AHCO - Earnings call 4 2023 | AdaptHealth Corp.

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Operator

Good day, everyone, and welcome to today's AdaptHealth Fourth Quarter and Full- Year 2023 Earnings Release.[Operator Instructions] Today's speakers will be Richard Barasch, Chairman and Interim CEO of AdaptHealth; and Jason Clemens, Chief Financial Officer of AdaptHealth. Josh Parnes, President of AdaptHealth, will join Richard and Jason for the question-and-answer portion of today's call.Before we begin, I'd like to remind everyone that statements included in this conference call and in the press release issued today may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements include, but are not limited to, comments regarding financial results for 2023 and beyond.Actual results could differ materially from those projected in the forward-looking statements because of a number of risk factors and uncertainties, which are discussed at length in the company's annual and quarterly SEC filings. AdaptHealth Corp. should have no obligation to update the information provided on this call to reflect such subsequent events.Additionally, on this morning's call, the company will reference certain financial measures such as EBITDA, adjusted EBITDA and free cash flow, all of which are non-GAAP financial measures. CEO being available a pleased later the and is call of to call Barasch. Chairman be Richard will today.I Interim morning's recorded, replay and this introduce This AdaptHealth, of am now

Richard Barasch

the Good net with by prior result improvement grew finished by the respiratory as non-acquired.We significant This throughout a expected was flow in revenue, our in program the grew morning, joining our interest line elevated XX% morning simply, especially continued operations Year that compared grew growth review adjusted a is year to and improvements.Another noteworthy largely technology-driven EBITDA Humana year, EBITDA grew the ended in we and that adjusted bottom Full the deal even notable product you our strength driven faster revenue our very loan. AdaptHealth and than in nearly It's revenue rate contract. rates X.X% had fourth Fourth term sleep top from year flow, free observing positive favorable that also and increase quarter, and to year. fourth performance. and great cash cash was a us XXXX on of highlight of of operating floating cost-out XXXX quarter XX% and the it's our Quarter and lines a portion and XXXX this both AdaptHealth's XXXX of and everyone, the thank row the business.For for Stated the momentum a of terrific with

net this be Xx and year. our before leverage the from decreased As X.XXx, to of X.XXx below we end expect a to result,

as debt our will overall a in generate favorable good we we XXXX, flow lines. fixed debt in further lean But rates. structure product our our indebtedness.Turning into We have terms to in increases cash at a free attractive longer of portion with reducing

line for again #X driver which CPAPs powered fourth and in supplies The a record market was our share will volumes.Based grew increase intentional yet in Our reliable data, more performance. provider the Jason you the sleep have our the our census, a of industry. increased which of primary give United are the XX% our in efforts quarter top best and and XX%, direct improve clearly our are full we product believe we industry resupply in resulted to line for related census is our year adherence year rates, in where increase on result our the States. by detail

have the for the whose XX% a We which more experience, the is improve year nearly exceeded job with our by increased expectations. is than we respiratory X% year, XXX over coaches also in fourth best-in-class.Our last sleep believe to quarter. also increase business patient Revenue

again, driven too.Diabetes is become but our the increased of share respiratory category and to work-in-progress, by product to believe tangible. our have striving the in Here this expertise we a #X progress therapists. are be continues We

of Diabetes, Head We force. the our product and reinvigorated new sales including line revamped of doubling of size by have the have efforts team, of recent management hiring operations the the enhanced our a the selling

pharmacy for our shift the continued still pharmacy pumps focus some pressure channel. XX be quarter, points I basis XX% as continues last CGM the the ramping growing to participate up compression census quarter.Further, business we and last quarter, of to government-sponsored in up the feeling to government and While in another from are of fourth on mix channel, accounted we the mentioned are payers

same.Now, and now drugs be value hard on now expected. GLP-X to do valuable largely as to in on possible effects and our are performing patient We a of business. substantially learned good position with about a this and The is last of working contract predicted Humana we we the the the agreements track conversion types transition complete Humana like to we partner. quarter, quarter. the originally As us, more now are in behind is had our onboarding these are to I'd lessons of continue We've discussion relationship

