Accendra Health (ACH) Q4 2020 earnings summary

Executive summary

• FY2020 revenue was $8.48B, down 7.9% YoY; continuing-operations diluted EPS was $1.39 vs. a loss of $0.37 in 2019, while operating income rose to $204.1M from $73.2M.

• COVID-19 reduced elective procedures and distribution revenue, partly offset by higher PPE demand, improved manufacturing output, favorable product mix and operating efficiencies.

• Strategic focus includes customer experience, continuous improvement, PPE and surgical product expansion, new verticals, technology and end-market expansion.

Financial highlights

• Net revenue was $8.480B vs. $9.211B in 2019; gross margin was $1.281B vs. $1.128B, and operating income was $204.1M vs. $73.2M.

• Net income was $29.9M vs. a $62.4M loss; continuing-operations income was $88.1M vs. a $22.6M loss.

• Continuing-operations diluted EPS was $1.39 vs. a loss of $0.37; diluted net EPS was $0.47 vs. a loss of $1.03.

• Operating cash flow was $339.2M vs. $166.1M; cash and cash equivalents ended at $83.1M, while total debt was $1.026B.

Outlook and guidance

• 2021 priorities include reliable financial performance, strategic investment, sustainable operational improvements and embedding the business system to support continuous improvement.

• Planned growth initiatives include expanding product categories beyond PPE and surgical infection prevention, entering new verticals, enhancing customer-focused technology and expanding end markets.

• Elevated PPE demand is expected to continue amid new protocols, stockpiling and new healthcare, non-healthcare and international demand channels; post-pandemic demand and growth rates remain uncertain.