AHCO - NASDAQ

Good day, everyone, and welcome to today's AdaptHealth Second Quarter 2023 Earnings Release. At this time, all participants are on a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Today's speakers will be Richard Barasch, Chairman and Interim CEO of AdaptHealth; and Jason Clemens, Chief Financial Officer of AdaptHealth. Josh Parnes, President of AdaptHealth, will join Richard and Jason for the question-and-answer portion of this call. Before we begin, I'd like to remind everyone that statements included in this conference call and in the press release issued today 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 financial results for 2023 and beyond. Actual results could differ materially from those projected in forward-looking statements because of a number of risks and factors and uncertainties, which are discussed at length in the company's annual and quarterly SEC filings. AdaptHealth Corp. should have no obligation to update the information provided on this call to reflect such subsequent events. Additionally, on this morning's call, the company will reference certain financial measures such as EBITDA, adjusted EBITDA and free cash flow, all of which are non-GAAP financial measures. This morning's call is being recorded and a replay of the call will be available later today. I'm now pleased to introduce the Chairman and Interim CEO of AdaptHealth, Richard Barasch. Sir?

Good morning, everyone. Thank you for joining us today to discuss AdaptHealth's second quarter performance. To start our call today, I'd like to take a moment to welcome Crispin Teufel, who will be joining AdaptHealth on September 1 as our new Chief Executive Officer. Crispin brings many years of industry experience and a deep understanding of the markets in which we operate. His expertise and proven track record will be key to this organization's future success. We're excited to get him on board and look forward to you getting the chance to meet with him in the coming months. AdaptHealth is a full-service, nationwide provider of products and services that enable our patients to live their healthiest lives at home and in the community. We have nearly 11,000 employees, including nearly 1,000 health care professionals who work to bring these needed products for approximately 4 million patients. We know that we are crucial in the health care continuum, especially for post-acute care and management of chronic diseases like diabetes, OSA and COPD. Most of our devices are connected and generate lots of useful data to help manage these chronic conditions and reduce downstream costs. We are now in the process of figuring out how best to use that connectivity for the benefit of our patients and our payer partners. Turning now to the details of the quarter. I'm pleased to report solid second quarter results, driven by strength in our core sleep and respiratory businesses coupled with sequential improvement in our diabetes business and successful execution of cost savings initiatives. Most notably, our non-acquired revenue were 8.7% and our adjusted EBITDA increased 14% year-over-year. We're also quite pleased with our improved cash flow generation in the first half of the year. The highlight of the quarter was continued growth in our sleep and respiratory product lines, which represent more than half of our total revenue. Building on the robust first quarter, these products grew a combined 15% year-over-year in the second quarter. Going down, the performance in our sleep business was driven by strong market demand, both new starts and resupply as well as our improved ability to service this demand more efficiently. The investments we've made in this business line over the past year are now paying off. We have enough equipment on hand to satisfy demand, and we've improved our processes in new starts, especially in resupply, an area of great strength for AdaptHealth. Industry data shows that we are the clear leader in sleep and have gained market share over the past year. Our respiratory line of business had its strongest patient acquisition quarter since the fourth quarter of 2021. We hit our set up expectations that we're starting to see stabilization in the length of time patients are on oxygen and vents, which had decreased during the pandemic. Now turning to diabetes. After a very disappointing first quarter, we saw a modest rebound in our diabetes business in the second quarter. We acknowledge that we did not react swiftly enough to changing market dynamics and are committed to resuming growth in this crucial market. Over the past three months, we've done a deep dive into all aspects of our diabetes business and have emerged with a solid plan to achieve results that reflect the growing market for diabetes supplies, especially CGMs and pumps. This plan, building on our existing patient census, which is the highest in our history, gives us a solid foundation upon which to grow. I'm going to highlight two specific areas of focus in our plan to regain our momentum. First, we are going to be even more intentional to focus on our government business, where the market for CGMs and pumps is large and growing. We're encouraged by recent decisions by Medicare and other government payers to widen their coverage of CGMs as a result of the emphasis on the medical benefits of compliance. The government market is growing rapidly, and we are generally able to achieve pricing that takes into account inflationary pressures. We've emphasized to our vibrant sales force, the importance of government business, and have already seen meaningful impact. Government-sponsored payers now represent 77% of our CGM census, an increase of 900 basis points compared to last year and up 200 basis points from the first quarter. We anticipate this trend will continue over the course of the year. As to the commercial business, we plan to update contracts to enable us to increase access to our current and new CGM patients, including through the pharmacy channel. We see this as an essential part of the strategy to offer full and creative solutions for our payer partners and patients. Next, we are employing the scale and capability of the entire AdaptHealth team to rapidly improve the operations of our diabetes business. One example is creating synergy between the HME and diabetes sales forces take advantage of HME's national reach. Another is to use our world-class HME resupply operation to make it easier and more efficient for our diabetes patients to get their supplies, including through digital reordering. The diabetes line of business is crucial to the growth and strategic success of AdaptHealth. Sadly, diabetes continues to grow rapidly in our population and we intend to expand our reach and services to help our patients manage this chronic disease. More to come on this important topic in future reports. Subsequent to our earnings call in May, we announced a relationship with Humana to become the value-based provider of home medical equipment and supplies to their Medicare Advantage, HMO members in 33 states plus the District of Columbia. The program began on July 1, 2023, and we were working hard on the implementation of this transformative arrangement. Based on our patient-focused culture, we’ve committed to high levels of customer service, which is a sign of the alignment that we’ve established with Humana. This value-based contract marks a significant step toward highlighting our essential role in keeping our patients healthy in their homes. We think this is an important new area of focus for AdaptHealth, and we intend to pursue other similar arrangements. Like most businesses, we’ve been affected by increased labor and other costs. We are actively mitigating inflationary factors in several ways. First, as we have done in the past, we’re continuing to add and refine technology that reduces the costly administrative friction between our prescribers, patients and payers. Among the most important KPIs we review each week is the percentage of e-prescribed orders that we process, which has grown meaningfully over the past year. Another tangible result of technology and process improvement is in our RCM function, which as Jason will describe has led to significantly reduced DSOs and better collections. Building on these technology improvements, we’re also focused on additional cost saving opportunities. As you know, we were an active acquirer in prior years and are now focused on achieving the scale of a much larger business. As a result of this effort, we are confident that we will achieve the previously announced target of $25 million in cost savings and we’re continuing to examine our operations for areas of further improvement. I’ll now turn the call over to Jason Clemens, our CFO, to review the second quarter financials and full year guidance. Jason?

