Investor Presentation May 22, 2023 Exhibit 99.1
Disclaimers and Forward-Looking Statements This investor presentation (this "presentation“) and any oral statements made in connection with this presentation are for information 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 as 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. The communication of this presentation is restricted by law and it is not intended for distribution to, or use by any person in, any jurisdiction 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 Securities Litigation Reform Act of 1995. All statements (other than statements of historical facts) in this presentation regarding our prospects, plans, financial position, business strategy and expected financial and operational results may constitute forward-looking statements. Forward-looking statements generally can be identified by the use of terminology such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may,” “should,” “predict,” “project,” “potential,” “continue” 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 our 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 those 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 in 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 referral sources, increased competition for Aveanna’s services or wage inflation, changes in the interpretation of government regulations or discretionary determinations made by government officials, uncertainties regarding the outcome of rate discussions with managed care organizations and our ability to effectively collect our cash from these organizations, 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, changes in tax rates, the impact of adverse weather, the impact to our business operations, reimbursements and patient population were the COVID-19 environment to worsen, and other risks set forth under the heading “Risk Factors” in Aveanna’s Annual Report on Form 10-K for its 2022 fiscal year filed with the Securities and Exchange Commission on March 16, 2023, which is available at www.sec.gov. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may prove to be incorrect or imprecise. Accordingly, forward-looking 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 speak 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 third 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 which 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 business, 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 calculated 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 financial 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
YEARS IN HEALTHCARE Today’s Presenters David Afshar Chief Financial Officer Jeff Shaner Chief Executive Officer 20+ 20+ CEO of Aveanna since January of 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 Former VP of Operations of Healthfield, acquired by Gentiva Health Services in 2006 Chief Financial Officer of Aveanna Healthcare since 2018 Former CFO of ApolloMD, a large multispecialty physician practice Former Chief Accounting Officer and Interim CFO with Regency Hospital Company, a long-term acute care provider Former Inspections Leader with the Public Company Accounting Oversight Board Former Senior Manager with Ernst & Young
The History of Aveanna 2017 Merger of PSA and Epic created Aveanna, a leading pediatric homecare company 2018 Acquired Premier Healthcare Services; added CA as a key state 2017 Bain co-investment with JH Whitney to form Aveanna 2020 Acquired Five Points Healthcare and Recover Health, expanding into Home Health & Hospice 2020 Acquired PPHHC, becoming a leading national Enteral provider 2022 Shift to Preferred payor and value-based strategy 2021 Aveanna Initial Public Offering 2023 Jeff Shaner appointed CEO
Aveanna at a Glance By The Numbers 2018 – 2022 Revenue Growth National Footprint Payor Mix4 2023 Guidance(1) Key Operating Statistics $1,840m Revenue 31% Gross Margin(2) $130m Adjusted EBITDA 327 Locations 33 States 26,000 Caregivers 39m Homecare Hours(3) 1,500+ Distinct Payors ___________________________ 1. Consistent with prior practice, we are not providing guidance on net income, or a reconciliation of Adjusted EBITDA thereto, at this time due to the volatility of certain required inputs that are not available without unreasonable efforts, including future fair value adjustments associated with our interest rate derivatives. 2. Q1’2023 Gross Margin 3. Q1’2023 PDS Hours annualized 4. Payor mix for FY 2022 ($ in millions) 9.3% CAGR
