Adapthealth Corp. · NASDAQ:AHCO
Adapthealth — Investor Presentation (July 2020)
27 slides from Adapthealth's investor presentation, July 2020
Slide 1: Investor Presentation
Investor Presentation July 2020
Slide 2: Disclaimers and Other Important Information
Disclaimer Disclaimers and Other Important Information This presentation (this “Presentation”) is for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a potential investment in AdaptHealth Corp. (“AdaptHealth” or the “Compa
Slide 3: Proven & Experienced Management Team
Proven & Experienced Management Team Luke McGee – Chief Executive Officer, Director Joshua Parnes – President, Director ▪ Chief Executive Officer of AdaptHealth ▪ President since 2017 ▪ Founded AdaptHealth with Quadrant Management in 2012 ▪ Mr. Parnes has day to day responsibilities for all operatin
Slide 4: Company Overview
Company Overview
Slide 5: Leading Provider of HME, CGM / Diabetes Management Products and Medical Supplies to the Home
Leading Provider of HME, CGM / Diabetes Management Products and Medical Supplies to the Home + Comprehensive portfolio of products addressing the needs of Ticker AHCO patients in the home Headquarters Plymouth Meeting, PA + Addressing large and growing market + HME: $12 - $15bn segment in the broade
Slide 6: AdaptHealth's Nationwide Footprint
AdaptHealth’s Nationwide Footprint 247 locations servicing 50 States(1) Corporate HQ AdaptHealth Solara(2) ActivStyle(3) (1) Pro Forma for Solara and ActivStyle acquisitions. / July 2020 (2) The acquisition of Solara closed on July 1, 2020. (3) The acquisition of ActivStyle closed on July 1, 2020. P
Slide 7: AdaptHealth's Strategic Vision
AdaptHealth’s Strategic Vision Today Pro Forma(1) Our Goal Leading Provider of HME, Leading Diversified Leading Provider of CGM / Diabetes Provider of HME Connected Health Management and Medical Solutions Supplies to the Home ▪ Leading technology platform ▪ Leader in sleep and diabetes, two ▪ Integr
Slide 8: HME Solutions
HME Solutions Industry provides a strategic entry point to serve and engage patients in the home Why is HME critical What is HME? to home care? + HME service providers deliver critical medical equipment into a + Enables patients with complex conditions to transition to their patient’s home preferred
Slide 9: CGM / Diabetes Management Solutions
CGM / Diabetes Management Solutions Solara acquisition provides AHCO a comprehensive suite of options for the effective management of diabetes, including CGMs, pumps, and ancillary supplies from all manufacturers Category & Representative Products Description Top Manufacturers ▪ Small sensor placed
Slide 10: Medical Supplies Solutions
Medical Supplies Solutions ActivStyle and PCS acquisitions further enhances AHCO’s product offering and boosts its footprint in areas such as wound care, urology, ostomy, breast pumps and incontinence supplies Category & Representative Products Description Top Manufacturers ▪ Wound care products are
Slide 11: Diverse Product Offering & Payor Mix
Diverse Product Offering & Payor Mix Pro Forma w/ PCS, Advanced Home Care, Healthline, Solara & ActivStyle Acquisitions Pro Forma Revenue Breakdown at 12/31/19 Net Revenue = $1.0bn Diabetes 19% Sleep Product Mix (1) 33% as of 12/31/19 Other Supply(3) 24% (2) 28% HME Respiratory 13% Product Rentals 1
Slide 12: AdaptHealth Expects to Service More Than 1.7mm Patients Annually
AdaptHealth Expects to Service More Than 1.7mm Patients Annually LTM Pro Forma Unique Patients Serviced Revenue (in thousands) ($ in millions) 1,800 1,710 Adapt Advanced Home Care PCS Healthline Solara ActivStyle ActivStyle Solara Adapt $1,200 1,600 1,400 $1,016 $1,000 1,181 1,200 1,137 1,010 1,039
Slide 13: Targeting 20% Growth Annually
Targeting 20% Growth Annually Growth Levers Platform (2) Diversification 12-15% M&A (1) 7-10% Organic Growth + Respiratory market growth 3-5% + 72 acquisitions completed since 2012(3) + Remote Patient Monitoring + Sleep market growth 7-9% + 1,000s of mom & pops still actionable + Respiratory Medicat
