Aveanna Healthcare (AVAH)

Shannon Drake Chief Legal Officer & Corporate Secretary
Tony Strange President & CEO
Jeff Shaner Chief Operating Officer
Dave Afshar CFO
Matt Borsch BMO Capital Markets
Joanna Gajuk Bank of America
Pito Chickering Deutsche Bank
Brian Tanquilut Jefferies
Sarah James Barclays
A.J. Rice Credit Suisse
Ben Hendrix RBC Capital Markets
John Ransom Raymond James
Call transcript
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Good morning and welcome to Aveanna Healthcare Holdings' First Quarter 2022 Earnings Conference Call. Today's call is being recorded and we've 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.

You may begin.

Shannon Drake

operator. you, Thank and everyone for us joining Good thank today. morning, you

press may by forward-looking XX, are the A our be this earnings www.aveanna.com may Aveanna's call We words Speaking website call and Officer will as contain documents as replay Aveanna's Afshar, issued words such and and XX-Q our are operate. publicly all revise SEC's and and and the the be our available to of Officer. listening on may Investor new available subject except website are or made, GAAP Executive in website, required laws, to of until available which are Chief of www.sec.gov. which as materially accordance not made the management's of a circumstances. the results based today's is statements well date Shaner, from the of who measures, cause are our could, forward-looking to and May today, yesterday. our of today implied most call financial Financial earnings differ and Aveanna's in Jeff and will with website. Chairman; GAAP will to by to that David Executive Windley, and on result anyone, We mentioned call, or today's change otherwise made separately our on our on release other securities call expressed forward-looking Chief on Also update our as measure XX, Rod which that we with on XXXX. our Operating we XX-Q, measure statements of Relations current non-GAAP or statements could identified the on assumptions Officer; may, non-GAAP statements, Aveanna's in those Aveanna remind financial are website a events Tony this any subsequent President; Chief risks about want federal These at replay at expressions. uncertainties be certain press These environment, call as release as XXXX. filed available beliefs and Form section similar any use business of during supplement Today's reported future All Strange, May SEC's both available statements in to our actual information, comparable reconciliation results whereas

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

Tony Strange

earnings Aveanna's quarter volume a an some from call. integration. public Shannon On for everyone. call oversight little and as M&A first of Thank the the of we'll our you morning, provide you, reimbursement insight joining we'll first provide and today, anniversary our as Thank This you results, environment. activity, as pipeline well the our into current perspective company. a provide trends a call our And into insight year of QX finally, both marks full good reporting

you like. can choose to Before you work say get details, to into environment, Aveanna today's you again like employees. the we once of I'd thank In all to the wherever

and of families we're their continue that and you to for put our the patients first However, needs grateful.

Omicron. quarter and ago, in to $XXX Comfort of in reduction for offset the results. related fourth approximately volume Care an the toward the a acquisitions compared Let's and The X%. was driven in the increase million, by of is later year turn which million increase $XXX our quarter by spike were partially the approximately Revenues to Accredited

the X,XXX in As and Prior to that of related estimate spiked XXX interruption averaging March. and we outlined under us early employees in spike to through that COVID December, and number February saw January a were mid-December began were on ran quarter. XXX that during given our last in day, of to the we number call, work approximately this million out between We timeframe. lost employees sidelined any that just cost $XX to $XX on million revenue in we

disruption any we and As pre-Omicron rebound further is additional notwithstanding disruptions COVID of levels today, to due accordingly, revenues to variants. this back expect to down

caregivers around for shortage color plans at all-time distorted. mitigate be markets for labor provide a our just to the to in some constrained. continue high, these I'll Demand an services nursing to some capacity be specifically of is labor minute. However, while more for continues ongoing

Moving on XX basis quarter ‘XX. points increase were the to of gross of QX XX.X%, an from margins for

volumes is SG&A Given impact of the our Omicron SG&A approximately The by to Total the our Care acquisitions year $XX.X burden each a are tax of increased pressures, right our expenses compared Accredited million the EBITDA $XX are year teams quarter-over-quarter driven in of line of margins. EBITDA. Comfort around and ago. and protecting once million gross quarter ongoing wage proud disciplined was our realized, the with and I'm for adjusted in reduced the the $X synergies the payroll variant expectations. quarter million associated was first operating with increased these especially Adjusted

in with to margins March, we meaningful line while what strong and in and near in to a in had SG&A call headwind our constraints labor ongoing be continue we revenues QX QX in on We these on revenue expect line gross normalize in anticipate a for impact remains term. expectations. remained softness the to volumes results with were the revenues forecasted While and

and of schedule very ahead many well. two the of integrations were integration. in They on Comfort we Care, Accredited and acquisitions the While are schedule these are with we're of actually instances, aspects topic going all on of

to complete and realized neither Omicron. expect from the be of the integration mid-year We immune XXXX, business of largely impact by synergies all with was the

accretive Accredited Comfort employees as Care these the highly will our well as office integrations. all the However, well Aveanna for that you've team be complete done story. integration lifting you the thank to and special to both and businesses of management heavy A are to performing

concerned, we as future we've that stated the XXXX first which integration, far spent M&A part As last of our we've call done. focused on on is

robust pipeline plenty Our and consider. there remains to transactions are of

transactions, to produce continue in approach on price our will our disciplined shareholders. synergies focusing those for remain We and accretion only to deals where consideration

Our liquidity remains strong.

