Q2 2023 AdaptHealth Corp Earnings Call
Okay.
Good day, everyone and welcome to today's <unk> 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.
You May register to ask a question by pressing star one on your telephone keypad.
Today's speakers will be Richard Barasch, Chairman and interim CEO of adapt health and Jason Clemens Chief Financial officer of adopt health.
Josh pardon us president of adapt health 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 factors and uncertainties.
Which are discussed at length in the company's annual and quarterly SEC filings.
Adopt health 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 or measures such as EBITDA, adjusted EBITDA and free cash flow all of which are non-GAAP financial measures.
This mornings 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 adopt health Richard Bearish Sir.
Good morning, everyone. Thank you for joining us today to discuss adapt health second quarter performance.
To start our call today I'd like to take a moment to welcome Kristin Teufel who'll be joining.
Adapt held on September <unk>, as our new Chief Executive Officer.
Christine brings many years of industry experience and a deep understanding of the markets in which we operate.
Because the expertise and proven track record will be key to this organization's future success.
I used to get them on board and look forward to getting the chance to meet with him in the coming months.
That health 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 11000 employees, including nearly 1000 health care professionals, who work to bring these needed products were approximately 4 million patients.
Know that we are crucial in the health care continuum, especially for post acute care and management of chronic diseases like diabetes.
<unk> and COPD.
Most of our devices are connected and generating 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 grew 8.7% 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 with continued growth in our sleep and respiratory product lines, which represent more than half of our total revenue.
Building on our robust first quarter. These products grew a combined 15% year over year in the second quarter.
Drilling down the performance in our sleep business was driven by strong market demand, both new starts and resupply.
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 and new starts, especially in resupply an area of great strength for adapt health.
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 and we're starting to see stabilization in the length of time patients are on oxygen events, 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 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 emerge with a solid plan to achieve results that reflect the growing market for diabetes supplies, especially CGM 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 with the market for CGM and pumps is large and growing.
We're encouraged by recent decisions by Medicare and other government payers to widen their coverage of CGM 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 salesforce importance of government business and have already seen meaningful impact.
Government sponsored payers now represents 77% of our CGM census increase a 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.
And 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 adapt health team to rapidly improve the operations of our diabetes business.
One example is creating synergy between the <unk> and diabetes sales forces take advantage of the <unk> national reach.
Another is to use our world class <unk> 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 adapt out.
Sadly diabetes continues to grow rapidly and 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 our relationship with Humana become the value based provider of home medical equipment and supplies.
Medicare advantage HMO members in 33 States plus the district of Columbia.
The program began on July one 2023, and we're 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.
Yeah.
This value based contract marks a significant step toward highlighting our central role in keeping our patients healthy in their homes.
We think this is an important new area of focus for adapt health and we intend to pursue other similar arrangements.
Like most businesses, we have been affected by increased labor and other costs.
We're 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 reviewed 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 reduce 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.
Okay.
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 Richards sentiment about the strength in our core product lines and the opportunities ahead of us in diabetes, let.
Let me begin by reviewing our second quarter results, our revenue of $793 $3 million increased 9.0% and our non acquired revenue increased eight 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.
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 pop 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 C. G. M. 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 mix 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 can 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, two days are trending in the right direction compared to $45 four days, a year ago and 42 seven 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 five four times down from $3 six three times at the end of the first quarter.
We were very pleased with Q2 results, but theres still a gap to make up from Q1 expectations. We are updating full year revenue and adjusted EBITDA guidance as follows.
Revenue of $3, one six to $3 <unk> 1 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 three 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 top 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 in 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.
At this time, if you would like to ask a question. Please press the star and one Keith on your telephone keypad.
You may remove yourself from the queue at any time by pressing star kill.
Once again that is star one to ask a question.
And our first question will come from Brian <unk> with Jefferies. Your line is open.
Hey, good morning, guys congrats on the quarter.
Jason Thank you for all the color on 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 he calls the channel shift within commercial as well.
Sure Brian Good morning.
You would offer a few points of context. So first if you look back to our capital markets day.
At September .
Our view was that by 2025, our diabetes product line would be delivering mid to upper single digit growth and.
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 O P. Five release.
With their two Bliss 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 it at that level and we believe that will 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 'twenty, four and and they move back to that longer term growth rate as as the opportunities in front of us.
You know that we capitalize on them.
Alright got it and then as we think about the.
Likely return is 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 margin and just incremental growth for the industry or even specifically phrased that.
Sure Brian .
I'll take the second part first.
Yeah.
The reentry of Philips.
To the marketplace I think would be welcomed by all market participants I think by providers Bye bye bye bye distributors by by patients.
If when they come back we believe they will but.
But we 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 with the with the consistent demand that we've seen in the fleet business.
And we don't think that more product really changes that now.
You can get into price and will that 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 once there's more availability on market and we will enter those negotiations with with with the.
Manufacturers that we went out with.
Got it if I may squeeze one last quick question, just any way, we should be thinking about the humana contract, but obviously, the big headline big Big contract decline, but how should we be thinking about the benefit of that and I know you said there'll be in the P&L beginning in the back half of the year, but just as a whole just to put some context around that contract.
