FALSE000172525500017252552024-08-062024-08-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

August 6, 2024
Date of Report (date of earliest event reported)

AdaptHealth Corp.
(Exact name of registrant as specified in its charter)

Delaware001-3839982-3677704
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification Number)
220 West Germantown Pike, Suite 250, Plymouth Meeting, PA 19462
(Address of principal executive offices and zip code)
(610) 424-4515
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, par value $0.0001 per shareAHCOThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02 - Results of Operations and Financial Condition.

The following information is furnished pursuant to Regulation FD.

On August 6, 2024, AdaptHealth Corp. (the "Company") issued a press release (the “Press Release”) announcing financial results for the quarter ended June 30, 2024. A copy of the Press Release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing.

Item 9.01 - Financial Statements and Exhibits
(d)    Exhibits

Exhibit No.Description
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated: August 6, 2024



AdaptHealth Corp.
By:
/s/ Jason Clemens
Name:
Jason Clemens
Title:
Chief Financial Officer


Exhibit 99.1
adapthealthimg001a.jpg
FOR IMMEDIATE RELEASE
ADAPTHEALTH CORP. ANNOUNCES SECOND QUARTER 2024 RESULTS
PLYMOUTH MEETING, Pa. – August 6, 2024 - AdaptHealth Corp. (NASDAQ: AHCO) (“AdaptHealth” or the “Company”), a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment, medical supplies, and related services, announced today financial results for the second quarter ended June 30, 2024.
Second Quarter Results and Highlights

All comparisons are to the quarter ended June 30, 2023 unless otherwise stated.
•Net revenue was $806.0 million compared to $793.3 million, an increase of 1.6%.
•Net income attributable to AdaptHealth Corp. was $19.4 million compared to net income of $14.0 million, an increase of 39.0%.
•Adjusted EBITDA was $165.3 million compared to $171.0 million, a decrease of 3.3%.
•Cash flow from operations was $247.0 million year-to-date 2024, an increase from $226.6 million during the comparable period in 2023, and free cash flow was $77.9 million year-to-date 2024, an increase from $54.8 million during the comparable period in 2023.

Subsequent to June 30, 2024, the Company signed a definitive agreement for the disposition of certain non-core assets, and the transaction is expected to close in the third quarter of 2024.

Management Commentary

Suzanne Foster, Chief Executive Officer of AdaptHealth, stated, “I want to recognize the team for delivering another consistent quarter with results in line with our expectations for net revenue, Adjusted EBITDA, and free cash flow.”

Foster continued, “I joined this team because I believe in our purpose and the vital role we play in improving healthcare. I am optimistic about the road ahead and look forward to working as One Adapt, a unified team, to support our patients in their homes.”

Financial Outlook

The Company is updating previous financial guidance for fiscal year 2024 by adjusting the midpoint for net revenue to account for the disposition of certain non-core assets, however, the Company is maintaining the midpoint for Adjusted EBITDA, and increasing the midpoint for free cash flow.

•Net revenue of $3.255 billion to $3.315 billion from $3.25 billion to $3.35 billion;
•Adjusted EBITDA of $660 million to $700 million from $650 million to $710 million;
•Free cash flow of $160 million to $180 million from $150 million to $180 million
Conference Call
Management will host a teleconference today, Tuesday, August 6, 2024, at 8:30 am ET to discuss the results and business activities with analysts and investors.

Interested parties may participate in the call by dialing: 
•(800) 343-4136 (Domestic) or
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•(203) 518-9843 (International)

When prompted, reference Conference ID: AHCO2Q24
To access the Webcast, please go to the Company’s Investor Relations page at https://adapthealth.com/investorrelations/
Following the live call, a replay will be available for six months on the Company's website, www.adapthealth.com, under "Investor Relations."
About AdaptHealth Corp.

AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment (HME), medical supplies, and related services. The Company provides a full suite of medical products and solutions designed to help patients manage chronic conditions in the home, adapt to challenges in their activities of daily living, and thrive. Product and service offerings include (i) sleep therapy equipment, supplies, and related services (including CPAP and bi PAP services) to individuals suffering from obstructive sleep apnea, (ii) medical devices and supplies to patients for the treatment of diabetes (including continuous glucose monitors and insulin pumps), (iii) HME to patients discharged from acute care and other facilities, (iv) oxygen and related chronic therapy services in the home, and (v) other HME devices and supplies on behalf of chronically ill patients with wound care, urological, incontinence, ostomy and nutritional supply needs. The Company is proud to partner with an extensive and highly diversified network of referral sources, including acute care hospitals, sleep labs, pulmonologists, skilled nursing facilities, and clinics. AdaptHealth services beneficiaries of Medicare, Medicaid, and commercial insurance payors, reaching approximately 4.2 million patients annually in all 50 states through its network of approximately 670 locations in 47 states.
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, estimates and forecasts of revenue and other financial and performance metrics and projections of market opportunity and expectations and the Company’s acquisition pipeline. These statements are based on various assumptions and on the current expectations of AdaptHealth management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company.