Melia and Mom Heather Valerie Brylee and Mom Marisa “I loved meeting the nurses and therapists who came to my home. They were caring, encouraging and so helpful with my recovery. Now I am independent again and feeling great after my hip replacement surgery.” “Melia’s progress has been amazing since coming home with Aveanna’s enteral nutrition and nursing services. You can see in her eyes what it means to her to be with family. Playing and laughing with her sisters is what Melia wakes up for every day.” “Having our Aveanna care team means less hospital visits, more consistent care and a partnership between me and her Aveanna nurses. Together, we keep Brylee home and in her best health.” Who We Serve: Pediatrics, Adults, and Geriatrics
Private Duty Services Segment By The Numbers Key Items Financial Highlights Key Operating Statistics 80% of Consolidated Revenue Run Rate1 28% – 30% Gross Margin2 3% - 5% Organic Growth Rate3 224 Locations 28 States 37,000 Patients on Service <10 Avg. Patient Age Avg. Case Length 3-5 Years Growth Drivers - Advanced clinical recruiting, experienced sales force, density in key geographies, leading clinical care and a strong technology platform Public Metrics – Hours, revenue rate, cost of revenue rate and spread Reimbursement Profile – Heavily weighted Medicaid and Medicaid MCO payors ___________________________ 1. Based upon Q1 2023 actual results. 2. Management’s expectation of gross margin percentages over time. 3. Management’s expectation of total organic revenue growth rate over time. One nurse – One Patient Full Time & Per Diem Caregivers paid by the hour Longer Length of Stay Demand exceeds Supply Preferred Payors and Government Partners
Medical Solutions Segment By The Numbers Key Items Financial Highlights Key Operating Statistics Locations Patients on Service Avg. Patient Age Avg. Case Length Growth Drivers - Clinically-specialized sales force, scaled infrastructure, new market expansion strategy, cross-sell between PDS and HHH Public Metrics - Unique patients served, reimbursement rate and cost of revenue Reimbursement Profile – Commercial Medicare and Medicaid Payors 8% of Consolidated Revenue Run Rate1 41% – 44% Gross Margin2 7% – 9% Organic Growth Rate3 18 31,000 Mixed 2-3 Years Nutritional Support – Enteral Product, Equipment and Supplies Provided to Pediatrics, Adults, and Seniors Monthly Distribution Services Longer Length of Stay Leading National Enteral Provider ___________________________ 1. Based upon Q1 2023 actual results. 2. Management’s expectation of gross margin percentages over time. 3. Management’s expectation of total organic revenue growth rate over time. 37 States We Deliver to
Home Health & Hospice Segment By The Numbers Key Items Financial Highlights Key Operating Statistics Locations States Patients on Service Avg. Patient Age Avg. Case Length Growth Drivers - Clinical outcomes and quality measures, experienced sales force, specialty programs targeting high- cost patient populations, meaningful investments in scalable infrastructure Public Metrics – Total admissions, episodic admissions, total episodes and revenue per episode Reimbursement Profile – Medicare and commercial payors based on fee for service and episodic payment structure 12% of Consolidated Revenue Run Rate1 45% – 47% Gross Margin2 7% - 9% Organic Growth Rate3 85 15 13,000 78 100 Days Home Health Geriatric Patient Population Short-term Intermittent Services Episodic Reimbursement Shorter Length of Stay Value Based Care Component Hospice Geriatric Patient Population Per Diem Reimbursement End-of-Life Care ___________________________ 1. Based upon Q1 2023 actual results. 2. Management’s expectation of gross margin percentages over time. 3. Management’s expectation of total organic revenue growth rate over time.
Reimbursement Environment is Structurally Positive Diverse group of payors includes managed care organizations (“MCOs”), state-based Medicaid programs, Medicare, MA plans, commercial insurance and other government payers across 33 states Over 1,500 distinct payors No single payor accounted for more than 16% of revenue in 2022 Diversified across 33 states Preferred payors make up >10% of current PDS volume In past year, 24 states had positive PDS rate increases Key Stats1 Stability of PDS Rates1 Represents <2% of total Medicaid expenditures Patients viewed as “protected population” Demand exceeds supply, supporting payor partnerships Services are essential, life-sustaining care ___________________________ 1. Management Data. 2. Payor mix for FY 2022 Payor Mix2
