Accendra Health, Inc. (NYSE:ACH) Q4 2025 Earnings Call Transcript

Accendra Health, Inc. (NYSE:ACH) Q4 2025 Earnings Call Transcript February 19, 2026

Accendra Health, Inc. misses on earnings expectations. Reported EPS is $0.21 EPS, expectations were $0.22.

Operator: Hello. Good day, and thank you for standing by. Welcome to the Accendra Health’s Fourth Quarter 2025 Earnings Conference Call. After the speaker’s remarks, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Will Parish, Vice President, Strategy, Corporate Development and Investor Relations.

Will Parrish: Thank you, operator. Good afternoon, everyone, and welcome to Accendra Health’s Fourth Quarter Earnings Call. Our comments on the call will be focused on the financial results of the fourth quarter of 2025 all of which are included in today’s press release. The press release, along with the fourth quarter 2025 supplemental slides are posted on the Investor Relations section of our website. Please note that during this call, we will make forward-looking statements that reflect the current views of Accendra Health about our business, financial performance and future events. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today.

Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs and projections will result or be achieved. Please refer to our SEC filings for a full description of these risks and uncertainties, including the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements that we make on this call or in our earnings press release are as of today, and we undertake no obligation to update these statements as a result of new information or future events, except to the extent required by applicable law. In our discussion today, we will refer to non-GAAP financial measures and believe they might help investors to better understand our performance or business trends.

Information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release. Today, I am joined by Ed Pesicka, Accendra Health’s President and Chief Executive Officer; Jon Leon, the company’s Chief Financial Officer; and Perry Bernocchi, the company’s Chief Operating Officer. I will now turn the call over to Ed. Ed?

Edward Pesicka: Thank you, Will. Good afternoon, everyone, and thank you for joining us on the call today. I am pleased to welcome all of you to our very first earnings call as Accendra Health. I’d like to begin by giving you my thoughts related to the strengths of Accendra Health and why we are so excited for our future and where we are going. First, it is important to understand the size of the market that we serve or the size of the pie. Our expansive payer relationship gives us access to approximately 300 million Americans of which the CDC estimates that 3 out of 4 adults are living with some type of chronic condition. And our nationwide footprint makes Accendra Health a premier choice for all constituents involved in the administration of care in the home-based setting.

In this expansive market, we have developed high brand recognition and customer support and reliance on both Byram and Apria. Our two primary go-to-market brands. We have established this through leading service, consistency and reliability. This continues to be validated by Net Promoter Scores that have exceeded the industry average for the last several years. We also have a broad range of growing product offerings and capabilities, which provides us the ability to serve patients in the home in many of the largest and fastest-growing chronic condition categories. As a result of the foregoing, we are a national leader in home-based care for numerous chronic conditions, which afflict millions of Americans and our strengths are differentiators compared to the vast majority of the thousands of other participants in the industry.

As we look forward, we have a bullish outlook on the long-term demand for our unique offerings. Economic pressures continue to push care to the home-based setting while the country’s aging population is afflicted with a rising number of chronic conditions. We are also optimistic about the strong long-term demand due to increasing awareness about proactive health management amongst the population, which is still meaningfully underdiagnosed, specifically in the sleep category. Another area of opportunity for us is in the anticipated competitive bidding, specifically in diabetes, urology an ostomy, all categories of strength for Accendra Health. As CMS, along with ourselves and other industry leaders work to drive fraud, waste and abuse out of the system, we believe that we are well positioned for Medicare’s competitive bidding process considering our footprint, our efficient service model and broad existing referral source recognition.

To capitalize on the overall favorable backdrop, we are leveraging technology and automation to ensure that we provide an industry-leading home-based care offering built on: one, Being a trusted, reliable and easy to understand partner for our patients and their clinicians; two, an integrated, streamlined and compliant reimbursement process for our payers, while at the same time, maintaining a best-in-class revenue cycle management capabilities; and three, providing a streamlined and cost-efficient channel to market for our manufacturing partners. Just a few examples of the use of technology to both improve the customer experience while also lowering our cost to serve include the use of technology to automate payer qualifications, enabling faster and more accurate order validation and improving revenue capture.