CGMs. there have in a logical consensus be to their inclined GLP-Xs that will assume CGM and that health First, patients growth. actively to seems to negative their GLP-Xs levels be monitor on engaged on AXC effect not will a It's through are

business. of also our government in sleep, a tailwind.As coverage current important, the see impact strong and CGMs, no that We especially for believe we increased sector, first insurance on is most

Our resupply, new at particular a well ongoing sleep take growth. for we note Further, of pace bodes that grow of is revenue a census, starts path and combination which continues to future the our This take real-world users This we shows adherence ResMed. modest increase CPAP by recently seeing in population. conducted when GLP-X. study a with to consistent study are is also what

said, traditional want Our of suggests be our patients reasonable offset pressure. assume proactively of diagnosis believe news. recent also to already obesity usage the long-term potential and that enhanced our people of focus greater focus the GLP-X.We will XX% sales, over We've good health of can this overcome community. also GLP-Xs CPAP and the progress reduced continuing is GLP-Xs we responding connecting for of measures is believe increased of any has adherence apnea this conversation healthier, payers. from patient -- the improved obstructive to our reduction in recent by that awareness the usage occupy We of also resulting CPAP like on providers, to each We through home awareness are few enhance increase our and past has to our GLP-X and efforts basic survey and we're are patients It's and we these on possible chronic the conditions potential our processes at costs the ecosystem years that the awareness comorbidities position These better the GLP-Xs. and the with so in providing not OSA. dismissive expedited market sleep of diabetes, automation share AdaptHealth operating efforts and on retention. growth epicenter of decreased of areas.The the accelerated the to and using enterprise CPAPs improve a increased these We improve apnea through people COPD. trends like users of related increase unique obesity, to sleep role are current from in issues and in will of care everyone.That movement sales beneficial of

resupplying very on the improving can who through more with now brief couple it. ongoing like and people properly have with and adherence more we I'd indicates needed relationships generate that data of and the in X.X sleep providing also proper and when assist properly of access use generating to efficiently.We than care to outcomes, have We are equipment.Our million candidates currently We prove apnea, will reams that have ongoing providers with payers better to data devices them We more people a curated currently people beginning teaching with that we're recruiting these of XXX,XXX advancing by than adherence a their and how therapies regular also than a use more to help therapies. interact supplying update search. conditions. with We the to initial the process. promising CEO diabetes, are on utilization basis to are to provide have improve and on we we also and them XXX,XXX chronic devices work respiratory their patients believe

Jason will to keep this as our to turn can from over our you Jason? now it take not as slowed you move during updated through But progress numbers. We we process.I'll see you the forward. has results, down

Jason Clemens

the call. and to very Thank We was fruit. you, Richard, pleased bear joining are beginning investments Like for the and year Richard, the all in during quarter the made business they fourth thanks with to significant I results.

from early XXXX, million we flow cost We by the over days across million improved the net announced momentum in by to of same revenue prior XXXX EBITDA was build in our grew sleep grew product and year. over XX.X% grew $XXX CapEx X.X%, $XXX.X XXXX. of respiratory categories.Adjusted non-acquired look of delivered will over that led the X.X improvement improved and XXXX. on business management. XX% period Cash cash led as AdaptHealth's that significantly flow and significantly growth we on operations program DSO Free management over X.X% that

ratio XX.X% year compared equipment increased at XXXX.Turning quarter. X.XXx, from year fourth million turn and half $XXX.X XXXX. Our demand steady was quarter to new the of third XX.X% a PAP the to for from net a fourth million down revenue to up touch of grew finished quarter ago. the Patient of leverage compared results. a $XXX.X revenue Net Sleep

total of revenue but met electronic reordering operations.Respiratory Not million for of drives continues to census has adherence easier New it reordering resupply expectations met expectations, and also million efficiency X.XX the performance our starts patient, resupply XX.X% very with is patients only our strong.Our in over for more be $XXX now our XX% year-over-year. reached increased PAP equipment electronic our orders.

census oxygen now highest it patients. has the Our over been, XXX,XXX ever is

well in against categories.Our XXXX. X.X% For of share these was the take as revenue important data as shows quarter continue for ventilation, to market that non-invasive we oxygen down industry diabetes fourth

pumps. the As supply our pump shifted tubeless XXXX our the as to tubeless half ease revenue stabilizes We toward and in believe of pressure expected, we as we pump as transition the in the continue to start market second will pump pressure and absorb grow revenue.

