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Aveanna Healthcare (AVAH)

Participants
Shannon Drake Chief Legal Officer and Corporate Secretary
Rod Windley Executive Chairman
Tony Strange President and CEO
David Afshar Chief Financial Officer
Jeff Shaner Chief Operating Officer
Joanna Gajuk Bank of America
A.J. Rice Credit Suisse
Sarah James Barclays
Brian Tanquilut Jefferies
Justin Bowers Deutsche Bank
Matt Borsch BMO Capital Markets
Call transcript
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Operator

Good morning. And welcome to Aveanna Healthcare Holdings Third Quarter 2021 Earnings Conference Call. Today’s call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I’d like to turn the conference over to Shannon Drake, Aveanna’s Chief Legal Officer and Corporate Secretary. Thank you.

begin. may You

Shannon Drake

Good Aveanna Operator. And you thank Thank third morning, quarter joining Healthcare’s XXXX for you, everyone. earnings call.

SEC to call of Chief press President; issued our made until may Form statements These XX-Q of Speaking may Tony section Shaner, to be or Aveanna’s assumptions Also Financial a these Listeners today’s read statements, are on forward-looking place materially differ quarter could expectations, Officer. reliance will are such Aveanna’s as Jeff current website contain November today implied in call expressed laws, as which XX, have to XX, Form the any by will XXXX, SEC. Windley, a of on made our that subsequent results, statements this are forward-looking the replay website risks not securities X-K cause We forward-looking or Risk operate. Operating Executive of update actual today’s a impact filings. All statements to beliefs to Officer; Except XXXX. be Aveanna Strange, disclosed similar filings subject or and revise complete may, are and listening documents Investor and on future made they those this to environment today, and Aveanna’s federal to Afshar, factors release of of earnings Executive could words may nor to available call. David reason. identified those and required any by today’s for call. third a our undue as yesterday Chief statements them. may who results and events, including the should Officer business circumstances undertake supplemental our encouraged result today’s expressions. the Aveanna’s replay updated management’s Factor information, Chief Rod on call and review presentation, We We of could, more as subsequent publicly well anyone www.aveanna.com. and will, that or as our are statements as headings filed our date forward-looking statements new November and our on are be call that encourage available These expect, does not other related discussion for other at we risks intend, about with from all our uncertainties plan, Relations to on be are words -- not been want the based changing under you our Also, which and Chairman; remind and

non-GAAP provide should GAAP. with addition results understanding in our certain complete results, exclusion can but of together in GAAP, and our relied our GAAP reported In our more we supplement with accordance business results, a measures. accordance the to not measures be of results with upon financial operating to they viewed believe GAAP we our When results with financial reported financial these that

available to release at press comparable reconciliation website measure and SEC’s non-GAAP most on is in In www.sec.gov. call call the which GAAP addition, on are a during our XX-Q, of our our in of any both mentioned earnings available and measure our -- earnings website the

Tony? the President, Executive possible limit so we Officer many remarks, follow-up, one Strange. that, comments open Tony will one callers questions. to question Following call initial over With turn Aveanna’s today’s we can time. prepared -- in your Please the I call to we Chief as to accommodate and will will allotted close that as and the

Tony Strange

Thank Thanks, Shannon, third and everyone. for earnings quarter call. you good morning, Aveanna’s joining

call. today’s lot a press see from cover can release of last night, have you we information our on As to

to insights our a on everyone’s run some the reimbursement we on as well questions. COVID-XX our today remarks current little goal The quarter will to as and is environments. results, company’s call As updates of may accommodate call long, a extend bit result provide our but the prepared third

with our us bring In and of to our addition, year the release the a you fund and that we XXXX published up of M&A investor guidance night as like our to deck would the M&A speed into full recent most some supplemental provide will as growth, assist well on above, to capital the all transactions, be XX-Q. last beyond. To deployment in referencing discussing along was we press insight

all first make like even take into to thank all caregivers more doing Today’s are the details, each jumping and and for what day. can to a task our smallest you moment the complex. of environment Before I’d every employees administrative

your make the to and patients You it in frail to vulnerable mission families bring and of most America. population

delayed spend long-term and that behalf supply Both at qualified continue Directors of on executive trends a overall caregivers industry Services alone. Across we about demand So, talking I the of to constraints an and services impact industry, our Hospice that see from we higher all-time our and Private importantly, & outlook our inability do. and and discharges what Duty our you being on meets segments to our home-based rate of they demand. settings and labor all for experience high. perhaps, Aveanna. to to that due The exceeds our providers how current thank Board you are team, moment acuity at the a like demand Health shareholders, Home patient our affect results, is not the hire for our more for

that believe we reasons, home these how viewed. we care in is shift a are experiencing For

policymakers, effecting years valuable in overall private the ever, can legislators and all and are costs. many play recognizing the time payers state that healthcare first care clinical and possibly reducing home while For role outcomes, federal in

reported During our of reimbursement care. that the we home-based states XX either increase expanded second and our XX for had quarter call, or benefits

the the where XX% operate following we managed states partners of to decision has the more care providing more As made that into the home. dollars XX our Many we to in indicates over That are of grown in. XX of states today, of invest services operate suit. that that number

in continue have you week, Health CMS We last ability obtaining by final it increase to was as better for our was our the rate published too saw increases originally Home and to target capacity. rule that And expected. than success

we pandemic. mandates healthcare is being point All have world nurses social The we that we that healthcare vaccination of issues an disrupted vaccinations, affected COVID-XX by the a been in X an home-based Americans know living always business increasing general has by to Hiring and world environment the in which these political specifically this wide the caregivers more disrupting it. a what enough play can refer and a with in in vaccinations yourself has In further belief as hard, left variety where that, COVID-XX been will indicators role complicated by find to role but played meaningful mandates a it Magnify environment. surrounding as America. of and in have industry million growing will workforce. meantime and in and a and hangover. all are has in you are care become increasingly difficult and the

over single every with along combat We other caregiver. hand-to-hand and healthcare engaged nurse doing? we are what every provider in are So

back a more and hours. return program have to to work work nurses to that We implemented come to work caregivers incentivizes and

