AdaptHealth (AHCO) 9 Aug 202020 Q2 Earnings call transcript

Company Profile

Participants

Chris Joyce	General Counsel
Josh Parnes	President
Luke McGee	Chief Executive Officer
Gregg Holst	Retiring Chief Financial Officer
Pito Chickering	Deutsche Bank
Stephen Tanal	SVB Leerink
Brian Tanquilut	Jeffries
Mathew Blackman	Stifel
Anton Hie	RBC Capital Markets
Richard Close	Canaccord Genuity

Call transcript

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Operator

Greetings, and welcome to AdaptHealth Corp. second quarter 2020 financial results conference call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions].

conference recorded. this reminder, a is being As I to your like to conference over turn the host, would now Mr. Chris Joyce, General Counsel. Thank you.

You may begin.

Chris Joyce

I'd relations call highlight earnings page. supplemental as ended this morning, Laura. Corp.'s that copy McGee, of posted should the for investor Officer. a call Parnes, questions. you, the presentation like not, on some Holst, release everyone have a Financial XXXX regarding welcome Thank Chief Gregg earlier then Retiring our earnings to Josh Luke a have earnings is received conference results In prepared slide well QX XX, Officer; I'd President; for from we'll release June quarter and if as our open We'll Chief the XXXX. moment, Everyone our to AdaptHealth comments like to Executive

which number Actual in forward-looking a remind Before this to no have Litigation those the results provided from our but may earnings factors that update limited regarding everyone financial annual information statements we included forward-looking of our events. to, XXXX are of results quarterly in discussed reflect constitute projected Private on risk call like AdaptHealth statements meaning could I'd this in and statements of and because release beyond. Corp. will our statements comments differ such include, uncertainties and are call filings. Act. materially SEC obligation the These the start, subsequent to and to not conference for in Reform within Securities

Luke available release. This Officer, today. recorded, call our A later call is which and as reference today's I'm be are measures, will included and information on EBITDA EBITDA, EBITDA EBITDA a first adjusted morning's in table Chief this being Additionally, pleased supplemental Executive call, such now we'll replay financial providing on McGee. non-GAAP financial measures. introduce of the to quarter is adjusted earnings and certain morning's

Luke McGee

call the this joining for everyone thanks, and morning. Chris, Thanks,

be Before to staff, on efforts QX, I our have AdaptHealth's and of important who've I like and will Throughout an second frontline these productive COVID-XX remarks those brand patients. teams in in get quarter. needs been five the had member continue clinical delivery an entire our would team proud crisis. health and of We workforce health to tremendous drivers, am the up and every has how of and and well-being months, last role times. AdaptHealth's to throughout incredibly each the the priorities AdaptHealth our extraordinary service such busy I continued stepped acknowledge the team and to need our extraordinarily patients' my during of played help

performed well, active further in help business core Our strategic we to attractive goals. acquisition long-term our were identifying and candidates

Solara July XXXX, Medical previously acquisitions As and two important Inc. strategically we on X, closed Supplies ActivStyle announced,

feedback on leading Solara business. strips the glucose rapidly blood will independent a the transformative more continuous as blood management a technology be is distributor diabetes it of leader diabetic transaction traditional real-time that adopted levels offers monitors establish to as the fast-growing a in in to community test is by glucose U.S. continues compared CGM meters. glucose This AdaptHealth and

of that to the Corporation run established business our XXXX. solutions X, synergies patient I'm at ahead AdaptHealth of needed conditions. January the home we medical in core year. to the related plan to It AdaptHealth's potential and core the proud McKesson bought Additionally, critical state business, a care fits our competency of products that the and to continue capture from transmitters ActiveStyle CGM incontinence around with with and we to mass of On provision well patients we recurring on resupply distributor chronic supplies. sensors adds is beginning

of million less of adjusted $XXX success. standard quarter, the million patient financial generated CapEx, in equipment net million For importantly, and $XX.X revenue, EBITDA $XX.X adjusted for we most our EBITDA measuring

results patient previously quarterly first adjusted year, require in solutions would and EBITDA acquisitions respectively, communicated our are we equipment our the our earned of for EBITDA of investments CapEx, which less and Excluding which platform. of $XX.X organically patient results the we and record integrating acquisition, growing and million company, care onto adjusted strategy the $XX.X million validate accretive technology

our products respiratory our efforts expect for pulse pre-pandemic procedures. the bi and lines of by end generate our to to in performed equipment Our adverse new machines, traditional orders supplies challenges on concentrators, COVID-XX on since orthotics, return starts, of business walkers, do the oxygen QX, resupply of elective in wide such stay-a-home strength and hospital levels commode cuffs to softness PAP equipment new we of like QX financial as range similar expanded $XX sales linked we discharges pandemic. pressure revenue blood Well, business, business direct-to-patient equipment of ventilators, not the other presented million on other providing and product oximeters. results, and in approximately by and To areas products facilities downward the care a subsided and will our largely rooms pandemic lines HME volumes to pressure partners. The sales adversely starts thermometers, to these and of closely for well impacted PAP quarter discharges able COVID-XX the We following offset has were CPAP impacts XXXX. emergency the and BXB referral focused considering rentals long-term from of linked offset in other

and AdaptHealth, traditional municipalities, a to hospital provide been our to Although systems. not equipment to channel distribution we've needed chain supply able for utilize NGOs much

generate to needs. channel related this few COVID-XX expect continued next on $XX quarters the based for revenue million in We

Josh to activities. President I'd Parnes, our our discuss turn integration the to over Now, like call to

Josh Parnes

Luke. Thanks,

our Patient Our January of since business point PCS important an Care has XXXX. solutions acquisition this in been focus team for

As we situation, our $XX in part restructuring PCS disclosed, losses turnaround we a expect onetime previously million as operational of investment, and is in and XXXX.

