Investors with an interest in Medical - Products stocks have likely encountered both AdaptHealth Corp. (AHCO) and Stryker (SYK) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates ...

Group 1 - Sleep apnea is a significant health disorder that is likely to increase in prevalence, particularly in Western countries due to an aging population [1] - Contributing factors to sleep apnea include age, excess weight, and unhealthy lifestyle choices [1] Group 2 - The article mentions the author's extensive experience in the financial and investment industry, including roles in financial performance analytics and trading [1] - The author expresses a strong interest in behavioral finance and investment narratives, indicating a diverse approach to investment strategies [1]

Investors interested in Medical - Products stocks are likely familiar with AdaptHealth Corp. (AHCO) and Abbott (ABT) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revisi ...

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was effectively flat year-over-year but exceeded the midpoint of guidance by 3%, with Sleep Health and Respiratory Health segments showing growth while Diabetes Health contracted [6][30] - Adjusted EBITDA for the fourth quarter contracted 2% year-over-year but was above the high end of guidance, with an adjusted EBITDA margin of 23.4%, slightly down from 23.8% in the prior year [7][38] - Free cash flow for the fourth quarter was $73 million, up 10% year-over-year and well above guidance [7][40] Business Line Data and Key Metrics Changes - Sleep Health revenue increased 3.4% year-over-year to $356.5 million, with new starts surpassing 120,000 for the third consecutive quarter [31] - Respiratory Health revenue was $165.3 million, up 1% year-over-year, with a record oxygen census of over 330,000 patients [33] - Diabetes Health revenue decreased 7.3% year-over-year to $171.3 million, but showed sequential growth of $30.2 million over the third quarter [34] - Wellness at Home revenue was $163.5 million, down 0.8% year-over-year, primarily due to the sale of certain custom rehab assets [35] Market Data and Key Metrics Changes - Full year 2024 net revenue was $3.26 billion, growing 1.9% year-over-year despite pressures from divestitures and reimbursement changes [30] - Sleep Health segment grew 4.5%, Respiratory Health grew 6.0%, while Diabetes Health declined 6.9% for the full year [30] Company Strategy and Development Direction - The company is focusing on five areas: One Adapt initiative, AI and automation, clinical relevance, organic growth, and strengthening the balance sheet [8][24] - A new segment structure was implemented to enhance visibility into customer needs and improve service excellence [12] - The company aims to lead in innovation within the home health industry and expand the value delivered to patients [13][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress and the potential for growth, particularly in the Sleep Health and Respiratory Health segments [5][51] - The company anticipates 2025 to be a transition year for growth, with expectations for accelerated growth in 2026 and beyond [51] Other Important Information - The company reduced debt by $170 million over the past year, with a net leverage ratio of 2.8x at year-end 2024 [24][42] - The company expects 2025 revenue guidance of $3.22 billion to $3.36 billion, reflecting a slight decline to modest growth [46] Q&A Session Summary Question: Can you talk more about the conversations with carriers over additional capitated arrangements? - Management confirmed ongoing discussions with various proposed capitated arrangements and noted a strong relationship with Humana, which has been complimentary about performance [55][56] Question: Can you discuss your working capital outlook and cash flow improvement? - Management expressed satisfaction with free cash flow performance in 2024 and expects continued improvement in days sales outstanding and inventory management [57][59] Question: What are your thoughts on the Diabetes business contribution to 2025 guidance? - Management indicated that while there are improving trends, they are cautious about committing to growth in the Diabetes segment until proven [66][68] Question: Can you elaborate on the changes made in the Diabetes resupply outreach program? - Management highlighted the implementation of a new leadership team and a focus on better patient outreach, which has led to improved retention and reduced attrition [86][90] Question: What is the impact of the purchase versus rental revenue situation? - Management explained that the shift is primarily in the Sleep segment, with revenue being recognized differently due to changes in reimbursement practices [100][102] Question: Can you provide updates on the capitated contract with Humana? - Management confirmed that the extension of the Humana contract was a positive development, with both parties satisfied with the ongoing relationship [109][111]