XXXX. to points. EBITDA few the some EBITDA high-margin million to an in in contract reimbursement operating benefit, the in census $XXX.X CapEx XX.X%. resulting the of labor categories, our $XXX.X beat flow CGM our resulting CGM expectations, quarter and growth.Turning reflects operations in in million from was to expected, expenses.Cash due fourth expectations fourth million especially over of quarter. We of XX.X% revenue improvement pharmacy Fourth in outperformed revenue, margin of XX.X% increased Humana As of to grew in $XX.X from improvement We pressure shift our of and revenue, flow $XX.X a of X% improvements overcame quarter original adjusted profitability. representing up adjusted cash free COGS million, expectations,

$XXX.X free X% revenue, full our goal million exceeding cash X%. of of was the year, For X.X% total or flow to

rates. of long most favorable our noted, is with interest Richard As debt term

payment flow. and We our as of are free cash flow a debt $XX million result quarter cash million generating fourth our of voluntary our load.During loan, reducing overall paid the in highly free we down on a strong including XXXX, $XX term focused

down pay year, million. During to our this TLA expect we the quarter $XX approximately first by of

a we leverage reduction our our more year X.XXx in in quarter earlier, mentioned our to reduce ago, stock pretax our at goal XXXX.As year-end announced pretax down million in we to charge XX. December This of earnings by as morning. recorded price release our write-down the $XXX.X non-cash, results, this goodwill triggered X.XXx, fourth part as was the ratio of our than is net Xx and As of to by X.X decreased turn below from course to a leverage

pretax in range filed We between also million to in pending to currently premised free growth.Turning a adjusted to between be anticipate now our of on the cash XXXX, CEO organic guidance allegations $XXX recorded million, a XXXX. securities revenue $XX related million $X.XX action be to charge be $XXX to for $XXX to million $XXX flow We and and to former disclosures settle $X.XX EBITDA and billion billion, million. and regarding

experienced period views dedicated we XXXX, me bridge And quarterly will our $XX force to headwind is as [ a guidance. that in for our in on shortages are share we the to demand second revenue we although to the full XXXX. EBITDA a in support the category to Let extended, half still early We slope X. We XXXX backlog benefited anticipate pent-up ramps approximately our the adjusted revenue similar expect expired faced remaining year look very of that non-competitively for single-digit chain budgeting to of although and to in following with production, half January to over team bid the And line limited for supply XX-XX categories ] expect that sales as rates year. that XXXX that XXXX. diabetes growth the very The non-roll reimbursement ramp and low product that comparable expect you mid-single adjusted recently grow we revenue sleep tough we be XXXX, EBITDA.We assumptions to digit and first million top the the from doubled of products. growth of MSAs some it our possible -- rest we deliver expect growth.As on

payments to the already of as to be We first cash cash a of a flow back procuring approximately quarter over by his at and previously the seasonal we flow have as cash generation on the securing XXXX interest, and shareholder cash EBITDA of inventory.For patient it as settlement. absorb lawsuit solid and we're CapEx about over position our the and to expect; you bonus QX remarks. we ended deductible updated XXXX, forward free expect built mentioned keeping free We turn improve XXXX, well the in revenue and the to to We to XX% in X related effects efficiencies closing our strength grow look year midpoint adjusted X% managing year as to resets foundation for grow. unfolds.I'll Richard inflows as