make to tools orient and to created We train. and apply, easier it for caregivers nurses have

not an his view programs some who will remarks. caregivers as rewarded vaccinated this the enough efforts subside. incentivize still then the And We prepared only additional U.S. supply will get The caregivers to for reach demand. our home-based to during is in have implemented COVID-XX reach have to meet do demand and appreciation demonstrated increasing will and new their disruption details nurses there and rates nurses and threat provide and loyalty and when we of labor markets Eventually to with an nature. will and near-term these a the Jeff We then even will care. they all have Aveanna. normal vaccination equilibrium in be there

previous extremely XX.X% despite and over basis the proud have XXX our even by this We margins our are revenues we XX%. of our more headwinds, we gross points these quarter expanded results impressive year grew to

shift and a disciplined than to dollars caregiver increase pricing nurse meet that management, on these margin Duty outstanding is also job Services. difficult had to reinvest environment, in Private expansion mix growth. into the will that an done during back to expansion profitability labor the gives of in managing able which our Health, has afforded of by to we in accelerate accompanied to Home expected expectations Team but flexibility is margin attributable we Some confidence related the us serve related lower this business revenue this volumes. us toward expenses some The be expense wages to should

on We like of M&A touch a will we But first provide night. a detailed results last our -- in our that activity review would the moment. we announced to

aware we are announcing October on you Xst SEC to X-K with Care. that had acquire agreement into entered As Comfort an we the filed the an

to As all acquire not but of as is well. our surrounding with the Care, agreement of and latest have the our SEC provide approvals details proceed this necessary to from we to you Accredited it call only intent received the Comfort

M&A between year $XX million $XXX a our new year. strategy $XX acquire produced is of and recall will you adjusted million to per As and EBITDA $XXX was million revenues that million between

businesses assets diligently -- acquire Aveanna on the manner. traditional to to capturing synergies timely in and in Health the was goal Our and both integrate acquired Duty Private Home work the a

the April close evening Doctor’s acquisition we Choice in the that and acquisitions to is With in two of expected QX. last announced

we a around M&A combination maintaining approximately in net Originally and revenues while will times X $XXX to X.X fund our exceeding acquired be to using XXXX leverage of contemplated growth, times. million Our goal. debt far the equity

we values have profile debt, transactions net care to in the our which both home given these to will However, with raise approximately of X stocks times. leverage fund depressed decided

very shareholders our valuations. our leverage sheet. future growth to down the the meantime, will use proud We at In depressed continued with time strategic these and bring to are of continued our M&A over without we balance existing work dilution of growth,

in, will deeper dive as over M&A. for as into for as future transactions, well So the lead with that Rod pipeline a insights the and call I into some turn a two our to Rod?

Rod Windley

obviously Tony. been very, very six Thanks, months. It’s a busy

Aveanna. completed all now XXXX, half which of six been transactions to second we the Just in into of reiterate, fully integrated have

extremely gone and completion. Next has well April integration and we that completed Choice nearing also is Doctor’s in

& two private Southern and to definitive Alabama summer the Certified a Home acquire Health duty it a Accredited through entered Care, have company in Home and made Care, as based Medicare additional in Comfort Over and we gauntlet a our result California. Company into Tennessee, Hospice agreements transactions

provides rate Comfort traditional Medicare the Hospice to and basis. look million provides Home both each approximately services its Care a services Hospice a Alabama, take represents & Comfort run Traditional in patient Comfort primarily with Care. makes and a XX%. another Care $XXX up with approximately state of the Let’s revenue locations, few closer revenue XX entire XX% these beginning care in through on XX% population current locations Tennessee. at Health produces throughout home of --

related Care record company reputation a Our an diligence with a making a to good Comfort its track indicated Aveanna. compliance solid markets it and that extremely fit well-run is for in stellar

multiple price is While to XX of the benefit approximately first closing December. present and tax We significant $XXX times. of purchase price Care reducing the of would Comfort value EBITDA licensure of synergized imply fully a the and with clearing million, $XXX $XX day received purchase million, the times thus approximately we week net between This during also XX sometime anticipate million. a

year provides California. per or Medicaid basis. of EBIDTA million on the a other transaction of company purchase our the in and than through its company of derived is eliminates California Accredited closed once times a through current $XXX of own business more based XX% unskilled unskilled Accredited’s business let’s a purchase around a labor skilled of care our Accredited is could unlike consistent and run XX of with that been in revenue the to to rate State programs, by today’s is duty retained revenues and recruited be on We family, second very environment. are quality price on reliable Accredited which approximately $XXX business and generating energized between leading X implied has base The The in million that state-funded and is in in basis state. $XXX is years and of home attendants settled, care. the attendance in multiple unskilled fantastic private upward is times. be Southern million, recruiting price volumes which one the reputation believe will has on are move fully adjusted based the X Care. the Accredited difficult provider through which providers a designated being for The considered Home services state. Now, our

Given in us Aveanna we believe move can play the a role density Accredited forward. as expenditures, that for healthcare brings to advantage that that reducing unskilled can overall strategic California the be we in

closing We have and the anticipate cleared end by all month. on the Accredited of necessary the hurdles

are to segment. make both of the environments has under highly were separate community process will and The businesses deal fortunate strategic different in in transactions being time in integrated same private in contract. integrated one transaction slowed competitive the first IMO other to teams. flow The be we fully XXX have one the with competitive. they are highly Both California, days. every Each and both the a XXXX along down continues with While not by either are equity the is them of acquisitions Alabama and is in integration majority occurring at

can we excited both about are tell these you very transactions. As

two excess space. lot We transactions, pass pipeline. only of day mix, process. On any Tony at in annualized our profile. Very revenue financial M&A position we stringent look earlier, care these those target million, given geography to We business for the acquired a transactions a home in transactions believe million M&A to of basis. both million XXXX approximately few As potential in our growth our of tracking as that in that transactions mentioned on in $XXX are an million our our our fit leader bring diligence and pursue $XXX $XXX the solidify compared $XXX to but

pay are the on over and transactions. to plans Dave turn future. foreseeable to meet While to we me we these that how for we you financing targets that, confident intend our more our pass we transactions will tell we to complete, than continue call let acquisition anticipated the With for about

