Apria, Inc. (the “Company” or “Apria”) (Nasdaq: APR), a leading
provider of integrated home healthcare equipment and related
services in the U.S., announced today financial results for the
fourth quarter and full year ended December 31, 2020.
“We made great strides during 2020, creating significant
efficiencies throughout the organization, and we closed out the
year with solid financial results ahead of our expectations,” said
Dan Starck, CEO of Apria. “Despite the challenges presented by the
ongoing pandemic, the team worked diligently to ensure we were able
to handle the increased demand for oxygen therapy and to help
reduce the pressure on overburdened hospitals.”
Mr. Starck continued, “Our 2020 results reflect the ongoing
efforts of the Apria team, the success of operational efficiencies,
as well as unique aspects of the COVID-19 public health emergency
that provided some tailwinds for Apria and the industry as a whole.
Looking ahead to 2021, while there is uncertainty surrounding the
duration of the COVID-19 public health emergency, we are confident
in our ability to achieve our 2021 guidance. We are focused on
continued operational execution, delivering growth, and leveraging
our technology to drive further efficiencies. Apria is a mature
organization with keen expertise in this space and we are prepared
to quickly adapt to the evolving macro environment. I’m very
optimistic about where this industry is headed and I believe Apria
is well positioned to seize on the opportunities ahead of us.”
Fourth Quarter Financial Highlights
Comparisons are to the three months ended December 31, 2019.
- Net revenue of $293.8 million, up 5% compared to $281.2
million
- Net Income of $25.9 million, up 347% compared to $5.8
million
- Adjusted EBITDA of $64.1 million, up 17% compared to $55.0
million
- Adjusted EBITDA less Patient Equipment Capex of $35.0 million,
up from $34.9 million
Full Year 2020 Financial Highlights
Comparisons are to the full year ended December 31, 2019.
- Net revenue of $1.11 billion, up 2% compared to $1.09
billion
- Net Income of $46.1 million, up 195% compared to $15.6
million
- Adjusted EBITDA of $226.9 million, up 30% compared to $174.0
million
- Adjusted EBITDA less Patient Equipment Capex of $134.2 million,
up 67% compared to $80.5 million
2021 Financial Guidance
For the first quarter of 2021, Apria is currently projecting the
following financial results:
- Net revenue of $268 million to $272 million
- Adjusted EBITDA of $45 million to $48 million
- Adjusted EBITDA less Patient
Equipment Capex of $21 million to $24 million
For the full year 2021, Apria is currently projecting the
following financial results:
- Net revenue of $1.11 billion to $1.14 billion
- Adjusted EBITDA of $203 million to $212 million
- Adjusted EBITDA less Patient
Equipment Capex of $108 to $115 million
Conference Call
Apria will host a conference call to discuss fourth quarter and
full year 2020 results on March 30, 2021 at 5:00 p.m. Eastern Time.
The conference call can be accessed by dialing (833) 362-0207 for
U.S. participants or (914) 987-7676 for international participants,
and referencing conference ID 9153499; or via a live audio webcast
that will be available online at apria.com/investor-relations. A
replay of the call will be available via webcast for on-demand
listening shortly after the completion of the call, at the same web
link, and will remain available for approximately 90 days.
About Apria
Apria is a leading provider of integrated home healthcare
equipment and related services in the United States. The Company
offers a comprehensive range of products and services for in-home
care and delivery across three core service lines: (1) home
respiratory therapy (including home oxygen and non-invasive
ventilation (“NIV”) services); (2) obstructive sleep apnea
(“OSA”) treatment (including continuous positive airway pressure
(“CPAP”) and bi-level positive airway pressure devices, and patient
support services); and (3) negative pressure wound therapy
(“NPWT”). Additionally, the Company supplies a wide range of home
medical equipment and other products and services to help improve
the quality of life for patients with home care needs. Our revenues
are generated through fee-for-service and capitation arrangements
with payors for equipment, supplies, services and other items we
rent or sell to patients. Through our offerings, we also provide
patients with a variety of clinical and administrative support
services and related products and supplies, most of which are
prescribed by a physician as part of a care plan. We are focused on
being the industry’s highest-quality provider of home healthcare
equipment and related services, while maintaining our commitment to
being a low-cost operator. The Company serves over 2 million
patients annually and offers a compelling value proposition to
patients, providers and payors by allowing patients to receive
necessary care and services in the comfort of their own home,
while, at the same time, reducing the costs of treatment. Learn
more at www.apria.com.
