Full Press Release Details
ADAPTHEALTH CORP. ANNOUNCES FIRST
QUARTER 2020 FINANCIAL RESULTS
Plymouth Meeting, PA - May 5, 2020 - AdaptHealth
Corp. (NASDAQ: AHCO) ("AdaptHealth" or the "Company"), a leading provider of home healthcare equipment,
medical supplies to the home and related services in the United States announced today
financial results for the three months ended March 31, 2020.
Luke McGee, Chief Executive Officer of AdaptHealth, commented,
"Despite significant and sudden challenges brought on by the COVID-19 pandemic, our strong first quarter performance reflects
the extraordinary hard work, resilience and dedication of our outstanding AdaptHealth team. Due in large measure to their efforts,
we are continuing to successfully deploy a scalable growth model focused on organic sales, acquisitions, accretive capital deployment,
margin expansion, and cash generation. Our HME business performed well, and ahead of our internal budgets despite the historical
softness of this three-month period during which patients are often managing through reset deductibles and insurance changes.
"We closed and fully integrated two significant and accretive
HME business acquisitions during the quarter that are also expected to add an aggregate $91 million in net revenue in 2020. Advanced
expands the Company's currently underpenetrated presence in the Southeast and Healthline strengthens our presence in Texas.
I could not be more excited about these two scaled acquisitions.
"Our home medical supplies business, Patient Care Solutions
(PCS), generated net revenue of $33.9 million for the quarter and negative EBITDA of $4.5 million. As previously disclosed, PCS
is a turn-around situation and as part of our investment we expect $15 million in one-time restructuring and operational losses
in 2020. We are pleased with our progress in addressing and curing various issues at PCS, and in the first quarter we exceeded
our internal revenue and operational projections. We continue to believe PCS will be profitable in the fourth quarter of 2020.
We are particularly excited about growth in the continuous glucose monitoring business at PCS and expect this will evolve into
a growing and increasingly significant new product offering for AdaptHealth."
The COVID-19 pandemic and related government-imposed
stay-at-home restrictions have had, and will continue to have, severe impact on global economic conditions and the environment
in which we operate our business. We have developed and deployed a series of initiatives designed to minimize disruptions to our
normal business activities and preserve our ability to execute our growth strategies.
2020 Outlook Affirmed
We cannot predict the duration of the COVID 19 crisis or the
full impact on our business. However, based on current trends, we are affirming our financial guidance for 2020 of net revenue
between $790 million to $808 million, Adjusted EBITDA of $160 million to $164 million, and Adjusted EBITDA less Patient Equipment
Capex of $98 million to $101 million. This outlook excludes anticipated first year PCS operating losses as well as severance and
restructuring costs associated with the PCS acquisition totaling approximately $15 million.
Luke McGee concluded: "I am very proud of our financial
performance in the first quarter but even more proud of how our AdaptHealth employees have responded to this unprecedented crisis
by supporting our patients and healthcare partners. Our employees on the front line in patient-facing roles have continued to serve
with professionalism and courage. I'm also very proud of our company's role in delivering life-saving equipment to
our referral partners, many of which are operating in the nation's worst virus hotspots."
Management will host a conference at 8:30
am ET today to discuss the results and business activities. Interested parties may participate in the call by dialing:
(877) 423-9820 (Domestic) or
(201) 493-6749 (International)
Webcast registration: Click Here
Following the live call, a replay will be available for six
months on the Company's website, www.adapthealth.com under "Investor Relations."
About AdaptHealth Corp.
AdaptHealth Corp. ("AdaptHealth")
is a leading provider of home healthcare equipment, medical supplies to the home and related services in the United States.
AdaptHealth provides a full suite of medical products and solutions designed to help patients manage chronic conditions in the
home, adapt to life and thrive. Product and services offerings include (i) sleep therapy equipment, supplies and related services
(including CPAP and bi PAP services) to individuals suffering from obstructive sleep apnea, (ii) home medical equipment (HME)
to patients discharged from acute care and other facilities, (iii) oxygen and related chronic therapy services in the home, and
(iv) other HME medical devices and supplies on behalf of chronically ill patients with diabetes care, wound care, urological,
ostomy and nutritional supply needs. The company is proud to partner with an extensive and highly diversified network of referral
sources, including acute care hospitals, sleep labs, pulmonologists, skilled nursing facilities, and clinics. AdaptHealth services
beneficiaries of Medicare, Medicaid and commercial insurance payors. AdaptHealth services over approximately 1.6 million patients
annually in all 50 states through its network of 220 locations in 38 states. Learn more at www.adapthealth.com.
Forward-Looking Statements
This press release includes certain statements that are not
historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend,"
"expect," "should," "would," "plan," "predict," "potential,"
"seem," "seek," "future," "outlook," and similar expressions that predict or indicate
future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not
limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics, projections
of market opportunity and expectations, the Company's acquisition pipeline and the impact of the recent coronavirus (COVID-19)
pandemic and our response to it. These statements are based on various assumptions and on the current expectations of Company management
and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and
are not intended to serve as, and must not be relied on, by any investor as, a guarantee, an assurance, a prediction or a definitive
statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions.