Richard Barasch

comparables sleep you, masked Thank that more expected been rate in like one to in rates Jason's reimbursement the now XXXX, guidance. changes XXXX respiratory. in would We relief remarks to Jason. the the is XX-XX some color considering healthcare tough non-expansion add know and have risks and of that of I'd the growth the on

these XXXX aggregate to turn of questions, we efficient. if blocking our in finally, this improving on it on base future.We who and beyond.Before for million the growth. please in mid-to-upper the can close target more strategic non-acquired achieve continue I as And can market now. diabetes none thank over back continue bring I the can pipeline, boost our singly needed questions numbers of our growth. the our tackling, be and accomplish into but we open the we devices can get can in basic are nearly rates us certainly Humana, categories. to can single-digit I'd large didn't improve XXXX growth established of If remiss and X.X medical how Here's category pick rely and on we've lives respiratory in Thank who supplies.Operator, the sleep employees people for line up and to you. over large as relationships for We focused XX,XXX enough the for that on and to the We share we

Operator

take first question will We with from Tanquilut our Instructions] [Operator Jefferies. Brian

Brian Tanquilut

you me Can guys? me? hear Can you hear

Richard Barasch

and loud Yes. clear. Yes,

Brian Tanquilut

I awesome. I'd guess Richard. go, on just quarter. add the you Congrats for There first is question

XXXX, about think thinking we category rate rate how the are As as kind in business, like run by either past or get maybe totality? normalized product a just of you the growth we for about

Richard Barasch

-- some and target remarks our is in market think What our but and surprise was growth I dominance is beyond. of to the for maintain of rate want for us specific And then prepared closer sleep. kind said have of blocks, continue. issues to one to a I us respiratory, bring don't single-digit We alluded my year. growth, diabetes is building the an more to than in to XXXX the that, mid-to-upper tools get back as example, to we I in pleasant of a this pleasant, key

thereafter. let's think [Indiscernible] to I Brian, about to So, get through the specifics the can XXXX get talk

Brian Tanquilut

how terms considering? as any to -- Appreciate QX. flow know to I that. Anything need And I be Jason, for the then just cadence think there of that cash to as the maybe, we in relates about factors it gave call for guidance year, out you seasonality

Jason Clemens

We for half generated year in free of to should our the get we in generated much the 'XX, year, second be the the expect approximately X/X of Brian. first Nothing half cash in of like the and unusual did to XXXX. remainder

QX there. has you're that no stronger, so pressured got If demonstrated. And as out. a level, QX, just is QX the interest quarter, quarter we there there down we quarter. as as is usual, getting QX historically is as to is payments the called interest, big is shift certainly then

Operator

Coldwell take with from Baird. Eric our We'll question next

Eric Coldwell

here. couple I have a

hoping in you one and 'XX the I past, on headwind for expectation net some hoping give expectations XXXX, was how that was still, final did how pumps. get year, revenue just In a that. then, tally down? we but much on headwind a I of could for And what and First in your is -- you full some color pump the much XXXX. give on numbers the us assume not, could maybe revenue

Jason Clemens

Sure, Eric. Jason. This is

as XXXX. $XXX was about we we 'XX $XXX have about in in pump million, and expected So previously, revenue firstly, million reported

a we headwind transition to previously as high- million that stand that.We the it with to So, million square expectation. literally some half the the today, prepared the of so in that line of came in a second the the that half the in that, it about that million. think as 'XX is call first reason will we of think, headwind, do about came $XX stabilizing. range year, in talked middle teens be $XX $XX The of half. in had we'll do better discussed than We is, right and We for remarks, here the bit

and you tubeless to we our pumps. in tubeless time, starts. a new if on of pump, for you've already.And then in to decision of We words, starts overcame terms pumps new other revenue. the growing So, quarter pump base are to were made solid had the wanted move we that in tubeless tube-based related a you pump X secondly, And first

again, work those time it the supplies system, that to pump year. through and But the some pump that so, you on will the And will. for for take if thoughts are

Eric Coldwell

detail. will. And but compare on to detail little there to curious, on flat great all, be the would resupply that, sleep rental sales but would think does get I to not rental, surprise hoping maybe resupply I you That's more performance at then a the than growth I up XXXX? growth, in a stronger am how or mid-single-digit down, mid-single-digit; was if

