AdaptHealth (AHCO) 9 May 212021 Q1 Earnings call transcript

Company Profile

Participants

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

Call transcript

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Operator

Greetings and welcome to the AdaptHealth First Quarter 2021 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Joyce, General Counsel. Thank you, sir.

You may begin.

Chris Joyce

welcome quarter AdaptHealth ended to call earnings like the for March would everyone Corp.’s to conference I XX, XXXX. received have earlier should a our of Everyone earnings this morning. copy release the would to a I slide QX the posted regarding results presentation as of Investor not, If Relations supplemental highlight that section well earnings like as is in XXXX release our website. Josh Chief will have Steve Executive Officer; from Financial some Griggs, Clemens, Jason comments we Parnes, prepared moment, and a In Officer. President; Co-Chief

the open then We questions. for will call

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

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

Steve Griggs

our joining Thank everyone you, Chris for thanks and call.

patients patients. employees resilience the by past I face XX patients. have couldn’t AdaptHealth challenge These and teams remaining our the focused in thanking And ongoing continued of have all serving country our time be would providers. months for our Before our like to on while demands. prepared unwavering been in our healthcare overwhelming to to start also I extraordinary commitment critical an this remarks, partners healthcare met for we their pandemic helping The of prouder been the their manage and efforts healthcare have how out across X,XXX the get system

collective our overall sleep home respiratory, communities needs services we of are and meeting equipment health, that confirms to diabetes, through our crucial Additionally, healthcare serve. COVID experience the the

Before we get Despite like discuss quarter. rate of highlights the the with the organic growth to to pandemic ongoing pleased the effects of product certain numbers, some of I’d on we’re XX.X%. of very our lines, the

of a hospital in business the discuss AeroCare growth and organic of organizations the alignment our as In confident integration discharge With return recent in will XXXX levels diabetes is of teams will organization. a in AdaptHealth well, resupply, each The seeing and and expectations. as expectations. stand the CPAP compliance, business, which best the result, across in patient will areas the entire speed implementing strengths that my areas organization’s progress such out meaningful at which synergies practices improvements the exceeded revenue to current balance organic pre-pandemic referral of made significant And we growth Josh that are future. our sleep We’ve and and are in quite meet adopting important we cost particular, feel as our have drive volumes of organizational management proceeding the and as we moment.

closed New HME were X, in largely five Massachusetts and company, a last previously most Spiro have in week. XXXX, recently a We market headquartered since acquiring full-line Spiro January underpenetrated. transactions which which completed is England, Health we operating

executed transactions, we make $XXX which see Bank more continue ability to organic Sheehan, lenders all this in in on to our with acquisitions. the credit provider accretive With lines AdaptHealth now worked Spiro, our growth AdaptHealth management to that drive opportunities Systems facility. and secured recently platform than led our AdaptHealth’s of of The Health AeroCare, England across other and The XXX mind, to team, expansion in million in our of Regions of a the robust market-leading million, through strategic, Spiro, $XXX local line expansion, has acquisition both execute Minnesota, substantial the acquisition M&A footprint product which advantage a pipeline supply of our M&A of premier to to scale includes combined a an growing geographic and top diabetes and expand in February HME and suppliers. coverage our on XXXX acquisition lines. us Alina across to With opportunities increase Gary The of and business market, credit teams like New HME flight, expand allows our strategic by take HME, a senior reinforces region. revolving product markets in acquisitions

our Grow acquire Going are AdaptHealth efficiently, story. and These aggressively of principles simple. intelligently. the forward, organically, goals are and growth organization operate the AeroCare legacy

the we industry HME and are XX I’m for Josh. of been combined path to Now now, will this one on I excited years. I’ve that that turn powerful over to enterprise, very And transform it part and continue

Josh Parnes

Thanks, Steve.

how our First, teams and said leadership about well new I’d and what Steve AeroCare team. AdaptHealth workforces to like have the our echo combined under

transforming in a regional is by have a and of the late functions. effort our ready November exceeding made the brightest on local leaders, this of are benefit operations overlapping their of to and it integration efforts joint AdaptHealth and expectations we are reflects planning lines. the many pre-closing meeting substantial important efforts progress tribute team These XXXX, and the and or that of ahead rationalizing our many most While our also our generally time best started teams, supported business AeroCare

Specifically, Bunting, and Dan branch see negotiations has on and branch goods review X RCM expect of negotiations direct completed transaction consolidation have closing by of we its Shaw ago, our and Despite of months the in In spend, branches. spend, sold office than XXXX in cost the consolidation. we led less of with direct completed these areas area QX operations beyond. great re-supply Rietkerk vendors largest benefit our team, our of the combined the and have financial consolidation, our success seen to

redundant our consolidation on than and the footprint our are reducing well overlapping reduce facilities locations, executing overhead. of XX our branches, more opportunities. consolidate to continuing to on are we evaluate to a and We way further exited At April, XXX plan to have infrastructure, we end rationalize

these implement two advantage companies work and working take streams both revenue While been our teams have operations, practices management and proceeded, sleep and our of synergies and to of technologies. have identify cycle hard best

confirm operating synergies revenue and will with when that have business AdaptHealth and realize, of forward AeroCare legacy the previous synergies work few run streams executed, These some will in time us the XXXX. guidance in Adapt-AeroCare we integration cost million of December synergies $XX million of examples XXXX QX progress, effect estimating as confident are XXXX. these into of as the and XX, place, While work give confidence by the XXXX plans $XX I’m to just to which the rate take a associated and our of move the performance improving