David Afshar

Rod. Thanks,

that XX.X we the new Accredited On sheet balance to the sheet pleased combination of position laid with filed to strong Rod liquidity and in debt. yesterday, that’s now we and slide fund you be on that plan supportive just deck Care are the We out. Exhibit balance on cash strategy such see will of Comfort a right acquisition a XX that and of

the from after Loan will $XXX have on launch Lien we balance loan We million million facility million $XX good to plan use new approximately securitization on and Second we that borrowings And approximately from and $XXX million $XXX XXXX M&A, of of these that for revolver. XXth fund sheet, two later new with still our availability of closed cash transactions, in proceeds available a under of Term we liquidity November. we our $XXX our term delayed million draw November

debt information in QX. fund balance had new I QX at approximately plan the M&A. provide forma also will on the on $XX a of sheet cash to We million use the little more end that just to we pro our

to fund has can comes of draw our QX rates by for that underwritten company scale plan we attractive The as million secured facility an $XXX and we grow. Bank receivables. million with securitization capital Our $XXX securitization interest is piece facility M&A. is new and the It’s efficient PNC by facility up our new and we to

best Term new efforts. by the it of is be committed an million total, the will Second $XXX other Regarding and raised will million through fully loan eight-year and underwritten $XXX Lien Loan, $XXX million be Barclays, in which

of the debt light you you of our to instead like As will forma best of incremental our that, in We in fund XX, X in will of the is add slide continuing leverage be of usage on interest and see think term for leverage, this And front? raises, M&A new M&A this pro financing incremental QX M&A on would with especially equity range. at the shareholders attractiveness Tony time. anything the markets, issuing credit the to total

Tony Strange

nice No. I a Dave, that really think, you out. laying did job

the is believe leverage use little is sheet originally we our our contemplated, we time better While for than a being. higher this balance a of

and comfortable of level a perspective. cash flow this managed before have many are We times leverage from quite

In capital beyond. believe future continue we As over acquisition runway time short, before, strategic XXXX our I of for and pipeline a through our reducing anticipate leverage give our that to balance continued existing our M&A sheet. we us use mentioned and structure and growth, growth

So a attention our dive turn QX let’s our toward results. into deeper

are with mentioned than As volumes. anticipated we results our despite I earlier, very lower pleased the

caused This The volumes volumes Private quarter historically third being Duty our the improvements was is Private coupled a to continued in rate Duty schools and Services year Hospice expectations. and partially to to than and market The summer Home of disruption for summer the in -- specific low and lower labor offset family be vacations. Health point softness caregiver the business due out family in Services. by & with

up net from $XXX Our QX were revenues overall of XX.X% million, XXXX.

up basis improvement We and continued basis to of margin QX XXXX see points driven points three of factors. primarily margin expansion XXXX. over QX is net revenue, to XX% of gross XX gross by The XXX up from

Private Health, approach improvements mix a controls. to shift expense Duty Services Home disciplined other our the continued rate in and toward and our very Continued labor

we As to of to the and late wages will near-term and some our decisions make markets, on these back strategically when accelerate fuel nurse choppy caregiver we navigate to into will growth. reinvest which availability, labor benefits dollars continue how

SG&A including line being other corporate in with expenses, the On expectations.

of the revenues. for quarter EBIDTA was Our million $XX.X XX.X% or

Dave I ability of call like segment our deeper also our cash mentioned cash Jeff The driver turn earlier. to Before strong I’d the our highlight that to the is for results, over to biggest into revenue. a monetize dive position

in team AR outstanding cash. an job done has revenue to Our cycle converting

team. cycle why it With collected more This Jeff, guys, through Congrats, by that, and exceeding segment coming. don’t quarter us detailed job revenue a you their entire walk the goals. $XXX Elkington Great million result? they James keep

Jeff Shaner

indicators with metrics pleased key am XXXX QX this share operating Tony. you, you our I and Thank to morning.

into and I’d safe challenge the operating instrumental pandemic, Aveanna risen providing get I been efficient and a spend like to adapt our teammates posed and efforts have to minutes and Before trends. COVID. our healthcare and the Throughout overcome Innovation our the recent in daily creativity COVID-XX caregiver patients’ of few by and homes. the our COVID-XX ability to segments, consistently activities employment on have challenges

virtually our our efforts training, onboarding, recruiting, every clinical and We have with re-engineered retention aspect employees. engagement of

All focused in on efficient streamlining manner. of caregivers and the process the been our have to most hire efforts onboard

have we have states comply. we every proud am governments state that that these vaccination each doubled healthcare XX we have full To-date, caregivers care caregiver workers. most with have efforts get and vaccine mandated ultimately continue mandates, and for receive to say local I families. and vaccinations As have introduced to and are to to our mandates COVID in patients and our their compliance chosen thankfully to for

We by mandates to move January Aveanna. by vaccinated including care additional mandates and vaccination as the OSHA trend industry, expect home forward and as dose continue December a this we These fully announced Xth. the create well recently for employees be challenges to all major requiring with first Xth as CMS mandates, most federal

of cases downward COVID consecutive has overcome our report to COVID prepared is mottos taught come and our our serve proud we will all weeks. adapt and to continue at mission. has together times. Aveanna this unexpected and a among be am expect can opportunity that and and reported the I we Aveanna However, continued our for our one for to us to trend one of XX However, another teammates is to employees

At return phasing unemployment benefits. of employment of to QX state we hiring the out and the expected federal improve trends. with enhanced schools to end and on the trends to caregiver Now

hires, offered on caregiver. point the are and trends will week and zones, positive recent seven in lift some applicants, moving current have Our throughout direction caregiver virtual all caregiver employment hours They a our Bonus a need QX. offering our caregivers payroll a recruiting days caregivers option clinicians in with daily weeks more for metrics, provided through cash completing Vaccination caregivers trends. XX virtual we vaccinated day offered key worked week to the to-date, The payroll I’d improvement us in a to X,XXX in faster who a and on flexible, clinical and efforts talk seven Program September have completed visits orientation to caregivers. orientation time and steady hires, point these fully hours early of engagement days yielded training that all or a include this last caregiver pay eight be over continue rewards believe like as for for caregivers trends paid employment employment low per for

