Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 001-38399 | |
Entity Registrant Name | AdaptHealth Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3677704 | |
Entity Address, Address Line One | 220 West Germantown Pike | |
Entity Address, Address Line Two | Suite 250 | |
Entity Address, City or Town | Plymouth Meeting | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19462 | |
City Area Code | 610 | |
Local Phone Number | 630-6357 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Trading Symbol | AHCO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001725255 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 56,334,882 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,978,020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 110,587 | $ 76,878 |
Accounts receivable | 119,243 | 78,619 |
Inventory | 24,444 | 13,239 |
Prepaid and other current assets | 9,367 | 12,679 |
Total current assets | 263,641 | 181,415 |
Equipment and other fixed assets, net | 83,216 | 63,559 |
Goodwill | 342,851 | 266,791 |
Other assets | 7,297 | 6,851 |
Deferred tax assets | 42,304 | 27,505 |
Total Assets | 739,309 | 546,121 |
Current liabilities: | ||
Accounts payable and accrued expenses | 142,501 | 102,728 |
Current portion of capital lease obligations | 22,198 | 19,750 |
Current portion of long-term debt | 2,584 | 1,721 |
Contract liabilities | 13,463 | 9,556 |
Other liabilities | 76,361 | 17,139 |
Total current liabilities | 257,107 | 150,894 |
Long-term debt, less current portion | 443,248 | 395,112 |
Other long-term liabilities | 45,748 | 29,364 |
Total Liabilities | 746,103 | 575,370 |
Commitments and contingencies (note 14) | ||
Stockholders' Equity (Deficit) | ||
Preferred Stock, par value of $0.0001 per share, 5,000,000 shares authorized; 158,105 and 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 1 | |
Additional paid-in capital | 37,614 | 11,252 |
Accumulated deficit | (23,335) | (27,210) |
Accumulated other comprehensive income | (5,795) | 1,431 |
Total stockholders' deficit attributable to AdaptHealth Corp. | 8,491 | (14,520) |
Noncontrolling interest in subsidiaries | (15,285) | (14,729) |
Total Stockholders' Equity (Deficit) | (6,794) | (29,249) |
Total Liabilities and Stockholders' Deficit | 739,309 | 546,121 |
Class A Common Stock | ||
Stockholders' Equity (Deficit) | ||
Common stock value | 3 | 4 |
Class B Common Stock | ||
Stockholders' Equity (Deficit) | ||
Common stock value | $ 3 | $ 3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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) | 158,105 | 0 |
Preferred stock, shares outstanding (in shares) | 158,105 | 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) | 30,664,560 | 40,816,292 |
Common stock, shares outstanding (in shares) | 30,664,560 | 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) | 28,508,750 | 31,563,799 |
Common stock, shares outstanding (in shares) | 28,508,750 | 31,563,799 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Net revenue | $ 232,116 | $ 124,154 | $ 423,555 | $ 243,652 |
Revenue, Product and Service [Extensible List] | us-gaap:HealthCarePatientServiceMember | us-gaap:HealthCarePatientServiceMember | ||
Costs and expenses: | ||||
Cost of net revenue | 197,517 | 102,150 | $ 364,057 | $ 202,377 |
Cost, Product and Service [Extensible List] | us-gaap:HealthCarePatientServiceMember | us-gaap:HealthCarePatientServiceMember | ||
General and administrative expenses | 17,092 | 6,335 | $ 31,439 | $ 19,418 |
Depreciation, excluding patient equipment depreciation | 1,037 | 758 | 2,278 | 1,599 |
Total costs and expenses | 215,646 | 109,243 | 397,774 | 223,394 |
Operating income | 16,470 | 14,911 | 25,781 | 20,258 |
Interest expense, net | 7,482 | 14,635 | 15,420 | 20,895 |
Loss on extinguishment of debt | 2,121 | |||
Income (loss) before income taxes | 8,988 | 276 | 10,361 | (2,758) |
Income tax expense | 1,819 | 1,998 | 2,926 | 4,417 |
Net income (loss) | 7,169 | (1,722) | 7,435 | (7,175) |
Income attributable to noncontrolling interest | 3,136 | 361 | 3,560 | 709 |
Net income (loss) attributable to AdaptHealth Corp. | $ 4,033 | $ (2,083) | $ 3,875 | $ (7,884) |
Net income (loss) per common share: | ||||
Basic | $ 0.09 | $ (0.10) | $ 0.09 | $ (0.44) |
Diluted | $ 0.08 | $ (0.10) | $ 0.08 | $ (0.44) |
Weighted average shares outstanding for net income (loss) attributable to AdaptHealth Corp.: | ||||
Basic | 44,508 | 21,721 | 43,242 | 17,814 |
Diluted | 47,834 | 21,721 | 46,100 | 17,814 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Consolidated Statements of Comprehensive Income (Loss) | ||||
Net income (loss) | $ 7,169 | $ (1,722) | $ 7,435 | $ (7,175) |
Other comprehensive loss: | ||||
Interest rate swap agreements, inclusive of reclassification adjustment | (1,066) | (12,483) | ||
Comprehensive income (loss) | 6,103 | (1,722) | (5,048) | (7,175) |
Net income attributable to noncontrolling interests | 3,136 | 361 | 3,560 | 709 |
Comprehensive income (loss) attributable to AdaptHealth Corp. | $ 2,967 | $ (2,083) | $ (8,608) | $ (7,884) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) / Members' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Class A Common StockCommon Stock | Class B Common StockCommon Stock | Members interest | Preferred Stock | 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 | $ (13,371) | $ 2,865 | $ 102,768 | |||||
Limited Liability Company (LLC) Members' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Issuance of members' interest, net of offering costs of $837 | 19,163 | 19,163 | |||||||
Redemption of members' interest | (2,112) | (1,601) | (3,713) | ||||||
Distributions to members | (250,000) | (250,000) | |||||||
Equity-based compensation | 5,223 | 5,223 | |||||||
Members equity, Ending Balance at Mar. 31, 2019 | 135,548 | (270,773) | 3,213 | (132,012) | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Net income (loss) | (5,801) | 348 | (5,453) | ||||||
Members equity, Beginning Balance at Dec. 31, 2018 | 113,274 | (13,371) | 2,865 | 102,768 | |||||
Members equity, Ending Balance at Jun. 30, 2019 | 135,731 | (272,856) | 2,236 | (134,889) | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Net income (loss) | $ (7,175) | ||||||||
Effects of the DFB Merger: | |||||||||
Stock Issued During Period, Shares, New Issues | 1,000 | ||||||||
Members equity, Beginning Balance at Mar. 31, 2019 | 135,548 | (270,773) | 3,213 | $ (132,012) | |||||
Limited Liability Company (LLC) Members' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Equity-based compensation | 183 | 183 | |||||||
Distributions to noncontrolling interest | (1,338) | (1,338) | |||||||
Members equity, Ending Balance at Jun. 30, 2019 | $ 135,731 | (272,856) | 2,236 | (134,889) | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Distributions to noncontrolling interest | (1,338) | (1,338) | |||||||
Net income (loss) | (2,083) | 361 | (1,722) | ||||||
Balance at beginning of period at Dec. 31, 2019 | $ 4 | $ 3 | $ 11,252 | (27,210) | $ 1,431 | (14,729) | (29,249) | ||
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 40,816 | 31,564 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Issuance of common stock for acquisitions | 6,248 | 6,248 | |||||||
Issuance of common stock for acquisitions (in shares) | 387 | ||||||||
Exchange of Class B Common Stock to Class A Common Stock | (361) | 361 | |||||||
Exchange of Class B Common Stock to Class A Common Stock (in shares) | 1,000 | (1,000) | |||||||
Cashless exercise of warrants (in shares) | 1,092 | ||||||||
Equity-based compensation | 2,223 | 2,223 | |||||||
Equity-based compensation (in shares) | 59 | ||||||||
Net income (loss) | (158) | 424 | 266 | ||||||
Equity activity resulting from Tax Receivable Agreement | 2,482 | 2,482 | |||||||
Change in fair value of interest rate swaps, net of reclassification adjustment | (6,570) | (4,847) | (11,417) | ||||||
Balance at end of period at Mar. 31, 2020 | $ 4 | $ 3 | 21,844 | (27,368) | (5,139) | (18,791) | (29,447) | ||
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 43,354 | 30,564 | |||||||
Balance at beginning of period at Dec. 31, 2019 | $ 4 | $ 3 | 11,252 | (27,210) | 1,431 | (14,729) | $ (29,249) | ||
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 40,816 | 31,564 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Cashless exercise of warrants (in shares) | 1,100 | ||||||||
Net income (loss) | $ 7,435 | ||||||||
Balance at end of period at Jun. 30, 2020 | $ 3 | $ 3 | $ 1 | 37,614 | (23,335) | (5,795) | (15,285) | (6,794) | |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 30,665 | 28,509 | 158 | ||||||
Limited Liability Company (LLC) Members' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Distributions to noncontrolling interest | (800) | (800) | |||||||
Balance at beginning of period at Mar. 31, 2020 | $ 4 | $ 3 | 21,844 | (27,368) | (5,139) | (18,791) | (29,447) | ||
Shares, Outstanding, Beginning Balance at Mar. 31, 2020 | 43,354 | 30,564 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||||||||
Exchange of Class B Common Stock to Class A Common Stock | (1,580) | 1,580 | |||||||
Exchange of Class B Common Stock to Class A Common Stock (in shares) | 2,055 | (2,055) | |||||||
Exchange of Class A Common Stock for Series B-1 Preferred Stock | $ (2) | $ 1 | 1 | ||||||
Exchange of Class A Common Stock for Series B-1 Preferred Stock (in shares) | (15,810) | 158 | |||||||
Distributions to noncontrolling interest | (800) | (800) | |||||||
Cashless exercise of warrants | $ 1 | 11,882 | 11,883 | ||||||
Cashless exercise of warrants (in shares) | 1,034 | ||||||||
Equity-based compensation | 3,244 | 3,244 | |||||||
Equity-based compensation (in shares) | 32 | ||||||||
Net income (loss) | 4,033 | 3,136 | 7,169 | ||||||
Equity activity resulting from Tax Receivable Agreement | 2,223 | 2,223 | |||||||
Change in fair value of interest rate swaps, net of reclassification adjustment | (656) | (410) | (1,066) | ||||||
Balance at end of period at Jun. 30, 2020 | $ 3 | $ 3 | $ 1 | $ 37,614 | $ (23,335) | $ (5,795) | $ (15,285) | $ (6,794) | |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 30,665 | 28,509 | 158 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Deficit) / Members' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Jun. 30, 2019 | |
Consolidated Statements of Changes in Stockholders' Equity (Deficit) / Members' Equity (Deficit) | ||
Issuance of members' interest, offering costs | $ 837 | $ 837 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 7,435 | $ (7,175) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation, including patient equipment depreciation | 35,114 | 28,206 |
Equity-based compensation | 5,467 | 5,406 |
Deferred income tax | 1,128 | 2,874 |
Change in fair value of interest rate swaps, net of reclassification adjustment | (1,415) | 9,437 |
Change in fair value of contingent consideration | (2,900) | |
Payment of contingent consideration - operating | (1,000) | |
Amortization of deferred financing costs | 783 | 588 |
Write-off of deferred financing costs | 2,121 | |
Gain on sale of investment | (591) | |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (20,506) | (12,986) |
Inventory | (6,792) | (2,245) |
Prepaid and other assets | 3,603 | (2,558) |
Accounts payable and accrued expenses and other current liabilities | 90,682 | 2,368 |
