19.9		18.4
Less: Net income attributable to noncontrolling interests	0.7		0.6
Net income (loss) attributable to Enhabit, Inc.	$	19.2	$	17.8

Weighted average common shares outstanding:
Basic	51.2		50.5
Diluted	52.9		50.8

Earnings (loss) per common share:
Basic earnings (loss) per share attributable to Enhabit, Inc. common stockholders	$	0.37	$	0.35
Diluted earnings (loss) per share attributable to Enhabit, Inc. common stockholders	$	0.36	$	0.35

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

Table of Contents

ENHABIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)


	Three Months Ended March 31,
(in millions)	2026		2025
Net income (loss)	$	19.9	$	18.4
Other comprehensive income (loss):
Unrealized gain (loss) on cash flow hedges, net of tax expense of $— and $— respectively	—		—
Total other comprehensive income (loss)	—		—
Comprehensive income (loss) including noncontrolling interests	19.9		18.4
Less: Comprehensive income attributable to noncontrolling interests	0.7		0.6
Comprehensive income (loss) attributable to Enhabit, Inc.	$	19.2	$	17.8

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

Table of Contents

ENHABIT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


(in millions)	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	50.0	$	43.6
Restricted cash	1.5		1.9
Accounts receivable, net of allowances	154.4		144.0




Prepaid expenses and other current assets	13.3		16.1
Total current assets	219.2		205.6
Property and equipment, net	16.7		15.5
Operating lease right-of-use assets	49.7		49.8
Goodwill	855.3		855.3
Intangible assets, net	35.1		38.5
Other long-term assets	2.9		2.4
Total assets	$	1,178.9	$	1,167.1
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	26.0	$	22.3
Current portion of operating lease liabilities	12.5		12.6
Accounts payable	8.6		9.2
Accrued payroll	50.9		40.4






Other current liabilities	42.2		41.8
Total current liabilities	140.2		126.3
Long-term debt, net of current portion	402.6		426.0
Long-term operating lease liabilities, net of current portion	39.0		39.1
Deferred income tax liabilities	13.2		11.5
Other long-term liabilities	—		0.1
Total liabilities	595.0		603.0
Commitments and contingencies (See Note 6)
Redeemable noncontrolling interests	5.0		5.0
Stockholders’ equity:






Total Enhabit, Inc. stockholders’ equity	553.5		534.0
Noncontrolling interests	25.4		25.1
Total stockholders’ equity	578.9		559.1
Total liabilities and stockholders’ equity	$	1,178.9	$	1,167.1

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

Table of Contents

ENHABIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)


	Three Months Ended March 31, 2026
	Enhabit, Inc. Common Stockholders
	Common Stock			Capital in Excess of Par Value		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock			Noncontrolling Interests		Total
(in millions)	Shares	Amount								Shares	Amount
Balance at December 31, 2025	50.7	$	0.5	$	443.6	$	—	$	93.7	0.5	$	(3.8)	$	25.1	$	559.1
Net income	—	—		—		—		19.2		—	—		0.7		19.9






Distributions	—	—		—		—		—		—	—		(0.4)		(0.4)
Stock-based compensation expense	—	—		3.9		—		—		—	—		—		3.9
Shares forfeited, including forfeitures due to net share settlement of income taxes	(0.3)	—		—		—		—		0.3	(3.6)		—		(3.6)
Issuance of common stock pursuant to omnibus incentive plan	0.8	—		—		—		—		—	—		—		—
Balance at March 31, 2026	51.2	$	0.5	$	447.5	$	—	$	112.9	0.8	$	(7.4)	$	25.4	$	578.9

	Three Months Ended March 31, 2025
	Enhabit, Inc. Common Stockholders
	Common Stock			Capital in Excess of Par Value		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock			Noncontrolling Interests		Total
(in millions)	Shares	Amount								Shares	Amount
Balance at December 31, 2024	50.4	$	0.5	$	426.6	$	(0.2)	$	98.3	0.2	$	(1.7)	$	25.4	$	548.9
Net (loss) income	—	—		—		—		17.8		—	—		0.6		18.4