PCS curing and half in to benefits, and various resupply addressing important QX our progress in businesses the our in expectations issues yielded our platform has Adding with at the pleased the revenue and outperformed first year. PCS are We QX. of

as the cash vendor the ActivStyle profitable collections, focused be and quarter and Solara believe I'll a very of in few over months. to on pricing in XXXX better improvements. of continue PCS fourth integration the product improvements and next formulary of be will result We

on Our expect strategy is we to order and in PCS to ActivStyle improve integrate medical diversity scale and processes resupply has our needed resupply business. add business. to PCS ActivStyle that product rates the will supplies

businesses operating expenses the in expect also integration of drive We will these corporate services. efficiencies and

to the we'll and AdaptHealth Solara business, will transitioning business Solara. the for the be CGM diabetes be of platform PCS

diabetes their costs healthcare and is and growth recurring opportunity need investments better largely in management excellent U.S., disease and down owners management. core among CGM led web our This condition. a giving leap with resupply, is competencies portal made associated the including there's phase. the Diabetes and allow a to information a costly believe the drive to resupply diseases with Steve to and patient they is and billing very relationships. Foreman, revenue the Solara in technology business in we previous generates referral is well-suited manage us by technology patients the forward team, that most integration accelerate after that an to an in will infrastructure has mobile-enabled chronic

technology back the point, With call down we balance processes our investment, offering this of In X.X the will integration patient and better service drive more throughout experience business for we operational can I'll At XXXX. on over invest while be that Luke. turn patients addition to believe we in we work, the to a focused than costs, to continuing million annually.

Luke McGee

Thanks, Josh.

raising detail, more underwritten activity. Gregg million the quarter The ActivStyle issuance want on $XXX of In Deerfield with Before comment Solara equity capital offering proceeds. financial net million million in transactions. an we connection public approximately comments $XXX One provides pipe for in followed recent Equity on July, issued in I the in and X.X the to early all Partners share results primary raising offering shares to and a

final in XXXX. also issued notes, million a and senior X.XXX% We maturity $XXX with unsecured

$XXX of at ability bank these capacity, invest of grow million senior $XXX million Lastly, our we goal with undrawn our result balance our vision. enhances stated facility activities under million and three leverage well to is Today, a EBITDA. of sheet, our have of cash revolver net $XXX times million in excess to our refinanced revolver. of $XXX we secured undrawn drawn longer-term and on The achieve closing, and the

our want We of we've Partners Williams. response of One appreciative Brad Equity on received in co-founder transaction, is two David and director to with CEO were also and resource great current AdaptHealth, He look Coppens doing of board welcome entrepreneur forward are are working him to and support Partners. managing of David new markets a to serial One for is by we the humbled delivering Williams Coppens Deerfield and I as us Brian and results. the public Inc. Solara committed Equity was CareX, I to and the a a and members board. the certainly

in and We from benefit expect his technology patient connections. healthcare to experience

be Additionally, Jason Jason in the AdaptHealth to ahead I CFO also operations he CFO. joined our of where company in with leaders replaced mid-July has financial public Jason very formally Jason would strong press welcome us. a and to from of operational I week. new has new be us like the Clemens. He advantage this experience, opportunities we Josh as MEDNAX, will a was public valuable six company's officer, and great will our Gregg company. that has immensely comes which the all the as role important to mindset

maturing retirement. the I'm success over years. to a him appreciation the turning the it Lastly, Gregg best Gregg, to with business. luck and before worked over part express have my I of to I has done in the all for six turn AdaptHealth. you. wish it I'd our over past like been his sincere of him work critical grateful of as Gregg, growing Gregg to

Gregg Holst

a Jason His also welcome excellent I to want and fully great Luke. and AdaptHealth, the I'm background of AdaptHealth confident he Josh fit be an to team. to is rest for Thanks Luke, will the partner AdaptHealth.

of equipment first $XX.X of XXXX. compared EBITDA less to million Included that was the PCS our XX% of history of the second in second net revenue increase of amount, quarter million in XXXX. of Our quarter CapEx generated million. revenue and from terms million, second the the XX% an $XX in quarter generated patient higher was net XXXX, We strongest profitability. in than revenue quarter $XX.X $XXX.X Adjusted

