Slides
Page 1
Investor Presentation May 2025
Page 2
Disclaimers and Forward-Looking Statements This investor presentation (this "presentation“) and any oral statements made in connection with this presentation are for in formation purposes only and do not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other securities of Aveanna Healthcare Holdings Inc. (including its consolidated subsidiaries, " Aveanna," the "Company," "we," "us" or "our"). The information contained herein does not purport to be all inclusive. The data contained herein has been derived from various internal and external sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. Any data on past performance contained herein is not an indication as to future performance. Except as required by applicable law, Aveanna assumes no obligation to update the information in this presentation. Nothing herein shall be deemed to constitute investment, legal, tax, financial, accounting or other advice. This presentation is not intended for distribution to, or use by, any person in, any j urisdiction where such distribution or use would be contrary to local law or regulation. No representation or warranty (whether express or implied) has been made by Aveanna with respect to the matters set forth in this presentation. Cautionary Note Regarding Forward -Looking Statements Certain matters discussed in this presentation constitute forward -looking statements within the meaning of the Private Securitie s Litigation Reform Act of 1995. All statements (other than statements of historical facts) in this presentation regarding our prospects, plans, financial position, business strategy, expected financial and operational results, and any ot her future events may constitute forward -looking statements. Forward -looking statements generally can be identified by the use of terminology such as “believe,” “expect,” “anticipate,” “design,” “would,” “could,” “intend,” “plan,” “estimate, ” “seek,” “will,” “may,” “should,” “predict,” “project,” “potential,” “continue,” “guidance,” or the negatives of these terms or variations of them or similar expressions. These statements are based on certain assumptions that we have made in light of ou r experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. These forward -looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward -looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from t hose expressed or implied by such forward -looking statements, such as our ability to successfully execute our growth strategy, including through organic growth and the completion of acquisitions, effective integration of the companies we acquire, unexpected costs of acquisitions and dispositions, the possibility that expected cost synergies may not materialize as expected, the failure of Aveanna or the companies we acquire to perform as expected, estimation inaccuracies i n revenue recognition, our ability to drive margin leverage through lower costs, unexpected increases in SG&A and other expenses, changes in reimbursement, changes in government regulations, changes in Aveanna’s relationships with refe rral sources, increased competition for Aveanna’s services or wage inflation, the failure to retain or attract employees, changes in the interpretation of government regulations or discretionary determinations made by government officia ls, uncertainties regarding the outcome of rate discussions with managed care organizations and our ability to effectively collect our cash from these organizations, changes in the case -mix of our patients, as well as the payor mix and pay ment methodologies, legal proceedings, claims or governmental inquiries, our ability to effectively collect and submit data required under Electronic Visit Verification regulations, our ability to comply with the terms and conditions of the CMS Review Choice Demonstration program, our ability to effectively implement and transition to new electronic medical record systems or billing and collection systems, a failure to maintain the security and functionality of our informa tion systems or to defend against or otherwise prevent a cybersecurity attack or breach, changes in tax rates, our substantial indebtedness, the impact of adverse weather, and other risks set forth under the heading “Risk Factors” in Aveanna’s Annual Report on Form 10 -K for its 2024 fiscal year filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2025, which is available at www.sec.gov , as well as under similar headings in Aveanna’s subsequently filed Quarterly Reports on Form 10 -Q and other filings with the SEC. In addition, these forward -looking