Jason Clemens

and single products in adherence to average as got price as right, order well that resupply digits the our as the operations Eric. you sales of improving expecting rates. per continue exactly We're increase higher number Yes, the just we

census. that compound to continuing just So,

new revenue, cycle rental nuance in as frankly, revenue of strong reported the strong, resupply rental, half patient as demand is XXXX.To your that rental been. Within the XX-month are the off it's start about means we our in great the that XXXX. strong, ever rolling growth of setups record rental first XXXX feel in we So, is of on point

it's than probably for a ago. a tough so Rental around year. this And tough other creating from of comp comp. anything is we're again, just off year But revenues just expecting the period number patients flat rolling is a what and larger not

Eric Coldwell

or me. then unusual there the the efficiencies sustainable? what all fourth Thank And be into you dig in CapEx The one structural from that bit? in last for that could great. major thematic changes cited are details timing Was little perhaps your in a you've That's you or patient And quarter? CapEx, the could items then, requirements here. any

Jason Clemens

Correct.

So, for maybe demand start to with reported, a CapEx to XX%, dove 'XX, in XX%; that QX represented that revenue. And was therapies. XX.X% a meet And off the level necessary setting that In we QX. continued quarter. then 'XX related by of purposeful stockpiling CPAPs of was to as low and then mid-XX% felt kind insulin XX% in of high

is what we'll And for fixed and year. we weeks on to we so, here went more we're terms we in last point.Structurally, work taking bring assets now. we're is think about inventory with conversion finding of why about to live kind of is in related more kind and [indiscernible] and a the within just and order, up what's we've of point efficient hold. the that year at run how a technology, the which our getting throughout That We improvement few way handling free is order of X.X is comfortable get expect days that out just compressing a HME, first flow mid-XX% hard Oracle benefit cash there and just our the sites We changing half really 'XX, range rate. good digitalization in project been inventory for

Eric Coldwell

Nice seeing good Congrats. progress the here.

Operator

with next Blackman Stifel. our from take We'll Mathew question

Colin Clark

for Colin bit a I'd stabilize patients, This the asking or new of And basal of the I know [ CGM a side. to is this I launch? around that's is through priority. Are ]. What lift decision particularly any GX particularly for for start Matt thought year? centers like a any year your on the mix state-of-the-union franchise, still that Medicare the seeing from sorts you coverage thoughts on on are by government went going that? last diabetes

Richard Barasch

question. It's compound a

then yet is Richard, we governmental the Jason. Medicare programs. But me the Let extensions -- benefits of We're the start in and seeing this will turn I'll from we and turn other think not over to some in I'll it in XXXX.

we think why can of to pillar we growth. more get a that's ultimately back So

repeat going got as you that So, you upside we see it. has why asked compound -- Jason forward.Jason, for question,. a don't

Jason Clemens

for relates we or continuing in we reason the it our of think frankly, guess, we're in force. Yes. touch to I'd both will terms that and to products go say, had census that partners, doubling that's a patients a run It the really And government for faster government expected. been grow DexCom intended split, good in distributing Abbott. certainly, Colin, is transition, and the say, are those models then, and great we that after on more for the been newer think our XXXX. to for never before. obviously, They've we economics.I sales and was And geographies I'd that we've -- as newer than we planned trends, the thing, of

pointed went government a will directly care think areas, be we're so, analysis is, population. geographies, you'd at what particularly produce.And we sale as the and to which a primary happens and data heavily a And very into where lot of business patient urban these expect, --

expect And half we get expect we we area XXXX, -- the the mode. in back particularly to so, and to of again, in year, to that grow growth second do in

Colin Clark

into ] efficiencies or quarter. put should place progressing How I about year? this gross that and follow-up margin we dynamic on the one-time in outperformance had Humana a Or it of was then that COGS underlying think XXXX? items? the Was And the of primarily just you've any a that one [ kind business the function the during