Net cash provided by operating activities | 111,008 | 26,036 |
Cash flows from investing activities: | ||
Payments for business acquisitions, net of cash acquired | (107,463) | (27,969) |
Payments for investments in cost-method companies | (1,000) | |
Purchases of equipment and other fixed assets | (10,915) | (10,741) |
Proceeds from sale of investment | 2,046 | |
Net cash used in investing activities | (117,332) | (38,710) |
Cash flows from financing activities: | ||
Proceeds from borrowings on long-term debt and lines of credit | 70,000 | 319,500 |
Repayments on long-term debt and lines of credit | (21,641) | (153,826) |
Payments on capital leases | (19,409) | (19,111) |
Proceeds from exercise of warrants | 11,883 | |
Distributions to noncontrolling interest | (800) | (1,338) |
Proceeds from issuance of promissory note payable | 100,000 | |
Proceeds from issuance of members' interests | 20,000 | |
Payments for equity issuance costs | (837) | |
Payments of deferred financing costs | (9,028) | |
Distributions to members | (250,000) | |
Payment of contingent consideration - financing | (12,000) | |
Payments for redemption of members' interest | (3,713) | |
Net cash provided by (used in) financing activities | 40,033 | (10,353) |
Net increase (decrease) in cash and cash equivalents | 33,709 | (23,027) |
Cash and cash equivalents - beginning of the period | 76,878 | 25,186 |
Cash and cash equivalents - end of the period | 110,587 | 2,159 |
Supplemental disclosures: | ||
Cash paid for interest | 15,488 | 7,351 |
Cash paid for income taxes | 2,155 | 438 |
Noncash investing and financing activities: | ||
Equipment acquired under capital lease obligations | 20,632 | 18,038 |
Unpaid equipment and other fixed asset purchases at end of year | 6,990 | 8,427 |
Equity consideration issued in connection with an acquisition | $ 6,248 | |
Contingent purchase price in connection with acquisitions | 1,500 | |
Seller note issued in connection with an acquisition | $ 2,000 |
General Information
General Information | 6 Months Ended |
Jun. 30, 2020 | |
General Information | |
General Information | (1) General Information 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 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 .. |
Revenue Recognition and Account
Revenue Recognition and Accounts Receivable | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Insurance $ 148,165 $ 68,909 $ 262,616 $ 136,626 Government 60,513 40,578 111,758 78,679 Patient pay 23,438 14,667 49,181 28,347 Net revenue $ 232,116 $ 124,154 $ 423,555 $ 243,652 The composition of net revenue by core service lines for the three and six months ended June 30, 2020 and 2019 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net sales revenue: Sleep $ 84,421 $ 50,433 $ 153,315 $ 97,560 Supplies to the home 34,240 1,915 67,579 3,944 HME 12,727 10,236 24,306 20,725 Respiratory 18,114 1,445 20,882 2,724 Other 11,463 8,967 23,856 16,999 Total net sales revenue $ 160,965 $ 72,996 $ 289,938 $ 141,952 Net revenue from fixed monthly equipment reimbursements: Sleep $ 22,644 $ 18,944 $ 45,313 $ 37,001 HME 13,262 10,202 25,439 20,445 Respiratory 30,856 20,009 55,863 40,438 Other 4,389 2,003 7,002 3,816 Total net revenue from fixed monthly equipment reimbursements $ 71,151 $ 51,158 $ 133,617 $ 101,700 Total net revenue: Sleep $ 107,065 $ 69,377 $ 198,628 $ 134,561 Supplies to the home 34,240 1,915 67,579 3,944 HME 25,989 20,438 49,745 41,170 Respiratory 48,970 21,454 76,745 43,162 Other 15,852 10,970 30,858 20,815 Total net revenue $ 232,116 $ 124,154 $ 423,555 $ 243,652 In response to the COVID-19 pandemic and the National Emergency Declaration, dated March 13, 2020, the Company increased its cash liquidity by, among other things, seeking recoupable advance payments of approximately $45.8 million made available by the Centers for Medicare & Medicaid Services(CMS) under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) legislation, which was received in April 2020. The recoupment of such amount by CMS is expected to begin in the third quarter of 2020 and will be applied to services provided and revenue recognized during the period in which the recoupment occurs. In addition, in April 2020, the Company received distributions of the CARES Act provider relief funds of approximately $17.2 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. The Company is currently in the process of determining how much of the CARES Act provider relief funds it will be entitled to based on the terms and conditions of the program. The total of the recoupable advance payments and the CARES Act provider relief funds of approximately $63 million is included in other current liabilities in the consolidated balance sheets as of June 30, 2020. 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 $16.8 million and $8.6 million as of June 30, 2020 and December 31, 2019, respectively. |
Significant Transactions
Significant Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Significant Transactions [Abstract] | |
Significant Transactions | (3) Significant Transactions Acquisitions During the six months ended June 30, 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. Six Months Ended June 30, 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 $18.4 million to equipment and other fixed assets, $2.7 million to inventory, $39.6 million to goodwill, and $2.2 million of net liabilities to 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 contingent consideration will be completed during the second half 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 six months ended June 30, 2020. The following table summarizes the consideration paid for the acquisitions during the six months ended June 30, 2020 (in thousands): Cash consideration $ 108,199 Equity consideration 6,248 Deferred payments 33 Total $ 114,480 The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date 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 remainder 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 six months ended June 30, 2020 (in thousands): Cash $ 736 Accounts receivable 20,118 Inventory 4,413 Prepaid and other current assets 1,334 Equipment and other fixed assets 25,264 Goodwill 76,060 Accounts payable and accrued expenses (6,493) Contract liabilities (3,906) Unfavorable lease liability (1,419) Capital lease obligations (1,627) Net assets acquired $ 114,480 Six Months Ended June 30, 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 six months ended June 30, 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, $19.1 million to goodwill, and $2.6 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 six months ended June 30, 2019. The following table summarizes the consideration paid for the acquisitions during the six months ended June 30, 2019 (in thousands): Cash consideration $ 27,768 Seller note 2,000 Estimated contingent consideration 1,500 Total $ 31,268 The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date 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 six months ended June 30, 2019 (in thousands): Cash $ 117 Accounts receivable 3,691 Inventory 3,610 Prepaid and other current assets 12 Equipment and other fixed assets 5,229 Other assets 110 Goodwill 21,951 Contract liabilities (1,186) Accounts payable and accrued expenses (2,266) Net assets acquired $ 31,268 The Company finalized the valuation of the fair value of the net assets acquired for these acquisitions during the remainder of 2019. During the six months ended June 30, 2019, the Company paid net cash of $318,000 relating to working capital adjustments associated with businesses that were acquired during 2018 which was recorded as an increase 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. (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenue $ 245,297 $ 184,190 $ 436,736 $ 365,914 Operating income $ 16,242 $ 5,719 $ 25,553 $ 972 The lower pro-forma operating income for the three and six months ended June 30, 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 for the significant acquisitions described above that is included in the Company’s consolidated statements of operations for the three and six months ended June 30, 2020 and 2019: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenue $ 53,002 $ 8,969 $ 93,727 $ 17,595 Operating income (loss) $ (2,061) $ 1,981 $ (7,621) $ 3,413 The operating loss for the three and six months ended June 30, 2020 is primarily due to operating losses related to PCS. Business Combination As discussed in Note 1, General Information 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 38% direct noncontrolling economic interest in AdaptHealth Holdings at June 30, 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. Other investments During the six months ended June 30, 2020, the Company paid an aggregate $1.0 million to acquire equity ownership and debt interests in certain companies. These investments are accounted for under the cost method of accounting. |
Equipment and Other Fixed Asset
Equipment and Other Fixed Assets | 6 Months Ended |
Jun. 30, 2020 | |
Equipment and Other Fixed Assets | |
Equipment and Other Fixed Assets | (4) Equipment and Other Fixed Assets Equipment and other fixed assets as of June 30, 2020 and December 31, 2019 are as follows (in thousands): June 30, December 31, 2020 2019 Patient medical equipment $ 132,311 $ 112,071 Vehicles 7,112 4,461 Other 19,198 15,474 158,621 132,006 Less accumulated depreciation (75,405) (68,447) $ 83,216 $ 63,559 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill. | |
Goodwill | (5) Goodwill The change in the carrying amount of goodwill for the six months ended June 30, 2020 was as follows (in thousands): Balance at December 31, 2019 $ 266,791 Acquired goodwill during the period 76,060 Balance at June 30, 2020 $ 342,851 The Company did not record any goodwill impairment charges during the three and six months ended June 30, 2020 and 2019. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 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 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 June 30, 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. (in thousands) Level 1 Level 2 Level 3 Fair Value June 30, 2020 Assets Money market accounts $ 68,183 $ — $ — $ 68,183 Total assets measured at fair value $ 68,183 $ — $ — $ 68,183 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 3,975 $ 3,975 Acquisition-related contingent consideration-long term — — 6,850 6,850 Interest rate swap agreements-short term — 5,872 — 5,872 Interest rate swap agreements-long term — 13,535 — 13,535 Total liabilities measured at fair value $ — $ 19,407 $ 10,825 $ 30,232 (in thousands) Level 1 Level 2 Level 3 Fair Value December 31, 2019 Assets Money market accounts $ 54,015 $ — $ — $ 54,015 Total assets measured at fair value $ 54,015 $ — $ — $ 54,015 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 4,825 $ 4,825 Acquisition-related contingent consideration-long term — — 9,900 9,900 Interest rate swap agreements-short term — 2,157 — 2,157 Interest rate swap agreements-long term — 6,182 — 6,182 Total liabilities measured at fair value $ — $ 8,339 $ 14,725 $ 23,064 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 June 30, 2020 and December 31, 2019 were classified as Level 2 of the fair value hierarchy. Refer to Note 7, Derivative Instruments and Hedging Activities 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 June 30, 2020, contingent consideration liabilities of $4.0 million and $6.8 million 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 $4.8 million and $9.9 million 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 six months ended June 30, 2020 and 2019 is as follows (in thousands): Six Months Ended June 30, 2020 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 14,725 $ — $ (1,000) $ (2,900) $ 10,825 Six Months Ended June 30, 2019 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 15,250 $ 1,500 $ (12,000) $ — $ 4,750 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 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 June 30, 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 million as of June 30, 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 derivatives designated as hedging instruments as well as their classification in the consolidated balance sheets at June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Balance Sheet Location Asset (Liability) Interest rate swap agreements Other current liabilities $ (5,872) $ (2,157) Interest rate swap agreements Other long-term liabilities (13,535) (6,182) Total $ (19,407) $ (8,339) During the three and six months ended June 30, 2020, as a result of the effect of cash flow hedge accounting, the Company recognized a loss of $0.4 million and $11.1 million, respectively, in other comprehensive income (loss). In addition, during the three and six months ended June 30, 2020, $0.7 million and $1.4 million, respectively, 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 and six months ended June 30, 2019, as a result of the effect of the Company’s derivative financial instruments that were not designated as hedging instruments, the Company recognized $6.7 million and $9.4 million, respectively, in interest expense, net in the accompanying consolidated statements of operations. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | (8) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses as of June 30, 2020 and December 31, 2019 consisted of the following (in thousands): June 30, December 31, 2020 2019 Accounts payable $ 103,590 $ 79,237 Employee related accruals 17,595 12,320 Accrued interest 4,752 4,022 Other 16,564 7,149 Total $ 142,501 $ 102,728 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Debt | (9) Debt The following is a summary of long term-debt as of June 30, 2020 and December 31, 2019 (in thousands): June 30, December 31, 2020 2019 Secured term loans $ 295,625 $ 246,250 Revolving credit facility 12,000 12,000 Note payable 143,500 143,500 Other 709 1,725 Unamortized deferred financing fees (6,002) (6,642) 445,832 396,833 Current portion (2,584) (1,721) Long-term portion $ 443,248 $ 395,112 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 million in new credit facilities, which consisted of a $300 million Initial Term Loan (Credit Facility Term Loan), $50 million Delayed Draw Term Loan (Delayed Draw), and $75 million 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 million, 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 bore 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 carried 0.5% of unused fee per annum, and the New Revolver carried 0.5% of unused line fee per annum. Under the credit facility, the Company was subject to various agreements that contained a number of restrictive covenants that, among other things, imposed operating and financial restrictions on the Company. Financial covenants included a Consolidated Total Leverage Ratio and a Fixed Charges Coverage Ratio, as defined in the agreement. The proceeds from the March 2019 Recapitalization Transactions were used to (1) repay existing amounts outstanding under the Company’s credit facility of $151.9 million, (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 million distribution to AdaptHealth Holdings’ members, and (4) redeem certain members’ interests, including the cumulative preferred dividends, for $3.7 million. In addition, the Company paid deferred financing costs of $9.0 million; 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 $2.1 million, which is included in loss on extinguishment of debt in the accompanying consolidated statements of operations for the six months ended June 30, 2019. Secured Term Loans The Credit Facility Term Loan required quarterly principal repayments beginning June 30, 2019 through December 31, 2023, and the unpaid principal balance was due at maturity in March 2024. In November 2019, the Company repaid $50 million under the Credit Facility Term Loan; such repayment satisfied the required principal repayments through September 2023. At June 30, 2020, there was $246.3 million outstanding under the Credit Facility Term Loan. The interest rate under the Credit Facility Term Loan was 2.67% at June 30, 2020. The Delayed Draw had 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 six months ended June 30, 2020, the Company borrowed $50 million under the Delayed Draw. The borrowing under the Delayed Draw required quarterly principal repayments of $0.3 million beginning March 31, 2020 through December 31, 2020, quarterly principal repayments of $0.6 million beginning March 31, 2021 through December 31, 2023, and the unpaid principal balance was due at maturity in March 2024. At June 30, 2020, there was $49.4 million outstanding under the Delayed Draw. The interest rate under the Delayed Draw was 2.67% at June 30, 2020. Revolving Credit Facility In March 2020, the Company borrowed $20 million under the New Revolver; such amount was repaid in April 2020. At June 30, 2020, there was $12 million outstanding under the New Revolver. The interest rate under the New Revolver was 2.67% at June 30, 2020. After consideration of stand-by letters of credit outstanding of $2.5 million, the remaining maximum borrowings available pursuant to the New Revolver were $60.5 million at June 30, 2020. Debt Refinancing On July 29, 2020, the Company refinanced its debt borrowings and repaid all amounts outstanding under its existing credit facility, including the outstanding balances due under the Credit Facility Term Loan, the Delayed Draw and the New Revolver. In connection with the debt refinancing the Company entered into a new credit agreement. Refer to Note 16, Subsequent Events 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 million (the Promissory Note) and the Company also received proceeds of $20 million 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 million, and the investor converted certain of its members’ interests to a $43.5 million promissory note. The new $100 million promissory note, together with the $43.5 million 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, 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. Under the New Promissory Note, the Company had the option to pay 6% of the interest in cash and 6% Payment in Kind (PIK), and the Company elected to pay the PIK interest in cash during all periods through June 30, 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 $5.9 million 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 June 30, 2020. In May 2020, the Company and the investor entered into a Put/Call Option and Consent Agreement (the Put/Call Agreement), pursuant to which certain put and call rights were granted to the parties with respect to shares of Class A Common Stock, shares of Class B Common Stock, and common units of AdaptHealth Holdings (each such common unit, together with one share of Class B Common Stock, a Consideration Unit) held by the investor. Pursuant to the Put/Call Agreement, during the period from the closing of the Company’s acquisition of Solara Medical Supplies LLC, which occurred on July 1, 2020 (the Solara Acquisition), until October 31, 2020 (the Option Period), the investor may require the Company to purchase up to 1,898,967 shares of Class A Common Stock and/or Consideration Units held by the investor (such shares of Class A Common Stock and Consideration Units, collectively, Interests) at a price per share of Class A Common Stock or per Consideration Unit equal to the greater of (x) $14.50 and (y) 85% of the 30-day volume-weighted average price per share of the Company’s Class A Common Stock on the date the exercise notice is delivered. During the Option Period, the Company may also require the investor to sell up to 1,898,967 of the Interests held by the investor to the Company at a price per share of Class A Common Stock or per Consideration Unit of $15.76. In addition, under the Put/Call Agreement, the investor waived certain consent rights under New Promissory Note, and the Company irrevocably agreed to pay all PIK interest payable under the New Promissory Note following the closing of the Solara Acquisition in cash rather than through an increase in the principal amount of the notes. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 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 Warrants At the Closing of the Business Combination, the Company had 12.7 million warrants outstanding. Each warrant is exercisable into 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 six months ended June 30, 2020, 3.9 million warrants were exercised in cashless transactions resulting in the issuance of 1.1 million shares of Class A Common Stock. In addition, during the six months ended June 30, 2020, 1.0 million warrants were exercised for cash proceeds of $11.9 million resulting in the issuance of 1.0 million shares of Class A Common Stock. As of June 30, 2020, the Company had 7.7 million warrants outstanding. Contingent Consideration Shares 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 average price of the Company’s Class A Common Stock for the month of December prior to each measurement date equals or exceeds certain hurdles set forth in the Merger Agreement. The former owners of AdaptHealth Holdings can potentially receive up to an additional 1.0 million shares at December 31, 2020, 2021 and 2022 (each a measurement date) and such average stock price hurdles are $15, $18 and $22 at each measurement date, respectively, for a total of 3.0 million shares, as a part of the earn-out consideration. Preferred Stock In June 2020, the Company entered into an exchange agreement (the Exchange Agreement) with an investor pursuant to which the investor exchanged 15,810,547 shares of the Company’s Class A Common Stock for 158,105 shares of a new series of non-voting convertible preferred stock of the Company designated as “Series B-1 Convertible Preferred Stock,” par value $0.0001 per share (Series B-1 Preferred Stock). The Series B-1 Preferred Stock liquidation preference is limited to its par value of $0.0001 per share. The Series B-1 Preferred Stock will participate equally and ratably on an as-converted basis with the holders of Class A Common Stock in all cash dividends paid on the Class A Common Stock. The Series B-1 Preferred Stock is non-voting. The holder may convert each share of Series B-1 Preferred Stock into 100 shares of Class A Common Stock (subject to certain anti-dilution adjustments) at its election, except to the extent that, following such conversion, the number of shares of Class A Common Stock held by such holder and its affiliates exceed 4.9% of the outstanding Class A Common