Q1 2021 Apria Inc Earnings Call
Good afternoon, and welcome to <unk> first quarter 2021 earnings conference call and webcast on.
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After todays presentation, there will be an opportunity to ask questions.
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Please note that this event is being recorded.
Leading today's call are Dan Stark, Chief Executive Officer, and Debbie Morris Chief Financial Officer.
Before we begin we would like to remind you that certain statements made during this call will be forward looking statements as defined by the private Securities Litigation Reform Act.
These forward looking statements are subject to various risks and uncertainties and reflect our current expectation based on our beliefs assumptions and information currently available to us.
Although we believe these expectations are reasonable we undertake no obligation to revise any statements to reflect changes that occur after this call.
Descriptions on some of the factors that could cause actual results to differ materially from these forward looking statements can be found on the risk factors section of the company's annual report on form 10-K for the year ended December 31st 2020, and it's on.
Other filings with the Securities and Exchange Commission.
Additional information will also be set forth in average quarterly report on form 10-Q for the period ended March 31st 2021, which is expected to be filed later today.
In addition, please note that the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance.
Details on the relationship between these non-GAAP measures and the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press release. It is posted on the company's website.
With that I'd like to turn the call over to Apria CEO Dan Stark. Please go ahead.
Thank you operator.
Welcome and thank you all for joining US this afternoon to discuss our first quarter 2021 earnings results.
I'm joined today by Debbie Morris, our Chief Financial Officer.
I'll begin my remarks, with some high level comments on our results from the quarter and context around our activities and Debbie will provide a more detailed review of the financials later on the call.
We built on our momentum coming out of 2020 <unk>.
Delivering a strong quarter ahead of our expectations on all three of our key metrics.
Our first quarter revenue grew to $275 3 million, a 2% increase over Q1 2020.
Adjusted EBITDA grew to $48 3 million.
A 15% increase over Q1 2020.
And adjusted EBITDA less patient equipment, Capex grew to $24 7 million a.
On a 41% increase over Q1 2020.
We have built a very solid foundation on which to grow this company and manage through these unprecedented times.
I believe this promising start to the year is reflective of that position.
I'll spend the bulk of my time today sharing some updates on our continued pursuit of the priorities that I outlined in our first call as a public company.
Execution.
Leveraging technology to drive operating efficiencies and growth.
Both organic and through M&A.
Starting with our priorities for the year I'll begin with execution.
As we all remember the country faced a massive surge of COVID-19 cases from the holiday season through mid February.
As a result of the surge in January our new patient starts per day on oxygen, where the highest single month total on record.
And while the virus prevalence began to dissipate to some extent in the back half of February we again had historically high new patient starts on oxygen.
In meeting the incredible challenge posed by those increased levels the entire apria team pulled together to work night and day to meet the needs of our referral customers and our new respiratory patients across the U S.
Throughout this pandemic apria and the industry have served as the pressure relief valve for hospitals by.
By getting people home to free up beds for the most severe cases.
And we continue to serve on that critical role during Q1.
Further during the quarter, we leveraged our national infrastructure to move assets and people around the country. According to need.
We have now lapped project simplify and we continue to realize the benefits as evidenced in our Q1 2021 results.
Despite the dampening effect of the spike early in the year on our non oxygen products. We are encouraged by the new patient volume trends that we saw towards the very end of the first quarter.
We saw increases in our non oxygen business lines that had been impacted previously and we exited March 2021 with incoming volumes nearly back at pre pandemic levels.
We believe this bodes well as the virus continues to subside.
Vaccine prevalence increases and a more normal patient flow returns to the health care system.
With new patient volumes, increasing it is important to clarify that it will still take some time for our revenues to increase accordingly, as the compounding effect of new patients on service built and our patient census growth.
Even so we are cautiously optimistic but remain conservative in our expectations as we've learned to anticipate uncertainties related to the ongoing pandemic.
Finally in terms of ensuring continued seamless execution, we are starting to address what our organization will look like in a post COVID-19 world.
As a reminder, the vast majority of our patient facing staff and operations have been and continue to be working on site in our branches across the country.
The remainder of those frontline employees, who had been able to transition to remote work over the last year will largely return in time.
We have embraced and will continue to embrace the flexibility of work from home and telecommuting.
Our ultimate goal is to use this flexibility to our advantage and to leverage our well equipped technology infrastructure and security layers to facilitate this hybrid work structure.
This aligns with another of our stated goals for the year.
