AdaptHealth (AHCO) 4 Mar 212020 Q4 Earnings call transcript

Company Profile

Participants

Chris Joyce	General Counsel
Luke McGee	Co-Chief Executive Officer
Steve Griggs	Co-Chief Executive Officer
Josh Parnes	President
Jason Clemens	Chief Financial Officer
Brian Tanquilut	Jefferies
Pito Chickering	Deutsche Bank
Whit Mayo	UBS
Matthew Blackman	Stifel
Anton Hie	RBC Capital Markets
Eric Coldwell	Baird
Richard Close	Canaccord Genuity
Kevin Fischbeck	Bank of America

Call transcript

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Operator

Greetings, and welcome to the AdaptHealth Corp. Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Chris Joyce. sir. ahead, go Please

Chris Joyce

earnings I’d prepared release call welcome December for have slide highlight of Everyone Kevin. not, regarding morning. AdaptHealth like presentation well I’d XX, to as Corp. should to our copy a conference the the received earlier like you, this everyone If earnings to that today’s moment, XXXX. release as Thank quarter supplemental ended Parnes, comments a of Relations results Luke section the of AdaptHealth. we’ll open call is have Clemens, In website. AdaptHealth; AdaptHealth; We’ll XXXX Steve some QX and the of Jason Investor for a from Officers McGee Financial Griggs, President posted our Executive Officer questions. Chief then and on Co-Chief of Josh

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

non-GAAP now This call be adjusted and reference financial introduce Additionally, of Officer, later EBITDA call EBITDA, recorded, Luke which Co-Chief CapEx, Executive on to measures, a equipment McGee. EBITDA, financial today. morning’s available the and patient such this adjusted measures. morning’s I’m our will being replay as pleased are less is certain call, we’ll all

Luke McGee

our heroism for be you critical in I quick by who needs of of our continued the face the drivers our patients and call. and teams crisis. COVID-XX with all Chris, everyone employees, thanks to impressed employees. clinical our continue front-line to delivery like the thank to of start have Thanks, I’d meet of joining a the to AdaptHealth

to thousands pulse ventilators, hundreds of with thermometers concentrators oxygen our and thousands in meet our throughout needs out did our Not the of only but of payers top in put more XXXX. that patients our to their provided home combined their have on of have equipment we of COVID. we while duration home hundreds combined, peers, and COVID health of so up responding amplified And patients grown partners. have of XXXX, throughout diagnosis. part care provided ability our best hospital needs we patients, the patient’s AeroCare On only and Adapt system step a to in to of of home. that, that To to along to empower record basis, context, and were with Our the did we health than hospital delivering medical HME AdaptHealth critical referrals oximeters lives We, a live XX,XXX now results. a financial the and

As our and EBITDA updated revenue, end EBITDA beat year will that CapEx. Jason guidance adjusted high results less published across adjusted November detail full the later, XXXX in of we our

In accretive in with closed that grow transformation We companies February XX XXXX. we AeroCare acquisitions year, on continue to our of total, the of business XXXX. acquisition the including acquired through X,

health years, The over the platform care the to goals integrate several our demonstrated our of AeroCare and accelerate deliver and home. the ability into past we’ve As will to cohesive in a acquisitions has acquisition here. only comprehensive team enhance

patient logistics satisfaction business for of a and view that with efficient doing referring common time, our by long a and turnaround shared powered ease our with have times business products technology, providers, teams management services. is success and a Our of connectivity and

We about talk remarks. progress continue in our in areas invest prepared we’ll these important team the and to

focused our we product And closed AeroCare and Oxygen Equipment of In Midwest Allina Medical on and other this on mix strengthening acquisitions. on earlier remain February, existing complementing the California. geographic the closing, Health we strategic our patient footprint, HME acquisition late Home we Following Southern closed two in and in acquisitions, & further access accretive Minneapolis. week, through businesses

out Solara We diabetes growing last the of continue to complement rapidly acquisition our year. to supply business build

supplier and an management the We of we’ve been additional with appropriate are and CGM throughout acquisition at announce the support in We’ve To Louisiana-based also small management United with a Upstate to of added leading York scale diabetes capital of our New acquisition and pleased the Louisiana end XXXX. supply, active financing, in Southeastern diabetes markets. a supplies States. the acquisitions

In deliver of with to are $XXX recent these incremental are secured XXXX, in activities, guidance to our expect refinancing credit these We pleased to revenue facilities about later. XX $XXX over unsecured Jason of issuance, to about the and including success acquisitions together total, successful note $XXX talk Steve our our components we XXXX. of million now, million senior talk we’ve in of increasing our million the million raised $XXX equity $XXX January first But million our our our accomplished call and what the guidance days. in for in will we quarterly. I’ll turn

Steve Griggs

other. collaboration Thanks, our start since tremendous teams demonstrated the each meeting have Luke. acknowledging by I’ll

Our aligned from beginning. mentalities are the

to we drive processes operating savings. fast of teams closing off learning practices, time our From growth details in well time announcement So implement spent the the systems. date, and That businesses, a are best cost start. respective spent very was to as our and detailed accelerate a through plans the resulted

the helping streamlining revenue in and touch cost $XX resupplies run Josh progress and few in closing, remain ensuring on the revenue a cycle. we their they the our we to million side, annual adherent they synergy deliver on rate to need get stay expected talk revenue patients areas key protocols, on track Prior synergies. will about achieve to on Importantly, when prescribed I’ll to focused synergies. patients it their need

First path is our sleep within business. here

XX for to practices first first patient our significant patient therapy. to success. on of of procedures the is therapy opportunity have critical The combined XX Accordingly, setup path best days to install days we focus