```markdown PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) AdaptHealth is a national leader in patient-centered healthcare-at-home solutions across four segments, serving 4.2 million patients annually - AdaptHealth operates in four reportable segments: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home, providing home medical equipment, medical supplies, and related services[22](index=22&type=chunk) - As of December 31, 2024, AdaptHealth serviced approximately **4.2 million patients annually** in all 50 states through a network of approximately 660 locations in 47 states[27](index=27&type=chunk)[216](index=216&type=chunk) Net Revenue Breakdown by Product Type (Year Ended December 31, 2024) | Product Type | Percentage of Net Revenue | | :------------- | :------------------------ | | Resupply and One-Time Sales | 64% | | Fixed Monthly Equipment Reimbursements | 32% | [Company Overview and Segments](index=7&type=section&id=1.1%20Company%20Overview%20and%20Segments) This section details AdaptHealth's operational segments and patient reach across the United States [Company Operations](index=7&type=section&id=1.2%20Company%20Operations) This section describes AdaptHealth's operational model and service delivery mechanisms [Competition](index=10&type=section&id=1.3%20Competition) This section outlines the competitive landscape within AdaptHealth's healthcare-at-home market [Government Regulation](index=11&type=section&id=1.4%20Government%20Regulation) This section addresses the significant governmental regulations impacting AdaptHealth's business operations [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) AdaptHealth faces diverse risks: supply chain, labor, inflation, cybersecurity, regulatory, financial, and public company compliance - Key business risks include reliance on a few suppliers, supply chain disruptions, labor shortages, and inflation, which can increase costs and impact profitability[18](index=18&type=chunk)[75](index=75&type=chunk)[79](index=79&type=chunk)[82](index=82&type=chunk) - Cybersecurity attacks, data breaches, and the proper functioning of information systems are critical, with potential for significant business disruption, financial loss, and reputational damage[18](index=18&type=chunk)[85](index=85&type=chunk)[89](index=89&type=chunk) - Regulatory changes in Medicare and Medicaid, healthcare fraud and abuse laws, and evolving data protection regulations (like HIPAA and CCPA) pose compliance risks and could lead to substantial penalties or reduced reimbursements[18](index=18&type=chunk)[51](index=51&type=chunk)[55](index=55&type=chunk)[122](index=122&type=chunk)[128](index=128&type=chunk)[149](index=149&type=chunk) - Financial risks include potential goodwill impairment (with **$2.7 billion** recorded as of Dec 31, 2024), challenges in generating sufficient cash flow for debt, and the need for additional capital for growth[20](index=20&type=chunk)[158](index=158&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk)[370](index=370&type=chunk) [Risks Related to Our Business and Industry](index=15&type=section&id=1A.1%20Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details specific risks inherent to AdaptHealth's business model and the broader healthcare industry [Risks Related to Regulation](index=25&type=section&id=1A.2%20Risks%20Related%20to%20Regulation) This section outlines the regulatory and compliance risks impacting AdaptHealth's operations and financial performance [Risks Related to Our Financial Condition](index=32&type=section&id=1A.3%20Risks%20Related%20to%20Our%20Financial%20Condition) This section addresses risks pertaining to AdaptHealth's financial health, including liquidity and capital structure [Risks Related to Our Securities](index=35&type=section&id=1A.4%20Risks%20Related%20to%20Our%20Securities) This section discusses risks associated with AdaptHealth's common stock and its market performance [Item 1B. Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - No unresolved staff comments were reported[190](index=190&type=chunk) [Item 1C. Cybersecurity](index=40&type=section&id=Item%201C.%20Cybersecurity) AdaptHealth maintains a comprehensive cybersecurity program, overseen by Audit Committee, with no material incidents reported - AdaptHealth employs physical, technical, and administrative security measures for IT systems, including a disaster recovery plan, aligned with NIST Special Publication 800 guidelines[191](index=191&type=chunk) - The cybersecurity program includes a vendor management and risk assessment program to ensure third-party environments meet HIPAA security requirements[192](index=192&type=chunk) - The Board of Directors, through its Audit Committee, oversees the cybersecurity program, receiving periodic updates from the CTO, CIO, and CISO, who possess over fifty years of combined experience[194](index=194&type=chunk)[195](index=195&type=chunk) - No material cybersecurity incidents affecting business strategy, results of operations, or financial condition were identified during the reporting period[193](index=193&type=chunk) [Cybersecurity Risk Management and Strategy](index=40&type=section&id=1C.1%20Cybersecurity%20Risk%20Management%20and%20Strategy) This section outlines AdaptHealth's approach to managing cybersecurity risks and its strategic framework [Cybersecurity Governance](index=41&type=section&id=1C.2%20Cybersecurity%20Governance) This section describes the oversight structure and responsibilities for AdaptHealth's cybersecurity program [Item 2. Properties](index=41&type=section&id=Item%202.