This press release includes certain historical consolidated
financial and other data for Apria Healthcare Group LLC (formerly
known as Apria Healthcare Group Inc.) (“Apria Healthcare Group”)
and its subsidiaries. In connection with our initial public
offering (“IPO”), we undertook certain reorganization transactions
as of February 10, 2021 so that Apria, Inc. directly or indirectly
owns all of the equity interests in Apria Healthcare Group and is
the holding company of our business.
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 the impact of the
COVID-19 public health emergency, 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, 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"
section of the Company’s prospectus dated February 10, 2021 filed
with the Securities and Exchange Commission (the “SEC”) on February
12, 2021, as such factors may be further updated from time to time
in the Company’s periodic filings with the SEC, including the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, which is expected to be filed on or about the
date of this press release, which are or will be accessible on the
SEC's website at www.sec.gov. These factors should not
be construed as exhaustive and should be read in conjunction with
the other cautionary statements that are included in this press
release and in the Company’s filings with the SEC. We undertake no
obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as required by law.
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
the United States (“GAAP”).The Company uses EBITDA, Adjusted EBITDA
and Adjusted EBITDA less Patient Equipment Capex, which are
financial measures that are not prepared in accordance with GAAP,
to analyze its financial results and believes that they are useful
to investors, as a supplement to GAAP measures.
EBITDA is a non-GAAP measure that represents net income for the
period before the impact of interest income, interest 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
businesses either period-over-period or with other businesses. The
Company uses Adjusted EBITDA as a key profitability measure to
assess the performance of our businesses. 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 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. 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
businesses.
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 first
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
macro-economic effects due to the COVID-19 pandemic that are not
yet quantifiable. The financial guidance is subject to risks and
uncertainties applicable to all forward-looking statements as
described elsewhere in this press release and in the Company’s
filings with the SEC.
|
APRIA HEALTHCARE
GROUP INC.CONSOLIDATED BALANCE SHEETS
(Unaudited) |
|
|
|
|
|
|
|
|
|
December 31, |
(in thousands, except
share and per share data) |
|
2020 |
|
2019 |
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
195,197 |
|
|
$ |
74,691 |
|
Accounts receivable |
|
|
74,774 |
|
|
|
84,071 |
|
Inventories |
|
|
6,680 |
|
|
|
6,849 |
|
Prepaid expenses and other current assets |
|
|
24,003 |
|
|
|
17,344 |
|
TOTAL CURRENT ASSETS |
|
|
300,654 |
|
|
|
182,955 |
|
PATIENT EQUIPMENT, less
accumulated depreciation of $356,888 and $322,153 as of December
31, 2020 and December 31, 2019, respectively |
|
|
223,972 |
|
|
|
232,656 |
|
PROPERTY, EQUIPMENT AND
IMPROVEMENTS, NET |
|
|
25,419 |
|
|
|
26,436 |
|
INTANGIBLE ASSETS, NET |
|
|
61,497 |
|
|
|
62,071 |
|
OPERATING LEASE RIGHT-OF-USE
ASSETS |
|
|
57,869 |
|
|
|
65,332 |
|
DEFERRED INCOME TAXES,
NET |
|
|
18,258 |
|
|
|
34,699 |
|
OTHER ASSETS |
|
|
17,315 |
|
|
|
13,004 |
|
TOTAL ASSETS |
|
$ |
704,984 |
|
|
$ |
