Adapthealth Corp. · NASDAQ:AHCO

Adapthealth — Conference Presentation (November 2019)

25 slides from Adapthealth's conference presentation, November 2019

  1. Slide 1: Investor Presentation

    Investor Presentation November 2019

  2. 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

  3. Slide 3: The 3rd Largest Provider of HME in the United States

    The 3rd Largest Provider of HME in the United States + Comprehensive portfolio of HME products for sale and rental Ticker AHCO; AHCOW Headquarters Plymouth Meeting, PA + Addressing a growing $12 - $15bn segment within the broader $56bn HME industry Outstanding Shares 72.4mm (3) + Serve 1mm patients

  4. Slide 4: AdaptHealth's Nationwide Footprint

    AdaptHealth’s Nationwide Footprint 150+ Locations servicing 49 States Corporate HQ / Investor Presentation / November 2019 Page 4

  5. Slide 5: Proven & Experienced Leadership

    Proven & Experienced Leadership AdaptHealth Leadership Team Luke McGee • Chairman and CEO of AdaptHealth since 2012; built business from $7mm of revenue in first acquisition Chief Executive Officer • Led the Company’s proven acquisition track record and developing a scalable platform with robust int

  6. Slide 6: HME Is Critical To Serving Patients At Home

    HME Is Critical To Serving Patients At Home Industry provides a strategic entry point to 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 h

  7. Slide 7: Fully Integrated, Centralized Platform

    Fully Integrated, Centralized Platform Tech-Enabled Infrastructure: Tech-Enabled Vendor Relationships Infrastructure ✓ Electronic portal / interface ✓ Proprietary workflow technology Proven Sales AdaptHealth Broad Payor & Marketing Platform Network ✓ Improved efficiency from time of order to deliver

  8. Slide 8: Diverse Product Offering & Payor Mix

    Diverse Product Offering & Payor Mix Revenue Breakdown at 9/30/19 Other Net Revenue = $380.1mm * 9% HME 17% Sleep Product Mix 57% Respiratory 17% 41% 59% HME Product Other HME Product Rentals 2% Sales MLTC Commercial 3% Patient 39% 14% Payor Mix Managed Medicaid 5% FFS Medicare FFS 30% Medicaid 2% M

  9. Slide 9: Multiple Growth Levers

    Multiple Growth Levers Targeted combined top line growth of ~20% Platform Diversification 12-15% (1) HME M&A 6-8% Organic Growth Source: Management (1) 12-15% growth through HME M&A is based on $100mm in revenue per year / Investor Presentation / November 2019 Page 9

  10. Slide 10: 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 80 (millions) 70 60 65.2 50 3.2% Oxygen Wheelchairs Beds 49.2 CAGR 40 30 20 10 0 Walkers Commodes Ventilation 2016 2025 Source:

  11. Slide 11: 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/ (

  12. Slide 12: Organic Growth: Increase HME Mix

    Organic Growth: Increase HME Mix Opportunity to grow HME revenue by $105mm annually in markets outside of NJ, PA & NY (1) Revenue Mix – NJ / PA / NY Revenue Mix – Other Markets 1 2 61% 39% 85% 15% Respiratory/Sleep HME/Other Respiratory/Sleep HME/Other Source: Management. YTD September 30, 2019 (1)

  13. Slide 13: HME M&A: Adapt by The Numbers

    HME M&A: Adapt by The Numbers 64 Closed transactions since 2012 18 Transactions closed in 2019 All Integrated into AdaptHealth systems Generating ~$110mm in annual revenue Opportunity For Future consolidation $100mm+ 5K+ small to mid-size HME companies remain Expected to acquire in revenue per year

  14. Slide 14: HME M&A: AH is a Proven Consolidator

    HME M&A: AH is a Proven Consolidator Cumulative Acquisitions Sample Annual Vendor & Purchase Price Cost Savings ($ in millions) ($ in millions) 64 Company 1 Company 2 $27.5 8% Savings $4.4 25% Savings 46 Cumulative Purchase Price $324 Cumulative Number of Acquisitions $3.3 $257 25 20 $25.4 18 16 $87