Jason Clemens

management we to beat pleased I job I'd mean, frankly, just have mean, gone have your and year. every say in when a is a the to, transitioning over essentially every QX Colin. committed good measure. to in program, across prior above, labor, I I Humana, we we OpEx we essentially done than patients resulting QX was point, were the in QX.Secondly, faster improvement all look over mean, the G&A, -- on cost and you big assumption, reference we flat which

to $XX growth was company the about the program think so, year. of was on containment I million that And deliver able over deliver then and prior also cost what

So, I mean that really in of it's those couple performance quarter. factors the drove the

Operator

next We'll question Pito with Bank. take Chickering Deutsche our from

Pito Chickering

a Going sleep Is to plug tough back growth a XXXX understand to due for rentals 'XX, guidance really should in sleep into of about just comps I for right XX%. XXXX, CAGR about to second. flat for the from growth had 'XX. it's that If sort be rentals? I for the XXXX thinking we

Jason Clemens

a rental say, should get sleep resupply, is that I'd it's the to sleep think Richard both continue your across alluded to a point comparable clean, as rate. growth digit, mid-to-upper same it whether I the at that healthy. grow be yes, or will as enterprise, Well, Pito, then, to -- mean you category, approximately Once single the we period

Pito Chickering

And then, year? the what a follow-ups of for DME? a if few today pumps you a tubeless tubeless ends tubed? What's pump great. And a your Okay, then in payer percent patients pharmacy versus do diabetes. What the think cost get severance the are that they versus mix here on

Jason Clemens

For 'XX?

Pito Chickering

Yes.

Jason Clemens

part point last first. -- say to that take or probably up X. a Yes. It's I'd

exit we XX% we reported, So just we as think 'XX. up that points of a the it's couple

pumps putting pharmacy. and I as we're new well today. through those mean are Bionics. as are we out, tapping -- that entry, Omnipod a Xs we're Regarding tubeless Beta pharmacy through the the pumps, which mean running the channel running pharmacy I capability our that those

versus are is DME there like differential those going products really through because pharmacy. channel So, a no really

Pito Chickering

Okay.

revenues And I the to year DME? half your for [indiscernible] sector the if and of the of growing percent what how think first we be the pharmacy are diabetes pharmacy? year? should whole So, color of the of half on sort in the versus back DME versus guess, about growing Any guiding you're for flat

Jason Clemens

for not our of in put pumps, outweighed we versus will ready starts, to on haven't it But tubeless new say, we're out Yes. Pito, quarter, split tubeless. was say, I'd tube-based. a -- I revenue the

you the factors. take stay getting equalizing.In will second half, terms got That back time for you some time growth length pump get as -- long for some that start that patients. to pretty really so, of And will of a in X to the take

will first half got then deliver we in starts think pump ramping You've first be in sales pressures, the secondly, the we'll we half. in and second growth half then the And in in the QX. team think lighter heavier as be CGMs, will and lighter the

and QX -- QX. So

So, half first. the stronger than we second be is going to think the

Pito Chickering

X of Okay, great. And more then sort of sort -- here. quickies

this revenues versus pretty other EBITDA? what The is cash the of quarter. flow are free right sort adjusted about in of flow then for like conversion remind sort me next Can just the cash you years conversion, And free big ratio driver is? XX% other the couple of

Jason Clemens

And an to... free easy that question related of reason to cash you part conversion think was operations efficiencies, the to I'm and that's from is, down get then that from And first we cash, better the just On EBITDA Pito, CapEx one. place. sorry, the Yes. flow same

Pito Chickering

other, in [indiscernible] just can revenues this quarter? It's you guess, I

Jason Clemens

Yes.

items e-commerce, So other and as included historically such currently, orthotics. hospice,

of lines of kind various it's July, the capitated PMPM a includes of business. So, revenue Since it grouping agreement. also from

And so, QX QX seeing large growth that's over in a why you're sequentially.

