AdaptHealth (AHCO) investor relations material

Leadership and organizational updates

• New CFO with extensive public company operational experience has joined, aiming to enhance controls, processes, and structure.

• The finance team is set to mature further, leveraging predictive analytics and real-time visibility.

• Recent leadership changes are designed to support ongoing integration after 160 acquisitions.

Strategic portfolio management and divestitures

• Competitive bidding risk has been minimized by divesting most of the diabetes business, retaining only a small portion for enterprise and hospital accounts.

• The company has stopped proactively selling low-margin, competitive bid risk product lines, focusing on sleep, respiratory, and HME.

• $100 million EBITDA reduction from diabetes divestiture clarified; only $30 million of stranded cost remains post-close, expected to be resolved within two years.

Operational and contract developments

• The Medicare DMEPOS supplier enrollment moratorium expired, enabling expansion in California and allowing applications for new billing numbers at 40 locations.

• Kaiser contract onboarding led to higher-than-expected utilization and cost overruns, prompting ongoing discussions to adjust economics and service levels.

• Humana expansion in Texas and South Florida was executed smoothly, with learnings from Kaiser applied to future contracts.