Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Entity Registrant Name | AdaptHealth Corp. | |
Entity Central Index Key | 0001725255 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 45,432,240 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 28,610,250 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 48,163,701 | $ 76,878,134 |
Accounts receivable | 118,650,575 | 78,619,230 |
Inventory | 17,967,948 | 13,239,037 |
Prepaid and other current assets | 9,759,439 | 12,678,423 |
Total current assets | 194,541,663 | 181,414,824 |
Equipment and other fixed assets, net | 87,300,924 | 63,559,080 |
Goodwill | 340,806,853 | 266,790,518 |
Other assets | 5,670,301 | 6,851,892 |
Deferred tax assets | 33,518,857 | 27,505,379 |
Total Assets | 661,838,598 | 546,121,693 |
Current liabilities: | ||
Accounts payable and accrued expenses | 136,071,887 | 102,728,093 |
Current portion of capital lease obligations | 20,421,195 | 19,749,854 |
Current portion of long-term debt | 2,615,705 | 1,721,132 |
Contract liabilities | 15,584,066 | 9,556,423 |
Other liabilities | 16,459,388 | 17,138,684 |
Total current liabilities | 191,152,241 | 150,894,186 |
Long-term debt, less current portion | 463,552,896 | 395,111,563 |
Capital lease obligations, less current portion | 165,876 | |
Other long-term liabilities | 36,580,187 | 29,364,151 |
Total Liabilities | 691,285,324 | 575,369,900 |
Commitments and contingencies (note 14) | ||
Stockholders' Deficit | ||
Additional paid-in capital | 21,843,967 | 11,252,052 |
Accumulated deficit | (27,367,676) | (27,209,514) |
Accumulated other comprehensive income | (5,139,138) | 1,431,029 |
Total stockholders' deficit attributable to AdaptHealth Corp. | (10,655,455) | (14,519,195) |
Noncontrolling interest in subsidiaries | (18,791,271) | (14,729,012) |
Total Stockholders' Equity (Deficit) | (29,446,726) | (29,248,207) |
Total Liabilities and Stockholders' Deficit | 661,838,598 | 546,121,693 |
Class A Common Stock | ||
Stockholders' Deficit | ||
Common stock value | 4,336 | 4,082 |
Class B Common Stock | ||
Stockholders' Deficit | ||
Common stock value | $ 3,056 | $ 3,156 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 210,000,000 | 210,000,000 |
Common stock, shares issued (in shares) | 43,354,251 | 40,816,292 |
Common stock, shares outstanding (in shares) | 43,354,251 | 40,816,292 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 30,563,799 | 31,563,799 |
Common stock, shares outstanding (in shares) | 30,563,799 | 31,563,799 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Net revenue | $ 191,439,034 | $ 119,498,274 |
Revenue, Product and Service [Extensible List] | us-gaap:HealthCarePatientServiceMember | us-gaap:HealthCarePatientServiceMember |
Costs and expenses: | ||
Cost of net revenue | $ 166,539,690 | $ 100,226,876 |
Cost, Product and Service [Extensible List] | us-gaap:HealthCarePatientServiceMember | us-gaap:HealthCarePatientServiceMember |
General and administrative expenses | $ 14,346,919 | $ 13,082,631 |
Depreciation, excluding patient equipment depreciation | 1,241,837 | 840,722 |
Total costs and expenses | 182,128,446 | 114,150,229 |
Operating income | 9,310,588 | 5,348,045 |
Interest expense, net | 7,938,243 | 6,260,331 |
Loss on extinguishment of debt | 2,121,451 | |
Income (loss) before income taxes | 1,372,345 | (3,033,737) |
Income tax expense | 1,106,722 | 2,418,441 |
Net income (loss) | 265,623 | (5,452,178) |
Income attributable to noncontrolling interest | 423,785 | 348,139 |
Net loss attributable to AdaptHealth Corp. | $ (158,162) | $ (5,800,317) |
Net loss per common share: | ||
Basic and diluted (per share) | $ (0.42) | |
Weighted average shares outstanding for net loss attributable to AdaptHealth Corp.: | ||
Basic and diluted (shares) | 41,976,560 | 13,863,570 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $ 265,623 | $ (5,452,178) |
Other comprehensive loss: | ||
Interest rate swap agreements, inclusive of reclassification adjustment | (11,417,216) | |
Comprehensive loss | (11,151,593) | (5,452,178) |
Net income attributable to noncontrolling interests | 423,785 | 348,139 |
Comprehensive loss attributable to AdaptHealth Corp. | $ (11,575,378) | $ (5,800,317) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) / Members’ Equity (Deficit) - USD ($) | Class A Common StockCommon Stock | Class A Common Stock | Class B Common StockCommon Stock | Class B Common Stock | Members interest | Additional paid-in capital | Accumulated Deficit | Accumulated other comprehensive income | Noncontrolling interests in subsidiaries | Total |
Members equity, Beginning Balance at Dec. 31, 2018 | $ 113,274,181 | $ (13,370,648) | $ 2,865,125 | $ 102,768,658 | ||||||
Limited Liability Company (LLC) Members' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||
Issuance of members' interest, net of offering costs of $837,156 | 19,162,844 | 19,162,844 | ||||||||
Redemption of members' interest | (2,112,500) | (1,600,955) | (3,713,455) | |||||||
Distributions to members | (250,000,000) | (250,000,000) | ||||||||
Equity-based compensation | 5,223,108 | 5,223,108 | ||||||||
Members equity, Ending Balance at Mar. 31, 2019 | $ 135,547,633 | (270,771,920) | 3,213,264 | (132,011,023) | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||
Net income (loss) | (5,800,317) | 348,139 | (5,452,178) | |||||||
Balance at beginning of period at Dec. 31, 2019 | $ 4,082 | $ 3,156 | $ 11,252,052 | (27,209,514) | $ 1,431,029 | (14,729,012) | (29,248,207) | |||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 40,816,292 | 40,816,292 | 31,563,799 | 31,563,799 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||||||||
Issuance of common stock for acquisitions | $ 39 | 6,247,976 | $ 6,248,015 | |||||||
Issuance of common stock for acquisitions (in shares) | 386,874 | |||||||||
Exchange of Class B Common Stock to Class A Common Stock | $ 100 | $ (100) | (361,005) | 361,005 | ||||||
Exchange of Class B Common Stock to Class A Common Stock (in shares) | 1,000,000 | (1,000,000) | ||||||||
Cashless exercise of warrants | $ 109 | (109) | ||||||||
Cashless exercise of warrants (in shares) | 1,092,468 | 1,092,468 | ||||||||
Equity-based compensation | $ 6 | 2,222,603 | $ 2,222,609 | |||||||
Equity-based compensation (in shares) | 58,617 | |||||||||
Net income (loss) | (158,162) | 423,785 | 265,623 | |||||||
Equity activity resulting from Tax Receivable Agreement | 2,482,450 | 2,482,450 | ||||||||
Change in fair value of interest rate swaps, net of reclassification adjustment | (6,570,167) | (4,847,049) | (11,417,216) | |||||||
Balance at end of period at Mar. 31, 2020 | $ 4,336 | $ 3,056 | $ 21,843,967 | $ (27,367,676) | $ (5,139,138) | $ (18,791,271) | $ (29,446,726) | |||
Balance at end of period (in shares) at Mar. 31, 2020 | 43,354,251 | 43,354,251 | 30,563,799 | 30,563,799 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) / Members’ Equity (Deficit) (Parenthetical) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) / Members’ Equity (Deficit) | |
Issuance of members' interest, offering costs | $ 837,156 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 265,623 | $ (5,452,178) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation, including patient equipment depreciation | 16,740,154 | 14,971,628 |
Equity-based compensation | 2,222,609 | 5,223,108 |
Deferred income tax | 479,092 | 1,483,430 |
Change in fair value of interest rate swaps, net of reclassification adjustment | (707,381) | 2,702,400 |
Change in fair value of contingent consideration | (2,000,000) | |
Amortization of deferred financing costs | 391,591 | 136,801 |
Write-off of deferred financing costs | 2,121,451 | |
Gain on sale of investment | (590,701) | |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (20,457,579) | (8,636,030) |
Inventory | 51,528 | (161,065) |
Prepaid and other assets | 3,908,676 | (172,468) |
Accounts payable and accrued expenses | 24,076,642 | 4,015,039 |
Net cash provided by operating activities | 24,380,254 | 16,232,116 |
Cash flows from investing activities: | ||
Purchases of equipment and other fixed assets | (7,534,433) | (5,297,940) |
Proceeds from sale of investment | 2,045,701 | |
Payments for business acquisitions, net of cash acquired | (105,840,930) | (20,881,343) |
Net cash used in investing activities | (111,329,662) | (26,179,283) |
Cash flows from financing activities: | ||
Proceeds from borrowings on long-term debt and lines of credit | 70,000,000 | 317,000,000 |
Repayments on long-term debt and lines of credit | (984,480) | (151,916,121) |
Payments on capital leases | (10,780,545) | (9,874,276) |
Proceeds from issuance of promissory note payable | 100,000,000 | |
Proceeds from issuance of members' interests | 20,000,000 | |
Payments for equity issuance costs | (837,156) | |
Payments of deferred financing costs | (9,027,753) | |
Distributions to members | (250,000,000) | |
Payment of contingent consideration | (12,000,000) | |
Payments for redemption of members' interest | (3,713,455) | |
Net cash provided by (used in) financing activities | 58,234,975 | (368,761) |
Net change in cash and cash equivalents | (28,714,433) | (10,315,928) |
Cash and cash equivalents - beginning of the period | 76,878,134 | 25,185,681 |
Cash and cash equivalents - end of the period | 48,163,701 | 14,869,753 |
Supplemental disclosures: | ||
Cash paid for interest | 7,704,405 | 2,829,928 |
Cash paid for income taxes | 2,085,831 | 39,244 |
Noncash investing and financing activities: | ||
Equipment acquired under capital lease obligations | 9,757,735 | 8,564,442 |
Unpaid equipment and other fixed asset purchases at end of year | 7,814,170 | 11,073,629 |
Equity consideration issued in connection with an acquisition | $ 6,248,015 | |
Contingent purchase price in connection with acquisitions | 1,500,000 | |
Seller note issued in connection with an acquisition | $ 2,000,000 |
General Information
General Information | 3 Months Ended |
Mar. 31, 2020 | |
General Information | |
General Information | (1) AdaptHealth Corp. and subsidiaries (AdaptHealth or the Company), f/k/a DFB Healthcare Acquisitions Corp. (DFB) is a leading provider of home healthcare equipment, medical supplies to the home and related services in the United States. AdaptHealth focuses primarily on providing (i) sleep therapy equipment, supplies and related services (including CPAP and bi‑PAP services) to individuals suffering from obstructive sleep apnea (OSA), (ii) home medical equipment (HME) to patients discharged from acute care and other facilities, (iii) oxygen and related chronic therapy services in the home, and (iv) other HME medical devices and supplies on behalf of chronically ill patients with diabetes care, wound care, urological, ostomy and nutritional supply needs. AdaptHealth services beneficiaries of Medicare, Medicaid and commercial insurance payors. On July 8, 2019, AdaptHealth Holdings LLC (AdaptHealth Holdings) entered into an Agreement and Plan of Merger (the Merger Agreement), as amended on October 15, 2019, with DFB, pursuant to which AdaptHealth Holdings combined with DFB (the Business Combination). The Business Combination closed on November 8, 2019. Refer to Note 3, Significant Transactions , for additional information regarding the Business Combination. Unless the context otherwise requires, “the Company”, “we,” “us,” and “our” refer, for periods prior to the closing of the Business Combination, to AdaptHealth Holdings and its subsidiaries and, for periods upon or after the closing of the Business Combination, to AdaptHealth Corp. and its subsidiaries, including AdaptHealth Holdings and its subsidiaries. The consolidated interim financial statements are unaudited, but reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of the results for a full year. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. (a) Basis of Presentation The consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, the consolidated interim financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The Business Combination was accounted for as a reverse recapitalization, with DFB treated as the acquired company and AdaptHealth Holdings as the acquirer, for financial reporting purposes. Therefore, the equity structure has been restated to that of the Company. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the Securities Act), as modified by the Jumpstart our Business Startups Act of 2012, (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and other exemptions. (b) Basis of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. (c) Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. (d) Accounting Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to revenue recognition and the valuation of accounts receivable (implicit price concession), income taxes, contingent consideration, equity-based compensation, interest rate swaps, and long-lived assets, including goodwill. Actual results could differ from those estimates. (e) Business Segment The Company’s chief operating decision-makers are its Chief Executive Officer and President, who make resource allocation decisions and assess performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-makers, or anyone else, for any planning, strategy and key decision-making regarding operations. The corporate office is responsible for contract negotiation with vendors and payors, corporate compliance with healthcare laws and regulations, and revenue cycle management. Accordingly, the Company has a single reportable segment and operating segment structure. (f) Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASU 2016-02), which amended authoritative guidance on accounting for leases. The new provisions require that a lessee of operating leases recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The Company is required to adopt the new standard for the annual reporting period beginning January 1, 2021, and interim reporting periods beginning January 1, 2022. The adoption of this standard is expected to have a material impact on the Company’s financial position. The Company is still evaluating the impact on its results of operations and does not expect the adoption of this standard to have an impact on liquidity. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (ASC Topic 350): Simplifying the Test for Goodwill Impairment , which will eliminate the requirement to calculate the implied fair value of goodwill, commonly referred to as “Step 2” in the current goodwill impairment test. An entity will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted this standard on January 1, 2020, which did not have a material impact on the Company’s consolidated financial statements. .. |
Revenue Recognition and Account
Revenue Recognition and Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Accounts Receivable | (2) Revenue Recognition and Accounts Receivable Revenue Recognition The Company generates revenues for services and related products that the Company provides to patients for home medical equipment, related supplies, and other items. The Company’s revenues are recognized in the period in which services and related products are provided to customers and are recorded either at a point in time for the sale of supplies and disposables, or over the fixed monthly service period for equipment. Revenues are recognized when control of the promised good or service is transferred to customers, in an amount that reflects the consideration to which the Company expects to receive from patients or under reimbursement arrangements with Medicare, Medicaid and third-party payors, in exchange for those goods and services. Sales revenue is recognized upon transfer of control of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenues for the sale of durable medical equipment and related supplies, including oxygen equipment, ventilators, wheelchairs, hospital beds and infusion pumps, are recognized at the time of delivery. The Company provides certain equipment to patients which is reimbursed periodically in fixed monthly payments for as long as the patient is using the equipment and medical necessity continues (in certain cases, the fixed monthly payments are capped at a certain amount). The equipment provided to the patient is based upon medical necessity as documented by prescriptions and other documentation received from the patient’s physician. The patient generally does not negotiate or have input with respect to the manufacturer or model of the equipment prescribed by their physician and delivered by the Company. Once initial delivery of this equipment is made to the patient for initial setup, a monthly billing process is established based on the initial setup service date. The Company recognizes the fixed monthly revenue ratably over the service period as earned, less estimated adjustments, and defers revenue for the portion of the monthly bill that is unearned. No separate revenue is earned from the initial setup process. Included in fixed monthly revenue are unbilled amounts for which the revenue recognition criteria had been met as of period-end but were not yet billed to the payor. The estimate of net unbilled fixed monthly revenue recognized is based on historical trends and estimates of future collectability. The Company disaggregates net revenue from contracts with customers by payor type and by core service lines. The Company believes that disaggregation of net revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The payment terms and conditions within the Company’s revenue-generating contracts vary by payor type and payor source. The composition of net revenue by payor type for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 2019 Insurance $ 114,450,697 $ 67,717,162 Government 51,244,994 38,100,765 Patient pay 25,743,343 13,680,347 Net revenue $ 191,439,034 $ 119,498,274 The composition of net revenue by core service lines for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 2019 Net sales revenue: Sleep $ 68,893,964 $ 47,127,169 Supplies to the home 33,338,901 2,028,936 HME 11,579,127 10,489,009 Respiratory 2,768,427 1,279,075 Other 12,393,306 8,031,775 Total net sales revenue $ 128,973,725 $ 68,955,964 Net revenue from fixed monthly equipment reimbursements: Sleep $ 22,668,559 $ 18,056,858 HME 12,177,277 10,242,636 Respiratory 25,006,951 20,429,189 Other 2,612,522 1,813,627 Total net revenue from fixed monthly equipment reimbursements $ 62,465,309 $ 50,542,310 Total net revenue: Sleep $ 91,562,523 $ 65,184,027 Supplies to the home 33,338,901 2,028,936 HME 23,756,404 20,731,645 Respiratory 27,775,378 21,708,264 Other 15,005,828 9,845,402 Total net revenue $ 191,439,034 $ 119,498,274 Accounts Receivable Due to the continuing changes in the healthcare industry and third-party reimbursement environment, certain estimates are required to record accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. The complexity of third-party billing arrangements and laws and regulations governing Medicare and Medicaid may result in adjustments to amounts originally recorded. The Company performs a periodic analysis to review the valuation of accounts receivable and collectability of outstanding balances. Management’s evaluation takes into consideration such factors as historical bad debt experience, business and economic conditions, trends in healthcare coverage, other collection indicators and information about specific receivables. The Company’s evaluation also considers the age and composition of the outstanding amounts in determining their estimated net realizable value. Included in accounts receivable are earned but unbilled accounts receivables. Billing delays, ranging from several days to several weeks, can occur due to the Company’s policy of compiling required payor specific documentation prior to billing for its services rendered. The Company recorded unbilled revenue of $18,064,863 and $8,611,272 as of March 31, 2020 and December 31, 2019, respectively. |
Significant Transactions
Significant Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Significant Transactions [Abstract] | |
Significant Transactions | (3) Significant Transactions Acquisitions During the three months ended March 31, 2020 and 2019, the Company made several acquisitions to strengthen its current market share in existing markets or to expand into new markets. The goodwill generated from these acquisitions is attributable to expected growth and cost synergies and the expected contribution of each acquisition to the overall Company strategy and is expected to be deductible for tax purposes. The estimated fair values of the net assets of acquired businesses as described below are subject to change resulting from such items as working capital adjustments post-acquisition. As a result, the acquisition accounting for certain acquired businesses could change in subsequent periods resulting in adjustments to goodwill once finalized. Three Months Ended March 31, 2020 On January 2, 2020, the Company purchased 100% of the equity interests of the Patient Care Solutions business (PCS), a subsidiary of McKesson Corporation. PCS is a home medical equipment supplies business. The Company allocated the consideration paid to the estimated fair values of the net assets acquired on a preliminary basis, including $16.3 million to accounts receivable, $0.5 million to equipment and other fixed assets, $1.4 million to goodwill, and $3.2 million of net liabilities to other working capital accounts. In addition, on March 2, 2020, the Company purchased certain assets of the durable medical equipment business of Advanced Home Care, Inc. (Advanced). The Company allocated the consideration paid to the estimated fair values of the net assets acquired on a preliminary basis, including $18.5 million to equipment and other fixed assets, $38.5 million to goodwill, and $1.5 million of net assets in other working capital accounts. The acquisition of Advanced also includes a potential contingent payment of up to $9.0 million based on certain conditions after closing. The Company is in the process of determining the fair value of such contingent payment, and as such an estimated fair value was not included in the consideration paid as part of the Company’s preliminary acquisition accounting. The valuation of such payment will be completed during the second quarter of 2020. In addition, during the period, the Company completed acquisitions of certain individually immaterial businesses, the results of which were immaterial to the Company’s results for the three months ended March 31, 2020. The following table summarizes the consideration paid for the acquisitions during the three months ended March 31, 2020: Cash consideration $ 106,178,017 Equity consideration 6,248,015 Deferred payments 14,250 Total $ 112,440,282 The Company allocated the consideration paid to the net assets acquired based on their estimated fair values. The Company is still evaluating the fair value of certain assets and liabilities for which provisional amounts were recorded and expects to finalize such evaluation during the second quarter of 2020. Based upon management’s evaluation, which is preliminary and subject to completion of working capital and other adjustments, the consideration paid was allocated as follows during the three months ended March 31, 2020: Cash $ 337,087 Accounts receivable 19,573,766 Inventory 4,780,439 Prepaid and other current assets 1,334,306 Equipment and other fixed assets 24,406,410 Goodwill 74,016,335 Accounts payable and accrued expenses (6,494,599) Contract liabilities (2,467,643) Unfavorable lease liability (1,418,931) Capital lease obligations (1,626,888) Net assets acquired $ 112,440,282 Three Months Ended March 31, 2019 On January 2, 2019, the Company purchased 100% of the equity of Gould’s Discount Medical, LLC (Goulds). Goulds is a home medical equipment and supplies business. During the three months ended March 31, 2019, the Company allocated the consideration paid to the estimated fair values of the net assets acquired on a preliminary basis, including $3.7 million to accounts receivable, $2.4 million to inventory, $1.7 million to equipment and other fixed assets, $18.6 million to goodwill, and $2.1 million of net liabilities to other working capital accounts. In addition, during the period, the Company completed acquisitions of certain individually immaterial businesses, the results of which were immaterial to the Company’s results for the three months ended March 31, 2019. The following table summarizes the consideration paid for the acquisitions during the three months ended March 