AdaptHealth Corp. (NASDAQ: AHCO) (“AdaptHealth” or the
“Company”), a national leader in providing patient-centered,
healthcare-at-home solutions including home medical equipment,
medical supplies, and related services, announced today financial
results for the first quarter ended March 31, 2022, and announced
the authorization of a share repurchase program for up to $200
million.
First Quarter Results and
Highlights
- AdaptHealth delivered solid net revenue and Adjusted EBITDA for
the first quarter, as it began to overcome ongoing challenges
resulting from shortages of CPAP equipment.
- Net revenue was $706.2 million compared to $482.1 million in
the first quarter of 2021, an increase of 46.5%.
- Net income attributable to AdaptHealth Corp. was $41.8 million,
or $0.08 per diluted share, compared to a net loss attributable to
AdaptHealth Corp. of $4.0 million, or $0.08 per diluted share, in
the first quarter of 2021.
- Organic growth for the first quarter was 3.7% and non-acquired
growth was 3.7%.
- Adjusted EBITDA was $137.6 million, compared to $104.2 million
in the first quarter of 2021, an increase of 32.1%.
- During the quarter, the Company began integration of the
previously-announced acquisition of Community Surgical Supply, and
for the year to date, has completed six acquisitions of HME and
Sleep providers.
- Cash flow from operations was $66.5 million in the first
quarter of 2022 compared to $18.4 million in the first quarter of
2021.
Guidance Updated for Fiscal Year
2022
Based on current business, market trends, governmental
reimbursement updates, and acquisitions to date, the Company is
updating its previously issued financial guidance for fiscal year
2022, as follows:
- Net revenue of $2.840 billion to $3.040 billion (previously
$2.825 billion to $3.025 billion);
- Adjusted EBITDA of $615 million to $675 million (previously
$610 million to $670 million); and
- Total capital expenditures representing 9-11% of net revenue
(unchanged).
Guidance for fiscal year 2022 does not include any contribution
from acquisitions that have not yet closed, or continuing Public
Health Emergency benefits beyond the currently scheduled expiration
date.
Share Repurchase
Authorization
The Company announced that its Board of Directors has authorized
a share repurchase program for up to $200 million of the Company’s
common stock through December 31, 2022. The timing and actual
number of shares to be repurchased will depend upon market
conditions and other factors. Shares may be repurchased from time
to time on the open market, through privately negotiated
transactions or otherwise. Purchases may be started or stopped at
any time without prior notice depending on market conditions and
other factors. The Company intends to fund the share repurchase
program through its available cash and liquidity.
Management Commentary
Steve Griggs, Chief Executive Officer, commented, “We are very
pleased with our strong start to the year. During the quarter we
have seen continued strength in our diabetes product line,
consistent with our expectations, and our HME product line
continues to be resilient as CPAP patient set ups in March and
April were at or near 2021 levels.
Despite overall economic challenges, including wage pressure and
higher equipment and fuel costs, AdaptHealth continues to meet our
expectations for growth and profitability. Our operating and
financial results demonstrate the Company’s strong position as a
leading national provider of medical equipment and supplies across
the U.S., with an increasingly important role to play in the lives
of our approximately 3.9 million patients.
The announcement of our $200 million share repurchase program
reflects our confidence in AdaptHealth’s outlook and our Board of
Directors’ view that AdaptHealth’s common stock continues to trade
at a discount based on our immediate prospects and the Company’s
long-term value. ”
Josh Parnes, President, commented, “We remain focused as an
organization on driving efficiency amid the ongoing challenges in
the operating environment, including through continued investments
in technology to drive better operating performance, improved
patient outcomes, and reduced cost of care.”
