“We delivered solid third quarter 2021 financial results that were reflective of our continued execution and operational improvements building on momentum from the first half of the year, despite external headwinds. Third quarter revenue was in-line with our guidance while Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex were at the high end or better than our forecast,” said
Third Quarter 2021 Financial Highlights
Comparisons are to the three months ended
- Net revenue of
$287.2 million , up 3.8% compared to$276.8 million - Net Income of
$22.8 million , or$0.60 per diluted share, up 300.1% from$5.7 million - Adjusted EBITDA of
$61.0 million , down 6.2% compared to$65.0 million - Adjusted EBITDA less Patient Equipment Capex of
$38.9 million , up 0.9% from$38.6 million
2021 Financial Guidance
For the fourth quarter of 2021,
- Net revenue of
$282 million to$298 million - Adjusted EBITDA of
$54 million to$60 million - Adjusted EBITDA less Patient Equipment Capex of
$27 million to$31 million
For the full year 2021,
- Net revenue of
$1.13 billion to$1.15 billion ; up from$1.12 billion to$1.15 billion - Adjusted EBITDA of
$228 million to$234 million ; up from$221 million to$231 million - Adjusted EBITDA less Patient Equipment Capex of
$135 million to$139 million ; revised from$132 million to$142 million
Third Quarter 2021 Earnings Conference Call
About
This press release includes certain historical consolidated financial and other data for
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements regarding our expectations regarding pending or potential acquisitions, product recalls, supply chain disruptions, and the future performance and financial results of our business and other non-historical statements. Forward-looking statements include all statements that do not relate solely to historical or current facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks related to the COVID-19 public health emergency, product and related recalls, the profitability of our capitation arrangements, renegotiation or termination of our contracts, reimbursements by Payors, our reliance on relatively few vendors, competition in the home healthcare industry, the inherent risk of liability in the provision of healthcare services, and reductions in Medicare and Medicaid and commercial payor reimbursement rates. Additional factors that could cause our actual outcomes or results to differ materially from those described in the forward-looking statements can be found in the “Risk Factors" sections of the Company’s Annual Report on Form 10-K for the period ended
Use of Non-GAAP Financial Information and Financial Guidance
This press release contains certain financial measures that are not recognized under generally accepted accounting principles in
EBITDA is a non-GAAP measure that represents net income for the period before the impact of interest income, interest expense, other income and expense, income taxes, and depreciation and amortization. EBITDA is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. EBITDA eliminates potential differences in performance caused by variations in capital structures, tax positions, the cost and age of tangible assets and the extent to which intangible assets are identifiable. Adjusted EBITDA is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business either period-over-period or with other businesses. The Company uses Adjusted EBITDA as a key profitability measure to assess the performance of our business. We believe that Adjusted EBITDA should, therefore, be made available to securities analysts, investors and other interested parties to assist in their assessment of the performance of our business. Adjusted EBITDA less Patient Equipment Capex is a non-GAAP measure that represents Adjusted EBITDA less purchases of patient equipment net of dispositions (“Patient Equipment Capex”). For purposes of this metric, Patient Equipment Capex is measured as the value of the patient equipment received less the net book value of dispositions of patient equipment during the accounting period. This metric is useful in evaluating the financial performance of the Company as the business requires significant capital expenditures to maintain its patient equipment fleet due to asset replacement and contractual commitments. The Company believes that Adjusted EBITDA less Patient Equipment Capex should, therefore, be made available to securities analysts, investors, and other interested parties to assist in their assessment of the performance of our business.
Reconciliations of historical EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex to our net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, are included in the tables attached to this press release. EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex should not be considered alternatives to net income or any other measure of financial performance calculated and presented in accordance with GAAP. EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex in the same manner as the Company calculates these measures.
The Company’s uses of EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
• although depreciation and amortization are noncash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA and Adjusted EBITDA do not reflect capital expenditure requirements for such replacements or other contractual commitments;
• EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex do not reflect changes in, or cash requirements for, our working capital needs;
• EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; and
• other companies, including companies in our industry, may calculate EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex measures differently, which reduces their usefulness as a comparative measure.
EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex exclude items that can have a significant effect on profit or loss and should, therefore, be used in conjunction with, not as substitutes for, profit or loss for the period. The Company compensates for these limitations by separately monitoring net income for the period.
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, and other non-recurring (income) expense for the fourth quarter in 2021 and the full year 2021. As a result, reconciliation of these forward-looking 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 anything we cannot quantify at this time, including the macro-economic effects of the COVID-19 pandemic, or the extent to which the Philips recall and other supply chain disruptions may differ from our expectations. The financial guidance is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release and in the Company’s filings with the
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
2021 | 2020 | |||||||
ASSETS | (unaudited) | |||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 216,497 | $ | 195,197 | ||||
Accounts receivable | 75,510 | 74,774 | ||||||
Inventories | 8,066 | 6,680 | ||||||
Prepaid expenses and other current assets | 24,033 | 24,003 | ||||||
TOTAL CURRENT ASSETS | 324,106 | 300,654 | ||||||
PATIENT EQUIPMENT, less accumulated depreciation of | 216,756 | 223,972 | ||||||
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET | 21,133 | 25,419 | ||||||
INTANGIBLE ASSETS, NET | 66,391 | 61,497 | ||||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 61,652 | 57,869 | ||||||
15,580 | — | |||||||
EQUITY METHOD INVESTMENT | 3,600 | — | ||||||
DEFERRED INCOME TAXES, NET | 835 | 18,258 | ||||||
NOTE RECEIVABLE, RELATED PARTY | 811 | — | ||||||
OTHER ASSETS | 18,254 | 17,315 | ||||||
TOTAL ASSETS | $ | 729,118 | $ | 704,984 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 108,653 | $ | 116,886 | ||||
Accrued payroll and related taxes and benefits | 53,713 | 55,628 | ||||||
Other accrued liabilities | 32,218 | 33,513 | ||||||
Deferred revenue | 26,886 | 25,821 | ||||||
Current portion of operating lease liabilities | 21,552 | 23,977 | ||||||
Current portion of long-term debt | 31,250 | 20,833 | ||||||
TOTAL CURRENT LIABILITIES | 274,272 | 276,658 | ||||||
LONG-TERM DEBT, less current portion | 351,142 | 376,389 | ||||||
OPERATING LEASE LIABILITIES, less current portion | 40,189 | 35,358 | ||||||
OTHER NONCURRENT LIABILITIES | 40,384 | 42,924 | ||||||
TOTAL LIABILITIES | 705,987 | 731,329 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Preferred stock, | ||||||||
Common stock, | 354 | — | ||||||
Additional paid-in capital | 955,283 | 954,087 | ||||||
Accumulated deficit | (932,506 | ) | (980,432 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 23,131 | (26,345 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 729,118 | $ | 704,984 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except share and per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net revenues: | ||||||||||||||||
Fee-for-service arrangements | $ | 229,293 | $ | 220,446 | $ | 676,814 | $ | 646,630 | ||||||||
Capitation | 57,904 | 56,314 | 171,936 | 168,298 | ||||||||||||
TOTAL NET REVENUES | 287,197 | 276,760 | 848,750 | 814,928 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of net revenues: | ||||||||||||||||
Product and supply costs | 48,809 | 45,192 | 152,723 | 141,563 | ||||||||||||
Patient equipment depreciation | 24,746 | 25,104 | 75,631 | 75,840 | ||||||||||||
Home respiratory therapists costs | 4,023 | 3,986 | 12,345 | 12,848 | ||||||||||||
Other | 4,284 | 4,417 | 12,829 | 13,669 | ||||||||||||
TOTAL COST OF NET REVENUES | 81,862 | 78,699 | 253,528 | 243,920 | ||||||||||||
Selling, distribution and administrative | 176,372 | 184,674 | 522,935 | 534,110 | ||||||||||||
TOTAL COSTS AND EXPENSES | 258,234 | 263,373 | 776,463 | 778,030 | ||||||||||||
OPERATING INCOME | 28,963 | 13,387 | 72,287 | 36,898 | ||||||||||||
Interest expense | 2,938 | 1,117 | 8,882 | 4,047 | ||||||||||||
Interest income | (51 | ) | (74 | ) | (142 | ) | (451 | ) | ||||||||
Gain from derecognition of nonfinancial asset | (3,994 | ) | — | (3,994 | ) | — | ||||||||||
INCOME BEFORE INCOME TAXES | 30,070 | 12,344 | 67,541 | 33,302 | ||||||||||||
Income tax expense | 7,264 | 6,644 | 19,615 | 13,034 | ||||||||||||
NET INCOME | $ | 22,806 | $ | 5,700 | $ | 47,926 | $ | 20,268 | ||||||||
Three | ||||||||||||||||
Months Ended | through | |||||||||||||||
Basic and diluted earnings per share: | ||||||||||||||||
Net income attributable to common stockholders | $ | 22,806 | $ | 46,387 | ||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 35,314,445 | 35,262,700 | ||||||||||||||
Diluted | 38,210,958 | 38,077,019 | ||||||||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.65 | $ | 1.32 | ||||||||||||
Diluted | $ | 0.60 | $ | 1.22 |
(1) | Prior to our IPO, our business was conducted through |
APRIA, INC.
NET REVENUES FOR EACH CORE SERVICE LINE (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||
Home respiratory therapy | $ | 118,811 | $ | 113,995 | $ | 349,139 | $ | 335,277 | ||||
OSA treatment | 118,253 | 111,981 | 353,917 | 330,965 | ||||||||
NPWT | 9,874 | 10,961 | 30,258 | 30,751 | ||||||||
Other equipment and services | 40,259 | 39,823 | 115,436 | 117,935 | ||||||||
Net revenues | $ | 287,197 | $ | 276,760 | $ | 848,750 | $ | 814,928 |
APRIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended | ||||||||
(in thousands) | 2021 | 2020 | ||||||
Net cash provided by operating activities | $ | 148,822 | $ | 158,939 | ||||
Net cash used in investing activities | (98,117 | ) | (72,532 | ) | ||||
Net cash used in financing activities | (29,405 | ) | (20,973 | ) | ||||
Net increase in cash and cash equivalents | 21,300 | 65,434 | ||||||
Cash and cash equivalents at beginning of period | 195,197 | 74,691 | ||||||
Cash and cash equivalents at end of period | $ | 216,497 | $ | 140,125 |
Non-GAAP Financial Information
This press release presents Apria’s EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex for the three and nine months ended
EBITDA is a non-GAAP measure that represents net income for the period before the impact of interest income, interest expense, other income and expense, income taxes, and depreciation and amortization.
Adjusted EBITDA is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business either period-over-period or with other businesses.
Adjusted EBITDA less Patient Equipment Capex is a non-GAAP measure that represents Adjusted EBITDA less purchases of patient equipment net of dispositions (“Patient Equipment Capex”). For purposes of this metric, Patient Equipment Capex is measured as the value of the patient equipment received less the net book value of dispositions of patient equipment during the accounting period.
Below, we have provided a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex to our net income, the most directly comparable financial measure calculated and presented in accordance with GAAP. EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex should not be considered alternatives to net income or any other measure of financial performance calculated and presented in accordance with GAAP. Our EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex may not be comparable to similarly titled measures of other organizations because other organizations may not calculate EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex in the same manner as we calculate these measures.
The following table reconciles net income, the most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDA less Patient Equipment Capex:
Three Months Ended | Nine Months Ended | ||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income | $ | 22,806 | $ | 5,700 | $ | 47,926 | $ | 20,268 | |||||||||
Interest (income) expense and other, net | (1,107 | ) | 1,043 | 4,746 | 3,596 | ||||||||||||
Income tax expense | 7,264 | 6,644 | 19,615 | 13,034 | |||||||||||||
Depreciation and amortization | 27,896 | 28,724 | 86,481 | 86,915 | |||||||||||||
EBITDA | $ | 56,859 | $ | 42,111 | $ | 158,768 | $ | 123,813 | |||||||||
Strategic transformation initiatives: | |||||||||||||||||
Simplify(a) | $ | — | $ | 322 | $ | — | $ | 1,159 | |||||||||
Financial system(b) | 340 | 351 | 1,081 | 1,414 | |||||||||||||
Other initiatives(c) | 75 | 54 | 114 | 99 | |||||||||||||
Stock-based compensation one-time award at IPO(d) | 1,057 | — | 3,497 | — | |||||||||||||
Stock-based compensation(e) | 1,530 | 606 | 3,825 | 1,929 | |||||||||||||
Legal settlements(f) | — | 19,725 | 1,750 | 32,525 | |||||||||||||
Acquisition costs(g) | 402 | — | 402 | — | |||||||||||||
Offering costs(h) | 699 | 1,826 | 4,151 | 1,826 | |||||||||||||
Adjusted EBITDA | $ | 60,962 | $ | 64,995 | $ | 173,588 | $ | 162,765 | |||||||||
Patient Equipment Capex | (22,040 | ) | (26,425 | ) | (65,822 | ) | (63,482 | ) | |||||||||
Adjusted EBITDA less Patient Equipment Capex | $ | 38,922 | $ | 38,570 | $ | 107,766 | $ | 99,283 |
(a) | Simplify represents one-time advisory fees and implementation costs associated with a key 2019 business transformation initiative focused on shifting to a patient-centric platform and optimizing end-to-end customer service. |
(b) | Costs associated with the implementation of a new financial system. |
(c) | Other initiatives include one-time costs associated with customer service initiatives in 2020 and costs associated with moving the corporate headquarters in 2021. |
(d) | The offering resulted in a one-time restricted stock unit (“RSUs”) grant to the Company’s Chief Financial Officer (“CFO”). The RSUs vest in tranches and are classified as liability awards since each tranche of RSUs can be settled in either cash or shares of our common stock at the CFO’s election. The first tranche of RSUs vested upon completion of the IPO and was settled in cash. The second tranche was settled in cash during the three months ended |
(e) | Stock-based compensation has historically been granted to certain of our employees and non-employee directors in the form of profit interest units of |
(f) | In 2021, the amount represents the final settlement amount of a claim brought under the Private Attorneys General Act of |
(g) | Acquisition costs include one-time costs associated with the acquisition of certain assets of |
(h) | Offering costs represent one-time costs relating to public offerings. As the Company did not receive any proceeds from the offerings, these costs were expensed as incurred in selling, distribution and administrative expenses in the unaudited condensed consolidated statements of income. |
Investor Contacts
ICR Westwicke
ApriaIR@westwicke.com
Media Contacts
ApriaPR@westwicke.com
Source:
2021 GlobeNewswire, Inc., source