%20Properties) AdaptHealth leases all its operating locations and corporate headquarters, believing current facilities are adequate - AdaptHealth leases all its offices and facilities, including its 15,500 square feet corporate headquarters in Plymouth Meeting, Pennsylvania[196](index=196&type=chunk) [Item 3. Legal Proceedings](index=41&type=section&id=Item%203.%20Legal%20Proceedings) AdaptHealth is involved in various legal proceedings, with management not expecting a material adverse effect, though outcomes are uncertain - The company is subject to legal proceedings, claims, and governmental investigations in the normal course of business[197](index=197&type=chunk) - Management believes current legal proceedings will not have a material adverse effect, but outcomes are uncertain and could lead to injunctive relief, damages, or defense costs[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to AdaptHealth Corp PART II [Item 5. Market Price of and Dividends on Registrant's Common Equity and Related Stockholder Matters; Issuer Purchases of Equity Securities](index=42&type=section&id=Item%205.%20Market%20Price%20of%20and%20Dividends%20on%20Registrant's%20Common%20Equity%20and%20Related%20Stockholder%20Matters%3B%20Issuer%20Purchases%20of%20Equity%20Securities) AdaptHealth's common stock trades on Nasdaq, with no cash dividends paid or planned, and no issuer purchases in Q4 2024 - AdaptHealth's Common Stock is listed on Nasdaq under the symbol 'AHCO'[201](index=201&type=chunk) - As of February 21, 2025, there were **134,867,011 shares** of Common Stock outstanding[8](index=8&type=chunk) - The company has not paid cash dividends and has no current plans to do so, intending to retain future earnings for operations, expansion, and debt repayment[181](index=181&type=chunk)[202](index=202&type=chunk) - No issuer purchases of equity securities were made during the quarter ended December 31, 2024[205](index=205&type=chunk) [Item 6. [Reserved]](index=42&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes AdaptHealth's financial performance, re-segmentation, inflation, operating results, liquidity, and accounting - Effective October 1, 2024, AdaptHealth realigned its reportable segments into Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home[208](index=208&type=chunk) - The company reclassified certain revenue cycle management costs from Cost of net revenue to General and administrative expenses, impacting prior period presentations but not historical net revenues, operating income, or cash flows[209](index=209&type=chunk) - Inflationary pressures, including increased costs for materials, labor, and transportation, have negatively impacted AdaptHealth's business, and the ability to pass these costs to customers is uncertain[217](index=217&type=chunk) Consolidated Net Income (Loss) Attributable to AdaptHealth Corp. | Year Ended December 31, | Net Income (Loss) (in thousands) | | :---------------------- | :------------------------------- | | 2024 | $90,422 | | 2023 | $(678,895) | | 2022 | $69,316 | Consolidated Net Revenue | Year Ended December 31, | Net Revenue (in thousands) | | :---------------------- | :------------------------- | | 2024 | $3,260,975 | | 2023 | $3,200,177 | | 2022 | $2,970,595 | - AdaptHealth recognized a non-cash goodwill impairment charge of **$830.8 million** in 2023 due to declines in market capitalization and revised financial projections, and **$13.1 million** in 2024 related to asset disposition[225](index=225&type=chunk)[245](index=245&type=chunk)[262](index=262&type=chunk) Adjusted EBITDA | Year Ended December 31, | Adjusted EBITDA (in thousands) | | :---------------------- | :----------------------------- | | 2024 | $688,657 | | 2023 | $670,795 | | 2022 | $593,770 | Free Cash Flow | Year Ended December 31, | Free Cash Flow (in thousands) | | :---------------------- | :---------------------------- | | 2024 | $235,784 | | 2023 | $143,203 | | 2022 | $(17,556) | - The company refinanced its credit agreement in September 2024, securing a **$650 million** term loan and **$300 million** revolving credit commitments, maturing in September 2029[226](index=226&type=chunk)[303](index=303&type=chunk)[544](index=544&type=chunk) - AdaptHealth