AHCO - Earnings call transcript Q4 2024

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Operator

Good day, everyone, and welcome to today's AdaptHealth Fourth Quarter 2024 Earnings Release. Today's speakers will be Suzanne Foster, Chief Executive Officer of AdaptHealth; and Jason Clemens, Chief Financial Officer of AdaptHealth.

Before we begin, I would 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 2025 and beyond. Actual results could differ materially from those projected in 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. Corp. AdaptHealth to subsequent provided events. obligation to this the such reflect update no on information call has

EBITDA, of Additionally, will measures adjusted reference this certain EBITDA, on morning's financial such call, as financial are non-GAAP which the company adjusted measures. all EBITDA,

more morning's find non-GAAP these is recorded of Chief a call accompanying is about presentation on the the measures are replay be today. It call, being now which AdaptHealth, information to posted the available call company's materials introduce can Officer You Executive in today's Suzanne pleasure website. later will This Foster. my and the of

Suzanne Foster

Good joining for morning, the thank everyone, and call. you

As foundation we progress our and the positioning by the long-term I'm close growth. out company encouraged and strengthening we've made towards for XXXX, success

into moment that, take results. to quarter fourth get to our like a I'd I review Before

high our revenue, year-over-year quarter exceeded each ranges but We we quarter quarter effectively the cash strong November. Fourth than prior and EBITDA reported are the guidance for XXXX, revenue our narrower well in on was high our the from at in offsetting Sleep well $XX of pleased X%, range, year early declined end year the reduced prior of XX% Sleep the the follows segment, acknowledging quarter year prior our Health increased and beat by Health delivered and of Health quarter, EBITDA XX.X% Health but range. our X% EBITDA X.X%. our quarter Health high adjusted in Diabetes Health guidance quarter. prior of that to year cash versus Wellness the at Home and flow adjusted quarter the Free revenue end X.X%, of was segments this guidance margin the while X% increased guidance quarter free flow up prior million, fourth shared flat was above adjusted Respiratory as from QX quarter, end expectations above in XX.X%, year our Fourth contraction segment. Compared modestly was fourth declined the fourth X.X% contracted midpoint Respiratory Diabetes range growth, by that

System and in of leaders of a Chain our to coming or out our additions while margin. AOS. looking line appointed holding newly this And Commercial operations professionals Officer senior Legal includes our month, are Operating last X strategy, quarter. made SVP new senior adjusted over EBITDA company the Supply know, we you initiative, quality application of balance on ensure that all and several of making improvement cultivate organic clinical we're our our experienced One with fronts. relevance, we Starting began continuous the care assembling which pleased identified included of automation, last X a by team As and August, and growth Adapt deliver and patients. We areas accelerating action already increasing focus, I'm AI Adapt, mindset that to these leader welcoming Chief the Adapt to One to forward work past new It leaders, of of sheet. taking months. of to our we we are Chief progress delivering quarter. And includes service recruiting build Officer, standardize and exceptional who also We and a talented for strengthening both on all this second joined an the This the the to appointment a

version of into performance. to business we the a them proactively provides these are us new allows to being moved around for operator improvement is are. This structure power we teams individuals levels an coordinates how that abundance lead by efforts of that identify unrivaled of health colleagues the throughout they of do the improve to and we in as recognize home segments. accountability means and structure an our reputation is to we fourth them harnessing the today. industry perform. One all our in employees Adapt to work other the is the excellence. and managing industry operations patient service implement leading managers the value quarter, in problem-solving of short, in being our X the changes, And empowering organizational and of and and automation accountability, drives with about what our coordination quality are it's and we company workforce across Just inviting focus best about execution. by expanding work It by segment to In starting the in changes increase visibility structure we the on organization harnessing the processes experience at through enlisting and their for important, we organization talent appointed for opportunities A the these about with prioritizes trust. Among needs that best to and we do challenging in what for general we our evolve time, customers, service the Further, the innovation building superior deliver participate measure the will excellence, same methods, patients. we example on our our and prime of already each must AI. training And