In coaches addition, and our next XX drive path of across to the increased sleep are days teams compliance aligning therapy. we for our appearance resources

have improvement. also visibility reporting and common We educate sold decisions so across enterprise teams efficient and drive the train to make to we our

eligibility regular, and and ensuring enhanced Second by is improve timely tap optimizing through requires efficient delivery. technology to shipping requirements outcomes costs resupply. There’s resupply. patient an opportunity dependable streamlining This ensuring while

our We’re working a company. entire to common for platform install

collections. patient is Third

patient enabled and monitored practices work very an integrate the ensure underway is projects setup of on implementing focused hardwire the but RCM time at hard processes. is revenue autopay practices to best the take We’re best to process or the cycle. over will materialize, to and Many of life beginning the these

on each Importantly, while and every new focused we business work remain day. these we winning revenue synergies, on

to turn I’ll discuss cost we’ll Next, synergies. the details. Josh let

Josh Parnes

on Steve. enhanced terms of direct recognize we’ve Thanks, scale reached the agreement the manufacturer combined On new purchasing, major company. purchasing with our that partners all

costs, result realized integrated. $XX shipping functions consolidation new methodical contribute well with to of wins roles these will also elimination majority in should expect insurance. consolidation is as of early be in some get We supplies duplicate The office cost already our and purchasing savings vendor underway to these with and some the terms QX. back-office our million Indirect in being combine significantly target synergy – to

Adapt of footprints were our based to complimentary, geographic locations and overlap AeroCare the time of deliver with there Although, on largely are to dozens patients.

country. are across resources already in process the jobs, consolidating locations, We of vehicles and

functions, centralized opportunity our We business efficiency including improved for operations. our customer cycle, have in tremendous resupply service and revenue

all areas We functions. are across bridging of practice our best technology and central

to results. initiatives e-Prescribing our Finally, to continue advance yield

our the from fourth at new through our quarter. diabetes beginning of already XX% generating Specifically, starts is business platform the e-Prescribe up X% of

Overall, the demand conversion We and proud our and we’re over programs and providers have referring sales With for to it e-Prescribe I’ll growing made this in investments to extremely pleased with that, of turn we’ve accelerate Jason. our results commission teams. to from training workflow.

Jason Clemens

for morning, Good Josh. joining and our call. Thanks, thanks

for fourth an XXXX. results XXXX. Adjusted million, quarter the fourth million, was quarter an fourth patient XXX% of our increase the EBITDA XXXX. $XX.X equipment of XXX% million, of net Adjusted generated CapEx EBITDA an less of quarter from quarter fourth to the from of increase from of the revenue of Turning was XXX% $XXX.X increase AdaptHealth $XX.X XXXX.

results update that million reporting relief include of returned announced HHS to $XX.X against the financial funds fund XXXX. January Our provider that The the XX, we will on qualified be government. funds remaining

As Luke of are we XXXX full QX proud results. and earlier, mentioned year our very

growing tremendous of setting record platform in including and reach, much a also operating more an challenging well to a that ourselves and time change an positioned results During we delivered ago, with to the environment and expanding a product our business an footprint year pandemic, were future expanded success. category. while exciting business due our Compared in fast for larger financial up is a geographic company diabetes made we

For the we geographies XX in markets HME density acquisitions, product in closed the include which portfolio, and closed the These of Southwest that provided full acquisitions high expanded acquisition supplies and AeroCare growth XXXX. not exposure year, in additional our diabetes. particularly like February, does and in added on Southeast the and Northeast

in have nicely that has pandemic a start on via focused capital and note, strong our On deploy new we we assertively our business mid-QX. rebounded the to acquisition, While organically. pipeline M&A remain lows continue growing we’ll business from

XX% than those pre-pandemic so PAP starts and walkers other cases will Specifically, in QX, December, end from reached that has be nearly and slowed highs. but XXXX QX of we start in remain of some declined down water in highs uptake XXXX. wheelchair PAP new we more HME XXXX pre-pandemic for confident which new has high by above the like for recovery, The in COVID our business, far and

the Our resupply resupply are continued in by business CGM business. steady has remained and encouraged the throughout growth we pandemic

the oxygen elevated a year-to-date QX business of back our XXXX. with XXXX increase half in Lastly, was significant and throughout

in levels including earnings the oxygen Synthesize to when COVID BXB. supplement, and BXB our remain of on and quarter. starts new year a at expect above balance was business all X.X%, organic the least pre-pandemic the our detailed for XXXX the growth XXXX QX first when above X.X% excluding trends slide full of the for We

increase quarter, BXB in excluding X.X% For starts including our in BXB. depressed was when when the new business, X.X% the quarter the mid-year, organic of and With census growth PAP COVID the to we after to fourth QX compared expansion XXXX, rebuilding CGM, on XX% oxygen for With to XXXX. continued turn in context for our X% between business growth in organic like growth, confident in organic guidance prospects I’d that and our and XXXX. remain market fourth

XXXX announced As year we for adjusted are revenue, adjusted CapEx. increasing EBITDA equipment EBITDA less guidance morning, and full patient our this net

million billion to EBITDA to $XXX guidance was And EBITDA Adjusted net full billion. $X.XX million less year Our $XXX previous adjusted CapEx XXXX patient $XXX equipment for million. to was million. revenue was $X.XX $XXX

previous As believe the running a million ahead contribution reminder, XX schedule is plan. of as delivery. in-year from guide closed well the as $XX acquisition We AeroCare of of and months assumed synergy on integration

guidance such, assumes As $XX million increased synergy of our realization. XXXX

Our earlier. acquisitions Luke partial other increased from the full from DMS guidance a of year contribution Allina year acquisition contribution and the a and includes mentioned

We previously closed and coming in expect acquirer million revenue to on basis be $XXX acquired including in an XXXX future the exceed acquisitions. believe and Allina months active and will over annualized BMS,

our reminder, yet any guidance from not acquisitions include a that does closed. been As contribution have not

back guiding adjusted to call of equipment $XXX to $XXX $XXX billion, million of over CapEx that, net to to EBITDA million billion million. to We revenue $X.XX and $XXX With adjusted are turn Luke. of less $X.XX I’ll the EB million