also remarks. seeing our coupled through or between with across flow of to the risk like revolver. safe willingness care. additional rising acuity Aveanna in debt. the -- community-based approval eventually for members reduce of supplemental Dave access desire creation this recently have in well be of a to and unskilled of to million and/or various will higher care patient the available approximately labor provide of the to that our even capacity. additional few are We to We're interest our articles the lack interest the safety covenant longer it's $XXX are loan rate rate from resources at looking free disruption leverage overall facilitate of in use with that and needs rates. however, pay profiling news their stay settings ratios; We're The to and the skill accretive program keeping environments hedges, Payers delayed Arizona platform. of transactions and some solutions the the state Most to trend to to hospital the draw allow and provide very outlets you the effort would home. associated indefinitely. circumstances some to the on announced on country term cash restrictions in the a family home during operating his downside provide across the With to major into in its of our insight care little out recognize to home we spend I'd minutes in reimbursement from the discharge this create could protected current cash an mandating additional capacity, leverage to other hand, environment connectivity seen additional media reduce into invest and capacity patients have hospital comfortable

continue to we continued the of productive business. In caregivers our their the of improvements impact rate in is have resulting beneficiaries, that with inflation around discussions partners meet our and across having demand the ability our addition, to payer shortage on

sessions to increase effort access are value there added equation that are pending states addition, several an are care. to enhance is to home a resources additional expand The thesis that mid-legislative are legislation that overarching that in In capacity. in needed would in healthcare reimbursement and is care the further

million the $X,XXX metrics, days the guidance, turn million. dive spend our and into revenues of outlook roughly I to a between we adjusted our on labor provided the and additional be other constraints. provided discussing On operating March I'd full provide. full headwinds like guidance a XX, the remains closed first provided information really deeper call year my EBITDA XXXX in haven't $XXX Omicron $X,XXX year sound, We XXXX. million as since that and and Before XXXX the between that In our would for half ongoing XX minute Jeff of remarks, to we for million fully recall, month, indicated we that guidance $XXX over the forecast you no color full around the updates year believe can behind of difficult we additional that that there's to our rationale due than

of our continue improvements throughout invest the volumes are The thoughts and year. that results the We wages, to impact provide immediate expectations has allow that in in which around the also threat returning to to line in out laid with Omicron In lift half our variant the pre-Omicron rate and our levels. March. year subsided provided will summary, us are ongoing the in we of second would

headwinds systems will capacity an are willing the as for State MCOs and concern. and well come the partnership the hand, a continue the volumes the to recognize table to as labor challenging to near to to this our term. On Medicaid other present growth in issue address overall as markets Medicaid and are

continue the of our our patients over on metrics. and I'm results to team Jeff insight environment, hand the Given the into story. further fellow going of fight shareholders. and the I'm our for Jeff? challenging proud a Aveanna our With part our to proud of to to operating to ultimately tenacity and I'm call that, be employees families, behalf of

Jeff Shaner

our and QX I Thank into spend minutes I'll operating indicators. trends you, our employment labor before few dive Tony. recent talking a through

aggressively On With Omicron pleased QX, our front, are number be approaching I'm travel one behind and reimbursement hospitals Omicron we continued competitive wages private the nurses. rate and cost driver pool us. them to many future states, continue outpaced are reimbursement have giver cost of had caused. and the trends. increased we significant Care Thankfully, to our XX%, workforce agencies the vaccinated with the some our as new of employment better retaining stabilized from states our was core nurses. hiring through work our be the for caregiver and now rates lobbying say nurses. recruitment to to rates, without improved us for very of fully In improved Medicaid qualified nursing variants ability targeted it's and The to the disruptive in for our competition disruption rates. a prepared wages has labor nursing of but duty we in retention that allow

love nurses that one-on-one work in and home. want patient tell working the setting Our in to with us the they homecare

provide are benefits ensuring at and earn appropriate continue to can caregivers Aveanna. our We an supplemental care skilled and focused wage on the

produced care during X.X% by or impact driven We Now segment QX. revenue of quarter, QX driven the sequential balanced of the in million XXXX. against Care was Home acquisition for the million by Omicron. hours hours over X.X Duty on improvement The to a improvement of $XXX.X was Private Accredited the approximately Services revenue results

XXXX up Our from per $XX.XX QX of QX hour revenue or of X%. was a $X.XX

in continue We rate proud already to XXXX PDS rate we and seven year-to-date segment. in have our improvements experience I'm say to increases

many legislators throughout our session, benefit we expect are Medicaid currently increases state of XXXX. As more expansion and rate in

As recently Aide, Medicaid system program announced, we applaud LHA, expansion. Health for Licensed its the Arizona

addition programs their to setting, -- are Working being in LHA states the families. by caregivers we and We level nurse preferred environment of like for appropriate Aveanna appropriate additional with care identifying and for unskilled progress for a lobbying look actively nurse. our care Aveanna setting current to care lowest supplement markets. We're I in provided the lowest caregiver an to additional remain this together, and LAH being home. one. program cost identifying unskilled forward a -- medically supports support buffer on an future loved the the in that one a core can fragile by sorry, Arizona The nursing updating provides family skilled children you to services to skilled the is calls. create adults important Aveanna continued cost the and family against provided loved and compensation difficult labor the believe The program

We to of of or cost gross million labor and Turning XX.X%. margin gross achieved our margin metrics. $XX.X

rate wage reflects to wins of Our rate our we've hour commitment made the through $XX.XX per our passing to caregivers.

payroll QX the impact, As margins to expect range. settle highest taxes for has our gross in XX% XX% to PDS I

hour ideal to within expectations $XX.XX. our was per with of our and spread QX Our $XX in $XX.XX range line

As our Tony completed business our am the very family. largely once a Care in again Home mentioned, into we with acquisition IMO integrating has the Accredited I team great have our and done business job pleased trends Aveanna California.

with pleased complete to Hospice the and of Now, that moving segment with our Comfort integration are am team, Care. the integration we Home for and QX largely I share staying on to Health

of of acquisition high and both Tennessee. The our home proud health that quality and delivered services assets to density acquiring our in commitment expansion We Comfort Care plans. hospice are Aveanna complement Care Alabama the to Comfort demonstrates geographic

the a offset XX% driver episodic The by we full revenue the growth labor approximately a impact admissions, over During XX,XXX being in quarter episodes XX% biggest and by revenue Comfort of was revenue, care. XX,XXX with produced QX pressures of increase of QX associated quarter, total driven Care, was million Omicron. $XX.X of total XXXX.