Program. to bring inactive to program caregiver also provide have with Aveanna, part-time new these efforts and a groups program more hours to week employees, nurses Bonus recruiting will retention. targets positive our who never nurses nurses strengthen to then and and our back have aligned is distinct and This to momentum XX-week introduced COVID all our groups boosting full-time care. We work more reach designed efforts reengaging the is get to for back former encourage of worked four caregiver four per caregiver pre-COVID nurses It of by shifts take rewarding and continue labor with trends. to some This

Tony for segments. services & XXXX to for continue exceed We demand our labor PDS the As mentioned, this dynamic supply. continues Health our and into Hospice believe Home well far will our

commodity our is through this that most precious Lastly, are are caregiver. environment we reminded

Services onto segment. Private Duty Now the

Patient produced approximately in The at the find of and is partner million driven patients home. we driver all-time to new X% of hours the hospitals decline decline. volume or was year-over-year with continue we of segment PDS demand care solutions caregiver during availability. our million to primary by as get volume high, children’s an decline our lack to in of payers approximately pediatric over QX QX During the $XXX.X a of Revenue or provided X.X% XXXX. a revenue quarter in X was

caregivers paid hired. low caregivers As week Day was and Labor our mentioned, point and new

our difficult metrics our through we benefits return innovation With focus environment and unemployment out am as efficiency leadership PDS continue in fight of and had of and improvements to efficiencies patients the on caregiver to -- eight employment and and a families. weeks improved proud creativity PDS. they the teams phasing hiring enhanced schools of I

$X.XX of XXXX improvements X.X%. to rate With of wage revenue rate primarily Services our Our up XX-year-to-date mix and caregivers. unskilled of QX and stabilization are we services. or Private per driven through our increases a Duty improvements between actively business rate by hour was reimbursement was $XX.XX from passing skilled This

this trend well expect to in We of the continue will and XXXX into trends be PDS our employment improved segment. driver this primary

to margin hour to of improvement Turning our in XXXX. gross to of with dollars. we gross per QX and year-over-year growth cost labor metrics, in margin was per million gross QX cost in $XXX.X continue experience margin up equates or PDS of XX.X%. a hour This of $XX.XX X.X% from $X.XX

hour spread improved $XX.XX. to our Lastly, per

as our spread spread still segment. -- I expect for hour $XX.XX to Long-term, against year-over-year to against investment the per our target a a increases believe rate balance growth to in balanced is range X% PDS $XX normalize caregiver We per positive strategic volume X% ideal we our the wages. X%

being are committed in harder of qualified the ever choice industry caregivers. and to We we retain to than PDS are working and employer the attract

transitioning mentioned, referral and need urgently families to home, for go the help wanting payers time our As many our sources first ever. home

excitement found and like about add my caregivers. referral our value retain be attract to would the proposition acquisition. sources have customers, payers to need Care the and Accredited our PDS both Home to and We to receptive our I

deep for reputation quality California. in respect Southern to families few last have care the the I have and the and months Accredited gotten Over the a provided know to team

story family. closing and the to be is California Accredited welcoming for already Our furthers Aveanna important a preparing IMO the continues and very our team Accredited state into to only employees that strategy. Aveanna

to on Home our presence. segment expand to Now & Hospice continue we where QX Health our for moving national

recover we that of have the mentioned to previously Aveanna Choice of to and integration and am family. Doctor’s the the health X share into of pleased in I progress stages it points expectations. ahead continues final are our As integrated fully we

team dedicated business methodically IMO way model. Hospice new led our & has as our Home Our acquisitions into Health we integrate the

Comfort great has services, our to IMO on continues announcement team Care integration and recent in and more sights locations, their of we caregivers Care & in enhance into about more With successful to network Hospice already Hospice the Hospice of leverages Tennessee. way which presence brings in in Comfort XXXX. Comfort another Alabama the we are and Home set as our talk Aveanna. Health density a excited Care also move meaningful

Now for on Home segment Health QX. Hospice to & indicators

& we produced employment believe increase will were million on the $XX XXXX. efforts. by update, for continued and focus QX this admissions, growth payer mix. caregiver XX,XXX margins driven XXX% a admissions approximately over growth margin of XX,XXX gross pressure felt remainder and nurse we quarter segment XX% total This the a in revenue, episodic businesses the From remain of gross was retention double-digit episode for emission On with our margin improvement QX am business with cost have Revenue expectations. care. quarter. Home rate on XX.X% a was episodes growth the and Doctor’s driver in for along $X,XXX perspective, XXXX. of a The primary a organic episodic Choice business, of recruitment of the pleased our During total line per I with was Health Hospice being and and

We our activity to have increased and recruitment keep acquired newly invested additional up with recruiters in businesses.

PDS offset We are our vast recruitment has on segment and some our leveraging that helped network market to pressures.

Our Health business expectations grow this XX% wages gross our organically in Home retaining range. X% and Hospice up & use us contract tenured margin We of staff. to to range budget XX% maintain is staff stepped and on have and the we focus bonuses allows to our our still XX% to retention a within our believe

updates. believe pleased has the their into CMS and we current with are XXXX Hospice pressures the recognized rate Lastly, for final Home Health rules labor incorporated this & and

from XX states support also effective We the program pilot of expansion all purchasing the to XXXX. value-based

these We our for Medicare and further are Advantage purchasing payers. look to well-positioned conversations value-based expand with

QX. results to Medical for Now our segment Solutions Aveanna

and Revenue produced with profile During strategy quarter novo de growth. year-over-year XX.X% million Medical volume our is with unique patients organic $XX.X or consistent to during in was serve This driven year-over-year by XX,XXX grow both QX, growth we revenue Solutions growth. of strong activities. the or XX.X%

QX to Our was product revenue benefit up the and both driven volume Hospice mix XXXX, from growth primarily & segments. expect from of Health PDS by revenue and UPS X.X% I shift. our $XXX.XX to Home of growth per of continue