Luke McGee

Jason. Thanks,

for call over summarize I’d key the the focus open we like Before quarters. areas coming questions, our to

be the on AeroCare integration Adapt. and First, of focused we will

are on we focused remain the of far but plan. completing this and running plan, ahead pleased progress by will We are

drive growth. Second, we will continue to ways organic to find

AeroCare practices XXXX. more We returns as from and growth a normal best seek cadence the will on course capitalize learn to throughout opportunities to also life of

of has been a in We patient ability improve to the Third, integrations. of experience better connected are Investment both in fourth, a initiatives our key of through value believe part in we key care. will acquirer successful our know, an processes, exciting patients’ We a technology diabetes. deep there our part plan success to technology pursue our are our we future to acquisitions we date. track internal of and to record that monitor health technology And creating choice and with additional invest HME expand will success. be

pandemic Steve, thank for take to AdaptHealth to the They’ve country and the On will next my open that fully I note, are heroes in absence. employees family their during am COVID-XX our with time for Adapt a a days. over and forward personal I year. the lines I my with Jason expecting past the like deeply deal I’d grateful arrival, son in real drive their her wife helping my little of questions. second a all girl and been contributions our the efforts. confident for child, baby Finally, With few I’m my leave planned and Josh please to her, up wife. Operator, spend all

Operator

conducting now be Our first question coming Tanquilut you. We’ll from question-and-answer a from [Operator Thank session. today Brian Jefferies. is Instructions]

now is line Your live.

Brian Tanquilut

of you a And good result on Is were on an during the question, a impacting guess strong stories. quarter, obviously, the then was Luke I’d investor during congrats were that Hey, quarter, guys. flip what as guess questions were I Volumes the are my there oxygen and of mortality perspective. baby. first from those. I there morning on figured COVID. a Congrats lot about concerns or about but questions the I whether seeing? the you’re COVID hit seeing that issue some of upcoming side,

just the happening outlook, now. so like just given around broadly speaking, noise And growth their kind right all

Luke McGee

Yes.

pretty we’ve the seen there much been really that and patients in we correlation. isn’t just So crossover consistent patient [indiscernible] base, haven’t our having mortality between renal

patients our home. of chronic are the most diseases have reminder, a As in

seen influx But our across sort a in so of as have base. related XXX What patient big is whatsoever prescribing And we Steve, of last haven’t oxygen what I’d to say increased COVID. days, respiratory more we oxygen. to, the mortality seen, Greg and and going yes, XX need stage diagnosed is, or I’ve it’s of ERS their and are just not the just stage were who COPD It’s diagnosis. for actually getting prescribes of issues cognizant COVID sort in X, who discussed, need the with X patients particularly

for So we think tailwind us. nice that, that’s a very, very

all you costs the pretty And built the set across frontload, in reap XX also operating Outside has last patient the the – up to frontload, what oxygen on cadence days. patient the also new really of get of oxygen, census your stays kind cost and Our CapEx of the as longer. you sort of AeroCare materially harvest oxygen at third little seen bit Adapt then, of it rebound, pretty whatever seen is of straight-line From as flatline it kind COVID. from our November. of a you’ve true to or key second products, wave, early saw call we the this and June until you we’ve want a and wave

pre-pandemic levels. – we’re not for PAP, we’re quite And so at

a of we’ll key probably end pre-pandemic We’re we’re that we for – like the some way categories sure and the pretty of at But couple the particularly be getting above pre-pandemic the we’re levels points. levels of close our census. of beds, see products sort have sort of of the oxygen for vaccines all almost above back will out, wheelchairs QX within rolling benefit

And XXXX. so we’re pretty excited growth about the

Brian Tanquilut

on Luke, diabetes last then, people And awesome. in weeks. the few been is area focused another That’s that have

CGM if And or reminding for So decided just one. strategy diabetes long-term a as the you growth you mind guidance number don’t diabetes, when go then us know you have into I for to group.

that the embedding happening shift terms the or CGM pharmacy in that assumption the is space? that’s of the what in PBM So within you’re

Luke McGee

resupply was business. of a lot another cadence Yes. When in acquired sort our bit comorbidity very quite resupply a There’s Solara, is to PAP the actually patient The about similar that wheelhouse. patients. patient product our base. it felt category like we a similar adding very of our of It’s between diabetic and was

think pharmacy so diabetes And that. similar a been about the could that the we we about Certainly, benefit. advanced And thought in people technology, shift is we’ve processes. use I similar that to talk headwind right

setups there we’re I we But certainly medical benefit. spectacular of with a all That’s opening numbers. that. benefit. see is XX% plans our are and in seeing XX% in the about We But more to terms that big it seeing pharmacy a seeing, network the in suggest the benefit, remind up business aren’t our we are service growth pharmacy, PBMs not basis. unit can not new on just we’re pharmacy that We’re

the is has There than that’s for here. surpassing any normalize. pricing But seeing some unit happened headwind You’re compression. pricing been more growth

of so the across And we look all business. diabetes

to all five unit we in when was is, XX% a of Then unit year-over-year of look excess and all them now, those coherent think across already it Brightree. think integrated I all growth sort the working we diabetes They’re platform. we’re at to well QX on get business growth bought QX, into of I businesses.

things our that in so And about our the diabetes just to fantastic has very sales has a our sold we are footprint advanced business. surface haven’t excited and co-marketing prescribers growth that We market. using PCPs. like really in the about people, yet like scratched force AeroCare

business. lot upside that So diabetes our a in we more think actually there’s

we up We Josh from started start which out just in team and the have now experience as of we shortens medical being standing to haven’t a QX It as done that the benefit. of bigger trends, XX% actually starts our pharmacy just roll to e-Prescribing in-patient new focus e-Prescribed. – many narrows been it We’ve a The pumps do. and fantastic think difference a insulin between turnaround kind should XXXX. mentioned, time,

long In seeing. a target. that the to X% we unit revenue about still is our and we guidance, saying, contributes certainly to diabetes that’s really net trends excited That the business. are conservative So even that trend assume to XX%. XX% answer It to XX% we’re

