On March 14, 2024, Aveanna Healthcare Holdings Inc (AVAH, Financial) released its 8-K filing, announcing financial results for the fourth quarter and fiscal year ended December 30, 2023. The company, a diversified home care platform providing care to medically complex, high-cost patient populations, reported a 6.1% increase in fourth-quarter revenue to $478.8 million compared to the same period last year. This growth was primarily driven by a $22.2 million increase in Private Duty Services (PDS) segment revenue and a $6.1 million increase in Medical Solutions (MS) segment revenue.
Financial Highlights and Challenges
The company's gross margin for the quarter increased by 15.3% to $148.4 million, reflecting a gross margin percentage of 31.0%. Despite these gains, Aveanna Healthcare experienced a net loss of $25.7 million for the quarter, which was a significant improvement from the net loss of $237.8 million in the prior year's quarter. This reduction in net loss was primarily due to a $205.1 million non-cash goodwill impairment charge recorded in the fourth quarter of 2022. Adjusted EBITDA for the quarter was $38.7 million, a 30.4% increase from the previous year, indicating a stronger operational performance.
For the full fiscal year 2023, Aveanna Healthcare reported revenue of $1,895.2 million, a 6.0% increase from the previous year. The company's net loss for the year was $134.5 million, a substantial improvement from a net loss of $662.0 million in fiscal year 2022. The adjusted net loss per diluted share was $(0.11) for fiscal year 2023, compared to adjusted net income per diluted share of $0.00 for fiscal year 2022.
Liquidity, Cash Flow, and Debt
As of December 30, 2023, Aveanna Healthcare had cash of $43.9 million and significant borrowing capacity, with an undrawn revolver and approximately $168.1 million of borrowing capacity available. The company's net cash provided by operating activities for fiscal year 2023 was $22.7 million, and free cash flow was $12.5 million. Total indebtedness stood at $1,469.8 million, with various interest rate hedging instruments in place.
Jeff Shaner, Chief Executive Officer, stated, "Our fourth quarter results reflect the substantial progress we have made in 2023, highlighted by revenue and Adjusted EBITDA growth of 6.1% and 30.4% respectively, when compared to the prior year period."
Matt Buckhalter, Chief Financial Officer, added, "The continued efforts of our strategic initiatives have positively impacted our cash flow from operations in 2023. The success of our preferred payor and government partner strategy gives us confidence in the momentum we carry into 2024."
2024 Outlook and Strategic Focus
Looking ahead, Aveanna Healthcare anticipates full-year 2024 revenue to be between $1,960 million and $1,980 million, with Adjusted EBITDA expected to range from $146 million to $150 million. The company's focus remains on expanding its position as a leading value-based homecare provider, with enhanced payor partnerships and investments in caregivers to deliver high-quality care to more patients.
The company's performance and strategic initiatives underscore its commitment to providing cost-effective home care solutions, which is increasingly important in the healthcare industry. Aveanna Healthcare's ability to improve its financial metrics, particularly in the face of industry challenges such as reimbursement pressures and regulatory changes, positions it as a resilient player in the healthcare providers and services sector.
For more detailed financial information and the full earnings report, investors and analysts are encouraged to review Aveanna Healthcare's 8-K filing.
Explore the complete 8-K earnings release (here) from Aveanna Healthcare Holdings Inc for further details.
