Revenue Performance - Revenue for Q4 2024 was $519.9 million, an increase of 8.6% compared to $478.8 million in Q4 2023[4] - Full year 2024 revenue reached $2,024.5 million, a 6.8% increase from $1,895.2 million in 2023[8] - Revenue for the three-month period ended December 28, 2024, was $519,872,000, an increase of 8.6% compared to $478,841,000 for the same period in 2023[35] - Total revenue for the fiscal year ended December 28, 2024, was $1,634,609, up 7.6% from $1,518,811 in 2023[38] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $55.2 million, representing a 42.8% increase from $38.7 million in Q4 2023[7] - Adjusted EBITDA for the three-month period ended December 28, 2024, was $55,208, compared to $38,663 in the same period of 2023[40] - Net income for Q4 2024 was $29.2 million, compared to a net loss of $25.7 million in Q4 2023[6] - Net income for the fiscal year ended December 28, 2024, was $29,180,000, compared to a net loss of $134,524,000 for the fiscal year ended December 30, 2023[35] - Adjusted net income for the fiscal year ended December 28, 2024, was $12,522,000, an improvement from a loss of $20,630,000 in the previous fiscal year[44] Cash Flow and Debt - Cash provided by operating activities for 2024 was $32.6 million, with free cash flow of $25.7 million[15] - Cash and cash equivalents at the end of the period increased to $84,288,000 from $43,942,000 at the beginning of the period[34] - As of December 28, 2024, the company had bank debt of $1,474.3 million, with interest rate exposure hedged through $520.0 million in interest rate swaps and $880.0 million in interest rate caps[15] - Total indebtedness as of December 28, 2024, was $1,474,300,000, with a significant portion attributed to the 2021 Extended Term Loan at an interest rate of S + 3.75%[34] Segment Performance - PDS segment revenue for the three-month period ended December 30, 2024, was $422,191, a 10.1% increase from $383,446 in the same period of 2023[37] - Gross margin for the PDS segment increased to $123,631, representing a 19.4% growth compared to $103,576 in the prior year[37] - HHH segment revenue for the three-month period ended December 30, 2024, was $54,423, a slight increase of 0.6% from $54,103 in the same period of 2023[37] Operational Metrics - Gross margin for Q4 2024 was $171.7 million, or 33.0% of revenue, up from $148.4 million, or 31.0% of revenue in Q4 2023[5] - Gross margin for the fiscal year 2024 was $444,461, a 4.9% increase from $423,720 in 2023[38] - Gross margin percentage for the fiscal year ended December 28, 2024, remained stable at 31.4% compared to the previous year[36] - Field contribution for the three-month period ended December 28, 2024, was $82,978,000, reflecting a 35.1% increase from $61,437,000 in the same period of 2023[36] Corporate Expenses and Adjustments - Corporate expenses for the fiscal year ended December 28, 2024, were $125,402,000, an increase of 10.9% from $113,034,000 in 2023[36] - Corporate expenses for the fiscal year ended December 28, 2024, increased to $18,443,000 from $15,388,000 in 2023[47] - Acquisition-related costs for the three-month period ended December 28, 2024, were $1,340,000, compared to no costs in the same period of 2023[47] - Total adjustments for the three-month period ended December 28, 2024, amounted to $(14,314,000), while for the fiscal year, it was $27,625,000[44] Shareholder Metrics - Adjusted net income per diluted share for Q4 2024 was $0.05, compared to an adjusted net loss per diluted share of $(0.02) in Q4 2023[6] - The weighted average shares outstanding, diluted, for the fiscal year ended December 28, 2024, was 199,349,000, compared to 189,956,000 in 2023[41]

Core Insights - Aveanna Healthcare Holdings Inc. reported strong financial results for the fourth quarter and fiscal year ended December 28, 2024, with significant growth in revenue and adjusted EBITDA, indicating a successful transformation year for the company [2][9]. Financial Performance - For the fourth quarter of 2024, revenue reached $519.9 million, an increase of 8.6% from $478.8 million in the same period of 2023, driven primarily by growth in the Private Duty Services segment [3][9]. - Adjusted EBITDA for the fourth quarter was $55.2 million, representing a 42.8% increase compared to $38.7 million in the fourth quarter of 2023 [6][9]. - The fiscal year 2024 revenue totaled $2,024.5 million, up 6.8% from $1,895.2 million in fiscal year 2023, with adjusted EBITDA increasing by 