Another example, building on the strength of our MyByram app is the expected launch of our new MyApria app in Q2 of this year, which is expected to enhance the customer experience while also increasing operational efficiency and supporting patient therapy adherence. Finally, in a practical application of leveraging technology, enhancing the customer experience and overall focus, we continue to see success in the fourth quarter with our Sleep Journey initiative. I’m happy to highlight continued success in our sale of sleep supplies, which grew in the range of 8% to 9% for both the quarter and full year. Finally, we are pleased to finish the fourth quarter with the completion of the sale of our former Products & Healthcare Services business, Owens & Minor to Platinum Equity on December 31.

I’d like to thank and commend all parties involved for working so diligently to complete the transaction in such a quick time frame. With the transaction now closed and final separation work well underway, Accendra Health is now devoting all of its focus and energy to strengthening our core home-based care businesses to achieve reliable and growing free cash flow, stable growth and debt reduction. We’re entering 2026 as a much leaner and more nimble business with a much higher margin profile post-PNHS divestiture. We have already taken actions to lean out our business and expect to continue taking actions to eliminate costs to address the loss of a large commercial payer as well as stranded costs. Despite never wanting to lose a customer, we maintained our financial discipline during the process.

Since that time, our focus has been to ensure smooth transition of patient care and minimize our cost of transitioning the relationship related to this contract. Finally, now that we have the sales proceeds in hand, we are well positioned to take a thoughtful approach to optimizing our capital structure, taking into consideration all stakeholders. We are committed to deleveraging, combined with metered investments as we move forward. This will be a continuation of what we did in Q4 with investments in technology, while also paying down debt by $65 million from ordinary free cash flow. Before I turn it over to Jon, let me reiterate my excitement about the strength of Accendra Health, the growing market that we participate in and where we are going as a business.

With that, I will now turn the call over to John to discuss our financial performance in the fourth quarter and our outlook for 2026. Jon?

Jonathan Leon: Thanks, Ed, and good afternoon. I want to start by reminding you that despite the closing of the divestiture at the end of 2025, we will continue to report our results on a continuing operations, discontinued operations basis for as long as accounting rules require us to show comparable results. And like the last couple of quarters, unless otherwise stated, my remarks today will focus on the continuing operations. The continuing operations financial statements are what you should expect from Accendra Health. I’m sure we all look forward to much reduced business complexity post divestiture as we move through 2026. Also please note that any discussion about the financial results and outlook for the company, will cover only non-GAAP financial measures.

You can find GAAP to non-GAAP financial reconciliations in the press release filed a short time ago and residing on our website at accendrahealth.com. Fourth quarter results were largely in line with much improved cash flow and lower debt compared to the third quarter. In the fourth quarter, there was decent year-over-year growth in the key categories of sleep therapy, ostomy and urology as we have seen in recent quarters. Diabetes grew by almost 2% versus last year, an improvement as compared to flat year-over-year results in Q3 and insulin pumps led to quarterly diabetes category growth. The fourth quarter saw the initial impact of a previously discussed contract loss and price impact of a large commercial payer. Overall, this payer’s impact on quarterly revenue was approximately 1% of what would have been over 3% growth.

This impact on revenue will significantly increase throughout 2026 in aggregate to approximately $300 million in 2026 versus 2025 and approximately an additional $40 million in 2027. We anticipate that we will have completely lapped the impact of this revenue loss by the end of the first quarter of 2027. We are on our way to replacing this lost revenue margin. For all of 2025, revenue was nearly $2.8 billion, up a little more than 3%. Throughout the year, growth in the large sleep category as well as ostomy and urology led the way, a somewhat weaker collection rate compared to a strong 2024, also inhibited top line growth. Fourth quarter adjusted EBITDA was $90 million compared to $102.5 million in last year’s fourth quarter. The change was driven by lower payment prices, inflationary product cost increases, higher health benefit costs and stranded costs that were only partially offset by lower other teammate benefit costs.

For the full year, adjusted EBITDA was $375 million, up slightly from 2024. The same factors impacted the fourth quarter drove the full year results. Adjusted EBITDA results include $12 million of stranded costs in the quarter from the pre-divestiture business and $36.5 million for the full year. Beginning with our Q1 2026 results, we will no longer be specifically breaking out stranded costs because with the finalization of the divestiture, these costs will now be part of the operating expenses of Accendra Health. Expense reduction, including former stranded costs is a key component of our 2026 expectations. As I mentioned, we saw much improved cash flow in the fourth quarter and related debt reduction. For the fourth quarter of 2025, operating cash flow was $68 million, which includes $67 million of cash used by the former discontinued Products & Healthcare services business.