Distributions	—	—		—		—		—		—	—		(0.9)		(0.9)




Stock-based compensation expense	—	—		3.2		—		—		—	—		—		3.2
Shares forfeited, including forfeitures due to net share settlement of income taxes	(0.2)	—		—		—		—		0.2	(1.3)		—		(1.3)
Issuance of common stock pursuant to omnibus incentive plan	0.4	—		—		—		—		—	—		—		—
Balance at March 31, 2025	50.6	$	0.5	$	429.8	$	(0.2)	$	116.1	0.4	$	(3.0)	$	25.1	$	568.3

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

Table of Contents

ENHABIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	Three Months Ended March 31,
(in millions)	2026		2025
Cash flows from operating activities:
Net income	$	19.9	$	18.4
Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization	4.6		6.3
Amortization of debt-related costs	2.3		0.4
Loss (gain) on sale of investment and disposal of assets	0.1		(19.3)



Stock-based compensation	3.9		4.0
Deferred income taxes	1.7		1.2

Changes in assets and liabilities, net of acquisitions—
Accounts receivable, net of allowances	(10.4)		(11.7)
Prepaid expenses and other assets	2.7		4.1
Accounts payable	(0.6)		1.4
Accrued payroll	10.5		11.6
Other liabilities	0.5		1.5
Net cash provided by operating activities	35.2		17.9
Cash flows from investing activities:

Purchases of property and equipment, including capitalized software costs	(2.5)		(0.3)
Proceeds from sale of investment	—		21.0
Other	(0.1)		0.1
Net cash (used in) provided by investing activities	(2.6)		20.8
Cash flows from financing activities:
Principal payments on term loan facility	(330.0)		(25.0)
Payments on revolving credit facility	(115.0)		—
Borrowings on term loan facility	315.0		—
Borrowings on revolving credit facility	110.0		—
Principal payments under finance lease obligations	(0.6)		(0.8)
Debt issuance costs	(2.0)		—
Distributions paid to noncontrolling interests of consolidated affiliates	(0.4)		(0.9)



Other	(3.6)		(1.5)
Net cash used in financing activities	(26.6)		(28.2)
Increase in cash, cash equivalents, and restricted cash	6.0		10.5
Cash, cash equivalents, and restricted cash at beginning of period	45.5		30.3
Cash, cash equivalents, and restricted cash at end of period	$	51.5	$	40.8

See also Note 9, Supplemental Cash Flow Information.

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

Table of Contents

ENHABIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.Summary of Significant Accounting Policies

Organization and Description of Business. Enhabit, Inc. (“Enhabit” or the “Company”), incorporated in Delaware in 2014, provides a comprehensive range of Medicare-certified skilled home health and hospice services in 35 states, with a concentration in the southern half of the United States. The Company manages its operations and discloses financial information using two reportable segments: (i) Home Health and (ii) Hospice. See Note 7, Segment Reporting. Prior to July 1, 2022, the Company operated as a reporting segment of Encompass Health Corporation (“Encompass”).

Separation from Encompass. On July 1, 2022, Encompass completed the separation of the Company through the distribution of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit to the stockholders of record of Encompass (the “Distribution”). As a result of the Distribution, Enhabit is now an independent public company, and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange (the “Separation”).

The Separation was completed pursuant to a separation and distribution agreement (the “Separation and Distribution Agreement”) and other agreements with Encompass related to the Separation, including, but not limited to, a tax matters agreement (the “Tax Matters Agreement”), an employee matters agreement (the “Employee Matters Agreement”), and a transition services agreement (the “Transition Services Agreement” or “TSA”). Following the Separation, certain functions were provided by Encompass under the TSA. Following the expiration of the TSA, these functions are now performed using the Company’s own resources or third‑party providers.

See Note 3, Long-Term Debt, for more information.