Stock of the Company. Equity-based Compensation 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 8.0 million shares of Class A Common Stock, subject to certain adjustments and limitations. During the three months ended June 30, 2020, the Company recorded equity-based compensation expense of $3.3 million, of which $1.6 and $1.7 million was included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statement of operations. During the six months ended June 30, 2020, the Company recorded equity-based compensation expense of $5.5 million, of which $3.3 and $2.2 million was included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statement of operations. During the three and six months ended June 30, 2019, the Company recorded equity-based compensation expense of $0.2 million and $5.4 million, respectively, which is included in general and administrative expenses in the accompanying consolidated statements of operations. The expense during the six months ended June 30, 2019 included $4.9 million in connection with the acceleration of vesting of certain of the 2018 Incentive Units and the modification of such awards discussed below. At June 30, 2020, there was $19.2 million of unrecognized compensation expense related to equity-based compensation awards, which is expected to be recognized over a weighted-average term of 2.7 years. At June 30, 2020, 2.9 million shares of the Company’s Class A Common Stock are available for issuance under the 2019 Plan. In May 2020, the Company granted a total of 11,625 shares of Class A Common Stock to certain newly hired employees. The fair value of these immediately vested shares was $0.2 million and was recognized as compensation cost during the six months ended June 30, 2020. In addition, in May 2020, the Company granted 15,891 shares of Class A Common Stock to certain frontline patient-facing employees in connection with a Covid-19 retention bonus program. The fair value of these immediately vested shares was $0.2 million and was recognized as compensation cost during the six months ended June 30, 2020 Stock Options In November 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. The grant-date fair value of the awards, using a Black-Scholes option pricing model, was $7.2 million 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. In April 2020, the Company granted 47,335 options to purchase shares of common stock of the Company to an employee that have an exercise price of $16.25 per share. The grant-date fair value of the awards, using a Black-Scholes option pricing model, was $0.3 million 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. A portion of all options outstanding 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 Company has no other options outstanding as of June 30, 2020. The assumptions used to determine the grant-date fair value of the stock options granted during the six months ended June 30, 2020 were as follows: Expected volatility 40.7 % Risk-free interest rate 0.4 % Expected term 6.0 years Dividend yield N/A Restricted Stock During the three months ended June 30, 2020, the Company granted 78,536 shares of restricted stock to certain employees, which vest over the four year period following the grant date, subject to the employees’ continuous employment through the applicable vesting date. The grant-date fair value of the awards was $1.3 million and is being recognized as expense on a straight-line basis over the employees’ requisite service period. In April 2020, the Company granted 20,656 shares of restricted stock to an employee. On each of December 31, 2020, 2021 and 2022, one -third of the shares are eligible to vest based on the cumulative annual growth rate of the Company’s stock during the ten trading days preceding the vesting date (which is considered a market condition), subject to the employee’s continuous employment with the Company through such vesting date. The grant-date fair value of the awards, using a Monte Carlo simulation analysis, was $0.3 million and is being recognized as expense on a straight-line basis over the employee’s requisite service period. In March 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 $4.9 million 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). In March 2020, the Company granted 341,123 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 $5.6 million, of which $0.3 million was recognized as expense on the grant date and $5.3 million 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 six months ended June 30, 2020 is presented below (in thousands, except per share data): Number of Shares of Weighted-Average Grant Date Restricted Stock Fair Value per Share Non-vested balance at January 1, 2020 901 $ 5.83 Granted 740 $ 16.22 Vested (20) $ 14.33 Forfeited (20) $ 8.11 Non-vested balance at June 30, 2020 1,601 $ 10.49 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 |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 6 Months Ended |
Jun. 30, 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 (EPS) has been recast for all historical periods to reflect the Company’s capital structure for all comparative periods. Basic EPS was computed by dividing net income (loss) attributable to AdaptHealth Corp. by the weighted-average number of outstanding shares of Class A Common Stock for the period. Diluted EPS is computed by dividing net income (loss) attributable to AdaptHealth Corp. by the weighted-average number of outstanding shares of Class A Common Stock after giving effect to all potential dilutive common stock. A reconciliation of the numerator and denominator used in the calculation of basic and diluted EPS is as follows (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator - Basic and Diluted EPS: Net income (loss) $ 7,169 $ (1,722) $ 7,435 $ (7,175) Less: Income attributable to noncontrolling interests 3,136 361 3,560 709 Net income (loss) attributable to AdaptHealth Corp. $ 4,033 $ (2,083) $ 3,875 $ (7,884) Denominator - Basic EPS: Weighted-average common shares outstanding for basic net income (loss) per common share 44,508 21,721 43,242 17,814 Basic net income (loss) per common share attributable to AdaptHealth Corp. $ 0.09 $ (0.10) $ 0.09 $ (0.44) Denominator - Diluted EPS: Weighted-average common shares outstanding 44,508 21,721 43,242 17,814 Plus: Contingent Consideration Shares (See Note 10) 350 — 350 — Plus: Warrants (See Note 10) 2,400 — 1,960 — Plus: Unvested restricted stock 576 — 548 — Adjusted weighted-average common shares outstanding for diluted net income (loss) per common share 47,834 21,721 46,100 17,814 Diluted net income (loss) per common share attributable to AdaptHealth Corp. $ 0.08 $ (0.10) $ 0.08 $ (0.44) |
Leases
Leases | 6 Months Ended |
Jun. 30, 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 less than $0.1 million for each of the three and six months ended June 30, 2020, and was less than $0.1 million for each of the three and six months ended June 30, 2019. As of June 30, 2020, future annual minimum payments required under lease obligations are as follows (in thousands): Twelve months ending June 30, 2021 $ 22,246 2022 714 Total 22,960 Less amount representing interest (128) 22,832 Current portion (22,198) Long-term portion $ 634 At June 30, 2020 and December 31, 2019, equipment under capital leases consisted of patient equipment with a cost basis of $42.1 million and $39.1 million, respectively, and accumulated depreciation of approximately $12.6 million and $11.7 million, 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 June 30, 2020 and December 31, 2019 was $1.3 million and $1.1 million, respectively. The Company recorded rent expense of $3.8 million and $2.3 million for the three months ended June 30, 2020 and 2019, respectively, and $7.3 million and $4.7 million for the six months ended June 30, 2020 and 2019, respectively. These amounts are 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 June 30, 2020 are as follows (in thousands): Twelve months ending June 30, 2021 $ 15,489 2022 11,711 2023 10,147 2024 8,874 2025 6,548 Thereafter 17,053 Total minimum payments required (a) $ 69,822 (a) Minimum payments have not been reduced by minimum sublease rentals of $2.4 million due in the future under noncancelable subleases. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 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 June 30, 2020 and 2019, the Company recorded income tax expense of $1.8 million and $2.0 million, respectively. For the six months ended June 30, 2020 and 2019, the Company recorded income tax expense of $2.9 million and $4.4 million, respectively. As of June 30, 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 six months ended June 30, 2020, the Company increased its TRA liability through an aggregate $11.2 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 six months ended June 30, 2020, the Company increased its deferred tax asset by $15.9 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 June 30, 2020 and December 31, 2019, the Company had a liability recorded relating to the TRA of approximately $22.0 million and $10.8 million, respectively, which is included in other long-term liabilities in the accompanying consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 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. 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 | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions | |
Related Party Transactions | (15) Related Party Transactions The Company has an outstanding note payable with a principal balance of $143.5 million with an investor who also has equity ownership in the Company. 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 $0.6 million and $0.4 million for the three months ended June 30, 2020 and 2019, respectively, and was $1.1 million and $0.9 million for the six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events | |