31, 2019. Cash consideration $ 21,562,495 Seller note 2,000,000 Estimated contingent consideration 1,500,000 Total $ 25,062,495 The Company allocated the consideration paid to the net assets acquired based on their estimated fair values. Based upon management’s evaluation, which was preliminary and subject to completion of working capital and other adjustments, the consideration paid was allocated as follows during the three months ended March 31, 2019. The Company finalized the valuation of the fair value of the net assets acquired for these acquisitions during the remainder of 2019. Cash $ 117,000 Accounts receivable 3,691,030 Inventory 2,468,427 Prepaid and other current assets 11,835 Equipment and other fixed assets 1,658,714 Goodwill 19,381,515 Accounts payable and accrued expenses (2,266,026) Net assets acquired $ 25,062,495 During the three months ended March 31, 2019, the Company received net cash of $564,152 relating to working capital adjustments associated with businesses that were acquired during 2018 which was recorded as a reduction to goodwill during the period. Pro‑Forma Information The unaudited pro-forma financial information presented below has been prepared by adjusting the historical results of the Company to include the historical results of the significant acquisitions described above. The unaudited pro-forma financial information is presented for illustrative purposes only and may not be indicative of the results of operations that would have actually occurred. In addition, future results may vary significantly from the results reflected in the pro-forma information. The unaudited pro-forma financial information does not reflect the impact of future events that may occur after the acquisitions, such as the impact of cost savings or other synergies that may result from these acquisitions, and does not include interest expense associated with debt incurred to fund the acquisitions. Three Months Ended March 31, 2020 2019 Net revenue $ 204,619,618 $ 181,724,059 Operating income (loss) $ 9,082,482 $ (4,746,892) The pro-forma operating loss for the three months ended March 31, 2019 is primarily due to operating losses related to PCS. Results of Businesses Acquired The following table presents the amount of net revenue and operating income (loss) since the respective acquisition dates included in the Company’s consolidated statements of operations for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Net revenue $ 40,724,747 $ 8,626,378 Operating income (loss) $ (5,559,851) $ 1,431,523 The operating loss for the three months ended March 31, 2020 is primarily due to operating losses related to PCS. Business Combination As discussed in Note 1, General Information , on July 8, 2019, AdaptHealth Holdings entered into the Merger Agreement, as amended on October 15, 2019, with DFB, pursuant to which AdaptHealth Holdings combined with DFB. The completion of the Business Combination (the Closing) occurred on November 8, 2019. AdaptHealth Holdings was the accounting acquirer in the Business Combination, which was treated as a reverse recapitalization. Accordingly, for accounting purposes, the merger was treated as the equivalent of AdaptHealth Holdings issuing stock for the net assets of DFB, accompanied by a recapitalization. In connection with the Business Combination, the name of the combined company was changed to AdaptHealth Corp. Following the Closing of the Business Combination, the holders of Class A Common Stock owned an approximate 56% direct controlling interest, with the remaining 44% direct noncontrolling interest owned by the former owners of AdaptHealth Holdings in the form of common units representing limited liability company interests in AdaptHealth Holdings from and after the Closing (New AdaptHealth Units), which is presented as noncontrolling interest in the consolidated financial statements. These members hold common unit interests of AdaptHealth Holdings and a corresponding number of shares of non-economic Class B Common Stock, which enables the holder to one vote per share. The New AdaptHealth Units and a corresponding number of shares of Class B Common Stock are exchangeable on a one-to-one basis for shares of Class A Common Stock. The holders of New AdaptHealth Units owned an approximate 41% direct noncontrolling economic interest in AdaptHealth Holdings at March 31, 2020. This direct noncontrolling interest will continue to decrease as New AdaptHealth Units and a corresponding number of shares of Class B Common Stock are exchanged for shares of Class A Common Stock. |
Equipment and Other Fixed Asset
Equipment and Other Fixed Assets | 3 Months Ended |
Mar. 31, 2020 | |
Equipment and Other Fixed Assets | |
Equipment and Other Fixed Assets | (4) Equipment and Other Fixed Assets Equipment and other fixed assets as of March 31, 2020 and December 31, 2019 are as follows: March 31, December 31, 2020 2019 Patient medical equipment $ 132,311,790 $ 112,070,831 Vehicles 6,916,895 4,461,041 Other 18,456,871 15,474,589 157,685,556 132,006,461 Less accumulated depreciation (70,384,632) (68,447,381) $ 87,300,924 $ 63,559,080 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill. | |
Goodwill | (5) Goodwill The change in the carrying amount of goodwill for the three months ended March 31, 2020 was as follows: Balance at December 31, 2019 $ 266,790,518 Acquired goodwill during the period 74,016,335 Balance at March 31, 2020 $ 340,806,853 The Company did not record any goodwill impairment charges during the three months ended March 31, 2020 and 2019. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Assets and Liabilities | |
Fair Value of Assets and Liabilities | (6) Fair Value of Assets and Liabilities FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), creates a single definition of fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. Assets and liabilities adjusted to fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by ASC 820, are as follows: Level input Input Definition Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs, other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The following table presents the valuation of the Company’s financial assets and liabilities as of March 31, 2020 and December 31, 2019 measured at fair value on a recurring basis. These estimates are not necessarily indicative of the amounts the Company could ultimately realize. Level 1 Level 2 Level 3 Fair Value March 31, 2020 Assets Money market accounts $ 4,117,161 $ — $ — $ 4,117,161 Total assets measured at fair value $ 4,117,161 $ — $ — $ 4,117,161 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 7,675,000 $ 7,675,000 Acquisition-related contingent consideration-long term — — 5,050,000 5,050,000 Interest rate swap agreements-short term — 5,373,647 — 5,373,647 Interest rate swap agreements-long term — 13,675,476 — 13,675,476 Total liabilities measured at fair value $ — $ 19,049,123 $ 12,725,000 $ 31,774,123 Level 1 Level 2 Level 3 Fair Value December 31, 2019 Assets Money market accounts $ 54,014,591 $ — $ — $ 54,014,591 Total assets measured at fair value $ 54,014,591 $ — $ — $ 54,014,591 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 4,825,000 $ 4,825,000 Acquisition-related contingent consideration-long term — — 9,900,000 9,900,000 Interest rate swap agreements-short term — 2,157,324 — 2,157,324 Interest rate swap agreements-long term — 6,181,964 — 6,181,964 Total liabilities measured at fair value $ — $ 8,339,288 $ 14,725,000 $ 23,064,288 Interest Rate Swaps The Company recognizes its interest rate swaps as either assets or liabilities in the accompanying consolidated balance sheets at fair value. The valuation of these derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company’s interest rate swaps held as of March 31, 2020 and December 31, 2019 were classified as Level 2 of the fair value hierarchy. Refer to Note 7, Derivative Instruments and Hedging Activities , for additional information regarding the Company’s derivative instruments. Contingent Consideration The Company estimates the fair value of acquisition-related contingent consideration liabilities by applying the income approach using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. At March 31, 2020, contingent consideration liabilities of $7,675,000 and $5,050,000 were included in other current liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheets. At December 31, 2019, contingent consideration liabilities of $4,825,000 and $9,900,000 were included in other current liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheets. A reconciliation of the Company’s contingent consideration liabilities related to acquisitions for the three months ended March 31, 2020 and 2019 is as follows: Three Months Ended March 31, 2020 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 14,725,000 $ — $ — $ (2,000,000) $ 12,725,000 Three Months Ended March 31, 2019 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 15,250,000 $ 1,500,000 $ (12,000,000) $ — $ 4,750,000 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | (7) Derivative Instruments and Hedging Activities The Company records all derivatives on its consolidated balance sheet at fair value. As of March 31, 2020 and December 31, 2019, the Company had outstanding interest rate derivatives with third parties in which the Company pays a fixed interest rate and receives a rate equal to the one-month LIBOR. The notional associated with the swap agreements was $250,000,000 as of March 31, 2020 and December 31, 2019 and have maturity dates at certain dates through March 2024. Prior to August 22, 2019, the interest rate swap agreements were not designated as cash flow hedging instruments for accounting purposes and accordingly changes in fair value of the interest rate swap agreements were recorded in earnings. On August 22, 2019, the Company designated its swaps as effective cash flow hedges of interest rate risk. Accordingly, subsequent to August 22, 2019, changes in the fair value of the interest rate swaps are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets at March 31, 2020 and December 31, 2019: As of March 31, 2020 Balance Sheet Fair Value Location Asset (Liability) Derivatives designated as hedging instruments: Interest rate swap agreements Other current liabilities $ (5,373,647) Interest rate swap agreements Other long-term liabilities (13,675,476) Total derivatives designated as hedging instruments $ (19,049,123) As of December 31, 2019 Balance Sheet Fair Value Location Asset (Liability) Derivatives designated as hedging instruments: Interest rate swap agreements Other current liabilities $ (2,157,324) Interest rate swap agreements Other long-term liabilities (6,181,964) Total derivatives designated as hedging instruments $ (8,339,288) During the three months ended March 31, 2020, as a result of the effect of cash flow hedge accounting, the Company recognized a loss of $10,709,835 in other comprehensive income (loss) and $707,381 was reclassified from other comprehensive income (loss) and recognized as a reduction to interest expense, net, in the accompanying consolidated statements of operations. During the three months ended March 31, 2019, as a result of the effect of the Company’s derivative financial instruments that were not designated as hedging instruments, the Company recognized $2,702,400 in interest expense, net in the accompanying consolidated statements of operations. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | (8) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, 2020 2019 Accounts payable $ 105,194,402 $ 79,237,323 Employee related accruals 9,002,909 12,319,746 Accrued interest 4,672,868 4,021,660 Other 17,201,708 7,149,364 Total $ 136,071,887 $ 102,728,093 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Debt | (9) Debt The following is a summary of long term‑debt as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Secured term loans $ 295,937,500 $ 246,250,000 Revolving credit facility 32,000,000 12,000,000 Note payable 143,500,000 143,500,000 Other 1,053,205 1,725,185 Unamortized deferred financing fees (6,322,104) (6,642,490) 466,168,601 396,832,695 Current portion (2,615,705) (1,721,132) Long-term portion $ 463,552,896 $ 395,111,563 In March 2019, the Company entered into several agreements, amendments and new credit facilities (herein after referred to as the March 2019 Recapitalization Transactions). The March 2019 Recapitalization Transactions included $425,000,000 in new credit facilities, which consisted of a $300,000,000 Initial Term Loan (Credit Facility Term Loan), $50,000,000 Delayed Draw Term Loan (Delayed Draw), and $75,000,000 Revolving Credit Facility (New Revolver), all with maturities in March 2024. In November 2019, the Company amended its credit agreement primarily to (i) increase the amount available under the Delayed Draw to $100,000,000, and (ii) revise the Consolidated Total Leverage Ratio thresholds and lower the applicable margin to determine the variable quarterly interest rate under the credit agreement. Amounts borrowed under the Credit Facility Term Loan and Delayed Draw bear interest quarterly at variable rates based upon the sum of (a) the LIBOR Rate for such interest period, plus (b) an applicable margin based upon the Company’s Consolidated Total Leverage Ratio. The Delayed Draw carries 0.5% of unused fee per annum, and the New Revolver carries 0.5% of unused line fee per annum. Under the credit facility, the Company is subject to various agreements that contain a number of restrictive covenants that, among other things, impose operating and financial restrictions on the Company. Financial covenants include a Consolidated Total Leverage Ratio and a Fixed Charges Coverage Ratio, as defined in the agreement. Additionally, under the terms of the debt amendment, the Company may be required to repay principal based on excess cash flow, as defined. The proceeds from the March 2019 Recapitalization Transactions were used to (1) repay existing amounts outstanding under the Company’s credit facility of $151,875,000, (2) pay transaction costs, fees and expenses related to the consummation of the transactions contemplated under the agreement (see Note and Unit Purchase Agreement discussed below), (3) pay a $250,000,000 distribution to AdaptHealth Holdings’ members, and (4) redeem certain members’ interests, including the cumulative preferred dividends, for $3,713,455. In addition, the Company paid deferred financing costs of $9,027,753; amortization of such costs is included in interest expense, net in the accompanying consolidated statements of operations. Further, the Company wrote off deferred financing costs of $2,121,451, which is included in loss on extinguishment of debt in the accompanying consolidated statements of operations for the three months ended March 31, 2019. Secured Term Loans The Credit Facility Term Loan requires quarterly principal repayments beginning June 30, 2019 through December 31, 2023, and the unpaid principal balance is due at maturity in March 2024. In November 2019, the Company repaid $50,000,000 under the Credit Facility Term Loan; such repayment satisfied the required principal repayments through September 2023. At March 31, 2020, there was $246,250,000 outstanding under the Credit Facility Term Loan. The interest rate under the Credit Facility Term Loan was 4.35% at March 31, 2020. The Delayed Draw has an availability period from the first business day immediately following the closing date (March 2019) to the earliest of (a) the Credit Facility Term Loan maturity date, (b) twenty-four months following the closing date, or (c) the date of the termination of the commitment. During the three months ended March 31, 2020, the Company borrowed $50,000,000 under the Delayed Draw. The borrowing under the Delayed Draw requires quarterly principal repayments of $312,500 beginning March 31, 2020 through December 31, 2020, quarterly principal repayments of $625,000 beginning March 31, 2021 through December 31, 2023, and the unpaid principal balance is due at maturity in March 2024. At March 31, 2020, there was $49,687,500 outstanding under the Delayed Draw. The interest rate under the Delayed Draw was 4.11% at March 31, 2020. Revolving Credit Facility During the three months ended March 31, 2020, the Company borrowed $20,000,000 under the New Revolver; such amount was repaid in April 2020. At March 31, 2020, there was $32,000,000 outstanding under the New Revolver. The interest rate under the New Revolver was 4.35% at March 31, 2020. After consideration of stand-by letters of credit outstanding of $2,496,518, the remaining maximum borrowings available pursuant to the New Revolver were $40,503,482 at March 31, 2020. Note Payable In connection with the March 2019 Recapitalization Transactions, the Company signed a Note and Unit Purchase Agreement with an investor. Pursuant to the agreement, the Company signed a promissory note agreement with a principal amount of $100,000,000 (the Promissory Note) and the Company also received proceeds of $20,000,000 for the purchase of members’ interests. In connection with the transactions completed as part of the Business Combination, the Promissory Note was replaced with a new amended and restated promissory note with a principal amount of $100,000,000, and the investor converted certain of its members’ interests to a $43,500,000 promissory note. The new $100,000,000 promissory note, together with the $43,500,000 promissory note, are collectively referred to herein as the New Promissory Note. The outstanding principal balance under the New Promissory Note is due on the tenth anniversary of the closing date of the Business Combination and bears interest at the following rates (a) for the period starting on the closing date and ending on the seventh anniversary, a rate of 12% per annum, with 6% payable in cash and 6% Payment in Kind (PIK), and (b) for the period starting on the day after the seventh anniversary of the closing date and ending on the maturity date, a rate equal to the greater of (i) 15% per annum or (ii) the twelve-month LIBOR plus 12% per annum. The Company has the option to pay the PIK interest in cash under the New Promissory Note, which it did during the three months ended March 31, 2020. If the Company elects to prepay the New Promissory Note prior to the third anniversary of the Closing of the Business Combination, then such prepayment of the outstanding principal and accrued interest will be subject to a make-whole premium equal to 10% of the total amount of outstanding principal and accrued interest through the date of such prepayment. If the Company elects to prepay the New Promissory Note prior to the fourth anniversary but after the third anniversary of the Closing of the Business Combination, then such prepayment of outstanding principal and accrued interest will be subject to a make-whole premium equal to 5% of the total amount of outstanding principal and accrued interest through the date of such prepayment. In connection with the Business Combination the investor generated taxable income and a current federal and state income tax liability of approximately $5,870,000 on the exchange of its members’ interests. Under the terms of the Merger Agreement, all investors indemnified the Company for all taxes attributable to periods prior to or on the closing date of the Business Combination. Accordingly, the Company recorded an indemnification asset of such amount, included in Prepaid and other current assets, and a corresponding current liability included in Other liabilities, in the accompanying consolidated balance sheets as of and December 31, 2019. This amount is no longer outstanding as of March 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity | |
Stockholders’ Equity | (10) Stockholders' Equity The Closing of the Business Combination occurred on November 8, 2019, refer to Note 3, Significant Transactions , for additional details regarding the Business Combination. Warrants At the Closing of the Business Combination, the Company had 12,666,666 warrants outstanding. Each warrant is exercisable for one share of common stock at a price of $11.50 per share. The exercise price and number of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. During the three months ended March 31, 2020, 3,938,630 warrants were exercised in cashless transactions which resulted in the issuance of 1,092,468 shares of Class A Common Stock. As of March 31, 2020, the Company had 8,728,036 warrants outstanding. Contingent Consideration Pursuant to the Merger Agreement, the former owners of AdaptHealth Holdings who received Class B Common Stock in connection with the Business Combination are entitled to receive an equity classified earn-out consideration to be paid in the form of New AdaptHealth Units (and a corresponding number of shares of Class B Common Stock) and the former owners of AdaptHealth Holdings who received Class A Common Stock in connection with the Business Combination are entitled to receive earn-out consideration to be paid in the form of Class A Common Stock, if the 30-day volume-weighted average price of the Company’s Class A Common Stock equals or exceeds certain hurdles set forth in the Merger Agreement. The former owners of AdaptHealth Holdings can potentially receive up to an additional 1,000,000 shares in December 2020, 2021 and 2022, for a total of 3,000,000 shares, as a part of the earn-out consideration. As of March 31, 2020, the hurdles have not been met. Equity‑based Compensation Incentive Units AdaptHealth Holdings granted Incentive Units in June 2019 (the 2019 Incentive Units) and in April 2018 (the 2018 Incentive Units) to certain members of management. With respect to the 2019 Incentive Units, 50% of the awards vest in equal annual installments on each of the first, second, third and fourth anniversaries of the Vesting Commencement Date as defined in the agreements (May 20, 2019). The remaining 50% had vesting terms based upon a performance condition. In connection with the Business Combination, the vesting conditions for this portion of the 2019 Incentive Units was changed to vest quarterly during the one-year period subsequent to the Closing of the Business Combination. The grant date fair value of the 2019 Incentive Units, as calculated under an Option Pricing Method, was $4,511,120, and is being recognized as expense over the employees’ requisite service period based on the vesting conditions described above. In conjunction with the March 2019 Recapitalization Transactions, the vesting of certain of the 2018 Incentive Units was accelerated and all holders of the 2018 Incentive Units received an advance for future distribution, which were treated as a modification of the awards for accounting purposes. In conjunction with the Business Combination, the vesting of a majority of the unvested 2018 Incentive Units was accelerated. 