Another product HME see correlate been area technologies. HME are Many centered bringing diabetes the opportunities and for investment diabetes lines. developing supplies on to streamlining and and and our together product technologies years what directly and infrastructure products has we focus of spent in teams and

approximately ability One of to diabetes, about the is both our the leverage very HME things sales to sleep cross-sell XXX-strong team are products. excited we and

promising of products results. cross-selling out in rolling showing of markets is phase diabetes select initial Our

of care technology we line. of matures greatly orders the have more of this referral reduced multiple efficiently. what adoption reduction our satisfaction. to and on increased processing the doctors time, allow patient orders also benefits turnaround palpable. to will overall we lines, leveraging new product our Continuing across us The model, the e-prescribe for be our diabetes of learned seamless multifaceted home creating our from As to a are an for plus. patients and of time digital efficient and sources theme to performance product will All role on play have our to allow diabetes coming important share more Over through in XX% should cost benefits growth higher by operate

Officer, with years AeroCare and of the has I’ve technology-forward in our to privilege HME working drive to the who patient last operational months, significant last develop few years closely many over Over an few enhanced healthcare very technology experience. Prast, spearheaded experience has Albert the Chief the efficiencies had Albert businesses. with Technology efforts of and leading

been already see. technology they this across what business, by excited have are our leveraging We teams combined and our

operational front, AdaptHealth technology I the the and to would leader the also Gary family. he been and on well-respected and and an welcome collaborating On of is the have supply technology, Gary Sheehan last industry. to and years advocate HME like Spiro few I team over the innovative and entire

our as to home digital well continue we invest to help in better Over patients. outcomes drive in months, patient the coming connected to technology as experience a significantly care enhanced plan

and As our both first organic more to for Steve of I our equipment, patient-centric scale is full the supplies our efficient home goal turn a that, model our M&A year creating will growth, and results With to discussion at continue while of it time, Jason care same outlook. business, mentioned, quarter and services. to on and a investing and over through

Jason Clemens

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

was $XXX.X substantial increase quarter the of XXXX focus, an from AdaptHealth the XXXX. including XXXX our organic completed increase February For net quarter XXXX. company-wide ending driving The acquisitions, revenue XXX% of efficient of of of is on growth result first which AeroCare, the reported million, March and first the XXXX, acquisition of our a integration X, and

frame quarter, also announced of performance acquisitions. by for a acquisitions first forma was from AeroCare, for $XXX.X reference, driven from As solid million primarily the pro but previously revenue

of front the several Medicare additional quarter in strong growth at by will XXXX in QX we changes new revenue the of additional the business significantly balance led our through diabetes tailwind line. the as in on product our XXXX the detailed that sequestration supplement, As very QX our to news growth provide our starts relief XX.X%, quarter was There’s was and organic learned for extended up earnings XXXX. during good organic year. regulatory against

fee Additionally, health impacting DME was the mid-July, schedule. non-rural public positively the non-CBA extended emergency through

fee in CMS the and which XXXX Finally reimbursement April schedule, published its higher importantly, rates. resulted DME

net impacts guide of quarter in $XXX.X I first in for for an Adjusted Some XXXX. discuss but partially were these balance of the quarter the for guidance the the XXXX increase was accounted later. of of EBITDA from million, these our of for will impact programs XXX% accounted that incremental first is our raise

expected PCS the improved margin from as in margins came particularly business XX.X% against XXXX, of for of AeroCare. results margin within period. and EBITDA quarter by materially turnaround EBITDA Adjusted the acquired led companies, adjusted first higher Our the

sequentially steam. picks We balance and and balance program the synergy integration expansion expect also we these of our continue incremental margin the as throughout up the trends year to expect throughout of XXXX,

XX, December we million be and ended XXXX synergies recognized reminder, QX $XX XXXX. synergies by the $XX a cost run to approximately rate such projected full As in million in of year

the $X.XX Turning ended the million billion of debt. of balance to cash sheet, we and with quarter $XXX

April previously our As the next capacity time $XXX by by announced, the to was in senior structure At from term our our facilities on our leverage XX, of million. increase step pro secured amending forma our loan we revolver X.Xx $XXX million and to net adjusted expanding by the deal, $XXX million planning capital took EBITDA.

the completion respect this with quickly M&A confident transaction, company the that are With has we the opportunities. move to of our to resources

previously remains EBITDA below guidance leverage to acquisitions. our at adjusted As our for stated, forma like net pro target for turn XXXX. I to Xx would or

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

of of to billion of $XXX less $XXX to adjusted We to billion, $XXX $X.XX are EBITDA million $X.XX equipment to and million. adjusted EBITDA million CapEx $XXX guiding patient revenue million net

our Steve. call closed. yet the been that, back have from As that I With turn to does not acquisitions contribution any reminder, guidance a not over include will

Steve Griggs

Thanks, Jason.

open McGee’s we questions, the like of for Before unpaid line leave absence. the announcement to Luke address of I’d your recent