Merger Agreement. As previously disclosed, on February 22, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company will be acquired by Anchor Parent, LLC, a Delaware limited liability company (“Parent”). Pursuant to the Merger Agreement, Anchor Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Parent, will be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation”). Parent and Merger Sub are affiliates of funds advised by Kinderhook Industries, LLC (or an affiliate thereof). The Merger is expected to close in the second quarter of 2026, subject to customary closing conditions. See Enhabit’s Current Report on Form 8-K filed on February 23, 2026 for more information regarding the Merger Agreement.

The consummation of the Merger remains subject to the satisfaction or, to the extent permitted under the Merger Agreement, waiver by each of us, Parent and Merger Sub, of closing conditions.

If the Merger is consummated, our common stock will no longer be publicly listed and traded on the New York Stock Exchange, our common stock will be deregistered under the Exchange Act, we will no longer file periodic reports with the SEC and existing stockholders will cease to have any ownership interest in the Company.

Basis of Presentation and Consolidation. The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries should be read in conjunction with the audited consolidated financial statements and accompanying notes contained in the Company’s Annual Report for the year ended December 31, 2025 on Form 10-K (the “Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 5, 2026. The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the SEC applicable to interim financial information. Accordingly, certain information and note disclosures included in financial statements prepared in accordance with GAAP have been omitted in these interim statements, as allowed by such SEC rules and regulations. The unaudited Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, management believes the disclosures are adequate to make the information presented not misleading.

The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary for a fair statement of the financial position, results of operations, and cash flows for each interim period presented.

Table of Contents

ENHABIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

The unaudited condensed consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which the Company exercises control, and, when applicable, entities in which the Company has a controlling financial interest. Enhabit eliminates all intercompany accounts and transactions within the Company from its financial results.

Net Service Revenue. Net service revenue disaggregated by payer source and segment is as follows (in millions):


	Home Health				Hospice				Consolidated
	Three Months Ended March 31,
	2026		2025		2026		2025		2026		2025
Medicare	$	106.4	$	114.2	$	61.8	$	57.2	$	168.2	$	171.4
Medicare Advantage	68.7		60.6		—		—		68.7		60.6
Managed Care	22.3		22.2		0.7		1.2		23.0		23.4
Medicaid	2.0		2.1		0.5		0.9		2.5		3.0
Other	2.4		1.5		—		—		2.4		1.5
Total	$	201.8	$	200.6	$	63.0	$	59.3	$	264.8	$	259.9

For a discussion of the Company’s significant accounting policies, including its policy related to Net service revenue, see Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Form 10‑K.

Earnings Per Common Share. The following table sets forth the computation of diluted weighted average common shares outstanding for the three months ended March 31, 2026 and 2025 (in millions):


	Three Months Ended March 31,
	2026	2025
Weighted average common shares outstanding:
Basic	51.2	50.5
Dilutive effect of restricted stock, restricted stock units, and performance units	1.7	0.3
Diluted	52.9	50.8

A total of 0.3 million and 0.3 million options to purchase Enhabit’s shares and 0.2 million and 0.4 million shares of restricted stock awards, performance units and restricted stock units were excluded from the diluted weighted average common shares outstanding for the three months ended March 31, 2026 and 2025, respectively, because their effects were anti‑dilutive. See Note 9, Stock-Based Payments, to the consolidated financial statements included in the Form 10-K for additional information.

Other Current Liabilities. Accrued other expenses includes $9.0 million and $9.5 million of accrued hospice-related costs, $3.8 million and $4.4 million of legal fees, $6.0 million and $6.0 million of workers’ compensation expense and $5.9 million and $7.1 million of medical insurance costs as of March 31, 2026 and December 31, 2025, respectively.

Recent Accounting Pronouncements. In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement (Topic 220): Reporting Comprehensive Income—Expense Disaggregation Disclosures.” This standard requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements. The Company

Table of Contents

ENHABIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEC Form 10-Q filed by Enhabit Inc.