These forward-looking statements are subject to a number of risks and uncertainties, including the outcome of judicial and administrative proceedings to which the Company may become a party or governmental investigations to which the Company may become subject that could interrupt or limit the Company’s operations, result in adverse judgments, settlements or fines and create negative publicity; changes in the Company’s customers’ preferences, prospects and the competitive conditions prevailing in the healthcare sector. A further description of such risks and uncertainties can be found in the Company’s filings with the Securities and Exchange Commission. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently knows or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause the Company’s assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
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Use of Non-GAAP Financial Information

The Company uses EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and free cash flow, which are financial measures that are not in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, to analyze its financial results and believes that they are useful to investors, as a supplement to U.S. GAAP measures. In addition, the Company’s ability to incur additional indebtedness and make investments under its existing credit agreement is governed, in part, by its ability to satisfy tests based on a variation of Adjusted EBITDA.

The Company believes Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in evaluating the Company’s financial performance. The Company uses Adjusted EBITDA as the profitability measure in its incentive compensation plans that have a profitability component and to evaluate acquisition opportunities, where it is most often used for purposes of contingent consideration arrangements.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity.

The Company uses free cash flow, which is a financial measure that is not in accordance with U.S. GAAP, in its operational and financial decision-making and believes free cash flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate the Company's competitors and to measure the ability of companies to service their debt. The Company's presentation of free cash flow should not be construed as a measure of liquidity or discretionary cash available to the Company to fund its cash needs, including investing in the growth of its business and meeting its obligations.

Free cash flow should not be considered as a measure of financial performance under U.S. GAAP. Accordingly, this key business metric has limitations as an analytical tool. It should not be considered as an alternative to any performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of AdaptHealth’s liquidity.
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ADAPTHEALTH CORP.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)June 30, 2024December 31, 2023
Assets
Current assets:
Cash$69,832 $77,132 
Accounts receivable437,077 388,910 
Inventory123,896 113,642 
Prepaid and other current assets55,623 69,338 
Total current assets686,428 649,022 
Equipment and other fixed assets, net496,136 495,101 
Operating lease right-of-use assets106,816 110,465 
Finance lease right-of-use assets37,660 31,962 
Goodwill2,711,880 2,724,958 
Identifiable intangible assets, net119,021 130,160 
Other assets19,418 21,128 
Deferred tax assets333,553 345,854 
Total Assets$4,510,912 $4,508,650 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses$446,560 $391,994 
Current portion of long-term debt40,000 53,368 
Current portion of operating lease obligations30,785 29,270 
Current portion of finance lease obligations11,587 9,122 
Contract liabilities36,245 38,570 
Warrant liability4,464 4,021 
Other liabilities26,383 10,654 
Total current liabilities596,024 536,999 
Long-term debt, less current portion2,040,451 2,094,614 
Operating lease obligations, less current portion80,249 85,529 
Finance lease obligations, less current portion25,933 22,746 
Other long-term liabilities275,602 302,093 
Total Liabilities3,018,259 3,041,981 
Total Stockholders' Equity1,492,653 1,466,669 
Total Liabilities and Stockholders' Equity$4,510,912 $4,508,650 
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ADAPTHEALTH CORP.
  Consolidated Statements of Operations (Unaudited)
 
 Three Months EndedSix Months Ended
June 30,June 30,
(in thousands, except share and per share data)2024202320242023
Net revenue$805,975 $793,286 $1,598,472 $1,537,912 
Costs and expenses:
Cost of net revenue678,973 673,397 1,354,666 1,328,793 
General and administrative expenses57,012 50,078 105,390 97,599 
Depreciation and amortization, excluding patient equipment depreciation11,395 15,549 22,760 31,081 
Goodwill impairment6,548 — 13,078 — 
Total costs and expenses753,928 739,024 1,495,894 1,457,473 
Operating income52,047 54,262 102,578 80,439 
Interest expense, net33,038 32,552 65,510 64,507 
Change in fair value of warrant liability (7,010)(812)443 (22,726)
Other (income) loss, net(1,760)2,082 3,345 3,257 
Income before income taxes27,779 20,440 33,280 35,401 
Income tax expense7,248 5,399 13,858 3,685 
Net income20,531 15,041 19,422 31,716 
Income attributable to noncontrolling interest1,096 1,064 2,121 2,032 
Net income attributable to AdaptHealth Corp.$19,435 $13,977 $17,301 $29,684 
Weighted average common shares outstanding - basic133,218134,295133,066134,409
Weighted average common shares outstanding - diluted136,029136,233135,698138,000
Basic net income per share$0.13 $0.10 $0.12 $0.20 
Diluted net income per share$0.13 $0.09 $0.12 $0.03 
 
