AdaptHealth Corp.

Hello and welcome to the ADAPT Health Corp. Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Chris Joyce, General Counsel. Please go ahead. Thank you, Kevin.

I'd like to welcome everyone to Adapt Health Corp.'s earnings conference call for the quarter ended September 30, 2020. Everyone should have received a copy of our earnings release earlier this morning. If not, I'd like to highlight that the earnings release, as well as a supplemental slide presentation regarding Q3 2020 results, is posted on our investor relations page. In a moment, we'll have some prepared remarks from Luke McGee, Chief Executive Officer, Josh Parnas, President, and Jason Clemens, Chief Financial Officer. will then open the call for questions. Before we start, I'd like to remind everyone that statements included in this conference call and in our earnings release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements include, but are not limited to, comments regarding our financial results for 2020 and beyond. Actual results could differ materially from those projected in such forward-looking statements because of a number of risk factors and uncertainties. which are discussed in our annual and quarterly FTC files. ADAPT Health Corp. shall have no obligation to update the information provided on this call to reflect such subsequent events. Additionally, on this morning's call, we'll reference certain financial measures such as EBITDA and adjusted EBITDA which are non-GAAP financial measures. A table providing supplemental information on EBITDA and adjusted EBITDA is included in today's first quarter earnings release. This morning's call is being recorded and a replay of the call will be available later today. I'm now pleased to introduce our Chief Executive Officer, Luke McGee.

Thanks, Chris, and thanks everyone for joining the call. Before I get to my remarks on the third quarter, I would like to acknowledge the tremendous efforts of AdaptHealth's frontline brand staff, clinical teams and delivery drivers who have played such an important role in AdaptHealth's continued service of our patients' health needs during these extraordinary times. Throughout the last eight months, our priorities have been and will continue to be the health and well-being of our patients and our workforce. I am incredibly proud of the entire AdaptHealth team and how each and every team member has stepped up to help those in need throughout the COVID-19 crisis. We ended 2019 as a fast-growing and profitable home medical equipment company with a small medical supplies business. With acquisitions in 2020, we have not only accelerated the growth of our home medical equipment business, have added a large and growing supplies business with a concentration in advanced diabetes supplies and management. We continue to be active acquirers of traditional HME businesses in the third quarter. When we acquired the HME assets of Advanced Home Care and Healthline Medical in March, we noted that there would be merit to adding additional density in the Southeast and Southwest. To that end, we acquired Family Medical, a $40 million revenue HME in Eastern North Carolina in mid-August, and close on another acquisition in Texas in early October. These additions add important scale and high growth geographies. We also made several smaller HME acquisitions in the Mid-Atlantic, Midwest and New England during the quarter. We are excited about the key operational leadership from these acquired companies and have retained many as leaders within AdaptHealth. In diabetes, we've used Solara as a platform on which we can grow a much larger national diabetes distribution and management business. We are excited about the continued market growth in continuous glucose monitors and insulin pumps and believe adoption rates will accelerate. Recently, we closed our first diabetes add-on acquisitions with the purchase of Diabetes Supply Center of the Midlands and Pinnacle Medical Solutions. These acquisitions should add $85 to $90 million to diabetes revenue in 2021. Our entry into the diabetes supplies and management space, along with our incumbency in the sleep disorder space, gives us the ability to generate useful real-time information about the health of our patients, particularly those with chronic conditions. This is a high priority for ADAPT Health as we evolve from a provider of equipment and supplies to a more complete connected healthcare solutions provider. We have an active M&A pipeline and plan to continue to be selectively acquisitive as we identify opportunities that deliver financial results in accordance with our disciplined approach while also furthering our strategic goals. Although our pipeline is robust, We are not including future acquisitions in our guidance for the remainder of 2020 or for 2021. On the regulatory front, we received positive news from CMS last week in regards to the Medicare Competitive Bid Program. As a refresher, the Round 2021 Competitive Bid Program was originally scheduled to be effective on January 1st, 2021 and encompassed 16 bid categories. On Tuesday of last week, CMS announced they would be proceeding with only two product categories, off-the-shelf back and e-braces. Although not entirely clear and subject to change, we interpret this announcement to mean a delay in the competitive bid program for any other categories until at least 2024. Additionally, in the proposed rule, CMS has indicated that they intend to make the higher blended rates in rural territories permanent, which is a welcome development. We await further guidance from CMS on whether they will be providing inflation increases for formerly competitive bid products and territories. We believe these changes to the competitive bid program and roll rates are a positive, and we expect the rate changes for the off-the-shelf back-and-e-races to be immaterial to Adapt Health. The proposed CMS rule also affirmed Medicare Part B coverage for continuous glucose monitors and expanded the universe of covered CGM devices. Although the vast majority of CGMs that we currently distribute have already been covered under Part B, we view the affirmation as positive. Now, I'd like to turn the call over to Josh Barnas, our president, to discuss our innovation activities.