31.9% to $183.6 million [7][11]. Profitability Metrics - Gross margin for the fourth quarter was $171.7 million, or 33.0% of revenue, compared to $148.4 million, or 31.0% of revenue, in the prior year, reflecting a 15.7% increase [4][9]. - The company achieved net income of $29.2 million in the fourth quarter of 2024, a turnaround from a net loss of $25.7 million in the same quarter of 2023 [5][9]. - For the fiscal year 2024, the net loss was reduced to $10.9 million from a loss of $134.5 million in fiscal year 2023, with adjusted net income per diluted share improving to $0.06 from a loss of $(0.11) [10][11]. Segment Performance - The Private Duty Services segment saw revenue increase by $38.7 million in the fourth quarter, while the Medical Solutions segment contributed an additional $2.0 million [3][7]. - The Home Health & Hospice segment experienced a slight revenue increase of $0.3 million, indicating stable performance [3]. Guidance and Future Outlook - The company provided guidance for fiscal year 2025, projecting revenue between $2.10 billion and $2.12 billion, and adjusted EBITDA between $190 million and $194 million [9][14]. - Management emphasized the focus on enhancing government and payor partnerships and leveraging their care platform to deliver high-quality, cost-effective care [2][13].

Industry Overview - The healthcare sector is experiencing growth due to technological advancements and increasing demand for medical services, leading to potential strong earnings growth in 2025 and beyond [1] - Rising healthcare expenditures, an aging population, and increasing disease prevalence are key factors driving this growth [1] Opportunities and Challenges - The sector faces both opportunities and challenges as 2025 approaches, with demographic trends and medical innovation supporting long-term growth, while potential government spending cuts and reduced funding create uncertainty [2] - Companies like Gilead Sciences, Option Care Health, and Aveanna Healthcare are highlighted as strong investment opportunities due to their resilience and impressive earnings surprise history [2] Gilead Sciences (GILD) - Gilead Sciences is a leader in the HIV market, known for its single-tablet regimen and significant market share [4] - The stock is trading near its 52-week high of $117.39, with a forward earnings ratio of 14.55X, significantly below the industry average of 45.36X [5] - The Zacks Consensus Estimate for GILD's 2025 earnings is $7.86 per share, reflecting a 70.1% year-over-year growth, with revenues projected at $28.55 billion [7] Option Care Health (OPCH) - Option Care Health specializes in home and alternate site infusion services, focusing on chronic and acute conditions [9] - The stock is close to its 52-week high of $34.85, with a forward earnings ratio of 22.46X, below its five-year median of 29.83X, indicating potential for further upside [10] - The Zacks Consensus Estimate for its 2025 earnings is $1.70 per share, indicating a 38.2% year-over-year growth, with revenues expected to increase by 8.3% [11] Aveanna Healthcare (AVAH) - Aveanna Healthcare operates as a diversified home care platform, allowing patients to receive care at home, which reduces reliance on costly hospital stays [12] - Analysts expect Aveanna to achieve and maintain profitability, supported by cost-reduction strategies and strategic partnerships [13] - The Zacks Consensus Estimate for Aveanna's 2024 earnings is 1 cent per share, indicating a 109.1% year-over-year improvement, with a projected jump to 7 cents per share in 2025 [15]

Company Announcement - Aveanna Healthcare Holdings Inc. will release its fourth quarter and full year results on March 13, 2025, before the market opens [1] - A conference call will follow at 10:00 a.m. Eastern Time on the same day [1] Conference Call Details - The conference call can be accessed by dialing 1-877-407-0789 for domestic callers and 1-201-689-8562 for international callers [2] - A replay of the call will be available three hours after it concludes, accessible at 1-844-512-2921 for domestic and 1-412-317-6671 for international callers, with a passcode of 13750192 [2] - The replay will be available until March 20, 2025 [2] Webcast Information - Interested parties can listen to a simultaneous webcast of the conference call on the Investor Relations section of the company's website [3] - The online replay will be available for one week following the call [3] Company Overview - Aveanna Healthcare is headquartered in Atlanta, Georgia, and operates in 33 states, providing a wide range of pediatric and adult healthcare services [4] - Services include nursing, rehabilitation, occupational nursing in schools, therapy services, day treatment centers, home health and hospice services, and enteral nutrition delivery [4] - The company also offers case management services to coordinate care among insurers, physicians, hospitals, and other providers, as well as respite healthcare services for caregivers [4] - Aveanna's services aim to provide high-quality, lower-cost alternatives to prolonged hospitalization [4]

