June 2021 Investor Presentation - Apria, Inc. Nasdaq: APR
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June 2021 Investor Presentation - Apria, Inc. Nasdaq: APR ©2021 Apria Healthcare Group Inc
DISCLAIMER
This Presentation 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. You should not rely upon forward-looking statements as predictions of
future events. All statements other than statements of historical facts contained in this Presentation, including information concerning our
possible or assumed future results of operations and expenses, business strategies and plans, competitive position, business and industry
environment and potential growth opportunities, are forward-looking statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should
not place undue reliance on any forward-looking statements in this Presentation. Except as required by law, we disclaim any obligation to
update any forward-looking statements for any reason after the date of this Presentation, or to update the reasons why actual results could
differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the
Company's expectations is included under “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed
with the SEC, as such factors may be updated from time to time in the Company’s periodic filings with the SEC.
You should not rely upon forward-looking statements as predictions of future events. Although Apria believes that the expectations reflected
in its forward-looking statements are reasonable, the Company cannot guarantee that the future results, performance, or events and
circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither the Company, nor any other person
(including any underwriter of the Company’s securities), assumes responsibility for the accuracy and completeness of the forward-looking
statements. The Company undertakes no obligation to update any forward-looking statements for any reason after the date of this
presentation to conform these statements to actual results or to changes in our expectations, except as required by law.
This Presentation includes certain financial measures that are calculated and presented on the basis of methodologies other than in
accordance with generally accepted accounting principles in the United States of America (“GAAP”). These non-GAAP financial measures
should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please refer to
the reconciliations of certain non-GAAP financial measures included in this Presentation to the most directly comparable financial measures
prepared in accordance with GAAP.
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©2021 Apria Healthcare Group Inc.
APRIA Overview ©2021 Apria Healthcare Group Inc.
Key Investment Highlights
One of the Largest DME Operators in the U.S., with National
11 Scale, Local Presence and Differentiated Capabilities
Well Positioned to Capture Secular Growth Tailwinds in the
21 Home-Based Care Setting
Expansive Offering with Exposure to Attractive Product
31 Markets
Strong Relationships with Payors and Referral Sources
41 Developed with Differentiated Sales Model
51 Leadership in Clinical Delivery
61 Leading Revenue Cycle Management
71 Strong and Experienced Management Team
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©2021 Apria Healthcare Group Inc.
Introduction to Apria
• A leading provider of integrated home healthcare equipment and related services in the United
States
• Offers a comprehensive range of products and services for in-home care and delivery across 3 core Therapies
service lines: Home Respiratory, Obstructive Sleep Apnea, and Negative Pressure Wound Therapy
• Supplies a wide range of home medical equipment, other respiratory services and other products to HOME
help improve the quality of life for patients with home care needs RESPIRATORY
• Provides home healthcare therapies that require high-touch service, including providing a bridge
from the acute care setting to the home
- Expansive network of branches, delivery technicians and respiratory therapists OBSTRUCTIVE
SLEEP APNEA
- Variety of clinical and administrative support services and related products and supplies
• Expertise in fee-for-service as well as capitation arrangements; has a capitated arrangement with the
largest west coast integrated healthcare system, Kaiser Permanente
WOUND
• Well-positioned for future growth through favorable industry dynamics, transition to value-based CARE
care, expansion of products and service offerings, leveraging in-home patient interactions and driving
volume growth through e-commerce
~$1.1bn ~18% ~6,500 275
Key Revenue Adj. EBITDA Margin(3) Employees Branches
Stats(2) 90% 6% 2.4mm
US Population We Are Able to Reach DME Industry Growth(1) Annual Deliveries
(1) CMS Projections for DME spend from 2018 through 2028.
(2) For the year ended December 31, 2020 except as otherwise noted.
(3) Represents the average across 2019 and 2020 period. Adjusted EBITDA and EBITDA Margin represents a non-GAAP measure, see Appendix for a reconciliation.
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©2021 Apria Healthcare Group Inc.
Business Updates Since IPO
• CMS permanently removes Budget Neutrality and provides oxygen rate increase
- In April, the Centers for Medicare & Medicaid Services (CMS) increased the oxygen
reimbursement rates by an average of ~10% and ~5% for CBA and non-CBA areas, respectively
- Due to the Consolidated Appropriations Act of 2021 eliminating budget neutrality requirements
• COVID-related
- On April 16th, CMS extended the Public Health Emergency (PHE) through July, will be updated in
90 day increments
- CMS suspended sequestration payment adjustment through December 31, 2021
• Additions to Management and the Board
- Appointed Michael-Bryant Hicks as General Counsel
- Appointed Susannah Gray, former CFO of Royalty Pharma and Terri Kline, former EVP of Henry
Ford Health System, to the Company’s Board of Directors
- Gray and Kline will serve on the Board’s Audit Committee
• Financial
- Q1 2021 Summary
• Net revenue of $275.3 million, up 2% YOY
• Adjusted EBITDA of $48.3 million, up 15% YOY
• Adjusted EBITDA less Patient Equipment Capex of $24.7 million, up 41% YOY
Source: Company filings and press releases.
