Aveanna Healthcare Holdings Inc (AVAH) Reports Mixed Q3 2023 Results Amidst Goodwill Impairment ...
Revenue increased by 7.9% year-over-year to $478.0 million in Q3 2023.
Net loss of $102.4 million reported, primarily due to a $105.1 million non-cash goodwill impairment charge.
Adjusted EBITDA saw a significant increase of 46.2% compared to the prior year, reaching $36.2 million.
Full year 2023 revenue guidance raised to between $1,870 million and $1,880 million.
On November 9, 2023, Aveanna Healthcare Holdings Inc (NASDAQ:AVAH), a diversified home care platform, announced its financial results for the third quarter ended September 30, 2023. The company reported a revenue increase of 7.9% to $478.0 million compared to the same period last year, driven by growth across its segments. However, a substantial net loss was incurred due to a non-cash goodwill impairment charge.
Financial Highlights and Performance
The company's gross margin improved by 9.4% to $147.3 million, reflecting a gross margin percentage of 30.8%. Despite the revenue growth and margin improvement, AVAH reported a net loss of $102.4 million for the quarter, which included a significant non-cash goodwill impairment charge of $105.1 million. This compares to a net income of $24.3 million in Q3 2022. Adjusted EBITDA, however, showed a strong increase of 46.2% to $36.2 million, indicating underlying operational strength.
Liquidity, Cash Flow, and Debt
As of September 30, 2023, Aveanna Healthcare had cash of $48.3 million and substantial borrowing capacity. The company's net cash provided by operating activities for the year-to-date was $25.7 million, with free cash flow reaching $16.9 million. Total indebtedness stood at $1,472.1 million, with various interest rate hedging instruments in place.
Management's Commentary
CEO Jeff Shaner expressed confidence in the company's strategy and revised outlook for the remainder of 2023, citing strong revenue and Adjusted EBITDA growth. Interim CFO Matt Buckhalter highlighted the positive impact of cost reduction efforts on cash flow and the success of Aveanna's preferred payor and government partner strategy.
Our third quarter results reflect the continued momentum in our business, highlighted by revenue and Adjusted EBITDA growth of 7.9% and 46.2% when compared to the prior year period. These strong results further affirm the Aveanna strategy to adapt and transform our business as we execute on our 2023 key initiatives, said Jeff Shaner, CEO of Aveanna Healthcare.
I am pleased with the continued execution of our 2023 strategic initiatives during the third quarter. Aveannas performance is highlighted by the 7.9% growth in revenue and 46.2% growth in Adjusted EBITDA as compared to prior year period. The cost reduction efforts implemented earlier this year have positively impacted our cash flow generated from operations in Q3, commented Matt Buckhalter, Interim CFO.
Revised Full Year 2023 Guidance
Aveanna Healthcare has raised its full-year 2023 revenue guidance to a range of $1,870 million to $1,880 million and Adjusted EBITDA guidance to between $134 million and $137 million. The company has not provided net income guidance due to the volatility of certain inputs.
The detailed financial tables provided by the company offer insights into the segment performance and the reconciliation of GAAP to non-GAAP measures, underscoring the company's focus on providing transparent and comprehensive financial information.
Investors and analysts can access a replay of the conference call discussing the Q3 2023 results or join the live webcast through the Investor Relations section of Aveanna's website.
For a more detailed analysis of Aveanna Healthcare Holdings Inc's financial results, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Aveanna Healthcare Holdings Inc for further details.
This article first appeared on GuruFocus.