I Turning gross the million stability XX.X%. to gross with continue our cost XX.X% in of margin gross gross goods equates experience in $XX.X moving in of to margin XX% remain This forward. margin in margins range we and or to to a dollars. year-over-year QX to XX% growth metrics, expect

in the of our allows conditions patients. to pediatric, -- nutrition results. and current environment. number referral enteral like Aveanna very through geriatric cost their and a care I’d Regardless back our still one home updating to market you With look call short-term continue dedication and on choice operating and that, forward of source the over our turn payers. families, Thank sources I is to homes. on end high three year and proud and am the I patient’s patients, In effective and Dave. referral QX you focus dedicated to segments model adult business a for service our proprietary safe fight quality, providing expansion to our difficult summary, healthcare to team of this of distribution Our all continued of

David Afshar

in a call. million was $XXX operations, is million Health liquidity go to that our Revenue Health of $XXX.X quarter an from facilities. on Home or QX XXXX, Home growth we Hospice The for XXXX, of in & will ago of increase result increase primarily million QX $XX.X I the as provide ahead Jeff. results for compared a X.X%. Health $XX.X & & significant driven over some acquisitions and Thanks, details as of credit this and Home have discussed Hospice million year our of by Hospice increase revenue segment,

continue also Tony we PDS particularly rate to see in the As wins segment. reimbursement mentioned,

The one due Our increased one environment X.X% caregivers PDS on supportive to balance at our PDS bring revenue increases. those rate rate to the patient of our hour unmet workforce the rate back and time. is mission a into for reduce and demand reimbursement services more

XX.X% of of QX Operating $XX.X from margin revenue our in a to of was gross million for was of for $XXX.X compared for or of QX increase. XXXX, to third gross of XXXX, XX.X% as ago third million $X.X margin the growth the growth our turning million revenue to Now our as to favorably XXXX, XX% a for XX.X% $XXX.X income million year XXXX, $XX.X revenue compares million quarter QX compared of gross quarter margin, the quarter. or

increase to in revenue in as quarter. QX from pleased X.X% revenue XXXX percentage operating see X.X% of ago are to of income year We the

Our of or million of year with this of charges in XX.X% XXXX. QX financial increase expenses as XX-basis-point XX-basis-point of revenue XXXX. The contribution in year of million of in Both that decreased over our options. X.X% percentage to however, in field to QX X.X% was million percentage was to to adjusted QX our million $X.X these a in MD&A. reason to operating revenue income modification XX.X% increase was our revenue, in $X.X positively of combined vesting and by the a in XXXX, $X.X increase as are of increase as related field to of of and the to included of costs a million as $X.X items further prior corporate recorded for corporate of delivered field our an QX ago XX.X% field Primary share-based QX $XX.X XXXX. X.X% of our debt improvement contribution expenses the incremental QX in we compared Note, that from footnotes contribution by from incremental an comp performance compared consolidated X.X% QX XXXX QX in our in was quarter. discussed our revenue expenses for statements margins increase quarter contribution revenue margin in improvement, growing the Offsetting corporate some in impacted

to being on XXXX, nine from $X.X represents increase on of interest of to in first a QX Primary XXXX, our million XXXX XXXX. items. million $X.X QX margin. of EBITDA QX margin months the QX months from EBITDA for On $X.X in million which $XXX.X QX other certain a a a ended the of nine XX.X% and $XX.X extinguishment million QX income $X.X offset the to income, decrease for of the $XXX.X driver increase of year-to-date which income. was an million of refinancing of or increase $X.X net for debt adjusted in Moving increase basis, Adjusted represents was XX.X% the million million by XXXX, operating million increased $X loan XXXX. from Net loss expense, million term related

of cash QX million balance respect included some cash mentioned operations thing year-to-date And operations & operations million flow, the liquidity year-to-date With total X, $XXX.X we at $XXX.X for approximate from had provided of strong available the in Medicare to and repay to $XX cash QX $XX received was our of resulting pursuant facility our to with the borrowing I’d our end period flow cash Hospice October as flow companies front, CARES by cash liquidity and XXXX on the from quarter. credit revolving million Home of $X of cash Health On that end, one million advances the XXXX, at in a liquidity XXXX of to positive Act. sheet usage capacity $XXX.X is under million. the of million, an for

These these of assumption for items in of this about the the purchase total. the potentially and of repaid payments have through the flows considered are non-recurring. end year comes repayment operating should advances, these will into out our until be $XX liabilities these cash transactions million While fully continue reduce of we which QX price

recorded million our debt addition restructure our of was Facility Credit in and in In back amount required as about $XX expenses. $X we be cost a modification treated Lien to paid million to July, corporate First that

cash So flow served operating on call this as QX. in a also our

flow advances, repayments by Medicare the operating and in will of be Looking I [inaudible] payment December, just an social cash taxes interest forward costs. to constrained security increasing mentioned, approximate continued QX, $XX our for million

with come this ending that work never Aveanna excellent in continue responding challenges and of cycle to work. cash and and to the do the have revenue million framework excess performance. year $XXX can’t for our front, collected our give the $XXX collection enough current drive in our operations, collections of Combined On revenue systems operations quarter maintaining see is really during yield. credit hard to million. and teams revenue collections our Transitioning to onto the cash improvements cycle of with we teams realization they acquired healthcare, all integrating I we operations approximately done and revenue and billing

of In the debt capital interest in Loans $XX.X rates. These million with of actions addition have our refinancing IPO collectively in have paid resulted XXXX QX Term XXXX, in our QX. $XX.X million Lien to sequential of to via interest subsequent in QX million repayment with our decreases we in $XX.X of from cash First proceeds cash improved lower and flow, structure the

for third we margins contribution I as expense that, considering quarter, with improvement that’s to delayed operating in tick QX income here our turn term comparatively. to Lien and loan are perspective refinancing $XXX financing are interest draw Before the and incurred operations. see and debt on up we flow as make incremental strategy. from from In continued the will with of we began added Tony. term on bit on back the with our XXth, structure M&A, million will July M&A any on development costs Together execute improvements liquidity $XXX the we of credit loan. LIBOR pleased to future incurring term summarize our a for with well-positioned X.XX% field our up connection related cash draw in from a provide and First draw as And to over October we wrap deliver capital to to well XXth, and a begin acquisition QX commitment on we our things interest improved our margin million have delayed fees loan delayed full To