October, application on And X, quarter, we patient just an that additional do a last patient creating our up mobile CPAP be we mentioned self-scheduling simplify self-pay called underway initiatives streamline To the December, them following we could in in the resources that for in reinvested and in feature in through launched feature a free several have work value. We experience, myAPP. I initiative introduced will name myAPP.

additional customer to CPAP immense and setup. representative need a patients new convenience These features self-scheduling we with the eliminates to to feature see provide service schedule increase interact an simplicity. Similarly, relevance. for a clinical Our opportunity

harnessing data patients equipment is the investing from evolution costly our of reducing in massive best-in-class for that rehospitalization. business patients, that to insights the system. actionable critical to phase drives we heavily outcomes our all quantities to This U.S. in improved incidence behavioral on patient-generated payers. in to in-home health We the programs, is environmental services adherence and more costs are using direction therapies next data deliver the longer healthcare physiological, already health benefit helping physicians and and build stay stakeholders our of reduced will of follow The and and the a

track benchmarks to and order in for effectiveness. implemented record sales we our These to care and While ability we orders indication are our of view this focus, strengthening inject Officer, large brings ambition, between a in we will that appropriately the proven our success and arrangements operations Russ role, a commercial fourth time realizing growth. of of our a we capitated organization confidence sales we businesses tissue of Chief Schuster, manage needed and the workflow improve quotas we In teams who connective path vote generation. expanded driving organic oversee Further, quarter, commercial and first the our the have clear our of around sales also a new incentives will which early solid wealth Commercial for conversion brings with stages who strategy the strong and to in recent patient to an quotas of area revenue. under who the delivering next intake proper are are and partnering me experience many growing to Russ' leadership, Under provide as revenue years. realigned performance

lost keeping channel, starts depressed resuming in benefit on causes, commenced focus in Diabetes standing causes end, of by operators patient pace underperformance. this damaging segment. on that We competition. new had a we all outreach are referring interactions. weren't how reimbursement pressures with Notwithstanding review elevated also our our and patients resupply of medical other growth our diagnostic the we our existing focused Health on the To with manage we with the determined that organic Excessive our weighed attrition structural patient we have diabetes physicians. rates Among review simply

experience using experience sense that to our resupply made that I general report center to are leadership resupply the sleep quarter, course the last beginning moves and the working. leverage an excellence. and outreach see quarter, made our makes integrated a we resupply manager, operations sleep experienced we installed we correct am our are As We aligned sleep In for business. practices patients. to I team an to for have our into new Diabetes under mentioned leadership operations diabetes segment, we resupply our diabetes promising signs these program best patient to pleased of actions deliver that fourth remodeled from that swift

resupply orders side, the in grew December. On year-over-year we

and and the performing we our opportunities QX rebuild seen and off referral are time related cautiously during have fee rate confidence QX going capitated and years executing drag diabetes that that a X new and XXXX see trust quarter. we exceeded patients. on growth reduced in continue in does a is for over how our organic forecast, starts, the XXXX the sources hard with well One we encouraged our overall saw albeit resupply optimistic Our our its we I to rate team with were less XXXX, are sequential shore we our organic both to and new to become delivering contrasts year of we in it's take expectations. improve but working of costs to patients On revenue to of payers by processes QX to contraction the performance, have our was to grow the are see diabetes with payers sequential plan in lowest and make arrangements growth, not satisfaction on diabetes up we are through which increase a trend time. Also some arrangements prior business terms outcomes, existing quarter will encouraged attrition to we

extension to contract to week, capitated of we In that a multi-year fact, past am I pleased agreed our this with Humana. announce

line. the last third-party. our to have non-core rehab turning reduced we extend $XX facility we we $XXX a reduce by to agreement another assets. to In completed strengthening credit in interest balance product year-end our certain stood our definitive ratio leverage maturity including the during And our product sell the the at additional Further, a in refinanced certain sell we In custom and Also of fourth will explore our XXXX, And transaction at lines. debt million senior net exit we a divestiture our to sheet. million, non-strategic expense. reached continued quarter. In we fourth quarter, to year, continue potential X.Xx. to of secured XXXX, incontinent XXXX, quarter, an objective outstanding third assets to Finally, the

accretive We focused our services these full company. be to to of that us our to potential In along keep steps proceeds closing, areas the for X journey to further realize an execution first designed about interested our and focus leadership reduction. In near-term. in our divestitures many of the are all and the team the healthcare adjusted help is strategic in lock expect to what Undoubtedly, respects, can map is direction are we a EBITDA just you margin aggregate assure more new to you on generate need road as debt I to of understanding it forthcoming. our arms keenly company, in accomplish

is Our will several opportunities years. from to over already best turn look I strategy executing forward to more that, resourcing value for establishing over plan and create vision team and that for progresses. With I sharing next sharpening that as our XXXX vision Jason. a to about it our how the