So the continuing operations business generated $135 million of cash from operating activities. For the full year, while the consolidated business of both continuing and discontinued operations had a use of cash from operating activities of over $100 million, the continuing operations that going toward Accendra generated $154 million in cash from operating activities. As a reminder, the full year cash flow from continuing operations includes $98 million in cash costs to terminate the Rotech acquisition in the summer of 2025. For the continuing operations, free cash flow in the fourth quarter, defined as adjusted EBITDA less patient equipment capital expenditures, net of noncash convert-to-sell write-off expense and after consolidated interest paid, was $18 million in the fourth quarter and for the year was $98 million.

This reinforces the strong cash generation profile of Accendra compared to the legacy business. At December 31, net debt was $1.8 billion, down $315 million from September 30 and down $46 million since year-end 2024. Prior to the closing of the divestiture, we had already reduced debt by $65 million from September 30. The net proceeds received from the divestiture of the Products & Healthcare Services business of $342 million are included in the December 31 cash balance. Also, as a result of customary final purchase price adjustments, including a working capital true-up, we expect to receive approximately $12 million to $15 million of additional proceeds in the spring. As divestiture closed, we used $66 million of proceeds to settle bank debt obligations under the AR securitization program that were entirely related to PNHS.

This is all detailed in slides filed via 8-K just after today’s market close and also residing on our website. In addition to the $282 million of cash on the balance sheet at December 31, we had nearly $220 million of available capacity under our committed revolving credit facility and $16 million available under a newly amended accounts receivable securitization program. The bottom line is that we believe there’s ample liquidity available for the business. Also, we ended the year comfortably in compliance with our debt covenants. As we’ve been saying for months, all net proceeds from the divestiture will be used to reduce our debt balance. We have a long-range leverage target of 3x adjusted EBITDA, which we believe is very achievable and debt reduction continues to be a top priority for 2026 and beyond.

We are also committed to maintaining a capital structure that supports the transformation of the business into a pure-play, cash-generative home-based care company. We are actively evaluating all options to optimize our capital structure into our engaging stakeholders to help ensure we come away with the structure that is the most appropriate for the new higher profit, better cash flow Accendra while protecting the interest of our shareholders. We believe this process will conclude in the near term. Turning now to the 2026 outlook. The slides I referenced earlier also include pages to assist with 2026 guidance and depict the key drivers from our 2025 results and our 2026 full year guidance. I’ll begin by walking through the net revenue slide.

We expect annual revenue to be between $2.55 billion and $2.65 billion. As you will see, the greatest impact results from the changes with the single large commercial payer discussed earlier. Of the $300 million-plus impact in 2026 compared to 2025, approximately 15% of the reduction versus prior year will occur in Q1 and 25% to 30% in each of the second through fourth quarters. This will be partially offset by volume growth and improved collection rates. Looking at the adjusted EBITDA slide as follows: we expect 2026 adjusted EBITDA to be in the range of $335 million to $355 million. Unsurprisingly, the large commercial payer change again has an outsized impact and will be somewhat mitigated by cost reduction directly related to this payer, other expense takeout and volume growth.

The 2026 expense reductions have been identified for some time and a number of actions have been taken or slated to be taken on a rigid time frame. Finally, we included a levered free cash flow walk, which again shows the strong cash flow from the Accendra business. At the midpoint, we expect at least $100 million of free cash flow in 2026. Much of the cash flow projected in 2026 is spoken for due to the cost throughout the year to separate Accendra from Owens & Minor and cash outlays related to certain expense reduction activity that I mentioned earlier. This is only a 2026 issue and future free cash flow is expected to be comparable or better and will help drive further debt reduction. In thinking about quarterly cadence, between cost reduction ramping throughout the year to a full run rate benefit, the replacement of the previously discussed impact of the large commercial payer, the time needed to reduce stranded costs and effectively separate from Owens & Minor in the business’ normal seasonality.

We expect about 60% of the adjusted EBITDA to be realized in the second half of the year with the first quarter of the year being the weakest and Q4, the strongest. In conclusion, Accendra Health is a very different company than the pre-divestiture Owens & Minor. The investment thesis is much improved, and we are proud to be among market leaders in a growing and dynamic space and look forward to demonstrating consistent earnings and strong cash flow. With that, I’ll now turn the call back to the operator for Q&A. Operator?