2019 Stock Incentive Plan On November 7, 2019, the stockholders of the Company approved the AdaptHealth Corp. 2019 Stock Incentive Plan (the 2019 Plan), effective upon closing of the Business Combination. In connection with the 2019 Plan, the Company provides equity-based compensation to attract and retain employees while also aligning employees’ interest with the interests of its stockholders. The 2019 Plan permits the grant of various equity-based awards to selected employees and directors. The 2019 Plan permits the grant of up to 8,000,000 shares of Class A Common Stock, subject to certain adjustments and limitations. Stock Options During the fourth quarter of 2019, the Company granted 3,416,666 options to purchase shares of common stock of the Company to certain executive officers that have an exercise price of $11.50 per share. A portion of the options are eligible to vest on December 31, 2020, 2021 and 2022 based on defined performance conditions, subject to the employees’ continuous employment through the applicable vesting date. The grant-date fair value of the awards, using a Black-Scholes option pricing model, was $7,248,653 and is being recognized as expense on a straight-line basis over the employees’ requisite service period subject to management’s estimation of the probability of vesting of such awards. The Company has no other options outstanding as of March 31, 2020. Restricted Stock On March 3, 2020, the Company granted 300,000 shares of restricted stock to an employee in conjunction with an acquisition. Of the total shares granted, 250,000 are eligible to vest based on certain performance conditions, subject to the employee's continuous employment through the applicable vesting date. The remaining 50,000 shares will vest 25% annually on December 31, 2020 through 2023, subject to the employee's continuous employment through the applicable vesting date. The total grant-date fair value of the award was $4,905,000 and is being recognized as expense on a straight-line basis over the employee’s requisite service period subject to management’s estimation of the probability of vesting of such awards (as it relates to the performance-based awards). On March 3, 2020, the Company granted 321,123 shares of restricted stock to various employees. Of the total shares granted, 15,417 shares vested on the grant date, and the remaining shares will vest 25% on each anniversary of the Vesting Commencement Dates (as defined in the agreements), subject to the employees’ continuous employment through the applicable vesting date. The grant-date fair value of the awards was $5,250,361, of which $252,068 was recognized as expense on the grant date and $4,998,293 is being recognized as expense on a straight-line basis over the employees’ requisite service period. Activity related to the Company’s non-vested restricted stock grants for the three months ended March 31, 2020 is presented below: Number of Shares of Weighted-Average Grant Date Restricted Stock Fair Value per Share Non-vested balance at January 1, 2020 901,250 $ 5.83 Granted 621,123 $ 16.35 Vested (15,417) $ 16.35 Forfeited (20,000) $ 8.11 Non-vested balance at March 31, 2020 1,486,956 $ 10.09 During the three months ended March 31, 2020, the Company recorded equity-based compensation expense of $2,222,609, of which $1,671,923 and $550,686 was included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statement of operations. During the three months ended March 31, 2019, the Company recorded equity-based compensation expense of $5,223,108 which is included in general and administrative expenses in the accompanying consolidated statements of operations. The expense during the three months ended March 31, 2019 included $4,894,720 in connection with the acceleration of vesting of certain of the 2018 Incentive Units and the modification of such awards discussed above. At March 31, 2020, there was $20,025,505 of unrecognized compensation expense related to equity-based compensation awards, which is expected to be recognized over a weighted-average term of 2.8 years. At March 31, 2020, 3,037,761 shares of the Company’s Class A Common Stock are available for issuance under the 2019 Plan. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings per share | |
Net Income (Loss) Per Common Share | (11) Net Income (Loss) Per Common Share The Business Combination was accounted for as a reverse recapitalization by which AdaptHealth Holdings issued stock for the net assets of the Company accompanied by a recapitalization. Earnings per share has been recast for all historical periods to reflect the Company’s capital structure for all comparative periods. The Company excluded the effect of the warrants, unvested restricted stock, stock options and Class B Common Stock from the computation of diluted net income (loss) per share for the three months ended March 31, 2020 because the effect of including them would be anti-dilutive as a result of the Company being in a net loss position for such period. There were no such items outstanding for the three months ended March 31, 2019. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Lease Commitments | |
Lease Commitments | (12) Leases Capital Leases The Company has acquired patient medical equipment and supplies, and office equipment through multiple capital leases. The capital lease obligations represent the present value of minimum lease payments under the respective agreement, payable monthly at various interest rates. Interest expense related to capital leases was $16,305 and $35,083 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, future annual minimum payments required under lease obligations are as follows: Twelve months ended March 31, 2021 $ 20,442,099 2022 215,164 Total 20,657,263 Less amount representing interest (70,192) 20,587,071 Current portion (20,421,195) Long-term portion $ 165,876 At March 31, 2020 and December 31, 2019, equipment under capital leases consisted of patient equipment with a cost basis of approximately $40,600,000 and $39,100,000, respectively, and accumulated depreciation of approximately $12,200,000 and $11,700,000, respectively. Depreciation expense for equipment purchased under capital leases is primarily included in cost of net revenue in the accompanying consolidated statements of operations. Operating Leases The Company leases its office facilities and office equipment under noncancelable lease agreements which expire at various dates through March 2033. Some of these lease agreements include an option to renew at the end of the term. The Company also leases certain patient medical equipment with such leases set to expire at various dates through November 2021. The Company also leases certain office facilities on a month to month basis. In some instances, the Company is also required to pay its pro rata share of real estate taxes and utility costs in connection with the premises. Some of the leases contain fixed annual increases of minimum rent. Accordingly, the Company recognizes rent expense on a straight-line basis and records the difference between the recognized rent expense and the amount payable under the lease as deferred rent. The deferred rent recorded in accounts payable and accrued expenses on the accompanying consolidated balance sheets at March 31, 2020 and December 31, 2019 was $1,180,874 and $1,124,702, respectively. The Company recorded rent expense of $3,505,955 and $2,351,566 for the three months ended March 31, 2020 and 2019, respectively, which is primarily included in cost of net revenue in the accompanying consolidated statements of operations. The minimum annual lease commitments under noncancelable leases with initial or remaining terms in excess of one year as of March 31, 2020 are as follows: Twelve months ended March 31, 2021 $ 16,547,233 2022 11,746,784 2023 9,823,064 2024 8,316,930 2025 6,390,029 Thereafter 17,668,659 Total minimum payments required (a) $ 70,492,699 (a) Minimum payments have not been reduced by minimum sublease rentals of $2,712,886 due in the future under noncancelable subleases. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | (13) Income Taxes The Company is subject to U.S. federal, state, and local income taxes with respect to its allocable share of any taxable income or loss of AdaptHealth Holdings. AdaptHealth Holdings is treated as a partnership for U.S. income tax purposes and generally does not pay income taxes in most jurisdictions. Instead, AdaptHealth Holdings’ taxable income or loss is passed through to its members, including the Company. Additionally, the Company is subject to U.S. federal, state, and local income taxes on the taxable income or loss of the underlying C-corporations in the AdaptHealth group where taxes are paid at the entity level. For the three months ended March 31, 2020 and 2019, the Company recorded income tax expense of $1,106,722 and $2,418,441 respectively. As of March 31, 2020 and December 31, 2019, the Company had no uncertain tax positions that would require recognition or disclosure in the consolidated interim financial statements. Tax Receivable Agreement AdaptHealth Corp. is party to a Tax Receivable Agreement (TRA) with certain current and former members of AdaptHealth Holdings. The TRA provides for the payment by AdaptHealth Corp. of 85% of the tax savings, if any, that AdaptHealth Corp. realizes (or is deemed to realize in certain circumstances) as a result of (i) certain increases in tax basis resulting from exchanges of New AdaptHealth Units and shares of Class B Common Stock; (ii) certain tax attributes of the corresponding sellers existing prior to an exchange; (iii) imputed interest deemed to be paid by AdapthHealth Corp. as a result of payments it makes under the TRA; and (iv) certain increases in tax basis resulting from payments AdaptHealth Corp. makes under the TRA. During the three months ended March 31, 2020, the Company increased its TRA liability through an aggregate $4.0 million reduction in additional-paid-in capital resulting from additional exchanges of New AdaptHealth Units and shares of Class B Common Stock. Correspondingly, during the three months ended March 31, 2020, the Company increased its deferred tax asset by approximately $6.5 million through an increase in additional-paid-in-capital resulting from these exchanges and additional increases of AdaptHealth Corp.’s ownership interest in AdaptHealth Holdings. At March 31, 2020 and December 31, 2019, the Company had a liability recorded relating to the TRA of approximately $14,800,000 and $10,800,000, respectively, which is included in other long-term liabilities in the accompanying consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (14) Commitments and Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies , the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgement is required to determine both probability and the estimated amount. The Company reviews at least quarterly and adjusts accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. At this time, the Company has no accrual related to lawsuits, claims, investigations and proceedings. In connection with the Company’s acquisition of PPS HME Holdings LLC (PPS) in May 2018, the Company assumed a Corporate Integrity Agreement (CIA) at one of PPS’ subsidiaries, Braden Partners L.P. d/b/a Pacific Pulmonary Services (BP). The CIA was entered into with the Office of Inspector General of the U.S. Department of Health and Human Services (OIG). The CIA has a five-year term which expires in April 2022. In connection with the acquisition and integration of PPS by AdaptHealth, the OIG confirmed that the requirements of the CIA imposed upon BP would only apply to the operations of BP and therefore no operations of any other AdaptHealth affiliate are subject to the requirements of the CIA following the acquisition. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | (15) Related Party Transactions The Company has an outstanding note payable with a principal balance of $143,500,000 with an investor who also has equity ownership in the Company. The Company and two of its executive officers each owned an equity interest in a vendor of the Company that provides workflow technology services. Each individual’s equity ownership was less than 1%. The expense related to this vendor was $1,456,501 and $779,110 for the three months ended March 31, 2020 and 2019, respectively. The Company accounted for this investment under the cost method of accounting based on its level of equity ownership. In February 2020, the Company and each executive officer sold their respective equity interest. The Company’s investment had a carrying value of $1,455,000 and the Company received proceeds of $2,045,701 in connection with the transaction, resulting in a gain of $590,701 which is included in cost of net revenue in the accompanying consolidated statements of operations for the three months ended March 31, 2020. The Company and two of its executive officers and shareholders own an equity interest in a vendor of the Company that provides automated order intake software. Each individual’s equity ownership is less than 1%. The expense related to this vendor was $544,449 and $450,000 for the three months ended March 31, 2020 and 2019, respectively. The Company accounts for this investment under the cost method of accounting based on its level of equity ownership. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | (16) Subsequent Events In response to the COVID-19 pandemic and the National Emergency Declaration, dated March 13, 2020, the Company activated certain business interruption protocols, including acquisition and distribution of personal protective equipment to its patient-facing employees, accelerated capital expenditures of certain products and relocation of significant portions of its workforce to “work-from-home” status. The Company also increased its cash liquidity by, among other things, seeking recoupable advance payments of approximately $47 million made available by CMS under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) legislation, which was received in April 2020. In addition, in April 2020, the Company received distributions of the CARES Act provider relief funds of approximately $17 million targeted to offset lost revenue and expenditures incurred in connection with the COVID-19 pandemic. The provider relief funds are subject to certain restrictions and are subject to recoupment if not used for designated purposes. As permitted under the CARES Act, the Company has also elected to defer certain portions of employer-paid FICA taxes otherwise payable from March 27, 2020 to January 1, 2021, which will be paid in two equal installments on December 31, 2021 and December 31, 2022. In April 2020 the Company repaid $20 million of amounts borrowed under the New Revolver upon receipt of the advanced payments from CMS and provider relief funds discussed above. Subsequent to March 31, 2020, holders of New AdaptHealth Units and Class B Common Stock exchanged 1,953,549 New AdaptHealth Units together with a corresponding number of shares of Class B Common Stock for 1,953,549 shares of Class A Common Stock. Subsequent to March 31, 2020, 109,983 warrants were exercised for proceeds of $1,264,804 resulting in the issuance of 109,983 shares of Class A Common Stock. |