Thank you, Richard, and thanks to all for joining our call today. I want to reiterate Richard sediment about the strength in our core product lines and the opportunities ahead of us in diabetes. Let me begin by reviewing our second quarter results. Our revenue of $793.3 million increased 9.0%, and our non-acquired revenue increased 8.7% year-over-year. Our second quarter results were led by strength in our sleep and respiratory product categories, both of which were up double digits. Taking a closer look at each of these product categories, our total sleep revenue of $303 million increased 16% compared to a year ago, driven by PAP equipment setups and consistent resupply operations. Our PAP equipment patient census grew 41% year-on-year and our resupply orders are up 11%. Respiratory delivered another strong quarter with revenue of $154 million, an increase of 13% year-over-year. As mentioned, this was the strongest quarter of net patient census since the fourth quarter of 2021. Our diabetes revenue was up 2% over the prior year. The 13% year-over-year increase in CGM patient census was just enough to offset the expected decline in pump and pump supply orders. Further, the strength in our government census helped offset the channel mixed pressures in our commercial business, which strengthens our foundation for future growth. As we look forward to the second half of the year, we anticipate third quarter year-over-year growth to be in line with the second quarter and the fourth quarter to be somewhat higher. Our adjusted EBITDA was $171 million in the quarter, an increase of 14% compared to a year ago. This reflects an adjusted EBITDA margin of 21.6%, a full point increase year-over-year, primarily attributed to execution of our cost management program. Cash flow from operations in the second quarter was $86.3 million. As expected, Q2 CapEx was 10.4% of revenue compared to 10.6% a year ago, and 12% in Q1. For the first half, we generated free cash flow of $54.8 million, which gives us confidence in achieving our full year goal of between 3% and 4% of revenue. Now turning to the balance sheet. We ended the second quarter with $45.1 million in cash. DSOs of 41.2 days are trending in the right direction compared to 45.4 days a year ago and 42.7 days last quarter. We expect DSOs to remain at this level in the second half as we fully realize the benefits of refining our revenue cycle process and investments we’ve made in our technology and workflow. Our net leverage ratio at the end of the quarter was 3.54x down from 3.63x at the end of the first quarter. We were very pleased with Q2 results, but there is still a gap to make up from Q1 expectations, so we are updating full year revenue and adjusted EBITDA guidance as follows. Revenue of $3.16 billion to $3.20 billion, adjusted EBITDA of $650 million to $680 million. We are maintaining our expectations for total CapEx between 10% and 12% of revenue and free cash flow between 3% and 4% of revenue. I would like to provide a little insight into the assumptions that support our guidance. We expect Q3 revenue to increase just over 5.0% year-over-year. Keep in mind that Q3 2022 is a tougher comparable period as the PAP equipment supply chain eased considerably in the second half of 2022. We expect Q3 adjusted EBITDA margin to be in line with Q2. In terms of free cash flow, we continue to expect the third quarter to contribute modestly and the rest of our projected free cash flow will come in the fourth quarter. We are making steady progress and we’re pleased with where we stand today. We look forward to providing updates on our operational improvements and our Humana agreement as it ramps up in the second half of the year. With that, we will open the call for questions. Operator?

