AdaptHealth(US:AHCO)2022-02-26 15:27Financial Data and Key Metrics Changes - AdaptHealth reported net revenue of $702 million for Q4 2021, representing a year-over-year growth of 102% [17] - Adjusted EBITDA for the quarter was $158 million, with an adjusted EBITDA margin of 22.5% [18] - For the full year, cash flow from operations was $276 million, and free cash flow was $72 million [20] Business Line Data and Key Metrics Changes - Organic growth for Q4 was 2.7%, with non-acquired growth at 2.4% [17] - The demand for PAP devices was robust, but the company faced challenges in fulfilling patient needs due to supply shortages [11] - The acquisition of Community Surgical Supply is expected to add approximately $100 million in annual revenue [13] Market Data and Key Metrics Changes - The company serves approximately 3.8 million patients annually, with over 32,000 daily deliveries [8] - The Philips PAP device recall significantly impacted supply, with only about 70% of patients receiving needed machines [24] Company Strategy and Development Direction - AdaptHealth aims to enhance its value proposition through acquisitions and technology integration, including the implementation of an enterprise-wide Oracle ERP system [13][15] - The company is focused on capturing market share as supply chain issues improve, particularly in the sleep sector [11][16] - The acquisition strategy remains active, with a focus on smaller, strategic deals while digesting previous acquisitions [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to recover from supply chain disruptions and capture backlog once PAP supply normalizes [24] - The company anticipates organic growth of approximately 4% for 2022, factoring in the impact of the Philips recall [22] - Management highlighted the importance of maintaining operational efficiency amid rising costs and supply chain challenges [12][50] Other Important Information - The company raised $600 million in fixed-rate debentures to fund acquisitions and simplify its capital structure [10] - The integration of AeroCare and other acquisitions has been successful, enhancing operational capabilities and technology solutions [9] Q&A Session Summary Question: Can you clarify the 2022 EBITDA guidance and the impact of CPAP supply issues? - Management explained that the guidance was adjusted down by $25 million, primarily due to a $45 million negative impact from CPAP supply challenges [26][29] Question: How are you managing pricing increases from vendors? - Management acknowledged that vendors are pushing through price increases, but the DMEPOS fee schedule increase has been accounted for in guidance [32][35] Question: What is the expected cadence for revenue growth throughout 2022? - Management indicated that revenue may be slightly back-weighted due to ongoing supply chain issues, with Q1 expected to be lower than normal [63] Question: Can you provide insights on the Community Surgical acquisition? - The acquisition is expected to enhance AdaptHealth's respiratory and clinical capabilities, with significant cross-pollination opportunities [78] Question: How is the company addressing labor cost pressures? - Management noted that while labor costs are increasing, operational efficiencies from technology investments are helping to mitigate these pressures [52][81]