Devon Scott

Devon Scott asked about the drivers behind the 8-9% growth in the Sleep Group, the underlying health of other market categories like home respiratory therapy, ostomy, and wound care, and what volume and pricing drivers are contemplated in guidance for these areas. He also sought clarification on the pharmacy DME mix in diabetes and the biggest swing factors for cash flow in the year.

Answer

Ed Pesicka, President and CEO, attributed Sleep Group growth to the 'Sleep Journey' initiative, ease of reorders, and increasing sleep apnea diagnoses, expecting low single-digit growth in most other categories. He clarified that the pharmacy DME mix in diabetes is a shift from DME to pharma, not a tailwind. Jonathan Leon, CFO, highlighted the $98 million transaction break and financing fees as the biggest one-time cash flow swing factor, emphasizing the new business's strong cash generation and different, lower working capital requirements.

Devon Scott asked about the drivers behind the 8-9% sleep category growth and the underlying health of other categories like home respiratory therapy, ostomy, and wound care, including volume and pricing expectations. He also sought clarification on the pharmacy/DME mix in diabetes and the biggest swing factors for cash flow in the year.

Answer

Ed Pesicka, President and CEO, attributed sleep growth to the 'sleep journey' initiative, focusing on patient capture and recurring revenue, alongside increasing sleep apnea diagnoses. He noted low single-digit growth expectations for most other categories, with initiatives to expand beyond that. He clarified that the pharmacy/DME mix in diabetes is a channel approach, not a tailwind, with a shift from DME to pharma. Jonathan Leon, CFO, identified the $98 million transaction break and financing fees as the largest one-time cash flow swing factor, emphasizing Accendra Health's cash-generative nature and strong working capital dynamics post-divestiture.