Jason Clemens

sheet will for to to follow moved with with structure into year the company. managing our the to balance reporting quarter I'm are everyone for we look Today, going our results segment outlook business that fourth how XXXX. Starting we thanks and our this for transparency with fourth our first and We Suzanne, align I'll change of to with plans you, before and increase call. and finishing time I a believe reporting for joining for our a allocation results. now full the our segment quarter, multiple capital review today. forward XXXX sharing our to performance, review Thank results

Suzanne rates grew Health, X.X% of revenue pressure year which For X.X% divestiture certain and the revenue and $X.XX net rehab our are XXXX to reimbursement growth and XXXX the capitated for for of year Sleep new and from overcame from of in Health full the originally offset the full custom channel these partially missteps produced public growth as Diabetes termination versus the Notably, segment, billion X.X% we XXXX, operational shifts at in by assets the correcting. X.X% in By earlier, net of Wellness growth revenue prior in COVID response health Health segment, Home, to X.X% was year. diabetes, headwinds, process offset weakness payer reimbursement by in revenue Health. pharmacy a we Respiratory decline that the the sleep resupply discussed in introduced blended XX/XX emergency pandemic. Underneath volumes, strong revenue Diabetes in of reflected

roughly was we just above November. prior the revenue quarter end the landed of but guidance range fourth the Our year versus flat quarter, in high provided

Our increased X.XX Sleep Health third Health of new starts area million, X.X% consecutive up strength. Sleep $XXX.X XXX,XXX to to Health And year-over-year now continues net X.X% XXXX. surpassed up Health sequentially quarter. an business and at our be Sleep the XX,XXX for stands Sleep from million. year-end another census revenue

CPAP Our of indicates loss. weight GLP-Xs manage survey using now XX.X% to or are that respondents diabetes

GLP-X our Despite We revenue a increase surpassing season, than difference and oxygen set versus in XXX,XXX patients modest the up between million patterns was on we start see now service. non-GLP-X record, fourth in flu are the X% continue resupply CPAP actively still census patients order quarter. to $XXX.X a compared another year cohorts. Respiratory to an the patients net Health slower normal to seeing adherence prior quarter, for in immaterial X

spent patients $XXX.X refills We interact AdaptHealth Diabetes including technology of X.X% need myAPP. Fourth continue revenue the prior decreased year to service help customer million with new from reduce quarter. providing that tank eliminate by quarter in representative, to the Adapt tools reordering time launched Health an the

over However, sequential the the X last years. quarter $XX.X in million the growth of most produced was third

that patient from partly by starts were better the early we earlier characterized While with than anticipated mentioned and changes results we Suzanne not due better results performance, to operational and are anticipated retention. satisfied than some

net $XXX.X as custom was disposed down revenue The products in certain quarter sale million, all other with categories, prior the by For of expected. fourth Wellness grew assets. product year includes quarter, from X.X% revenue driven which Home, at the this remaining segment rehab

starting end November. we X% Turning adjusted versus XXXX range our high to support was about and as in guidance for provided XX.X% year Respiratory XXXX, in processes EBITDA of held our for the to in full was from which EBITDA full EBITDA technology year made at long-term up with for results. in By full that growth. was in XXXX XXXX the we even margin, Sleep $XXX.X Health, and Diabetes X.X% profitability Adjusted XXXX year XX.X% and XX.X% expect Wellness Health, above on XX.X% We for in XX.X% the investments line Health adjusted X.X% we Home. segment, margin leadership, and million

and basis driven EBITDA mix. Health points, margin Sleep Our adjusted contracted XXX product predominantly by payer

adjusted Health a as margin of of expanded result EBITDA full points Respiratory year XXX capitated basis a Our key contracts.