Luke XXXX XXXX, charged on had fraud for company formally by Denmark in certain activities private the between that related As you and authorities and know, the XXXX. announced to April alleged been tax learned XX, had

and behavior conduct The April connection independent the we personal from business unpaid Following the is a law an with Chairman directors. and an criminal is being that committee, were Committee role to these of Terry from company investigation as is company. investigation firm special Audit and revelations, Luke conducted AdaptHealth’s believe underway, that by the independent initiated the leading inquiry entirely connection separate The the the his relief between of alleged co-CEO of was is there is alleged Luke prior confirm or no contact the this to private company, unaware prior on and into Connors, past investigation AdaptHealth’s place Directors and his to immediately operation. to this no the XX. by activities Luke’s and DLA primary investigation continue well Board special of of committee Piper,

you As this it open would any Therefore, been have can will I investigation. this to any that taking regarding With for answer counsel questions about be sure please or be am the instructed we situation understand, by not call questions line investigation. on questions. the inappropriate we ongoing that, operator, Luke’s

Operator

question of Tanquilut question. proceed you. [Operator Brian first your with from Thank with Instructions] the Our Jefferies. Please line comes

Brian Tanquilut

guys. comments that appreciate Hey, I will to good made, last morning Steve, I ask of that. a I the but kind guess question you related

you about So, was with he how a the company of AeroCare. investors’ would years built over Luke the business? the together on big concerns company Obviously, you address the Josh and part and

have things fine, everything CEO? the responsibilities over you would are well how that bandwidth comfort that to in of give company guys control that had have going and is when investors was that you So guys the Luke he take and some you to the

Steve Griggs

Well, I have in of business, said we it have been experience in a have the lot years. like I XX

home vision So AdaptHealth system, made confident I importance and acquisition evolving am business or had The this part a crucial combination that more much for we and AeroCare of the delivery so is the business that the healthcare as the companies. going operate sense vision That’s heading very, aligned. forward. care the can that much had very of where the the of why we’re very

how I’m the the markets was work, in we from confident and familiar the President, with familiar I big it but we’re ‘XXs, the in was work loan company the support by So capital increase how evidenced pretty a very markets it. bank public granted, is group. in got tremendous

importance similar, far heading the it’s is to growing as The we headed, not a as care is I think do tremendously. direction. same, ability be is unprecedented. if very in Home growing. think things where is clear Its are I company So home to pretty at going

in patients You in cannot future the care take as today. manner of do we the same

So things all we advantage have to we’re environment, that. and place of that these have in opportunity. home And to go people the to for prepared processes and take got

the AdaptHealth leadership very team. to our mission carry we’re ability So very, comfortable forward through of of

We have people great in the field.

in people corporate We have great offices.

a really, to are all impressed with contributing through processes numbers to really And we the this world We class could that make very doing. we’re the go that people make are of difference a organization.

Josh Parnes

I just quickly color over Hey, we there. Obviously, been the Brian. a X have of I and working last met closely will in little when Luke X, add kind XXXX. years from

every doing in day his been the of in things of have of things really We hand in the some some lane. lane, kind glove my

the of on the the very army and team built strength at AeroCare we years, shared. the the overall we’ve and kind and and the each fits a where script, is how technology, and where that said the veterans, Spiro of system, HME the over the us obviously, set future healthcare inside really of means got the complete like now management done of feel said. kind So thinking and in additional every the good from behind this employees I’m we of there’s we’re day. because this both we people care like that acquisition, helping about that kind know we But into are where and the today out. with business what end of that’s about Steve connected more terms really importantly, getting business delivery this day, about the And Obviously, of feel the vision we we vision we good are up execution we are, our

strategy just well going this numbers executing going plan. we on to that and executing So will confident where prove feel definitely we that now. And is to we to business Luke’s and continue our presence about obviously, where is are established and we on we and the miss are believe through continue the

Brian Tanquilut

business you the it. you appreciate mentioned I is, Josh, question guess that. my diabetes happy with are second I

Now over – the QX, QX right. from growth just QX revenue $X little as or I to from in billion, look at a sequential

side as you acquisitions know QX some have that well. I in in done So

thinking should growth? little flow sequential have next are about the how right? diabetes given in quarters better quarter So, you and we in thinking be terms deal That shouldn’t business a how the about performed – the the that, of

Josh Parnes

Yes. QX a of timing Obviously, with some before thing is quarterly get this of December. business deductibles you reset spike in a

processes the business, last We’re extremely long Obviously, business business softer all progress in of QX, that proud that for both and organic numbers, how product them made which our came the since of haven’t and expectations to is the in of some extremely kind are and we’ve the July, acquisitions only diabetes been typically on performing, line pathway an restructuring diabetes growth line. is we but current particularly better quarter. putting confident organizing the and ahead proud this about on been we e-prescribing and of bottom

Brian Tanquilut

question me, the in as obviously, the you And it. about are any for of how organic Jason, cadence about seasonality we for thinking Got I strong or I the in about breakdown the the raising just think guidance, guidance the then quarters? QX should growth factoring thinking year. How guess, be last

Jason Clemens

on give would that. happy overarching you I Sure. some to be comments

XX% a just lot in are is dynamics And healthcare diabetes, XX%. said of deductibles and there, to under know, is It steps the I in that still as of QX in revenue quarters. patterns, resetting due X you mean, and a particularly we traditional A big but the ordering bigger the business of perspective And then Josh QX QX, patterns. patient annual this don’t quarter. from in touch revenue As in the up quarter, produces first general, a to somewhere ballpark guide from of quarter.

that. what’s And driving so really that’s

I we that we under months X. because know, you only For X of a AeroCare – had, that to XX% are touch as opposed as quarter, under mentioned this

Brian Tanquilut

Got it. Thanks, guys.