And that we’re base. so about excited

Brian Tanquilut

you Luke. could and something then awesome. That’s sleep Emerging medical And change thinking about. apnea how these about, as business third me, talking inspired then people are technology are occur? Obviously, is and med there’s that your question for sleep. there How developments

Luke McGee

of sort think the of importance is more in if add. the in sleep, or to anything sort space and need whether space, has medical sleep more trend venture of the health, we to the in a us. hygiene overall traditional sleep it of you be across can Steve here general, he In I awareness mean, for Yes. for great see hop

patients we a some something them want that therapy PAP, And options. life. We have other Inspire, a can’t we’re it’s our that’s best it think for business going alternative And And sleep to start more growth sleep financially, have surgical aware it well. sure likely people people in like you to grows fine more at that’s Inspire, tough Steve, make as still being We taking – there? means make apnea, folks. that’s they the participate test, procedure. on whether are or just most in where be mean, surgical if Inspire I do our being of PAP, patients and a to want anything we don’t home, on to like lab even add if helping if live because

Steve Griggs

and procedures PAP choice, is really long, get still tune. surgical going time. the Yes. fine same had therapy for thing to of Maybe way mode We’ve be those a that long, sleep it’s the appliances long us is some dental kind awareness the the I with going patients just But prefer but in short-term, to only that again, stuff. in of that long-term. the and of think help not really,

these of CPAP a patients patients, traditional So be PAP the the portion will majority bi through vast, the select of machine. but or for therapy be on will small vast procedures a PAP

Brian Tanquilut

that? me, obviously not Got were we it. comp into the by released question as? comp rates you for then bid Or into does bidding read are bidding happen. How And though even The comp out last came rates how what should reading Luke. CMS,

Luke McGee

Yes.

to they to weren’t going postponed savings. came they bidding, rounded obviously, any I out and too CMS so get I – into read think when this it’s tough So much mean, provided

rates which this this. across think weeks out the product were rates sort category, of in at were products a have that beds. lessening – providers. the won’t probably – predicted there’s categories going existing some I are every go proved of of of been number that of we six, across Rates some that almost had released to product walk wheelchair up the that certainly eight lot point a their people because The do

going to And rates are so go up.

to think, certainly would I And versus are a Chicago there you, Oxygen was going related scored I clearing that, key I bid have up our But going is the I’d believe moving like program, been OMV in up. anticipated actually the price and they would probably rates new anomalies. to I And Miami. takeaway median. acknowledge, some Now directly when rate is to go also think up. had had remind competitive XXX%,

be stay And rate interesting make. some our in probably program so belief anything, that, at think But general, across whether product we’re rate and bottom. it if we CMS to going it in a of inflation validated the see most our categories, that I sort to – are going of touch sort about to they’ll come. XXXX in to changes slight And of will there’s they’re with pursue

Brian Tanquilut

again. Thanks, Congrats. Awesome.

Luke McGee

Thanks, Brian.

Operator

Thanks.

Our next coming question Pito Chickering today is from Bank. Deutsche from

now is line live. Your

Pito Chickering

my Good morning, quick guys. A couple taking of here. questions and for quarter. nice Thanks ones

On growth the to rate. guidance XXXX the about organic talked raise, you X% XX%

solely a check, since is done guidance? guidance just So double your from last the coming M&A rate

Luke McGee

on any the we revenue side, change revenue. So didn’t

is the So adjusted CapEx. the acquisitions, that raise EBITDA less patient be and to would – the related revenue adjusted EBITDA

be. We this the we we We’ll cost better We But probably that on will what synergy have some of a release full than synergies sort sense. visibility. we of the comment to guidance. have haven’t anticipated. we and QX forward we able some when of have faster earnings realize total At were certainly think do point, the moved we raised

of guidance of sort synergies. updated acceleration the of million relates the to $X So

Pito Chickering

quarter? it. revenues has us changed you one got color some guidance, another? from your fourth XXXX And on organic way sort And as you diabetes, it to Okay, saw the of in or organic revenue you XXXX at the can on bridge the and your all fourth sleep quarter, growth what give the guidance

Luke McGee

Yes.

half and QX. of was that the into growth that so we’re much So probably a me. through contributor rentals. so – QX you here organic zero the just in to of is still census guess basically saw QX, just continued the my revenue depressed our want you working Jason, is if so in In of sleep from and QX, hop QX organic contributor not in clarify come census. was and We QX, should sleep growth out to back sleep depressed because a because can We in

sleep honest. In we’re new beat – we the guide, the resets, back normal, top QX. QX plan we what to for to does diabetes, in of because so to tends on And deductible think line the of yes, it internal And That’s monitor seeing diabetes, is sort have XX% be our be start in We’ll to if Right to to we’ll diabetes. continue December. that to particularly contribution the feel we raise heavier good the because full quarters, other pretty that. compared now diabetes right guidance we continues do now, for still with XX% to outperform, year trends. XXXX.