driven hospice our focused While to our From to through in $X,XXX, Care Comfort and home slightly, XXX pleased contract This a we of per both reflects labor. less Gross perspective, admissions rate our basis mix utilization, QX. and Home episode PTO margin segment base. manage maintaining gross us health admission difficult was gross down by XX% overtime Health cost health the on less sequentially volumes from give range. in and episodic visits in this XX.X%, QX line can and ability was XX% controls were QX I and market. XX% labor we up was great and better am in quarter down shift impact cost are margin per per margins points improvement to with dependency X.X% range. our Home expectations episode Revenue are XX% from the a team's confidence fight QX. for that with margins the episodic our visits patient the the on

Homecare proud hospice system. home in Aveanna, that fully operating at segment we From our to the Hospice business transitioned day support we Health the the mission. proud Aveanna are announce home Lastly, team. to we and have made one our the to health decision health I and the to -- of Homebase Home am invest best-in-class systems

initiative and Our Homecare this move Systems our our forward and a made look to team as reality. giving segment, that business at insight Health more Home Homebase IMO partners key Hospice have into I forward. we

segment results Now to Solutions our Aveanna Medical for QX.

to per of the supply Revenue make contract quarter, was recall suppliers September infant XX,XXX a of our decline Abbott's FDA $XXX.XX. revenue of the urgent of shortage revenue. Sturgis, million of UPS on the This the million shutdown and continued on EleCare product. Revenue sequentially, per approximately Michigan and nutrition. families $XX drivers main impact primary EBIT $XX.X signed XXXX plant, producer produced or rate chain. driven which chain forced The served of was patients UPS our triggered were February, event In and infant the X.X%. impact national with we is unique approximately in During we by supply the decisions internal down the

believe suppliers our and by to to tirelessly worked identify the products view as will has disruption nature to rebound patients. initial temporary mid-summer. We team and get this Aveanna solutions in Our

margin decline goods $XX.X dollars range. of XX.X%. of the gross gross gross in expect margin stabilize and achieved primarily Turning gross to to continue our XX% The items. margin metrics. was mentioned margins second I XX% half the million in in above We XXXX to driven or the to cost by in

improved achieved efficiencies March grow and in April ability confident in office patients We business am I to unique and need. our on our the admissions have unfortunate, record for Solutions families finding in in are solutions patient moving the team's our Medical due gained served and disruptions focus these the While back we to forward.

continue while We fight continue chain ease. chain our as supply we of the care patients' summary, difficult expect supply these issues to through growth keeping trends the do. center labor and begin near-term In we to to environment, at everything

continue our to better will improve and We and through improvements pass to volumes. to wage the ongoing other effort benefits core caregivers

incredible team. of proud of form I to demand state services, we payers Aveanna side, along our continue bright the improvements. in with our the legislatures am see rate strong for from support and On our

Your for for Dave? families Dave Thank like color and is tenacity to care to I'd With over their inspiring. call that, patients on resilience you. the and to QX. continue our turn additional

Dave Afshar

and Thanks, results. summary Jeff. ahead first the a provide I'll quarter of go

$XX million, the first quarter First quarter $XXX was XXXX revenue million from of of an increase ‘XX. or X%

of million $XX in segment first revenue from revenue our compared Home XX% the XXXX in and in revenue $XX.X QX revenue of of revenue Hospice acquisition acquisitions of was million Health Accredited April Our comparable Comfort the drove in and segment segment Medical segment of the the Doctor's growth first or over XXXX, quarter. the or comprised a XXXX Health revenue Home QX periods. PDS Choice overall and million quarter with increased XXXX and to the ‘XX segment quarter quarter year growth first first X% revenue flat or and combined Care ago $XX X% revenue. total Solutions of revenue QX was of XX% revenue. million total was and revenue the Hospice contributed drove our of in total PDS quarter $XXX in

variant PDS comparable recruitment negatively first retention workforce PDS Accredited the revenue QX and impacting PDS contributed segment slightly constraining down by was volumes. Medical patient clinical decreasing in and acquisition pressured quarters. the quarter, our of Omicron X% Solutions the incremental revenue the While over caregiver

turning Now to margin. gross

were business, Health primarily quarter XX.X% X.X% increased quarter in of XX from which Solutions XX.X% Corporate the percentage expenses margin XX.X% XXXX, to and and Our decreases gross the quarter. non-cash of PDS our first of X.X% to the costs, year PDS financial revenue revenue first as the our discussed Hospice to first decreased in points percentages ago quarter of in our growth than of ‘XX Field compared growth first margin in to the contribution compensation segments. net in ‘XX margin Home margin as to in a statements a in percentage the in the gross of of XXXX, This revenue further was in Medical ‘XX. and higher basis first has business, of XX.X% gross of in result from quarter quarter MD&A. as the in footnote our share-based in nine our attributable

the found press X.X% to compared table infrastructure expenses as of integration the In of incurred compensation to quarter public integration a necessary our be first as incremental integration revenue activities. Adjusted then benefits professional associated of those addition, non-cash release. services well we corporate adjusted expenses principal revenue cost corporate the in process corporate company expenses as and were to the and the in we corresponding acquire can companies for adjustments incremental and in ‘XX for compensation to quarter and support and costs first X.X% of share-based with from The support also ‘XX.

quarter as compared EBITDA. income, quarter adjusted net of to ‘XX. million and for in the XXXX operating to $XX.X on Moving the million was first income first Operating of income $XX.X

the to first decrease first drove to the of the $X.X recorded quarter was future the million drivers from increases gain our significant million accelerated material the XXXX. Adjusted increase compared in and quarter for expenses Rescue first market benefited of in during of in during increase quarter comparable $X.X during $XX.X operating million of revenue $XX of the quarter gains resulted costs, of operating XXXX. million from increase contribution, the income related ‘XX, acquisition the rate In this over million rates $XX.X quarter swap XXXX. $XX.X decrease compared in or periods. valuation $XX.X recovery million of expectations in to X.X% The a revenue Act overall million primary the quarter cap other first the quarter The EBITDA of income first interest income decrease million valuation was a Plan in first as the the in XXXX quarter million to non-cash $X.X first of Net of in and XX.X% EBITDA corporate income the received of XXXX. American million $X.X for first related XXXX. decrease funds in or and million Adjusted $XX.X of the interest addition fuel in $X.X were