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©2021 Apria Healthcare Group Inc.
What is DME and How is it Vital to Home Care?
The Durable Medical Equipment (“DME”) industry allows patients to receive treatment of chronic illnesses in their
preferred home setting
Overview of DME DME is Vital to Home Care
• Critical medical equipment used in the home to enable
Allows patients with complicated healthcare
patients to be home with a better quality of life
needs to transition to a preferred home setting
• Reimbursed by healthcare insurance including Medicare
• Primarily serve patients with need for respiratory, sleep and
mobility equipment including oxygen equipment, CPAP Provides for greater patient independence and
better outcomes
equipment, wound care equipment, wheelchairs, hospital
beds, bathroom aids, and other home medical equipment
• Strategic entry point into the patient home, where care
Serves a large and growing demand for
provision continues to grow treatment of chronic illnesses
Strategic entry into the patient home enables
trust and patient relationships
Oxygen Concentrator
CPAP Machine & Mask Wound Care Therapy
Harnesses continual technological evolution for
better care in the home
Wheelchair Rolling Walker
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©2021 Apria Healthcare Group Inc.
Highly Favorable Industry Dynamics
We believe Apria is well positioned to capture favorable industry trends, including: increasing prevalence of chronic disease, rapid
technological advancements, and a growing aging population, which are the leading factors propelling the overall demand for durable
medical equipment
Durable Medical Equipment Expenditures: Historic & Projected (CMS)
($ in billions)
$93 $98
$83 $88
$74 $78
$66 $70
$58 $62
$49 $51 $52 $55
$42 $44 $45 $47
$40
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E
• United States population aged 65 and over will grow substantially from 15.2% of the population in 2016 to 20.6% of the
Aging Population population by 2030
• Increasing obesity rates and clinical consequences of the high prevalence of smoking from earlier decades will drive
Rising Incidence Of higher diagnosis rates for a number of chronic conditions
Chronic Diseases
• Certain chronic diseases currently under-diagnosed
• Home healthcare increasingly sought out as an attractive, cost-effective, and clinically appropriate alternative to
Continued Shift Toward facility-based care
Home Healthcare
• Pandemic environment further emphasized the need for homecare as a lower risk setting for many patients
Preference For In-home • Improved technology has resulted in a wider variety of treatments being administered in patient homes
Care • Patients prefer the convenience and independence of in-home care
Highly Fragmented • Between 2012 and 2018, the overall number of Durable Medical Equipment, Prosthetics, Orthotics and Supplies
Market (“DMEPOS”) suppliers that bill Medicare more than $10 million annually fell from 73 to 57
Sources: CMS, United States Census Bureau, Medicare Payment Advisory Commission, HME News, and Henry J. Kaiser Family Foundation
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©2021 Apria Healthcare Group Inc.
Apria’s Market Opportunity is Large and Growing
Apria is aligned with a number of large and growing markets, which are all benefitting from increased shift to in-
home care
Market Size and Growth Estimates
1 Respiratory Devices Market Size ($B) Market Growth (%)
• COPD patient population continues to grow as average age increases
• Oxygen therapy is a feeder into non-invasive ventilation as the patient
disease state progresses $6.2B(1) 6.3%(1)
• Rising prevalence of chronic respiratory diseases
2 Obstructive Sleep Apnea
• 80% of moderate and severe sleep-disordered breathing cases remain
undiagnosed $2.2B(2) 7.6%(2)
• 1 in 15 adults has moderate to severe obstructive sleep apnea, while 1 in 10
adults has diabetes (prevalence similar to asthma)
3 NPWT (Wound Therapy)
• Aging population increases size of addressable market $2.1B(3) 5.2%(3)
• New product development and research for treatment best practice
Source: Industry research
(1) Represents estimated market size of Respiratory Care Devices Market in North America as of 2018, with estimated compound annual growth from 2018 through 2025.
(2) Represents estimated market size of Sleep Apnea Devices Market in North America as of 2018, with estimated compound annual growth from 2018 through 2025.
(3) Represents estimated market size of NPWT Devices Market globally as of 2018, with estimated compound annual growth from 2018 through 2023.
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©2021 Apria Healthcare Group Inc.