Sure sure. So we're very excited to be already rolling and our new Humana relationship again, it's over 1 million patients.
That have come online that that we're managing there theyre Damian meet their <unk> needs.
Across the product lines of sleep.
Respiratory and HIV.
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.
When we report Q3.
We should expect to see.
Sequential growth in those three categories I mean that that's where the growth will come for these for these humana patients.
It's early were working through conversions, just you know heavy lift that we're integrating at the moment.
So we're being very cautious on specific number of 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.
The.
Equipment.
Buy ins if you will.
What is the thought process you maintained your cash flow. So I'm, assuming that's not a big deal, but what is the outlook for needing to go out and acquire equipment for the on boarding of the Humana patients and then I have a follow up thanks.
Sure Good question, Eric So.
I would first note that.
Our capex as a percent of revenue for the quarter was within our expectations.
We.
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.
We had reported.
Our intention too to load up on path on respiratory on on one other other patient equipment.
Some of that was was invested to go after.
What we see is 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 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 with.
With the rest of the business so in.
In other words, we believe that our 11% midpoint for Capex.
That we feel very good hitting at or below 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 <unk>.
System upgrades and.
<unk> of various activities in the company over the last couple of years one area that.
I believe we're still a bit behind was.
The processes.
People paper manual activities going on in your warehouses and I know you had an initiative to to.
Systems and invest in Digitization and in technology in 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.
The hardware and the tech in the warehouses that comes with it to create a full warehouse management system.
We've had we've had great success of course, you know running the daily issues logs and everything else you'd expect that come with these implementations, but what's really exciting is the.
The data that we've now got at our fingertips on for each warehouse worker.
Number of Pix, theyre running per hour and per day.
We know specifically what they're picking we know specifically, what's you know patient returns whats 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 important sites within the <unk> 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 <unk>.
Embedded in Oracle on men's and Max's 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 thats on the balance sheet, you will note a tick down in our inventory we are charging our teams to continue to focus on running turns faster and getting getting cash out of the balance sheet.
So were work 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 as part of our cost management program that I'm sure. We'll talk about later over the course of 'twenty three but this really gives us an ability to unlock that value.
Now that now that we've got we've got the technology turned on so you know in terms of returns or more cash changes to our free cash flow estimates.
Think of this as 2020 for money if you will.
So we're spending the money this year to get the technology installed.
But we do believe that our our free cash.
Generating power is going to increase.
As part of these efforts.
Thank you very much I 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 diabetes.
Jason just hoping for any insight you may have specifically on CGM volume trends in particular with basal coverage now.
Seen any step up in patient adoption post reimbursement I guess, a follow up there I think I heard you say, 77% government payer mix and CGM now, what's a reasonable ceiling for that metric and then I've got one guidance follow up.
Yes.
Sure, Matt REIT reasonable ceiling I.
I don't know probably halfway from here to 100.
Could be reasonable.
I would say.
In terms of.
In terms of CGM.
In general.
I'd say that we're very happy with the census growth.
This quarter, we hit a record sensus volume for diabetes and for CGM.
Of course, you know 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 to sell all products.
That sounds easier than it is in terms of training, enabling equipping.
It's a different sale super 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 it's for US. It's good business. It's strong it's healthy units.
Until your basal comment it is growing.
I think like <unk> com its early we won't put numbers on that.
It's just very very early we do think that Tam is somewhere between three and up to up to 4 million patients.
Of basal basal patients.
We agree medicare's open for it in the commercials are well over 50% adoption there, but it's it's really early innings and we havent nor will we include any expectations on Basel or in our guide.
For for 2023.
Alright, I appreciate that.
And then just as we reflect the new revenue guidance that our models, how should we think about which segments revenues should move lower and is it isolated to any in particular or is it sort of broad based just any help on onset of segments.
Yes, sure sure, Matt so across the product categories.
I'd say firstly in diabetes.
Very modest growth in Q2 at 2%, we think thats 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 that's that's what we're 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.
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 entered Q3, we are lapping those arrangements and so expect supplies to the home to come back down to very low single digit.
Growth rate could it be two could it be three in that in the ballpark and then thirdly.
I would note on the <unk> book of business.
As we've reported previously we have changed sales incentives to focus on E prescribed.
Ordering that is absolutely working as already prescribed is up pretty.
Pretty considerably in <unk>.
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.
Helpful. Thank you so much.
Thank you.
Our next question will come from Peter Chickering with Deutsche Bank. Your line is open.
Hi, there guys, you've got a cure and Ryan on for Peter 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 it has not just started to work itself out, but we're feeling we're feeling very good about about the movement of product I'd.
I'd tell you the summertime I mean as usual setup.
Set ups are a bit soft you know folks are on vacation providers on vacation.
Holidays things like that so nothing out of the ordinary.
Other than what we would expect over over the summer time here.
Got it thanks, and then on the <unk> margins.
Obviously you came in nicely ahead of your expectations I think in <unk>. When you when you kind of got into that just under 20% you'd 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 di.
Sir.
I wouldn't say that the margin.
The improvement is due to the pure diabetes rebound I mean keep in mind, the diabetes product lines come at.