is involved in several legal proceedings, including class action lawsuits and civil investigative demands from the U.S. Attorney's Office related to billing practices for ventilators and humidifiers[330](index=330&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk)[342](index=342&type=chunk)[344](index=344&type=chunk)[609](index=609&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk)[621](index=621&type=chunk)[624](index=624&type=chunk) [Re-segmentation and Reclassifications](index=43&type=section&id=7.1%20Re-segmentation%20and%20Reclassifications) This section explains AdaptHealth's recent realignment of reportable segments and financial reclassifications [AdaptHealth Corp. Overview](index=43&type=section&id=7.2%20AdaptHealth%20Corp.%20Overview) This section provides a general overview of AdaptHealth Corp.'s business and strategic direction [Impact of Inflation](index=44&type=section&id=7.3%20Impact%20of%20Inflation) This section discusses the effects of inflationary pressures on AdaptHealth's operational costs and profitability [Key Components of Operating Results](index=44&type=section&id=7.4%20Key%20Components%20of%20Operating%20Results) This section identifies and explains the primary drivers of AdaptHealth's operating results, including revenue and expenses [Factors Affecting AdaptHealth's Operating Results](index=44&type=section&id=7.5%20Factors%20Affecting%20AdaptHealth's%20Operating%20Results) This section analyzes various internal and external factors influencing AdaptHealth's financial and operational outcomes [Key Business Metrics](index=46&type=section&id=7.6%20Key%20Business%20Metrics) This section presents and discusses the essential performance indicators used to evaluate AdaptHealth's business [Consolidated Results of Operations](index=48&type=section&id=7.7%20Consolidated%20Results%20of%20Operations) This section provides a comprehensive review of AdaptHealth's overall financial performance across all segments [Segment Results of Operations](index=57&type=section&id=7.8%20Segment%20Results%20of%20Operations) This section details the financial performance and contributions of each of AdaptHealth's operating segments [Free Cash Flow](index=64&type=section&id=7.9%20Free%20Cash%20Flow) This section analyzes AdaptHealth's free cash flow generation and its implications for liquidity and investment [Liquidity and Capital Resources](index=64&type=section&id=7.10%20Liquidity%20and%20Capital%20Resources) This section assesses AdaptHealth's financial flexibility, cash position, and available capital for operations and growth [Critical Accounting Policies and Estimates](index=67&type=section&id=7.11%20Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the significant accounting policies and judgments that materially impact AdaptHealth's financial reporting [Recent Accounting Pronouncements](index=70&type=section&id=7.12%20Recent%20Accounting%20Pronouncements) This section discusses the impact of newly issued accounting standards on AdaptHealth's financial statements [Commitments and Contingencies](index=70&type=section&id=7.13%20Commitments%20and%20Contingencies) This section details AdaptHealth's contractual obligations, legal liabilities, and potential future financial exposures [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) AdaptHealth's primary market risk is interest rate fluctuations on variable-rate debt, impacting net income by $3.0 million - The company's main market risk is interest rate fluctuations on its variable-rate debt under the 2024 Credit Agreement[346](index=346&type=chunk) - A **100 basis point change** in interest rates is estimated to have a **$3.0 million** annual impact on net income (loss) before taxes[346](index=346&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) AdaptHealth's audited financials and KPMG's reports are presented, noting an adverse opinion on internal controls - The consolidated financial statements for 2024, 2023, and 2022 are presented, including balance sheets, statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows[349](index=349&type=chunk) - KPMG LLP issued an unqualified opinion on the consolidated financial statements but an **adverse opinion** on the effectiveness of internal control over financial reporting as of December 31, 2024[351](index=351&type=chunk)[352](index=352&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) - A critical audit matter identified was the evaluation of the implicit price concession estimate due to the complexity and subjectivity of historical reimbursement experience[356](index=356&type=chunk)[357](index=357&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=74&type=section&id=8.1%20Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) This section includes the audit opinions from the independent registered public accounting firm on AdaptHealth's financial statements [Consolidated Financial