Steve Griggs

you. Thank

Operator

Thank you.

Anton question. Our proceed question your the from line Markets. RBC next is with coming Please Hie of with Capital

Anton Hie

guys. Thanks. morning, Good

the performance, kind new some kind you extension into you I heard I off raise? of not factors Brian’s the guidance that M&A holiday of was the the Just help but latest maybe question those the components of feeds how all versus think additional completed last one right. sure there elements, how little then a in million I’m just then organic breakdown three sequester into $XX EBITDA And sort so of guidance? really and that could bit, mentioned already that of possibly. feeds of

Jason Clemens

Sure, to happy Anton. Be cover that.

you So right on relief. firstly, have it sequestration got

of regulatory fee terms other X. on In CMS tailwinds, schedules publish new the did April

part pushing that it been a and of pass mean, As once time. leadership talk to that about were around to industry for, frankly, long efforts those bit. little our finish, increases oxygen for I a Steve has team, can the I I

In in, single-digit of think that, the I thinking of it, terms the of increase oxygen call about you size dollars. mean, the annual can of high millions

run is acquisition New so it England. only the that X And in course, we’re of Spiro excited frankly, So you incredibly then math. you for the so months, just about have that rest got to

reason synergy, the bands still tightened or the raise. in you year. But that slightly. the did suspect was for saw frankly, it’s we I early as So of the synergy, delivery in-year later delivery change we’ll rate but not the the exit talk about have

add comments of still about increases? the Steve, out. are the and a to in that put want a feel pandemic you on numbers We do couple we we great oxygen

Steve Griggs

seemed gone that to it, of from like feel out care, didn’t. of but to time. a there, and home there neutrality come some to had should budget came related The in agreed, but authority competitive been concentrators. just it And And related industry, was people we in bunch CMS. lot spent increases was in VGMA, came that out CMS bidding and XX the it have talking away, involved was oxygen oxygen When it I it. out discontinue ago and that the put like XX they – CTRC, Yes. years portable to condition were a they to get of didn’t

So it legislative action. had go through to

they hill, X. years it work after industry with able and in the April years finally, to So were years take and of out

that now industry. that in just resulted rates, increase those which the level So everybody within sets for

Anton Hie

presence talk shutdowns, Okay, very Texas great. a you that there, impact Obviously, saw. we or but that wondered about certainly lot may severe winter a address just you from you areas performance that guys much in any saw and – I organic growth storms you know have strong if had Arkansas, could of the that have can I quick? how some real

Steve Griggs

those revenues the of of that their weeks in have back the storms, but performed those complaining certainly, both popped quarter. nobody nicely setups, that. states patient mean, business from is a two I the And over about didn’t we Yes. those states well lot

nicely So, and performance. really our no had financial they effect on back popped

Anton Hie

Okay. real you of seeing I access quarter? kind me, within trended – and/or – real the are of And then kind surge last month-to-month you through at we the out. patient like last have the seems still obviously, are and COVID one are maybe vaccines big any Are how that with rolling for seeing mean, point issues from we this

Steve Griggs

Generally, business. and for healthcare are Yes. entities the the open healthcare businesses

So, I – how to to lot – much still and past care sleep the and get the labs, are to virtual still our a whether to still. we’re in come pretty that come treated are doctors’ to offices pandemic offices, of people we come willing think

speaking, generally that is So behind us.

to it’s I February. don’t January and think of everybody figure out but I in that that talked why some I kind happened, did everybody hard saw softness – to.

March So April it popped was and interesting nicely. back an but time,

us. behind it’s like feel generally we So,

I’ve see be The tell time about going to this Now, interesting you, thing whole can I in business predicting COVID to darn future. how oxygen a on long pretty been good patients and forward, consistently the be the affect of stuff and expectations. it should it’s rest our going long-haulers going but affects business within growing what that are calling our they the and how like to is

Anton Hie

Steve. Thanks,

Steve Griggs

you. Thank

Operator

you. Thank

coming Blackman proceed from question. Please with Mathew with Our your next Stifel. question is

Mathew Blackman

in in you’re for then past, any start, couple XXXX? everyone. on? you Jason, priorities now your focused there I the have general about $XXX big million just my Maybe to are million Steve revenue will morning taking what Steve, Is Good questions. for annual M&A a and for be follow-ups to couple area of talked picture going a in maybe, $XXX Thanks questions And to you’ve particular more contribution. in of

You threshold? signal recently. And any obviously there particular you as that Should a focus? opportunities we you lines that may that of areas are that perhaps credit expanded take put the above see

