Business Wire | Aug 5, 2021 06:30AM EDT

AdaptHealth Corp. Announces Second Quarter 2021 Financial Results

Aug. 05, 2021

PLYMOUTH MEETING, Pa.--(BUSINESS WIRE)--Aug. 05, 2021--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, 2021.

Highlights

* In the second quarter, AdaptHealth delivered its highest quarterly net revenue and adjusted EBITDA as a public company. * AdaptHealth completed four acquisitions during the quarter, including the previously announced acquisition of New England-based Spiro Health Services, a provider of home medical equipment and supplies, and Healthy Living Medical Supplies, a Michigan-based diabetes management business. * AdaptHealth completed six additional acquisitions following the quarter, expanding HME operations in Kentucky, Ohio, West Virginia, New Jersey, New York, South Carolina, and Florida. * To date, the Company has acquired over $300 million of annualized revenue in 2021, incremental to AeroCare.

Second Quarter Results

* Net revenue was $617.0 million, compared to $232.1 million in the second quarter of 2020, a 166% increase. * Organic growth for the second quarter was 10.1%. * Net income attributable to AdaptHealth Corp. was $79.1 million, or $0.12 per diluted share, compared to $4.5 million, or $0.08 per diluted share, in the second quarter of 2020. * Adjusted EBITDA was $147.4 million, compared to $42.6 million in the second quarter of 2020, a 246% increase. * Adjusted EBITDA less Patient Equipment Capex was $98.9 million, compared to $30.6 million in the second quarter of 2020, a 223% increase.

Increased Guidance

Based on current business and market trends, the Company is increasing its previously issued financial guidance for fiscal year 2021 as follows:

* Net revenue of $2.38 billion to $2.48 billion, up from prior guidance of $2.22 billion to $2.39 billion; * Adjusted EBITDA of $555 million to $580 million, up from prior guidance of $525 million to $565 million; and * Adjusted EBITDA less Patient Equipment Capex of $360 million to $375 million, up from prior guidance of $330 million to $360 million.

Management Commentary

Steve Griggs, Chief Executive Officer, commented, "We are very pleased with our financial results this quarter which were driven by the outstanding efforts of our combined team. Our results were largely driven by a full quarter of AeroCare and realization of integration synergies. Our business continues to grow organically as well as through strategic acquisitions in key markets which complement our national platform. In the second quarter we acquired several excellent businesses including Spiro Health Services, a provider of home medical equipment and supplies, and Healthy Living Medical Supplies, a provider of continuous glucose monitors and insulin pumps which strategically expands our diabetes footprint in the Midwest."

Mr. Griggs continued, "It has been six months since the acquisition of AeroCare, and we have already achieved many of the ambitious goals we set out to accomplish including improving patient access, patient experience, and clinical outcomes. With these goals in mind, we continue to execute on our strategy of organic growth, improving operations, and closing accretive acquisitions."

Josh Parnes, President, commented, "We have made great progress towards our strategic roadmap within operational technologies and chronic disease management to enhance our overall business. As an example, we are very pleased with the results of our e-prescribe technology in diabetes which has improved patient and provider satisfaction through reduced cycle time. While we are very excited in the results we've already seen, we're even more optimistic about our continued transformation journey towards improving patient outcomes and reducing the overall cost of care."

Conference Call

Management will host a conference at 8:30 am ET today to discuss the results and business activities. Interested parties may participate in the call by dialing:

* (877) 423-9820 (Domestic) or * (201) 493-6749 (International)

Webcast registration: Click Here

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, medical supplies, and related services. AdaptHealth provides a full suite of medical products and solutions designed to help patients manage chronic conditions in the home, adapt to life and thrive. Product and services 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) home medical equipment (HME) to patients discharged from acute care and other facilities, (iv) oxygen and related chronic therapy services in the home, and (v) other HME medical 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. AdaptHealth services approximately 3.3 million patients annually in all 50 states through its network of 678 locations in 47 states. Learn more at www.adapthealth.com.

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 clients' preferences, prospects and the competitive conditions prevailing in the healthcare sector; and the impact of the recent coronavirus (COVID-19) pandemic and the Company's response to it. 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.

Use of Non-GAAP Financial Information and Financial Guidance

This release contains non-GAAP financial guidance, which is adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These non-GAAP items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of future operating results. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods.