Q&A Session

Operator: [Operator Instructions]. Your first question comes from Michael Cherny of Leerink Partners.

Michael Cherny: Maybe if I can just dive in on some of the commentary you made on investments. Fully understand, I think we all do the dynamics around debt pay down, but you talked about targeted investments. As you think about the businesses, especially with the Rotech deal being in the background, what do you see target investments looking like for the RemainCo going forward?

Edward Pesicka: Yes. I think there’s a couple of different ways to look at this. And when I talked about the metered investments, primarily in 2026, we’re looking at investment in technology, as I talked about, to continue to lower our cost to serve as well as improve their customer experience. I think on the — if you’re looking specifically around the M&A side, there may be an opportunity to do some tuck-ins but again, I think our — I know our primary focus in 2026 is going to be around debt reduction. And then those metered investments would be around technology to improve customer experience as well as lower cost to serve and we would consider, if appropriate, some small little tuck-ins.

Michael Cherny: That’s helpful. And just one more. You talked about the rebuild of revenue recapture opportunity as you have the large customer rolling off. You signed a preferred agreement with Optum. How is that going so far?

Edward Pesicka: Look, it’s still early in the process. We’re starting to gain some traction. But as Jon talked even in his prepared remarks, the opportunity for us to fill in the gaps, we know we won’t fill and complete — completely fill in the gap. So you can see from our walk on revenue, but it does create opportunity for us to redeploy resources to start to backfill that revenue with other revenue, whether it be a preferred provider agreement or just expansion of existing contracts and relationships that we have.

Operator: Your next question comes from Kevin Caliendo with UBS.

Kevin Caliendo: One, just a numbers question. Jon, how much was patient CapEx in the fourth quarter? And how should we think about patient CapEx as a percentage of overall CapEx in 2026.

Jonathan Leon: Yes, Kevin. It was $45 million in the quarter, about $189 million for the year. If you think about 2026, as we’ve talked about, this customer — customers that were losing had a disproportionate amount of CapEx relative to the size of that agreement. So as you saw in our guidance numbers coming down by some $25 million, $30 million. But that — you think about patient CapEx was going to run roughly 95% of the total going forward.

Kevin Caliendo: Okay. That’s helpful. Just wondering if there’s been — there’s been talk of a manufacturer coming back to market who had been sort of out of the market for a while. Wondering if you have any update on that? And I was wondering if that could actually maybe provide a little relief on cost if another manufacturer were to come in CPAP or events or and the like.

Edward Pesicka: Yes. Obviously, I can’t comment on what other companies are planning on doing, but should another manufacturer come back into the space, I think it would create a different competitive dynamic in the market.

Operator: The next question comes from Daniel Grosslight with Citi.

Daniel Grosslight: Really appreciate all the detail that you’ve provided in your presentation. If I could just go to the adjusted EBITDA range for the ’26 guide. I’m curious if you can kind of maybe break down for us how much of that volume improvement I guess it will largely come through volume improvement. But how much of that is driven by Optimum and perhaps other contracts that you haven’t announced publicly yet? And how much is kind of non-Optimum and noncontracted at the moment?

Jonathan Leon: Yes, Daniel, it’s Jon. I would say — I would not say there’s a lot of preferred agreement built into that volume growth, and it’s fairly well spread across all therapy categories. So as Ed mentioned earlier, that these are — these contracts are attractive. It takes a while to ramp them up. So yes, we have some upside built into the volume growth, but it is by no means the bulk of that, and it’s pretty well spread across customers and therapy categories.

Daniel Grosslight: Got it. Okay. And then on your CapEx guidance, you’re no longer guiding to a net CapEx number and I see a footnote that’s because I guess I don’t know. I just said it doesn’t include sales, patient CapEx. What are your expectations now on a net basis for CapEx? And is the delta going to be reduced significantly because of that contract rolling off?

Jonathan Leon: So overall, I would still expect about 30% of the growth to be the number that you’re going to see in the sales of patient CapEx, remember when calculating any cash flow off of that, that number, that 30% is already in your adjusted EBITDA number. So we wanted to be clear that we’re not double counting. So that’s why we’ve presented the way we have today. But when you think about the dollars coming back, it’s roughly 30% of the total.