Pito Chickering

Okay. It’s lot there the at of of actually the in the last can models some appropriately? what – can just the to range February. anything couple give the in COVID general concern the on annual EBITDA There first color guys of catch Is January in sort around we percent obviously a quarter coming you’ve of of of M&A don’t was us your spike done to what your look – so of over hard business years. the and amount seasonality due

Luke McGee

Yes.

business that think isn’t There I effect. seasonal very so seasonal. And the is some

doesn’t tends ordered. quarter weakest resupply be First get quarter some the as reset, deductibles just to

$XXX sure in would little looked that know reserving We conservative sort with of – of patients XX% we’re the PAP QX diabetes. more to QX, a year going I and biggest earnings ordering of on in come contributor resupply a you through and you’re of helps, bit have QX. QX XX% are weighted of the probably would the if to half Pito. bit being that more bad the just year, than deductible say patient we Hopefully, QX we’ll appropriately little debt in more is the back going recognition, at But co-pay. because more revenue be to because making and that

Pito Chickering

one much. last Will you so how And that just quick than create if us of impacts Thank it walk dilution, you’re liability. through that thinking more here. shares does? common Okay, The Can original? consideration great. then the dilution you

Luke McGee

and on amount with SEC me. as expected the some the price clarification, of the of dilution bless listen, bought for God on was some Based was the X tremendous kind being we price we accountant to a from we nonsense, of wants amount changed into of business put dilution. on EPS you related guidance. this which some million be our been It’s million based more of shares, positive correct X on again, this updated here no as expect letter SPAC, where end have one. for to those we’re out just earned accounting. Jason at just of hop the he Yes. if is, focusing above same sort diluted a in the you when It $XX of it’s knows, can million Nothing comment another No, the SPACs X just in focus everybody as the And the has year. more is stock perspective. whatsoever. This stock additional count. an to shares would position, already factored the accounting, sort It’s earned if been implication. share will, accounting on Yes,

So you want anything, add to go Jason, if ahead.

Jason Clemens

to don’t that, Luke. to I anything have add No,

Pito Chickering

so you much, Thank Great. guys.

Operator

Thank you.

Whit from Mayo Our next question is UBS. coming from

Your live. line is now

Whit Mayo

to I to thanks. savings the contract go opportunity. and Hey, manufacturing wanted back

could beyond It sounds of opportunities to finding and like guys pretty you frame at good least this. about you maybe at above some you line would be are mostly where previously talked Steve Any guys communicated. what sight that? this or contemplated into think you tracking I way point? I have maybe had think

Luke McGee

Yes.

through. in fiscal accelerating XXXX. the So The so we miss of make did million recognition but anything. still invoices – see on $X lead We expected, early it moving we Steve a realization the earlier right think than higher didn’t I synergy we we both that efforts, and bit thought. it’s that come we The I sure bit the quantums part a and mission the are little little when and I just want of probably to than took

back be QX. release supporting yes, partners us. But of to we’ll They’re the They’ve in been with pretty we’re think us. investors I negotiations great we happy turned when months to said, sort I As manufacturer two out. way the

they that discussion, fulfill just in We’re Steve, can making there. anything efficiently. price a to not do sure want but you it’s ways we’re ordering add more

Steve Griggs

that’s right. think I

contracts will to those of Luke on those lot for us. come through And alluded patterns pricings As and our based, purchasing come processes. it, a up, it��s

I in hedged think a all And so that’s perfect direction.

we’re with So $XX very comfortable million. the

Whit Mayo

Okay.

that’s circle the contract So from $X manufacturing if that you’re forward million in I opportunity? the the primarily guide, moving

Luke McGee

Yes.

that could related it you exclusively to – be hitting time. think fair I of us, that’s would say to So just ahead

Whit Mayo

an you Other question the that challenges look there’s market. supply it sort across of Is this some and what you? should you’ve as this what’s in feel And of is be I had, seeing an responded well-documented mean the a oxygen. curious does kind but just I’m seeing. I very you’re of industry at opportunity, happening little opportunity? how for bit What like

Luke McGee

mean, I quarter the fourth to in price for I concentrators. I back pushing trace – can hard was to direct mean, all think goes you oxygen. to competitive Yes. buy a it pretty line the bidding, oxygen

down, and far sort the their it, then community So of the that so of buying wasn’t capacity. as much provider manufacturers reduce

global in there’s have a when so And this pandemic shortage. the spike, we just

some met some January. December able of up utilize almost during demand. AeroCare. big of sort quantum and to team inventory new were But weeks Steve ahead of supply to to the excesses think those was AeroCare’s credit, we throughout of happen thinking there the they could sure sort Adapt certain had the same mean, at what to spike. built not to of make we done and smartly I that, a I in year, if were XXX% starts

were there – the We to did system. turned anybody this able shock have never get we not so to to product. And down. We was

we competitors inventory meet have to some California, well-known manufacturers, In subsided been us. had from but feel systems, deliver backlog emergency were that every for for bit. And all like for fact, very them. were We some actually looking who oxygen. we we We’ve from health not has sufficient and buy sort smaller on to make to to need shock hospital single wholesale asked been OX in the calls that concentrators. of we’ve only good a The There’s able actually we – still that’s looking system needs. help but even a met of able the call

able a to last supplier were concentrators get we think I – able small XX in We’re need week. to

Whit Mayo

One me. last helpful. for one That’s

including old all? Solara that active And number that’s I think at style, million Thanks. all got. Is the $X and $XX Just target of was synergies. I moved million,

Luke McGee

to hard to and that honest, adding think, think diabetes now. so focused to the business and on it’s about been I we’ve number it, be very

What to stack on active acquisitions. the got all plan. You is comment I is running can at absolutely style

we’re and probably excited more actually Solara. our business, than now diabetes we Solara bought about

basis with particularly not SCM, now – answer the Pinnacle, look we I And PCS excited inherited it’s have from diabetes. so with with that just on we to mentioned a think diabetes business not the the But about question, it at we very Solara, combined your for to are McKesson.

Whit Mayo

if Okay. it Thanks. I not in appreciate plan, ahead. with At guys. line least

Operator

Thank you.