custom points adjusted well of of operations revenue Health maintained and Diabetes as of lower Our on adjusted EBITDA basis margin benefiting contracted Wellness XXX contracts certain in anticipation with from XXX as full margin expanded key also resuming growth. points, basis as Home a assets year the EBITDA capacity sales revenue disposition margins. rehab lower we at capitated

we the fourth support points Adjusted costs, XX growth. the increased aforementioned of For was by adjusted XXXX, primarily investments driven million. labor basis quarter, reflecting XX.X% making are contracted $XXX.X from EBITDA EBITDA margin to QX

cash and to flow, capital balance sheet allocation. Moving

full revenue And from X.X% cash down $XXX.X of XXXX. XX.X% million, operations to For $XXX.X a free full was revenue, XXXX. compared million against $XXX.X $XXX.X up CapEx in was million million or year was year XXXX, cash XX.X% ago. from year of flow flow

November. cash and For the the cash, Loan tuck-in full slightly we in the our was QX Term remainder million, above XXXX. unrestricted QX for in Change $XX.X XXXX cash of XX.X, The reduce million the of to guidance to free we following continued of to million was from receivable flow $X.X was situation stood $XXX.X million below the Southeast million down normalize XXXX. Free in $XX accounts provided the in earlier X.X% went and on flow, sales used revenue, from million. fourth cash deployed as million flow the quarter XXXX a at year-end. CapEx A. for $XX.X of run Of balance million high at quarter $XXX.X XXXX, previous in Healthcare from which $XX.X range the rate acquisition XX.X% to Days down operations end outstanding $XX.X the was

financial cash revenue level efficiencies, flow. opportunities which on management, our management capturing of to We improve increasing improving are are inventory cost cycle working the all and our streamline operations, of

XXXX, last net was leverage X.XXx, end and down ratio billion down from As from the our debt at year-end net end quarter X.XXx at of stood $X.XX the at and of XXXX. X.XXx of

last As Between Suzanne over well progress priorities, we toward balance XXXX, using cash free last a debt, we've in that in made allocation already our this reduction free flow year. $XXX been near-term the in a cash our and the Recall achieving reduce million of target for leverage. TLA mentioned, to resulting we introduced in capital quarter, the XXXX net our path expectations target. generation we along X.Xx are

to our capital reducing are organic investing terms growth our allocation, balance In to priorities debt our current and of strengthen accelerate further sheet.

custom completed definitive [ XXXX, last we assets million additional As divestiture certain In in transaction incontinent one earlier, non-core quarter, a to quarter non-core similarly agreement reached sell we sized sell product noted a to rehab represent the to revenue And in fourth a In we approximately assets the line. explore assets. certain ]. $XXX of these aggregate, will third-party.

out expect we of look our to Further horizon, for will and equipment strategic activity geographic footprint be the we home now, patient acquisitions M&A providers continue modest. on medical increase to to For access. round

guidance. to Turning

XXX Rental of mix life, purchase effectively drag growth. over year to billion of from custom requires by XX revenue billion in basis point point revenue a versus points approximately basis assets periods. rehab XXXX, deferring disposition and assets to useful certain revenue. future X% basis rental offset amortizing the growth, to changes This expect assumes underlying revenue the their XX a X% drag non-cash we $X.XX or to full in $X.XX revenue related negative of to For X positive partially

We first of expect disproportionately remaining affect the smaller this quarter to XXXX. and be the quarters in

We to a XXXX. look include dispositions any And closed. reminder, as expect quarterly the of our that to impact shape revenue of does not from acquisitions not yet similar guidance or

XXXX EBITDA $XXX full We to million. of expect $XXX adjusted year million

of EBITDA approximately margin year adjusted and XX%, expect with We line in full XXXX.

aforementioned We XXXX. entirely impact expect to in to flow the basis see XX point to bottom-line the

of cash full first in and of $XXX second range the flow Finally, expect XXXX, we to XXXX year. free approximately that to year the expect the Similar half $XXX half estimate of year X/X million. we in our in remainder results of in the the million the

expect X% XXXX, quarter XXXX. For between QX the revenue to first down we be of X% and versus