617,153 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
$ |
116,886 |
|
|
$ |
122,819 |
|
Accrued payroll and related taxes and benefits |
|
|
55,628 |
|
|
|
48,651 |
|
Other accrued liabilities |
|
|
33,513 |
|
|
|
27,834 |
|
Deferred revenue |
|
|
25,821 |
|
|
|
24,860 |
|
Current portion of operating lease liabilities |
|
|
23,977 |
|
|
|
24,546 |
|
Current portion of long-term debt |
|
|
20,833 |
|
|
|
3,750 |
|
TOTAL CURRENT LIABILITIES |
|
|
276,658 |
|
|
|
252,460 |
|
LONG-TERM DEBT, less current
portion |
|
|
376,389 |
|
|
|
144,034 |
|
OPERATING LEASE LIABILITIES,
less current portion |
|
|
35,358 |
|
|
|
40,287 |
|
LEGAL RESERVE |
|
|
— |
|
|
|
12,200 |
|
OTHER NONCURRENT
LIABILITIES |
|
|
42,924 |
|
|
|
33,656 |
|
TOTAL LIABILITIES |
|
|
731,329 |
|
|
|
482,637 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
STOCKHOLDERS’ (DEFICIT)
EQUITY |
|
|
|
|
|
|
Common stock, $0.01 par value: 1,100,000 shares authorized; 992,719
shares issued as of December 31, 2020 and 2019 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
954,087 |
|
|
|
1,161,087 |
|
Accumulated deficit |
|
|
(980,432 |
) |
|
|
(1,026,571 |
) |
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
(26,345 |
) |
|
|
134,516 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
$ |
704,984 |
|
|
$ |
617,153 |
|
|
|
|
|
|
|
|
|
|
|
APRIA HEALTHCARE
GROUP INC.CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
(in thousands, except
share and per share data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee-for-service arrangements |
|
$ |
237,216 |
|
|
$ |
225,720 |
|
|
$ |
883,846 |
|
|
$ |
870,344 |
|
Capitation |
|
|
56,573 |
|
|
|
55,445 |
|
|
|
224,871 |
|
|
|
218,531 |
|
TOTAL NET REVENUES |
|
|
293,789 |
|
|
|
281,165 |
|
|
|
1,108,717 |
|
|
|
1,088,875 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product and supply costs |
|
|
51,104 |
|
|
|
51,476 |
|
|
|
192,667 |
|
|
|
206,067 |
|
Patient equipment depreciation |
|
|
25,479 |
|
|
|
24,798 |
|
|
|
101,319 |
|
|
|
97,386 |
|
Home respiratory therapists costs |
|
|
4,034 |
|
|
|
4,716 |
|
|
|
16,882 |
|
|
|
19,560 |
|
Other |
|
|
3,733 |
|
|
|
4,658 |
|
|
|
17,402 |
|
|
|
17,701 |
|
TOTAL COST OF NET REVENUES |
|
|
84,350 |
|
|
|
85,648 |
|
|
|
328,270 |
|
|
|
340,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, distribution and administrative |
|
|
175,189 |
|
|
|
183,200 |
|
|
|
709,299 |
|
|
|
720,746 |
|
TOTAL COSTS AND EXPENSES |
|
|
259,539 |
|
|
|
268,848 |
|
|
|
1,037,569 |
|
|
|
1,061,460 |
|
OPERATING INCOME |
|
|
34,250 |
|
|
|
12,317 |
|
|
|
71,148 |
|
|
|
27,415 |
|
Interest expense and
other |
|
|
2,261 |
|
|
|
1,767 |
|
|
|
6,308 |
|
|
|
5,112 |
|
Interest income and other |
|
|
(46 |
) |
|
|
106 |
|
|
|
(498 |
) |
|
|
(1,446 |
) |
INCOME BEFORE INCOME TAXES |
|
|
32,035 |
|
|
|
10,444 |
|
|
|
65,338 |
|
|
|
23,749 |
|
Income tax expense |
|
|
6,164 |
|
|
|
4,662 |
|
|
|
19,199 |
|
|
|
8,127 |
|
NET INCOME |
|
$ |
25,871 |
|
|
$ |
5,782 |
|
|
$ |
46,139 |
|
|
$ |
15,622 |
|
Basic and diluted earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
|
$ |
26.06 |
|
|
$ |
5.82 |
|
|
$ |
46.48 |
|
|
$ |
15.74 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
992,719 |
|
|
|
992,719 |
|
|
|
992,719 |
|
|
|
992,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APRIA HEALTHCARE GROUP INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
(in
thousands) |
|
2020 |
|
2019 |
Net cash provided by operating activities |
|
$ |
196,713 |
|
|
$ |
161,850 |
|
Net cash used in investing
activities |
|
|
(91,727 |
) |
|
|
(92,713 |
) |
Net cash provided by (used in)
financing activities |
|
|
15,520 |
|
|
|
(59,116 |
) |
Net increase in cash and cash
equivalents |
|
|
120,506 |
|
|
|