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ADAPTHEALTH CORP.
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended
June 30,
(in thousands)20242023
Cash flows from operating activities:
Net income$19,422 $31,716 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including patient equipment depreciation184,038 193,109 
Goodwill impairment13,078 — 
Equity-based compensation9,751 12,763 
Change in fair value of warrant liability443 (22,726)
Reduction in the carrying amount of operating lease right-of-use assets17,770 16,794 
Reduction in the carrying amount of finance lease right-of-use assets4,793 3,007 
Deferred income tax expense12,103 1,413 
Change in fair value of interest rate swaps, net of reclassification adjustment(367)(987)
Amortization of deferred financing costs2,729 2,617 
Payment of contingent consideration from an acquisition(1,850)— 
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable(48,166)(5,011)
Inventory(10,254)13,808 
Prepaid and other assets16,225 10,199 
Operating lease obligations(17,887)(16,662)
Operating liabilities45,191 (13,473)
Net cash provided by operating activities247,019 226,567 
Cash flows from investing activities:
Purchases of equipment and other fixed assets(169,163)(171,730)
Payments for business acquisitions, net of cash acquired— (17,905)
Payments for cost method investments— (128)
Net cash used in investing activities(169,163)(189,763)
Cash flows from financing activities:
Proceeds from borrowings on lines of credit75,000 50,000 
Repayments on long-term debt and lines of credit(145,000)(65,000)
Repayments of finance lease obligations(4,890)(3,679)
Payments for shares purchased under share repurchase program— (9,224)
Proceeds from the exercise of stock options545 — 
Proceeds received in connection with employee stock purchase plan607 1,021 
Payments relating to the Tax Receivable Agreement(1,432)(3,202)
Distributions to noncontrolling interest(3,500)(2,500)
Payments for tax withholdings from restricted stock vesting and stock option exercises(1,399)(4,366)
Payments of contingent consideration and deferred purchase price from acquisitions(5,087)(1,000)
Net cash used in financing activities(85,156)(37,950)
Net decrease in cash(7,300)(1,146)
Cash at beginning of period77,132 46,272 
Cash at end of period$69,832 $45,126 
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ADAPTHEALTH CORP.
Non-GAAP Financial Measures
 
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

This press release presents AdaptHealth’s EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the three and six months ended June 30, 2024 and 2023.
AdaptHealth defines EBITDA as net income (loss) attributable to AdaptHealth Corp., plus net income (loss) attributable to noncontrolling interests, interest expense, net, income tax expense (benefit), and depreciation and amortization, including patient equipment depreciation.
AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus equity-based compensation expense, change in fair value of the warrant liability, goodwill impairment, litigation settlement expense (gain), and certain other non-recurring items of expense or income.
AdaptHealth defines Adjusted EBITDA Margin as Adjusted EBITDA (as defined above) as a percentage of net revenue.

The following unaudited table presents the reconciliation of net income attributable to AdaptHealth Corp. to EBITDA and Adjusted EBITDA, and the reconciliation of net income attributable to AdaptHealth Corp. as a percentage of net revenue to Adjusted EBITDA Margin, for the three months ended June 30, 2024 and 2023:

Three Months Ended June 30,
20242023
(Unaudited)
(in thousands, except percentages)DollarsRevenue PercentageDollarsRevenue Percentage
Net income attributable to AdaptHealth Corp.$19,4352.4%$13,9771.8%
Income attributable to noncontrolling interest1,0960.1%1,0640.1%
Interest expense, net33,0384.1%32,5524.1%
Income tax expense7,2480.9%5,3990.7%
Depreciation and amortization, including patient equipment depreciation91,16211.3%99,29612.5%
EBITDA151,97918.8%152,28819.2%
Equity-based compensation expense (a)5,2180.6%6,8470.9%
Change in fair value of warrant liability (b)(7,010)(0.9)%(812)(0.1)%
Goodwill impairment (c)6,5480.8%——%
Litigation settlement gain (d)(1,760)(0.2)%——%
Other non-recurring expenses, net (e)10,3401.3%12,7221.6%
Adjusted EBITDA$165,31520.5%$171,04521.6%
Adjusted EBITDA Margin20.5%21.6%
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents a non-cash gain for the change in the estimated fair value of the warrant liability.
(c)Represents a non-cash goodwill impairment charge relating to an immaterial business disposal during 2024.
(d)Represents a pre-tax gain for the change in fair value of shares of common stock of the Company that were issued in July 2024 following final court approval of the settlement of a previously disclosed securities class action lawsuit.
(e)The 2024 period consists of $5.8 million of consulting expenses associated with systems implementation activities, $1.6 million of expenses associated with litigation, $0.9 million write-down of assets, and
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ADAPTHEALTH CORP.
$2.0 million of other non-recurring expenses. The 2023 period consists of $2.5 million of expenses associated with litigation, $4.9 million of severance charges (of which $2.9 million relates to the separation of the Company's former CEO), $1.4 million of consulting expenses associated with systems implementation activities, $1.4 million of impairments of operating lease right-of-use assets and $2.5 million of other non-recurring expenses.
The following unaudited table presents the reconciliation of net income attributable to AdaptHealth Corp. to EBITDA and Adjusted EBITDA, and the reconciliation of net income attributable to AdaptHealth Corp. as a percentage of net revenue to Adjusted EBITDA Margin, for the six months ended June 30, 2024 and 2023:
Six Months Ended June 30,
20242023
(Unaudited)
(in thousands, except percentages)DollarsRevenue PercentageDollarsRevenue Percentage
Net income attributable to AdaptHealth Corp.$17,3011.1%$29,6841.9%
Income attributable to noncontrolling interest2,1210.1%2,0320.1%
Interest expense, net65,5104.1%64,5074.2%
Income tax expense13,8580.9%3,6850.3%
Depreciation and amortization, including patient equipment depreciation184,03811.5%193,10912.6%
EBITDA282,82817.7%293,01719.1%
Equity-based compensation expense (a)9,7510.6%12,7630.8%
Change in fair value of warrant liability (b)443—%(22,726)(1.5)%
Goodwill impairment (c)13,0780.8%——%
Litigation settlement expense (d)3,3450.2%——%
Other non-recurring expenses, net (e)14,3550.9%21,9551.4%
Adjusted EBITDA$323,80020.3%$305,00919.8%
Adjusted EBITDA Margin20.3%19.8%
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents a non-cash charge or gain for the change in the estimated fair value of the warrant liability.
(c)Represents non-cash goodwill impairment charges relating to an immaterial business disposal during 2024.
(d)Represents a $2.4 million charge for the change in fair value of shares of common stock of the Company that were issued in July 2024 following final court approval of the settlement of a previously disclosed securities class action lawsuit, as well as an expense of $0.9 million to settle a shareholder derivative complaint.
(e)The 2024 period consists of $6.8 million of consulting expenses associated with systems implementation activities, $2.8 million of expenses associated with litigation, $1.6 million write-down of assets, and $3.1 million of other non-recurring expenses. The 2023 period consists of $9.6 million of expenses associated with litigation, $4.9 million of severance charges (of which $2.9 million relates to the separation of the Company's former CEO), $2.6 million of consulting expenses associated with systems implementation activities, $1.4 million of impairments of operating lease right-of-use assets, and $3.4 million of other non-recurring expenses.
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ADAPTHEALTH CORP.
Free Cash Flow

This press release presents AdaptHealth’s free cash flow for the three and six months ended June 30, 2024 and 2023.

AdaptHealth defines free cash flow as net cash provided by operating activities less cash paid for purchases of equipment and other fixed assets.
 
The following unaudited table reconciles net cash provided by operating activities to the free cash flow measure for the three and six months ended June 30, 2024 and 2023:

Three Months EndedSix Months Ended
June 30,June 30,
2024202320242023
(in thousands)(Unaudited)
Net cash provided by operating activities$197,984 $86,319 $247,019 $226,567 
Purchases of equipment and other fixed assets(81,272)(82,610)(169,163)(171,730)
Free cash flow$116,712 $3,709 $77,856 $54,837 




Contacts
AdaptHealth Corp.
Jason Clemens, CFA
Chief Financial Officer
IR@adapthealth.com
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v3.24.2.u1
Cover
Aug. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 06, 2024
Entity Registrant Name AdaptHealth Corp.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38399
Entity Tax Identification Number 82-3677704
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19462
Entity Address, Address Line Two Suite 250
Entity Address, Address Line One 220 West Germantown Pike
Entity Address, City or Town Plymouth Meeting
City Area Code 610
Local Phone Number 424-4515
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.0001 per share
Trading Symbol AHCO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001725255
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