We adjusted expectations expect well These XX% weakness will proportionately the first the to as in margin drops rental of and mix EBITDA XX% bottom-line. which QX reflect XXXX. the Diabetes an as from the ongoing to Health performance versus for affect of purchase entirely our drag quarter noted, revenue, as

expect free quarter QX we modest. In our usual, results cash flow exceeded our As XXXX be to expectations. fourth summary,

be strong balance free to our year good for flow on are XXXX We generation making expect progress another sheet. cash and

XXXX the we focus of on that path to end you X remarks. a up questions? XXXX the While we're expect Operator, accelerated our confident are year would of call a for of for our brings to areas open to on and beyond. That executing to growth, are kindly and foundation transition be strengthen somewhat we me growth in my

Operator

with Our Ben come Instructions] Hendrix question RBC [Operator Capital Markets. first from will

Benjamin Hendrix

to point incremental outperformance, capitated reduction talk with are payers, to arrangement of clinical we that about admissions those the additional of with you've you Specifically, a you arrangements? over the Can Humana yet or more in can demonstrate programs? been more data kind other adoption carriers support at capitated conversations having

Suzanne Foster

start Thanks Yes. with that. question. the I'll for

parts. X So

that our with arrangements going conversations variety in of capitated progressing ongoing proposed a have We are well. pipeline

We patients we're and some complementary conversations including remains their we're of In review strong. regularly our data about with about having. terms that relationship that meet and they've very the the Humana, and performance, data the been how of very managing performance

Jason Clemens

add additional that fact, since quarter, I'd the signed last have, Ben, arrangements. we in capitated

but near we Now Humana of nowhere and are are scale making size progress. these the arrangement, the

that clear. kind you of parties like if are over things extension, I contract voting, have of terms a in both been multiple we'd I think relationship Humana quite years. pretty going to mean, continue well and said in will, I I the signing think mean, has

Benjamin Hendrix

I just And quick. Great. more one could if in squeeze real

efficiency much revenue change and can more noted in normalization expect from well You following cycle outlook? cash reach about working Can the inventory those talk outage. and initiatives DSO as timing How capital of your kind your flow to we you targets? measures improvement as various

Jason Clemens

with have Sure, I'd Well, we're first, say, levers XXXX. free pleased made our performance in incredibly cash progress. all Really, capital Ben. flow working of

handicapped following in revenue the that on starting normalize front, change impact. were is AR but and the DSO we to cycle Now the earlier outage year, certainly, by

DSOs So better we expect or over the same of course XXXX.

the front, in On payables course move terms payment the significant the year. of throughout we some had

that us thrilled and all $XXX at brought Now folks is we're Adapt why are of free the that new recur flow. the team not of that 'XX, midpoint, making that the cash notice in him certainly, expecting we're Officer CapEx Chief talked improvement at management and and in our as on to joined every then very million management. inventory CapEx, to that well And leads that the as committing recently. here And with he's about, day. of as you'll which we're inventory Suzanne demonstrable in to a Operating he We're him rest have

Operator

from come will Stifel. Blackman with question next Our Mathew

Mathew Blackman

quick to follow-up. my to question a confirmation do I I wanted upfront get before

disposal about and bps additional On of correct? due drag you to of for fourth the talked XXXX, in the just assets. one not assets year, the the disposal That's line guidance planned XX in quarter the this the

Jason Clemens

Yes, you got it.

Mathew Blackman

business, curious the about Okay. thinking on the then guidance. contribution I'm And XXXX to for Diabetes you're what

in improvement Curious pumps You've the I'm trends in last improving to how year. you're in the CGM. quarters. fourth several guidance this progressed baking curious also very that the And somewhat during quarter? then what got obvious

Jason Clemens

Sure.

growth were reported but for effectively million. $X year and down by been about $X the tune million, about the of flat. we supplies, in for it the over was same. $X some We pump So the fourth time first quarter, In have it pump the quarter, the million, prior third might modest

jump-off relates in start pump revenue and modest to and I pump a supplies, some do we're as and at it we stable growth pump supplies. So point showing expect think to pump

the As to of that are in get largest ourselves. it frankly, too it. the we've of quarter segment, We big a There to lot we're It's that commit part not CGM, business. growth last of is to we proven segment, until ahead Diabetes want going which to said pieces. a moving don't relates