Conference Call
Management will host a conference call at 8:30 am ET today to
discuss the results and business activities. Interested parties may
participate in the call by dialing:
• (877) 407-6176 (Domestic) or
• (201) 689-8451 (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 is a national leader in providing patient-centered,
healthcare-at-home solutions including home medical equipment
(HME), medical supplies, and related services. The Company provides
a full suite of medical products and solutions designed to help
patients manage chronic conditions in the home, adapt to challenges
in their activities of daily living, and thrive. Product and
service offerings include (i) sleep therapy equipment, supplies,
and related services (including CPAP and bi PAP services) to
individuals suffering from obstructive sleep apnea, (ii) medical
devices and supplies to patients for the treatment of diabetes
(including continuous glucose monitors and insulin pumps), (iii)
HME to patients discharged from acute care and other facilities,
(iv) oxygen and related chronic therapy services in the home, and
(v) other HME devices and supplies on behalf of chronically ill
patients with wound care, urological, incontinence, 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, reaching
approximately 3.9 million patients annually in all 50 states
through its network of over 750 locations in 47 states.
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 and projections of market opportunity and
expectations and the Company’s acquisition pipeline. These
statements are based on various assumptions and on the current
expectations of AdaptHealth 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 customers’
preferences, prospects and the competitive conditions prevailing in
the healthcare sector; and the impact of the 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.
Use of Non-GAAP Financial Information
and Financial Guidance
This release contains non-GAAP financial guidance, which is
adjusted to exclude certain costs, expenses, gains and losses and
other specified items that are evaluated on an individual basis.
These non-GAAP items are adjusted after considering their
quantitative and qualitative aspects and typically have one or more
of the following characteristics, such as being highly variable,
difficult to project, unusual in nature, significant to the results
of a particular period or not indicative of future operating
results. Similar charges or gains were recognized in prior periods
and will likely reoccur in future periods.
The Company uses EBITDA and Adjusted EBITDA, which are financial
measures that are not prepared in accordance with generally
accepted accounting principles in the United States, or U.S. GAAP,
to analyze its financial results and believes that they are useful
to investors, as a supplement to U.S. GAAP measures.
The Company believes Adjusted EBITDA is useful to investors in
evaluating the Company’s financial performance. The Company uses
this metric as the profitability measure in its incentive
compensation plans that have a profitability component and to
evaluate acquisition opportunities, where it is most often used for
purposes of contingent consideration arrangements.
EBITDA and Adjusted EBITDA should not be considered as measures
of financial performance under U.S. GAAP, and the items excluded
from EBITDA and Adjusted EBITDA are significant components in
understanding and assessing financial performance. Accordingly,
these key business metrics have limitations as an analytical tool.
They should not be considered as an alternative to net income or
any other performance measures derived in accordance with U.S. GAAP
or as an alternative to cash flows from operating activities as a
measure of the Company’s liquidity.
There is no reliable or reasonably estimable comparable GAAP
measure for the Company’s non-GAAP financial guidance because the
Company is not able to reliably predict the impact of certain
items, including equity-based compensation expense, transaction
costs, changes in fair value of the warrant liability, and other
non-recurring items of expense or income in full year 2022. As a
result, reconciliation of these non-GAAP measures to the most
directly comparable GAAP measure is not available without
unreasonable effort. In addition, the Company believes such a
reconciliation would imply a degree of precision and certainty that
could be confusing to investors. The variability of the specified
items may have a significant and unpredictable impact on the
Company’s future GAAP results.
In addition, the Company’s non-GAAP financial guidance in this
release excludes the impact of any potential additional future
strategic acquisitions and any specified items that have not yet
been identified and quantified. The guidance also excludes
macro-economic effects due to the COVID-19 pandemic that are not
yet quantifiable. The financial guidance is subject to risks and
uncertainties applicable to all forward-looking statements as
described elsewhere in this press release.
