Adapthealth Corp. · NASDAQ:AHCO
Adapthealth — Investor Presentation (January 2020)
26 slides from Adapthealth's investor presentation, January 2020
Slide 1: Investor Presentation 2020
Investor Presentation 2020 January 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: 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 Headquarters Plymouth Meeting, PA + Addressing a growing $12 - $15bn segment within the broader $56bn HME industry Outstanding Shares 72.4mm (3) + Serve 1.3mm+ patients and
Slide 4: AdaptHealth's Nationwide Footprint
AdaptHealth’s Nationwide Footprint 160+ Locations servicing 50 States Corporate HQ / Investor Presentation / January 2020 Page 4
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
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
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
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
Slide 9: Product Offering & Payor Mix
Product Offering & Payor Mix Pro Forma w/ PCS & Advanced Acquisitions Revenue Breakdown at 9/30/19 Supplies 20% Sleep 41% Product Mix Other 8% 34% HME 15% Respiratory Product Rentals 16% 66% Product Sales Patient 12% Payor Mix Governmental Commercial/ 32% Other 4 56% *Less Provision for Doubtful Acc
Slide 10: 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 / January 2020 Page 10
Slide 11: 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:
Slide 12: 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 13: 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)
Slide 14: HME M&A: Adapt by The Numbers
HME M&A: Adapt by The Numbers 65 Closed transactions since 2012 19 Transactions closed in 2019* All Integrated into AdaptHealth systems Generating ~$225mm in annual revenue Opportunity For Future consolidation $100mm+ 5K+ small to mid-size HME companies remain Expected to acquire in revenue per year
Slide 15: HME M&A: AH is a Proven Consolidator
HME M&A: AH is a Proven Consolidator Cumulative Acquisitions Sample Annual Vendor & Purchase Price Cost Savings ($ in millions) ($ in millions) Company 1 Company 2 64 65 Cumulative Purchase Price Cumulative Number of Acquisitions 8% Savings $4.4 $27.5 25% Savings 46 $338 $324 $3.3 $257 25 $25.4 20 1
Slide 16: HME M&A: Competitive Landscape
HME M&A: Competitive Landscape Nationals Scaled Regionals Product-Specific Mom & Pops 6K+ / Investor Presentation / January 2020 Page 16
Slide 17: Platform Diversification
Platform Diversification Supplies Respiratory Medications Home Infusion (diabetes, ostomy, Remote Patient Monitoring Home Dialysis urological, wound care) Near Term Long Term Source: Management / Investor Presentation / January 2020 Page 17
Slide 18: Acquisition Overview
Acquisition Overview + McKesson Patient Care Solutions + Advanced Home Care
Slide 19: McKesson Patient Care Solutions
McKesson Patient Care Solutions Company Overview + Patient Care Solutions (PCS) was part of McKesson + PCS provides patients with wound care, ostomy, urology, Product Mix 1 Payor Mix 1 diabetes, incontinence, and breast pump supplies and equipment + Headquartered in Moon Township, PA (near Pittsburg
Slide 20: Advanced Home Care
Advanced Home Care Company Overview + Advanced Home Care (AHC) is currently a joint-venture of twelve regional healthcare systems—AdaptHealth is acquiring its HME business + AHC HME is a full-service home medical equipment provider offering Product Mix 1 Payor Mix 1 Oxygen, Sleep, HME, Enteral, and
Slide 21: Financial Supplement
Financial Supplement
Slide 22: Financial Projections
Financial Projections ($ In Millions) Net Revenue1 Adj. EBITDA3 $682.7 $162.0 $100.0 Acquisition Case $20.0 Acquisition Case $518.8 $123.3 $345.3 $84.4 $192.6 $582.7 $142.0 $174.3 $45.0 $33.1 2016A 2017A 2018A 2019E 2020E 2016A 2017A 2018A 2019E 2020E ✓ Revenue growth driven by organic growth as the
Slide 23: 2019E to 2020E Bridge – Base Case
2019E to 2020E Bridge – “Base Case” Adjusted EBITDA Adjusted EBITDA (1) Less Patient Equipment Capex (1) ($ in millions) ($ in millions) Note: “Base Case“ excludes acquisition projection of $100mm of revenue per year at 20% EBITDA margin and 10% EBITDA less Patient Equipment Capex margin. Charts are
Slide 24: Capital Structure
Capital Structure Debt Equity As of SPAC merger 9/30/2019 PF 1 transaction close 3 ($ in millions) Term Loan $246.3 Class A Shares 40.3mm Preferred Note $143.5 Class B Shares (legacy shareholders) 32.1mm Other Debt $1.7 72.4mm Less: Cash on Hand ($59.6) Shares held by Management * Net Debt $331.9 16
Slide 25: 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 2018A Net Income / (Loss) attributable to AdaptHealth Holdings LLC ($4.2) $9.7 $23.3 Plus: Income attributable to non-controlling interest 0.6 0.6 1.1 Plus: Interest
Slide 26: Thank You!
Thank You!