We and are intend do balance until for of progress to But committing that growth We're getting to we're making ahead not ourselves. yet we to the of segment we're it. not XXXX. able in prove the Diabetes

Mathew Blackman

And in a the rate see we minor you quarter. that uptick a capitated revenue Should quarterly revenues to for during expect fourth did reasonable XQ be XXXX? arrangement run

Jason Clemens

will signed the those They We early agreements start Yes. XXXX. fourth quarter. in actually in

I year right think the very in way of the think modest is revenue it. capitated a the over to increase course about

Operator

will from come Tanquilut Our with next Brian question Jefferies.

Brian Tanquilut

the maybe yet. on committing to a Suzanne, Jason's Congrats quarter. the follow-up Diabetes business last growing to comment, not

whole and you've the synergies to to mean, And you owning I this enterprise. here value digest been today, point? still So do at strategic from sit where you see diabetes

Suzanne Foster

Thanks broad the coming the One At is we're us one-stop X and out this It's the do. well. from the our in potential hospital there I proving of shop reasons. One are playing hypothesis but we a for question. with is value the growth for out, proposition point, portfolio Yes. for areas. is, see customers X

of are the where is is. And think well reach. systems if bigger that point, see opportunity breadth of hospital arrangements. the strong to to and as is track full be portfolio mentioned continue to our an as there's the believe value of value well, that feedback So on seems our I we're capitated geographic portfolio and a with from second proposition. the But future up there. we continues seem that that That is to breadth pipeline we by intrigued for it holding where a value. this earlier, at be reason be that we'll receiving the here to winning good payers We our And prop that

get we performing that's if our can diabetes point, the this portfolio, at well combination. and we So of a breadth winning think

Brian Tanquilut

then as I your maybe, I guidance about appreciate that. follow-up, And my Jason, ranges. think

it cash mentioned the first, that that XXXX is last to you've you know I you're you any expecting guide other about cash flow, as business we midpoint is below is of EBITDA? just is of conservatism mentioned else considering and need margins And the takes sold. free puts So need But there? things we there guidance then in the think to to anything just flow be of year's. or and And be some flat. terms

Jason Clemens

Brian. Sure,

a that did a really about a in that But moved there. we important in in lot. do of We we So million free regarding cash mean, I showing XXXX. talked flow a ways a cash second about at We $XX yes, just in free payment year really, less the XXXX. to needle frankly. the flow, row, payment mid, extensions are that's result the it's extensions, not term possible,

And these of mean, incredibly expense we we we some mean, investments. for going that to there. interest to free the made I company think bit. out a to flow intend is in to some in the we we continue things, We've of reason. I people will let company was and the we're we on And in and time. I building cash flow flow ups expectation going the lot great first growth fuel flow, here little key can do a and get that I a cash cash There's play considerably help and look, quarter to keep year. XXXX. a margins. through that mean, that in have making margins, going contribute early million. less feel in interest under progress going going and free machine got that so just appropriate it's adjusted and we've in new we we're areas mean, $XX look, should to they're significant talented the they're And this of we're if fourth that I guide. to terms the long But quarter think of here. I'd all the and intend revenue put out but certainly, higher very at say,

Operator

Our Canaccord. from come next Close will Richard with question

Richard Close

diabetes outreach Good news and reworking just the Can a you, resupply talk the the program the you've standpoint? about progress. on changes referral then from of made Suzanne, rebuilding there, bit trust that of the little process

Suzanne Foster

the for question. Thanks Sure.