Subsequent Events | (16) Subsequent Events Financing Transactions On July 1, 2020, the Company received gross proceeds of $190.0 million in connection with a private placement of 10.9 million shares of Class A Common Stock and 39,706 shares of Series A Preferred Stock. In addition, on July 1, 2020, the Company received gross proceeds of $35.0 million in connection with the issuance and sale of 35,000 shares of Series B-2 Preferred Stock. On July 1, 2020, the Company amended its then existing credit agreement. In connection with the amendment, the Company borrowed $216.3 million as a term loan (the Incremental Term Loan). On July 6, 2020, the Company completed an underwritten public offering of 9.2 million shares of its Class A Common Stock at a price of $15.50 per share. In connection with the offering, the Company received proceeds of $134.0 million which were net of the underwriting discount. Acquisitions On July 1, 2020, the Company acquired all of the issued and outstanding equity interests of Solara Medical Supplies, LLC (Solara). The Company believes Solara is the largest independent distributor of continuous glucose monitors (“CGM”) in the United States and offers a comprehensive suite of direct-to-patient diabetes management supplies to patients throughout the country, including CGMs, insulin pumps and other diabetic supplies. The total consideration consisted of a cash payment of $380.7 million at closing and 3.9 million shares of the Company’s Class A Common Stock valued at $16 per share. The cash paid at closing included approximately $10.0 million withheld in escrow to fund certain potential indemnification matters. On July 1, 2020, the Company acquired all of the issued and outstanding equity interests of ActivStyle, Inc. (ActivStyle). ActivStyle is a leading direct-to-consumer supply company that provides incontinence and urology products to patients throughout the United States. The total consideration consisted of a cash payment of $65.5 million at closing. As of the date the consolidated interim financial statements were available to be issued, the Company was in the process of determining the allocation of the purchase price to the fair value of the net assets acquired for the Solara and ActivSyle acquisitions. Senior Unsecured Note Offering On July 29, 2020, the Company completed an offering of $350.0 million aggregate principal amount of senior unsecured notes due 2028 (the Notes). The interest rate under the Notes is 6.125% per annum and the Notes will mature on August 1, 2028. Interest on the Notes will be payable on February 1st and August 1st of each year, beginning on February 1, 2021. The net proceeds from the issuance of the Notes were used to repay a portion of the outstanding term loan borrowings under the Company’s existing credit agreement and to pay related fees and expenses. The Notes will be redeemable at the Company’s option, in whole or in part, at any time on or after August 1, 2023, and the redemption price for the Notes if redeemed during the 12 months beginning (i) August 1, 2023 is 103.063%, (ii) August 1, 2024 is 102.042%, (iii) August 1, 2025 is 101.021% and (iv) August 1, 2026 and thereafter is 100.000%, in each case together with accrued and unpaid interest. The Company may also redeem some or all of the Notes before August 1, 2023 at a redemption price of 100% of the principal amount of the Notes, plus a “make-whole” premium, together with accrued and unpaid interest. In addition, the Company may redeem up to 40% of the original aggregate principal amount of the Notes before August 1, 2023 with the proceeds from certain equity offerings at a redemption price equal to 106.125% of the principal amount of the Notes, together with accrued and unpaid interest. Furthermore, the Company may be required to make an offer to purchase the Notes upon the sale of certain assets or upon specific kinds of changes of control. Debt Refinancing On July 29, 2020, the Company refinanced its debt borrowings under its existing credit agreement and entered into a new credit agreement (the Credit Agreement). The Credit Agreement consists of a $250 million term loan (the Term Loan) and $200 million in commitments for revolving credit loans with a $15 million letter of credit sublimit (the Revolver), both with maturities in July 2025. The borrowing under the Term Loan requires quarterly principal repayments of $1.6 million beginning September 30, 2020 through June 30, 2022, increasing to $3.1 million beginning September 30, 2022 through June 30, 2025, and the unpaid principal balance is due at maturity in July 2025. No amounts were borrowed under the Revolver. Borrowings under the Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the Credit Agreement. Borrowings under the Term Loan were used to repay certain indebtedness under the Company’s existing credit agreement and to pay related fees and expenses. Amounts borrowed under the Term Loan bear interest quarterly at variable rates based upon the sum of (a) the Adjusted LIBOR Rate (subject to a floor) equal to the LIBOR (as defined) for the applicable interest period, plus (b) an applicable margin ranging from 2.50% to 3.75% per annum based on the Consolidated Total Leverage Ratio (as defined). The Revolver carries a commitment fee during the term of the Credit Agreement ranging from 0.25% to 0.50% per annum of the average daily undrawn portion of the Revolver based on the Consolidated Total Leverage Ratio. Under the Credit Agreement, the Company is subject to 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 Consolidated Fixed Charge Coverage Ratio, as defined in the Credit Agreement. The Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, and non-compliance with healthcare laws. Any borrowing under the Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty, other than customary breakage costs, and any amounts repaid may be reborrowed. Mandatory prepayments are required in connection with the disposition of assets to the extent not reinvested, unpermitted debt transactions, and excess cash flow, as defined, if certain leverage tests are not met. The Company used a portion of the net proceeds received from the Notes and the amounts borrowed under the Term Loan to fully repay the outstanding principal balances, accrued interest and related fees under its existing credit facility, including the amounts under the Credit Facility Term Loan, the Delayed Draw, the New Revolver and the Incremental Term Loan. Redemption of Public Warrants On August 4, 2020, the Company announced that it will redeem all of its outstanding public warrants (the Public Warrants) to purchase shares of the Company’s Class A Common Stock (the Common Stock), that were issued under the Warrant Agreement, dated February 15, 2018 (the Warrant Agreement), by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the Warrant Agent), as part of the units sold in the Company’s initial public offering (the IPO), for a redemption price of $0.01 per Public Warrant (the Redemption Price), that remain outstanding on September 2, 2020 (the Redemption Date). Warrants to purchase Common Stock that were issued under the Warrant Agreement in a private placement simultaneously with the IPO and still held by the initial holders thereof or their permitted transferees are not subject to this redemption. Under the terms of the Warrant Agreement, the Company is entitled to redeem all of the outstanding Public Warrants if the last sales price of the Common Stock is at least $18.00 per share on each of twenty trading days within any thirty-day trading period ending on the third trading day prior to the date on which a notice of redemption is given. At the direction of the Company, the Warrant Agent has delivered a notice of redemption to each of the registered holders of the outstanding Public Warrants. In addition, in accordance with the Warrant Agreement, the Company has elected to require that, upon delivery of the notice of redemption, all Public Warrants are to be exercised only on a “cashless basis.” Accordingly, holders may no longer exercise Public Warrants and receive Common Stock in exchange for payment in cash of the $11.50 per warrant exercise price. Instead, a holder exercising a Public Warrant will be deemed to pay the $11.50 per warrant exercise price by the surrender of 0.6144 of a share of Common Stock (such fraction determined as described below) that such holder would have been entitled to receive upon a cash exercise of a Public Warrant. Accordingly, by virtue of the cashless exercise of the Public Warrants, exercising warrant holders will receive 0.3856 of a share of Common Stock for each Public Warrant surrendered for exercise. Any Public Warrants that remain unexercised on the Redemption Date will be void and no longer exercisable, and the holders will have no rights with respect to those Public Warrants, except to receive the Redemption Price. The number of shares of Common Stock that each exercising warrant holder will receive by virtue of the cashless exercise (instead of paying the $11.50 per Public Warrant cash exercise price) was calculated in accordance with the terms of the Warrant Agreement and is equal to the quotient obtained by dividing (x) the product of the number of shares underlying the Public Warrants held by such warrant holder, multiplied by the difference between $18.7175, the average last sale price of the Common Stock for the ten trading days ending on July 29, 2020, the third trading day prior to the date of the redemption notice (the Fair Market Value) and $11.50, by (y) the Fair Market Value. If any holder of Public Warrants would, after taking into account all of such holder’s Public Warrants exercised at one time, be entitled to receive a fractional interest in a share of Common Stock, the number of shares the holder will be entitled to receive will be rounded down to the nearest whole number of shares. |
General Information (Policies)
General Information (Policies) | 6 Months Ended |
Jun. 30, 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 |
Revenue Recognition and Accou_2
Revenue Recognition and Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of composition of net revenues by payor type and core service lines | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Insurance $ 148,165 $ 68,909 $ 262,616 $ 136,626 Government 60,513 40,578 111,758 78,679 Patient pay 23,438 14,667 49,181 28,347 Net revenue $ 232,116 $ 124,154 $ 423,555 $ 243,652 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net sales revenue: Sleep $ 84,421 $ 50,433 $ 153,315 $ 97,560 Supplies to the home 34,240 1,915 67,579 3,944 HME 12,727 10,236 24,306 20,725 Respiratory 18,114 1,445 20,882 2,724 Other 11,463 8,967 23,856 16,999 Total net sales revenue $ 160,965 $ 72,996 $ 289,938 $ 141,952 Net revenue from fixed monthly equipment reimbursements: Sleep $ 22,644 $ 18,944 $ 45,313 $ 37,001 HME 13,262 10,202 25,439 20,445 Respiratory 30,856 20,009 55,863 40,438 Other 4,389 2,003 7,002 3,816 Total net revenue from fixed monthly equipment reimbursements $ 71,151 $ 51,158 $ 133,617 $ 101,700 Total net revenue: Sleep $ 107,065 $ 69,377 $ 198,628 $ 134,561 Supplies to the home 34,240 1,915 67,579 3,944 HME 25,989 20,438 49,745 41,170 Respiratory 48,970 21,454 76,745 43,162 Other 15,852 10,970 30,858 20,815 Total net revenue $ 232,116 $ 124,154 $ 423,555 $ 243,652 |
Significant Transactions (Table
Significant Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Acquisition | |
Schedule of proforma net revenue and operating income | (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenue $ 245,297 $ 184,190 $ 436,736 $ 365,914 Operating income $ 16,242 $ 5,719 $ 25,553 $ 972 |
Summary of results of business acquired | (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenue $ 53,002 $ 8,969 $ 93,727 $ 17,595 Operating income (loss) $ (2,061) $ 1,981 $ (7,621) $ 3,413 |
Significant Acquisitions In 2020 [Member] | |
Business Acquisition | |
Summary of consideration | Cash consideration $ 108,199 Equity consideration 6,248 Deferred payments 33 Total $ 114,480 |
Summary of estimated fair values of the net assets acquired | Cash $ 736 Accounts receivable 20,118 Inventory 4,413 Prepaid and other current assets 1,334 Equipment and other fixed assets 25,264 Goodwill 76,060 Accounts payable and accrued expenses (6,493) Contract liabilities (3,906) Unfavorable lease liability (1,419) Capital lease obligations (1,627) Net assets acquired $ 114,480 |
Significant acquisitions in 2019 | |
Business Acquisition | |
Summary of consideration | Cash consideration $ 27,768 Seller note 2,000 Estimated contingent consideration 1,500 Total $ 31,268 |