Company Overview - Aveanna Healthcare is headquartered in Atlanta, Georgia, and operates in 33 states, offering a wide range of pediatric and adult healthcare services [3] - Services include nursing, rehabilitation, occupational nursing in schools, therapy services, day treatment centers for medically fragile and chronically ill patients, home health and hospice services, and enteral nutrition delivery [3] - The company also provides case management services to coordinate care among insurers, physicians, hospitals, and other healthcare providers, as well as respite healthcare services for temporary caregiver relief [3] Upcoming Events - Aveanna's management team will attend the 43rd Annual J.P. Morgan Healthcare Conference in San Francisco on January 15, 2025 [5] - The presentation will take place at 10:30 a.m. PST, followed by one-on-one investor meetings on the same day [2]

Core Viewpoint - Aveanna Healthcare (AVAH) is experiencing significant selling pressure, having declined 17.6% over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, with analysts predicting better earnings than previously expected [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 indicating that a stock may be oversold [2]. - AVAH's current RSI reading is 29.51, suggesting that the heavy selling may be exhausting, indicating a potential bounce back [5]. - Technical analysis indicates that stocks oscillate between overbought and oversold conditions, and the RSI can help identify points of reversal [3]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts covering AVAH, with earnings estimates for the current year being raised by 5.9% over the last 30 days, which typically correlates with price appreciation [7]. - AVAH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a potential turnaround [8].

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was approximately $509 million, representing a 6.5% increase over the prior year period [7] - Adjusted EBITDA for Q3 was $47.8 million, reflecting a 32.2% increase year-over-year due to improved payer rates and cost reduction efforts [7][35] - Consolidated gross margin was $159.7 million or 31.4% [35] Business Line Data and Key Metrics Changes - Private Duty Services (PDS) revenue was approximately $409 million, a 6.4% increase driven by 10.5 million hours of care, a volume increase of 3.8% [34][36] - Home Health & Hospice segment revenue was approximately $54.1 million, a 2.2% increase, with 76% of admissions being episodic [39][40] - Medical Solutions segment revenue was $45.3 million, a 12.6% increase, with gross margins at approximately 45.6% [43][44] Market Data and Key Metrics Changes - Preferred payer agreements accounted for approximately 47% of total PDS MCO volumes, up from 45% in Q2 [21] - The episodic payer mix was 76% in Q3, exceeding the goal of maintaining it above 70% [22] Company Strategy and Development Direction - The company is focused on enhancing partnerships with government and preferred payers to create additional caregiver capacity [29] - Strategic initiatives include identifying cost efficiencies, managing capital structure, and engaging employees [29] - The company plans to implement a preferred payer strategy in the Medical Solutions segment by the end of 2025 [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the labor environment remains challenging but is showing signs of improvement [10][47] - The company expects full year 2024 revenue to be approximately $2 billion and adjusted EBITDA to exceed $168 million [30][52] - Management expressed optimism about the continued positive momentum in rate increases and preferred payer agreements [66] Other Important Information - The company has secured 12 state rate increases year-to-date and expects more in early 2025 [13] - Liquidity at the end of Q3 was approximately $285 million, providing room