Our next is from Blackman Matthew Stifel. question today coming from

live. is Your line now

Matthew Blackman

more still could we of underway. see a congrats realize play Clearly, that done, a XXXX and Good you quickly have mentioned. But the follow-ups. synergies I XXXX? morning, is the AeroCare event? can a I start, of of in and work to be revenue synergies is start back of of there’s everyone solid just these on any end year. appreciate work how half highlighted? beyond as Steve, out some do to And you think of Or Maybe revenue then you the you couple

Steve Griggs

XXXX. of certainly in You of the that half will XXXX, happen see some back

We’re right proceeding now. along

but they patients you incremental grow type all slowly, it’s so the just add as And on patients rental base. of on

from end efforts. should So half of contributions of I be all XXXX, nice think by the we some second those seeing

Matthew Blackman

that. these the One faster new would of businesses the And that of the cost for acquired then margin there acquisitions? about of the one that higher? those clarify, of of drive EBITDA businesses. the imply from by is for that sort some want sub-corporate you’ve new we these guess realization from entirely Jason, Is final those about it after EBITDA of M&A, range are to to just but guidance the type that Any does Luke. synergies. is – driven What I raise as from say on Okay, help some question think opportunity contribution appreciate that the lift so some revenue just I margins I entirety in

Jason Clemens

Matt. sure, Sure, Yes.

announcement mean I late when the we guide XXXX. Aero in revenue that growth you’ve on in the out So increased organic mean, the got with came revenue side, we the right. I

organic your very So no rock-solid increased we’re our growth. by evidence about. there, the kind we is Luke just feel acquisitions mentioned change excited To point, real that revenue of that from about confirming the

mean, we and such some when very out you vendor some these acquired you’re these I that think think a about. as businesses. million the negotiation really of of get gate, out some of run the synergy the what the I is I at just of we’ve $X math, recently scale, businesses. talked mean take increase your ramp I are in getting in synergy,

that just really the the profile that synergies, things talking programs. well tail, has things of and as as labor is longer and reason Some that’s about I tail, mean, longer have you’re kind revenue like the difference. things those coming in Steve cost-outs downstream seeing like margin those a a

Matthew Blackman

strategy question. a sense. more you to not, you Makes care might past? need? then in the might to these Do the potentially assets initiatives visible the bigger the we connected it, how contributors be aggressively now And If think growth? pursue, incremental Okay. you scale question Luke, have final do talked what picture like else for about let’s and feel when call And you’ve

Luke McGee

in technology diabetes we’re in than pilot do of so think a year. of will to admittedly, in can – hope expand side, the later bigger which exciting, well, have value, think mean we I care way sort tackle them to disease. it portion this. give this goes be It’s all launched product scale with pilot I we don’t I and to this able their of on just I more more No, this which just Yes. all mean of is would a to that. go quarter that. them lacking our of do technology early I population deliver sort future we to create then connected a lot there’s a to sort manage sort is that if on that

going We’re side. connected also on to the hires make we’re – share some

of problem on remain finding bullish And what a that is – we’ve we start I we ever prioritizing many opportunities think have, and as sort them. as is so care, connected to it’s like been. good to have there we’re

homes. We these are patients’ sort in of

helping We with are patients care chronic their diseases.

launched expect continue results. may in we a a say, contributor not and to quarter. to that don’t we’re and this sort with already it be we peers. technology, we contribution may from It be internally with way our led long and pilot an the sort Yes, will just a may better impacts caveat to as on offer of right. differentiated externally that more so at offering we financial it e-prescribing. If volumes, of connected I ourselves, offer think of enhanced have the see update And a get just next experience. part And like be We care care from quarter things some connected to as we both line. differentiate all we see revenue in XXXX. health be it explicit XXXX start to Hopefully, start may on customer bundled go a can plan volume. we have to We

Matthew Blackman

appreciate Really it. Thanks sense. makes right, so much. All

Operator

you. Thank

coming from Our RBC from Anton next Hie question Capital today Markets. is

Your line live. is now

Anton Hie

my on and news. add the want team family just Luke Thanks. to the to to congrats I

dynamic to It here. the if Just Have affect pipeline what just obviously, M&A could sound you execute a some of changes couple lot seen kind at you’ve there. you the like One, been get bidding, operators. downstream your doesn’t for competitive on a able color that probably that but of on, left all?

Luke McGee

to a and pipeline. good No, both little AeroCare really, time see we’ve – with active been great investors have mean we having Yes. Obviously, as Last bit. a pipelines. spoke really we foreshadow deep we we Adapt I a

isn’t Do funded is, more feel don’t other seeing We to opportunity M&A? who get have Now to are do competitive? there. out I And going mean if competitors well hard that anything answer that well, the you now? of think lots Does we’re more lots it’s and it asked way be questions, we whatsoever.

great have a pipeline. We

We AeroCare the record are, out well. a I nice really shot being that value value is too. our do on of creating. said, a disciplined sure Financially good these excited. track we’re Dan will importantly, side just to And Bunting, very mean I Operations, of to that. have and They will integration COO for most acquisitions. on as team. acquisitions as say remain on But a the make we accretive contributing is job I really great Branch disciplined integration,

to continue going And the you’re acquisitive year. be to so I us see think throughout

Anton Hie

dynamic about a going give bit talked Can patient there? you earlier diabetes pricing. Okay. versus on in what’s and the growth unit And Luke, between the question, previous you color of growth little

Luke McGee

Yes.

of in diabetes, nearly reimbursement. primarily grand so Medicare, – – still scheme advanced XXXX it’s really has believe So by diabetes the CGM in for approved I the was

pharmacy seen K to And at code. you’re so our line it been but the shift top slowed did seeing some there’s the rate, what versus to channel, is We’ve which codes necessarily A methodology, hasn’t we the switch not and growth a all payment some payers acknowledge, numbers. Medicare

continue this these so been see underwriting And we’ve to as we acquisitions.

is, which kind XXs we of the settling completely the range, in margin low underwriting category. We’re gross think, for appropriate

still therapy. We of still and are the census, CGM because who concerned in just is to kind long compounding because which for excited whatsoever of starts, we’re on which new there’s compounding we’re I the of nothing – we that so the really about I going this stay think really persist about that are we’re coming people only early we’re on be should new are that to growth means lot And the of census, think a not seeing mean in but it’s are which we’re in diabetes. therapy, – pretty years. length excited we seeing

Anton Hie

you of strongest couple Texas me. weeks? disruptions I talk there had about final may growth for know in some states. with past and the we’ve of the storms organic of experienced bit you then a Can Tennessee the were AeroCare’s And one little couple a Thanks. winter have Okay.