Thank you. [Operator Instructions] And our first question will come from Brian Tanquilut with Jefferies. Your line is open.

Good morning, guys. Congrats on the quarter. And Jason, thank you for all the color and the guidance. So maybe as we look past kind of like the normalization trend that we’re hopefully seeing through the rest of the year. How are you guys thinking about what the normalized growth rates should be for the diabetes business as all the moving parts click with the shift to government and the – what do you call it, the channel shift within commercial as well?

Sure. Brian, good morning. We would offer a few points of context. So first if you look back to our Capital Markets Day last September, our view was that by 2025, our diabetes product line would be delivering mid to upper single digit growth, and we still think that’s true. Now the path that we estimated back then versus today is a different one. We saw growth gliding down from mid-teens to low teens to kind of that final resting place, if you will. And in fact, what we’re seeing is trends and headwinds face us just sooner than we expected. I mean, pumps has been a continued pressure point. Also a big opportunity we think going forward, but a big pressure point with the OP 5 release with their tubeless technology. We estimated that this would be a $9 million to $10 million a quarter headwind over the course of 2023 as compared to prior year. We saw that in Q1. We again saw that in Q2, spot on at that level, and we believe that’ll continue for the course of the year. So what we’re guiding is, our view that we will grow through that with modest low-single-digit growth on each quarter for the balance of the year. We think we’ll add a couple of points in 2024 and then move back to that longer-term growth rate as the opportunities in front of us that we capitalize on them.

All right. Got it. And then as we think about the likely return of Philips potentially in the market in the next few months or so. How are you thinking about what that could do as I think about maybe 2024 in terms of potential margins and just incremental growth for the industry or even specifically for Adapt?

Sure, Brian. I’ll take the second part first. The reentry of Phillips to the marketplace, I think would be welcomed by all market participants. I think by providers, by distributors, by patients. If when they come back, we believe they will, but we continue to think it’s up to six months after the estimates that are out there on the Street, so we’re – in other words, we’re not counting on it. In terms of margins or growth, we’re at a point today that our supply chain is healthy. I mean, we’re getting the product we need when we need it to get on our patients with the consistent demand that we’ve seen in the sleep business. And we don’t think that more products really changes that. Now you can get into price and will that drive change within price? I mean, we think it’s logical to think so. But we’ll have to let that play out once there’s more availability on market. And we will enter those negotiations with the PAP manufacturers that we want to enter with.

Got it. Jason, if I might squeeze one last quick question. Just any way we should be thinking about the Humana contract. Obviously, big headline, big contract, big client, but how should we be thinking about the benefit of that? And I know you said it’ll be in the P&L beginning the back half of the year. But just as a whole, just to put some context around the contract. Thanks.

Sure, sure. So we’re very excited to be already rolling in our new Humana relationship. Again, it’s over 1 million patients that have come online that that we’re managing their DME needs across the product lines of sleep, respiratory, and HME. It excludes the diabetes product line and the supplies to the home product line. We think there’s opportunity there in the future, but this contract excludes those lines. So, when we report Q3, we should expect to see sequential growth in those three categories. I mean, that’s where the growth will come for these Humana patients. It’s early. We’re working through conversions just a heavy lift that we’re integrating at the moment. So we’re going to be very cautious on specific number expectations for the contract, but it is all fully baked inside of our guidance that we refresh this morning.

Awesome. Thank you.