Summary of estimated fair values of the net assets acquired | Cash $ 117 Accounts receivable 3,691 Inventory 3,610 Prepaid and other current assets 12 Equipment and other fixed assets 5,229 Other assets 110 Goodwill 21,951 Contract liabilities (1,186) Accounts payable and accrued expenses (2,266) Net assets acquired $ 31,268 |
Equipment and Other Fixed Ass_2
Equipment and Other Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equipment and Other Fixed Assets | |
Schedule of equipment and other fixed assets | June 30, December 31, 2020 2019 Patient medical equipment $ 132,311 $ 112,071 Vehicles 7,112 4,461 Other 19,198 15,474 158,621 132,006 Less accumulated depreciation (75,405) (68,447) $ 83,216 $ 63,559 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill. | |
Schedule of change in the carrying amount of goodwill | Balance at December 31, 2019 $ 266,791 Acquired goodwill during the period 76,060 Balance at June 30, 2020 $ 342,851 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value of Assets and Liabilities | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | (in thousands) Level 1 Level 2 Level 3 Fair Value June 30, 2020 Assets Money market accounts $ 68,183 $ — $ — $ 68,183 Total assets measured at fair value $ 68,183 $ — $ — $ 68,183 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 3,975 $ 3,975 Acquisition-related contingent consideration-long term — — 6,850 6,850 Interest rate swap agreements-short term — 5,872 — 5,872 Interest rate swap agreements-long term — 13,535 — 13,535 Total liabilities measured at fair value $ — $ 19,407 $ 10,825 $ 30,232 (in thousands) Level 1 Level 2 Level 3 Fair Value December 31, 2019 Assets Money market accounts $ 54,015 $ — $ — $ 54,015 Total assets measured at fair value $ 54,015 $ — $ — $ 54,015 Liabilities Acquisition-related contingent consideration-short term $ — $ — $ 4,825 $ 4,825 Acquisition-related contingent consideration-long term — — 9,900 9,900 Interest rate swap agreements-short term — 2,157 — 2,157 Interest rate swap agreements-long term — 6,182 — 6,182 Total liabilities measured at fair value $ — $ 8,339 $ 14,725 $ 23,064 |
Reconciliation of contingent consideration liabilities related to acquisitions | Six Months Ended June 30, 2020 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 14,725 $ — $ (1,000) $ (2,900) $ 10,825 Six Months Ended June 30, 2019 Beginning Balance Additions Payments Change in Fair Value Ending Balance Contingent consideration - Level 3 liabilities $ 15,250 $ 1,500 $ (12,000) $ — $ 4,750 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities | |
Summary of fair value of derivative financial instruments as well as their classification on the consolidated balance sheets | June 30, 2020 December 31, 2019 Balance Sheet Location Asset (Liability) Interest rate swap agreements Other current liabilities $ (5,872) $ (2,157) Interest rate swap agreements Other long-term liabilities (13,535) (6,182) Total $ (19,407) $ (8,339) |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Expenses | |
Schedule of components accounts payable and accrued expenses | June 30, December 31, 2020 2019 Accounts payable $ 103,590 $ 79,237 Employee related accruals 17,595 12,320 Accrued interest 4,752 4,022 Other 16,564 7,149 Total $ 142,501 $ 102,728 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt | |
Schedule of summary of long term debt | June 30, December 31, 2020 2019 Secured term loans $ 295,625 $ 246,250 Revolving credit facility 12,000 12,000 Note payable 143,500 143,500 Other 709 1,725 Unamortized deferred financing fees (6,002) (6,642) 445,832 396,833 Current portion (2,584) (1,721) Long-term portion $ 443,248 $ 395,112 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Acquisition | |
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 $ 5.83 Granted 740 $ 16.22 Vested (20) $ 14.33 Forfeited (20) $ 8.11 Non-vested balance at June 30, 2020 1,601 $ 10.49 |
Options | |
Business Acquisition | |
Schedule of assumptions used to determine the grant date fair value | Expected volatility 40.7 % Risk-free interest rate 0.4 % Expected term 6.0 years Dividend yield N/A |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings per share | |
Schedule of calculation of basic and diluted earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator - Basic and Diluted EPS: Net income (loss) $ 7,169 $ (1,722) $ 7,435 $ (7,175) Less: Income attributable to noncontrolling interests 3,136 361 3,560 709 Net income (loss) attributable to AdaptHealth Corp. $ 4,033 $ (2,083) $ 3,875 $ (7,884) Denominator - Basic EPS: Weighted-average common shares outstanding for basic net income (loss) per common share 44,508 21,721 43,242 17,814 Basic net income (loss) per common share attributable to AdaptHealth Corp. $ 0.09 $ (0.10) $ 0.09 $ (0.44) Denominator - Diluted EPS: Weighted-average common shares outstanding 44,508 21,721 43,242 17,814 Plus: Contingent Consideration Shares (See Note 10) 350 — 350 — Plus: Warrants (See Note 10) 2,400 — 1,960 — Plus: Unvested restricted stock 576 — 548 — Adjusted weighted-average common shares outstanding for diluted net income (loss) per common share 47,834 21,721 46,100 17,814 Diluted net income (loss) per common share attributable to AdaptHealth Corp. $ 0.08 $ (0.10) $ 0.08 $ (0.44) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Lease Commitments | |
Summary of future annual minimum payments required under lease obligations | Twelve months ending June 30, 2021 $ 22,246 2022 714 Total 22,960 Less amount representing interest (128) 22,832 Current portion (22,198) Long-term portion $ 634 |
Summary of minimum annual lease commitments under noncancelable leases | Twelve months ending June 30, 2021 $ 15,489 2022 11,711 2023 10,147 2024 8,874 2025 6,548 Thereafter 17,053 Total minimum payments required (a) $ 69,822 (a) Minimum payments have not been reduced by minimum sublease rentals of $2.4 million due in the future under noncancelable subleases. |
Revenue Recognition and Accou_3
Revenue Recognition and Accounts Receivable (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue Recognition | ||||||
Total net revenues | $ 232,116 | $ 124,154 | $ 423,555 | $ 243,652 | ||
CARES Act Recoupable Advance Payment | $ 45,800 | |||||
CARES Act Provider Relief Funds | $ 17,200 | |||||
Total CARES Act funds | 63,000 | 63,000 | ||||
Unbilled revenue | 16,800 | 16,800 | $ 8,600 | |||
Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 160,965 | 72,996 | 289,938 | 141,952 | ||
Transferred over Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 71,151 | 51,158 | 133,617 | 101,700 | ||
Sleep | ||||||
Revenue Recognition | ||||||
Total net revenues | 107,065 | 69,377 | 198,628 | 134,561 | ||
Sleep | Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 84,421 | 50,433 | 153,315 | 97,560 | ||
Sleep | Transferred over Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 22,644 | 18,944 | 45,313 | 37,001 | ||
Supplies to the home | ||||||
Revenue Recognition | ||||||
Total net revenues | 34,240 | 1,915 | 67,579 | 3,944 | ||
Supplies to the home | Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 34,240 | 1,915 | 67,579 | 3,944 | ||
HME | ||||||
Revenue Recognition | ||||||
Total net revenues | 25,989 | 20,438 | 49,745 | 41,170 | ||
HME | Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 12,727 | 10,236 | 24,306 | 20,725 | ||
HME | Transferred over Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 13,262 | 10,202 | 25,439 | 20,445 | ||
Respiratory | ||||||
Revenue Recognition | ||||||
Total net revenues | 48,970 | 21,454 | 76,745 | 43,162 | ||
Respiratory | Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 18,114 | 1,445 | 20,882 | 2,724 | ||
Respiratory | Transferred over Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 30,856 | 20,009 | 55,863 | 40,438 | ||
Other | ||||||
Revenue Recognition | ||||||
Total net revenues | 15,852 | 10,970 | 30,858 | 20,815 | ||
Other | Transferred at Point in Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 11,463 | 8,967 | 23,856 | 16,999 | ||
Other | Transferred over Time [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 4,389 | 2,003 | 7,002 | 3,816 | ||
Insurance Payor [Member] | ||||||
Revenue Recognition | ||||||
Total net revenues | 148,165 | 68,909 | 262,616 | 136,626 | ||
Government payor | ||||||
Revenue Recognition | ||||||
Total net revenues | 60,513 | 40,578 | 111,758 | 78,679 | ||
Patient payor | ||||||
Revenue Recognition | ||||||
Total net revenues | $ 23,438 | $ 14,667 | $ 49,181 | $ 28,347 |
Significant Transactions - Cons
Significant Transactions - Consideration and Allocation (Details) - USD ($) | 6 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 02, 2020 | Jan. 02, 2020 | Dec. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Estimated fair values of net assets acquired | |||||||
Cash | $ 117,000 | ||||||
Accounts receivables | 3,691,000 | ||||||
Inventory | 3,610,000 | ||||||
Prepaid and other current assets | 12,000 | ||||||
Equipment and other fixed assets | 5,229,000 | ||||||
Other assets | 110,000 | ||||||
Goodwill | $ 342,851,000 | 21,951,000 | $ 266,791,000 | ||||
Accounts payable and accrued expenses | (2,266,000) | ||||||
Contract liabilities | (1,186,000) | ||||||
Net assets acquired | 31,268,000 | ||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | |||||||
Equity consideration issued in connection with an acquisition | 6,248,000 | ||||||
Liability incurred | 2,000,000 | ||||||
Contingent consideration obligations | 10,825,000 | 4,750,000 | $ 14,725,000 | $ 15,250,000 | |||
Deferred payments/contingent consideration | 1,500,000 | ||||||
Receipt of working capital adjustment from 2018 acquisitions | 318,000 | ||||||
Significant Acquisitions In 2020 [Member] | |||||||
Estimated fair values of net assets acquired | |||||||
Cash | 736,000 | ||||||
Accounts receivables | 20,118,000 | ||||||
Inventory | 4,413,000 | ||||||
Prepaid and other current assets | 1,334,000 | ||||||
Equipment and other fixed assets | 25,264,000 | ||||||
Goodwill | 76,060,000 | ||||||
Accounts payable and accrued expenses | (6,493,000) | ||||||
Contract liabilities | (3,906,000) | ||||||
Unfavorable lease liability | (1,419,000) | ||||||
Capital lease obligations | (1,627,000) | ||||||
Net assets acquired | 114,480,000 | ||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | |||||||
Cash payment | 108,199,000 | ||||||
Equity consideration issued in connection with an acquisition | 6,248,000 | ||||||
Deferred payments/contingent consideration | 33,000 | ||||||
Total consideration | $ 114,480,000 | ||||||
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] | |||||||
Estimated fair values of net assets acquired | |||||||
Inventory | $ 2,700,000 | ||||||
Equipment and other fixed assets | 18,400,000 | ||||||
Goodwill | 39,600,000 | ||||||
Accounts payable and accrued expenses | (2,200,000) | ||||||
Potential contingent payment | $ 9,000,000 | ||||||
Significant acquisitions in 2019 | |||||||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | |||||||
Cash payment | 27,768,000 | ||||||
Liability incurred | 2,000,000 | ||||||
Deferred payments/contingent consideration | 1,500,000 | ||||||
Total consideration | 31,268,000 | ||||||
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 | 19,100,000 | ||||||
Accounts payable and accrued expenses | $ (2,600,000) |
Significant Transactions - Pro-