Tony Strange

current Dave for Thanks, you around to near-term we believe before trends full are year partially continue We be Q&A, and and will like offset for how improvement our give will the the XXXX continue in up rate. continued volumes XXXX. solid, by line guidance thoughts thinking about to our we we future, open would that our

range a estimate. result billion expect than the in billion, our $X.XX year previous we As to XXXX our be lower revenues full to which $X.XX of is

that year of However, and Accredited believe include approach and acquisitions we given impact the disciplined deliver $XXX original EBIDTA outlook XXXX. of earlier. management, Comfort of the full improvements This we the for estimate spoke we does million that will not the our Care rate expense to

budget during are currently base the we our process that year with use guidance the issue XXXX and We both expect to quarter. engaged a we full for bottoms first acquisitions in up business sometime

our With longer don’t it to than call, open we questions? optimistic as on why year-over-year growth line our look are and go. as mid-teen we covered much accommodate we stay in usual going our can. success for and are have Operator people forward about to many so maintaining We we we as because to that, the sharing up material

Operator

Bank is you. proceed. with Thank of [Operator Joanna Instructions] from Please Gajuk first question Our America.

Tony Strange

Joanna. Hi,

Joanna Gajuk

Hi. Hi. Good you taking Good for Thank morning. my morning. questions.

thing, the pending might the guess, that I last just appreciated so I I here acquisition. for So, on about guess, the very the contribution the be, synergies comment deal details

tailwinds So it, want it growth, and that? so also and EBITDA commentary? any in before call that’s to XXXX about level organic I $XX think higher EBITDA your Thank presume, then so sounds year other they next to you. add, And million I headwinds could clarify we when

Tony Strange

well. summarized think, it I Joanna, fairly you So,

think about I going with we think dealing still in time of immediate don’t labor markets. think, see COVID to By we the be to the XXXX, the think change we QX, I some about miraculous markets. we and I there’s half will that we when any recovery first in the labor don’t any the be hangover of talked get

are is, we opinion the continue to get time are our and some see of next labor we markets, midyear to nimble. be However, by and we the normalization hoping year, type going to stability to of

allows to higher continue to the And to whether get heard innovative want demand company the we for to industry things be to be times care today home know and that, than of when that labor I and bring table first reactive finding effective out the last than that XXXX think we can can the And markets. services continue I half ideas tell do we the be you our I long-term But need we healthcare a the can’t executing is in back, and to go the to changing patients into to business, that right really settings payers Jeff, or today. legislators going some the think on driver it’s up to half is going XXXX, of laid sooner help later. that. that is coming rather the space us ever several that ever. think, saying all of about the capacity, to you us to one continues alike what policymakers in of aspect I What demand more is I the is answer the are you cost increase now we

Joanna Gajuk

will back to queue. you. Thank I the go

Tony Strange

Joanna. Thanks,

Operator

Credit Our next question proceed. Suisse. Please is Rice with A.J. from

A.J. Rice

just for dynamics on question, obviously, the the really Maybe because different there’s on sign pay. on first, know, it’s going hard so to many neuro bonuses, comment. labor Thanks everybody. bonuses, pay, overtime Hi, retention

into you it of apples-to-apples, the third the increase a were versus the of an the of have are rate looking what this do things sort sense you all-in increase parameters you result in? last in of might your of at SWB seeing? -- kind looking various And or quarter, year If what kind around rate SWB an year ratio XXXX

Tony Strange

we talked it. experiencing what about and Jeff of your is today, first I looking question are half A.J. think the at

out As we into we actively you looking increases, team, pointed operating rate at that our actively Jeff, are team reinvesting and are are we all back ways do these are the the And reinvest of these how we -- different getting some clinicians. dollars?

you probably question the to When have stabilize. margins about put to margins My when here… look think, continued increases hot I increased come. that’s forward, as wages. little issue back forward, on to rate But spot increase Duty indicated I in those we the we to then think a And Jeff, of half to timing our Private a we when second we into your those into the and guess continuing we rate moving our today However, put don’t are is, kind dollars get of versus if also are margins is just expand. that going want expect bit Jeff, QX,

Jeff Shaner

Yeah.

Tony Strange

hot you little free will see to look that as but for know don’t think we if that, pull probably back we quantify rate try feel bit that I if If QX, to little in. I a probably -- jump spread business want we bit. $XX.XX see it into …and today. I a to

Jeff Shaner

those get nurse and rate and takes get over out and appropriately that phone $XX, we A.J., see there incremental high push takes us Tony. we increases. increase all those start as specific $XX, our the to still us on think, that ultimately out. really so one-by-one on rate get think, ideal the it’s the $X, our are and handed rate months it’s will date conversations nurses weeks range one by I that to in hit time The to above back get increases to a on Agreed probably, it It’s the under nurse rate QX, that we And they to I continue increases spot each date. back And not conversation. get one and nurse a

takes flushed it increases market. think, I point, just kind to said, have through of the books already And fully Tony months Tony’s more to in rate well, we that to, QX. the get three So months for six

books on large states. our one We rate have increase January of pretty a and the largest Xst for

to come to are continue So through into XXXX. our PDS going segment increases rate

XX% side gross segment It probably XX% the Tony in on going right our And that, we through. HHH range it’s about. of we talked think as that said, we and a so PDS I XX%. us kind thing, think push margins at those are to stay take good But to will on ideal is as the time think to

think that to We that pretty probably number to is have years we and four five been stay going forward looking. close for or years at XX%

Tony Strange

we the somehow are rate driven. of to listeners one want A.J. wage here adjustments leave the And these increases with in that, don’t Yeah. event that things is

and a operators I change. something do talked an are the think constantly rates these are reach your every spread week, the ongoing at is is we where guys this and If as We of we and day. you people point they going making every we look Jeff And can every look doesn’t XXnd, about adjustments this, go done with spread, say, that. hands at on not rate are This slight March exercise. imagine, that now day okay, wage and levers on the keeping our that single to