Thank you. Our next question will come from Eric Coldwell with Baird. Your line is open.

Thanks very much. Good morning. So on – just one quick one on Humana, and then I have another set of questions. On the equipment buy-ins, if you will. What is the thought process? You maintained your cash flow, so I’m assuming it’s not a big deal. But what is the outlook for needing to go out and acquire equipment for the onboarding of the Humana patients? And then I have a follow-up. Thanks.

Sure. Good question, Eric. So yes, I’d first note that our CapEx as a percent of revenue for the quarter was within our expectations. We reported 10.4% of revenue that’s actually down a couple of bps over the second quarter of last year. And as expected, it’s down considerably from Q1 where we had reported our intention to load up on PAP, on respiratory, on other patient equipment. Some of that was invested to go after what we see as a very large and growing sleep market and to continue winning share. We believe we had as Richard mentioned. And then secondly was in preparation for this agreement. So, we’re confident that the revenue that will come online with Humana, that it won’t – the profile of that in terms of the CapEx need will be consistent with the rest of the business. So, in other words, we believe that our 11% midpoint for CapEx that we feel very good hitting at or below that that number for the year.

Got it. Thank you. My other question was about another initiative that Jason you’ve had internally, which is, as you’ve gone through system upgrades and consolidation of various activities in the company over the last couple of years, one area that I believe was still a bit behind was the processes, people, paper, manual activities going on in your warehouses. And I know you had an initiative to upgrade systems and invest in digitization and technology and those warehouses to improve your automation and process. So I’m curious if you can give us a status check on where you are with that and what’s left to come? Thanks.

Sure, Eric. So we’re happy to report, we went live last Tuesday. So this is a full integration with Oracle Cloud and the hardware and the tech and the warehouses that comes with it to create a full warehouse management system. We’ve had great success, of course, running the daily issues logs and everything else you’d expect that that come with these implementations. But what’s really exciting is, the data that we’ve now got at our fingertips on for each warehouse worker, the number of picks they’re running per hour and per day, we know specifically what they’re picking, we know specifically what’s patient returns, what’s coming back across our entire diabetes platform. So it’s only been a week, but it’s been a good week. We are targeting a handful of important of sites within the HME portfolio in Texas that we’re aiming to go live early Q4. And that work is underway. So the way to think about this from an efficiency standpoint, the AI embedded in Oracle on mins and maxes and ordering thresholds based on your demand plan that is all in process of getting turned on eliminating more than a fair amount of cost there. As well as squeezing the inventory that’s on the balance sheet, you’ll note a tick down in our inventory. We are charging our teams to continue to focus on run and turns faster and getting cash out of the balance sheet. And so we’ll report more to come on that. Finally, the ability to fully integrate and consolidate these sites is now unlocked. We’ve taken out a lot of locations. It’s part of our cost management program that I’m sure we’ll talk about later over the course of 2023. But this really gives us an ability to unlock that value now that we’ve got the technology turned on. So, in terms of returns or more cash, changes to our free cash flow estimates, think of this as 2024 money, if you will. So we’re spending the money this year to get the technology installed. But we do believe that our free cash generating power is going to increase as part of these efforts.

Thank you very much. Appreciate the answers.

Thank you. Our next question will come from Mathew Blackman with Stifel. Your line is open.

Good morning, everybody. Thanks for taking my questions. I’ve got two maybe to start on, on diabetes. Jason, just hoping for any insight you may have specifically on CGM volume trends, in particular with basal coverage now. Have you seen any step up in patient adoption post-reimbursement? And I guess a follow-up there, I think I heard you say 77% government payer mix in CGM now. What’s a reasonable ceiling for that metric? And then I’ve got one guidance follow-up.

Sure, Matt. Reasonable ceiling, I don’t know, probably halfway from here to 100 could be reasonable. I’d say in terms of – in terms of CGMs in general, I’d say that we’re very happy with the census growth. In this quarter, we hit a record census volume for diabetes and for CGM. Of course, our government book is growing faster. That’s quite intentional as Richard described in the opening remarks, harnessing the power of our 700 person strong sales force across the country to sell all products. I mean. That sounds easier than it is in terms of training, enabling, equipping, it’s a different sale. It’s a different sales cycle, but our teams are continuing to grow the cross-sell. And again, that cross-sell is pointed directly at the government business, which we think is for us, it’s good business, it’s strong, it’s healthy and it’s to your basal comment, it is growing. I think like Dexcom, it’s early. We won’t put a numbers on that. It’s just very, very early. We do think that TAM is somewhere between 3 million and up to 4 million patients of basal patients. We agree Medicare is open for it, and the commercials are well over 50% adoption there. But it’s really early innings and we haven’t nor will we include any expectations on basal in our guide for 2023.