<unk> really leverage our technology to drive operating efficiencies.
The pandemic challenged all of us to rapidly change the ways in which things get done.
As well as opening new opportunities to leverage technology in order to improve processes provide.
Provide greater access for patients and drive efficiency.
One area that has benefited greatly as telehealth, which we believe will have a long lasting effect and will become a normal means of access for patients to interact with their health care providers.
During the public health emergency the relaxation of the telehealth guidelines made nearly any means of telehealth possible.
When the Phe expires, we expect that the requirements for HIPAA compliant telehealth access will be reinstated.
We are ready for the post phe environment from a technology perspective.
And expect that we will leverage telehealth far into the future in order to increase patient access to apria as well as increased efficiencies for our team members.
Finally, we remain committed to growth.
On the organic front as I mentioned earlier, we're seeing promising trends of incoming patient volume, though it does take time for those volume should translate to replenish census numbers and ultimately revenue growth.
We are clearly not past the challenges presented by COVID-19, just yet, but I am confident with the investments that we made on our sales efforts and service capabilities, we have positioned ourselves well to increase our rate of growth is new patient volumes return.
And in terms of M&A, we continue to have a robust active pipeline.
Our M&A team has no shortage of opportunities to review and work on.
While taking a measured and judicious approach, we do expect to pursue strategic opportunities throughout the course of the year.
Prior to turning the call over to Debbie I'd also like to share a quick update with respect to the current regulatory environment.
Since our last call we've received more clarity around a few aspects of the interim regulatory environment modifications that exist today due to the COVID-19 pandemic.
First as of April 15th the public health emergency has been extended through July of this year.
The <unk> provides an interim price increase for Medicare patients in the non bid non rural areas of the country and keeps intact. The 50 50 blended rate in the rural areas of the country.
While the Phe extension was largely expected.
The extension still needs to go through the mandatory process and this is done in 90 day increments.
Therefore, we expect to provide an update on the pag on a quarterly basis.
Secondarily the suspension of sequestration was officially extended through year end.
And lastly, as a reminder, as of April one CMS has permanently remove the budget neutrality rate adjustment for oxygen equipment that has resulted in a reimbursement rate increase for some oxygen systems.
These are tailwind for abbvie and the entire industry.
And the combination of these actions will help reduce some of the uncertainty in our industry as the country begins to normalize.
To sum things up.
We reported solid first quarter results and continue to build on momentum from last year.
We're executing at a high level and driving operational improvements.
The regulatory environment is stable and we're seeing some benefits for the remainder of the year.
Importantly, we're seeing encouraging patient volume trends, while our M&A pipeline remains robust.
I'd like to thank the entire apria team for their dedication and hard work helping to drive. These results. They are the heartbeat of Apria and they are the individuals that deliver our mission every day <unk>.
Improving the quality of life for our patients at home.
I'll now turn the call over to Debbie to review, our financial performance in more detail and provide our outlook for 2021.
Thank you Dan and thank you to everyone who joined the call today.
Echo Dan we delivered a solid start to the year net revenue adjusted EBITDA and adjusted EBITDA less patient equipment Capex for the quarter were all up year over year.
Net revenue of $275 3 million increased 2% year over year, largely due to growth in oxygen and sleep supply on.
Offset in part by the negative impact of COVID-19 on some of our other therapies.
Net revenue came in above the high end of the range as we saw stronger than projected quarter end, including the return of new sleep equipment patients as well as some rebuild of non invasive ventilation sensitive.
The rebuild of noninvasive ventilation census, stemming from new patients coming on service as well as the stabilization of the patients on service as we work through beginning of the year processing of patients who changed insurance coverage.
As you may have already seen we concluded a product level revenue table on our earnings release to provide further clarity into the breakdown on the revenue contribution in the quarter and how that compares on a year over year basis.
During the quarter gross margin contracted slightly year over year to 68, 4%, primarily as a result of the increase in sleep supplies, coupled with higher depreciation costs associated with the increase in oxygen therapy, and lastly, an increase in reserves for non recoverable patient equipment.
Adjusted EBITDA in the quarter of $48 3 million.
Increased 15% from $42 1 million in the first quarter of last year, and adjusted EBITDA less patient equipment Capex of $24 7 million increased 41% from $17 6 million.
Both metrics were at the high end of their respective ranges.
The combination of topline growth, namely an oxygen sleep supply project simplify and continual variable cost management, while the patient census, rebuilds drove the year over year improved performance.
Moving on to the balance sheet as of March 31, we had $171 million in cash and total debt of $396 million.
This correlates to a trailing 12 month leverage ratio on an adjusted EBITDA less patient equipment Capex of approximately one six times.
Alright, let's turn to the outlook for 2021.
As Dan mentioned as of April 15th the public health Emergency has been extended through July of this year and the suspension of sequestration was officially extended through year end.
We also have the benefit of budget neutrality, which we talked about last quarter.
Well, we had assumed that the public health emergency would be extended through the second quarter.
Benefit of the deferral of sequestration and budget neutrality are now reflected in our second quarter guidance.
For the second quarter of 'twenty one we.
We expect net revenue of $277 million to $282 million.
Adjusted EBITDA of $51 million to $55 million.
And adjusted EBITDA, less patient equipment, capex of $28 million to $32 million.
For full year 'twenty, one we are increasing our guidance to account for the first quarter performance as well as the impact of the suspension of sequestration through the end of the year.
While we outperformed our first quarter guidance, we continue to see some volatility associated with COVID-19.
COVID-19 surge, which continued into the first quarter and while undoubtedly very positive for oxygen and the business overall further delayed the rebuild of a census for our other therapies.
As such we expect the favorability in Q1 to be partially offset by lower than expected census, heading into the second quarter.
In other words, while oxygen returns to a more normalized level there may be a lag.
An air pocket, while asleep noninvasive ventilation negative pressure wound therapy, and other equipment census, and revenue rebuild.
We continue to see strong cash collections and benefits from the public health emergency in terms of Medicare reimbursement rates and relax documentation requirements.
And we continue to manage our cost structure effectively.
We expect labor and some operating cost to increase as we rebuild patient census, as volume volumes return.
Although we have not seen a material impact as of yet we are also carefully monitoring labor and materials cost.
In summary, we are increasing our 2021 guidance for favorability in the first quarter as well as the benefit of the suspension of sequestration, partially offset by slower census in revenue rebuild as well as some increased costs.
As a reminder, we incorporated budget neutrality into our guidance last quarter and our guidance does not include future M&A.
For full year 2021, we are increasing our guidance to the following net.
Revenue of 1.12 to 1.14 billion from $1, one one to 114 billion.
Adjusted EBITDA of $207 million to $216 million up from 203 to 212 million.
Adjusted EBITDA less patient equipment, capex of $113 million to $120 million.
Up from $108 million to $115 million.
We believe maintaining a conservative outlook on 'twenty, one until the future of COVID-19 unfolds further continues to be prudent.
I am pleased with operating start to the year and maintain confidence better as an organization, we are well positioned to manage and communicate effectively through whatever occurs.
To close out our prepared remarks today.
I want to thank the entire apria team for helping achieve our mission of improving the quality of life for our patients at home.
Operator, we will now open the call to questions.
If you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
To withdraw your question press the pound key.
Our first question comes from Kevin Fischbeck with Bank of America.
Hi, This is actually Joanna <unk> filling in for Kevin today. So thanks for taking the question. So so first just to make sure I get it right in terms of the guidance range. So.
You mentioned you're on your latest for our Q1 outperformance versus your guidance right. So thats about now almost $2 million per the midpoint and bad debt sequestration or at least the last time, you talk about $3 million to $4 million, but the sequestration relief right through the end of the year. So is it still that the number you're thinking about for that benefit.
Yes, John that's correct.
So that was good.
That would bring us too low.
Like I guess, a five and a half million dollars a guy.
Guidance raise and then did I get it correctly that.
You are not including anything incremental for that.
Expansion of the Phe.
Yeah. So both to answer both of your questions in regards to the Phe that we are already had assumed debt would be effective through July of this year. So that did not change our guidance, but as far as the your math is correct. So the other component that's just a $1 million relative.
Relatively small number is as I said, the offset too.
Those two facts as we see the impact of COVID-19 and the delay in the census build we expect some volatility still in some delay in that revenue.
Earnings fell so thats why its just slightly offset from the increase over Q1.
Right and then you mentioned on just something about increased cost I wasn't quite sure what you're referring to.
Well, what I had said.
We are anticipating as volume growth that will have an increase in costs that we've had.
We're also keeping our eye on.
The macroeconomic what we're hearing about materials costs, and such and we have not seen a significant increase in either labor costs or materials costs, but obviously, keeping an eye on that.
Okay. So you pretty much just including some conservatism.
In that number for those reasons.
Yes.
Okay, that's great and my.
My other question was.
On the wound therapy business the revenue.
It's always very good very helpful that you provided the segment revenue you'll see the press release after the wound therapy revenue like declined slightly year over year. So you put them on saying that things.
Our slow their two per belt.
Is that the way to think about that.
Yes in Q1, we still saw because of the surge of COVID-19, there's still an impact on negative pressure wound therapy with the increase we do expect when you look at full year guidance that we will see some increase as patients return to.
Surgical procedures and such.
Right and also on the segments I know that you're deemphasizing their debt out there our business the other equipment revenues.
And those revenues were down still Atlantic, 69% year over year weighted actually came into low how we were expecting it. So is there a similar dynamic or you're kind of exiting more parts of that business.
No, we're not exiting any anything else than others.
Equipment and services, but we have seen a further deterioration of the sentence because there is a large part of rental sensors and the other equipment. So that too has been impacted by the COVID-19 surge. So while we had products that were up mainly oxygen and sleep resupply other equipment and services also has been negatively impacted including that.
So we expect to see that start to rebuild again as as.
As some of the volatility diminishes.
And we have not we're not exiting other any other services in there.
Right. It makes sense and I guess, that's what you were talking about before and just just to close that loop.
Do you expect these businesses day were impacted.
Negatively.
Kind of returning to normal all the time and sensors for building turned out I guess the expectation is that the oxygen business going on could have.
Normalized meaning declines from that from the peak numbers that you've seen so far.
Right, Yeah, well see some.
Slower growth rate in home respiratory therapy, as oxygen slows and non invasive that picks up we will see an increase in the OSA treatment.
Increase in negative pressure wound therapy and increase in other.
Right.
Likely this year as high as the other products.
Right, but on that front I guess would you say that there is.
That respiratory demand.
Is there any indication that this page actually these patients actually might stay longer with you that day, they were kind of turning to chronic patients or are they pretty much kind of.
Stop using it at some point and Thats why you expect normalization.
Well, we have some increase with acute patients acute COVID-19 patients and those are the patients.
That we expect to ultimately come off service and there are still COVID-19 patients we start with do you have.
Some of the volatility across the nation. So we do expect the acute patients to come down we do we have seen summarize expect we may continue in COPD patients just with the higher awareness of the disease and the importance of respiratory helped.
That's very helpful color. Thank you.
Our next question comes from Ralph Giacobbe with Citi.
Okay.
Just hoping you could talk more about the rebuild.
Net.
Sure on exact.
I guess part of it was dan's commentary sort of encouraging recent volume trends.
Yes.
Thanks.
Sure.
This is a segment in our marketing group.
Sort of tie those two together.
Yeah sure Ralph this is Dan and I'll, let Debbie pick up after I finish but.
One of the things we're uncertain about is the duration on length of stay for the COVID-19 patients.
And then we had a significant amount of COVID-19 patients that came on service and they have a much we're expecting to have a much shorter length of stay than our normal COPD population.
No.
And then were offset by the delay in kind of growth of replenishing the census on the other.
Other therapies. So what we saw coming out of March was basically back to pre pandemic on a new patient start basis for the other therapies, but the sensus had essentially had a setback because of basically 10 months of lower starts.
On new patient starts so.
We're not quite sure how the transition of the COVID-19 patients off of oxygen.
If that will outpace essentially the growth in the census, and the other products are in.
In order to make sure that the revenue continues to accelerate does that make sense at all what we're trying what I'm trying to paint their okay.
Okay.
Okay.
Wanted to ask about the.
The OSB business because that actually.
On your.
And we had especially when considering the heightened COVID-19 period.
Being there to call out in terms of being able to challenge some of that was.
Volume was coming back or anything on what drove that strength.
Yes, I think so two things one all of last year really.
And increased demand from our sleep supply resupply business.
And that performed very well on the first quarter.
And then really through kind of March and.
Towards the very end of March really we've seen.
The return of a pretty pretty significant volumes from a new patient start standpoint.
And essentially exited March specific to new patient starts on CPAP right at where we were.
In Q1 of 2020, so that that was a pleasant surprise with how quickly it kind of snapped back after the virus prep.
Prevalent started declining in late February mid to late February that came back pretty quickly.
Okay got it and then last one from me on <unk>.
I heard you say increase from increase in reserves.
All lines.
Related to if you could just give some detail there. Thanks.
Yes, we have routes that were related to gross margin comment the slight contraction in.
Q1, So we had increase in reserve for lost equipment I would say, it's partially attributable to.
Some of the craziness for lack of a better word, but with all the volatility last year in <unk>.
Increase in certain equipment, and then difficulty in certain cases getting into patients home homes as we looked at reserves, we increased those reserves for lots of equipment and it's not something that I would expect to repeat but there was some impact of call. It 40 to 50 basis points.
In Q1.
40 to 50 basis points to the gross margin.
Gross margin yes.
Okay.
On the repeat so on sort of.
Let's go on to <unk>.
Correct.
Yes, Ralph maybe that maybe to add just a little color in our in the normal course of business.
When there is not a pandemic.
We have a great opportunity when we instruct patients about how to contact us where to find us when they contact us when they need it picked up and through the COVID-19 period there was.
We don't always have patient contact upfront as direct as we normally do so took a just a conservative view there that Debbie alluded to for the course of the past year from an equipment reserve standpoint.
Okay got it thank you.
Our next question comes from Chris Pneumonitis with Piper Sandler.
Hey, guys, thanks, and congrats on a strong quarter.
Touch on some of the margin improvement on the quarter I just wanted to square it on really what's been driving that had been primarily a product mix thing or are you guys getting outsized benefits from simplify.
Our continued focus on RPI or maybe it's a little bit COVID-19 benefit related so just maybe any color around that and the expectations for the year would be great.
It looks like the midpoint of your updated guidance implies about 20 basis points lift for the year versus prior.
Yes, Chris I think some of that is you've hit on some of them.
Continuing on Dan hit on it in his opening remarks, the continuing benefit of simplifying which continues to be.
<unk> to precisely carve out.
We see continued favorability.
Costs in.
In addition to that we continue to benefit from.
What do you call, it simplify or otherwise being able to manage our variable costs.
On volume.
Returns are hasn't returned in certain cases, we can continue to manage to keep costs down.
So to the extent that not coming up in advance of the revenue build.
And if you look at it yeah.
Got it.
Oh go ahead to get patients on.
I think that low.
The two primary areas that I would point out.
Got it that's great and then just on the sleep New starts you still getting the benefit of ads on testing.
I'm kind of thinking like would it be fair to attribute the stronger new start kind of getting a lift from maybe.
More at home testing and in combination with some of the traditional sleep labs are likely opening back up.
Yes, I think that's a really good observation.
Yeah, basically home sleep testing kept the industry of float for a period of time last year.
And then with the labs, beginning to reopen and trying to get back capacity get back to 100% capacity as well as the addition of.
Home sleep test.
Good.
There is a opportunity to open the top of the funnel. If you will around the diagnosis of new sleep sleep patients.
Got it that's great and then last one from me.
It's kind of another interesting callout on telehealth in your prepared remarks.
Can you just remind us again, what the biggest benefit has been really what processes, it's really been replacing or maybe enhancing in your operations. Thanks.
Yeah from our perspective.
What it really does is drive.
Efficiencies and the ability for our teams to.
<unk> be able to talk and actually see a patient and or what's happening in order to avoid going to the home and that really historically in this industry everything was done that.
We get a call you go to the home.
COVID-19 drove enforced not going to their homes. So we could learn to use telehealth and we use it for instruction.
We use it for diagnosing a patient equipment problems.
Which makes then going to the home.
Physically really the last resort if if it can be solved that way. So it's driven just a tremendous amount of efficiency within our organization and really see what it really does also not just victory, but it really opens access because.
An individual that whether the restaurant therapist somewhat diagnosing an issue. They can they can look touch and feel many more things going on every day, then if they're moving around the city to try to do so so we think telehealth is beneficial the patients most of the patients enjoy it and they don't all enjoy it.
But some still want the personal interaction.
But it's been a very high uptake on it and we certainly think it will be again, a normal means of access in the future.
Awesome. Thanks again.
Got it thanks, Chris.
Our next question comes from Jamie Paris with Goldman Sachs.
Good afternoon.
Wanted to just as we get towards the end of COVID-19 potentially here.
Just to go back to the the impact you actually experienced from COVID-19, both positive and negative I know you've spoken to the.
Qualitatively a lot on this call, but wondering if you can put some numbers to them I know guys from positive gain oxygen supplies to the extent you can quantify that that would be great came on on the negatives on NII.
Mislead patients just so we can get a sense of how youre thinking about where you might have been.
On the ex COVID-19.
Where we should think about being this trending as we get on the other side of this.
Sure Jamie.
As we've consistently said, it's difficult to precisely measure, but we do.
Worked very hard on trying to measure so I would say kind of summing up what I think the impact was for Q1.
From a revenue perspective, its essentially no impact strangely enough because the rate increases in pag are offset by the reduction in volume from some of the other therapies. So it truly look at revenue it's neutral.
Those two.
We get down to adjusted EBITDA, there is some flow through because the price flow through at a certain.
Full rate very soon.
A reduction in volume we get that.
Not the full drag on volume hits, the bottom line, because we're managing costs.
I would say between them.
$1 million to $2 million for Q1, that's an estimate and it's.
Really an estimate.
But that's roughly from an adjusted EBITDA and adjusted EBITDA less Capex perspective, it's in that range.
Okay. Okay. That's helpful. And then on respiratory you talked about some of the benefit from from COVID-19 patients and those might having a lower per.
Are you at a time that they're on your census for can you give us a sense.
What percent of your census is tied up with these more recent COVID-19 patients and how youre thinking about potentially rolling off.
It's relatively it's very small our patient census is pretty significant.
The volume of COVID-19 patients and the overall sense it is not a material per.
H.
Okay, but it would still potentially be on.
Noticeable headwind to the extent that rolls off or on.
Yes Lindsay.
Cereal.
Some has built up and now of those patients will come off so yes, we will see a reduction over time, because there's a cumulative effect production on those patients while non invasive that increases.
I don't know that off yet.
The COVID-19 patients, but I think it's I think it's less than 5%.
I can follow up with newco.
Alright, that's helpful and then Dan maybe one for you just high level.
Wanted to ask about your complicated business and relationship with Kaiser.
A big part of the business and it's a long standing relationship, but just wanted to get an update from you on on.
The latest agreement looks like what's driving growth alone W can chime in with any.
Commentary on how the margin profile of that business compares to the fee for service business.
Yes so.
Just from a broad relationship standpoint.
We are continuing to be in a negotiation position with.
With Kaiser.
All signs are that things are.
Moving towards a very mutually beneficial agreement moving forward.
We hope to update everybody on one on one of these calls that it's done.
But I'd say, we're making substantial progress and I think a good outcome.
We'll be we'll be in the near future here. So.
Very pleased with having been kaiser's.
<unk> partner for 20, plus years, and we expect that to go on for a few more years so through the renegotiation.
From a from a interestingly enough.
Just maybe a little color on Jamie around COVID-19 and Kaiser's the two companies.
Made.
Extreme modifications to way the way that we interacted even though 20 plus years, we've had very close relationship of working together.
Kaiser on Apria really did a file.
An outstanding job and I give all the credit to our folks in the field.
Thinking of ways to make sure that they helped Kaiser specifically.
The overwhelming volume that they were seeing really in the Los Angeles area.
On the Orange County area in the San Francisco Bay area During January and February just a phenomenal job between the two organizations.
And Jamie just Bart.
Yeah go ahead go.
Go ahead, I was going to come to your margin question.
On margin from a payer.
Payer perspective, or otherwise I would just say.
Very important relationship for us it is a different profile because there's certain administrative burden, but because it's a pay on a per member per month amount. So there is not some of the authorization in such requirements and a number of different aspects but.
Although other than that I can't comment further.
Okay, That's fair and Dan I, just wanted to follow up on from your comments that sounded pretty.
Pretty promising.
Gain on on the agreement with Kaiser how should we think about the range of outcomes I mean could that relationship. The expanded how are you thinking about additional partners.
<unk> business the way health care is going these days.
Just any additional thoughts on how that could.
Impact that business once.
Once you reach an agreement.
Well I don't I think the successor agreement will be very similar in nature to where we are today.
Around products and services initially.
We would love to explore and it's really up to us and Kaiser to think about that for the future but.
I think the the job at hand, right now is to make sure that we gain the successor agreement with the current situation.
And we'd love to expand and have expanded over the years with them. So I think it's.
Getting that getting that like I said, given the successor agreement done.
Mutually beneficial for both and then look at potential opportunities.
Alright, thanks, so much.
Thanks, Jamie.
That concludes today's question and answer session I would like to turn the call back to Dan Stark for closing remarks.
Great well I appreciate that and thank you everyone again for joining us this afternoon.
We appreciate both your time and your interest in Apria and we are we certainly are proud of the first quarter were absolutely proud of our team and what they've delivered and we certainly look forward to speaking with everybody in the future. So thank you everybody take care.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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And on that.
On.
Yes.
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Good day.
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