Accendra Health (ACH) Q4 2016 earnings summary

Executive summary

• FY16 adjusted EPS reached a record $2.05, up $0.05 YoY; reported diluted EPS was $1.76, up $0.11.

• Management launched a transformation agenda focused on route-to-market technology, non-acute care, manufacturer outsourcing, and data and analytics services.

Financial highlights

• Revenue was $9.723bn, down 0.5% YoY; gross margin was $1.187bn, down 2.2%, and 12.21% of revenue versus 12.43%.

• GAAP operating earnings were $199.6m versus $200.4m; adjusted operating earnings were $224.3m versus $227.3m.

• Net income was $108.8m versus $103.4m; adjusted net income was $126.6m versus $125.3m.

• DS&A was $970.4m, down 2.4% YoY, or 9.98% of revenue versus 10.17%; acquisition and realignment charges were $24.7m.

Outlook and guidance

• 2017 is expected to be a year of investment and transformation; revenue and gross margin are expected to remain pressured by the large customer exit and competition.

• CPS capacity and workforce constraints may continue into 2017; additional realignment charges are expected as repositioning continues.

• The first-quarter 2017 dividend was raised 1% to $0.2575 per share; future quarterly dividends are anticipated, subject to board discretion and financial conditions.