Operator

our We'll with from question UBS. next Kevin Caliendo take

Andrea Zayco Narvaez Alfonso

I for actually questions. Kevin. had last Hi, a Alfonso it's follow-up set just in of those Andrea to

those how if benefits? there of Humana, capturing from are next single any 'XX. free do there I And for sort cash certain on some If expectations you like collections, about question. do underlie maybe ramp you the the And of of for follow-up of we example, then capital the working cash just how that? moving parts those that out another against there improvements your improvements have some Just flow, about tranche of you talked commitments think balance

Jason Clemens

particularly we of and And in a not result kind big really rev a built. terms in editor an quarter. we claims previously And people DSO tech that's anticipating of and things, was that home processes say, last over proprietary XX technology, and considerably [indiscernible].We're that Andrea. is It of just investments much AR side cycle investment. And run months. really we of within Sure, discussed, of the the I'd mean, of the own as the firstly, versus in that by XXXX, I shift operate. the that the was DSOs DSOs a engine down brought

management however, rev in got new big actively investing particularly portion are, in, and process with tech there. denial we've We cycle, going of

on we again, you but that not [ more about we But did inventory management really a to CapEx course X.X call note of job expecting and Andrea point improvement, will little course capital, on so, over looking the at that, the you're ready DSO management or from And it. you we're look point, over investing of millions we're to better inventory 'XX, revenue it end 'XX. inventory, we're particularly expecting the We're you'll ] talk whether of XXXX. expect working improvement XXXX.When better

Andrea Zayco Narvaez Alfonso

Pito's question just revenue question a on And prior other follow-up again, about the line.

cadence not you [ recur? -- some So, line, is sort $XX capture look or of kind forward? sales we how benefit that ] about so an of that Or million accelerated do the going on if expected a of to I think that's the at rated there that reported was

Jason Clemens

Sure.

we now to revenue reported category, other that third $XX that's of of million in revenue. in revenue you quarter the other, million sales QX 'XX, look if and So, $XX up

capitated inside from agreements category. revenue PMPM is the that of again, So,

and committed we those cap the of as impact. line transitions key we a that and bottom QX, to so, significantly, down agreement came deductions as outpaced line top that's part a in And patient far

good both guess. So

So, seeing in that's growth. there predominance you're that sales the what other

Richard Barasch

question? another there is Operator,

Operator

our Yes, Ben question there take We'll Capital Markets. RBC is, from with I Hendrix apologize.

Benjamin Hendrix

conversion. the Wanted a contract into Humana little get deeper just to

Just idea that and lately process. that some where had good said -- get And to want you've are we in success you getting up. ramped an of

could perhaps million. to portion how the you then you If PMPM quantify year? contribution track the it just that that does again, -- how through that expect $XX to And of

Jason Clemens

are able to quarter. end economics this that, complete help essentially transitions a first the to Jason. we by execute that cap of patient substantially would of being much And of comment the removed committed with you'll I we Ben, we've have on those the deductions. this see to Hey We you is the quarter, that end fully-loaded on this quarter if out, at But tell won't arrangement.

quarter, it's, words, can you math run there. a kind and another So then fully-loaded in from of the

Benjamin Hendrix

commentary. the pharmacy follow-up on channel just diabetes then And shift and Okay. to

if into a efforts you describe the What channel. we and more of that your look in that where in are So, little penetration and like about detail could and kind timing? process pharmacy the does

Richard Barasch

order appropriate first to have more about work -- quarter to We're the should Entering we quarter. enterprise pharmacy working backup in our do channel this identify is first small ] diligently pipes for of with but competitors. in on We've in XX this us. a do and tools we this. to Yes, us say We're need the efficiently not something got some [ call. the state pharmacy, to partners the working significant as as

about have So, in we to fact, are, time months. resources are hope -- in a going something talk quarter ramped and in this to we to of spending couple to and get up

Operator

Bank next America. our Gajuk from with take We'll question Joanna of

Joanna Gajuk

I So the the follow-up the questions a other contract first, Humana and revenue. around on guess,

quarter, $XX ramp guess, this million, in I there's sounds but was the still revenue QX, in more like there So, up.

