Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) Q4 2023 Earnings Call Transcript

Matt Buckhalter: I think you nailed it. Gross margins kind of flat on our H2 results from 2023, kind of reengaging that through 2024. Obviously, a little bit of seasonality in here in the front half of the year, specifically Q1, which is some state tax implications that occur. But then from there, just good old fashion leveraging overhead, nipping and tucking where appropriate, taking some costs out where appropriate. But I think that’s where you’ll see that 20 basis point margin expansion on the bottom line.

Kieran Ryan: Got it. Thank you. And then lastly, just — as we think about where revenues and PDS grow in 2024, wherever that shakes out, say, somewhere in like the 4% to 5% range, maybe how should we think about the contribution from volumes versus rate, ’24? Thank you.

Matt Buckhalter: Yes. Historically, we would have told you that rate would have been 1% for an entire year out there. I think you can look at 2023 and see that we grew 3.8% on the rate, and 3.5% on the volume to be just north of 7%. I think you kind of nailed it in that 4% to 5% range is a good range for us. We had a very successful year with 19 state rate increases, 8 of them being double-digits as well as our preferred payors being 17% of our total PDS volume. We’re going to continue that engagement into 2024. But I think it’s — I would take it and draw it right down the middle and say half of it will be rate, half of it will be volume. There’s a chance to outperform, of course, if we’re able to lean in pulling additional preferred payors through it, but splitting it kind of 50-50 is where I would model it out.

Kieran Ryan: Thanks a lot.

Jeff Shaner: Thanks, Kieran.

Operator: Thank you. Ladies and gentlemen, there are no other questions at this time. I’ll turn the floor back to Mr. Shaner for any final comments.

Jeff Shaner: Thank you, Melissa, and thank you, everyone for your interest in our Aveanna story. We look forward to updating you on our continued progress at the end of Q1. Thank you and have a great day.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.