The Company uses EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex, which are financial measures that are not prepared 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 less Patient Equipment Capex.

The Company believes Adjusted EBITDA less Patient Equipment Capex is useful to investors in evaluating the Company's financial performance. The Company's business requires significant investment in equipment purchases to maintain its patient equipment inventory. Some equipment title transfers to patients' ownership after a prescribed number of fixed monthly payments. Equipment that does not transfer wears out or often times is not recovered after a patient's use of the equipment terminates. The Company uses this metric 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. In addition, the Company's debt agreements contain covenants that use a variation of Adjusted EBITDA less Patient Equipment Capex for purposes of determining debt covenant compliance. For purposes of this metric, patient equipment capital expenditure is measured as the value of the patient equipment received during the accounting period without regard to whether the equipment is purchased or financed through lease transactions.

EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex 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.

There is no reliable or reasonably estimable comparable GAAP measure for the Company's non-GAAP financial guidance because the Company is not able to reliably predict the impact of certain items, including equity-based compensation expense, transaction costs, changes in fair value of both the contingent consideration common shares liability and the warrant liability, and other non-recurring (income) expense in full year 2021. As a result, reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is not available without unreasonable effort. In addition, the Company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. The variability of the specified items may have a significant and unpredictable impact on the Company's future GAAP results.

In addition, the Company's non-GAAP financial guidance in this release excludes the impact of any potential additional future strategic acquisitions and any specified items that have not yet been identified and quantified. The guidance also excludes macro-economic effects due to the COVID-19 pandemic that are not yet quantifiable. The financial guidance is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release.

ADAPTHEALTH CORP.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands) June 30, December 31, 2021 2020AssetsCurrent assets: Cash and cash equivalents $ 178,189 $ 99,962

Accounts receivable 302,127 171,065

Inventory 81,507 58,783

Prepaid and other current 29,046 33,441 assets Total current 590,869 363,251 assets Equipment and other fixed assets, net 309,071 110,468

Goodwill 3,231,200 998,810

Identifiable intangible assets, 233,630 116,061 net Other assets 19,344 16,483

Deferred tax asset 303,551 208,399

Total assets $ 4,687,665 $ 1,813,472

Liabilities and Stockholders' EquityCurrentliabilities: Accounts payable and accrued expenses 350,714 254,212

Current portion of capital lease 23,919 22,282 obligations Current portion of long-term 96,750 8,146 debt Contract liabilities 24,872 11,043

Other 83,861 89,524 liabilities Contingent consideration common shares 25,758 36,846 liability Total current 605,874 422,053 liabilities Long-term debt, less current 1,776,326 776,568 portion Other long-term 317,464 186,470 liabilities Long-term portion of contingent consideration 20,675 33,631 common shares liability Warrant liability 73,283 113,905

Total 2,793,622 1,532,627 liabilities Total Stockholders' 1,894,043 280,845 Equity Total Liabilities and $ 4,687,665 $ 1,813,472 Stockholders' EquityADAPTHEALTH CORP.

Consolidated Statements of Operations (Unaudited)

Three Months EndedSix Months Ended(in thousands, except per share data)June 30,June 30,2021

2020

2021

2020

Net revenue$617,017

$232,116

$1,099,136

$423,555

Costs and expenses:Cost of net revenue490,720

198,418

887,418

366,048

General and administrative expenses42,946

17,092

99,578

31,439

Depreciation and amortization, excluding patient equipment17,944

1,036

31,324

2,278

Total costs and expenses551,610

216,546

1,018,320

399,765

Operating income65,407

15,570

80,816

23,790

Interest expense23,147

7,482

45,332

15,420

Loss on extinguishment of debt, net7,736

-

11,949

-

Change in fair value of contingent consideration common shares liability(22,079)

(42)

(24,044)

16,325

Change in fair value of warrant liability(37,454)

(654)

(40,622)

35,446

Other loss (income), net1,669

(900)

1,150

(1,991)

Income (loss) before income taxes92,388

9,684

87,051

(41,410)

Income tax expense12,330

1,826

10,635

185

Net income (loss)80,058

7,858

76,416

(41,595)

Income (loss) attributable to noncontrolling interests951

3,388

1,275

(11,514)

Net income (loss) attributable to AdaptHealth Corp.$79,107

$4,470

$75,141

$(30,081)

Weighted average common shares outstanding - basic129,664

44,508

120,438

43,242

Weighted average common shares outstanding - diluted136,582

47,834

127,720

43,242

Basic net income (loss) per share$0.56

$0.10

$0.56

$(0.70)

Diluted net income (loss) per share$0.12

$0.08

$0.06

$(0.70)

ADAPTHEALTH CORP.