A.J. Rice

it follow-up or was Okay. up if much have Maybe mentioned how just there? XX Do us, OSHA quick the and bit in the the does disruptive you at vaccine. end the -- lead tell those the of happen you wonder obviously the if in pretty could you I that a right states? experience rollout because was just provisions. of quite get What was leading a that XX state national mandated you we to impact are of day? What your see time

Tony Strange

tell states counties, until date great people and CMS exemption a outcome people push the were mandates. medical question And cities, was getting outcome no end the from That’s to at XX But vaccinated. in will outcome an the federal A.J., the primary also of obviously, or was the exemptions. states, had whether OSHA you, helped our The But end. a yet Yeah. most religious it A.J. I definitive well, those everything and as

don’t. it. that continued our their days So vaccination I I compliance to have already our vaccinations the it did to and a most last But, cards and force There’s noise up But caregivers, about is lot in they and government mandate you, last the I us there tripled all will you CMS XX since wish got care a rate ultimately, X municipalities. or tell Monday, decision. OSHA was in just people XXX% people employee noise in proving of Obviously, vaccination, it’s mandate. the turning been of every tell to whether a days. most new they it employees XX to kind love would lot of and leading make

think, it’s decision on to decision. or an appropriate fully to people stay, end, to to make be the In the people work, to most that I exemption file. forcing So, vaccinated -- are either continue just have making it’s to

dates. our counties, staggered between They So of were September to different material were dates to changed than volume and the has business. XX negative specific been was states one-half they us in impact think, and I question It or November. not less early and a X% of our

A.J. Rice

a Thanks lot. Okay.

Tony Strange

Thank you.

Operator

Please James question is Barclays. proceed. from Sarah with next Our

Sarah James

Thank normal better you. XXXX year. a to the look XXXX I understand about seasonality just try or of might versus like

also of us couple what was synergy But pieces related with the moving can a an then got to have changes, You a different the great seasonality… deals? and probably, idea you give and of timing, different the

Tony Strange

Sure, Sarah.

asked of you ready any about really guidance, guidance to we are not specific XXXX. on provide specifically type So XXXX,

for nurse related to to like I better seasonality caregivers, what typical year you are being following back schools building volumes normalized that, families then as as volumes also However, QX of in level can looks we for QX, tail a during of more out. off QX And tell start a are come see caregivers to kind and vacations again us summer and -- QX, in is QX both in volumes the well then up volumes even tend year. and

that. be and quarter kind tends year to QX kind any best don’t If ends think seasonality is than this year the different follows of tends of you lowest book-ins, quarter think to two about our I don’t and be that any the so our I just of think QX it cycle. given XXXX in

the think in was what’s seasonality markets. experienced that going on QX I by exacerbated we in labor

would in today However, nothing cause any you pile it. had than XXXX I here, that but that. think we our business I that different to still guess in know seasonality And look of can Jeff there’s from,

Jeff Shaner

environment caregivers. think, I be we will X, are ago, books wages QX. said have agree, we you pass it, said thing coming increases this continue Tony. Sarah, that continued the to will Tony the and on rate one think fighting And few so January I his in minutes I as through to QX effective through remarks additional labor help us in And

six for fighting summer expecting will QX, seasonality seasonality the summer just we normal months don’t normal XXXX schools, the to through fight that schools labor we of come back the our I and and to be are will months think the are out in I a or as So through continue but the QX I year. first Tony environment session, with schools different really be agree so think from have

Sarah James

really trying $X deals $X for That’s looking you deal. just bit And million about each looks synergies the to a for insights the helpful, pre- unpack like these Jeff. then implied it there at million are is post-evaluation, and to little

or factors can revenue So us any what if give in is you synergies I an there discussed of think? idea

Jeff Shaner

way to it. the at the Sarah, think, are -- you way right about way you are think So, the I tugging think I is it

come Rod can implied multiples You back that about. those talked between

stream. to either that those duplicate know, EBITDA synergies being believe in disclosed we to around you ask that number. haven’t any overhead you more revenue resources post-synergized corporate we beginning However, talked synergy provides Rod synergies field. a creating said, And than in finance be develop as are human value any integration density as versus you that revenue it’s are EBITDA, just services our terms and counting density accounting the are things our be synergies about think deal yet and And determined. not is is With the primarily types and current payroll move not exact you about in we These synergies, going And those integration are any and out it’s just those about the revenue us, specifically process, deals. of all plans, synergized reason expenses, so going and for these as people typical of related would in and buckets, for from are of and creating shareholders. that be to that of major the additive we that the to in markets buckets to

we they are transactions. both excited are both about So --

Tony Strange

Sarah. you, Thank

Operator

you. Thank

question next proceed. Tanquilut from Please Our is Brian with Jefferies.

Tony Strange

Brian. morning, Good

Brian Tanquilut

Yeah. morning. Good Hey.

adding sorry, again, about we already what to maybe this, but million of think this million acquisitions. we to So on $XX up so $XXX Jeff, to just about $XX have million are a starting million are the we from XXXX base if year, off $XX for touched

takes now the can we XXXX. as us are puts set level part? think point about if I starting just think the and help giving the But through you like guidance. So moving not the you know and

Tony Strange

So, Brian, guidance I not not think, you we so are but right XXXX we tenacity. providing are for are appreciate we your yet,

about about, the I rates pieces. in the have think And we like numbers, comment only that won’t have and is, you other exact look growth there got the think you are think on have in. the going right The to but what I I the to half and I you piece predict normal again, going what pieces XXXX being has your normal, is, is our talked Jeff underlying to growth in of our first to think think rates would and think businesses real don’t question that what we yet. would we are is be -- ready

got would So, you have add? the all pieces. you right, Jeff, anything but

Jeff Shaner

back mentioned, And of budget Brian, at are we half Aveanna. middle I of think, as the that Tony in the our process

our the and do budget -- up. bottoms and have corporate infrastructure. every are both bringing We up in We the that from teams single a and Care Accredited Comfort through bottom location

in our talk two excited their right of seen have that the would them. of And in rates deals we Care bringing the solid are year to week have a we so year than they know the first we growth that differently that But be what into and that XXXX. say we any budgeting that normally process you why we outlook and we finish excited, impressive have nothing do Accredited on about are think and diligence after will the are there’s engage really we process -- two been that And But hence and Comfort that we process or to I December. land we of about second think that the XXXX.