you non-cash accounts of the net payable used of of quarter capital of of of in also XX-Q, an find relation by which resources to M&A between number the our section credit liabilities. facilities in usage ‘XX capital COVID can adjusted changes operating significant most our cash million adjusted be significant payments cash of income for operating relative interest, which the to net net EBITDA first which compared found compared The cash reconciliation our $X.X million first affect can XXXX. update quarter XXXX. income of first related in to a against our that in two a used provide our in and and related for titled due about includes first our quarter hedging. working and the of most operating to related activities ‘XX higher operating for which in adjusted net a items integration changes Cash also decrease in paid million ‘XX, of items, on was section Turning assets cash in was the the the drivers cash And liquidity, operating the costs, liabilities costs, flow. quarter variances first share-based to in comp. include reconciliation. related operating decrease flows decrease I'll outlined the liquidity MD&A, the in quarter flow of now for in use $XX costs you be accrued found and costs, EBITDA in $XX.X both from in in of EBITDA cash million of of a acquisition quarter was statement XXXX, of the and and can and $XX.X When items cash think Net in which XXXX, first of significant of

‘XX. teams business, a is And Home from I'd Hospice and business. our was work one each delayed-draw As of April under the third-party the had and annual cash continue associated available of of typically our of quarter of availability X, facility in under the million in processes amount XXXX sequential area on congratulate to future performed of and in With the in first to borrowing improve credit revolving cash $XXX million loan occurs our revenue well collected our XX.X revalidation it PDS increase acquisitions. our of item, execution. million the following QX first $XX securitization like in in under our The we $XXX.X XX.X on of revenue during collections and their $XX.X XXXX, term of we of to our of which capacity our facility field preparation of credit was with Each facility, liquidity with days facilities, primary available days. the the and first under Health million for teams respect our XXXX quarter we year our DSO million insurance availability against year, $XXX our cycle requires and million driver this $XXX significant quarter with and of DSO,

Turning to credit our facilities.

can resources XX-Q. our table debt outstanding the the Our XXXX, $X.X billion components liquidity as which in and of and capital found April approximated indebtedness of of be section X,

exposure fixed rate and $XXX team, million swaps we debt of following credit cap interest summary LIBOR the million variable the notional instruments, that rate I of as rate hedged with amount $XXX great that this exposure here, our at amount as to rate convert under of I'm interest work interest wrap X%. facilities to resilience Our our together was rate proud to Aveanna of company. the up caps and In build notional

and are is the special. rate With interest exposure these position, of Our respect reduce to rate reduce our think the once environment, current the continue And a it to to our that through taken primed which infrastructure for exposure to for We're hedges culture interest strong rising and we that implementing strategic people pressures confident headwinds. I by labor growth we're platform liquidity ready is we've that, makes questions. us and benefit what to rates from our we to supportive Aveanna open with proactive operator, initiatives. up market steps navigate


much, Thank Borsch from session. you very go Please gentlemen, Our ahead. conducting Instructions] is first the question-and-answer Markets. be Capital sir. of [Operator Ladies and we now will question BMO Matt

Matt Borsch

just Private coming Health quarter of based and you've the guidance, that the revenue side Thank change just particularly Home on of mean you. Can expecting your in second of that in trends the versus you the growth and give us sense a are you now may made I where maybe and as seen composition seeing the on Duty. first the terms well, quarter into in Hospice

Tony Strange

Matt, So, a good question. that's

of the I'll we Omicron. really don't as we couple it's the the constraints said, when think as provide think a of guidance. and impact first most let -- caregivers quarterly our comments. the segment to of about half we've guidance, One, constraint make don't with -- think defensive about guidance. we that me But I I really And this of two, labor year Duty driven by more is the with the the well softness primarily that in Private attributable talked provide

some is of immune the that business talking labor think constraints we from the while with less some I about, issues they're believe there that we've I that labor not out the Home of have our nurses. Health impacted been by

labor probably a perspective, I on weighted the of So impact your businesses, Duty across constraints labor Duty, toward but more was with Omicron the the from -- question of more Health Omicron think and would Private of all Private constraint heavily Duty side. Home answer our Private I both

when we think Omicron color impact I -- with in the residual think to most laid and we be would it relates I it around of We bit QX variant that said of on As little March XX, our out. a QX. guidance

will and constraint contemplating away went out. that going continue the far made in discussions that labor rate different so very MCOs go XXXX, -- And and about what releases timing read comes are volumes when actually the the say to into see foreseeable be we was during well seven of Pennsylvania XX% rate in the and environment the rate then services itself when that rest all or quarter. we've to those with that Omicron. we're believe rate that we of Jeff rate one ongoing reinvested through, down remarks, Omicron will we issue these rate the environment the improve, to things and of think will a hold as flow for rate with go XX% comment my and about payers volume we the talk rate and can believe But dollars we rate when, and for still I January through one of we a as that remarks, information, I increase, happen, if wasn't wages. dollars was increases as saw that as of into However, the increases happening positive to world a thing seeing in of immediately we matter you that able -- we of I when away, play the effective and with own think fact, we XXXX quarter, and Jeff every even State there press their increase increases of sessions wages, invest in see that I'm was as with the will about their positive the meaningful those rate going take while changes And put be is a what remainder can't and know public changes that those a then while a the each future legislative seen and

to able continue that based and will in what we gives your rate do Hopefully, volume volume as be remainder question, that, this rate that of improve follow we will Matt. increases. So I in us of XXXX know through the all that's push answered on, we confidence to

Matt Borsch

you I'll analyst. go let you next the detail. that Thank did. certainly you Well, for all to

Tony Strange

Thanks, Matt.