Consolidated Statements of Operations (Unaudited)

Three Months Ended Six Months Ended(in thousands, except per June 30, June 30,share data) 2021 2020 2021 2020

Net revenue $ 617,017 $ 232,116 $ 1,099,136 $ 423,555

Costs and expenses:Cost of net revenue 490,720 198,418 887,418 366,048

General and administrative 42,946 17,092 99,578 31,439expensesDepreciation and amortization, 17,944 1,036 31,324 2,278excluding patient equipment Total costs and expenses 551,610 216,546 1,018,320 399,765

Operating income 65,407 15,570 80,816 23,790

Interest expense 23,147 7,482 45,332 15,420

Loss on extinguishment of 7,736 - 11,949 -debt, netChange in fair value of (22,079) (42) (24,044) 16,325contingent considerationcommon shares liabilityChange in fair value of (37,454) (654) (40,622) 35,446warrant liabilityOther loss (income), net 1,669 (900) 1,150 (1,991)

Income (loss) before income 92,388 9,684 87,051 (41,410) taxesIncome tax expense 12,330 1,826 10,635 185

Net income (loss) 80,058 7,858 76,416 (41,595)

Income (loss) attributable to 951 3,388 1,275 (11,514)noncontrolling interests Net income (loss) 79,107 4,470 75,141 (30,081) attributable to AdaptHealth $ $ $ $ Corp. Weighted average common shares 129,664 44,508 120,438 43,242outstanding - basicWeighted average common shares 136,582 47,834 127,720 43,242outstanding - diluted Basic net income (loss) per $ 0.56 $ 0.10 $ 0.56 $ (0.70)shareDiluted net income (loss) per $ 0.12 $ 0.08 $ 0.06 $ (0.70)shareADAPTHEALTH CORP.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)Six Months Ended June 30,2021

2020

Cash flows from operating activities:Net income (loss)$76,416

$(41,595)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation, including patient equipment depreciation86,768

35,114

Equity-based compensation16,029

5,467

Change in fair value of contingent consideration common shares liability(24,044)

16,325

Change in fair value of warrant liability(40,622)

35,446

Deferred income tax expense (income)6,544

(1,613)

Change in fair value of interest rate swaps, net of reclassification adjustment(1,443)

(1,415)

Change in fair value of contingent consideration255

(2,900)

Payment of contingent consideration in connection with an acquisition-

(1,000)

Amortization of intangible assets24,231

-

Amortization of deferred financing costs2,306

783

Imputed interest expense173

-

Write-off of deferred financing costs3,495

-

Loss on extinguishment of debt from prepayment penalty8,454

-

Gain on sale of investment-

(591)

Changes in operating assets and liabilities, net of effects from acquisitions:Accounts receivable(4,608)

(20,506)

Inventory15,841

(6,792)

Prepaid and other assets8,678

3,603

Accounts payable and accrued expenses and other current liabilities(30,849)

90,682

Net cash provided by operating activities147,624

111,008

Cash flows from investing activities:Payments for business acquisitions, net of cash acquired(1,292,631)

(107,463)

Purchases of equipment and other fixed assets(79,396)

(10,915)

Payments for investments in cost method companies-

(1,000)

Proceeds from sale of investment-

2,046

Net cash used in investing activities(1,372,027)

(117,332)

Cash flows from financing activities:Proceeds from borrowings on long-term debt and lines of credit1,070,000

70,000

Repayments on long-term debt and lines of credit(470,521)

(21,641)

Proceeds from the issuance of Class A Common Stock278,850

-

Proceeds from the issuance of senior unsecured notes500,000

-

Proceeds from exercise of warrants-

11,883

Proceeds from exercise of stock options2,300

-

Payments on capital leases(19,767)

(19,409)

Payments for equity issuance costs(13,832)

-

Payments of deferred financing costs(18,039)

-

Proceeds received in connection with Employee Stock Purchase Plan314

-

Payments for tax withholdings from equity-based compensation activity(810)

-

Distributions to noncontrolling interests(1,070)

(800)

Payment of contingent consideration in connection with acquisitions(13,396)

-

Payment of deferred purchase price in connection with acquisitions(2,945)

-

Payments for debt prepayment penalties(8,454)

-

Net cash provided by financing activities1,302,630

40,033

Net increase in cash and cash equivalents78,227

33,709

Cash and cash equivalents at beginning of period99,962

76,878

Cash and cash equivalents at end of period$178,189

$110,587

Non-GAAP Financial Measures

This press release presents AdaptHealth's EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three and six months ended June 30, 2021 and 2020.