Steve Griggs

Well, is time, core of the was the and is that which going Spiro you our and Gary focus in just get our opportunity saw really – long activity significant, diabetes of which sleep and assets, be so and oxygen I’ve both of the we’re And of to thought I high-quality for excited known is that really business, is two care, the to there. is kind acquisition and team, merge think ventilation. more we it’s a a more he got that. and strength not to But example. companies respiratory that seeing are about available out good the and company. the joining into

going is think of and a that. to across lot – spectrum the So pipeline of we’re it’s in I robust, the have opportunities whole

have make far growth initiatives, organization. has tremendous don’t the backbone grown together I mean now but and put today foundation think I ambitions. all but parts opportunities the organization changed. I and to to through time works then it’s acquisition. the an and And the have only that we not came and works all in the this to future. put pieces mission when and organizations mean, create I significantly that here they As as AdaptHealth the together, And was

not we the care got to to so to organization task. an able the that’s take to in be And just And have of that. have foundation easy

don’t to get advantage the management, it revenue You create in place we that and the that be able mean to it. will do all boom, each actually we to just IT, will so accounting, happens. of the areas – we be in have and those your right, further we the snap competitive cycle improve fingers and I it people done if and

through happens. can XX it. streams work So of And people a company to assigned work go mentality on should stuff our us aspects focus and in organization really we do that that sales apart. that every becoming to we all or of our to on an all sure XX set better that overreaching is stuff day different to, have company an combined into we that that make bring this have organic really to And the is

And great not assets it, up. And are and to pass going just up, showing our so we’re these that’s focus. then them within

Mathew Blackman

a I for And you heard I want make just Jason, couple appreciate that. to I correctly. you, sure

you think quarter sort range. the of I said the correctly? pro that Did in somewhere hear rate forma, run is I million $XXX first revenue

Jason Clemens

Correct.

Mathew Blackman

Is be about spike G&A did sort it Okay. And of related trajectory not, AeroCare in that for all then that’s the if quarter. And from And the should me. is Thanks. that else? or is something here? we thinking

Jason Clemens

as a pretty of And adjusting out, we’re Yes, great SG&A even percent adjustments question, Matt. through there. revenue hold G&A, I mean, there is seeing steady. some to EBITDA flows that after

should technology call over I continuing in us think investments XX couple of you months, and it, infrastructure bps from next, that’s these what as higher XX, a we’re the back-office maybe expect really But call mean, move of XX expect next, scaling. too the months. it, over I to to percent wouldn’t a as continue revenue SG&A to to point, much XX your I

Mathew Blackman

Thanks.

Operator

you. Thank

Pito with Deutsche Our Chickering question proceed coming question. is Bank. next Please with from your

Pito Chickering

It’s morning Good a month guys. obviously team. trying management for been very the

sort If and operations, the leader of about behind Adapt. you think always sort of step both and visionary back was Luke strategy

ago? at to I’m within foresee then, just acquisition deals Josh, month change be will some that just over So operations happening M&A? changes And any in aggressive in as business? the changes on side of an there curious, terms well. target any the you will with you being check And all of perspective, from there Are

Steve Griggs

Yes.

on are acquisitions, focus. as far we As

I billion as think about much that. the says can acquisitions ability fact $X.X probably as in do that and available the we I have to say capital

care, huge huge, lines. focus, for opportunity product same I think us. this got Home again, those the again, in is has the

and do through there so of our going to future both is acquisition. take as we’re assets through care out to organic part the home and many in And expansion growth that mission, of getting the and field advantage of

Jason Clemens

Pito, And question operations. regarding your I’ll address second

as work around making all the Luke about, the far saw happens. and he back does hard sausage to we used it, the So joke I we in where easy do and as work

of if us. care we’re positioned nicely, the the there patient, a we perspective, which and less between So technology like, and Luke we clearly just was just the mean, to But him on I’d was brightest thing that really able say to last I think best getting And again, team number that where our velocity where really operational but to being was the able built is in terms needs partner and provider, a go. over to shared up better drive set of organization is of other alignment with in a a I great kind visionary. ground a this or Luke that and the would regional I out care. business have from years change together kind solid the to leaders become industry. post-acute Dan the when vision the also really by we’re be apart much regards of Rietkerk, would take kind can of again, changing think number of the time, investment referral through the system of as amount and we’ve connected within a phenomenal terms we’re orders I’ve ago lot work – that care a that to leading best of feel be home Shaw care in and team, set years kind of even I ourselves the of world. go well to change the the meaningful footprint go of last helped really of through over our With is more time, that got as AeroCare, we and gets produced some that more and potentially, from the from number the as really as changers really HME we operation, the Bunting folks meet of in able provider the of to some the in. really And the over be team, state to be be months and cost state friction going of of over efficient just of post-acute AeroCare

more see you’ll going in from pretty to of scene. areas. those more investment So And look I to aggressive that in kind make from moves us of think us, we’re that

feeling operation the we’re good today. the So about is where us in but more from future, pretty

Pito Chickering

was you Okay, of rate, I’ve organic is best growth great. the that with do us throughout driver think that cross-selling that? two the you. the any seen sort between The progresses through XX.X%, have rate? How of components on kind you the known practices I of the year? can organic you Can key you color us diabetes guys companies, that what walk growth since give of And