Thank you, sir.

question next from Please Bank America. go ahead. of Gajuk is Joanna Our of

Joanna Gajuk

for taking question. Thanks morning. Good the

press release, the March. you million I funding received Act, Plan this signed under you I was, guess I'm early in first, $X.X in quarter, guess, mentioned sorry, the So Rescue American there

question the that through? Yeah. this coming was is, funding contemplated the in you So included guidance

Jeff Shaner

funds with, XXXX. Hey, federal and mega think is government, we funds the ARPA we related I'll state consider Jeff, I received start that programs throughout from Joanna. This

caregiver. rate receive permanent in I'll to we we correct, through the received in in year. ARPA expect We temporary to just numerous the do amounts increases, ways. QX, like Pennsylvania in But pass we Joanna, QX temporary and to that funds contemplated receive right them rate tell received, It in as receive are we ARPA QX, different and how the you, think lumpsum about we we funds increases, You're funds in intended is talked about ARPA QX. as one Tony meant well receive

in are and and being a as and all of of as I what that's think beyond. one in whether I is Carolina or in think certainly QX of Medicaid states, the it's our one-time by and all North said -- in rates it's or a amount rate well saw and realignment driven it's think which permanent pass-through we it the we'll things federal support it's supported I the QX to Tony caregivers to of support to that see temporary intended that's and you programs in think continue -- wages a whether a So rate think of I Pennsylvania that,

Tony Strange

this. would with Jeff, agree you So,

in increase of reminded another funds, I XXXX are increase" permanent "temporary rate increase agree are in in Jeff rate rate that more Pennsylvania, late about, -- well. the rate, Joanna, rate talked increase was ARPA about Pennsylvania is XXXX, derived in rate change, was that a so we just a of think the rate way funds funds. additional North we State ARPA form than now think are those likely I'm with also we of a had just those just it So the just coming as through the like, through when is Carolina laid that out, They increase or it I

rate our permit it positive it built ARPA all is have movement relates both to in as rate at all least So into it temporary we -- increases, is in guidance, rate mind, the time, funds increases, through it's change. our rate

Joanna Gajuk

[Multiple Speakers] sir. Go ahead,

Jeff Shaner

is just to caregivers and we may realign and the fashion that help to in done have that caregivers or Tony's rate add to do. to form No, continue point passed and intention is the through what of some be that

Joanna Gajuk

probably makes sense. that's No,

we been the at talking you've guess of I when so rates and the been the that's end throughout contemplating okay, last March. about better I So year, funding for have expectation you guess spoke time

coming be it think the to but like the so segment that kind so through the the rate, when that grow point starting to in like is should QX I rate PDS our additional I the rate Thank that of focus shale $X and hour. as as something average use about way I'm sounds it the think, million, thinking we from the a anyway, guess I is follow-up to so there funding starting We have quarter quarters when then you. exclude guess going per So that okay, about is question, there. following in $XX.XX

Tony Strange

It's a Joanna. great question,

lesser would acquisition. we I type or Accredited Accredited the answer being think point that yes, is will I think now think that volume is we've reimbursement was the mix a more so rest in business as continue increase does it the rate see of to impact mix, And Accredited primarily part $XX.XX of or business one is skill the I we have the story. thing XXXX. business the out primarily throughout on But that quarter not our unskilled the of driven the that said

to wage range increases is, that in that But expect throughout think that rate yes, the we We as thinking of the that about $XX.XX we spread I for sorry to $XX.XX, see move and also of expect -- our hour per correct. net quarters. the remain of for PDS rest the all $XX segment you're XXXX rest of the

Joanna Gajuk

you. Thank


The Please ahead. Thank next Bank. Deutsche you is very question Pito of from Chickering go much.

Pito Chickering

my Good Hey. for taking questions. guys. morning, Thanks

labor Can both in an terms you of Home markets recruitment update terms the April and active what seeing, PDS in of give question. you're to Health in back nurses us and May? Just in in

Jeff Shaner

Yeah, Pito.

nurses current the well. the states retain focused think on -- leading remain has said the as in that to reimbursement I'm rate we really of we the Tony We're found kind for the segment fallen for and Pennsylvania Services hire think May, where to, going where Duty Xst pretty think Private reimbursement rate is where it new able -- going legislatures. July has to efforts that rates market to we be as I move competitive, example both use we state the nurses behind the are news I the those necessary on think we expect. can rate continue are increases on a to date were of at nurses June, April, states reengage additional and in is reengage up really that we most talk that level very and positive we or have reporting in August, we'll that in big

states industry have as caregivers. to behind, to demonstrate think collectively been an able for that the efforts, lobbying wage that environment I our been both kind may move of we've current individually has fallen able and

is us able As and the so the and at payers, Tony found one to it's engage caregivers, driving we to this engage receptive absolute rate legislatures is I is to prepared that mentioned, continue to culture the we've wage engagement to great, I think number level decision be and great, necessary said got decision, is in my for the audience have as to remarks, the get but be wage continually conversation. wage to

Tony Strange

this just And going be my more comments Pito, So opinion. to and are my color is around that.

I years to mission to I think And I think two year places always the was I our important, migrated think a they equally felt mission. or think on nurses was that where side. a connected ago,

job desirable think we with it's that compelling nurses. a is a to compelling have the for very and mission job I offer a job

are then then perspective, we our front nursing surgery disadvantage. are seat in same with wage to we think the a and and we'll when back do, -- climb I place environments we're be hospitals, in that in the has think wages, I centers, I from But better, we're to skilled be my and this us facilities, -- taken Jeff able -- and be for year However, believe and think I be compete reasons, from inflation that mission I -- think more until confidence have, on be in we think laid of about we're out, new to those way I And going in a a we'll until the just and can think going we operating all well. with that spot of comments perspective. mission well just better chasing gives as a trend as progresses, at folks will wage the we we're think fine backseat I all to that

Pito Chickering

look your increases, rate this, just into recruitment rate right and they're normal that levels? sort you active to percentage understand to whole dependent you portfolio and good completely as as get but wage greatest as back just the upon back to July there, to increases go So critical example today, I of a positive a the going nurse how now and things X is are that's or