Many actual events and circumstances are beyond the control of the Company.
These forward-looking statements are subject to a number of
risks and uncertainties, including the outcome of judicial and administrative proceedings to which the Company may become a party
or governmental investigations to which the Company may become subject that could interrupt or limit the Company's operations,
result in adverse judgments, settlements or fines and create negative publicity; changes in the Company's clients'
preferences, prospects and the competitive conditions prevailing in the healthcare sector; and the impact of the recent coronavirus
(COVID-19) pandemic and the Company's response to it. A further description of such risks and uncertainties can be found
in the Company's filings with the Securities and Exchange Commission. If the risks materialize or assumptions prove incorrect,
actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks
that the Company presently knows or that the Company currently believes are immaterial that could also cause actual results to
differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company's
expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that
subsequent events and developments will cause the Company's assessments to change. However, while the Company may elect to
update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as representing the Company's assessments as of any date subsequent
to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| (in thousands) | 2020 | 2019 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 48,164 | $ | 76,878 | ||||
| Accounts receivable, net | 118,651 | 78,619 | ||||||
| Inventory | 17,968 | 13,239 | ||||||
| Prepaid and other current assets | 9,759 | 12,679 | ||||||
| Total current assets | 194,542 | 181,415 | ||||||
| Equipment and other fixed assets, net | 87,301 | 63,559 | ||||||
| Goodwill | 340,807 | 266,791 | ||||||
| Other assets | 5,670 | 6,852 | ||||||
| Deferred tax asset | 33,519 | 27,505 | ||||||
| Total assets | $ | 661,839 | $ | 546,122 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | 136,072 | 102,728 | ||||||
| Current portion of capital lease obligations | 20,421 | 19,750 | ||||||
| Current portion of long-term debt | 2,616 | 1,721 | ||||||
| Contract liabilities | 15,584 | 9,556 | ||||||
| Other liabilities | 16,460 | 17,139 | ||||||
| Total current liabilities | 191,153 | 150,894 | ||||||
| Long-term debt, less current portion | 463,553 | 395,112 | ||||||
| Other long-term liabilities | 36,580 | 29,364 | ||||||
| Total liabilities | 691,286 | 575,370 | ||||||
| Total Stockholders' Deficit | (29,447 | ) | (29,248 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 661,839 | $ | 546,122 | ||||
| Number of issued and oustanding shares: | ||||||||
| Class A Common Stock | 43,354 | 40,816 | ||||||
| Class B Common Stock | 30,564 | 31,564 |
Condensed Consolidated Statements
of Operations (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands, except per share data) | 2020 | 2019 | ||||||
| Net revenue | $ | 191,439 | $ | 119,498 | ||||
| Costs and expenses: | ||||||||
| Cost of net revenue | 166,540 | 100,227 | ||||||
| General and administrative expenses | 14,347 | 13,083 | ||||||
| Depreciation, excluding patient equipment depreciation | 1,241 | 841 | ||||||
| Total costs and expenses | 182,128 | 114,151 | ||||||
| Operating income | 9,311 | 5,347 | ||||||
| Interest expense | 7,938 | 6,260 | ||||||
| Loss on extinguishment of debt, net | - | 2,121 | ||||||
| Income (loss) before income taxes | 1,373 | (3,034 | ) | |||||
| Income tax expense | 1,107 | 2,418 | ||||||
| Net income (loss) | 266 | (5,452 | ) | |||||
| Income attributable to noncontrolling interests | 424 | 348 | ||||||
| Net loss attributable to AdaptHealth Corp. | $ | (158 | ) | $ | (5,800 | ) | ||
| Net loss per common share attributable to AdaptHealth Corp.: | ||||||||
| Basic and diluted | $ | - | $ | (0.42 | ) | |||
| Weighted average shares outstanding for net loss attributable to AdaptHealth Corp.: | ||||||||
| Basic and diluted | 41,977 | 13,864 |
Condensed Consolidated Statements
of Cash Flows (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (in thousands) | 2020 | 2019 | ||||||
| Net cash provided by operating activities | $ | 24,380 | $ | 16,232 | ||||
| Net cash used in investing activities | (111,329 | ) | (26,179 | ) | ||||
| Net cash provided by (used in) financing activities | 58,235 | (369 | ) | |||||
| Net decrease in cash and cash equivalents | (28,714 | ) | (10,316 | ) | ||||
| Cash and cash equivalents at beginning of period | 76,878 | 25,186 | ||||||
| Cash and cash equivalents at end of period | $ | 48,164 | $ | 14,870 |
Non-GAAP Financial Measures
This press release presents AdaptHealth's EBITDA, Adjusted
EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three months ended March 31, 2020 and 2019.
AdaptHealth defines EBITDA as net income (loss) attributable
to AdaptHealth Corp., plus net income attributable to noncontrolling interests, interest expense (income), income tax expense (benefit),