AdaptHealth defines EBITDA as net income (loss) attributable to AdaptHealth Corp., plus net income (loss) attributable to noncontrolling interests, interest expense (income), income tax expense (benefit), and depreciation and amortization.

AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus loss on extinguishment of debt, equity?based compensation expense, transaction costs, severance, change in fair value of the contingent consideration common shares liability, change in fair value of the warrant liability, and non-recurring items of expense (income).

AdaptHealth defines Adjusted EBITDA less Patient Equipment Capex as Adjusted EBITDA (as defined above) less patient equipment acquired during the period without regard to whether the equipment was purchased or financed through lease transactions.

The following unaudited table presents the reconciliation of net loss attributable to AdaptHealth Corp. to EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three and six months ended June 30, 2021 and 2020:

ADAPTHEALTH CORP.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands) Six Months Ended June 30, 2021 2020

Cash flows from operating activities:Net income (loss) $ 76,416 $ (41,595)

Adjustments to reconcile net income (loss) to netcash provided by operating activities:Depreciation, including patient equipment 86,768 35,114depreciationEquity-based compensation 16,029 5,467

Change in fair value of contingent consideration (24,044) 16,325common shares liabilityChange in fair value of warrant liability (40,622) 35,446

Deferred income tax expense (income) 6,544 (1,613)

Change in fair value of interest rate swaps, net of (1,443) (1,415)reclassification adjustmentChange in fair value of contingent consideration 255 (2,900)

Payment of contingent consideration in connection - (1,000)with an acquisitionAmortization of intangible assets 24,231 -

Amortization of deferred financing costs 2,306 783

Imputed interest expense 173 -

Write-off of deferred financing costs 3,495 -

Loss on extinguishment of debt from prepayment 8,454 -penaltyGain on sale of investment - (591)

Changes in operating assets and liabilities, net ofeffects from acquisitions:Accounts receivable (4,608) (20,506)

Inventory 15,841 (6,792)

Prepaid and other assets 8,678 3,603

Accounts payable and accrued expenses and other (30,849) 90,682current liabilitiesNet cash provided by operating activities 147,624 111,008

Cash flows from investing activities:Payments for business acquisitions, net of cash (1,292,631) (107,463)acquiredPurchases of equipment and other fixed assets (79,396) (10,915)

Payments for investments in cost method companies - (1,000)

Proceeds from sale of investment - 2,046

Net cash used in investing activities (1,372,027) (117,332)

Cash flows from financing activities:Proceeds from borrowings on long-term debt and 1,070,000 70,000lines of creditRepayments on long-term debt and lines of credit (470,521) (21,641)

Proceeds from the issuance of Class A Common Stock 278,850 -

Proceeds from the issuance of senior unsecured 500,000 -notesProceeds from exercise of warrants - 11,883

Proceeds from exercise of stock options 2,300 -

Payments on capital leases (19,767) (19,409)

Payments for equity issuance costs (13,832) -

Payments of deferred financing costs (18,039) -

Proceeds received in connection with Employee Stock 314 -Purchase PlanPayments for tax withholdings from equity-based (810) -compensation activityDistributions to noncontrolling interests (1,070) (800)

Payment of contingent consideration in connection (13,396) -with acquisitionsPayment of deferred purchase price in connection (2,945) -with acquisitionsPayments for debt prepayment penalties (8,454) -

Net cash provided by financing activities 1,302,630 40,033

Net increase in cash and cash equivalents 78,227 33,709

Cash and cash equivalents at beginning of period 99,962 76,878

Cash and cash equivalents at end of period $ 178,189 $ 110,587

Non-GAAP Financial Measures

This press release presents AdaptHealth's EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three and six months ended June 30, 2021 and 2020.

