AdaptHealth Corp
For the period ended Nov 5, 2024. Filed Nov 5, 2024.
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Nov 5, 2024 · Filed Nov 5, 2024
Contents
EX-99.1 · EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
This press release presents AdaptHealth’s EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the three and nine months ended September 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, loss on extinguishment of debt, litigation settlement expense, 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 September 30, 2024 and 2023:
| Three Months Ended September 30, | ||||
|---|---|---|---|---|
| 2024 · 2023 | ||||
| (Unaudited) | ||||
| (in thousands, except percentages) | Dollars | Revenue Percentage | Dollars | Revenue Percentage |
| Net income (loss) attributable to AdaptHealth Corp. | $22,859 | 2.8% | $(454,076) | (56.5)% |
| Income attributable to noncontrolling interest | 1,096 | 0.1% | 1,155 | 0.1% |
| Interest expense, net | 31,429 | 3.9% | 32,306 | 4.0% |
| Income tax expense (benefit) | 8,073 | 1.0% | (34,578) | (4.2)% |
| Depreciation and amortization, including patient equipment depreciation | 90,759 | 11.3% | 97,310 | 12.1% |
| EBITDA | 154,216 | 19.1% | (357,883) | (44.5)% |
| Equity-based compensation expense (a) | 863 | 0.1% | 4,521 | 0.5% |
| Change in fair value of warrant liability (b) | (2,243) | (0.3)% | (9,160) | (1.1)% |
| Goodwill impairment (c) | — | —% | 511,866 | 63.7% |
| Loss on extinguishment of debt (d) | 2,273 | 0.3% | — | —% |
| Other non-recurring expenses, net (e) | 9,148 | 1.2% | 11,823 | 1.4% |
| Adjusted EBITDA | $164,257 | 20.4% | $161,167 | 20.0% |
| Adjusted EBITDA Margin | 20.4% | 20.0% | ||
(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 as a result of the fair value of the Company’s reporting unit being less than its carrying value.
(d)Represents lender fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement.
(e)The 2024 period consists of $3.3 million of severance charges (primarily related to the separation of the Company's former President), $2.8 million of consulting expenses associated with systems implementation activities, $1.1 million write-down of assets, $0.5 million of expenses associated with litigation, and
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$1.5 million of other non-recurring expenses. The 2023 period consists of $2.9 million of expenses associated with litigation, $1.5 million of severance charges, $3.6 million of lease termination costs associated with a cost management program, $1.3 million of consulting expenses associated with systems implementation activities, 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 nine months ended September 30, 2024 and 2023:
| Nine Months Ended September 30, | |||||
|---|---|---|---|---|---|
| 2024 · 2023 | |||||
| (Unaudited) | |||||
| (in thousands, except percentages) · Dollars · Revenue Percentage · Dollars · Revenue Percentage | |||||
| Net income (loss) attributable to AdaptHealth Corp. | $40,160 | 1.7% | $(424,392) | (18.1)% | |
| Income attributable to noncontrolling interest | 3,217 | 0.1% | 3,187 | 0.1% | |
| Interest expense, net | 96,939 | 4.0% | 96,813 | 4.1% | |
| Income tax expense (benefit) | 21,931 | 0.9% | (30,893) | (1.3)% | |
| Depreciation and amortization, including patient equipment depreciation | 274,797 | 11.5% | 290,419 | 12.4% | |
| EBITDA | 437,044 | 18.2% | (64,866) | (2.8)% | |
| Equity-based compensation expense (a) | 10,614 | 0.4% | 17,284 | 0.7% | |
| Change in fair value of warrant liability (b) | (1,800) | (0.1)% | (31,886) | (1.4)% | |
| Goodwill impairment (c) | 13,078 | 0.5% | 511,866 | 21.9% | |
| Loss on extinguishment of debt (d) | 2,273 | 0.1% | — | —% | |
| Litigation settlement expense (e) | 3,345 | 0.1% | — | —% | |
| Other non-recurring expenses, net (f) | 23,503 | 1.1% | 33,778 | 1.5% | |
| Adjusted EBITDA | $488,057 | 20.3% | $466,176 | 19.9% | |
| Adjusted EBITDA Margin | 20.3% | 19.9% | |||
(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)The 2024 period includes non-cash goodwill impairment charges relating to the disposition of certain immaterial custom rehab technology assets. The 2023 period includes a non-cash goodwill impairment charge as a result of the fair value of the Company’s reporting unit being less than it's carrying value.
(d)Represents lender fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement.
(e)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.
(f)The 2024 period consists of $9.7 million of consulting expenses associated with systems implementation activities, $3.3 million of severance charges (primarily related to the separation of the Company's former President), $3.3 million of expenses associated with litigation, $2.7 million write-down of assets, and $4.5 million of other non-recurring expenses. The 2023 period consists of $12.5 million of expenses associated with litigation, $6.3 million of severance charges (of which $2.9 million related to the separation of the Company's former CEO), $4.1 million of lease termination costs associated with a cost management program, $3.9 million of consulting expenses associated with systems implementation activities, $0.9 million of net impairments of operating lease right-of-use assets, and $6.1 million of other non-recurring expenses.
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