Luke McGee

Sure, I’ll that handle one. let Steve

Steve Griggs

started. that could weeks our of patients, to came take it those care weeks that. storms disrupted will our our to them new costs Texas have But the oxygen been through those X.X and certainly, get starts And get mean, all I to stuff – Yes. certainly, declined ran in like for X.X started dramatically. that patients up that

but new four revenue three, delay hasn’t to two next a such weeks, just the recurring the Over in changed. really revenues,

a So bit, be they’ll March our nicely. insignificant, results. bounced Expenses and up little Same back just will report Texas will operations Tennessee. fine be very but in in

by a operations bit will be bit be be our for will little heavier affected and little So won’t revenue. March on Maybe expenses, it. February quarter, the on a heavy

Anton Hie

Thanks, Steve.

Operator

you. Thank

Our from Baird. Coldwell next coming from question Eric is

is line Your now live.

Eric Coldwell

couple or Thanks very you question guess here. I’ll but much. you make XXXX of squeeze age gracefully is in do The front in a out when something up, bow you old I

mentioned have you hundreds guys country. Luke, the one, combination First be – would around you of facilities the synergies. There obviously,

in – had kind that consolidate might a be to consolidated. I on facility point finer look sort. that, comes your say I what $XX a facilities hoping you to potential how of the number think get that was dozens. the of management, And specifically real for heard you what things I actually much when synergy the goal, rent, estate, from at you million

Luke McGee

Yes.

aren’t a thousand of kept feet. five These leases. couple pretty three terms of our most it’s maybe. preferred, I’ll a don’t not big of so Most We generally And to square combined a we combined years first. year-to-year. locations. lease of – if million short, our big mean a near – I month-to-month couple – are couple these not question is XXX – of or mean hundred answer we number. I cost last finding bucks have It’s sort the –

you I XX I But were think here. other. can think – identified it’s close facilities each hop we that and about to in Josh, enough

for the out business and I one every looking the and side. of – market, yes, location. comment to cut every I We get. much think to close to on we maybe side Steve this, know. can service kind we’re there’s mean, it’s the and want on sales also important to not like market, us so XX, customer But go in costs can

So might an yes, rent savings delivery truck. there the there is actual be

mean But of in savings. I utility we’re – we actually these some growth. markets, get to want sort reinvest in You

you million and We’re Steve, there? in branch number consolidation. deliver from big hop Josh number. the guys cost It’s that want $XX going comes do synergy not to a that to just

Josh Parnes

Yes, I that. with agree

than I thought. what think more initially we have it’s would

dollars our locations big pretty the considering are of when in obviously, terms locations much have could drivers, and we in those And consolidate some and rent, and Just expense that we’re us did of to locations But complementary we’re the vehicle be expense grow. consolidated. labor the kind some the even help putting we that growth, organic back since of things, reinvesting expense. delivery the foundational

the So big it’s to not to be our going going nice a synergy be case. it’s of driver number, but

Eric Coldwell

reserve upon a opportunity to and your a just I year. ability beaten comments. you’re the is you collections again, path to those what longer-term today. for always focus maybe side of so focus, and with – past. thought you that of was always of you there because, and with appreciate I the a again, bad talked or being I’ve be trend doing curious I two in you – reminded other three you’re historic something bit And how and be about and QX have where that AeroCare where on maybe wasn’t stand may to you more I one, one little opportunity debt acquisitions bad fast upon there initiatives when improve the seasonality other maybe am felt to I Adapt Luke, a the just little flip into cautious had you. the debt off have collectibility. to points But like focus improve me biggest growing you going profile, The underway

Luke McGee

would I’m of we that the and specifics. going is numbers definitely talk you agree upside, some think let I to there Listen, about of Steve with some

get to setups. things. on get lot other and better on if we’re of having you the about educate to data And reimbursement. real us, insurance they’re pay at setup did really, One and not we’re our and better better make – processes. sure talk gotten right are patient deductible more a put a and Because it’s the But file some two with we of new there’s can about about insurance seeing oversupplying the continue claim just so drop appropriately new that’s commercial card to is better have it’s on you’re let points their to think versus going file, have I’ll and in and pay quantity, trends that of quantitative opportunity. that, can evidence going you a I patient job, getting need better the systems – a big on AeroCare month-over-month. place. patient Steve sort you we then a how you because some to their co-pay When

Steve Griggs

in that There’s great no Yes. pay making particular. improvements in question we’re patient

service, conversations a is the comes policy company. financial in responsibility. When to patient on now – combined is one of comes So the the for the first

that a making right there’s So we we do have all what with the decisions there have if right beginning. financial things those we’re that, or to that go anything to waiver and is if away, to like need on reduced at patient

for or of co-private as have take over bills auto way pay. pay starts to the deal. attachment big a through the but Adapt a big, of credit going of on those XX% That’s credit now So on process, it, card, its today, of are mid-XXs that being XX%-plus side, in for the for is the for new AeroCare. up – will pay, out over we’re work our to And XX% going time to being that put all a number out of that auto from mid-XXs card

come XX%-plus new those and there. as closer year there you’ll that as in and on starts the XX%, see those keep up get come closer So adding in goes and

continues pay the see the function the to identification of AeroCare’s the pretty mechanism, superior improve and payment that it. to – it addition, has right those and narrowing, authorization, – superior processes the of So are the Adapt Luke patient getting in side you’ll reauthorization, superior. RCM right just mentioned, that But which the was right right

to we’re the basis. help is our collection those, which insurance implementing percentage on So going

combination think, building again, significant a those those effect. thing. I so But two, And of will it’s have

and you see lower should percentage increased or percentage. of collection percent increased XXXX, in really So bad debt

Eric Coldwell

guys. I the much, performance. it. very Thanks appreciate on Congrats

Luke McGee

Thanks, Eric.