Apria’s Value Proposition
We offer a compelling value proposition for Patients, Providers and Payors
PATIENTS PROVIDERS PAYORS
Committed to improving Aim to be a trusted advocate Seek to effectively manage the
experience and clinical and provider of patient clinical transition from the acute care
outcome for each patient we needs in patients’ homes, setting to a low-cost home
serve. Patients generally while fostering lasting doctor- setting with a high reliability
prefer the convenience and patient relationships of clinical support and quality
typical cost advantages of equipment to lower
home healthcare over readmission rates
institutional care
Provide reliable, consistent service with 24/7/365 availability
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©2021 Apria Healthcare Group Inc.Strategic Entry Point Direct to Patients In-home
Through a diversity of touch points with delivery technicians, respiratory therapists, and customer service personnel
Apria’s platform provides a direct entry point into the home with a range of strategic opportunities
• Number of home encounters, largely through delivery technicians and respiratory therapists,
provides a bridge between acute care setting to home healthcare setting
- ~2 million unique patients serviced in 2020 Hospital Physician Office
- ~2.4 million deliveries made in 2020
- Over 735,000 clinician interactions in 2020
- Approximately 275 branches with ability to reach more than 90% of the U.S. population
• Apria’s platform and operations provide a direct entry point into the home with strategic
ramifications across a range of applications for one of the sicker and more costly patient
populations
- Population health
- Nursing and other homecare services
- Chronic disease management
- Remote patient monitoring
• Apria’s infrastructure is scalable and we believe can support the addition of new products
and services with minimal incremental investment in sales and distribution or other fixed
costs Patient Home
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©2021 Apria Healthcare Group Inc.National Scale With Differentiated Capabilities
As one of the leading national platforms with a substantial urban presence, Apria has differentiated capabilities with
cost advantages and strategic / commercial implications
National Platform Managed Contracts Leading RCM Expertise Tech-Enabled Infrastructure
«˜
BROAD NATIONAL SCALE HIGH COMMERCIAL PAYOR MIX REVENUE MANAGEMENT TECHNOLOGY
• Over 275 branches with • Over 1,600 payor contracts • Centralized billing • Electronic prescribing
ability to reach more than • ~78% of revenue from • Core competency in • Telehealth platform
90% of the U.S. population Commercial payors(1) commercial and Medicare • Robotics Process Automation
• National sales force billing
• Expertise in fee-for-service as
• Workflow automation
• Ability to serve most U.S. well as capitation • Automated insurance
hospital facilities eligibility validation • Patient eSign
• Capitated arrangement with
• National single-source deals the largest west coast • Online payment portal • Customer relationship
with integrated health integrated healthcare system, management
systems Kaiser Permanente • Retail eCommerce
• Robust logistics platform • Data Analytics /KPIs
• High quality clinical • Driver routing and dispatch
capabilities
(1) For the year ended December 31, 2020.
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©2021 Apria Healthcare Group Inc.Expansive Offering in Attractive Product Markets
Apria is contracted with nearly all insurance companies and managed care organizations to provide a comprehensive
range of services for in-home care and delivery
Obstructive Sleep Apnea Negative Pressure Wound Home Medical Equipment
Home Respiratory Therapy
Treatment Therapy and Other Services
2020 Revenue $454mm $454mm $43mm $158mm
% of Total Revenue 41% 41% 4% 14%
Home respiratory therapies, One of the largest providers Equipment, supplies and Home medical equipment
including complex of OSA therapy devices and services to facilitate wound
Business Description respiratory treatment services in the U.S. dressing and healing at
home, across all severities of
wounds
Oxygen, nebulizers, unit CPAP, BiPAP, masks & Pumps, dressings & supplies Beds, wheelchairs & aids for
dose medications & supplies activities of daily living
ventilators Fully-integrated sleep
Products / Services
Noninvasive ventilation (NIV) management program
COPD, CHF and acute Obstructive Sleep Apnea Acute and chronic complex Stroke, inability to ambulate
Diagnosis Examples respiratory distress wounds
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©2021 Apria Healthcare Group Inc.Strong Payor and Referral Source Relationships
Key Statistics and Value Proposition Illustrative Clients
• Apria offers Payors access to an extensive national footprint,
national logistics systems, respiratory clinical expertise,
competitive pricing, alternative payment arrangements,
including fee-for-service and capitation for defined patient
populations, and our ability to connect electronically with
Payors’ systems
• Apria has actively worked to improve its payor mix, with
Commercial Payors accounting for ~78% of 2020 revenues
• The top Payor (Kaiser Permanente) accounted for 23% of
revenue in 2020
Payor Mix Payor Concentration
All Other
Medicare Payors #1 Payor
21% Government 23% 23%
22%
Medicaid
1%
Commercial (1)
78%
#2 Medicare
21%
#3 - #8 Payors
33%
(1) Managed care payors are included in Commercial segment of Payor Mix.
