Aveanna Healthcare Holdings Inc at RBC Capital Markets Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ben Hendrix - RBC Capital Markets - Analyst : So let's start off just with a general discussion, Tony. Like many providers, Aveanna saw significant Omicron-driven disruption in the first quarter. And for investors who may be less familiar with your core PDS business, can you talk about how the supply and the labor -- supply of labor and patient demand have fared through the pandemic? And how the backdrop looks coming out of the Omicron surge?

Question: Ben Hendrix - RBC Capital Markets - Analyst : Thank you.

Question: Ben Hendrix - RBC Capital Markets - Analyst : Great. Welcome, fellas. One aspect of your PDS segment that really stands out is the gross margin stability, consistently falling in that 29% to 30% range historically through past economic cycles and through COVID. Can you talk about the strategy for balancing reimbursement rate with wage growth that keeps it that stable?

Question: Ben Hendrix - RBC Capital Markets - Analyst : In the fourth quarter, you implemented a onetime return-to-work incentive program, trying to improve recruitment and retention. Can you comment on the success of that and if that's something you might think about putting in place again this year?

Question: Ben Hendrix - RBC Capital Markets - Analyst : And that brings me to my next question. On the first quarter call, I think what stood out was that you had a nice confident tone about the PDS reimbursement backdrop, kind of heading through the back of the year, and some of the increases you're getting from some of your Medicaid payers. I wonder if you could kind of talk about that landscape.

Question: Ben Hendrix - RBC Capital Markets - Analyst : And you've also noticed some -- or mentioned some progress, and I believe it was Arizona with some of your non-skilled wage support.

Question: Ben Hendrix - RBC Capital Markets - Analyst : You've grown your home health segment very rapidly in the past few years, through both platform acquisitions and smaller tuck-ins. Can you expand on your home health strategy and why you believe it's a good complement to core PDS? What synergies do you believe you can achieve from the current business?

Question: Ben Hendrix - RBC Capital Markets - Analyst : I think in an announcement this morning, you talked about -- officially kind of announced the completion of the rollout of Homecare Homebase. Certainly, I know that's not a small undertaking, so congratulations. And can you talk about kind of how much more juice you can squeeze out of that in terms of margin? And if that's going to help with the whole M&A integration front?

Question: Ben Hendrix - RBC Capital Markets - Analyst : Let's just shift briefly to the balance sheet. Can you talk about your current leverage versus maintenance covenants? And then also with primarily term debt, how are you positioned for rising interest rates?

Question: Ben Hendrix - RBC Capital Markets - Analyst : All right. And just kind of going down to valuation, thinking, on one hand, about historical home care trading multiples and that 29x multiple that Optum is paying for LHC Group. And then on the other hand, thinking about the solid ballast that you have, with the stable margin PDS business, and then your team's M&A prowess in home health. What's the market missing?

Question: Ben Hendrix - RBC Capital Markets - Analyst : Well, actually, I think that brings us right to the end of our segment unless there's any other questions from the audience. Thank you very much and really appreciate you joining us today.