Jason Clemens

if and product Pito, story. on how supplies and I to DME mean back I the high side about year. products, start of very very, mean, steady levels, to the traditional our and, And cross-selling be we’re kind growers, and and I I reached consistent the somewhat she of frankly, think consider steady math then Steve goes the generally will of mean, pass Josh as you of we we balance at of I’ll exciting watermark to look lines, for the those the I there. start how home. on the we’ve the guide above part components with pre-pandemic slower the each but

in frankly as of get we’re a As a little that there of thinking we early pop is nonrecurring. QX into respiratory bit

we firm it’s our But for As still that on materialize put feel Steve range the respiratory. balance to tell mentioned still COVID, will about to expectations haulers on that the long out – of year. how we earlier, the early over related the

As business. that in of and very happy we with PAP March, get sleep, terms starts stand into where are with we you

above QX high expected just back by you, watermark, And for us tell on we expectations a the as I’ll said, has the last, are, certainly last call. January we’re on expectations. end bit is great. resupply of we is then mean, least, was beating we’re resupply soft, Growth frankly, to this story February not the about been but tremendous so Now I excited business. and internal diabetes. as side. a Volumes just

on, will even still But seeing indicating guidance this typically for XX% on is part accordingly. business just still for that goes XX% haven’t year. year the we that talk everything market We cautious we to raise to we because in end right as we’re somewhat continue are the the a of And owned refresh to about this are diabetes the we company.

of Regarding kind this, this pass I’d probably of Josh. and the all and cross-sell parts exciting the more to Steve

Steve Griggs

Yes. is to fascinating The cross-sell me.

So access this lot all stuff. a limited able and get into had if them you in weren’t offices, think about to our sales XXXX, reps out doctors’ there of

able and high-quality they making were back our still opened of that very, they accounts, do. our into all mean, relationships, referral produce information very information – busy have get so so very, the reps information Well, that And sources, reestablish those bring are now which patient numbers. sure up, we to back compliance patient I that’s to to and the success patient demographic reestablish those all now

incredibly in we’ve even the that, great busy. within But already they cross-sell. So all made are strides

hours, reps put much they upon was – very I extra because talking started in optimistic for stuff. and so accounts while So I were took expecting But we’re to our themselves, about it went it, wasn’t the busy.

ahead so be great so we making are we’d busy really just of I we’re thought it’s But now. right And because progress. – where incredibly

as the driver good those And patients we be of going to momentum it. later a us the get So comfortable sending think and doctors for I the about entities. year various starts the it’s part of that to you in building types feel more

Pito Chickering

you and don’t the harder? has ask quick the what gone has is gone guidance follow-ups to I here, I easier for just didn’t two Okay. then change how expectations. relative What think. around wanted your synergies your year, to And integration tracking

Jason Clemens

synergy operations, the of dollars. to on start seeing You with we’re want I’ll and guys what on kind follow-up

Josh Parnes

I’ll is Yes, take This Sure. Josh. it.

we I’d synergies cost I cross-selling, yes, say consolidation said, really, plan resupply. longer that some direct in So goods. on been the office Steve like the the also has mean, going of revenue think well. takes from branch of script, and really the synergy PAP stuff would I like is management, purchasing, cycle The kind be mentioned highlights revenue the of the

feel stuff, along. it’s that intake less no Some we well tail I what doing very the the really everybody it will confident of as But pass of it The Those of about. in all definitely integrations. the are feel go a operator and measured done. softer for job will numbers. politics, Jason that technology I’ll how these in things over the kind focused thing on And and which some but longer just the is of getting we’re the I certainly think tail about, customer terms service Obviously, good business feel most good now, play is longer a our years, really But by team operationally cultural about metrics that, right otherwise, of getting numbers time. XXXX. out where to and we is that’s is it into their and aspects, some

Jason Clemens

is for I’ll say has of synergy work when effect is we that’s the date, recurring on depending and hard These in a these can are a contract Josh. dollars first heavily of mean have that quarter. that been Thanks, in million that the I’d But dollars But tell realized materialized. March. flowing, to the the the weighted right, have of this. couple that, I I dollars. of all confirm beauty in you very there day you place. locked And shape start programs

of I’m of couple year. million recurring will be the quoting for balance the the So

we’ve stage. in million are that to with what increase in-year some So at we’re extraordinarily take do. and confident But or There team our this cautious been work got seeing, the hill see do over climb a in-year. big XX here we’ve we’re about synergy we’ve that what the confidence to on exit based to But rate got. that can so very number confident we why months is to $XX still and you

Pito Chickering

you CapEx quick $XX million. the by adjusted question, And EBITDA raised just last numbers one less

that you oxygen think earlier single was digits. high said I

it is from and $X so guidance million to coming Thanks transaction? the raise, So million think Spiro the from oxygen about right $X much.

Jason Clemens

say, April X was Well, oxygen. an Pito, it implementation I’d date for

just you’re ramp it a that as bit there. it’s of oxygen little a revenue should thinking flow But of through. So correctly

Pito Chickering

Thanks guys.