Slide 14: Organic Growth: Long-Term Market Growth Rates
Organic Growth: Long-Term Market Growth Rates Our solutions play an important role in managing these chronic diseases in the home Healthcare and Lost PF 2019 Net Revenue(1) less Estimated Long-Term Market Chronic Disease Productivity Costs AdaptHealth Product(1) Product Line BD Growth Rates(2) ($bn)
Slide 15: Organic Growth: Aging Population
Organic Growth: Aging Population Population 65+ is growing 6.5x faster than overall population growth Product & Services US Population Aged 65+ 1 Needed by Aging Seniors 2 (millions) 80 70 60 65.2 50 Oxygen Wheelchairs Beds Insulin Pumps 3.2% 49.2 CAGR 40 30 20 10 0 2016 2025 Walkers Commodes Ventil
Slide 16: Organic Growth: Sleep / CPAP
Organic Growth: Sleep / CPAP 26% Adults 30-70 Years old 54mm People in the US with AHI ≥ 5 (2,3) are estimated to have sleep apnea (1) ~80% Undiagnosed Sleep Apnea 24mm People in the US with AHI ≥ 15 (2,3) (1) AASM; https://aasm.org/rising-prevalence-of-sleep-apnea-in-u-s-threatens-public-health/ /
Slide 17: Organic Growth: Diabetes
Organic Growth: Diabetes US Diabetes Device Market ($ billions) CGM Market (1) $3.4 Insulin Pump Market (1) $2.2 34mm Americans have diabetes with diagnosed cases having doubled since 2000(2) $2.1 $1.6 1/7 $1 out of every $7 healthcare dollars is spent treating diabetes or a complication of the dise
Slide 18: M&A: Adapt by The Numbers
M&A: Adapt by The Numbers 72 Closed transactions since 2012(1) All Integrated into AdaptHealth systems 18 / 8 Transactions closed in 2019 / 2020(2) 2019 acquired ~$110mm in annual revenue Opportunity YTD 2020 acquired ~$490mm in annual revenue For future consolidation 6K+ small to mid-size HME compa
Slide 19: M&A: AHCO is a Proven Consolidator
M&A: AHCO is a Proven Consolidator Cumulative Acquisitions Sample Top Vendor & Purchase Price Annual Cost Savings ($ in millions) ($ in millions) $924 Pre-Acquisition Post-Acquisition 72 Expenses Expenses Savings % Cumulative Purchase Price Cumulative Number of Acquisitions 64 Transaction 1 $27.5 $2
Slide 20: M&A: Competitive Landscape
M&A: Competitive Landscape Nationals Scaled Regionals Product-Specific Mom & Pops 6K+ / July 2020 Page 20
Slide 21: Positioned to Lead the Shift to Connected Healthcare
Positioned to Lead the Shift to Connected Healthcare Patients Payors and Providers + Simplify Health + Monitor Treatment Management Plan Effectiveness + Encourage + Drive Early Compliance Interventions + Drive Better + Reduce Engagement Hospitalizations + Improve Outcomes + Improve Outcomes Blood Pr
Slide 22: Case Study: Diabetic Patient on CGM and Sleep Therapy
Case Study: Diabetic Patient on CGM and Sleep Therapy Illustrative Diabetic Patient Needs AdaptHealth Platform ▪ Allows the Company to monitor: CPAP ▪ Real-time insulin levels ▪ Real-time information on sleep quality Pump CGM ▪ Weight fluctuation ▪ Patient data can be compared to a baseline and used
Slide 23: Financial Supplement
Financial Supplement
Slide 24: Historical Financial Performance
Historical Financial Performance Net Revenue ($ In Millions) Adj. EBITDA(2) $529.6 $123.0 $84.4 $345.3 $174.3 $192.6 $45.0 $33.1 2016A 2017A 2018A 2019A 2016A 2017A 2018A 2019A Adj. EBITDA less Patient Capital Expenditures(1)(2) Adj. EBITDA less Patient Capex Margin(2) 13.1% 14.3% $75.6 10.0% $45.1
Slide 25: Capital Structure
Capital Structure Net Debt(1)(2) Equity(1) 3/31/20 PF(3) 3/31/20 PF (shares in millions) ($ in millions) Class A Common Shares (3/31/20)(4) 43.4 Senior Secured Loans $524.2 Class B Common Shares (3/31/20) 30.6 Preferred Note 143.5 Solara Rollover Equity (pro forma) 3.9 Capital Leases 20.6 OneEquity
Slide 26: Adjusted EBITDA Bridge
Adjusted EBITDA Bridge AdaptHealth Adjusted EBITDA Bridge to Net Income Fiscal Year Ended December 31 2016A 2017A 2018A 2019A Net Income / (Loss) attributable to AdaptHealth Corp. ($4.2) $9.7 $23.3 ($15.0) Plus: Income attributable to noncontrolling interest 0.6 0.6 1.1 2.1 Plus: Interest expense ex
Slide 27: Thank You!
Thank You!