Industry Trends Current and Future Trends Cost Savings Value-Based Care Shift to preferred payor and value-based care strategy Increasing recognition of Aveanna’s value proposition Leveraging success of early value-based models with emerging preferred payor opportunities Believe Aveanna is well-positioned to benefit from shift to value-based care due to our scaled platform, clinical competency, and compliance programs Senior Population Growth Every day in the U.S., 10,000 people turn 65 Continued increase in life expectancy Labor Environment Post-Covid, inflationary labor market continues to drive nursing shortage Preferred payor arrangements and other payor reimbursement rate increases allow for incremental caregiver wages, recruitment, and retention Daily Cost of PDN Daily Cost of Adult Home Health Continued Shift to Care in the Home Institutional costs of care and patient preference driving increased Federal and State awareness of the benefits of care at home Shift to the preferred home setting generally supported by constituents, including patients, families, payors, and referral sources ___________________________ Source: Third party consulting report, management PDN PICU $400 $6,000 $50 $2,000
Q1 2023 Summary Results PDS Q1 2023 revenue growth of 6.5% from Q1 2022, driven by 9.8 million hours of care or 1.8% YOY volume increase MS Q1 2023 revenue growth of 10.7% from Q1 2022, driven by strong volume growth of 9.0% Sequential improvement in Q1 2023 HHH results from Q4 2022 - HHH admission trends returning to a more normalized level - HHH revenue cycle operations continue to improve Q1 2023 demonstrated continued focus on optimization across Aveanna’s overhead platform Revenue and Gross Margin % by Segment $ in millions Q1 2022 Q1 2023 Y/Y% Change Revenue $450.5 $466.4 3.5% Gross Margin $144.8 $144.5 0.0% Adjusted EBITDA(1) $38.0 $28.5 -25.0% Consolidated Results 32.1% 31.0% 28.1% 27.9% 48.7% 44.6% 41.7% 40.8% Gross Margin % Key Highlights ___________________________ 1. Adjusted EBITDA is a non-GAAP financial measure. See Appendix for a reconciliation to the most comparable GAAP measure
Q1 2023 Balance Sheet Update Cash Flow Liquidity Indebtedness and Hedging Liquidity of over $215m, comprised of the following: $34m cash on balance sheet $162m revolver availability $20m securitization availability Undrawn revolver at the end of Q1 Borrowing capacity under revolver subject to a 7.6x maintenance leverage covenant if total revolving facility usage is greater than 30% of total facility Q1 cash provided by operating activities of $7.5m Q1 free cash flow of $2.9m(1) Expected 2023 cash flow benefits from cost reduction efforts Goal to drive positive operating cash flow in 2H ‘23 Total variable rate debt of $1,478m, consisting of: First Lien: $907m (L + 3.75%) Second Lien: $415m (L + 7.00%) Securitization: $155m (BSBY + 2.25%) 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
Large, Fragmented Home Care Markets Support Sustainable Growth $18bn Legacy Pediatric Focus Personal Care $15.0bn Annual U.S. Healthcare Spend $4.0tn Therapy $6.0bn Enteral Nutrition $2.5bn Therapy $6.0bn Private Duty Nursing $9.5bn Hospice $19.0bn $89bn Addressable Adult Opportunity TAM annual growth from 2020-2025 $107bn ~4–5% Untapped PDN demand with only a fraction of children and adults getting needed care Therapy trends with early intervention services and government initiatives Expanding insurance coverage for Medicaid Beneficiaries Our Market Opportunity Home Health $55.0bn ___________________________ Source: 2020 Third party consulting report, management estimates.
Compelling Growth Opportunities Historically stable gross margins of ~30-32%2; with focus on optimization opportunities Focus on branch, regional and corporate overhead costs to drive improved margins Margin Profile Focus Believe increasing recognition of Aveanna’s compelling value proposition to patients, payors and referral sources. Payors understand overarching thesis that homecare is value-add in the healthcare equation Aveanna’s infrastructure is primed to support growth opportunities from unmet demand for our services Aveanna Platform Primed for Growth Preferred payors account for more than 10% of PDS volumes, with continued growth opportunities Preferred payor arrangements and reimbursement rate increases allow for incremental caregiver wages Preferred Payor Growth Opportunities Revenue growth combined with cost right-sizing actions provide for cash flow improvement opportunities Goal to drive positive, sustainable cash flow and reduce leverage over time Cash Flow Generation Opportunities Aveanna’s operations across 33 states provides diversified geographic and business mix Diversified payor mix with no single payer accounting for more than ~16% of revenue1 Diversified and Stable Platform ___________________________ 1. Payor mix for FY 2022. 2. Based on gross margin percentages in fiscal year 2021 through Q1 2023
Appendix
Reconciliation of Net (loss) income to Adjusted EBITDA ___________________________ 1. 1-8: Please see our earnings release posted on May 11, 2023 for further description of the nature of these items
Reconciliation of Net cash provided by operating activities to free cash flow