General Information (Policies)
General Information (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, the consolidated interim financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. The Business Combination was accounted for as a reverse recapitalization, with DFB treated as the acquired company and AdaptHealth Holdings as the acquirer, for financial reporting purposes. Therefore, the equity structure has been restated to that of the Company. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the Securities Act), as modified by the Jumpstart our Business Startups Act of 2012, (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and other exemptions. |
Basis of Consolidation | (b) Basis of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Concentration of Credit Risk | (c) Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Accounting Estimates | (d) Accounting Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to revenue recognition and the valuation of accounts receivable (implicit price concession), income taxes, contingent consideration, equity-based compensation, interest rate swaps, and long-lived assets, including goodwill. Actual results could differ from those estimates. |
Business segment | (e) Business Segment The Company’s chief operating decision-makers are its Chief Executive Officer and President, who make resource allocation decisions and assess performance based on financial information presented on an aggregate basis. There are no segment managers who are held accountable by the chief operating decision-makers, or anyone else, for any planning, strategy and key decision-making regarding operations. The corporate office is responsible for contract negotiation with vendors and payors, corporate compliance with healthcare laws and regulations, and revenue cycle management. Accordingly, the Company has a single reportable segment and operating segment structure. |
Recent Accounting Pronouncements | (f) Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASU 2016-02), which amended authoritative guidance on accounting for leases. The new provisions require that a lessee of operating leases recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. The Company is required to adopt the new standard for the annual reporting period beginning January 1, 2021, and interim reporting periods beginning January 1, 2022. The adoption of this standard is expected to have a material impact on the Company’s financial position. The Company is still evaluating the impact on its results of operations and does not expect the adoption of this standard to have an impact on liquidity. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (ASC Topic 350): Simplifying the Test for Goodwill Impairment , which will eliminate the requirement to calculate the implied fair value of goodwill, commonly referred to as “Step 2” in the current goodwill impairment test. An entity will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted this standard on January 1, 2020, which did not have a material impact on the Company’s consolidated financial statements. |
Revenue Recognition and Accou_2
Revenue Recognition and Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of composition of net revenues by payor type and core service lines | Three Months Ended March 31, 2020 2019 Insurance $ 114,450,697 $ 67,717,162 Government 51,244,994 38,100,765 Patient pay 25,743,343 13,680,347 Net revenue $ 191,439,034 $ 119,498,274 Three Months Ended March 31, 2020 2019 Net sales revenue: Sleep $ 68,893,964 $ 47,127,169 Supplies to the home 33,338,901 2,028,936 HME 11,579,127 10,489,009 Respiratory 2,768,427 1,279,075 Other 12,393,306 8,031,775 Total net sales revenue $ 128,973,725 $ 68,955,964 Net revenue from fixed monthly equipment reimbursements: Sleep $ 22,668,559 $ 18,056,858 HME 12,177,277 10,242,636 Respiratory 25,006,951 20,429,189 Other 2,612,522 1,813,627 Total net revenue from fixed monthly equipment reimbursements $ 62,465,309 $ 50,542,310 Total net revenue: Sleep $ 91,562,523 $ 65,184,027 Supplies to the home 33,338,901 2,028,936 HME 23,756,404 20,731,645 Respiratory 27,775,378 21,708,264 Other 15,005,828 9,845,402 Total net revenue $ 191,439,034 $ 119,498,274 |
Significant Transactions (Table
Significant Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Acquisition | |
Schedule of proforma net revenue and operating income | Three Months Ended March 31, 2020 2019 Net revenue $ 204,619,618 $ 181,724,059 Operating income (loss) $ 9,082,482 $ (4,746,892) |
Summary of results of business acquired | Three Months Ended March 31, 2020 2019 Net revenue $ 40,724,747 $ 8,626,378 Operating income (loss) $ (5,559,851) $ 1,431,523 |
Significant Acquisitions In 2020 [Member] | |
Business Acquisition | |
Summary of consideration | Cash consideration $ 106,178,017 Equity consideration 6,248,015 Deferred payments 14,250 Total $ 112,440,282 |
Summary of estimated fair values of the net assets acquired | Cash $ 337,087 Accounts receivable 19,573,766 Inventory 4,780,439 Prepaid and other current assets 1,334,306 Equipment and other fixed assets 24,406,410 Goodwill 74,016,335 Accounts payable and accrued expenses (6,494,599) Contract liabilities (2,467,643) Unfavorable lease liability (1,418,931) Capital lease obligations (1,626,888) Net assets acquired $ 112,440,282 |
Significant acquisitions in 2019 | |
Business Acquisition | |
Summary of consideration | Cash consideration $ 21,562,495 Seller note 2,000,000 Estimated contingent consideration 1,500,000 Total $ 25,062,495 |
Summary of estimated fair values of the net assets acquired | Cash $ 117,000 Accounts receivable 3,691,030 Inventory 2,468,427 Prepaid and other current assets 11,835 Equipment and other fixed assets 1,658,714 Goodwill 19,381,515 Accounts payable and accrued expenses (2,266,026) Net assets acquired $ 25,062,495 |
Equipment and Other Fixed Ass_2
Equipment and Other Fixed Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equipment and Other Fixed Assets | |
Schedule of equipment and other fixed assets | March 31, December 31, 2020 2019 Patient medical equipment $ 132,311,790 $ 112,070,831 Vehicles 6,916,895 4,461,041 Other 18,456,871 15,474,589 157,685,556 132,006,461 Less accumulated depreciation (70,384,632) (68,447,381) $ 87,300,924 $ 63,559,080 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill. | |
Schedule of change in the carrying amount of goodwill | Balance at December 31, 2019 $ 266,790,518 Acquired goodwill during the period 74,016,335 Balance at March 31, 2020 $ 340,806,853 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Assets and Liabilities | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Fair Value March 31, 2020 Assets Money market accounts $ 4,117,161 $ — $ — $ 4,117,161 Total assets measured at fair value $ 4,117,161 $ — $ — $ 4,117,161 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 7,675,000 $ 7,675,000 Acquisition-related contingent consideration-long term — — 5,050,000 5,050,000 Interest rate swap agreements-short term — 5,373,647 — 5,373,647 Interest rate swap agreements-long term — 13,675,476 — 13,675,476 Total liabilities measured at fair value $ — $ 19,049,123 $ 12,725,000 $ 31,774,123 Level 1 Level 2 Level 3 Fair Value December 31, 2019 Assets Money market accounts $ 54,014,591 $ — $ — $ 54,014,591 Total assets measured at fair value $ 54,014,591 $ — $ — $ 54,014,591 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 4,825,000 $ 4,825,000 Acquisition-related contingent consideration-long term — — 9,900,000 9,900,000 Interest rate swap agreements-short term — 2,157,324 — 2,157,324 Interest rate swap agreements-long term — 6,181,964 — 6,181,964 Total liabilities measured at fair value $ — $ 8,339,288 $ 14,725,000 $ 23,064,288 |
Reconciliation of contingent consideration liabilities related to acquisitions | Three Months Ended March 31, 2020 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 14,725,000 $ — $ — $ (2,000,000) $ 12,725,000 Three Months Ended March 31, 2019 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 15,250,000 $ 1,500,000 $ (12,000,000) $ — $ 4,750,000 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities | |
Summary of fair value of derivative financial instruments as well as their classification on the consolidated balance sheets | As of March 31, 2020 Balance Sheet Fair Value Location Asset (Liability) Derivatives designated as hedging instruments: Interest rate swap agreements Other current liabilities $ (5,373,647) Interest rate swap agreements Other long-term liabilities (13,675,476) Total derivatives designated as hedging instruments $ (19,049,123) As of December 31, 2019 Balance Sheet Fair Value Location Asset (Liability) Derivatives designated as hedging instruments: Interest rate swap agreements Other current liabilities $ (2,157,324) Interest rate swap agreements Other long-term liabilities (6,181,964) Total derivatives designated as hedging instruments $ (8,339,288) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounts Payable and Accrued Expenses | |
Schedule of components accounts payable and accrued expenses | March 31, December 31, 2020 2019 Accounts payable $ 105,194,402 $ 79,237,323 Employee related accruals 9,002,909 12,319,746 Accrued interest 4,672,868 4,021,660 Other 17,201,708 7,149,364 Total $ 136,071,887 $ 102,728,093 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt | |
Schedule of summary of long term debt | March 31, December 31, 2020 2019 Secured term loans $ 295,937,500 $ 246,250,000 Revolving credit facility 32,000,000 12,000,000 Note payable 143,500,000 143,500,000 Other 1,053,205 1,725,185 Unamortized deferred financing fees (6,322,104) (6,642,490) 466,168,601 396,832,695 Current portion (2,615,705) (1,721,132) Long-term portion $ 463,552,896 $ 395,111,563 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity | |
Nonvested Restricted Stock Shares Activity [Table Text Block] | Number of Shares of Weighted-Average Grant Date Restricted Stock Fair Value per Share Non-vested balance at January 1, 2020 901,250 $ 5.83 Granted 621,123 $ 16.35 Vested (15,417) $ 16.35 Forfeited (20,000) $ 8.11 Non-vested balance at March 31, 2020 1,486,956 $ 10.09 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Lease Commitments | |
Summary of future annual minimum payments required under lease obligations | Twelve months ended March 31, 2021 $ 20,442,099 2022 215,164 Total 20,657,263 Less amount representing interest (70,192) 20,587,071 Current portion (20,421,195) Long-term portion $ 165,876 |
Summary of minimum annual lease commitments under noncancelable leases | Twelve months ended March 31, 2021 $ 16,547,233 2022 11,746,784 2023 9,823,064 2024 8,316,930 2025 6,390,029 Thereafter 17,668,659 Total minimum payments required (a) $ 70,492,699 (a) Minimum payments have not been reduced by minimum sublease rentals of $2,712,886 due in the future under noncancelable subleases. |