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 represent almost almost two thirds of our business and they're performing well they're healthy.
It's all systems go and that's really helping helping the margin improvement with addition of the cost management programs that we discussed.
Thank you.
Yes.
Thank you.
Our next question comes from Joanna.
With Bank of America. Your line is open.
Hey, good morning, Thanks, so much for taking the question here.
So I guess first on the other humana contract. So I know it's early right. It just started.
A little bit more than a month ago July 1st but can you.
Talk about.
Progress has been in terms of that transition and of.
The 1 million patients you're talking about.
The vast majority of our new and also with that do you need additional infrastructure to support this contract.
I'm trying to get a sense of the margin profile of that business versus your kind of thing.
The legacy business.
Sure John .
A couple of infrastructure investments that we've made.
It was important to us upon entering this this this new arrangement.
Relationship with Humana to really over club it and invest in the customer service aspect.
We've done that we've stood up a dedicated.
Onshore call center specific floor.
For these humana patients.
We have.
Double down within our within our sales force I mean, the number of referral points that.
This arrangement opens up is considerable.
You know.
Lots of new referral points that frankly, we havent earned.
Referral from.
In some cases ever.
In other cases in a very long time and so.
That's that's taking resource to crack open those doors and to and to start.
To start taking care of the patients in those in those provider groups.
So that's really on the on the.
In terms of the infrastructure side I would say again on Capex, we discussed earlier I think with Eric that.
We are comfortable with our capex projections with our utilization projections.
In terms of servicing the contract and then you know really it's all about.
You know again that high touch taking care of patients.
You are reporting new SL as to Humana around operational metrics turnaround times and the such patient satisfaction is just paramount here of course that helps.
<unk> as you know with with a variety of things, including reimbursement to get those patient satisfaction scores.
Up and that's what we're focused on doing.
Ken if I may I guess related question on the diabetes side, so you're talking about that.
Shifting to the government business on it it is a lower rate than commercial.
So like I assume.
And lower margin right there so.
How does how should think about that business going forward in terms of the margin profile just said it's traditionally.
Traditionally being below the.
Other products in your portfolio and then will you adjust cost structure for that 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 focus is that the technology is enabling a.
Of course, we'll be 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 and 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 two diabetes space.
I'm sorry, the type one I'm mixing up the type one diabetes space, which we all know as you know is very heavily concentrated with <unk> products.
The type two.
We are growing.
Again through our primary care sales force.
The sales people that we've retrained and enabled to go after new business.
We do expect to continue growth of whats 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 those that those businesses generate for us and so margins and margins in very good shape.
This is more about growing through the pump headwinds.
We've reported as well as growing through.
The payer mix trends that again, we've reported I mean this this is our plan to again grow grow through these things and if we execute margin will be just fine.
Thank you and if I may just ask all up since you mentioned the government business and you have been I guess.
Today, neither in other parts of the portfolio. So just quickly outlook for Medicare rates and anticipated competitive bedding.
And the expectations are there I'm equally CMS put the program on pause when it comes to competitive bidding.
But are you expecting any announcement later this year for 2025 competitive bidding at any kind of years in terms of new categories that will be included in there. Thank you.
Yes, good question Julien.
You know as you said.
<unk> formerly.
Postpone competitive bidding.
We don't believe that competitive bid will go away forever.
You know frankly adapters has benefited from these programs over the year, we think patients and providers and certainly the taxpayers.
The benefit from these programs. So we don't think that it.
We will go away.
Timing is very hard to predict on this I mean.
Some context might be just the complexity and running the program when you've got <unk>.
Hundreds and hundreds of Msas all over the country with thousands of thousands of products and what we believe is between five and 6000 remaining providers in the space and Nadeem Mi companies in the space.
They'll accept.
Essentially 10 bids many.
Many more will bid and so it's a big big calculated out of CMS I guess that runs all the data through but.
That administrative side is not 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 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.
As a reminder, that is star one to ask a question.
And our next question will come from Kevin Kelly <unk> with UBS. Your line is open.
Thanks, Thanks for taking my question.
Richard I wanted to ask what <unk>.
Away from Crispin coming in and taking over as CEO , maybe give us a little bit on on the process and Chris <unk> background and sort of what you expect him to bring to the table.
When he starts in a month.
Kevin Thanks.
Obviously from Christmas background 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 too.
Can you just help us get to be a better company blocking and tackling administrative where we're doing a lot of great things. He can help us further those is financially oriented he came up through finance in his prior organization and we expect that he will tighten down or even greatly.
<unk> financial.
Processes over the next several months. So it's really it's really a higher to make us a better company.
Do you think there is an opportunity with him in place to take share.
Obviously, he was running one of your competitors, yes, there are a lot of those relationships are.
Our 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 xs and OS and alike.
Yes, it's about executing the <unk> in our business.
Yes.
We are very respectful Christmas prior prior employment and we will 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 on the greater side of caution there, but where 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.
I'd like to turn it back over to management for any additional or closing remarks.
Yeah.
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 adapt health. Thank you very much.
Thank you ladies and gentlemen, this does conclude today's program and we appreciate your participation.
You may disconnect at any time.
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