Significant Transactions - Pro-forma Financial Information and Results of Business Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pro-forma financial information: | ||||
Pro-forma net revenue | $ 245,297 | $ 184,190 | $ 436,736 | $ 365,914 |
Pro-forma operating income | 16,242 | 5,719 | 25,553 | 972 |
Net revenue since acquisition date | 53,002 | 8,969 | 93,727 | 17,595 |
Operating income (loss) since acquisition date | $ (2,061) | $ 1,981 | $ (7,621) | $ 3,413 |
Significant Transactions - Busi
Significant Transactions - Business Combination (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)item | Nov. 08, 2019 | |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Payments to acquire cost method investments | $ | $ 1,000 | |
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 | 38.00% | 44.00% |
Class B Common Stock | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Number of votes per share | item | 1 |
Equipment and Other Fixed Ass_3
Equipment and Other Fixed Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | $ 158,621 | $ 132,006 |
Less accumulated depreciation | (75,405) | (68,447) |
Equipment and other fixed assets, net | 83,216 | 63,559 |
Patient medical equipment | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | 132,311 | 112,071 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | 7,112 | 4,461 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Equipment and other fixed assets, gross | $ 19,198 | $ 15,474 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net carrying amount | ||||
Beginning balance | $ 266,791,000 | |||
Acquired goodwill during the period | 76,060,000 | |||
Ending balance | $ 342,851,000 | $ 21,951,000 | 342,851,000 | $ 21,951,000 |
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Valuation of Financial Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Total assets measured at fair value | $ 68,183 | $ 54,015 |
Liabilities | ||
Total liabilities measured at fair value | 30,232 | 23,064 |
Acquisition-related contingent consideration obligations-short term | ||
Liabilities | ||
Total liabilities measured at fair value | 3,975 | 4,825 |
Acquisition-related contingent consideration obligations-long term | ||
Liabilities | ||
Total liabilities measured at fair value | 6,850 | 9,900 |
Interest Rate Swap Short-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 5,872 | 2,157 |
Interest Rate Swap Long-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 13,535 | 6,182 |
Money market accounts | ||
Assets | ||
Total assets measured at fair value | 68,183 | 54,015 |
Level 1 | ||
Assets | ||
Total assets measured at fair value | 68,183 | 54,015 |
Level 1 | Money market accounts | ||
Assets | ||
Total assets measured at fair value | 68,183 | 54,015 |
Level 2 | ||
Liabilities | ||
Total liabilities measured at fair value | 19,407 | 8,339 |
Level 2 | Interest Rate Swap Short-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 5,872 | 2,157 |
Level 2 | Interest Rate Swap Long-term [Member] | ||
Liabilities | ||
Total liabilities measured at fair value | 13,535 | 6,182 |
Level 3 | ||
Liabilities | ||
Total liabilities measured at fair value | 10,825 | 14,725 |
Level 3 | Acquisition-related contingent consideration obligations-short term | ||
Liabilities | ||
Total liabilities measured at fair value | 3,975 | 4,825 |
Level 3 | Acquisition-related contingent consideration obligations-long term | ||
Liabilities | ||
Total liabilities measured at fair value | $ 6,850 | $ 9,900 |
Fair Value - Contingent Conside
Fair Value - Contingent Consideration (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | $ 14,725 | $ 15,250 |
Additions | 1,500 | |
Payment of contingent consideration - operating | (1,000) | |
Payment of contingent consideration - financing | (12,000) | |
Gain | (2,900) | |
Contingent consideration liability at end of period | 10,825 | $ 4,750 |
Level 3 | Other current liabilities | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | 4,800 | |
Contingent consideration liability at end of period | 4,000 | |
Level 3 | Other long-term liabilities | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Contingent consideration liability at beginning of period | 9,900 | |
Contingent consideration liability at end of period | $ 6,800 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Financial instruments (Details) - Derivatives designated as hedging instruments - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative financial instruments | ||
Fair Value Liability | $ (19,407) | $ (8,339) |
Interest rate swap agreements | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount | 250,000 | 250,000 |
Interest rate swap agreements | Other current liabilities | ||
Derivative financial instruments | ||
Fair Value Liability | (5,872) | (2,157) |
Interest rate swap agreements | Other long-term liabilities | ||
Derivative financial instruments | ||
Fair Value Liability | $ (13,535) | $ (6,182) |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effect on Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative | $ (0.4) | $ (11.1) |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income | $ 0.7 | $ 1.4 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Not designated (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Interest rate swap agreements | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ (6.7) | $ (9.4) |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Expenses | ||
Accounts payable | $ 103,590 | $ 79,237 |
Employee related accruals | 17,595 | 12,320 |
Accrued interest | 4,752 | 4,022 |
Other | 16,564 | 7,149 |
Accounts payable and accrued expenses | $ 142,501 | $ 102,728 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Nov. 30, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||||
Unamortized deferred financing fees | $ (6,002) | $ (6,642) | ||
Debt, Net | 445,832 | 396,833 | ||
Current portion | (2,584) | (1,721) | ||
Long-term portion | 443,248 | 395,112 | ||
Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 425,000 | |||
Secured term loans | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 295,625 | 246,250 | ||
Initial/credit facility term loan | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 246,300 | |||
Borrowing capacity | 300,000 | |||
Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 49,400 | |||
Borrowing capacity | $ 100,000 | 50,000 | ||
Revolving credit facility/revolver | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 12,000 | 12,000 | ||
Borrowing capacity | $ 75,000 | |||
New Promissory Note | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | 143,500 | 143,500 | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Debt, Gross | $ 709 | $ 1,725 |
Debt - Long term debt (Details)
Debt - Long term debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Nov. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||||
Unused fee (Percentage) | 0.50% | ||||||
Repayment of credit facility | $ 151,900 | ||||||
Distributions to members | 250,000 | $ 250,000 | |||||
Redemption of members' interest | 3,700 | 3,713 | |||||
Payments of Debt Issuance Costs | $ 9,000 | ||||||
Write-off of deferred financing costs | 2,121 | ||||||
Repayment of loan | $ 21,641 | $ 153,826 | |||||
Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 425,000 | 425,000 | |||||
Secured term loans | |||||||
Debt Instrument [Line Items] | |||||||
Debt balance outstanding | 295,625 | $ 246,250 | |||||
Initial/credit facility term loan | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | 300,000 | 300,000 | |||||
Repayment of loan | $ 50,000 | ||||||
Debt balance outstanding | $ 246,300 | ||||||
Credit facility Interest rate | 2.67% | ||||||
Delayed Draw Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | $ 100,000 | $ 50,000 | $ 50,000 | ||||
Face amount | $ 50,000 | ||||||
Debt balance outstanding | $ 49,400 | ||||||
Credit facility Interest rate | 2.67% | ||||||
Debt term | 24 months | 24 months | |||||
Delayed Draw Term Loan | First Specified Repayment Period [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly principal repayments | $ 300 | ||||||
Delayed Draw Term Loan | Second Specified Repayment Period [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Quarterly principal repayments | 600 | ||||||
Revolving credit facility/revolver | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | $ 75,000 | $ 75,000 | |||||
Face amount | $ 20,000 | ||||||
Debt balance outstanding | $ 12,000 | $ 12,000 | |||||
Credit facility Interest rate | 2.67% | ||||||
Remaining maximum borrowings available | $ 60,500 | ||||||
Letter of Credit [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt balance outstanding | $ 2,500 |
Debt - Notes (Details)
Debt - Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | May 20, 2020 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Proceeds from issuance of members' interests | $ 20,000 | $ 20,000 | |||
Number of shares in Consideration Unit | 1 | ||||
Number of shares under Put/Call Option and Consent Agreement | 1,898,967 | ||||
Minimum fixed purchase price (in dollars per share) | $ 14.50 | ||||
Minimum variable price, as percent of weighted average price | 85.00% | ||||
Sales price (in dollars per share) | $ 15.76 | ||||
Current tax liability associated with recapitalization | $ 5,900 | ||||
New Promissory Note | Period starting on the closing date and ending on the seventh anniversary | |||||
Debt Instrument [Line Items] | |||||
Debt Interest rate | 12.00% | ||||
New Promissory Note | Period starting on the day after the seventh anniversary of the closing date and ending on the maturity date | |||||
Debt Instrument [Line Items] | |||||
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 | ||||
Promissory Note From Members Interest [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 43,500 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019shares | Dec. 31, 2019$ / shares | Nov. 08, 2019shares | Feb. 15, 2018$ / shares | |
Class of Stock [Line Items] | ||||||
Warrants outstanding | 7,700,000 | 7,700,000 | ||||
Warrant exercisable price | $ / shares | $ 11.50 | |||||
Warrants exercised | 3,900,000 | 1,000,000 | ||||
Shares issued for warrants exercised | 1,100,000 | |||||
Proceeds from exercise of warrants | $ | $ 11,883 | |||||
Shares issued | 1,000,000 | |||||
Earn-out consideration, shares per annual installment | 1,000,000 | |||||
First stock price hurdle (in dollars per share) | $ / shares | $ 15 | |||||
Second stock price hurdle (in dollars per share) | $ / shares | 18 | |||||
Third stock price hurdle (in dollars per share) | $ / shares | $ 22 | |||||
Earn-out consideration, total shares | 3,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Exchange of Class A Common Stock for Series B-1 Preferred Stock (in shares) | 15,810,547 | |||||
Shares of common stock received in conversion for each share of preferred stock | 100 | 100 | ||||
Preferred stock conversion, ceiling as a percent of outstanding common stock | 4.9 | |||||
Series B Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Exchange of Class A Common Stock for Series B-1 Preferred Stock (in shares) | 158,105 | |||||
Adapt Health Holdings LLC | ||||||
Class of Stock [Line Items] | ||||||
Warrants outstanding | 12,700,000 | |||||
Common stock for each warrant exercised | 1 | 1 | ||||
Warrant exercisable price | $ / shares | $ 11.50 | $ 11.50 |
Stockholders' Equity - Equity-b
