Aveanna Healthcare Holdings, Inc. (NASDAQ: AVAH), a leading,
diversified home care platform focused on providing care to
medically complex, high-cost patient populations, today announced
preliminary second quarter 2022 results and updated full-year 2022
guidance. The Company also announced that it plans to release its
second quarter results after the market close on Wednesday, August
10, 2022, to be followed by a conference call on Thursday, August
11, 2022 at 10:00 a.m. Eastern Time.
As a result of continued challenges in the labor
markets, including both shortages in workforce and inflationary
wage pressures which have not abated, Aveanna expects weaker than
anticipated second quarter 2022 results. While the books for the
second quarter are not yet closed, our preliminary view suggests
that sequential quarterly results will not improve from the first
quarter to the second quarter as we had originally anticipated, and
that Adjusted EBITDA for the second quarter will more likely be in
the range of $36 million to $39 million.
While we anticipate continued reimbursement rate
increases during the second half of 2022, a meaningful portion of
which will be passed through to caregivers in an effort to increase
available clinical labor, our revised outlook assumes that the
current labor market pressures will persist for the remainder of
the year. We will provide further details and insights on these
rate increases, corresponding wage pass-throughs and payment model
enhancements on our regularly scheduled second quarter 2022
earnings conference call. We will also provide details on our
overall second quarter results, including any non-cash goodwill
impairment charge we may incur as a result of the circumstances
noted above.
In consideration of all these factors, we are
revising our full-year 2022 guidance to reflect these
conditions.
Revised Full Year 2022
Guidance
- Revenue of at
least $1,785 million, updated from prior guidance of revenue in a
range of $1,890 million to $1,920 million.
Consistent with prior practice, we are not
providing guidance on net income at this time due to the
volatility of certain required inputs that are not available
without unreasonable efforts, including future fair value
adjustments associated with our interest rate swaps and caps.
- Adjusted EBITDA of at least $150
million, updated from prior guidance of Adjusted EBITDA in a range
of $190 million to $205 million.
We continue to have ample liquidity to fund our
operations with consolidated cash and cash equivalents of
approximately $12 million as of July 2, 2022 and $167 million of
availability under our revolving credit facility. Notwithstanding
our revised full-year 2022 guidance, we have flexibility within our
leverage covenants under our revolving credit facility, and we have
continued to meet all debt related covenants. Over the past year,
we have also proactively modified or entered into interest rate
hedges to mitigate our exposure to rising interest rates, with a
$520 million notional interest rate swap that expires in June, 2026
and a $880 million notional interest rate cap that expires in
February, 2027.
Conference Call
Aveanna will host a conference call on Thursday,
August 11, 2022, at 10:00 a.m. Eastern Time to discuss our second
quarter 2022 results. The conference call can be accessed live over
the phone by dialing 1-877-407-0789, or for international callers,
1-201-689-8562. A telephonic replay of the conference call will be
available until August 18, 2022, by dialing 1-844-512-2921, or for
international callers, 1-412-317-6671. The passcode for the replay
is 13731001. A live webcast of our conference call will also be
available under the Investor Relations section of our website:
https://ir.aveanna.com/. The online replay will also be available
for one week following the call.
Non-GAAP Financial Measures
In addition to our results of operations
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”), we also evaluate our financial performance
using EBITDA, Adjusted EBITDA, Field contribution, Field
contribution margin, Adjusted corporate expense, Adjusted net
income and Adjusted net income per diluted share. Given our
determination of adjustments in arriving at our computations, these
non-GAAP measures have limitations as analytical tools and should
not be considered in isolation or as substitutes or alternatives to
net income or loss, revenue, operating income or loss, cash flows
from operating activities, total indebtedness or any other
financial measures calculated in accordance with GAAP.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP
financial measures and are not intended to replace financial
performance measures determined in accordance with GAAP, such as
net income (loss). Rather, we present EBITDA and Adjusted EBITDA as
supplemental measures of our performance. We define EBITDA as net
income (loss) before interest expense, net; income tax (expense)
benefit; and depreciation and amortization. We define Adjusted
EBITDA as EBITDA, adjusted for the impact of certain other items
that are either non-recurring, infrequent, non-cash, unusual, or
items deemed by us to not be indicative of the performance of our
core operations, including impairments of goodwill, intangible
assets, and other long-lived assets; non-cash, share-based
compensation; sponsor fees; loss on extinguishment of debt; fees
related to debt modifications; the effect of interest rate
derivatives; acquisition-related and integration costs; legal costs
and settlements associated with acquisition matters; the
discontinuation of our ABA Therapy services; non-acquisition
related legal settlements; and other system transition costs,
professional fees and other costs. As non-GAAP financial measures,
our computations of EBITDA and Adjusted EBITDA may vary from
similarly termed non-GAAP financial measures used by other
companies, making comparisons with other companies on the basis of
this measure impracticable.