statements necessarily depend upon assumptions, estimates and dates that may prove to be incorrect or imprecise. Accordingly, forward -looki ng statements included in this presentation do not purport to be predictions of future events or circumstances, and actual results may differ materially from those expressed by forward -looking statements. All forward -looking statements spea k only as of the date made, and Aveanna undertakes no obligation to update or revise any forward -looking statements, whether as a result of new information, future events or otherwise, except as required by law. Industry and Market Data Unless otherwise indicated, information contained in this presentation concerning our industry, competitive position and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources and management estimates. Aveanna has not independently verified the information and data obtained from thir d party sources and cannot assure you of such data’s accuracy or completeness. Management estimates are derived from publicly available information released by third -party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data, and our experience in, and knowledge of, such industry and markets, which we believe to be reasonable. Any industry forecasts are based on data (including third -party data), models and experience of various professionals and are based on various assumptions, all of which are subject to change without notice. In addition, projections, assumptions and estimates of the future performance of the industry in wh ich we operate, and our future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described in “Cautionary Note Regarding Forward -Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. Non- GAAP Financial Measures This presentation includes various performance indicators and non -GAAP financial measures that we use to help us evaluate our bu siness, identify trends affecting our business, formulate business plans, and make strategic decisions. EBITDA, Adjusted EBITDA, Free Cash Flow, and pro forma presentations of the foregoing are financial measures that are calcula ted and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Reconciliations of such non -GAAP measures to their nearest comparable GAAP measures can be found in the Appendix to this presentation. Any non -GAAP financial measures used in this presentation are in addition to, and not meant to be considered superior to, or a substitute for, the Company’s financia l statements prepared in accordance with GAAP. Additional information with respect to Aveanna is contained in its filings with the SEC and is available at the SEC's website , www.sec.gov, and on Aveanna's website, www.aveanna.com 2
Page 3
3
Page 4
Debbie Stewart Principal Accounting Officer Jeff Shaner Chief Executive Officer 4 • CEO of Aveanna since 2023 • Instrumental in formation of Aveanna Healthcare • Chief Operating Officer of Aveanna Healthcare since 2017 • Chief Operating Officer of PSA Healthcare since 2015 • Former SVP, President of Operations of Gentiva Health Services • Former President of Gentiva Health Services’ Hospice Division • CFO of Aveanna since 2023 • Integral to Aveanna’s financial structure since inception • Senior Vice President of Finance for Aveanna Healthcare since 2016 • Leads the Company’s Investor Relations Group • Former Vice President of Finance of PSA Healthcare since 2015 • Principal Accounting Officer of Aveanna since 2023 • Vice President of Accounting and Controller of Aveanna since 2021 • Leads the Company’s Accounting, Tax, SEC Reporting and Internal Audit teams • Former Assurance Senior Manager of Ernst & Young • Certified Public Accountant since 2009 Matt Buckhalter Chief Financial Officer Leadership Presenters
Page 5
$1,495 $1,679 $1,788 $1,895 $2,025 $2,150 2020A 2021A 2022A 2023A 2024A 2025G Medicaid MCO 58% Medicaid 23% Commercial 9% Medicare 10% Aveanna Overview 2025 Guidance(1) Key Operating Statistics >$2.15b Revenue 32.8% Gross Margin(2) >$207m Adjusted EBITDA 341 Locations 34 States 26,500 Caregivers 43.5m Homecare Hours(3) 86 Preferred Payors 5 ___________________________ 1. Consistent with prior practice, we are not providing guidance on net income, or a reconciliation of Adjusted EBITDA thereto, at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with our interest rate derivatives. 2. Q1 2025 Gross Margin 3. Q1 2025 PDS Hours Annualized 4. Q1 2025 Payor mix ($ in millions) 7.5% CAGR By The Numbers Payor Mix4 2020 – 2025 RevenueGrowth National Footprint No single payor contributes more than 10% of total revenue
Page 6