Operator

you. Thank

question today from Richard next Close Our from is Genuity. coming Canaccord

is now line live. Your

Richard Close

question just housekeeping. on be of to I Steve’s should earlier comments Or for the guidance, revenue on was wondering Thanks upside? synergies? XXXX that I guidance the any we on questions. based is guess potential the revenue the last to XXXX of some synergies Congratulations. and clear, Great. primarily here, Mine does think as include Jason, the

Jason Clemens

It does synergy. not any include revenue

mean we the mean as as we’ll talk the of goes if to I visibility, get the course be the synergy those make Over we’ll year adjustments confirmed year, about I on. there’s that. had,

guide, this not synergy. any include it in does So revenue

Richard Close

in great. Okay, $XXX And your million think $XXX something the referenced I number. Jason, difference could you Luke comments, in then, acquisitions XXXX. million completed then If the of the clarify on And those about guess, guidance, that? What’s just that two? already again talked million in I to the $XXX for terms you were

Jason Clemens

Richard. sure, $XXX of acquisitions Yes, to $XXX in the difference closed. Sure. $XXX than our today, included them AdaptHealth to is to – and part visibility acquisitions. have are guide They’re The other The such. those to AdaptHealth. part $XXX we’re in expectations is million, million million include that that million $XXX is for is we of working some as None really give million of that already

Richard Close

Okay, great. again. Thank you. Congratulations

Jason Clemens

Richard. Thanks,

Operator

[Operator Instructions] you. from Kevin Fischbeck Thank is Our from of Bank question America. coming next

live. is line now Your

Kevin Fischbeck

questions. guess I a of just thanks. Great, modeling couple

for guidance? First, money cares in how we XXXX? Second, about your is there should any think taxes

Jason Clemens

Hey Kevin, it’s Jason.

those So funds million funds was we there provider guidance. the fund. from reported this we the in care relief of no, What qualified that $XX.X morning are no

there recognized the we’ve no fourth in funds that quarter, are in the So and guide. included

probably from we have reported projecting shares, that once what mid-XX% the be contingent we a tax, for on we bridge. based of won’t impact we’re to terms But impact. that taxpayer the cross – and In QX we

Kevin Fischbeck

to get issues. comp bit lanky because XX% how below And I year you’d but helpful. for that QX on going the back then That’s XX%? the exit the of like about bit to growth guess, probably rate a to half mean that comp a there. year, X% going of of to year, QX, of color in that all of how we’re we X% It to your then be I sounds think against. rate think be about Okay. year is the well little X% more given the just maybe little thoughts kind do I this want just is – the above in your a because

Luke McGee

the us if your hop comp growth and for think QX. out it, sort Jason, of as on be think even of comp would the you I ex BXB it BXB the that QX, would that I should of point, to in full can took To for easy in. it hit and year. yes, you

think QX harder would to was to last And because so up strong. I bit also number QX that be yes, a a year going put big is just little

You to of XXXX, also full rolling if so the a a going AeroCare, year X% think would But is to I in you year. right XX% reference have to lanky of and it look bit be X% year XXXX point. XX% full that’s versus of

Kevin Fischbeck

was just Are more that might demand? was going but clear down, COVID. a I case because guess oxygen saying that last Okay. as oxygen – much question, of I year has – to Are as you there just probably you of COPD for would not the maybe it really you still it that because be you think are been be this just not Or And COPD? underlying still that, you what expectation saying comment down then is would lot you that this as to patients wasn’t see wasn’t my were me coming COVID, through. XXX% guess, it

Luke McGee

Yes.

about think I is census-driven oxygen you a if think business.

build-up January February. November, into census in And seen we’ve rapid relatively December, in even and so the

– So QX. probably through and

New census starts build. will elevated, so to will the be continue

Some through year. the will these off fall COVID patients of

– lot to back revenue go the to our lighter they and to is think oxygen it’s compared comment do XXX, that raise We elevated – all? back going all point think half. XXX. if half overarching these start where to so they of onetime on they – behold needed census the a the bump, yes, to to first XX. of because going than coming to just on they it’s actually And [indiscernible] the partly didn’t I But put it, into people XX the of year, COVID at and a tested realize a these on COVID Steve, probably just was blood want you it’s in oxygen go not who anyway remain it’s And their

Steve Griggs

Yes.

two are answer the I But think to So One there’s oxygen. what know going And of effects the of components. have that. to we don’t that be COVID? is long-term the we solution is

in and the through more than attention to I will has these and you to this medical believe the patients and on The will, that addition it, oxygen when you out go community, service we pandemic. thought. extend year, But of COPD and life patients talk So government, beyond maybe to during the even putting the go by physicians heightened pandemic on there full the that. will the

going be there’s think of lot I be a patient. attention still to So the on COPD

think these I that these groups. and towards be and patients there’ll identification past in systems early that, had with with more scrutiny health than been so And more doctor of it years, there’ll the I think be

growth oxygen nice rate still suspect will I a have XXXX. through So

Kevin Fischbeck

Thanks. helpful. That’s Okay.

Operator

question-and-answer Luke I’d back floor session. of comments. reached closing turn over further We you. Thank the our end any to to for like

Luke McGee

everyone, and much. you Thank delivering in so Thank participating. going you to talking to out and look for few guys you, We results a forward months.

Steve Griggs

you. Thank

Operator

Thank you. teleconference today’s That conclude does and webcast.

may participation day. your disconnect at have today. this We you You your a and line wonderful for time, thank

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