Excluding PCS, an $XX.X million million, the of to a quarter second XX% to $X.X $XX.X XXXX. CapEx equipment which EBITDA Adjusted compared second XXXX. adjusted the quarterly in of increase quarter of patient EBITDA $XX.X incurred less was million was million, loss compared

of million quarter XXXX. Net million. emphasize, $X was quarter $X.X related income be we Act not and these loss starts the This $XX.X occurred Excluding received compares to expenses in PCS, second revenue other believe do adjusted of million, expenses a EBITDA compared intended AdaptHealth of include I previously and $XX Based on CPAP stimulus are lost These will attributable to increase as we COVID-XX. a Corp. funds. we in any to April to stimulus. the XX% net cover actual to as was XXXX. new products, results in lost funds want from of and declines revenue CARES discussed, the the keep million to additional our to second entitled

of secured of excess facility, that, equities our to and We Luke. the million offering regulatory guidelines $XXX capacity account, $XXX sheet, certifications back closing regards guidance, we of quarter it of $XXX the balance taking of Currently, have definitive the In the are of on when and cash undrawn financing, we'll successful senior million I'll our in bond to With revolver. continue with appropriate sheet turn we on into to monitor ended refinancing cash. more million balance the make finalized. and

Luke McGee

Gregg. Thanks,

leader patients home medical are to to provider sleep increase patients home. their medical leading the Before chronic is and management strategic questions, acquisitions, We're also I our are payers, is there that home. and opportunity million of believe important can we that we the supplies and connections, recurring contracts annually, and X.X and our a diabetes time, we open in conditions believe to but relationships diversified we XXXX These categories a up in a it categories, for other our home. referral we Over to connected product With utilize partner care payer our manage have vision products help the With guidance. non-discretionary offer well we a want patients. solution. fast-growing providers two built recent restate diabetes, company in health patient equipment, our become a value-added in under to an

note $XXX are but we based financial In duration for conclusion, increasing adjusted thanks referral million, delivered anticipated for terms to $XXX impact of partners of trends, our COVID-XX my In to remain the between excluded questions? less patients XXXX or of $X serve our predict of $XXX our million PCS. you guidance, to million This revenue on million business, Equipment current expected I and AdaptHealth I'd million. and all strategy our $XXX CapEx ever more cannot appreciation with prospects. adjusted have the record financial and and on previous PCS net losses outlook for EBITDA Please Patient $XXX includes They EBITDA and and we our full million crisis the results, million. to EBITDA $XXX can confident the guidance to guidance and will of adjusted our continue than for up open Operator, approximately reiterate courage losses about line up professionalism. the stepped like employees.

Operator

a At Pito Deutsche line Chickering [Operator instructions] question-and-answer this will conducting question from be of Bank. session. with Our time, first the we comes

You may proceed your with question.

Pito Chickering

Thanks morning, A taking for of questions guys. couple Good question. my here.

forma one There's from moving The of a quarter. it's the million $XX.X and CapEx $XX lot excluding million a ActivStyle guidance. quarter. of on of pro pro to and take Solara $XX.X accretion That run million parts about first a definitely less forma guidance. synergies, the about rate XQ if take is I gets EBITDA But within

guidance, looks the $XX.X EBITDA Looking it less million. at CapEx revised back the half though is

us of pro EBITDA sort CapEx what help XQ forma is you year? bridge can So, of the the back into half the minus

Luke McGee

close million, $XX $XX.X a pickup million year, it includes significant think it's that the And anywhere in BXB some No, although get I taking to question, Pito. of that of expect from we the continued had that Yes. we to half business traction sort great a back won't in the the be QX.

should sort to of you of margins think the mid that sort business contribution on margin. I assume high-XXs was

you also, And that add out should back PCS the you quarter, losses. the so when of back

line would I previous think looked to have quarter in $XX range. with something guidance a clean in like absent of million both the million those $XX our

number the by You'll you'd four the on acquisitions. you multiply in that suggested our with you're line add find guidance. think and you And I for

Pito Chickering

focused XQ. Perfect. you other level, press it. is this the talked you about it's And you a how then on got guys during it's think sustainable rate resupply quarter was versus quarters? release Okay, the new better, if CPAP What the do this in forward? reorder business And then going

Luke McGee

up definitely I it's at same-store hard of look it's can height to that you people basis which for mean with acquisitions the supply say even related quarter. on I going pandemic we At even in is in double-digits we're a time, the tell look as CPAP ordering. the we to a on is impact resupply. better. to whether that whether be were the up some business, you low of basis, a sort July, at digits of or the April still single There on same same-store it

that home we've treated focused captured therapy hygiene. off and have as at fallen and the they've think do otherwise probably respiratory would stayed I So, on patients that

experience in optimistic We're investing the permanent technologies And seen in also sort make I doubly of we resupply we're sort cautiously make we to view yes, to certainly patient do it's integration, getting sure we touch that we've on as Josh integration, including think integration, permanent of permanent making that, a -- shift shift. up So, everything better patients. just and focused those yes, and can processes second in make sure a half with mentioned, trend, is, rates. that business a reorder

Pito Chickering

on last then for you question Okay. here PCS. And quick

due XQ have $X.X loss is How to Thanks that the loss would and what much. of much COVID didn't been of of we million in So, have loss of if kind in XQ. sort sort so COVID?

