Accendra Health (ACH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 5% year-over-year to $2.7 billion, driven by strong demand in Patient Direct and Medical Distribution, with robust growth in diabetes and sleep supplies.

• Adjusted EBITDA rose 5% year-over-year to $142 million; adjusted EPS was $0.42, while GAAP net loss was $(12.8) million or $(0.17) per share.

• Nearly $200 million in total debt reduction achieved in Q3, including full redemption of 2024 senior notes, with over $750 million paid down since the Apria acquisition.

• Announced agreement to acquire Rotech Healthcare Holdings for $1.36 billion, expected to close in H1 2025, with fully committed financing and anticipated $40 million in tax benefits.

• Legal settlements, exit/realignment charges, and a one-time $17.9 million tax charge impacted results.

Financial highlights

• Q3 2024 net revenue: $2.7 billion, up 5% year-over-year; Patient Direct revenue: $687 million (+6%); Products & Healthcare Services revenue: $2.0 billion (+5%).

• Gross profit was $560 million (20.6% of net revenue), with margins up 20 bps sequentially but down 20 bps year-over-year due to a prior LIFO credit.

• GAAP operating income was $24.2 million; adjusted operating income was $84.2 million, flat year-over-year and up 10% sequentially.

• Adjusted EBITDA reached $142 million, up over 5% year-over-year.

• GAAP net loss was $12.8 million ($0.17/share); adjusted net income was $33.1 million ($0.42/share), slightly down from last year.

Outlook and guidance

• Full-year 2024 revenue expected between $10.6–$10.8 billion, adjusted EBITDA $540–$550 million, and adjusted EPS $1.45–$1.55, excluding Rotech acquisition impact.

• Gross margin anticipated between 20.5% and 21.0%; interest expense projected at $142–$144 million; capital expenditures forecasted at $225–$235 million.

• Guidance assumes stable commodity prices, current FX rates, and continued inflation and pricing pressures.

• Sequential growth and improved cash flows are anticipated in Q4, with positive momentum expected into 2025.

• Guidance excludes any impact from the pending Rotech acquisition.