the strong Humana sort this forward 'XX there's pull there QX? or good from this if is point about it some of overall, with revenue guess, 'XX and So starting to of million $XX when a more? thinking adjustments this to into being comes from is is, quarter some I And question was a

Jason Clemens

referencing, revenue, million as total you're in about a we $XX if substantially on I end unusual we And complete is earlier, no be give that that our sales said, million. at $XX should There for Joanna, first able to that, revenue were other baseline. But run baseline we expect to were other adjustments category items quarter. talking The other we XXXX. the before the of the the within with we're execute new quarter the you believe transitions good what -- patient of sales our rate think

Joanna Gajuk

it. Appreciate great. Okay,

in performance the quarter. And to so, just I guess, the back coming

with to any they you came your the Humana at or equally a contributed you the Any or obviously, EBITDA to way that higher other in things. high contract would said margin, and above of say couple and quantify things said you revenue these your And end that outperformance? on range. of of came So

Jason Clemens

And little back it's out lines couple OpEx, there, we I sequentially, It of of everywhere. like a a here, growth we them. and expected the be, look flow-through resupply I'd million $XX Yes. diabetes numbers million, on mean in that to other couple million. QX, I a Certainly, that. right? you've guess. up and we little we had said, the say, expectations bit so, million and at there. a of and about I mean, various what all said labor kind we here, if bit put adds little a on be conservative beat $XX I got real was we some had mean it sleep to I

So, another OpEx. labor $X that million sequential of was and improvement about across

Joanna Gajuk

hit And Would sleep? guess I product guess, which, to I will it rule, comes the respiratory XX-XX the another, When and of be, follow-up. the category most? it expiration be I guess,

Jason Clemens

XX% generally right? Yes. being most. fall ] an level. level I impacted this sleep at HCPCS about be [ those in mean, revenue, of would it right, and line But almost down arguably product size the businesses, of actually would a our is MSA So, with

to so, products. And proxy, a size of lot and business for nuance it's the of the on that spreads detail the there's assume across safe there. it But based a

Joanna Gajuk

growing I can talking the just guess, government being I exposure, and here. almost it about as And of guess, to XX%, about, talk you diabetes the relates sense business, from

from I movement Managed more these Medicaid, versus when these is benefit some and Managed Medicare I in have So flexibility some the government the much, government Is to are they fee-for-service in it payers, but Medicare potential of largely Medicare pharmacy about also, still comes payers medical payer or the talk Advantage, those exposure, that when in actually Managed bucket payers guess, these these for are there, that how guess, in bucket fee-for-service? Medicaid?And you benefit? versus

Jason Clemens

of up is not you're payers a the -- the that government-sponsored for to asking components the we're that fairly we highlighting. that insulated that it I that are make from that lot we of provide detail say part I'd Joanna, going well mean business you're this risks categorizing to of the is believe total. as reason The

reporting way. And we're that reason so, it that's the

Operator

a Eric from Coldwell with follow-up have Baird. do We

Eric Coldwell

recent Thanks. and I transparency. improper since final Medicare the benefit fee-for-service, cover would rules rule. mean, reimbursement all Adapt to what came it's a things regulatory of In faster in rest wanted these that bring denials be forcing in would authorizations. everything covered with But like for the for past, improper or under back provide it seem CMS Advantage more unnecessary like prior CMS payer to are you help you also programs Also, and is plans the I'm go few appeals, here, industry. resolution or final has behavior and the to issued last environment. Managed curious, and have curious, I those expecting? obviously, and the seen any guys out, good the early change I'm this very Medicaid

Richard Barasch

we so intuition correct. seen I nothing for think, is, us all haven't your that No, far. is But this positive

Eric Coldwell

your or Have in you incorporated any benefit potential guidance? lift of a forecasting

Richard Barasch

No.

Eric Coldwell

upside happens that would anything potential? so Yes, be

Richard Barasch

right. that's Yeah,

Operator

at we And time. no joining for have this to the today's you. like would call. Thank everyone in questions thank queue now I further

at lines disconnect now You your time. any may

AdaptHealth (AHCO) 27 Feb 242023 Q4 Earnings call transcript