10,021 |
|
Cash and cash equivalents at
beginning of period |
|
|
74,691 |
|
|
|
64,670 |
|
Cash and cash equivalents at
end of period |
|
$ |
195,197 |
|
|
$ |
74,691 |
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP Financial
InformationThe following table reconciles net income, the
most directly comparable GAAP measure, to EBITDA, Adjusted EBITDA
and Adjusted EBITDA less Patient Equipment Capex for the periods
presented:
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
(in thousands) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income |
|
$ |
25,871 |
|
|
$ |
5,782 |
|
|
$ |
46,139 |
|
|
$ |
15,622 |
|
Interest expense, net and
other |
|
|
2,214 |
|
|
|
1,873 |
|
|
|
5,810 |
|
|
|
3,666 |
|
Income tax expense |
|
|
6,165 |
|
|
|
4,662 |
|
|
|
19,199 |
|
|
|
8,127 |
|
Depreciation and
amortization |
|
|
28,315 |
|
|
|
28,326 |
|
|
|
115,230 |
|
|
|
111,576 |
|
EBITDA |
|
$ |
62,565 |
|
|
$ |
40,643 |
|
|
$ |
186,378 |
|
|
$ |
138,991 |
|
Strategic transformation
initiatives: |
|
|
|
|
|
|
|
|
|
|
|
|
Simplify(a) |
|
$ |
— |
|
|
$ |
849 |
|
|
|
1,159 |
|
|
|
11,775 |
|
Financial systems(b) |
|
|
432 |
|
|
|
— |
|
|
|
1,846 |
|
|
|
— |
|
Other initiatives(c) |
|
|
366 |
|
|
|
30 |
|
|
|
465 |
|
|
|
834 |
|
Stock-based compensation and
other(d) |
|
|
2,910 |
|
|
|
967 |
|
|
|
4,839 |
|
|
|
9,024 |
|
Legal settlements(e) |
|
|
(3,634 |
) |
|
|
12,200 |
|
|
|
28,891 |
|
|
|
12,200 |
|
Offering costs(f) |
|
|
1,454 |
|
|
|
320 |
|
|
|
3,280 |
|
|
|
1,148 |
|
Adjusted
EBITDA |
|
$ |
64,093 |
|
|
$ |
55,009 |
|
|
$ |
226,858 |
|
|
$ |
173,972 |
|
Patient Equipment Capex |
|
|
(29,153 |
) |
|
|
(20,048 |
) |
|
|
(92,635 |
) |
|
|
(93,449 |
) |
Adjusted EBITDA less
Patient Equipment Capex |
|
$ |
34,940 |
|
|
$ |
34,961 |
|
|
$ |
134,223 |
|
|
$ |
80,523 |
|
________________________
(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 initiative includes one-time third-party logistics advisory
costs associated with a 24-month initiative launched in January
2018 designed to modify the branch network in order to reduce
branch operating costs while maintaining or improving patient
service levels, one-time costs associated with customer service
initiatives, one-time costs associated with implementation of an
electronic sales, service and rental agreement and one-time costs
associated with developing and launching our e-commerce
platform. |
(d) |
|
Stock-based compensation has historically been granted to certain
of our employees in the form of profit interest units of our parent
and stock appreciation rights. For time-based vesting awards, we
recognize a non-cash compensation expense based on the fair value
of the awards determined at the date of grant over the requisite
service period. In June 2019, all outstanding performance
Class B units were modified to accelerate vesting resulting in
$7.0 million stock compensation expense. Other compensation
includes long-term incentive compensation. |
(e) |
|
Represents the increase in the settlement amount in relation to a
series of civil investigative demands from the United States
Attorney’s Office for the Southern District of New York offset by a
one-time unrelated $3.0 million recovery in the three months ended
December 31, 2020. |
(f) |
|
Offering costs represent one-time costs relating to preparation for
our IPO and accelerated implementation of new accounting standards.
As the Company did not receive any proceeds from the offering,
these costs were expensed as incurred in selling, distribution and
administrative expenses in the consolidated statements of
income. |
|
|
|
Investor Contacts
ApriaIR@westwicke.com
Media Contacts
ApriaPR@westwicke.com
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