Melia and Mom Heather Valerie 6 Aveanna's Transformative Homecare Platform Preferred Payor Partnerships Government Affairs Strategy Scaled National Platform Technology and Data Driven Results Reduction in Total Cost of Care Our advanced homecare platform positions us to improve outcomes with data-driven results and introduce value-based agreements that deliver exceptional value to our partners. Improved Clinical Outcomes
Page 7
7 Aveanna's Transformative Homecare Platform PDS Preferred Payors State Rate Increases Home Health Episodic MixValue-based Agreements Continued substantial progress as demonstrated by key performance metrics. (1) ___________________________ 1. See Disclaimers and Forward-looking Statements slide. 7 14 22 30 2022 2023 2024 2025 Projected Projected Projected Projected 3 5 8 12 2022 2023 2024 2025 13 19 12 10 2022 2023 2024 2025 62% 71% 76% 75% 2022 2023 2024 2025 +
Page 8
Melia and Mom Heather Valerie Our future opportunity will continue to provide enhanced value that is driven by our significant investment in our value-based national homecare platform. 8 Aveanna's Transformative Homecare Platform Value-based Organic Growth Risk-based GrowthCore Organic Growth Scaled national platform drives growth Payor partnerships underpinned by shared value creation Government agencies shifting programs and reimbursement to homecare Data and outcomes that define value and savings Capitating risk and population health management Strategic tuck-in acquisitions that strengthen our offerings to key payor and government partners M&A 3 – 4% 2 – 3% 1 – 2% 1 – 1.5%1 – 1.5% 7 – 10% ___________________________ 1. See Disclaimers and Forward-looking Statements slide. Long-term Growth Rate (1)
Page 9
9 ValerieMelia and Mom Heather Aveanna Business Segments
Page 10
Private Duty Services Segment Financial Highlights Key Operating Statistics $1,700m Net Revenue1 26% – 28% Gross Margin2 3% – 5% Organic Growth Rate3 234 Locations 27 States 38,200 Patients on Service 54% % of PP Volume 10 Preferred Payors 24 • Preferred Payor Partnershipsunderpinned by enhanced rates andvalue-based agreements • Defined Government Affairs Strategy in every state • Scaled National Recruiting Platform to accelerate caregiver hiring • Technology and Data Driven Outcomes that support value-based agreements • Strategic M&A tuck in opportunities in key states ___________________________ 1. TTM Q1 2025 revenue. 2. Management’s target for gross margin percentages over time. 3. Management’s target for total organic revenue growth rate over time. • One Nurse – One Patient • Full Time & Per Diem Caregivers Paid by the Hour • Longer Length of Stay • Patient Demand Exceeds Caregiver Supply • Services Delivered in the Comfort of the Patient's Home By The Numbers Key Items nt s • One • Full Care • Long • Patie Care • Serv Com
Page 11
Home Health & Hospice Segment Financial Highlights Key Operating Statistics Locations States Patients on Service Episodic Mix 12 Preferred Payors $220m Net Revenue1 50% – 52% Gross Margin2 5% – 7% Organic Growth Rate3 82 15 12,800 45 Home Health • Geriatric Patient Population • Intermittent Services • Shorter Length of Stay • Value-based Care Component • RN, PT, OT, SLP, SW and HHA Hospice • Geriatric Patient Population • Per Diem Reimbursement • End-of-life Care / Support ___________________________ 1. TTM Q1 2025 revenue. 2. Management’s target for gross margin percentages over time. 3. Management’s target for total organic revenue growth rate over time. 77% • HH Preferred Payors defined as episodic agreements • Caregiver Capacity aligned with preferred payors • Episodic Payor Agreements and Value-based Payments driven by CMS Star Ratings • Organic growth initiatives that support the preferred payor strategy By The Numbers Key Items ment vice ors Hom • Ge • Int • Sh • Va • RN Hosp • Ge • Pe • En
Page 12
Medical Solutions Segment Financial Highlights Key Operating Statistics States we deliver to Patients on Service 11 Preferred Payors $174m Net Revenue1 42% – 44% Gross Margin2 8% – 10% Organic Growth Rate3 25 29,500 17 • Nutritional Support – Enteral Product, Equipment and Supplies • Provided to Pediatric, Adult, and Geriatric Patients • 24-hour Clinical Support • Longer Length of Stay • Leading National Enteral Provider ___________________________ 1. TTM Q1 2025 revenue. 2. Management’s target for gross margin percentages over time. 3. Management’s target for total organic revenue growth rate over time. • Preferred PayorContracts provide in-network patient support at favorable rates • Enhanced AMS Model driving need to refine our payor network with focus on preferred payors • Nationally Scaled Enteral Provider • Strong Patient Demand drives growth trends • Symbiotic relationship with PDN services Key Items By The Numbers 2–3 Years Avg. Case Length Rate / UPS ~$470