Brian Tanquilut

you follow-up labor the like like more it is Tony, side then sounds equation, still of And demand it driven. the right? feel that. Appreciate Yeah. my sounds quickly, pretty So about really good this really

staff that could balancing that, or volume all you So during the right? these good you quarter? temp how just could thinking obviously are through you So mean fill pretty margins I how the the things bring to right? chase that demand, and philosophically? in So, that were and you idea gross are

Tony Strange

will Well, I correct you.

where out There’s that calls get can demand. You home? hospitals from how bringing what about ways this we great feel to Jeff us not saying, of we families by or or get felt pretty people goes you group do demand. this patient calls payers, said, care these that a do? this anything can day get I patient team don’t phone about good particular there Is you hospital. the are managed payers get -- saying, find got from are can and have We getting and the to to of table, the I

demand box? willing out of to guys What box. outside think We all-time do of can an our the business at is are So the high. you the for

that growth is, art I about away in we And think, second your going business. to part are of give you sake growth. The margin for question margins tell that’s can balancing the the of this not with I our

the controls we ability end. our guys our and to market-by-market deal, are single back patient the but ability exercise shareholders. sometimes touch state-by-state situation Jeff about an is it’s how and to and and service and where day. that we done the our to thoughtful margin the not one a other for -- And it dollars patient and So patient-by-patient caregivers? a it’s pay However, work disciplined and we this Jason operators ongoing the every balance our exercise against not put protect won’t just And every are a light resources looking be value on their do these we out and particular just at in takes doesn’t to going field, how economic and not -- those it this and

Jeff Shaner

well, specific And Brian, for Tony family calling to not state-wide, I think, family begging said to it’s first it $X it’s to get two an right, payers hour it obscene, nurses -- could be in them And home? hospital double would is incredibly the a days rep hour? we a literally in it’s said it’s days the family take and cases for had really old family, XX or per saying, that for in today some payer head our the Tony number managed payer it a a the the home get Medicaid calling flipped care we payers home. where operators trying are take? to it’s this managed is will what large has team And the that well, who’s get What’s our rate of and another hourly now if you

never the in payer why we from we labor shifted and market back goes love it’s get way has we love -- are the think and we seen cause So kind our And I we we from believe hate to a of have market that but creativity standpoint, here in that that don’t problems years the families XX solve a the home. side.

Brian Tanquilut

you. Thank

Tony Strange

Brian. Thanks,

Operator

Thanks.

Justin Our proceed. with question is from Deutsche Bank. Bowers Please next

Justin Bowers

guys. morning, Good Hi.

Tony Strange

Hi, Justin.

Jeff Shaner

Hi, Justin.

Justin Bowers

revenue unskilled then It’s just the there’s less a bit? to by model? like how be asset elaborate probably is Accredited little you not lower is risk little us helpful labor well bit with help investors, it that understand what that on maybe mix of versus skilled a elaborate that and Can understood would on

Tony Strange

Justin start -- already. let’s with let’s base Well, our in business California

Private So business. we have unskilled That a to related in base California business Duty. an is

separately business, have unskilled, business have California, a predominantly in But well. business have a in unskilled unskilled apart we in skilled for And strong in into the will do labor significant we caregiver. California. also skilled skilled responsible a patient in these particular business. identifying there’s of Accredited attendant Medicaid it’s of programs, all small and the presence It your of several or and the very base different families the that part we but The programs question of California. our are business even fold that, to Now mirrors as hiring is State our from business the through

no a of different lot. like business we of unskilled the percentages with said in, Aveanna California places we high. because it in prepared think, of I It’s businesses that is in Rod burden -- is which of recruitment are the back terms in and it and really that well the than and family not the really as remarks, gross and And that, the it that off takes -- his so margin

the that run business, to as and retaining of because of are doing doesn’t you recruiting onboarding much those However, things. types take the and overhead and it all not

in So unskilled. question and to California we to the predominantly identical broadly, answer are in, is business your it that it’s unskilled

Justin Bowers

Appreciate Understand. it.

Tony Strange

Thanks, Justin.

Operator

and back Ladies call like remarks. Tony of and would end time to Strange reached any the we turn have to gentlemen, for allocated closing I the our

Tony Strange

the line going a we Hold are on, to little longer. stay Operator. Operator, bit for on

we group over that. -- we our help ran questions, we to long as stay continue will But We take with remarks understand them because as our need business. will prepared this to and knew we

Operator

question Instructions] Okay. our is Capital from And [Operator BMO with Matt Please proceed. next Borsch Markets.

Matt Borsch

situation issue shifting market. just Advantage reimbursement you seem would Are adult in resolve Medicare reimbursement the ask care current I your sort the to hopefully to you are I to gather that? idea around thought of one be I about constraint and optimism Hey. the the be that or around resolve the -- home the may going seeing

Tony Strange

Yeah.

of really I most our Medicaid around Advantage and the comments payers. Medicaid think the were environment

of I rate segment. increase how an increase our were net payers So the Medicare pay those I PDS that think certainly, X.X% & episode Health a our and of update, think the be Home Hospice at more Brian’s most was we Medicaid that, -- of by answer Advantage answering basis. of the optimism, shared will Certainly, question was rate for who

patients But to continue and Medicaid comments the of Tony payers. like on continue more Medicare geriatric have our talked, I I we we rest like approach to as our a meaningful Advantage side. push is more think that disciplined level. were really and focused pay payers will Medicaid the at the in we as we scale And and a think again, payers, think to around the we industry the business very to take this grow -- I

Matt Borsch

All right. Great.

you. We wait will and see. Thank

Tony Strange

do Thanks, Matt. questions? we Operator, have other

Operator

questions. No. There are no further

Tony Strange

we your morning. on a of great cover luck you and know of of each covered have every to today’s to appreciate lot to time call. lot I we thank continued Aveanna. -- we always continue a one have Well, But day. your support and have of us this and I Good for information and all of want ground your we Okay. a patience

Operator

This concludes today’s conference.

You Thank may you for disconnect lines your time. participation. your at this