Stockholders' Equity - Equity-based compensation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Nov. 07, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expense | $ 3.3 | $ 0.2 | $ 5.5 | $ 5.4 | |
Accelerated vesting cost | $ 4.9 | ||||
Unrecognized compensation expense | 19.2 | $ 19.2 | |||
Recognition period | 2 years 8 months 12 days | ||||
General and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expense | 1.6 | $ 3.3 | |||
Cost of Sales [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expense | $ 1.7 | $ 2.2 | |||
2019 Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized for issuance | 8 | ||||
Stock are available for issuance | 2.9 | 2.9 |
Stockholders' Equity - Common s
Stockholders' Equity - Common stock awards (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expense | $ 3.3 | $ 0.2 | $ 5.5 | $ 5.4 | |
Awards To Newly Hired Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, shares | 11,625 | ||||
Equity-based compensation expense | $ 0.2 | ||||
Retention Program Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted, shares | 15,891 | ||||
Equity-based compensation expense | $ 0.2 |
Stockholders' Equity - Options
Stockholders' Equity - Options activity and assumptions (Details) - Options - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Apr. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 47,335 | 3,416,666 | |
Options granted, exercise price | $ 16.25 | $ 11.50 | |
Grant date value | $ 0.3 | $ 7.2 | |
Expected volatility | 40.70% | ||
Risk-free interest rate | 0.40% | ||
Expected term | 6 years |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted stock (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity-based compensation expense | $ 3.3 | $ 0.2 | $ 5.5 | $ 5.4 | ||
Single Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted, shares | 20,656 | 300,000 | ||||
Vesting percentage | 33.00% | 25.00% | ||||
Grant date fair value | $ 0.3 | $ 4.9 | ||||
Number of trading days | 10 days | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Granted, shares | 20,656 | 300,000 | ||||
Various Employees [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted, shares | 341,123 | 78,536 | ||||
Vesting period | 4 years | |||||
Grant date fair value | $ 5.6 | $ 1.3 | ||||
Equity-based compensation expense | 0.3 | |||||
Compensation cost, portion to be recognized over service period | $ 5.3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Granted, shares | 341,123 | 78,536 | ||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted, shares | 740,000 | |||||
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 | 901,000 | |||||
Granted, shares | 740,000 | |||||
Vested, shares | (20,000) | |||||
Forfeited, shares | (20,000) | |||||
Non-vested balance at end of period | 1,601,000 | 1,601,000 | ||||
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 | 16.22 | |||||
Vested, grant date fair value | 14.33 | |||||
Forfeited, grant date fair value | 8.11 | |||||
Non-vested, grant date fair value at end of period | $ 10.49 | $ 10.49 | ||||
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 - Incentiv
Stockholders' Equity - Incentive Units (Details) - 2019 Incentive Plan $ in Millions | 1 Months Ended |
Jun. 30, 2019USD ($) | |
Equitybased Compensation | |
Vesting period | 1 year |
Grant date fair value | $ 4.5 |
Tranche 1 | |
Equitybased Compensation | |
Vesting percentage | 50.00% |
Tranche 2 | |
Equitybased Compensation | |
Vesting percentage | 50.00% |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||||
Net income (loss) | $ 7,169 | $ 266 | $ (1,722) | $ (5,453) | $ 7,435 | $ (7,175) |
Income attributable to noncontrolling interest | 3,136 | 361 | 3,560 | 709 | ||
Net Income (Loss) Available to Common Stockholders, Basic, Total | $ 4,033 | $ (2,083) | $ 3,875 | $ (7,884) | ||
Denominator: | ||||||
Weighted Average Number of Shares Outstanding, Basic | 44,508 | 21,721 | 43,242 | 17,814 | ||
Earnings Per Share, Basic | $ 0.09 | $ (0.10) | $ 0.09 | $ (0.44) | ||
Denominator: | ||||||
Plus: contingent consideration shares | 350 | 350 | ||||
Plus: warrants | 2,400 | 1,960 | ||||
Plus: unvested restricted stock | 576 | 548 | ||||
Adjusted weighted average common shares outstanding, diluted | 47,834 | 21,721 | 46,100 | 17,814 | ||
Earnings Per Share, Diluted | $ 0.08 | $ (0.10) | $ 0.08 | $ (0.44) |
Leases - Capital leases (Detail
Leases - Capital leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Capital Leases, Future Minimum Payments Due, Rolling Maturity [Abstract] | |||||
2021 | $ 22,246 | $ 22,246 | |||
2022 | 714 | 714 | |||
Total | 22,960 | 22,960 | |||
Less amount representing interest | (128) | (128) | |||
Capital lease obligations | 22,832 | 22,832 | |||
Current portion | (22,198) | (22,198) | $ (19,750) | ||
Noncurrent | 634 | 634 | |||
Equipment under capital leases | |||||
Equipment under capital leases | |||||
Cost of equipment under capital leases | 42,100 | 42,100 | 39,100 | ||
Accumulated depreciation of equipment under capital leases | 12,600 | 12,600 | $ 11,700 | ||
Maximum | |||||
Capital Leased Assets [Line Items] | |||||
Interest expense related to capital leases | $ 100 | $ 100 | $ 100 | $ 100 |
Leases - Operating (Details)
Leases - Operating (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Lease Commitments | |||||
Deferred rent | $ 1,300 | $ 1,300 | $ 1,100 | ||
Rent expense | 3,800 | $ 2,300 | 7,300 | $ 4,700 | |
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract] | |||||
2021 | 15,489 | 15,489 | |||
2022 | 11,711 | 11,711 | |||
2023 | 10,147 | 10,147 | |||
2024 | 8,874 | 8,874 | |||
2025 | 6,548 | 6,548 | |||
Thereafter | 17,053 | 17,053 | |||
Lease commitments | 69,822 | 69,822 | |||
Minimum annual lease commitments under noncancelable leases | |||||
Minimum sublease rentals | $ 2,400 | $ 2,400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Taxes | |||||
Income Tax Expense (Benefit) | $ 1,819,000 | $ 1,998,000 | $ 2,926,000 | $ 4,417,000 | |
Uncertain tax positions | $ 0 | $ 0 | $ 0 | ||
Tax Receivable Agreement, payout percentage | 85.00% | ||||
Increase in liability due to additional exchanges | $ 11,200,000 | ||||
Increase in deferred tax asset | 15,900,000 | ||||
Liability related to TRA | $ 22,000,000 | $ 10,800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended | 6 Months Ended |
May 31, 2018USD ($) | Jun. 30, 2020USD ($) | |
Commitments and Contingencies. | ||
Accrual related to lawsuits, claims, investigations and proceedings | $ 0 | |
Number of subsidiaries | 1 | |
Agreement Term | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | |
Related Party Transaction [Line Items] | ||||
Proceeds from sale of investment | $ 2,046 | |||
Investor | ||||
Related Party Transaction [Line Items] | ||||
Loan from related party | $ 143,500 | $ 143,500 | ||
Vendor two | ||||
Related Party Transaction [Line Items] | ||||
Number of executives | item | 2 | |||
Ownership interest, as a percent | 1.00% | 1.00% | ||
Expense for related party | $ 600 | $ 400 | $ 1,100 | $ 900 |
Subsequent Events - Financing a
Subsequent Events - Financing and Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 06, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Subsequent Event | ||||
Shares issued | 1,000,000 | |||
Proceeds from borrowings on long-term debt and lines of credit | $ 70,000 | $ 319,500 | ||
Subsequent Event | ||||
Subsequent Event | ||||
Proceeds from sale of stock | $ 134,000 | $ 190,000 | ||
Shares issued | 9,200,000 | |||
Proceeds from borrowings on long-term debt and lines of credit | 216,300 | |||
Share Price | $ 15.50 | |||
Subsequent Event | Solara Medical Supplies, LLC [Member] | ||||
Subsequent Event | ||||
Cash payment | $ 380,700 | |||
Issuance of common stock for acquisitions (in shares) | 3,900,000 | |||
Share Price | $ 16 | |||
Business Combination, Escrow Payment | $ 10,000 | |||
Subsequent Event | ActivStyle, Inc. [Member] | ||||
Subsequent Event | ||||
Cash payment | $ 65,500 | |||
Subsequent Event | Class A Common Stock | ||||
Subsequent Event | ||||
Shares issued | 10,900,000 | |||
Subsequent Event | Series A Preferred Stock | ||||
Subsequent Event | ||||
Shares issued | 39,706 | |||
Subsequent Event | Series B Preferred Stock | ||||
Subsequent Event | ||||
Proceeds from sale of stock | $ 35,000 | |||
Shares issued | 35,000 |
Subsequent Events - Notes and R
Subsequent Events - Notes and Refinancing (Details) - Subsequent Event $ in Millions | Jul. 29, 2020USD ($) |
Redemption Period One | |
Subsequent Event | |
Redemption price, as percent of principal | 100.00% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | |
Subsequent Event | |
Debt issued | $ 350 |
Debt Interest rate | 6.125% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | Redemption Period One | |
Subsequent Event | |
Redemption price, as percent of principal, proceeds from equity offerings | 106.125% |
Percentage of original principal that may be redeemed | 40.00% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | Redemption Period Two | |
Subsequent Event | |
Redemption price, as percent of principal | 103.063% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | Redemption Period Three | |
Subsequent Event | |
Redemption price, as percent of principal | 102.042% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | Redemption Period Four | |
Subsequent Event | |
Redemption price, as percent of principal | 101.021% |
Senoir Notes 6.125 Per Cent Due 2028 [Member] | Redemption Period Five and thereafter | |
Subsequent Event | |
Redemption price, as percent of principal | 100.00% |
Term Loan Maturing July 2025 [Member] | |
Subsequent Event | |
Debt issued | $ 250 |
Term Loan Maturing July 2025 [Member] | Minimum | |
Subsequent Event | |
Spread on variable rate | 2.50% |
Term Loan Maturing July 2025 [Member] | Maximum | |
Subsequent Event | |
Spread on variable rate | 3.75% |
Term Loan Maturing July 2025 [Member] | Redemption Period One | |
Subsequent Event | |
Quarterly principal payments | $ 1.6 |
Term Loan Maturing July 2025 [Member] | Redemption Period Two | |
Subsequent Event | |
Quarterly principal payments | 3.1 |
Revolving Credit Loans Maturing July 2025 [Member] | |
Subsequent Event | |
Borrowing capacity | 200 |
Borrowings on lines of credit | $ 0 |
Revolving Credit Loans Maturing July 2025 [Member] | Minimum | |
Subsequent Event | |
Commitment fee (as a percent) | 0.25% |
Revolving Credit Loans Maturing July 2025 [Member] | Maximum | |
Subsequent Event | |
Commitment fee (as a percent) | 0.50% |
Revolver Letter Of Credit Sublimit Maturing July 2025. [Member] | |
Subsequent Event | |
Borrowing capacity | $ 15 |
Subsequent Events - Warrants, e
Subsequent Events - Warrants, etc. (Details) | Aug. 04, 2020$ / sharesshares | Jul. 29, 2020$ / shares | Feb. 15, 2018USD ($)$ / shares |
Subsequent Event | |||
Warrant redemption, stock price trigger (in dollars per share) | $ 18 | ||
Warrant redemption, number of trading days | $ | 20 | ||
Warrant redemption, trading day period | $ | 30 | ||
Exercise price of warrants | $ 11.50 | ||
Subsequent Event | |||
Subsequent Event | |||
Warrant redemption price (in dollars per share) | $ 0.01 | ||
Exercise price of warrants | $ 11.50 | ||
Share equivalent of exercise price (in shares) | shares | 0.6144 | ||
Common stock for each warrant exercised | shares | 0.3856 | ||
Average last sale price (in dollars per share) | $ 18.7175 |