All right. I appreciate that. And then just as we reflect the new revenue guidance in our models, how should we think about which segments revenues should move lower in? Is it isolated to any in particular? Or is it sort of broad based? Just any help on sort of segments?

Yes, sure. Sure, Matt. So across the product categories, I’d say firstly in diabetes, we saw very modest growth in Q2 at 2%. We think that’s about in line in Q3. We’re hopeful it’s up a touch. Could it be a point, could it be two maybe in Q4, that's what we're thinking. If you look at supplies to the home, you'll see that year-over-year growth has been low to mid-teens each quarter now for four quarters. The reason for that was the value-based arrangements that Josh executed and spoke about a year ago. Now as we enter Q3, we are lapping those arrangements. And so expect supplies to the home to come back down to a very low single-digit growth rate? Could it be two? Could it be three in that ballpark? And then thirdly, I'd note on the HME book of business, as we've reported previously, we have changed sales incentive to focus on e-prescribe, ordering that is absolutely working. As already prescribed, is up pretty considerably in DME. And with that comes just cleaner orders, cleaner claims, better margins in terms of processing and servicing. So that will give you a perspective on some of the lower growers, if you will, and then you round it out by continued performance, we think, in sleep and respiratory to round up the rest.

Really helpful. Thank you so much.

Thank you. Our next question will come from Pito Chickering with Deutsche Bank. Your line is open.

Hi there, guys. You’ve got Kieran Ryan on for Pito. Thanks for taking the question. Another solid quarter on the sleep side, I was just wondering, are you still seeing any of those issues on kind of the new start logistics side that is kind of limited the new starts despite record backlog? Or is that starting to work itself out at this point?

Yes. Good question. It has not just started to work itself out, but we're feeling very good about the movement of product. I'll tell you in the summertime, I mean, as usual, setups are a bit soft, folks on vacation, providers on vacation, holidays, things like that. So nothing out of the ordinary other than what we'd expect over the summer time here.

Got it. Thanks. And then on the 2Q margins, obviously, came in nicely ahead of your expectations. I think in 1Q, when you kind of guided to that just under 20%, you said that, that does – that did include the benefits from the cost savings program. So should we just read the upside as being pretty much purely related to the rebound in diabetes there?

I wouldn't say that the margin improvement is due to the pure diabetes rebound. I mean, keep in mind, the diabetes product lines come at the lowest margins across the product catalog, as we've reported several times. Really, what we're seeing is the strength in sleep and respiratory. I mean those products together, I mean, represent almost two-thirds of our business and they're performing well. They're healthy. It's all systems go, and that's really helping the margin improvement with addition of the cost management programs that we discussed.

Thank you.

Thank you. Our next question comes from Joanna Gajuk with Bank of America. Your line is open.

Good morning. Thanks so much for taking the question here. So I guess, first on the Humana contract. So I know it's early, right. It just started a little bit more than a month ago, July 1. But can you talk about how focus has been in terms of the transitions and of the one million patients, you're talking about – are these the vast majority that are new? And also with that, do you need additional infrastructure to support this contract, trying to get a sense of the margin profile of that business versus your kind of legacy business?

Sure, Joanna. A couple of infrastructure investments that we've made. It was important to us upon entering this new arrangement, this new relationship with Humana to really overclub it and invest in the customer service aspect. We've done that. We've stood up a dedicated onshore call center specific for these Humana patients. We have doubled down within our sales force. I mean the number of referral points that this arrangement opens up is considerable, lots of new referral points that, frankly, we haven't earned a referral from, in some cases, ever or in other cases, in a very long time. And so that's taking resource to crack open those doors and to start taking care of the patients in those provider groups. So that's really on the – in terms of the infrastructure side. I'd say, again, on CapEx, we discussed earlier, I think with Eric, that we're comfortable with our CapEx projections with our utilization projections in terms of servicing the contract. And then really, it's all about – again, that high touch taking care of patients, reporting new SLAs to Humana around operational metrics, turnaround times and the such, patient satisfaction is just paramount here. Of course, that helps the MA payers, as you know, with a variety of things, including reimbursement to get those patient satisfaction scores up. And that's what we're focused on doing.

If I may, I guess related question on the diabetes, right. So you're talking about the shift to the government business and it is a lower rate than commercial. So I assume a lower margin right there. So how should we think about this business going forward in terms of the margin profile? I just said it's traditionally being below the other products in your portfolio? And then will you adjust cost structure for the change? Or I guess if that's part of the program that you had already announced in terms of the cost savings in response to those changes in the diabetes business?

Yes, that's right, Joanna. There are some intermediate term, less than 12 months cost management focuses that the technology is enabling. Of course, we'll be happy to execute on that and increase margin profile. I'd say in general, the government book of business has been large at Adapt since we started in diabetes. Some of that was just the nature of the businesses we bought and their profiles focused heavily within the Type 2 diabetes space. I'm sorry, the Type 1. I'm mixing up the Type 1 diabetes space, which we all know is very heavily concentrated with DexCom products. The Type 2 space we are growing again, through our primary care sales force, the DME sales people that we've retrained and enabled to go after new business, we do expect to continue growth of what's already a very large government book of business, and we're thrilled to take that business. We're very pleased with the money and particularly with the free cash flow that these businesses generate for us. And so margin is in very good shape. This is more about growing through the pump headwinds that we've reported as well as growing through the payer mix trends that again, we've reported. I mean this is our plan to again grow through these things. And if we execute margin, we'll be just fine.

Thank you. And if I may, just for the last follow-up since you mentioned the government business and you've been, I guess, exposed to that in other parts of the portfolio. Just quickly outlook for Medicare rates and specifically competitive bidding and what the expectations are there, I mean, clearly CMS put the program on path when it comes to competitive bidding, but are you expecting any announcement later this year for a 2025 competitive bidding? And any kind of views in terms of new categories that will be included in there? Thank you.

Yes. Good question, Joanna. As you said, the CMS formally postpone competitive bidding. We don't believe that competitive bid will go away forever. Frankly, Adapt has benefited from these programs over the year. We think patients and providers and certainly the taxpayers have benefited from these programs. So we don't think that it will go away. Timing is very hard to predict on this. I mean, some context might be just the complexity in running the program. I mean, you've got hundreds and hundreds of MSAs all over the country with thousands and thousands of products. And what we believe is between 5,000 and 6,000 remaining providers in the space, the DME companies in the space. They'll accept essentially 10 bids, many more will bid. And so it's a big calculator down at CMS, I guess, that runs all the data through. But that administrative side is not a fast or easy process. And so in order to meet a 2025 go live, if you will, for another competitive bid program, things need to get rolling in terms of the bidding process and everything else. So that's more context, I mean we won't speculate on what will happen next. But we think we've positioned our business well regardless.

Thank you. [Operator Instructions] And our next question will come from Kevin Caliendo with UBS. Your line is open.

Thanks for taking my question. Richard, want to ask what – you were a month away from Crispin coming in and taking over as CEO. Maybe give us a little bit on the process and Crispin's background and sort of what you expect him to bring to the table when he starts in a month?

Kevin, thanks. Obviously, from Crispin's background, he brings a great deal of experience in the businesses that we are in. And we felt that it was very important to bring someone in who could hit the ground running to just help us get to be a better company, blocking and tackling, administrative – we're doing a lot of great things. He can help us further those. He's financially oriented. He came up through finance in his prior organization, and we expect that he will tighten down or even greatly improve financial processes over the next several months. So it's really – it's really a hire to make us a better company.

Do you think there's an opportunity with him in place to take share? Obviously, he was running one of your competitors, a lot of those relationships are at the personal level. Is that an opportunity set? Is that something we should be contemplating? Or is this coming in and this is more about executing X's and O's and the like?

Yes, it's about executing the X's and O's in our business. We are very respectful of Crispin's prior employment and we'll not do anything to jeopardize anything that he has ever done in that company from a confidentiality perspective. So we have to be on the greater side of caution there. But what we do expect is for him to help us be a better company.

Fair enough. That’s super helpful. Thank you.

Thank you. And at this time, there are no further questions in the queue. So I would like to turn it back over to management for any additional or closing remarks.

Thanks, everyone, for joining the call this morning. We look forward to talking to many of you to give you even some more detail on what was a very, very positive and encouraging quarter for AdaptHealth. Thank you very much.