Jeff Shaner

-- -- I I step Hospice X. and as our legislatures July reliance just and what use expect, XX retention effective of rates July No, the back X example an is of subsided state are Pito, our me June and Home in many rates business with as where be turnover say much only are and Health on contract full-time better, our caregivers, date and we we let employing storm appropriately. our over whether labor in has our Omicron right segment, we time benefited line think

addition a predictive can staff mentioned we technology employ we and Medalogix to of where allocate and the with think full of the segment. Homebase, I use were the So benefited caregiver and indicators like Hospice our better as better in full-time Home Health Homecare Muse able and rollout

to last we're with and it and the with and negotiate As Tony we comments, our rate that to and based on state legislatures. payers, business, to our PDS -- able talking segment with are discussions and the you rate our or legislatures would our this our have quarters, a very I our I fighting relates positive again continue held and we with been payers we've week-to-week in three my very, to tell think four sequentially

and retain and We caregivers a be at are to as our to times, it held through decisions the pass which and process rate they make to that right great outcome done as QX recruit their more. that to for incremental budgeting and through they to their their expect will so, we've we decisions annual continue relates to I make consistently, us,

Tony Strange

significantly, to the And and this day this and didn't it's then our and business We may rate and as but bring answer. an were other and through going rate you than up then use different to Pito, way, never the the Duty we once and back goes the anticipated. let way pass go ask that that -- The we push that that fuel just through a so our ahead growth. is event you gross margins wage amount Private why we to the wage in, ahead I'm opportunity is in question out problem you of the about now significant can in were catch wage asked go coming your wouldn't that down

be We pull to never able back. that will

give so materializes that served kudos the growth as past. slowed the way wage on of that be we'll but I I has and through, down, for and team certainly proceed. has meantime, protected passing us our disciplined rate in lot a hand in the other think So margins It operating that'll being the well

Pito Chickering

much. so Thanks right. All


go you. Thank Jefferies. ahead. Brian is of Tanquilut question Please The from next

Brian Tanquilut

how my thinking about you so second us QX burden. morning, maybe what of guess since the with if like Hey. be you was internally, were on with we line expecting first essentially kind question. three that can mentioned quarter, Good guys versus in share you avoid should Tony, we any I color can just guys. missing

Tony Strange

we Sure. try. provide we don't don't stop of quarterly to short going guidance. Well, I'll provide, so I'm Brian,

provide guidance, per quarterly provide we between and to don't while second try half really guidance did se. color first we Our half,

wage continue have while end payer we those I end or it related benefit unfortunately, today seen that up agencies of think all think, of that's had now. the We've continue off, that not, that way is a about in want our talking will made of that which think don't the year Jeff QX. we will to not rate Street the at have one XX one will state, a the on pressure fiscal impact to any quarter. headwinds and I second lot the June about thinking point, so or is any to we're of volume state -- won't a the lot and changes fortunately end happening I June,

don't in I year, XX. I will for of So -- on be QX to that a the half said more giving you said to that would I different second of do tell think but than don't I and than that that March you challenge, the no to ready that we're QX we We think a that. would challenging QX, QX continue number think we terms be you

Brian Tanquilut

was the that. shortfall decent Home in versus understand. Health regional where I guess appreciate think looks bit the No. expenses so totally higher. Street, I it I about my question, the second side, came the also P&L a in and I as and more

can business side Health maybe and just you how or bring anything in expenses with on you forward. down regional can terms of much of on a what going you share So Home can bring any thoughts just if dollar happened basis us the in the

Jeff Shaner

Jeff. great Yeah. question. a It's Brian, it's

four of rollout been year. that last team and today reason a We've of the on is team of a acquired companies, Homecare part has that completion that for seven like We for implementation that September the companies distraction think we Homebase announced because the last to I in headwind that months. platform. started rolled for the four

system synergy of at the much, enough really year, Health one covered part going getting platform, realization between We accordingly. to of QX one a of of two that and to points major, set business but able major a lift. continue our Home that Hospice this major, some report systems, today. to and and is enough division we respond in to long the of We're data to from around our We get what been this to QX us level realization that. and You've Health deeper ago be Hospice almost was Home knew of able years wanted and to five achieve be and much acquired

that that in but think things segment my do that believe we're as business, and point. we expect all to positioned we comments, see mentioned report I we'll just I margin to to contribution we'll we see in even think well improvement, we of continued continued at don't gross I though for see profitability continue individually, improvements this field So also mentioned due the

Brian Tanquilut

Got it. Thank you.

Jeff Shaner

Thanks, Brian.


is from Sarah go of ahead. question Barclays. you. Thank Please next James The

Sarah James

you. Thank

impact I'm sounds like being right, it more but guys there to the they’re within sounds talking and and and today, $XX COVID I about in it's maybe sounded into just in to million like want are XQ it rate last increases reiterating about it. it $XX coming if million you play could movement then to up sure some XQ $XX of million guide, talked understanding So XQ you more be quarter this about potentially you XQ. and make quarter today, you're like talked last

that have within range? movement does I So some the right changes I imply do and guess, the

Tony Strange

pull going I'm So to apart. gosh, to that try

year I has think our changed guidance, full the our don't to back at around Going thoughts all. guidance

a $X.XXX the so, around revenue billion $X.XX and changed our that in thoughts guidance we at I all. And billion we've think talked being don't about to

COVID but in I have and then a comments of impact, in was some think and about that which I'd been and look from in in call, comments made COVID and reference QX the Specifically about QX at would we or Omicron, think have portion back QX. I notes some the your March, the go and overall impact of the smaller to my

of the impact that million. all that would have of $XX overall across think I So been kind

that of talked way changes we're that don't we today. think QX, the any about about $XX of year know of we being QX number What but whole looking notwithstanding what the to on right. for in any million based You're in revenue I kind was that, $XX million

Sarah James

a rate event? side, more the or of in being slower ore they is this on And are implemented coming your always was that slower XQ expectation

Tony Strange

Jeff mid-year, a definition No, I had them my I comment and a comment different come to Jeff the comment mean, of come seven rate lot throughout the by so are increases no but think in made the about lot fiscal year. year, throughout continue the, on end, we that XX mean we've states year. made going mid-year we -- June of I don't and in to trend throughout they're the anticipate earlier year about the the