Operator: The next question comes from John Stansel with JPMorgan.

John Stansel: I just want to touch on in the adjusted EBITDA bridge. The manufacturer cost increases and inflation seems like it’s outpacing pricing growth. Is that concentrated to a particular category or area? And how should we think about that as a kind of durable trend?

Jonathan Leon: Yes. I would tell you, John, it’s — certainly, I wouldn’t call it a trend, I’d call it more of an opportunity for us. And I would not particularly tell you it’s linked to any one supplier. It’s a trend. We have seen it for a while, but it’s clearly a focal point for us as we go enter 2026 and beyond. And we view it as an opportunity to really grow the EBITDA from where we are today.

John Stansel: Great. And then you mentioned that you’re kind of considering all options to kind of optimize the balance sheet. Can you just spend a little more time talking about your levers around balance sheet optimization. It sounds like there’s kind of imminent changes you think you could be making?

Edward Pesicka: Yes. The way we think about this is, obviously, with the sale of NHS business and with the cash on hand on the balance sheet plus with the improvement in net debt in the fourth quarter beyond that, any time you have a major transaction like this, it creates the opportunity for us to step back and really assess our capital structure. It gives us the opportunity to assess our capital structure holistically. And I think we have to and we will look at it based on the business that we have, what Accendra is, it’s a business today that has a much different working capital requirement than what the legacy business was. It’s a business that we do have relatively predictable PSC or CapEx on it. And it’s a business that has much stronger margins than the legacy business. So I think that’s important to understand that as the backdrop of, as we have the transaction that’s closed, we have the cash on hand. It gives us an opportunity to really step back and reassess.

Jonathan Leon: The only thing I would add as a comment, which I fully agree with is we obviously have some things we have to address and the maturities that are in ’27, so debt coming current later this quarter, which is the half to. But to Ed’s point, everything else will be opportunistic in making sure we have a capital structure that fits the new business model.

Operator: The next question comes from Eric Coldwell with Baird.

Eric Coldwell: I wanted to go back to that recent question on manufacturer cost increases and inflation. I want to be — if we can, I want to be clear on this. Are you seeing broad-based cost increases across multiple manufacturers and categories? And is that — so is it general market environment? Are they passing tariffs on do you guys trying to figure out what it actually is? Is it related to a specific primarily a specific manufacturer, a specific product line? And then how does that compare to the past? Because this is — obviously, this is a new chart for us. Thanks for giving it to us. But we don’t really have the historical context on it. And then finally, Jonathan, you said you saw some opportunity there to improve upon it. What’s in your control? What opportunities are in your control? How do you improve upon it?

Edward Pesicka: Yes. I guess I’ll add a little more color on it. So Eric, it is not across — it is not across every single category that we participate in. it’s in some of the more major categories where there’s — this is a normal process we see every year to some extent, and we have the ability to offset it with a different — a couple of different areas. We have the opportunity to potentially offset it with mid-year all these contracts aren’t locked in for the full year. There’s ones that are phasing in during the year. And I think it creates opportunity for us to work closer with various manufacturing partners to look at different pricing models and growth incentives and other things like that. So that’s where we think about it and where we’re going to be able to go after and attack it.

So I think that hopefully frames it out. It’s not necessarily tariff related. It is more related to normal inflation that we’ve seen historically and then our ability now to work that down as the year progresses. And I think that’s what Jon — I don’t want to speak for you, Jon, but I think you probably meant that as the year progresses, this is the number we have right now. There’s opportunity for us to continue to work with our manufacturing partners to mitigate and reduce some of that.

Eric Coldwell: Yes. That’s super helpful. If I could do one follow-up?

Edward Pesicka: Sure.

Eric Coldwell: Yes. Collection rate also on that same chart. You mentioned in the prepared commentary that collection rate was a bit of a — I think you said it was a bit of a headwind in ’25, which impacted growth, but clearly, that would have been a big drop through to EBIT to profit. You’re looking for some improvement in ’26. What gives confidence what are the drivers of the improvement? Basically, what happened? And how do you — it’s not a huge number, but how do you fix it?