Statements](index=78&type=section&id=8.2%20Consolidated%20Financial%20Statements) This section presents AdaptHealth's complete set of consolidated financial statements for the reported periods [Notes to Consolidated Financial Statements](index=85&type=section&id=8.3%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes supporting the figures presented in the consolidated financial statements [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=123&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) No changes in or disagreements with accountants on accounting and financial disclosure were reported - No changes in or disagreements with accountants on accounting and financial disclosure were reported[650](index=650&type=chunk) [Item 9A. Controls and Procedures](index=123&type=section&id=Item%209A.%20Controls%20and%20Procedures) AdaptHealth's disclosure controls were ineffective due to a material weakness in inventory valuation; other weaknesses remediated - Disclosure controls and procedures were not effective as of December 31, 2024, due to a material weakness in internal control over financial reporting[651](index=651&type=chunk) - The identified material weakness relates to process-level controls over the determination of excess or obsolete medical equipment and other inventory balances, specifically lacking a mechanism to track movement and status of inventory[654](index=654&type=chunk) - Two previously reported material weaknesses (Revenue Process and Procurement Process) from December 31, 2023, have been remediated during 2024[656](index=656&type=chunk)[657](index=657&type=chunk)[658](index=658&type=chunk) - Remediation efforts for the Inventory Valuation Material Weakness include implementing a perpetual inventory system, which has been rolled out to **102 locations**, covering **30% of inventory value**, as of December 31, 2024[659](index=659&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=123&type=section&id=9A.1%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of AdaptHealth's disclosure controls and procedures [Management's Report on Internal Control Over Financial Reporting](index=123&type=section&id=9A.2%20Management's%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) This section presents management's assessment of the effectiveness of AdaptHealth's internal control over financial reporting [Remediation of Previously Reported Material Weaknesses in Internal Control Over Financing Reporting](index=145&type=section&id=9A.3%20Remediation%20of%20Previously%20Reported%20Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financing%20Reporting) This section details the actions taken to address and resolve prior material weaknesses in internal control over financial reporting [Remediation of Material Weakness Existing as of December 31, 2024](index=145&type=section&id=9A.4%20Remediation%20of%20Material%20Weakness%20Existing%20as%20of%20December%2031%2C%202024) This section outlines ongoing efforts to remediate the material weakness identified as of December 31, 2024 [Changes in Internal Control over Financial Reporting](index=146&type=section&id=9A.5%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports any changes in AdaptHealth's internal control over financial reporting during the period [Item 9B. Other Information](index=146&type=section&id=Item%209B.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or officers in Q4 2024 - No Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or officers in Q4 2024[662](index=662&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=146&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to AdaptHealth Corp PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=146&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the 2025 Definitive Proxy Statement - Information is incorporated by reference from the 2025 Definitive Proxy Statement[10](index=10&type=chunk)[665](index=665&type=chunk) [Item 11. Executive Compensation](index=146&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the 2025 Definitive Proxy Statement - Information is incorporated by reference from the 2025 Definitive Proxy Statement[10](index=10&type=chunk)[666](index=666&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=146&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the 2025 Definitive Proxy Statement - Information is incorporated by reference from the 2025 Definitive Proxy Statement[10](index=10&type=chunk)[667](index=667&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=146&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the 2025 Definitive Proxy Statement - Information is incorporated by reference from the 2025 Definitive Proxy Statement[10](index=10&type=chunk)[668](index=668&type=chunk) [Item 14. Principal Accountant's Fees and Services](index=146&type=section&id=Item%2014.