leadership Gary with of very the started some Sheehan, We company experienced operator, at work was put did own team. his new and here we CEO a remarkable in So who Adapt. then the

brought organization will, and if HME and structure business. that the he So thinking, you to

and a a tackling was there and back you on of blocking great business QX. how run just that lot he in So early of basics the brought getting to

there contacting on we rather bleeding was remarkable right information that a to reach you what by like In patients quarter. how addition, quickly get fairly stopped. to caused was the Cox to the us our business. importantly, to attrition. understands our program, former within continuing business to good the Diabetes with put just stopped. if is end see their to out reach time, more patients it of And resupply. foundation the but in for That has well a outreaches. had in back which that resupply we back, and to same loop business team able over outreach -- That with diabetes processes right I the different at But will, shifting patients variety sleep quickly And how of that a providing were had how Nashville that engine of win the and was excessively frustration to control not And lot mean back, us we where out, that in were resupply allowed Matt

been team So I'm to with has down that pleased the expertise Nashville do. incredibly able that in

so that's and retention. the On attrition -- around

leader, has came in, very our we way for sales One a hospitals, team communicate good what about Adapt importantly, the prop On team selling they're new has starts, taken need large that where to a focused on going Ward, our better techniques, partnered new value has more selling but and with we our referral. Graham and HME the approach improving in the

just that process. information getting were we Sometimes couldn't we

that patient product so And we information can referral retrained how to need. the that the so on been appropriate and get that move team has that that get they

so force salespeople now there or several XX or together. with XX in hundred out the our team partnering is team HME that and So they're

then new with progress the just on all basic strong and on under Gary, blocking and tackling the both execution. So of resupply pleased I'm starts, leadership the fronts, and the

Richard Close

implementing very along that. a first a those lines? sales Did for you bit was helpful. received? the Can Anything in you as create how talked any That's quota talk that time follow-up, little And sales then about that force? the changes

Suzanne Foster

Yes. initiative. Really excited by this

volume and got we the quota So first -- that of back really Originally, one setting. that just our at right paid projects I force no was sales was time after on started. here, in

team gets the us because we to it fair rollout that perfection The situation. has next very X all so out as it did XXXX we off delicate possible January as want be. make upfront X And be and did a a years analysis, work really that know the can a it's We sure with it very sales force a responded deep been understand the to to to over that favorably. program. has we close really rolled -- kicked where They way through in done would that be this that

everyone always will more you us it, experienced from the when go it, And it's much our around set that's allowed that is these pretty so well they've predictable. we've understands know rallied there's And to make where what quotas sales force. forecasting silence

very managing We're the really it by leadership were and was in our leadership very all, through this who team it heavily and sales good transition. been has successful in the our also sales operations new force. supported came of all supportive So team

highlights So year. perspective past this is one the performance team this a of from of the

Operator

Coldwell will Eric question next with come Our Baird. from

Eric Coldwell

Congrats far, on Suzanne. nice progress the so

like know, this a happening? that little bit. $XX is I'd impact don't if Why like, What And bit. happening? you've I What little that $XX in looks situation, But coming in maybe dig segment? QX in It a beyond. I got it on of, then to something ballpark I one is dig commentary revenue starts revenue. rental versus So could back hoping and you in in the QX the million purchase understood assume on million, just correctly,

Jason Clemens

pieces I is reasons. say as in really our that reimbursed all product that differently been Sure, way account way but is lines, have reimbursed, different components changed mean, technology Well, separatable, I might in it Eric. that but has firstly, Jason. we Sleep equipment. the past not over that components they're would all I the for the mean, This it across That's improves, the the tech they're -- way change as we of core really to revenue. now evolved get focused that time, does business. for

about as are as products you appreciated a cycle. an And over know, so example, XX-month sleep, most in

at what a And is really so in mix. we're that that's change looking here

got so We And top-line. million at to calculated delayed. to $XX be that $XX you've that correctly the expect million really about revenue,

the until impact So it the first a over of bigger wane and we the in It the XX-month be year second will the pass the cycle. third and in will course quarter.