AdaptHealth defines EBITDA as net income (loss) attributable to AdaptHealth Corp., plus net income (loss) attributable to noncontrolling interests, interest expense (income), income tax expense (benefit), and depreciation and amortization.

AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus loss on extinguishment of debt, equity?based compensation expense, transaction costs, severance, change in fair value of the contingent consideration common shares liability, change in fair value of the warrant liability, and non-recurring items of expense (income).

AdaptHealth defines Adjusted EBITDA less Patient Equipment Capex as Adjusted EBITDA (as defined above) less patient equipment acquired during the period without regard to whether the equipment was purchased or financed through lease transactions.

The following unaudited table presents the reconciliation of net loss attributable to AdaptHealth Corp. to EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three and six months ended June 30, 2021 and 2020:

Three Months Ended Six Months Ended

(in thousands) June 30, June 30, 2021 2020 2021 2020

Net income(loss) 4,470 (30,081 )attributable $ 79,107 $ $ 75,141 $to AdaptHealthCorp.Income (loss)attributable 3,388 (11,514 )to 951 1,275 noncontrollinginterestsInterest 7,482 15,420 expense, net 23,147 45,332

Income tax 1,826 expense 12,330 10,635 185

Depreciationandamortization, 18,374 35,114 including 63,793 110,999 patientequipmentdepreciation 35,540 9,124 EBITDA 179,328 243,382

Loss on extinguishment 7,736 - 11,949 -of debt (a)Equity-based 3,244 5,467 compensation 7,447 16,029 expense (b)Transaction 3,541 6,399 costs (c) 8,100 39,954

1,905 2,324 Severance (d) 594 1,533

Change in fairvalue of contingent (22,079 ) (42 ) (24,044 ) 16,325 considerationcommon sharesliability (e)Change in fair value of (37,454 ) (654 ) (40,622 ) 35,446 warrantliability (f)Other ) (1,991 )non-recurring 3,719 (900 3,385 income (g)Adjusted 42,634 73,094 EBITDA 147,391 251,566

Less: Patient ) (12,068 ) ) (25,035 )equipment (48,525 (90,783 capex (h)AdjustedEBITDA less 30,566 48,059 Patient $ 98,866 $ $ 160,783 $EquipmentCapex (a) Represents write offs of unamortized deferred financing costs related to refinancing of debt and pre-payment penalties for early debt payoff. (b) Represents equity-based compensation expense for awards granted to employees and non-employee directors. The higher expense in the 2021 period is due to overall increased equity compensation grant activity in that period, as well as expense resulting from accelerated vesting of certain awards in that period, including accelerated vesting of certain awards in connection with the separation of the Company's former Co-CEO. (c) Represents transaction costs related to acquisitions. (d) Represents severance costs related to acquisition integration and internal AdaptHealth restructuring and workforce reduction activities. (e) Represents a non-cash charge or gain for the change in the estimated fair value of the contingent consideration common shares liability. (f) Represents a non-cash charge or gain for the change in the estimated fair value of the warrant liability. (g) The 2021 year-to-date period includes $1.5 million of expenses related to legal and other costs associated with the separation of the Company's former Co-CEO, $0.9 million of expenses associated with legal settlements for employee and other matters, $1.0 million of expenses associated with lease terminations, a $0.3 million charge for the increase in the fair value of a contingent consideration liability related to an acquisition, and $0.2 million of other non-recurring charges, offset by a gain of $0.5 million for the receipt of earnout proceeds in connection with the sale of an investment. The 2020 year-to-date period includes $2.9 million of reductions in the fair value of contingent consideration liabilities related to acquisitions, a $0.6 million gain related to the sale of an investment, offset by a $1.5 million expense related to a transition services agreement executed in connection with an acquisition completed in 2020. (h) Represents the value of the patient equipment obtained during the respective period without regard to whether the equipment is purchased or financed through lease transactions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005529/en/

CONTACT: AdaptHealth Corp. Jason Clemens, CFA Chief Financial Officer jclemens@adapthealth.com

CONTACT: Vice President, Marketing Brittany Lett (646) 394-9207 blett@adapthealth.com

CONTACT: The Equity Group Inc. Devin Sullivan Senior Vice President (212) 836-9608 dsullivan@equityny.com

CONTACT: Kalle Ahl, CFA Vice President (212) 836-9614 kahl@equityny.com