Luke McGee

think Because it's there's business, of resupply actually much on such a a PCS. I don't COVID Yes. I impact been --

acquisition we've But largely Now, as operating products, -- well. of plan revenue run of behind expenses unfortunately, plan. we've seen track our at plan. ahead tracked Expense cost

add is this PCS with line together, actually directly If all our original almost you plan. in

you've impacted think COVID, of PAP respiratory, the by up. don't been supply go of oxygen least the business I So, probably seen that's any part and

starts You've but down, bent the seen PAP other steady. metal been and pretty of some new orthotics has go PCS

wouldn't COVID too I to so And attribute business. weakness that much

Pito Chickering

much Nice Great. so quarter. guys. Thanks

Operator

the Stephen question Our from with Tanal SVB next comes line of Leerink.

with You your may question. proceed

Stephen Tanal

you in think perhaps Appreciate on wonder level? you all amount also like estimated the morning if year the to color on a contribution. may if But sort the EBITDA be appreciate spending maybe in revenue around of lost, guys. Good the by G&A a of taken BXB details, $XX of because It extension COVID. number. gross have like sounds like few sort recur and don't framing I that revenue I the the it you've pandemic and impact that you're net net at million direct estimate next of an you will effect guys other the

Luke McGee

time, Yes. first direct you Steve, What going the we're spending of sort of the can all of far sort sort half G&A I to At in the and impact. mid so is labor single-digit COVID detail. of this that is tell to provide not related of in

exactly $XX on be on think for BXB, said, the you're can In the of next -- the we a the been. what we million I call think as of I quarter of quantifying million that impact terms it's revenue QX. couple you in per year. right certainly guys throughout expect has But rest about the to And

Stephen Tanal

helpful. That's

Okay.

extent the kind in for a environment? you've revenue forma current you I wonder think how extend lines can state, weakness you us sense business normal And expect a certain outlook like in the year-end, traditional impacts so if give that more for in then its today, to to I past guess the business rate be of of and you where would pro run built

Luke McGee

Yes.

so if think business into has on understanding. of go where two And little start an detail -- down so bit approximately The the guys so you so big basis, -- sort PAP quarter, sort a to at for XX%. and you lines impacted I at you everyone a more of same-store most on just look that severely the new starts, were and looked trends,

quite of It's the in the in here actually starts new we've July. coming July. PAP week best since March had in You've as down of on terms mitigate last scripts that week We had not seen new in in July. much

of business that walkers, in the taken here saw is de But those And and And would sort only it just we've so expanding the starts. commodes kind at than QX, have of obviously, Again, in look that severely you you country when coming then There we've are QX. we been of were back account sleep new look in because little other pandemic you the really a if -- because competency parts next that that certainly, we the very PAP bit we've interesting even you've down. business still, orthotics, XX% of think business. COVID that's markets sort organic the hitting still July. seen a with, just include line, growth, started. seen that line lot same about new And it's was been about rebound to we've faster at largest novo what impacted. because wheelchairs on Really, Those XX% the it's mitigating you if in be off that's markets. basis, down then

in year year. flat So July walkers over commodes and you saw basically

actually be are about flat. wheelchairs Beds up pretty You've significantly.

going of be most for country we in going And back of our take and more. impact is sleep sort as backlog very if we a look of eligible of I so year, was going that cautious of challenged even into think CPAP area severe are the a and There's the to because new up, more for rest do really home pre-COVID and the think can do open those teams of test are side, home do I'm it's doctors tests opens back a people even slow. as overnight, was sleep people be will weakness to and post-COVID availability that us those the up. the about, back to taking only sleep the lounge that trend occurring that on at starts. the accelerating who sort going We've

teams And we've to on more do challenged so certainly that. our

we've a of revenue, of I half think you into. In should we out come run a going to that the couple think There's in the terms think rate PAP that's pretty provided, be the not time, BXB, new lot one the of business. back if slowdown a starts of sort guidance on the we of good is as from of dollars where business guidance first said, the it's I million impact what includes and

Stephen Tanal

progressing us give well minute helpful. high what's super in All gears like was your right. to like after pretty And kind wondering ActivStyle, deals? how and a to in. But level, back get transactions just sense the do? And maybe I to been shifting position the left integrations for I it what's for then at maybe it platforms a will and these you sizable guess, month to of That's take if there, thoughts execute sounds long Solara a done to a can integrate the are on

Luke McGee

the it details. a I turn owned to I'm to would caution to some We'll businesses get I split to first. I'm these it is Josh that. mean going We've month. part only over second answer going for early.

us. strong we excited, May. we trends. new has on were exhibiting if basis think as at the existing helped grow that not business a business, businesses I than start we more when organic today combined Both signed and The you bought deals McKesson acquisitions are we Rodney for CGM look CGM with excited are from if in about Carson the the it

saw light in that businesses. Solara, QX to even was frankly, absolutely had an strong of add ever new start we've the in July And combining COVID. You best month and just that you the

going prospects. XXXX. of them a things want the get So the business every It strong exactly is to the Josh, where year take these sort we of integrations. more about for we're of can to excited talk rest bit the about

to on and than of terms continuing than probably and not we're -- smaller Solara. side, execute accretive identifying of on sort acquisition I focused ActivStyle smaller strategy the our of think but In probably,

We But will integration the on Josh? those throughout year, we the making continue the of transactions and Solara that of don't sure distract execute rest to ActivStyle.

