AdaptHealth(US:AHCO)2021-03-04 19:41Financial Data and Key Metrics Changes - AdaptHealth generated net revenue of $348.4 million for Q4 2020, an increase of 133% from Q4 2019 [19] - Adjusted EBITDA was $79.4 million, up 136% from the same quarter last year [19] - Adjusted EBITDA less patient equipment CapEx reached $58.5 million, reflecting a 168% increase year-over-year [19] - For the full year, organic growth was reported at 8.6%, including COVID B2B business, and 5.6% excluding it [22] Business Line Data and Key Metrics Changes - The company provided home medical equipment to over 43,000 patients with a COVID diagnosis, highlighting the growth in home health needs [8] - The diabetes supply business is rapidly growing, with unit growth exceeding 50% year-over-year across all diabetes businesses [38] - The oxygen business saw significant increases, particularly in the latter half of Q4 2020 and into 2021, with expectations to remain above pre-pandemic levels [22] Market Data and Key Metrics Changes - The company closed 22 acquisitions in 2020, enhancing its geographic footprint and product portfolio, particularly in high-growth HME markets [20] - The acquisition of AeroCare is expected to deliver $130 million to $150 million of incremental revenue in 2021 [12] - The company anticipates organic growth prospects between 8% and 10% for 2021, driven by recovery in new starts and market expansion [22] Company Strategy and Development Direction - AdaptHealth is focused on integrating AeroCare and pursuing additional value-creating acquisitions in both HME and diabetes sectors [25] - The company plans to invest in technology to improve internal processes and enhance patient experience [25] - Management emphasized the importance of maintaining a disciplined approach to acquisitions, ensuring they are financially accretive and value-creating [81] Management's Comments on Operating Environment and Future Outlook - Management noted that they have not seen increased mortality among their patient base despite COVID-19, and there has been a significant influx of oxygen prescribing related to the pandemic [31] - The company remains optimistic about growth in 2021, expecting to exceed pre-pandemic levels for most key products by the end of Q1 [33] - Management expressed confidence in the diabetes business, projecting a conservative growth contribution of 10% to 15% to the overall growth target for 2021 [39] Other Important Information - The company has been active in capital markets, successfully raising $500 million in unsecured notes and $279 million in equity in January 2021 [12] - Management highlighted the importance of e-Prescribing, with 20% of new starts now being e-Prescribed, which enhances patient experience and operational efficiency [18] Q&A Session Summary Question: Concerns about COVID's impact on volumes and oxygen demand - Management clarified that they have not seen increased mortality among their patients and noted a significant rise in oxygen prescribing due to COVID-related issues [31][32] Question: Strategy behind entering the diabetes market - The strategy was to add a product category that aligns with their existing patient base, leveraging similar technology and processes [35] Question: Impact of competitive bidding rates released by CMS - Management indicated that the rates suggest a potential increase in pricing due to reduced provider numbers, validating their belief that rates are at a bottom [44] Question: Guidance for 2021 and organic growth contributions - The guidance increase is primarily driven by acquisitions, with organic growth expected to be between 8% and 10% [23][48] Question: Realization of AeroCare revenue synergies - Management expects to see contributions from AeroCare revenue synergies in the second half of 2021 [70] Question: Supply challenges in the oxygen market - Management acknowledged supply challenges but noted that they have sufficient inventory to meet demand and have been able to assist other health systems [64]