AdaptHealth(US:AHCO)2020-08-09 14:42Financial Data and Key Metrics Changes - AdaptHealth Corp. generated net revenue of $232.1 million in Q2 2020, an 87% increase from Q2 2019 and 21% higher than Q1 2020 [18] - Adjusted EBITDA was $42.6 million, compared to $29.5 million in Q2 2019, while adjusted EBITDA less patient equipment CapEx was $30.6 million, up from $18.1 million in Q2 2019 [19] - Net income attributable to AdaptHealth was $4 million, compared to a net loss of $2.1 million in Q2 2019 [19] Business Line Data and Key Metrics Changes - The Patient Care Solutions (PCS) segment generated net revenue of $33 million, but incurred a quarterly loss of $3.6 million [18][19] - The traditional direct-to-patient HME and supplies business performed well, with a low double-digit increase in CPAP supply business [10][28] - B2B revenue for equipment sales and rentals reached approximately $28 million in Q2, with expectations of generating $70 million in revenue over the next few quarters [11] Market Data and Key Metrics Changes - The company noted a significant impact from COVID-19 on certain product lines, particularly CPAP new starts, which were down approximately 30% in Q2 [38] - Despite challenges, the CGM (Continuous Glucose Monitoring) business showed strong performance, benefiting from increased adoption and Medicare relaxations [78] Company Strategy and Development Direction - AdaptHealth aims to integrate recent acquisitions (Solara and ActivStyle) to enhance its diabetes management and medical supplies business, focusing on resupply processes and operational efficiencies [8][13] - The company is committed to investing in technology and business processes to improve patient experience and operational costs [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery of CPAP new starts and the overall business environment, emphasizing the importance of integration and investment in technology [39][62] - The company increased its 2020 financial guidance, projecting net revenue between $935 million and $983 million, and adjusted EBITDA of $169 million to $178 million [22] Other Important Information - The company raised approximately $134 million through a public offering and secured additional financing, enhancing its liquidity position with over $300 million in cash [15][20] - New board members were welcomed, including Brad Coppens and David Williams, to strengthen the company's strategic direction [16] Q&A Session Summary Question: Guidance clarification regarding EBITDA less CapEx - Management explained the adjustments in guidance, noting that the B2B business would not maintain the same revenue levels in the second half of the year [26] Question: CPAP reorder rates and sustainability - Management reported low double-digit growth in CPAP supply business and expressed cautious optimism about maintaining improved resupply rates [28] Question: PCS losses and COVID impact - Management indicated that PCS's performance was largely in line with expectations and not significantly impacted by COVID [32] Question: Future B2B business opportunities - Management expressed cautious optimism about the persistence of B2B revenue, estimating a couple of million dollars per quarter in the near future [70] Question: Integration of Solara and ActivStyle - Management confirmed that integration efforts are ongoing and will take time, with a focus on leveraging existing competencies to drive growth [84]