Accendra Health (ACH) Q4 2012 earnings summary

Executive summary

• FY12 revenue rose 3.2% YoY to $8.91B, while adjusted operating earnings fell to $206.9M and adjusted diluted EPS to $1.85 from $1.94.

• Movianto, acquired Aug. 31 for approximately $157M, added a European logistics platform and contributed $176.7M of revenue for four months.

Financial highlights

• Revenue was $8.91B, up 3.2% YoY; GAAP operating earnings were $196.8M versus $203.5M, and net income was $109.0M versus $115.2M.

• GAAP diluted EPS was $1.72 versus $1.81; adjusted diluted EPS was $1.85 versus $1.94, excluding acquisition-related and exit/realignment charges.

• Gross margin increased to $924.7M from $857.5M; gross margin rate rose to 10.38% from 9.94%, largely reflecting Movianto and fee-for-service gains.

• SG&A increased to $682.6M from $610.7M, mainly due to Movianto; SG&A as a share of revenue rose to 7.66% from 7.08%.

Outlook and guidance

• Targeted approximately $4M of additional lease-exit and related charges in 2013 following $2.2M of 2012 Domestic exit and realignment charges.

• Began a multi-year, $50M U.S. IT infrastructure transformation in 2012 to improve operating and data efficiencies, customer service, and future cost trends.

• The Board approved a 9% quarterly dividend increase to $0.24 per share in Feb. 2013; future dividends remain subject to Board discretion and business conditions.