Revenue Recognition and Accou_3
Revenue Recognition and Accounts Receivable (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue Recognition | |||
Total net revenues | $ 191,439,034 | $ 119,498,274 | |
Unbilled revenue | 18,064,863 | $ 8,611,272 | |
Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 128,973,725 | 68,955,964 | |
Transferred over Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 62,465,309 | 50,542,310 | |
Sleep | |||
Revenue Recognition | |||
Total net revenues | 91,562,523 | 65,184,027 | |
Sleep | Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 68,893,964 | 47,127,169 | |
Sleep | Transferred over Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 22,668,559 | 18,056,858 | |
Supplies To The Home [Member] | |||
Revenue Recognition | |||
Total net revenues | 33,338,901 | 2,028,936 | |
Supplies To The Home [Member] | Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 33,338,901 | 2,028,936 | |
HME | |||
Revenue Recognition | |||
Total net revenues | 23,756,404 | 20,731,645 | |
HME | Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 11,579,127 | 10,489,009 | |
HME | Transferred over Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 12,177,277 | 10,242,636 | |
Respiratory | |||
Revenue Recognition | |||
Total net revenues | 27,775,378 | 21,708,264 | |
Respiratory | Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 2,768,427 | 1,279,075 | |
Respiratory | Transferred over Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 25,006,951 | 20,429,189 | |
Other | |||
Revenue Recognition | |||
Total net revenues | 15,005,828 | 9,845,402 | |
Other | Transferred at Point in Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 12,393,306 | 8,031,775 | |
Other | Transferred over Time [Member] | |||
Revenue Recognition | |||
Total net revenues | 2,612,522 | 1,813,627 | |
Government payor | |||
Revenue Recognition | |||
Total net revenues | 51,244,994 | 38,100,765 | |
Insurance payor | |||
Revenue Recognition | |||
Total net revenues | 114,450,697 | 67,717,162 | |
Patient payor | |||
Revenue Recognition | |||
Total net revenues | $ 25,743,343 | $ 13,680,347 |
Significant Transactions - Cons
Significant Transactions - Consideration and Allocation (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 02, 2020 | Jan. 02, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | |
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | ||||||
Equity consideration issued in connection with an acquisition | $ 6,248,015 | |||||
Liability incurred | $ 2,000,000 | |||||
Deferred payments/contingent consideration | 1,500,000 | |||||
Receipt of working capital adjustment from 2018 acquisitions | 564,152 | |||||
Estimated fair values of net assets acquired | ||||||
Cash | 117,000 | |||||
Accounts receivables | 3,691,030 | |||||
Inventory | 2,468,427 | |||||
Prepaid and other current assets | 11,835 | |||||
Equipment and other fixed assets | 1,658,714 | |||||
Goodwill | 340,806,853 | 19,381,515 | $ 266,790,518 | |||
Accounts payable and accrued expenses | (2,266,026) | |||||
Net assets acquired | 25,062,495 | |||||
Significant Acquisitions In 2020 [Member] | ||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | ||||||
Cash payment | 106,178,017 | |||||
Equity consideration issued in connection with an acquisition | 6,248,015 | |||||
Deferred payments/contingent consideration | 14,250 | |||||
Total consideration | 112,440,282 | |||||
Estimated fair values of net assets acquired | ||||||
Cash | 337,087 | |||||
Accounts receivables | 19,573,766 | |||||
Inventory | 4,780,439 | |||||
Prepaid and other current assets | 1,334,306 | |||||
Equipment and other fixed assets | 24,406,410 | |||||
Goodwill | 74,016,335 | |||||
Accounts payable and accrued expenses | (6,494,599) | |||||
Contract liabilities | (2,467,643) | |||||
Unfavorable lease liability | (1,418,931) | |||||
Capital lease obligations | (1,626,888) | |||||
Net assets acquired | $ 112,440,282 | |||||
Patient Care Solutions (PCS) [Member] | ||||||
Business Acquisition | ||||||
Interest acquired, as a percent | 100.00% | |||||
Estimated fair values of net assets acquired | ||||||
Accounts receivables | $ 16,300,000 | |||||
Equipment and other fixed assets | 500,000 | |||||
Goodwill | 1,400,000 | |||||
Accounts payable and accrued expenses | $ (3,200,000) | |||||
Advanced Home Care Inc [Member] | ||||||
Business Acquisition | ||||||
Potential contingent payment | $ 9,000,000 | |||||
Estimated fair values of net assets acquired | ||||||
Equipment and other fixed assets | 18,500,000 | |||||
Other assets | 1,500,000 | |||||
Goodwill | $ 38,500,000 | |||||
Significant acquisitions in 2019 | ||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | ||||||
Cash payment | 21,562,495 | |||||
Liability incurred | 2,000,000 | |||||
Deferred payments/contingent consideration | 1,500,000 | |||||
Total consideration | $ 25,062,495 | |||||
Gould’s | ||||||
Business Acquisition | ||||||
Interest acquired, as a percent | 100.00% | |||||
Estimated fair values of net assets acquired | ||||||
Accounts receivables | $ 3,700,000 | |||||
Inventory | 2,400,000 | |||||
Equipment and other fixed assets | 1,700,000 | |||||
Goodwill | 18,600,000 | |||||
Accounts payable and accrued expenses | $ (2,100,000) |
Significant Transactions - Pro-
Significant Transactions - Pro-forma Financial Information and Results of Business Acquired (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pro-forma financial information: | ||
Pro-forma net revenue | $ 204,619,618 | $ 181,724,059 |
Pro-forma operating income | 9,082,482 | (4,746,892) |
Net revenue since acquisition date | 40,724,747 | 8,626,378 |
Operating income (loss) since acquisition date | $ (5,559,851) | $ 1,431,523 |
Significant Transactions - Busi
Significant Transactions - Business Combination (Details) - item | 3 Months Ended | |
Mar. 31, 2020 | Nov. 08, 2019 | |
Adapt Health Holdings LLC | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Controlling interest, as a percent | 56.00% | |
Class A Common Stock | Shareholders of Adapt Health Holdings LLC | Adapt Health Holdings LLC | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Noncontrolling interest, as a percent | 41.00% | 44.00% |
Class B Common Stock | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Number of votes per share | 1 |
Equipment and Other Fixed Ass_3
Equipment and Other Fixed Assets (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | $ 157,685,556 | $ 132,006,461 |
Less accumulated depreciation | (70,384,632) | (68,447,381) |
Equipment and other fixed assets, net | 87,300,924 | 63,559,080 |
Patient medical equipment | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | 132,311,790 | 112,070,831 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | 6,916,895 | 4,461,041 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | $ 18,456,871 | $ 15,474,589 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net carrying amount | ||
Beginning balance | $ 266,790,518 | |
Acquired goodwill during the period | 74,016,335 | |
Ending balance | 340,806,853 | $ 19,381,515 |
Goodwill, Impairment Loss | $ 0 | $ 0 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Valuation of Financial Assets and Liabilities (Details) - Recurring - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Total assets measured at fair value | $ 4,117,161 | $ 54,014,591 |
Liabilities | ||
Total liabilities measured at fair value | 31,774,123 | 23,064,288 |
Acquisition-related contingent consideration obligations-short term | ||
Liabilities | ||
Total liabilities measured at fair value | 7,675,000 | 4,825,000 |
Acquisition-related contingent consideration obligations-long term | ||
Liabilities | ||
Total liabilities measured at fair value | 5,050,000 | 9,900,000 |
Interest Rate Swap Short-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 5,373,647 | 2,157,324 |
Interest Rate Swap Long-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 13,675,476 | 6,181,964 |
Money market accounts | ||
Assets | ||
Total assets measured at fair value | 4,117,161 | 54,014,591 |
Level 1 | ||
Assets | ||
Total assets measured at fair value | 4,117,161 | 54,014,591 |
Level 1 | Money market accounts | ||
Assets | ||
Total assets measured at fair value | 4,117,161 | 54,014,591 |
Level 2 | ||
Liabilities | ||
Total liabilities measured at fair value | 19,049,123 | 8,339,288 |
Level 2 | Interest Rate Swap Short-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 5,373,647 | 2,157,324 |
Level 2 | Interest Rate Swap Long-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 13,675,476 | 6,181,964 |
Level 3 | ||
Liabilities | ||
Total liabilities measured at fair value | 12,725,000 | 14,725,000 |
Level 3 | Acquisition-related contingent consideration obligations-short term | ||
Liabilities | ||
Total liabilities measured at fair value | 7,675,000 | 4,825,000 |
Level 3 | Acquisition-related contingent consideration obligations-long term | ||
Liabilities | ||
Total liabilities measured at fair value | $ 5,050,000 | $ 9,900,000 |
Fair Value - Contingent Conside
Fair Value - Contingent Consideration (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | $ 14,725,000 | $ 15,250,000 |
Additions | 1,500,000 | |
Payment of contingent consideration | (12,000,000) | |
Gain | (2,000,000) | |
Contingent consideration liability at end of period | 12,725,000 | $ 4,750,000 |
Level 3 | Other current liabilities | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | 4,825,000 | |
Contingent consideration liability at end of period | 7,675,000 | |
Level 3 | Other long-term liabilities | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | 9,900,000 | |
Contingent consideration liability at end of period | $ 5,050,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Financial instruments (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives designated as hedging instruments | ||
Derivative financial instruments | ||
Fair Value Liability | $ (19,049,123) | |
Derivatives designated as hedging instruments | Interest rate swap agreements | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount | 250,000,000 | $ 250,000,000 |
Derivatives designated as hedging instruments | Interest rate swap agreements | Other current liabilities | ||
Derivative financial instruments | ||
Fair Value Liability | (5,373,647) | |
Derivatives designated as hedging instruments | Interest rate swap agreements | Other long-term liabilities | ||
Derivative financial instruments | ||
Fair Value Liability | $ (13,675,476) | |
Derivatives not designated as hedging instruments | ||
Derivative financial instruments | ||
Fair Value Liability | (8,339,288) | |
Derivatives not designated as hedging instruments | Interest rate swap agreements | Prepaid and other current assets | ||
Derivative financial instruments | ||
Fair Value Liability | (2,157,324) | |
Derivatives not designated as hedging instruments | Interest rate swap agreements | Other current liabilities | ||
Derivative financial instruments | ||
Fair Value Liability | $ (6,181,964) |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effect on Accumulated Other Comprehensive Income (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Derivative Instruments and Hedging Activities | |
Amount of Gain or (Loss) Recognized in OCI on Derivative | $ 10,709,835 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | $ 707,381 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Not designated (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Interest rate swap agreements | Interest expense | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 2,702,400 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 105,194,402 | $ 79,237,323 |
Employee related accruals | 9,002,909 | 12,319,746 |
Accrued interest | 4,672,868 | 4,021,660 |
Other | 17,201,708 | 7,149,364 |
Accounts payable and accrued expenses | $ 136,071,887 | $ 102,728,093 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||||
Unamortized deferred financing fees | $ (6,322,104) | $ (6,642,490) | ||
Debt, Net | 466,168,601 | 396,832,695 | ||
Current portion | (2,615,705) | (1,721,132) | ||
Long-term Debt, Excluding Current Maturities, Total | 463,552,896 | 395,111,563 | ||
Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 425,000,000 | |||
