Accendra Health (ACH) Q4 2019 earnings summary

Executive summary

• 2019 revenue fell 2.2% YoY to $9.21B; net loss narrowed to $62.4M from $437.0M in 2018, when large impairment charges weighed on results.

• Service levels were restored, customer focus and infrastructure investment increased, and a new leadership team was assembled.

Financial highlights

• Gross margin rose 5.4% to $1.128B; reported operating income was $73.2M versus a $352.3M loss in 2018.

• Net loss per diluted share was $1.03 versus $7.28 in 2018; 2019 included $39.8M of discontinued-operations losses.

• Interest expense increased 38.2% to $98.1M, primarily due to acquisition-related borrowings and higher rates and fees after the February 2019 credit amendment.

• Operating cash flow was $166.1M; capital expenditures were $52.2M, down from $65.7M in 2018.

Outlook and guidance

• 2020 priorities include operational excellence, productivity, customer retention and wins, profitable growth, debt reduction, and reinvestment.

• Movianto sale was expected to close in H1 2020 for $133M cash proceeds; proceeds were permitted for repayment of 2021 Notes under the February credit amendment.

• COVID-19 impacts remained uncertain as medical-product supply disruptions, increased demand, and manufacturer allocations had emerged.