Steve Griggs

Pito. Thanks,

Operator

you. Thank

is Close next proceed Canaccord Richard from Our question. with question Genuity. your with coming Please

Richard Close

bands. on tightening you mentioned I one just the on maybe was synergies, Jason, want just something. to in of the Thanks. I exactly the earlier, curious And answers meant. that check what In

Jason Clemens

just I on the was Sure. adjusted EBITDA Equipment range Yes. revenue, less about talking Patient CapEx. and Richard, EBITDA adjusted guidance

came tightened the the bands numbers So up, slightly.

course go going us as we of a the moving over moving through the as to think see the year. those year, you’re of bands course I just closer

Richard Close

wanted and synergies that there. check I Okay. wasn’t just if sure to was to related the

out about the the to discussions, – curious has up the Luke. to And but a curious came acquisitions, over of since Moving in about I’m potential targets? come all lot talked with been that guys it’s on course month you discussions in just respect with a at call, whether news any I’m that your

Steve Griggs

just a Josh. Gary Well, at known sure, Gary for a up, – He’s some Sheehan for I’ve take time. come I’ll Spiro. known it’s Gary but has long known Luke Dan and time. long

with competing it every much them pretty – We were affect sure were the did. they in obviously, we with competing with but – one it in every acquisition the didn’t of And competing they that is acquisition were did. similar. transaction. came and so us. Adapt competed yes, We outcome We with other And and up AeroCare competed –

ability we up, the to it but So done. get to certainly, going don’t it’s affecting deal a come see

Josh Parnes

And is want – give I’ll to little Josh. this I add more there. a just just you color

used throughout just always with about to more Josh. than is him Luke the than than about closely in obviously, this So tell Luke, about business just more me year me, just working that more

diabetes the say in even AeroCare merger think Luke Spiro what than us this up middle and the I when I would our the are businesses the takes, the I would open positively. thought of about and year, the on anything would the our think more you impact of night, growth deal, acquisition, have of events kind puts I if vision

individuals. not mean going really of a It’s team. is business obviously, It’s operations. this built was necessarily be locations. It’s But the or years progress, technology. general, very It’s machine of in It’s we even one, that it’s analysts. confident is when multiple I over vision. It’s last companies that’s the So think on guys of the with scenes, why talking around great any investors technologies you a face or happy the I number a built only who’s the lot drivers. into maybe to results. a the people It’s see that one combination is and there which feel and we I making lot blended behind good will all think, of and and infrastructure.

Richard Close

is over go on question final time? above said my And you could think you e-prescribe. that I over Where just that go XX%. again? Can

Jason Clemens

Sure.

So handle I’ll that.

was it for XX% So line. new orders product our diabetes plus on

take that just in proud mentioned businesses the business extremely script Steve we’re because and I really little we is learnt a what really, a this number some that I over diabetes business, bit bringing going nexus vis-à-vis in and that’s and diabetes about we’re the business, taking our think of we’ve supplies what order of I mean, one to HME our of what our be the over October. things was to to cross-selling. business, started and talking we’re in of HME from

process are deliver the and our of we do to terms orders that And be technology We important have XXX-plus continues to our a as marketplace. as reps how differentiating team how the of customers. in won’t sales in to product line ability evolve, out we

goal, time, physician a to these drive is over experience to lines home. and bring together all of seamless product kind in for the our patient So referring their

at going get we’d we ahead. extremely believe for north it’s less that e-prescribing obviously, general, where see over we’re much, not e-prescription kind more and is over But going some get of get proud will gone time over that over to like room Over XX%. we But than this time, there. X to think time, of XX% of our up similar But plus to, in be where of And to pharmacy maybe to months, XX%, take time, XX% – I much dominant. significantly want XX% year. So is plus, really business. time in what even kind to and we’re to becoming that of there it

we So continue there. pushing will

Richard Close

Okay, thank you.

Operator

Thank you.

Our next Kevin Please your with Bank of question Fischbeck question. comes with America. proceed from

Kevin Fischbeck

then are it guess, reconcile and of it, because but oxygen extended. trying rate the sequestration to Alright. Great. sounds the raise update guidance deal Still I the also the like majority was

think all say more into flowing as how beyond use to to should if trying you of raise of and anything I little just a of out? real guidance nature and that in XXXX kind tracking think then, off And pieces the we how in this it. you base as understand guess, is of increase we bit kind much So of the which base is there about a is in there And the to and should grow. kind of one-time about that here we importantly, be

Steve Griggs

time Well, with the of spent our organizations. I’ve a and the hill sequester, on lot

association we we’re just so be hospital their extended. the and, And have you When rode again, and very very, CMS physician confident Congress, pounding that, the and that association would coattails. off

it So I’ll that as was always Jason. other then in to far the And as the numbers, over numbers. increase, turn sequester the

Josh Parnes

Steve. Thanks,

very We’ve talked pay bridge AeroCare be about haven’t end of you quarter, the we’re mean, going about would what as seeing guess I I or We’ve talked that we about suspect real not learning it combined. thinking, terms Kevin, in about will are foundation we those that and about the all. expectation any XXXX. from thought way mean, into we’re but It’s that to included short-term say as we revenue that Adapt We’ve into hung in of on so hung resupply. what externally. PAP like job numbers I our paper or above is grow PAP each is that, asking programs these or again, to patient relief management that we we a Those over surpass the start specific when supplemental talk XXXX team, is programs this you’re numbers forward through that sequestration, and on compliance other, So synergy, once we’ve and rates. supplemental revenue tail year the The guide. about of beyond. I’d on for numbers talked our and coming in and XXXX. into stopped, will haven’t of programs pen absolutely putting I any eliminated Again, we and

Kevin Fischbeck

Okay.

year, that in two is have guide next something are the but oxygen the have did back on year, to also So that only include but include already. we guide which the bigger – the deals like that in the partially the – to it things normalized sequestration, in would the and need out, the really does

new, So right? that’s not

Steve Griggs

Correct.