  15. Slide 15: HME M&A: Competitive Landscape

    HME M&A: Competitive Landscape Nationals Scaled Regionals Product-Specific Mom & Pops 6K+ / Investor Presentation / November 2019 Page 15

  16. Slide 16: Platform Diversification

    Platform Diversification Supplies Respiratory Medications Home Infusion (diabetes, ostomy, Remote Patient Monitoring Home Dialysis urological, wound care) Near Term Long Term Source: Management / Investor Presentation / November 2019 Page 16

  17. Slide 17: Financial Supplement

    Financial Supplement

  18. Slide 18: Financial Results: Net Revenue

    Financial Results: Net Revenue ($ in millions) 160.0 140.0 136.5 124.2 119.5 120.0 108.7 102.2 100.0 78.5 80.0 60.0 56.0 40.0 20.0 - Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Source: Management / Investor Presentation / November 2019 Page 18

  19. Slide 19: Financial Results: Adj EBITDA & Adj E-C

    Financial Results: Adj EBITDA & Adj E-C Adjusted EBITDA Adjusted EBITDA (1) Less Patient Equipment Capex (1) ($ in millions) ($ in millions) 35.0 20.0 18.7 31.7 18.1 29.5 18.0 17.0 30.0 28.2 16.0 14.8 25.3 25.7 14.3 25.0 14.0 19.1 12.0 20.0 9.6 10.0 14.3 15.0 8.0 6.4 10.0 6.0 4.0 5.0 2.0 - - Q1 '18

  20. Slide 20: Financial Projections

    Financial Projections ($ In Millions) Net Revenue1 Adj. EBITDA4 $682.7 $162.0 Acquisition Case $20.0 Acquisition Case $100.0 $123.3 $518.8 $409.4 $89.5 $192.6 $582.7 $142.0 $174.3 $45.0 $33.1 2 2 2016A 2017A 2018PF 2019E 2020E 2016A 2017A 2018PF 2019E 2020E ✓ Revenue growth driven by organic growth

  21. Slide 21: 2019E to 2020E Bridge – Base Case

    2019E to 2020E Bridge – “Base Case” Adjusted EBITDA Adjusted EBITDA (1) Less Patient Equipment Capex (1) ($ in millions) ($ in millions) Note: “Base Case“ excludes acquisition projection of $100mm of revenue per year at 20% EBITDA margin and 10% EBITDA less Patient Equipment Capex margin. Charts are

  22. Slide 22: Capital Structure

    Capital Structure Debt Equity 9/30/2019 PF 1 Class A Class B Total Legacy AH Holdings shareholders ($ in millions) Blue Mountain 3,647,353 150,581 3,797,934 Term Loan $246.3 Management * 1,524,561 14,673,995 16,198,556 Preferred Note $143.5 Other 14,651,787 17,289,223 31,941,010 Other Debt $1.7 19,8

  23. Slide 23: Pro Forma Adjusted EBITDA Bridge

    Pro Forma Adjusted EBITDA Bridge AdaptHealth Pro Forma Adjusted EBITDA Bridge to Net Income Fiscal Year Ended December 31 2016A 2017A 2018PF1 Net Income / (Loss) attributable to AdaptHealth Holdings LLC ($4.2) $9.7 $23.3 Plus: Income attributable to noncontrolling interest 0.6 0.6 1.1 Plus: Interest

  24. Slide 24: Adjusted EBITDA Bridge

    Adjusted EBITDA Bridge AdaptHealth Adjusted EBITDA Bridge to Net Income Q1’18 Q2 ’18 Q3 ’18 Q4 ’18 Q1 ’19 Q2 ’19 Q3 ‘19 Net Income / (Loss) attributable to AdaptHealth Holdings LLC $3.7 $3.6 $12.4 $3.5 $(3.5) $(4.4) $(3.7) Plus: Income attributable to noncontrolling interest 0.2 0.2 0.3 0.4 0.3 0.4

  25. Slide 25: Thank You!

    Thank You!

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