Josh Parnes

Yeah.

marching on on increase drive really of So per technology resupply, our and and are we to of really, solutions PCS integration to the of a management order drive orders the our of PCS better the call, mentioned a that some that's result. better to amount I Solara, we're the and core going side. Like and integrate so turns result competency have dollars ours, and the the to on our revenue be leveraging know-how on both systems

better As the half better gross drive of going kind out gate going of formulary the of year. and to with second we're mentioned the a margin into pricing better also,

that's really, So side. the PCS strategy of kind the on

some and side, growth Solara be Solara to There's of there diabetes, that CGM lot management stand-alone starts of Steve move and the integration the great business the and by there. Solara On business done the has opportunity a to Foreman. over PCS were to the for with There's and happening they a kind business led CGM do our job. team that

squared of are to going take long take, to journeys of So months but these to really and get they're crazy not couple kind in get that things all place it's these away. a --

orders that's of So the operational the side business. of the kind from marching

Stephen Tanal

competitive bidding. on Great. just I in And more then maybe one if could slip

then produce as revenue, that you so a for could much. for Thank the margins, provide you, on update you maybe your as get new last CMS for me. EBITDA adjusted much the an sense rates, latest kind expectations of to that expect impact when on and be to will guys wanted thing. Just 'XX And

Luke McGee

a on could softness in impact that don't think what new Yeah. high think new previous CapEx whispers post-acute I CMS pretty we Obviously, you continues hearing can rates. XXX less to out letter a we many rates But there in week take bank. parts about soon you of terms CapEx the really congressional maybe pieces. There's on to week, likely this our than release just sort of signatories dollar be based more of about that single-digit less that But was commentary single-digit find the the delaying we with is likely saw a so other high I -- last rule-making there are so and EBITDA year. PAP hear operating supply program sign are. for changed that on anything's competitive some of our into sort I don't push. a case EBITDA moving -- know healthcare bid

we the again, there's program on so And a But in based know we rates what base will is today. impact we case on is. moving what the of find continue, we QX. will pieces. on out outlook lot changed provide But guidance the our Once have our rate, will updated nothing's

Stephen Tanal

Great. Thanks so much.

Operator

comes Brian question next Our from the line of Tanquilut with Jeffries.

You may with your question. proceed

Brian Tanquilut

good. for really Congrats my and guys looks question you. I guess the guys. quarter first raised morning good short on Hey, this

sitting now your you want out capital cash minimum So them that cash I be and about that's a send thinking balance as much the what sizable mean, view in this you're what sheet, for I balance, think be there about I I that's how right mean, your seeing on should cash to should deployment? pretty

Luke McGee

Yeah.

sort cash balance so long-term structure place ideal think of right the senior I have reflective wanted and bond we and lenders – to capital our our than certainly we that is be So be would as more now. with of and relationships in right current put liquidity – with opportunistic the we

tend to we're but reflective they put again be right deals. that as capital long-term M&A sure structure able the an We do that to of was making I that smaller -- active pipeline, I in place. think said, have we

on kind cash I would for $XX run going So million to cash absolute that sheet with excess the think I $XX of think quarters. next probably the we're of in several minimum range. million the to balance

that's now. right the we if the accretive time, wise a to see run We myself excess have time, some be that period same at acquisitions significant optionality, won't there's on of that the cash deploying about certainly board just obviously, we so And and carry shy thinks decision. for if negative

Brian Tanquilut

question Got to you. follow-up earlier. Steve's I then on guess And from

single bidding, what as think the are is about of you your about products? you high So to thinking. back those some competitive comp you're bid said negative on to manufacturer the How pass cuts we ability digits thinking for

Luke McGee

respects, continue the delaying more conversations renewals if manufacturers. extending productive In have until current very We clarity. contract and some there's contract very, to actually terms with

known, both of for time. renegotiating contracts is sides, think new until awkward that's I an somewhat

the constructive. what been so is manufacturer say And I'd has very

there equitable volume to be an COVID of last to world, hit continue even would a there's sharing light perfect and of not our of a targets, that for We in share, payment concession the additional so continue certainly lot will any with nice optimistic year, In both am that contract and come. I manufacturers. we gives better to It's a organic seat purchase those volume, table a be to aggregator acquired. the It and at of us time through an pain drive certainly can volume. price

Brian Tanquilut

makes decent as for I it rental one it amount. down overall CapEx a explanation for was That like revenue percentage Any guess a looks sense. patient I'm Gregg. revenue, looking that? at question of or

Gregg Holst

Yes.

slowdown that's starts. -- that's in new CPAP related the course, so directly Of to

that decline life CapEx. our So -- in decrease. I That mean, that's patient that for depreciable CPAP the But starts short accounts biggest component all XX months. is new of with only the equipment a of

Brian Tanquilut

at look or million? one-timers Any OK. in And call that $XX very quarter. you obviously strong free out I $XX Gregg, million as number then, cash would this that

Gregg Holst

to requirement a expected, have would apparently, which have CARES operating an Well, includes -- what I stimulus. count accounting the is not but big that Act as wouldn't definitely which Yeah. been And call out. that's there's it