for operational and growth investments [48][49] Q&A Session Summary Question: Progress on preferred payer relationships in home health - Management indicated they are in the later stages of developing these relationships and expect continued growth in episodic volume [55] Question: Thoughts on final Home Health rules and budget neutrality - Management expressed disappointment in CMS's lack of action but noted their model remains successful under current reimbursement structures [61] Question: Pricing increases and labor market outlook for 2025 - Management highlighted positive momentum from rate increases and improvements in the labor market, with expectations for continued growth [64][66] Question: Sustainability of free cash flow generation - Management noted Q3 is typically a high period for cash flow and expects to remain a positive free cash flow company for 2024 [75] Question: Cost savings initiatives and margin outlook - Management stated that most cost reduction efforts are complete, with a focus now on Medical Solutions for further efficiencies [83] Question: Hiring trends in Georgia and Massachusetts - Management reported significant improvements in hiring and case fill rates in Georgia following rate increases [88][90] Question: Geographic expansion and M&A plans - Management confirmed plans to reenter the M&A market in 2025, focusing on Private Duty Services and Home Health & Hospice [93]

Core Insights - Aveanna Healthcare (AVAH) reported revenue of $509.02 million for Q3 2024, marking a year-over-year increase of 6.5% and exceeding the Zacks Consensus Estimate by 2.67% [1] - The company achieved an EPS of $0.02, a significant improvement from -$0.03 a year ago, resulting in an EPS surprise of 300.00% compared to the consensus estimate of -$0.01 [1] Financial Performance Metrics - Hours - PDS: 10,474 hours, surpassing the estimated 10,301.9 hours [3] - Revenue rate - MS: $492.67, compared to the average estimate of $454.77 [3] - Unique patients served (UPS) - MS: 92, matching the estimated average [3] - Revenue rate - PDS: $39.10, exceeding the average estimate of $38.66 [3] - Revenue - PDS: $409.56 million, above the estimated $399.42 million, reflecting a 6.5% year-over-year change [3] - Revenue - MS: $45.33 million, compared to the estimated $41.66 million, indicating a year-over-year change of 12.6% [3] - Revenue - HHH: $54.14 million, slightly above the estimated $53.32 million, with a year-over-year change of 2.2% [3] Stock Performance - Aveanna's shares have returned +3% over the past month, in line with the Zacks S&P 500 composite's +3.2% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Group 1 - Aveanna Healthcare reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of a loss of $0.01 per share, and showing improvement from a loss of $0.03 per share a year ago, resulting in an earnings surprise of 300% [1] - The company achieved revenues of $509.02 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.67% and increasing from $478.01 million in the same quarter last year [2] - Aveanna has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating strong operational performance [2] Group 2 - Since the beginning of the year, Aveanna shares have increased by approximately 79.5%, significantly outperforming the S&P 500's gain of 24.3% [3] - The future performance of Aveanna's stock will largely depend on management's commentary during the earnings call and the subsequent revisions of earnings estimates [4][6] - The current consensus EPS estimate for the upcoming quarter is breakeven on revenues of $499.84 million, while for the current fiscal year, it is -$0.03 on revenues of $1.99 billion [7] Group 3 - The Medical - Outpatient and Home Healthcare industry, to which Aveanna belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook for companies within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Third Quarter Revenue was $509.0 million, a 6.5% increase compared to $478.0 million in the prior year period[1] - Revenue for the three-month period ended September 28, 2024, was $509,023, an increase of 6.5% compared to $478,010 for the same period in 2023[29] - Revenue for the nine-month period ended September 28, 2024, reached $1,212,418,000, a 6.8% increase from $1,135,365,000[35] - Revenue for the three-month period in the UPS segment was $45,326,000, a 12.6% increase from $40,271,000[34] - Revenue per completed episode in home health increased to $3,104, up from $3,046, marking a 