Jeff Shaner

But in that be we was driven well had think so $XX also that was to some we'll year-to-date, with are by we we'll through and think million XX fiscal some $XX in September funds shape the range by and Yeah. the in same I $XX well states year into, seven that we're by midyear And year-to-date to of we'll million again mid-teens I the I last time QX, in very I September year end and to think be do another we're federal think mean getting talking that Sarah, high-teens have certainly that million, time rate and COVID and time April, be record a by in October October. the the great very get into and QX. pleased end increases, the of a think and were play XXXX. I about I we We

Sarah James

going? update day last how just question, us work you And on the Great. is could rollout

Tony Strange

work Homebase? mean work What you do you said day, day or Homecare

Sarah James

to you that employees your day or [Multiple allows work The pay Speakers]

Tony Strange

it we have like out I that it, the get and access it I No. machine it's it, fine, week. Those it. with the are caregivers but PDS weekly we loved know, something count, being you to an caregivers have it. enjoyed by, every of walk no, and given just don't pretty our as great of in the almost thousands It's of who utilize to exact but Sarah, it want going the pay it value-added caregivers they've it's utilized those of run who have of caregivers, ATM to and thousands, and tune new somewhere have groves being it a week X,XXX on that from caregivers something to and need shiny mean being that people by and quickly, great X,XXX to any came caregivers. was been went taking all And thousands

than to great. tools, addition it's asking. other but of So nice you our going toolbox been will, for it's if a recruitment that, retention Thanks


Please go next Thank from from ahead. Rice Suisse. question you. A.J. The is Credit

A.J. Rice

on guess, the that to how something Hi, this that might you -- the the I it everybody. Maybe Duty Arizona to you're help side? obviously, just adult can leverage a is think it you -- rolling I when going adult just the on in sounds program for for allow -- be me be states. how have institutionalized out and a otherwise it patients do, back side, that's nurse other it getting level does little home, it -- you somehow to to helps on template sounds It understand stay bit said help but like side, be could also it about Medicare does allow reimbursed like you Private a could

Tony Strange

now, the Private of it of their they're would think hours either be but now skilled but it activities the we're doing neighbors for their -- you nurses as think Hospice and age, nursing it it on and out Services. the is or and Private think by template very, only -- Health successful of side as states. that for of segment, been numerous on already of think by program granted, not of loved But in over segment, patients that, and this template we that some nursing of but cared not ones are receiving XXX% this Services of Services for of immediate in or new Private Duty adopted is support new be said, adult it's being, Home very Duty the five Colorado Private Duty as patients we've Colorado as A.J. Arizona, caring it will in same their intermittent, side Duty hour hours, that either the in I are age the Yeah. will A.J. came not being the years been is and RN LPN now the obviously parents

to It's not in PDS to model, not conversations -- in realm. are a nature in which from, certainly in and to, again adopt with We additive it's is subtracting numerous but unskilled is nature. states it's the similar additive it

A.J. Rice

competitive be to going follow-up was my ask landscape. you And to question about Okay. the

your seen they at might doing a to regional reasonable mom-and-pop looking staff your be describing just are continue much in one you you're in think I way, and partner, said remained deal better pretty to prepared same there they out of get remarks, think pipeline the the any therefore, robust, you're dealing the challenges to providers, drop they that are is reason any rate can't the labor to you because market, serve have patients. with

Tony Strange

space, of So think think Hospice in it's I I that answer Home an no. and Duty insightful Health between question the A.J. Health and and Private that I'm of going Hospice to Home divide versus the your question and is

it -- saying deals weren't same I well, that, come suffering run the my from However, immune this but for [indiscernible] they're companies level if they be back so the and fact, in Home many to that Hospice are of it's that Rod and they they're certainly for there specifically of normal and at see this but have the that not will COVID and and rate where Health adjustment adjusting look are such. throwing would COVID, the we reduced staffing, in not shortage way. of the struggling volumes we report think they've nursing in Matter got

and pay to talking do were that Sarah size meaningful Private labor scale daily and so the companies the things the issues difficult, Jeff just and just are environment. on pressures but that tools, to and try the of staffing difficult do don't have is and Now companies caregivers, one attract side, don't those that it to Duty ability have about things being that the to a

we of couple the Duty just a and come say this table seen to can't have We Private do anymore. companies

creates very understand for takes us being We in and about to comment, where that. my said our So but be shareholders. it disciplined as we're it opportunity, I I think to trading and a what we're deal accretive

we're time. the to to going approach M&A, about So the we're disciplined very same being at but continue to grow

A.J. Rice


Just able anymore Private have this we so do not is, that probably them out patients, maybe it, or on clarify that? can be or how that cover just side, we going assume to the someone they says do Duty if about you their if patients make do can't think to buy you're can you those

Tony Strange

they are on and a done they're why to they caregiver like harder out done have most is business easy don't door to thing and staffing difficult going it can't of Private get I population work, really paying is working come and what They make nurses for I they with able I'm getting I'll apart internal easier gallon It the versus side. maybe money. I've proud, that, getting what they're business and fact, matter our wouldn't understanding much right and the it to think some heard the about it's like with just is that meaningful from of and they why closing our we're to wage a really most where this the and like not are, really just more and the Duty and said trying can be encouraging an when it some harder and like miles especially that to back. like Private to really go we've run like work. to Duty They effective and the clarify now leadership. nurses and XXX like caregivers XX like here, the in the Duty right XX mission. The business quite information X the really density they frankly, you work scale for limb that they and gas groceries they in are and you're and business are work. size our money the staff when how when They on that They as with and that a leave, and patients have the it's work $X does matter just would them work miles a market they XX very to like a as patients back to we've -- patients about Private a $X us. way X go in makes is less I'm But apart, the market, there do where orientation.

how know money. reengage and sight caregivers the to So We -- get clear it's caregiver. take what of to Private we we more to how going see line the of it's go in get know to Duty a

A.J. Rice


Okay. Thanks a lot.

Tony Strange

Thanks, A.J.


Ben next Markets. The ahead. Hendrix from Please you. of Thank RBC question is Capital go

Ben Hendrix

Thanks guys.

you've the quick done, Just side, just almost of follow-up of what Comfort that's expect on idea with that Care per Homebase up Home of efficiencies go gain how you a that got and to from and Homecare trended Muse I running. Health kind kind where the segment, perspective really margin on integrated maybe with color rollout and wanted of can get to can Homecare Medalogix kind that an nearly visits now in episode, Thanks. Homebase,

Tony Strange

I'll I Health And Muse the guys. got I best gross just, a then for Homebase It's to one of enjoyed is added remarks, room as we were little in they've Homecare Home action know pushing there still We And XX.X%, think getting best Hospice and as We've thing is business. see right get set margin we why in love to that Homecare and get to Home haven't we think quarters, Medalogix we're and left improvement. some items. the few think just able still talking about over Homebase reports the a for our both settles it's partnerships and fully the improvement. that and another for best Hospice our said the reason XX%. just those prepared -- We're and it all of really my point, is digested running point-and-a-half actionable of that bit there time Health lot businesses, Yeah. it. question Homebase reporting all one they've last takes say great We've about Homecare about got spent the to I our data, time digesting of we in, we as a think

that of of of think Home that to that we us business, now the and more the get believe Hospice platform. I all can we're Health continue cost on side out efficiencies

as So the just putting home case right whether right said, it's cost just mix, nurse visits better a the at it's whether per time. get the it's whether episode, right and visit, in it's whether you insight per

knowing thing ability I we've that most the a Rob best I that data. on business is think I'm go-forward got the the manage and basis, about excited the to for

it's I almost excitement started hear process implementation with our you and a been the months, XX think contract so voices, And Homebase. obviously we in as Homecare sign

we're the be and to glad focusing of just So efficiencies. glad side on the be driving it now other to on

Ben Hendrix

guys. Thanks Great.

Tony Strange

Ben. Thanks,


you. Thank

of question is Please last ahead. from Our John James. go Ransom Raymond

John Ransom


Just to the labor money the of solved kind tag on and to how things.

in of the you second So get sort to have the you of of a do expect update just first year percentage terms. in range question, half

Tony Strange

-- A second call be March said that. go way back that a of EBITDA the that run to on on on we answer the I would half XX, range back you question that in can the well, expect we of rate I to the is, kind of think if year John, best

numbers we've talked more come true. look like, specifically reengage. got $XXX we $XXX think nurses for order think million to I might in I basis. was but -- run we've about the range $XXX get nurses number rate to that number million or what we don't in have on the a so for workforce to to million In the that have used happen, to in order those

John Ransom

said on in all expectations, have think goes going What do I think today you let's baseline a is, just $XXX how increase state, pricing your kind as to we X% to it rate about you're say, of to seven all your $XXX, sit card, details. have you the I'm is mean for you by that average updates, pay so the your we trying don't realizing pricing, to

Tony Strange

some you of now. in. your X% don't or around Jeff, change. to it answer And you But that, price Yeah. I why But not is your pricing, basket X% market it's no, give color chime better understand Jeff? kind John, don't question the update meaningful why question,

Jeff Shaner

have Yeah. biggest John, date. and our two process our their states, final effective of in a of a five July couple states biggest X are legislative

full we to the the in a table hour of movement $X So XX% intention the legislative two about rate markets, north or have range that and an the kind talking on move XX% states, the talking $X so in in we negotiating. in meaningful, those the would rates process movement we're that's reimbursement in those type with wage

Tony Strange

kind of example. Pennsylvania this rates, of shows would at Pennsylvania we're a about. data that so that's a so you year, great the point and great be talking raised Well, magnitude beginning just the XX%

John Ransom

All right.

So this, so use if it let's might we confusing. about so be think just to less were dollar,

to kind that got in back you margin bit are around no a more the just do there is keep historical $X goes So you you really let's $X to state, say an to total nurse, pass there's think of earnings the your about pay and caregiver. a or the increase little that we through back hour to turnaround having for and company that right

Tony Strange

you're I think thinking about it is way correct. the

of would go outside -- or rate actually the margins we our think I bit, the caregiver. to expand even even little hold margin the increase could a but most directly

Jeff Shaner

efficient say, will and I And rate. faster going John, it's

John Ransom

do profit A that. the XX% increase I'll like in dollars, something math, gross but

So there is you. got no I -- And Okay. then follow-up. Yeah. my

Tony Strange

north. kind Private Jeff to John, -- John, just the margins, the not made margins thinking going rate XX%. business. be we're of I'm increase the it be in We're to clear. relates thinking drive of Gross comment to sorry but rate I there'll settle tough, XX% that that they as increases, to not or little a connection XX% want to is of number Duty taking XX% out, when We're

We everything, back margin will caregiver. all to it the and but down push take the

John Ransom


That's G&A the stays way to some leverage. and you dollars margin think are hard it. same, get the So about the the

Tony Strange

G&A. growth And and growth. get We

John Ransom

up we or to next what step Yeah. wanted, the any would All right. My have other you question is in flag? all do have year debt that covenant been obviously the care numbers we two

Tony Strange

and got maintenance leverage covenant -- have period, of we compliance a got room perspective, covenant first but third we've there a that have in we just where so we're from No, fair on lien only on revolver, drawn just we've of or credit more ratio, adjusted a turns roughly a our fair amount based would if of that a X.X room. at have we amount be EBITDA, a

John Ransom

Thank for me. you. it That's Okay.

Tony Strange

Thanks, John.


Strange comments. and Thank for at time some much. very There to Tony floor you Mr. to would questions further like closing back the are this no I turn

Tony Strange

all operator interest and in you, appreciate of your appreciate Thank your morning this we time really do and Aveanna.

ourselves look a glad to forward always, available extent do to As you make we anybody we'll With QX we'd the that, that you updating needs to be you. have after to additional some and great time follow-up, spend day. with individually. Thank


Ladies concludes much, Thank today's you and that very sir. gentlemen, teleconference.

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