ADAPTHEALTH CORP.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands) March 31, 2022 December 31,
2021 Assets Current assets: Cash and cash equivalents $
119,428
$
149,627
Accounts receivable
369,898
359,896
Inventory
99,636
123,095
Prepaid and other current assets
26,026
37,440
Total current assets
614,988
670,058
Equipment and other fixed assets, net
424,764
398,577
Operating lease right-of-use assets
142,092
147,760
Goodwill
3,515,066
3,512,567
Identifiable intangible assets, net
192,370
202,231
Other assets
15,170
15,098
Deferred tax assets
299,891
304,193
Total Assets $
5,204,341
$
5,250,484
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable and accrued expenses $
316,051
$
358,384
Current portion of finance lease obligations
8,692
15,446
Current portion of operating lease obligations
30,597
31,418
Current portion of long-term debt
20,000
20,000
Contract liabilities
30,613
31,370
Other liabilities
37,602
43,194
Total current liabilities
443,555
499,812
Long-term debt, less current portion
2,179,730
2,183,552
Operating lease obligations, less current portion
115,420
120,180
Other long-term liabilities
313,963
322,487
Warrant liability
31,047
57,764
Total Liabilities
3,083,715
3,183,795
Total Stockholders' Equity
2,120,626
2,066,689
Total Liabilities and Stockholders' Equity $
5,204,341
$
5,250,484
ADAPTHEALTH CORP.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended (in thousands, except per share
data) March 31,
2022
2021
Net revenue $
706,203
$
482,119
Costs and expenses: Cost of net revenue
597,122
396,698
General and administrative expenses
41,444
56,632
Depreciation and amortization, excluding patient equipment
depreciation
16,085
13,380
Total costs and expenses
654,651
466,710
Operating income
51,552
15,409
Interest expense, net
24,776
22,185
Change in fair value of warrant liability
(26,717)
(3,168)
Change in fair value of contingent consideration common shares
liability
—
(1,965)
Loss on extinguishment of debt
—
4,213
Other (income) loss, net
5,660
(519)
Income (loss) before income taxes
47,833
(5,337)
Income tax expense (benefit)
5,603
(1,695)
Net income (loss)
42,230
(3,642)
Income attributable to noncontrolling interest
480
324
Net income (loss) attributable to AdaptHealth Corp. $
41,750
$
(3,966)
Weighted average common shares outstanding - basic
134,023
111,109
Weighted average common shares outstanding - diluted
138,483
115,995
Basic net income (loss) per share $
0.29
$
(0.04)
Diluted net income (loss) per share $
0.08
$
(0.08)
ADAPTHEALTH CORP.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands) Three Months Ended March 31,
2022
2021
Cash flows from operating activities: Net income (loss) $
42,230
$
(3,642)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization, including
patient equipment depreciation
77,030
47,206
Equity-based compensation
5,502
8,582
Change in fair value of contingent consideration common shares
liability
—
(1,965)
Change in fair value of warrant liability
(26,717)
(3,168)
Reduction in the carrying amount of operating lease right-of-use
assets
7,484
6,957
Deferred income tax expense (benefit)
4,303
(1,695)
Change in fair value of interest rate swaps, net of
reclassification adjustment
(726)
(709)
Amortization of deferred financing costs
1,309
894
Write-off of deferred financing costs
—
4,213
Other
—
266
Changes in operating assets and liabilities, net of effects from
acquisitions: Accounts receivable
(9,481)
(7,344)
Inventory
21,331
16,444
Prepaid and other assets
12,237
2,589
Operating lease obligations
(7,420)
(6,806)
Operating liabilities
(60,631)
(43,442)
Net cash provided by operating activities
66,451
18,380
Cash flows from investing activities: Payments for business
acquisitions, net of cash acquired
(2,932)
(1,178,168)
Purchases of equipment and other fixed assets
(77,166)
(35,596)
Net cash used in investing activities
(80,098)
(1,213,764)
Cash flows from financing activities: Proceeds from borrowings on
long-term debt and lines of credit
—
795,000
Repayments on long-term debt and lines of credit
(5,000)
(303,771)
Repayments of finance lease obligations
(8,156)
(9,854)
Proceeds from the exercise of stock options
723
—
Proceeds received in connection with employee stock purchase plan
753
314
Proceeds from the issuance of senior unsecured notes
—
500,000
Proceeds from the issuance of Class A Common Stock
—
278,850
Payments for equity issuance costs
—
(13,832)
Payments of deferred financing costs
—
(16,148)
Payments for tax withholdings from restricted stock vesting and
stock option exercises
(1,269)
(810)
Payments of contingent consideration and deferred purchase price
from acquisitions
(3,603)
(2,190)
Net cash (used in) provided by financing activities
(16,552)
1,227,559
Net (decrease) increase in cash and cash equivalents
(30,199)
32,175
Cash and cash equivalents at beginning of period
149,627
99,962
Cash and cash equivalents at end of period $
119,428
$
132,137
Non-GAAP Financial
Measures
This press release presents AdaptHealth’s EBITDA and Adjusted
EBITDA for the three months ended March 31, 2022 and 2021.