1.9% increase[33] Profitability Metrics - Gross margin increased 8.4% to $159.7 million, representing 31.4% of revenue for Q3 2024[3] - Gross margin for the nine-month period ended September 28, 2024, was $463,820, representing a gross margin percentage of 30.8%[31] - The company reported a gross margin percentage of 31.4% for the three-month period ended September 28, 2024, compared to 30.8% for the same period in 2023[30] - Gross margin for the same period was $109,827,000, with a gross margin percentage of 26.8%, down from 27.2% year-over-year[32] - Gross margin for the nine-month period was $320,830,000, with a gross margin percentage of 26.5%, down from 28.2% year-over-year[35] Net Income and Loss - Net loss for Q3 2024 was $42.8 million, significantly improved from a net loss of $102.4 million in Q3 2023[4] - Net loss for the nine-month period ended September 28, 2024, was $40,109, compared to a net loss of $108,788 for the same period in 2023[29] - Net loss for the three-month period ended September 28, 2024, was $42,843, compared to a loss of $102,389 for the same period in 2023, indicating a significant improvement[39] Adjusted Metrics - Adjusted Net income was $4.6 million, an increase of $9.3 million over the comparable prior year period[1] - Adjusted EBITDA was $47.8 million, a 32.2% increase compared to $36.2 million in Q3 2023[5] - Adjusted EBITDA for the three-month period ended September 28, 2024, was $36,191, compared to $36,191 for the same period in 2023, reflecting stable operational performance[38] Cash Flow and Liquidity - Cash as of September 28, 2024, was $78.5 million with an incremental borrowing capacity of $37.9 million[8] - Free cash flow for 2024 was reported at $16.7 million[8] - Cash and cash equivalents at the end of the period were $78,462, up from $48,294 at the end of the previous year[27] - Net cash provided by operating activities for the nine-month period ended September 28, 2024, was $19,231, compared to $25,677 for the same period in 2023[27] - Free cash flow for the nine-month period ended September 28, 2024, was $16,720, demonstrating positive cash generation capabilities[43] Debt and Financing - Bank debt as of September 28, 2024, was $1,480.2 million, with interest rate exposure hedged through $520.0 million in interest rate swaps and $880.0 million in interest rate caps[8] - Total indebtedness as of September 28, 2024, was $1,480,150, including a 2021 Extended Term Loan of $895,150 and a Second Lien Term Loan of $415,000[28] - Interest expense, net for the nine-month period ended September 28, 2024, was $118,208, compared to $113,304 for the same period in 2023, indicating rising financing costs[38] Operational Efficiency - Field contribution for the three-month period ended September 28, 2024, was $71,515, reflecting a 27.1% increase from $56,260 in the same period in 2023[30] - Operating income for the three-month period ended September 28, 2024, was $34,024, a significant improvement from an operating loss of $76,352 in the same period in 2023[30] - The field contribution margin improved to 14.0% for the three-month period ended September 28, 2024, compared to 11.8% in the prior year[36] Other Financial Metrics - Corporate expenses for the nine-month period ended September 28, 2024, were $91,981, an increase of 8.6% compared to $84,735 for the same period in 2023[31] - Total adjustments for the three-month period ended September 28, 2024, amounted to $48,952, down from $96,069 in the same period last year, indicating reduced operational disruptions[42] - Goodwill impairment for the nine-month period ended September 28, 2024, was $2,904, significantly lower than $107,222 for the same period in 2023, suggesting improved asset valuation[39] - Non-cash share-based compensation for the three-month period ended September 28, 2024, was $4,902, slightly down from $5,116 in the same period last year[39] - Acquisition-related costs for the three-month period ended September 28, 2024, were $150, down from $428 in the same period last year, indicating a decrease in transaction-related expenses[39] Shareholder Metrics - The weighted average shares outstanding, diluted, increased to 193,361 for the three-month period ended September 28, 2024, from 189,139 in the same period last year[39] - Income tax expense for the three-month period ended September 28, 2024, was $15,511, a significant increase from $631 in the same period last year, reflecting changes in tax obligations[39]