Jonathan Leon: Yes, Eric, I’m actually very confident in that rebound in ’26 because the pullback we saw was largely due to some of the technology investments we made in ’24 and ’25 that just you make the investments, there’s a learning curve, things have to get worked out. We worked out the kinks. So that just really set us back a little bit. The technology we put in place, we’ll be all very confident will be additive to our collection rate going forward. So I will tell you the pullback that you saw is minor. But does fall through. you’re correct about that, but really related to the onboarding or the implementation of new investments to improve in the future. So still really happy with where the rate is overall, but I mean it came up a very strong ’24 had some investments we had to work through, and it’s going to get better than ’26.

Eric Coldwell: What is your bad debt rate? Now that you’re a stand-alone pure play, maybe you can talk about that a little bit.

Jonathan Leon: We had not contemplated talking about debt. It’s not disclosed, but I’ll tell you I put it up against anybody else in the business.

Eric Coldwell: You want to give us a [ Brent Bastia Volkswagen ] kind of ratio here?

Jonathan Leon: I’ll respectfully pass on the opportunity to do so.

Operator: Your next question comes from Allen Lutz with Bank of America Securities.

Unknown Analyst: This is Dave on for Allen. Maybe just to kick it off, just more on the revenue side. your sleep growth was 89%. It looks to be a slight step up quarter-over-quarter. Just would love to know what’s driving that. And then would just also love to get a sense of the underlying health of the market across some of the other categories outside of sleep and diabetes and what’s contemplated in guidance here for drivers of growth. I guess, from a volume and pricing perspective, specifically for home respiratory therapy, ostomy, wound care.

Edward Pesicka: Yes. So I think talk about the sleep category and what’s been driving it. We’ve talked a lot about it over the last year was our sleep journey. And Perry and the team across the business have spent a significant amount of time understanding that sleep journey from patient capture upfront. But as important, if not more importantly, the residual reoccurring revenues associated with sleep making sure that it’s easy for — easy for the customers, that being the patient to get the reorders and that revenue cycle continuing. So that’s helped out tremendously with it. I think overall, too, I think you got to be cognizant in the sleep category. It’s a growing category. More and more people continue to get diagnosed with sleep apnea.

That continues to expand, and it creates opportunity for additional growth there. I think in diabetes, too, it’s a little bit of a mix. We saw — in the fact that with diabetes, we saw volume go up slightly more than what our overall growth rate was. And that’s — we got a little bit of the pharmacy DME mix in there that’s driving that. And I guess overall, the anticipation is you’ve got low single-digit growth in most of these categories on average, some of them above that, some bit lower than that expected in 2026. And the growth plan is that plus several other initiatives we have in various categories to expand beyond that. So hopefully, that frames it out, what we’re seeing right now.

Unknown Analyst: I guess just real quick one clarification point. I think you mentioned some of the benefits from the pharmacy DME mix. I guess, is that now a tailwind on the diabetes side. Is that what you’re mentioning or at least was — is the expectation?

Edward Pesicka: Yes, no tailwind at all. That’s kind of — it’s just a one channel versus the other channel.

Jonathan Leon: We’re still seeing the shift from pharma to DME — sorry. DME to pharma. Yes.

Unknown Analyst: Got it. Yes, I just want to clarify that. And then, yes, I think there’s a lot of, obviously, great color you guys provided on the various drivers of cash flow here. But I just wanted to take a step back. And I would just love to get an understanding of what the biggest swing factors are here for the year on cash flow. From your standpoint where you sit, where you have visibility into and maybe ones that are less so. Just what are the biggest swing factors we should think through here?

Edward Pesicka: I think the biggest stand-alone single item there is if you’re looking at the slides we’ve provided is the transaction break fee and the transaction financing fees, that’s $98 million. It’s probably the biggest one-timer there.

Jonathan Leon: Yes. It’s important to realize also, Dave, that Accendra Health compared to legacy Owens & Minor, the working capital business, it’s completely different. This is a business that runs with very little of any working capital consumption. And we have opportunities to improve on that as well. So it’s cash generative. It’s a recurring revenue business with really strong working capital. dynamics behind us. We’re very, very different than what you guys are used to about.

Operator: This concludes the question-and-answer session. I’ll turn the call to Ed Pesicka for closing remarks.

Edward Pesicka: Thank you, operator, for that. Look, this is an extremely exciting period in the history of Accendra Health. We, myself, personally, we’re all extremely excited about what the future has as a pure-play supplier in the home-based care space. and I look forward to continuing to providing updates and sharing our progress with you as we continue through the year. So thank you.

Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect.