Accendra Health (ACH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 4–4.2% year-over-year to $2.67–$2.7 billion, with both Products & Healthcare Services and Patient Direct segments contributing to growth.

• Announced definitive agreement to acquire Rotech Healthcare Holdings for $1.36 billion in cash, expected to close by year-end 2024, expanding the Patient Direct segment.

• Adjusted EBITDA grew 12% year-over-year to $127 million; adjusted EPS doubled to $0.36 from $0.18 in Q2 2023.

• Operating cash flow was $116 million, enabling $70–$71 million in net debt reduction during the quarter.

• Net loss was $31.9–$32 million for Q2 2024, impacted by a $17–$17.2 million one-time tax charge.

Financial highlights

• Gross profit rose to $544–$544.2 million in Q2 2024, with a gross margin of 20.4%.

• Products & Healthcare Services revenue reached $2–$2.01 billion, up 4–4.1% year-over-year; Medical Distribution grew 5%.

• Patient Direct revenue was $660–$660.4 million, up 4–4.4% year-over-year, led by diabetes and sleep supplies.

• GAAP operating income was $20.3 million (up 87%); adjusted operating income was $76.3 million (up 23%).

• Adjusted net income was $28–$28.2 million ($0.36/share); adjusted EBITDA was $127 million, up 12%.

Outlook and guidance

• 2024 revenue guidance reaffirmed at $10.5–$10.9 billion; adjusted EBITDA expected at $550–$590 million; adjusted EPS projected at $1.40–$1.70.

• Gross margin guidance for 2024 is 21.0–21.5%; interest expense projected at $141–$146 million; capital expenditures at $220–$240 million.

• Adjusted effective tax rate expected between 27.5% and 28.9%; diluted weighted average shares outstanding estimated at ~78.5 million.

• Guidance excludes impact from the Rotech acquisition and is based on stable commodity prices and FX rates.

• Expects modest sequential growth Q2–Q3 and stronger growth Q3–Q4; strong cash flow generation anticipated in H2.