Page 13
13 Scaled Platform Built for Driving Growth and Enhancing Value
Page 14
Fragmented Home Care Markets Support Sustainable Growth $20bn Legacy Pediatric Focus Personal Care $18.0bn Annual U.S. Healthcare Spend $4.5tn Therapy $6.0bn Enteral Nutrition $3.0bn Therapy $7.0bn Private Duty Nursing $10.0bn Hospice $23.0bn $99bn Addressable Adult Opportunity TAM annual growth from 2023-2028 $119bn ~4% ü Untapped PDN demand with only a fraction of children and adults getting needed care ü Family caregiver program expansion ü Expanding insurance coverage for Medicaid beneficiaries Our Market Opportunity Home Health $58.0bn ___________________________ Source: 2022 Third party consulting report, management estimates. 14
Page 15
$41 $42 $55 $57 $17 $18 $29 $31 $395 $460 $491 $559 $100 $135 $146 $184 MS Q1'24 MS Q1'25 HHH Q1'24 HHH Q1'25 PDS Q1'24 PDS Q1'25 Total Q1'24 Total Q1'25 Q1 2025 Financial Performance: Summary Results • PDS Q1 2025 revenue growth of 16.5% from Q1 2024, driven by 10.9 million hours of care or 6.1% YOY volume increase • MS Q1 2025 gross margin growth of 8.3% from Q1 2024, driven by modernization efforts taking hold • HHH Q1 2025 gross margin growth of 6.1% from Q1 2024, driven by strong episodic mix and caregiver utilization • Q1 2025 demonstrated continued focus on optimization across Aveanna’s overhead platform and preferred payor strategy • 2024 Operating Cash Flow of positive $32.6m and Free Cash Flow of positive $25.7m (2) 15 $ in millions Q1 2024 Q1 2025 Y/Y% Change Revenue $490.7 $559.2 14.0% Gross Margin $145.9 $183.6 25.9% Adjusted EBITDA(1) $34.9 $67.4 93.1% 29.7% 32.8%25.4% 29.3%53.1% 54.2%40.8% 42.7%Gross Margin % ___________________________ 1. Adjusted EBITDA is a non-GAAP financial measure. See Appendix for a reconciliation to the most comparable GAAP measure 2. Free Cash Flow is a non-GAAP financial measure. See Appendix for a reconciliation to the most comparable GAAP measure Consolidated Results Key Highlights Revenue and Gross Margin % by Segment $ in millions
Page 16
Financial Performance: Capital Structure 16 • Liquidity of $265.7m, comprised of the following: • $71.5m cash on balance sheet • $138.0m revolver availability • $56.2m securitization availability • Undrawn revolver at the end of Q1 • $32m in outstanding letters of creditat the end of Q1 • Total variable rate debt of $1,474m, consisting of: • First Lien: $888.3m (S + 3.75%) • Second Lien: $415m (S + 7.00%) • Securitization: $168.8m (S + 3.15%) • Interest rate hedges in place: • $520m notional interest rate swap (expires June 2026) • $880m notional, 3% interest rate cap (expires February 2027) ___________________________ 1. Free Cash Flow is a non-GAAP financial measure. See Appendix for a reconciliation to the most comparable GAAP measure • 2024 cash provided by operating activities of $32.6m • 2024 free cash flow of $25.7m(1) • Goal to continue drive positive operating cash flow FY 2025 Liquidity Cash Flow Indebtedness and Hedging
Page 17
Path Forward: Strategic and Operational Focus on Driving Shareholder Value 17 Value-based Growth Enhanced Capital Structure Core Organic Growth
Page 18
18 Appendix
Page 19
Reconciliation of Net Income (Loss) to Adjusted EBITDA 19___________________________ 1-7: Please see our earnings release posted on May 8, 2025 for further description of the nature of these items (dollars in thousands) March 29, 2025 March 30, 2024 Net income (loss) 5,193$ (11,172)$ Interest expense, net 36,203 39,545 Income tax expense 4,955 12,662 Depreciation and amortization 2,594 2,912 EBITDA 48,945 43,947 Goodwill, intangible and other long-lived asset impairment 167 2,320 Non-cash share-based compensation 10,996 4,081 Interest rate derivatives (1) 5,595 (17,918) Acquisition-related costs (2) 107 - Integration costs (3) 274 299 Legal costs and settlements associated with acquisition matters (4) 1,039 402 Restructuring (5) 336 1,470 Other legal matters (6) 76 1,095 Other adjustments (7) (181) (813) Total adjustments 18,409$ (9,064)$ Adjusted EBITDA 67,354$ 34,883$ For the three-month periods ended
Page 20
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow 20 For the fiscal year ended (dollars in thousands) December 28, 2024 Net cash provided by operating activities 32,637$ Purchases of property and equipment, and software (6,319) Principal payments of term loans (9,200) Principal payments of notes payable and financing lease obligations (6,908) Settlements with swap counterparties 15,489 Free cash flow 25,699$