Brian Tanquilut

one-timer So that's in of other words? in kind the only there, like,

Gregg Holst

and CMS the well, payment Yeah. we the and had And advanced on -- then payment. then

Brian Tanquilut

health, talked Luke, prepared should be that you. Is there? we connected you're the that offering? through as you got thinking you're be as we that that you you your making about running about investments that in thinking remarks. already question How me, last should the for about? is develop try Okay, something -- Or P&L, product, that

Luke McGee

It expensed. Yeah. currently been has

and out that, wouldn't surprised that, won't to there's it dollar included that I in guidance. there the investment. of accelerating mid-single-digit strategic where excited to if continue But good be Some investment we're we one sort about, million XXXX decide is, come that. investment in a going we in drive per results it's think think make be I a we do But if se. area

And All lot the, that, well apps demand in the a out seeing we're continued there can for in it. is research chasing COVID and the connected -- of we're particularly be on also there we're sort that Obviously, And doing the health, of connected sort there's sort and Yeah, positioned. are trend in chronic people we're we of a more we're uniquely business really of offering our of environment, Obviously, from sort and side leaning and and whether care of positioned. the or devices, software. technology with behind uniquely it think side. device would management. from software

helped thinking in So hired to need invest Andy really in on March, we that. But has us who we do Palan, some that.

think the And -- included in of rest guidance it's so I the that, year. again, the for

And through that won't As P&L include may we Likely, release we there. bump be we'll want reflective. capitalized. XXXX when in And run into XXXX, that may do in we'll be we come to guidance, there. investment the

Brian Tanquilut

All guys. Congrats you right, all. good. sounds Thanks,

Luke McGee

Thanks, Brian.

Operator

line of Blackman Stifel. from Mathew comes the question with next Our

with question. proceed may You your

Mathew Blackman

in revenue morning, Thanks And just taking Good everyone. for implied in what's start growth? Maybe roughly Gregg, growth, to question. guidance for full-year organic organic the quarter? the the was updated what

Gregg Holst

Yeah.

quarter well, was -- revenue. so So of growth BXB because for the extraordinary, organic the

excess in So XX%. it of was

percent it some related the and weakness COVID, with the exclude you was BXB -- at of If growth or organic a couple the X%. to of

same, of the kind going projected kind for new -- then lower COVID. very because of So and level -- a steady businesses we've of a and essentially of forward, the amount

Luke McGee

in not you July, of bent starts metal. the where and we're seeing and And more X%, to nice context the rest see just make orthotic again, new growth. the look the X% of a first year-over-year, guidance, is organic going organic growth COVID half, within growth month bit very isolated you're just categories, And a I the any does obviously, the quarter. for at But for PAP the so respiratory most of that add even very actually one that. to little well mean, year, if are proud to positive have sort in then, that BXB. of to we've QX, We're the business. to we weakness around Mat, even it's obviously really just so included given And in

So QX. X% I think X%, we're on to back confident, that we in that can be

Mathew Blackman

And dollars a channel? then, this from Appreciate million future next that. You should future the you it. couple could BXB opportunities? mentioned for maybe we Luke, magnitude of of about talk Got business How couple quarters. of about opportunities think the

Luke McGee

Yeah.

million work. had and -- call at certainly team deliver. said, we in it isn't to your from slowdown the April team was know a line the We of we've saw credit next can the That's never and mean, when couple and in generate to we us, out on lemonade you to ways knew but core lemons, I that to I a I'm optimistic. help. persistence been quarters, and sort the even as other of pretty give we've did AdaptHealth true what our March hospital frankly, maybe of we of And chaotic, say, know quarter systems I buy think this some can price you business entire listen, to making sort before, the particularly think continue attitude and challenged didn't able it $XX cautiously we of I We we're surprised highlights lot couple of to find we we've in We Northeast. hey, before, the our seen that as is, our best, the it a in of operators -- there's by BXB. make dollars Certainly, been think million I've persist? that the of business. per of that

be we our paid to stronger relationship time, all chain competency And some goes can shipping great gotten for so, blue-chip optimistic with XXXX. a it that being won't I it future cautiously need is can. core the we've isn't product, utilize cognizant, But At that's doing be supply of if we to of in certainly same our away, into We've that and out and also spill that the BXB shy able think and that too. if about just been then referral again, it. sources,

Mathew Blackman

on savings, dyssynergy side. question speak? side be or plug apologize this, Solara Thanks I again, there do of upfront play, Are you've talked over do synergies understanding synergies play And just or last time? color but need on out it you priorities. for to and for day risk, to opportunities about are if sort they Thanks And And it. one and the truly is Got on sensitive longer-term so the the touched on but revenue cost the revenue expense to we synergies, any Josh.

Luke McGee

appreciate I question. the Yes.