%20Principal%20Accountant's%20Fees%20and%20Services) Information for this item is incorporated by reference from the 2025 Definitive Proxy Statement - Information is incorporated by reference from the 2025 Definitive Proxy Statement[10](index=10&type=chunk)[669](index=669&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=147&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists consolidated financial statements and supplementary data from Item 8, plus a comprehensive index of exhibits - Lists the consolidated financial statements and supplementary data included in Item 8[672](index=672&type=chunk)[673](index=673&type=chunk) - Includes a comprehensive index of exhibits filed as part of the Form 10-K[673](index=673&type=chunk) [Item 16. Form 10-K Summary](index=147&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K Summary is provided - No Form 10-K Summary is provided[674](index=674&type=chunk) [Signatures](index=152&type=section&id=Signatures) The report is signed by the CEO, CFO, CAO, and Board members, certifying its submission - The report is signed by the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and members of the Board of Directors[683](index=683&type=chunk)[685](index=685&type=chunk)[688](index=688&type=chunk) ```

Financial Data and Key Metrics Changes - Fourth quarter revenue was effectively flat year-over-year but exceeded the high end of guidance by 3% [6][30] - Adjusted EBITDA for the fourth quarter contracted 2% year-over-year but was above guidance [7][36] - Free cash flow for the fourth quarter was $73 million, up 10% from the prior year [7][39] Business Line Data and Key Metrics Changes - Sleep Health revenue increased 3.4% year-over-year in Q4 [6][31] - Respiratory Health revenue increased 1% year-over-year in Q4 [6][33] - Diabetes Health revenue decreased 7.3% year-over-year in Q4, but showed sequential growth of $30.2 million over Q3 [6][34] - Wellness at Home revenue declined 0.8% year-over-year in Q4 [6][35] Market Data and Key Metrics Changes - For full year 2024, net revenue grew 1.9% to $3.26 billion, with notable growth in Sleep Health (4.5%) and Respiratory Health (6.0%) [30] - The company reported a net leverage ratio of 2.79 times at year-end 2024, down from 3.16 times at the end of 2023 [42] Company Strategy and Development Direction - The company is focusing on five areas: One Adapt initiative, AI and automation, clinical relevance, organic growth, and strengthening the balance sheet [8][24] - A new segment structure was implemented to enhance visibility and accountability [12][28] - The company aims to lead in innovation within the home health industry and improve patient experience through automation and AI [13][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to manage patient care and expand its role in healthcare [17][22] - The company anticipates 2025 to be a transition year for growth, with expectations for accelerated growth in 2026 and beyond [51] Other Important Information - The company reduced debt by $170 million in the past year, including $50 million in Q4 [24][42] - A multi-year extension of the capitated contract with Humana was announced [23] Q&A Session Summary Question: Can you talk more about the conversations with carriers over additional capitated arrangements? - Management confirmed ongoing discussions and a strong relationship with Humana, with positive performance reviews [55][56] Question: Can you discuss your working capital outlook and cash flow improvement? - Management indicated progress in working capital and expects stable or improved days sales outstanding (DSO) in 2025 [57][58] Question: What are your thoughts on the Diabetes business contribution to 2025 guidance? - Management noted stable revenue for pump supplies and cautious optimism for growth in the Diabetes segment [66][68] Question: Can you elaborate on the changes made in the Diabetes resupply outreach program? - Management highlighted the implementation of a new leadership team and improved patient outreach strategies [87][92] Question: How was the sales quota initiative received by the sales force? - Management reported a positive response from the sales team, which has improved forecasting and accountability [95][96] Question: Can you provide insights on the purchase versus rental revenue dynamics? - Management explained the impact of changes in reimbursement structures, particularly in the sleep business [102][103] Question: What is the expected impact of the 75/25 reimbursement model for 2025? - Management indicated a stable reimbursement environment with no significant changes expected [106][118]

Financial Supplement Q4 2024 Disclaimer This presentation contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management's current views concerning future business, events, trends, contingencies, financial performance, or financial condition, appear at various places in this communication and may use words like "aim," "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "forecast," "future," "goal, ...