We believe our computations of EBITDA and
Adjusted EBITDA are helpful in highlighting trends in our core
operating performance. In determining which adjustments are made to
arrive at EBITDA and Adjusted EBITDA, we consider both (1) certain
non-recurring, infrequent, non-cash or unusual items, which can
vary significantly from year to year, as well as (2) certain other
items that may be recurring, frequent, or settled in cash but which
we do not believe are indicative of our core operating performance.
We use EBITDA and Adjusted EBITDA to assess operating performance
and make business decisions.
We incurred substantial acquisition-related
costs and integration costs in fiscal years 2022, 2021, and 2020.
The underlying acquisition activities take place over a defined
timeframe, have distinct project timelines and are incremental to
activities and costs that arise in the ordinary course of our
business. Therefore, we believe it is important to exclude these
costs from our Adjusted EBITDA because it provides us a normalized
view of our core, ongoing operations after integrating our acquired
companies, which is an important measure in assessing our
performance.
Forward-Looking Statements
Certain matters discussed in this press release
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
(other than statements of historical facts) in this press release
regarding our prospects, plans, financial position, business
strategy and expected financial and operational results may
constitute forward-looking statements. Forward-looking statements
generally can be identified by the use of terminology such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“seek,” “will,” “may,” “should,” “predict,” “project,” “potential,”
“continue” or the negatives of these terms or variations of them or
similar expressions. These statements are based on certain
assumptions that we have made in light of our experience in the
industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate in these circumstances. These
forward-looking statements are based on our current expectations
and beliefs concerning future developments and their potential
effect on us. Forward-looking statements involve a number of risks
and uncertainties that may cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, such as our ability to successfully execute our growth
strategy, including through organic growth and the completion of
acquisitions, effective integration of the companies we acquire,
unexpected costs of acquisitions and dispositions, the possibility
that expected cost synergies may not materialize as expected, the
failure of Aveanna or the companies we acquire to perform as
expected, estimation inaccuracies in revenue recognition, our
ability to drive margin leverage through lower costs, unexpected
increases in SG&A and other expenses, changes in reimbursement,
changes in government regulations, changes in Aveanna’s
relationships with referral sources, increased competition for
Aveanna’s services or wage inflation, changes in the interpretation
of government regulations or discretionary determinations made by
government officials, uncertainties regarding the outcome of rate
discussions with managed care organizations and our ability to
effectively collect our cash from these organizations, our ability
to effectively bill and collect under new Electronic Visit
Verification regulations, changes in tax rates, the impact of
adverse weather, the impact to our business operations,
reimbursements and patient population were
the COVID-19 environment to worsen, and other risks
set forth under the heading “Risk Factors” in Aveanna‘s Annual
Report on Form 10-K for its 2021 fiscal year filed with the
Securities and Exchange Commission on March 28, 2022, which is
available at www.sec.gov. In addition, these forward-looking
statements necessarily depend upon assumptions, estimates and dates
that may prove to be incorrect or imprecise. Accordingly,
forward-looking statements included in this press release do not
purport to be predictions of future events or circumstances, and
actual results may differ materially from those expressed by
forward-looking statements. All forward-looking statements speak
only as of the date made, and Aveanna undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
About Aveanna Healthcare
Aveanna Healthcare is headquartered in Atlanta,
Georgia and has locations in 33 states providing a broad range of
pediatric and adult healthcare services including nursing,
rehabilitation services, occupational nursing in schools, therapy
services, day treatment centers for medically fragile and
chronically ill children and adults, home health and hospice
services, as well as delivery of enteral nutrition and other
products to patients. The Company also provides case management
services in order to assist families and patients by coordinating
the provision of services between insurers or other payers,
physicians, hospitals, and other healthcare providers. In addition,
the Company provides respite healthcare services, which are
temporary care provider services provided in relief of the
patient’s normal caregiver. The Company’s services are designed to
provide a high quality, lower cost alternative to prolonged
hospitalization. For more information, please
visit www.aveanna.com.
Investor ContactDave AfsharChief Financial
Officerir@aveanna.com
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