Secured term loans | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 295,937,500 | 246,250,000 | ||
Initial/credit facility term loan | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 246,250,000 | |||
Borrowing capacity | 300,000,000 | |||
Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 49,687,500 | |||
Borrowing capacity | $ 100,000,000 | 50,000,000 | ||
Revolving credit facility/revolver | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 32,000,000 | 12,000,000 | ||
Borrowing capacity | $ 75,000,000 | |||
New Promissory Note | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 143,500,000 | 143,500,000 | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | $ 1,053,205 | $ 1,725,185 |
Debt - Long term debt (Details)
Debt - Long term debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Nov. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Unused fee (Percentage) | 0.50% | ||||
Repayment of credit facility | $ 151,875,000 | ||||
Distributions to members | 250,000,000 | $ 250,000,000 | |||
Redemption of members' interest | 3,713,455 | 3,713,455 | |||
Payments of Debt Issuance Costs | 9,027,753 | ||||
Write-off of deferred financing costs | 2,121,451 | 2,121,451 | |||
Repayment of loan | $ 984,480 | 151,916,121 | |||
Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | 425,000,000 | 425,000,000 | |||
Secured term loans | |||||
Debt Instrument [Line Items] | |||||
Debt balance outstanding | 295,937,500 | $ 246,250,000 | |||
Initial/credit facility term loan | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | 300,000,000 | 300,000,000 | |||
Repayment of loan | $ 50,000,000 | ||||
Debt balance outstanding | $ 246,250,000 | ||||
Credit facility Interest rate | 4.35% | ||||
Delayed Draw Term Loan | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 100,000,000 | $ 50,000,000 | $ 50,000,000 | ||
Face amount | $ 50,000,000 | ||||
Debt balance outstanding | $ 49,687,500 | ||||
Credit facility Interest rate | 4.11% | ||||
Debt term | 24 months | 24 months | |||
Delayed Draw Term Loan | First Specified Repayment Period [Member] | |||||
Debt Instrument [Line Items] | |||||
Quarterly principal repayments | $ 312,500 | ||||
Delayed Draw Term Loan | Second Specified Repayment Period [Member] | |||||
Debt Instrument [Line Items] | |||||
Quarterly principal repayments | 625,000 | ||||
Revolving credit facility/revolver | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 75,000,000 | $ 75,000,000 | |||
Face amount | $ 20,000,000 | ||||
Debt balance outstanding | $ 32,000,000 | $ 12,000,000 | |||
Credit facility Interest rate | 4.35% | ||||
Remaining maximum borrowings available | $ 40,503,482 | ||||
Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt balance outstanding | $ 2,496,518 |
Debt - Notes (Details)
Debt - Notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Proceeds from issuance of members' interests | $ 20,000,000 | $ 20,000,000 | ||
Current tax liability associated with recapitalization | $ 5,870,000 | $ 5,870,000 | ||
New Promissory Note | Period starting on the closing date and ending on the seventh anniversary | ||||
Debt Instrument [Line Items] | ||||
Debt Interest rate | 12.00% | |||
Interest rate payable in cash | 6.00% | |||
Interest rate payable in kind | 6.00% | |||
New Promissory Note | Period Starting On Closing Date And Ending On Third Anniversary [Member] | ||||
Debt Instrument [Line Items] | ||||
Make-whole premium, as a percent | 10.00% | |||
New Promissory Note | Period Starting On Third Anniversary And Ending Prior To Fourth Anniversary [Member] | ||||
Debt Instrument [Line Items] | ||||
Make-whole premium, as a percent | 5.00% | |||
New Promissory Note | Minimum | Period starting on the day after the seventh anniversary of the closing date and ending on the maturity date | ||||
Debt Instrument [Line Items] | ||||
Debt Interest rate | 15.00% | |||
New Promissory Note | Twelve-month LIBOR | Minimum | Period starting on the day after the seventh anniversary of the closing date and ending on the maturity date | ||||
Debt Instrument [Line Items] | ||||
Rate margin | 12.00% | |||
Promissory Note With Investor [Member] | ||||
Debt Instrument [Line Items] | ||||
Face amount | 100,000,000 | 100,000,000 | ||
Promissory Note From Members Interest [Member] | ||||
Debt Instrument [Line Items] | ||||
Face amount | $ 43,500,000 | $ 43,500,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Nov. 08, 2019 | |
Class of Stock [Line Items] | ||||
Warrants outstanding | 8,728,036 | |||
Warrants exercised | 3,938,630 | |||
Shares issued for warrants exercised | 1,092,468 | |||
Price period | 30 days | |||
Earn-out consideration, shares per annual installment | 1,000,000 | |||
Earn-out consideration, total shares | 3,000,000 | |||
Proceeds from issuance of members' interests | $ 20,000,000 | $ 20,000,000 | ||
Adapt Health Holdings LLC | ||||
Class of Stock [Line Items] | ||||
Warrants outstanding | 12,666,666 | |||
Common stock for each warrant exercised | 1 | |||
Warrant exercisable price | $ 11.50 |
Stockholders' Equity - Equity_b
Stockholders' Equity - Equity‑based Compensation (Details) - 2019 Incentive Plan | 1 Months Ended |
Jun. 30, 2019USD ($) | |
Equity‑based Compensation | |
Vesting period | 1 year |
Grant date fair value | $ 4,511,120 |
Tranche 1 | |
Equity‑based Compensation | |
Vesting percentage | 50.00% |
Tranche 2 | |
Equity‑based Compensation | |
Vesting percentage | 50.00% |
Stockholders' Equity - Shares a
Stockholders' Equity - Shares authorized and common stock awards (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Nov. 07, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 2,222,609 | $ 5,223,108 | |
2019 Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for issuance | 8,000,000 |
Stockholders' Equity - Options
Stockholders' Equity - Options activity and assumptions for fair value (Details) - Options - USD ($) | Nov. 21, 2019 | Mar. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 3,416,666 | |
Options granted, exercise price | $ 11.50 | |
Grant date value | $ 7,248,653 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted stock (Details) - USD ($) | Mar. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 2,222,609 | $ 5,223,108 | |
Single Employee [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 300,000 | ||
Vesting percentage | 25.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted, shares | 300,000 | ||
Various Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 321,123 | ||
Grant date fair value | $ 5,250,361 | ||
Equity-based compensation expense | 252,068 | ||
Compensation cost, portion to be recognized over service period | $ 4,998,293 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted, shares | 321,123 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 621,123 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested balance at beginning of period | 901,250 | ||
Granted, shares | 621,123 | ||
Vested, shares | (15,417) | ||
Forfeited, shares | (20,000) | ||
Non-vested balance at end of period | 1,486,956 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Non-vested, grant date fair value at beginning of period | $ 5.83 | ||
Granted, grant date fair value | 16.35 | ||
Vested, grant date fair value | 16.35 | ||
Forfeited, grant date fair value | 8.11 | ||
Non-vested, grant date fair value at end of period | $ 10.09 | ||
Restricted Stock | Single Employee [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date fair value | $ 4,905,000 | ||
Tranche 1 | Single Employee [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 250,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted, shares | 250,000 | ||
Tranche 1 | Various Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 15,417 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted, shares | 15,417 | ||
Tranche 2 | Single Employee [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, shares | 50,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted, shares | 50,000 | ||
Tranche 2 | Various Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% |
Stockholders' Equity - Compensa
Stockholders' Equity - Compensation expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation expense | $ 2,222,609 | $ 5,223,108 |
Accelerated vesting cost | 4,894,720 | |
Unrecognized compensation expense | $ 20,025,505 | |
Recognition period | 2 years 9 months 18 days | |
General and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation expense | $ 1,671,923 | |
Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity-based compensation expense | $ 550,686 | |
2019 Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock are available for issuance | 3,037,761 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) | 3 Months Ended |
Mar. 31, 2019shares | |
Earnings per share | |
Anti-dilutive securities excluded (in shares) | 0 |
Leases - Capital leases (Detail
Leases - Capital leases (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Capital Leased Assets [Line Items] | |||
Interest expense related to capital leases | $ 16,305 | $ 35,083 | |
Future annual minimum payments required under lease obligations | |||
2021 | 20,442,099 | ||
2022 | 215,164 | ||
Total | 20,657,263 | ||
Less amount representing interest | (70,192) | ||
Capital lease obligations | 20,587,071 | ||
Current portion | (20,421,195) | $ (19,749,854) | |
Noncurrent | 165,876 | ||
Equipment under capital leases | |||
Equipment under capital leases | |||
Cost of equipment under capital leases | 40,600,000 | 39,100,000 | |
Accumulated depreciation of equipment under capital leases | $ 12,200,000 | $ 11,700,000 |
Leases - Operating (Details)
Leases - Operating (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Lease Commitments | |||
Deferred rent | $ 1,180,874 | $ 1,124,702 | |
Rent expense | 3,505,955 | $ 2,351,566 | |
Minimum annual lease commitments under noncancelable leases | |||
2021 | 16,547,233 | ||
2022 | 11,746,784 | ||
2023 | 9,823,064 | ||
2024 | 8,316,930 | ||
2025 | 6,390,029 | ||
Thereafter | 17,668,659 | ||
Lease commitments | 70,492,699 | ||
Minimum sublease rentals | $ 2,712,886 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Taxes | |||
Income Tax Expense (Benefit) | $ 1,106,722 | $ 2,418,441 | |
Uncertain tax positions | $ 0 | $ 0 | |
Tax Receivable Agreement, payout percentage | 85.00% | ||
Increase in liability due to additional exchanges | $ 4,000,000 | ||
Increase in deferred tax asset | 6,500,000 | ||
Liability related to TRA | $ 14,800,000 | $ 10,800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies. | ||
Accrual related to lawsuits, claims, investigations and proceedings | $ 0 | $ 0 |
Agreement Term | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2020USD ($) | Mar. 31, 2020USD ($)item | Mar. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||
Proceeds from sale of investment | $ 2,045,701 | ||
Investor | |||
Related Party Transaction [Line Items] | |||
Loan from related party | $ 143,500,000 | ||
Vendor one | |||
Related Party Transaction [Line Items] | |||
Number of executives | item | 2 | ||
Ownership interest, as a percent | 1.00% | ||
Expense for related party | $ 1,456,501 | $ 779,110 | |
Carrying value | $ 1,455,000 | ||
Proceeds from sale of investment | $ 2,045,701 | ||
Gain on sale of investment | $ 590,701 | ||
Vendor two | |||
Related Party Transaction [Line Items] | |||
Number of executives | item | 2 | ||
Ownership interest, as a percent | 1.00% | ||
Expense for related party | $ 544,449 | $ 450,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | |
Apr. 30, 2020USD ($)itemshares | Mar. 31, 2019USD ($) | |
Subsequent Event | ||
Repayment of credit facility | $ 151,875,000 | |
Subsequent Event | ||
Subsequent Event | ||
CARES Act Recoupable Advance Payment | $ 47,000,000 | |
CARES Act Provider Relief Funds | $ 17,000,000 | |
CARES Act FICA Tax Deferral, Number Of Installments | item | 2 | |
Repayment of credit facility | $ 20,000,000 | |
Warrants exercised | shares | 109,983 | |
Proceeds from exercise of warrants | $ 1,264,804 | |
Subsequent Event | Class A Common Stock | ||
Subsequent Event | ||
Number of shares converted | shares | 1,953,549 | |
Shares obtained through exercise of warrants | shares | 109,983 | |
Subsequent Event | Class B Common Stock | ||
Subsequent Event | ||
Number of shares converted | shares | 1,953,549 |