AdaptHealth Corp. (AHCO) came out with quarterly earnings of $0.39 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.64 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 34.48%. A quarter ago, it was expected that this company would post earnings of $0.20 per share when it actually produced earnings of $0.21, delivering a surprise of 5%.Over the last four quarters, the company ha ...

Financial Performance - Net revenue for the full year 2024 was $3,261.0 million, an increase of 1.9% compared to $3,200.2 million in 2023[4] - Net income attributable to AdaptHealth Corp. for 2024 was $90.4 million, a significant recovery from a net loss of $678.9 million in 2023[4] - Adjusted EBITDA for the full year 2024 was $688.7 million, reflecting a 2.7% increase from $670.8 million in 2023[4] - For Q4 2024, net revenue was $856.6 million, a slight decrease of 0.2% compared to $858.2 million in Q4 2023[4] - Q4 2024 net income attributable to AdaptHealth Corp. was $50.3 million, recovering from a net loss of $254.5 million in Q4 2023[4] - Adjusted EBITDA for Q4 2024 was $200.6 million, down 2.0% from $204.6 million in Q4 2023[4] - Net revenue for the three months ended December 31, 2024, was $856,645, a slight decrease of 0.1% compared to $858,234 in the same period of 2023[21] - Net income attributable to AdaptHealth Corp. for the twelve months ended December 31, 2024, was $90,422, a significant improvement from a net loss of $678,895 in 2023[32] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $688,657, representing an adjusted EBITDA margin of 21.1%, compared to $670,795 and 21.0% in 2023[32] - Operating income for the three months ended December 31, 2024, was $97,667, compared to an operating loss of $217,804 in the same period of 2023[21] - Total costs and expenses for the twelve months ended December 31, 2024, were $2,997,243, down from $3,798,578 in 2023[21] Cash Flow and Financial Position - Cash flow from operations increased to $541.8 million in 2024 from $480.7 million in 2023, while free cash flow rose to $235.8 million from $143.2 million[4] - Cash flows from operating activities for the twelve months ended December 31, 2024, increased to $541,839 from $480,666 in 2023[23] - The company had cash at the end of the period amounting to $109,747, an increase from $77,132 at the beginning of the period[27] - Free cash flow for Q4 2024 was $73.1 million, compared to $66.6 million in Q4 2023, representing an increase of 7.2%[34] - For the twelve months ended December 31, 2024, free cash flow totaled $143.2 million, a decrease from $235.8 million in 2023, reflecting a decline of 39.2%[34] - Net cash provided by operating activities for Q4 2024 was $150.4 million, down from $155.3 million in Q4 2023, indicating a decrease of 5.7%[34] Strategic Initiatives and Expenses - AdaptHealth reached a definitive agreement to sell certain incontinence assets in its Wellness at Home segment during Q4 2024[4] - The 2024 period included $2.4 million in charges related to the change in fair value of common stock issued following a court-approved securities class action lawsuit[35] - Consulting expenses in 2024 amounted to $13.9 million for systems implementation activities, while 2023 saw $5.6 million for similar expenses, reflecting a significant increase[35] - Severance charges in 2024 were $3.9 million, primarily related to the separation of the former President, compared to $7.1 million in 2023, which included $2.9 million for the former CEO's separation[35] - The company incurred $4.5 million in consulting expenses associated with asset dispositions in 2024, indicating a strategic focus on optimizing asset management[35] Impairments and Interest Expenses - The company reported a goodwill impairment of $13,078 for the twelve months ended December 31, 2024, significantly lower than the $830,787 recorded in 2023[32] - Interest expense for the twelve months ended December 31, 2024, was $126,668, a slight decrease from $130,299 in 2023[32] - Non-cash goodwill impairment charges were recorded in both years, with 2024 reflecting charges related to the disposition of certain immaterial custom rehab technology assets[35]