Kevin Fischbeck

That makes sense.

want – or who potential there. or And patients you your and able follow-up I you are of convert mean a on turning you diagnosis, able haulers. actually business are color COVID kind about document are just Okay. chronic? any comments are come that into for to Love then, to guess, hear in to with to they the respiratory long the seeing I

Steve Griggs

lives. we’re own to and certainly, are back that Well, of oxygen benefit lot patients happy normal for off getting going are to their what see their these a they

So patients. positive those that’s for a

So that we’re said and is with out effects patients. a documentation there process, the help to about that, there them having lot a lot communities thrilled on physician that in of the these had long-term COVID

They a And in to are doctors. Denver, like there Colorado, out to patients they closely, of where go mean, different that something are you lot Jewish them are these so big take out pretty watching and providers more hesitant National oxygen. there. if you’re off seeing I or respiratory

out a and gosh lot affects are found coming So showing how some but functional off, having get those that fully really still just of symptoms is people long-term. in patients be disease still are there that of to of or this Thank those them trouble lot oxygen.

Kevin Fischbeck

Okay, alright. Great, thanks.

Operator

of Eric question Thank Coldwell Baird. from Please with is Instructions] [Operator proceed you. question. the your Our coming with next line

Eric Coldwell

Thanks very much.

that going thought about was because we I comments, the on not too, to – prior holiday extension management Sorry, it in was sequester based question, ask was guidance.

just So clarified. annualized I revenue the the so. couple I an recent want specific EBITDA the for and Again, acquisition, a Spiro, here, most on did I’ve calls looking basis? toggling have think you’re deal, deal I to apologize of that’s been clarify you that provided for also been

Jason Clemens

is Jason. this problem. No Eric,

really that. guidance not We nor put our out just been specific Spiro on have revenue policy on any not It’s profitability or to acquisition. internal do

other oxygen rates place that directly can the April that That X. of run updated of is in the the However, side – attributable regarding I And say raise certainly guide, in on guide Spiro. that other comments the raise. I half, you part the of went our math half terms of is to shouldn’t mean, the

Eric Coldwell

the growth base you at just have prior. the and where way comments curious, it. on on Thank do a all appreciate do the the Jason, to And intact days organic am then growth pro out deals company that. look Got forma you you calculation traditional take organic was I would much. and business annualize more XXX yet that

Jason Clemens

right? like because Yes. mean have revenue I with right, as patient system, classic same-store platform, AdaptHealth around little so on whole the more produced are It’s right? of resupply efficiently even may I the that business need it. they against there mean, this a start I difficult they compare the is will part to we way. going to of patient, they comes year, to sector and that come operate smarter of – as in That patient no our of to we when healthcare, need kind so resupply what last don’t but on, the mean, Patients move is real the because right?

of organic in in we don’t of there the QVs growth is So the follow, right? year business, prior validating and your to the ownership reasons view. quarter, regardless with traditional supplement in And why do a so the What that number is revenue we’re words, I of visibility provide such. guess, we our

compared is we’re and we at that’s about of AdaptHealth So, – I that against great since the the regardless are of ownership XX.X%, what seeing year mean, And frankly, again, businesses growth QX. the revenue are feeling you year-over-year great. year-over-year. feeling come the

Eric Coldwell

to know updates, able date us? where these share take then it. weeks, information have you for get of do you a update was again, terms just, or hunch if findings? have of a the time share but to not I with on and but Will and process take explain might sure No, next then you curious you the how the I place line things sometimes they Yes. some I of if that. level to others Piper not I’m sometimes conclusion specifics to that thorough us? of kind for be have might the you what specifics a us on am that in comments, curious months, you’re of be on everything And I’m for if how in can’t be yet findings? of target to your just kind discussion there The plan reviewed can to And I on looking Street investigation. know in going comment led this went you findings Thank a process? what detail you a or findings,

Jason Clemens

completion Well, your months, X be the month next know. a probably update the will or so, of which I maybe investigation, don’t

this We how to guess get it. a making will sure predominantly promise a We in through on you want of they I do and manner. a multitude see private do Denmark. how can’t comment things, going fast to but it’s thorough that, or that out will they play They was even investigation,

not business. just would gas, we’re in the wild so that think wild and I a guest best be at

investigation thorough through And described, So will your to be next be completion. the while expect complete we will that process. go as we’ve update and we that

Eric Coldwell

appreciate I it. guys. again Thanks good. Sounds

Jason Clemens

Thank you.

Steve Griggs

Eric. Thanks, Sure.

Operator

Thank additional this are at questions no time. you. There

to like So to over closing any I’d management pass comments. the for back additional floor

Steve Griggs

to increased a are as that like a continue patients, great forward there part to thank job, Thank out and just look our our and you. and increased X,XXX go care we and doing and make would they of take once again, efficiencies employees of care growth every the day healthcare I continuum. home we bigger to everybody, thank

Operator

your today’s gentlemen, at this for lines and teleconference. time. We participation, this does you you your and thank Ladies disconnect conclude may

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