So, yes, this synergies. is integration more kind of

the any of acquisitions So actual out Obviously, level systems the things the sizable drastic on our as but gradual. It's kind M&A and product get we synergies our both our more not anticipating us. integration. and of cost kind standard gate, kind of We're of are out for of these more course business. of

they're longer to lead out time process. synergies the So gradual more get the it's may generally, a bigger a little businesses, businesses. bit to of But

Operator

Capital Hie with next instructions] comes from Our question RBC Markets. line Anton of [Operator the

your with question. proceed may You

Anton Hie

issue queue had Thanks. the quarter Congrats Must there. a guys. have on

follow-ups CPAP how us on can resupply to kind line ramp time new of here kind affected for up, that? -- as of -- start the timeline couple a is Just back by of the remind you the

Luke McGee

Yes.

are again, what in up mid-single tracking the seen decline digits of the digits. low sort you've in is -- new light in said, resupply and we That's were And in QX double so, starts. we as still of in July

if better. had CPAP been so, be business those patient would to would a start been numbers the get new new for general set The up. have same, the And cadence obviously,

eligible and that need we that a They're of has provide initial sort sure then though patient all their do on cycle. order be quarterly, on needs exhausted we're supplies a on make patient new to ones. of even -- the sort will On supply basis. it quarterly We should average, and getting be may

eligible so, we about It's year. X.X out got And of per that orders patient times. four

start basically, new eligible so they'd for the and resupply. up ramps quarter be And then next

Anton Hie

continuing same and are strength or surprised Okay. Great. the strength diabetes to that you're in I'm the CGM And you resupply. the then that see

can masking it's maybe it be or different visits that the and Just given strong of affected the and that that diabetes. explain slowdown of physician is in experienced you kind things on may that the just why that April? Again a slowdown CGM office starts, kind in CPAP it's

Luke McGee

have fingersticks the switch only but think a positioned the sort CGM. Obviously, Obviously, in switch that in seen that weren't as to sort diagnosing And business to probably Solara -- biggest growth of of take CGM from well is been even was was the have sort some on CGM in not to beyond do business. that CPAP. which Yeah. QX also the new we've particularly a was to relaxation the There on uptick also We've I market from. is patients of seen smaller you new it's take trend, therapy. eligible or mean, suppliers a who side, of I Medicare for enabled guidance you payer

we QX month certainly I business CGM PCS, performance and that's to very, was business. after of it the Medicare looking record to the of we in in think together, Again and I month, And wasn't the share, strength combination patients. continues that it's some but have to the see us taking of surprised number a the pleasantly very driving But the also of think that are merge up forward so record continuing opening as at a combination it obviously relaxations businesses eligible just Solara. the

Anton Hie

the the BXB new one. channels if little and Okay. I'm you channels release, do you that but And that Can to last stuff, just with bit? new is -- not Just elaborate elaborate new customers? then here the Great. on one has just sure the and around on press maybe customers. that In mentioned language a

Luke McGee

Yes.

and of of part comprehensive health, that won't value-added of connected excited of that chronic be time, opportunity to hit may over very hit in Again, we something a back previous to really wholesale our hopefully, customers is states. that one And just more deliver business though, that the can that solutions lot channel, historically. reiterate disease not where it's a BXB, solution. we're the XXXX were XXXX, And very, but about certainly, new so that think have challenge a question QX, go done across we and new I not new just to sort

Anton Hie

Okay. Congrats. very Great. Thanks much.

Operator

of Close line question next with Richard Our comes Canaccord the Genuity. from

question. proceed your may with You

Richard Close

Great. acquisitions. and results financing on Thank and Congratulations you. the the operating

I'm guess from would previous growth? taking Just questions. of forward. will was you ActivStyle, specifically wondering maybe on PCS dive that on from you said going processes ActivStyle be drive And And growth driving curious, some the existing faster you what I operations just mentioned deeper the to at resupply also your benefit Solara. that then into I

just if you a wondering So could I details items? give was on little those more both bit

Luke McGee

Sure. second the over it the one, Josh take turn for and one. I'll first I'll to

on of key it got Solara one can of XX, us to in the certainly selling -- force. The XX to over for We've over amount about sort the and field in that is ability was increase field It's the their to rep about the a a already largely of pre-acquisition. we like strategies at that -- sales in to we'd of day two quarters. terms have -- next of for field productive dependent got it it territory. take is sort So XX take payers

is our with and PCS bigger business together So coverage. contracted Solara big just advantages the of one putting of

in the that should we're use there's covered we be metric for, of than to that is productive XX% if that that contracted market. more lives be we know so that And rep able

CGM. we And a we green map, would lot kind at coverage of so looked XX% because if have that that for contracted more now, territories shade a there's you

the so that And than and share. biggest coverage, the of that's allow to our to CGM -- field to which wave the continue fair reps hopefully the sales contract benefit drive from us more take it's addition us allows should

pharmacy the more as Even benefit accepted. widely becomes

over to ActivStyle Josh the processes. about to turn the recent side, On talk it I'll

Josh Parnes

Yes. Sure.

medical experience this the of quarterly some the calling so the was integration, on and as ActivStyle resupply, into incontinence our our experience, incontinence. and side, such focus monthly the shipments on to diabetes core those care revenue wound recurring care doing nature that categories, of or PCS going such initially supplies, into that leverages supply urology, really On thesis competency as and medical CPAP is wound the urology, leveraging and our on and patient what so resupply resupply we're with the

experience, as we recurring the of resupply. the what like on do I nature of to really engaged the amount that, turns we'd is think getting the we the get, So focus in patient patient integrate

that core in business. to what we're to about when our refer talking ActivStyle PCS the that's competencies So leveraging we