Eric Coldwell

All material and other was and out XX/XX if be? hoping just on that impact impacts checking what of for fourth those that or we or reimbursement topic, or of the a year tally XXXX right. DC regulatory are confirming that final there's to My I get there and no the are, things might beyond next quarter could the post-PHE changes,

Jason Clemens

Eric. Sure,

So we million right previously in top-line XXXX. We area. a discussed came about pressure bottom-line that and in $XX

quarters of quarter. year, For than in to due the XX% quarter, the to the pressure just that represented the revenue fourth activity close more frankly, that fourth of other

effective for that There as fee deserves what so went we very, the entirely awarded look would reimbursement. year. it December That's January payer in as operations, across just this normal landscape, view we're on in full of the contract-by-contract post frame we accounted And increase get think year very at environment early to guidance. we a was But overall, we our as then 'XX, reimbursement schedule working stable. reimbursed stable. And course in

Eric Coldwell

And if one more. do could I just

change a a like to of them. competitor change to bit a headwind You alluded capitated in seems that and a expected recently contracts had one their that of

some You've deal just other have the Humana announced wins. and extended

very here update on renewal longer a provide color expansions for any the any -- agreement? you could we're happy limitations, there of doing we're to was You what it any changes, doing, Is concessions, states? are or much products pretty is term or like with we keep going there curious, sound it I'm there them. in terms pricing of

Jason Clemens

be utilization here I their for to in dedicated our accounting in us, we arrangements every AdaptHealth that value the have pricing full comments competitors and Yes, for proposition say, know capability them, the on robust. of team pipeline don't arrangements will we're tracking guidance. selling we a continues wins 'XX Eric, got that capitated We've contracts. core for any these I focuses any have not new day, of real management. mean, of our at built a I on of

However, we are hard at work it. at

Eric Coldwell

big Anything updates contract extended? the -- you any was on nuanced? And that changes would or

Jason Clemens

I that mean, just very this terms an really favorably of sides both as think you of today. I think view can extension

has think things. for and talking think deal us we're it with I relationship, years. we're multiple for Humana, makes of original that and no lot you're a competitors pleased So other for I it mean, I very sense, about extending and all it the

Operator

Deutsche Bank. [Operator will question come next Instructions] Pito with Chickering Our from

Kieran Ryan

Pito. Ryan on for This Kieran is

diabetes. to start wanted Just on

pricing like expansion in absent any payers? quarter resupply certain called talk little bit the in commented there? sales into continue a and XQ know on that see you kind other was the new from wanted to if Can just for a for pharmacy of shift factor at you to with you've dynamics I out all that expectations should rate that XXXX Just we your starts think if other line around pressure about the and already. stable

Jason Clemens

if expected. look Sure, Medicaid about went their determinations as of within XXXX as Kieran. we payer we agencies reimbursement for at again made that played out on whole, as largely couple a I and states expected. diabetes reimbursement We that key a mean, spoke

shift versus hear But it last reimbursement any believe -- as sure of here a we year. partner. seems that our guidance. occurs, what pharmacy good. certainly, think I It we shift will muted and be when as be policy kind we if to today, we happened that stand stand to feel to we'll But we update stable any here like in change, as very today,

Kieran Ryan

about rental then XXXX we there's quarters coming should of think demand. underlying if on just sleep, outside growth you of a dynamic, that can puts And and there how a sales color provide in around really strong any just versus some or row few off takes -- of

understand to sleep the outcomes thinking want how and Just about range of in for XXXX? kind you're

Jason Clemens

assumptions. perspective, I expect introduced revenue and segments the mean, we in guide prior I we to quarter what Wellness difference look in we've Kieran. from expect make you enterprise. compounding way. not we're at Sure, on compression XXXX, diabetes for produce we is do our that Respiratory our growth mean, do for in to but in any just Home We the offer year. when enterprise up diabetes. consistent segments. but modeled do better, the mean, position at to we Sleep expect over intend what have do I a growth each modest and And to to We some the can

offer. can Sleep solid year forward and looking the segments. We're we other what in a to that's So

Operator

now I'll have Foster further appears additional any remarks. this we program to at turn questions It time. Suzanne for no the over back

Suzanne Foster

participating our today. Thank in for you, everyone, call

that team is accomplish to progress key lot relatively time. full up, the services X short but of on our focus made still, on we the in that company. have takeaways we areas we've And wrap our a to path a of as is potential confident a I'm the and Just are to lot health invigorated a realizing

in So you many forward with person we again. weeks. of coming you to look Thanks meeting as in the

Operator

and today's Ladies event. you. gentlemen, Thank this concludes

You now may disconnect.

AdaptHealth (AHCO) 25 Feb 252024 Q4 Earnings call transcript