AdaptHealth defines EBITDA as net income (loss) attributable to
AdaptHealth Corp., plus net income (loss) attributable to
noncontrolling interests, interest expense, net, income tax expense
(benefit), and depreciation and amortization.
AdaptHealth defines Adjusted EBITDA as EBITDA (as defined
above), plus loss on extinguishment of debt, equity‑based
compensation expense, transaction costs, change in fair value of
the contingent consideration common shares liability, change in
fair value of the warrant liability, and other non-recurring items
of expense or income.
The following unaudited table presents the reconciliation of net
income (loss) attributable to AdaptHealth Corp. to EBITDA and
Adjusted EBITDA for the three months ended March 31, 2022 and
2021:
Three Months Ended (in thousands) March 31,
2022
2021
Net income (loss) attributable to AdaptHealth Corp. $
41,750
$
(3,966)
Income attributable to noncontrolling interest
480
324
Interest expense, net
24,776
22,185
Income tax expense (benefit)
5,603
(1,695)
Depreciation and amortization, including patient equipment
depreciation
77,030
47,206
EBITDA
149,639
64,054
Loss on extinguishment of debt (a)
—
4,213
Equity-based compensation expense (b)
5,502
8,582
Transaction costs (c)
3,108
31,854
Change in fair value of contingent consideration common shares
liability (d)
—
(1,965)
Change in fair value of warrant liability (e)
(26,717)
(3,168)
Other non-recurring expense, net (f)
6,112
605
Adjusted EBITDA $
137,644
$
104,175
(a) Represents write offs of unamortized deferred financing
costs related to refinancing of debt. (b) Represents equity-based
compensation expense for awards granted to employees and
non-employee directors. (c) Represents transaction costs and
expenses related to other integration efforts related to
acquisitions. (d) Represents a non-cash gain for the change in the
estimated fair value of the contingent consideration common shares
liability. (e) Represents a non-cash gain for the change in the
estimated fair value of the warrant liability. (f) The 2022 period
consists of a $4.5 million expense related to changes in
AdaptHealth’s estimated TRA liability, $0.5 million of expenses
associated with litigation claims, $0.4 million of expenses
associated with lease terminations, a $0.8 million loss related to
the write-off of an investment, offset by $0.1 million of net other
non-recurring items of income. The 2021 period includes $0.9
million of severance expense and a $0.2 million charge for the
increase in the fair value of a contingent consideration liability
related to an acquisition, offset by a gain of $0.5 million for the
receipt of earnout proceeds in connection with an investment that
was sold in 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510005666/en/
AdaptHealth Corp. Jason Clemens, CFA Chief Financial
Officer
Anton Hie Vice President, Investor Relations
IR@adapthealth.com
AdaptHealth (NASDAQ:AHCO)
Historical Stock Chart
From Aug 2024 to Sep 2024
AdaptHealth (NASDAQ:AHCO)
Historical Stock Chart
From Sep 2023 to Sep 2024