Richard Close

Okay.

was doing were there doing business nothing what the necessarily you So better than there? necessary, that or you were previously ActivStyle guys into entire was PCS integrating

Josh Parnes

at ActiveStyle, of supply was think on we a our to the do management job pretty doing business. big resupply leverage robust for January, was business the the that is got I thesis really PCS and experience. base a doing when of PCS good one their us, resupply there was revenue there was, what really not So opportunity business. the supply And that ActivStyle or in we if historically on that in And side medical did side time the the upside we technology a of that's of acquired well. team why

the when increased that driving hoping business we're PCS we to leverage and revenue and into turns. that, So

Richard Close

back Obviously, And of these the to getting But new a bit now half geographic curious, year the earlier. maybe that and saying Luke, transactions M&A, deeper on then little and through on Okay. questions right maybe and would on smaller. with the expansion in scale term, maybe M&A, priorities existing -- even or be areas. I'm are what near-term respect to is or then it longer product markets maybe some two digesting the in here dive

the I diabetes target think area. couple of as foreshadowed sort a ago, a quarters you

helpful. regarding thoughts be that would any So,

Luke McGee

Yeah.

think, want Southwest, markets in say density. like there From can We that serve And where underpenetrated of seen need be to say to foremost, from particular returns. sort like markets overpay year, where and so, to be add want then we to a and to be earlier did additional there, really acquisitions acquisition the capital really, for this have with allocation and our platform feel not we're we'd get up. look doing and in don't on also are geography. adding we in we an Are a We've sure. as nice that we disciplined We we Southeast yes. to first then too hung to sort there try and And that market. I of

in growth. the Southeast or would in the we ourselves thought into world, an upper do of because opportunities more to engine if CGM one that not Midwest to other perfect. we where on like box. to we would at the market Southwest I an future price And find so and also time, than the be think and to potentially continue perfect force could that for don't we're acquire. Solara right same side a will CGM going like more inhibitor is in larger we is the sort target, be But like acquisition the look it We that

got breaking And two now of lens the the our separate it's folks so core stresses then each It's our HME with sort we're of And right those. different in CGM, they pieces. we've into tasked put frankly, really, and M&A organization. and

So, another. doing one doesn't actually inhibit us from doing

categories I quite should out cautious one read product into and ActivStyle with product a other of think could the Solara terms home. put be we expansions. bit pretty there no In and we off foreshadowing. bit But want to I into Like long about term, we you think that product know

going the and or And one, categories when supplies, hop with focus making are those off it most But can comparable dialysis. before if sort happy is the in home density you're in far, product home additional think, so be we excellent, really investment those look offering, to us the think the see next pretty that post-acute sure we in I equipment diverse you into next on I infusion already become we what eventually one really whether we're respects. by and additional some pharmacy spectrum of across more and have, -- think we

take product if to next. the product offering that like that to think like and I health, add we so, drive additional try an we'd before do can we to things And then connected

Richard Close

of Okay. you stand-alone with Helpful. that thinking that think or is And go-to-market about that? existing is a within my company are separate somewhat as How the unit how health strategy the or that's the connected in on that, and embedded about you businesses? final terms in question is whether operating you that

Luke McGee

because it's different you selling best-in-class it parts pay are that to we're the interesting the of We're the competencies going also the sort managed think point ones an relationship with organization, with pull of question. I that which call setting integrated and Well, outside. today. we're separate. Obviously, sort higher plan up from patients, from think I and to out time, the of the operation. care for going and going patients is your there, the has results, they're and driving likely to on the But who is calling we're be Over

again it's we when health, Remember, we're the those so supplying in it's a patient's patient home leveraging a of connected hybrid. them. relationships. And about little think I Certainly all about think bit

of the And connected get to think are touch people in lot get actually and so a I engagement. health who other with doing patient struggle

help to coaching use can partner, time, the solutions adherence we're of sort approach therapies get is acquire, either relationship, engaging resupply. to us Our the with on differentiated they're sort relying already because technology patient their our and time. can't of approach demonstrate And we and of develop that because all offer where then we're can we solutions, that drive believe you that can wasting the out, over home an drive in technology we resonates cost we the out, if because we're patient's is cost that

delivers We a think payer be better we're patients a outcome. deliver we cost again, that. better that that deliver outcome excited the have to And that can to able into health the do a solution we to

Richard Close

congratulations. Great. Thank you and

Luke McGee

questions? any are more Thank there you. Operator,

Operator

the Ladies the for back would not we questions. call Mr. have and remarks. session. reached more do gentlemen, this I McGee over to have We question-and-answer closing turn of any end like to Luke

Luke McGee

team us partner amazing for to Josh Again, quarter. I, reiterate want retiring business. an CFO. thanks for as AdaptHealth just the been Gregg to Holst, He's we've our I and helping deliver Sincere the this my to entire appreciation built

as the in will to CFO. excited We He's great for going Clemens things same time, new welcome us. to And do him. at our miss we're Jason

to to So forward quarter. everybody next with you you that, and look thank talking we

Operator

for joining us today. conference. concludes you This today’s Thank

great Thank time. Have for You day. at a you may your participation. this lines disconnect

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