Note: All numbers reflected on page represent 2020 data.
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©2021 Apria Healthcare Group Inc.Leader in Clinical Delivery
Apria has differentiated clinical expertise, leveraging protocols and data to drive optimal outcomes across its
product lines
COPD Obstructive Sleep Apnea (OSA)
• From nebulizers to Oxygen to NIV, seamless product offering • Apria’s sleep therapy program is designed to provide patients
along the COPD continuum with the convenient options they want and the tools they need
• Apria’s patient centric clinical program is driven by Respiratory to succeed
Therapists personally involved in patient follow-up to address • Premium Care SleepTM
issues and help improve therapy compliance
- Fully-integrated sleep management program designed to
• Apria provides comprehensive care for COPD patients conveniently provide OSA patients with the tools they need
throughout all stages of the disease from mild to severe or very to improve their sleep
severe
- Monitors the OSA treatment compliance of almost 168,000
sleep patients on a nightly basis during the critical first 90
days of their treatment and proactively reach out to
patients who may need help to improve their compliance
through clinical intervention and other support from Apria
Select Products Select Products
Battery Powered Portable Oxygen Home Bilevel Positive Airway
CPAP Mask
Nebulizer Concentrator Ventilator Pressure Device
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©2021 Apria Healthcare Group Inc.Strong and Experienced Management Team
Experienced management team who has guided the company through recent industry transition and positioned the
company for growth
Company Officer Years at Apria Selected Experience¹
Daniel Starck
23 Years2
Chief Executive Officer
Debra Morris
8 Years
EVP, Chief Financial Officer
Michael-Bryant Hicks
1 Year
EVP, General Counsel & Secretary
Angela Fyfe
5 Years
EVP, Enterprise Services
Robert Walker
12 Years
EVP, Managed Care
Mark Litkovitz
12 Years
EVP, Chief Information Officer
Celina Scally
Chief Human Resources Officer, 31 Years
SVP
(1) Includes individuals who have returned to Apria.
(2) Dan was with Apria for 14 years prior to joining Corvel in 2006, then rejoined Apria in 2012.
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©2021 Apria Healthcare Group Inc.Fragmented HME Market Offers Growth Opportunity
Medicare HME Providers(1) Competitive Landscape
8,837
6,152
July 2013 April 2020
• Highly fragmented industry in consolidation phase driven by CMS competitive bid program
• National competitors are gaining share primarily through acquisitions
• Medicare competitive bidding results provide for rate stabilization and opportunity for consolidation of smaller and regional providers
• Illustrative Acquisition Criteria:
• Size:Growth Strategy
Apria has a range of highly executable growth strategies targeting new and existing markets
Grow eCommerce through a
Patient-centric Approach
‒ Service existing patients with
new offerings and also serves
Strategic Acquisitions as an additional acquisition
‒ Continue to evaluate such channel for new patients
opportunities through a ‒ Direct-to-patient marketing
disciplined approach, seeking focused on service and clinical
complementary acquisitions support
Maintain Leadership in Existing ‒ Various markets we
Markets participate in remain highly
‒ National platform that is fragmented and ripe for
difficult to replicate consolidation
‒ Actively working to increase 5
the diagnosis and treatment of
OSA through collaboration with 4
primary care physicians
‒ Leverage these strengths to
maintain share and capture
3
market growth
2 Enable the Transition to Value-based
Healthcare
‒ Ability to transition patients from
the acute care setting to the
Expand Product and Service Offerings home, as well as to support the
1 ‒ Continued focus on expanding new prevention of unnecessary
product lines and services both readmissions
organically and through acquisitions ‒ Demonstrated expertise in non-
‒ Diabetes and the provision of diabetic traditional payment models, such
supplies represents a compelling as capitation arrangements
opportunity, as diabetic patients often
suffer from many co-morbidities,
including OSA and respiratory which
we already treat
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©2021 Apria Healthcare Group Inc.Historical Financial Overview ©2021 Apria Healthcare Group Inc.
Q1 ’21 Update
Apria’s first quarter 2021 results were ahead of expectations building on momentum from 2020
Commentary Net Revenue
(in $mm)
• First quarter 2021 results were ahead of expectations
on all three key metrics, building on momentum from $269
$275
2020 and establishing a solid foundation for future
growth
Q1 2020 Q1 2021
Adjusted EBITDA(1) Adj. EBITDA – Patient Equipment Capex(1)
(in $mm) (in $mm)
$48 $25
$42 $18
Q1 2020 Q1 2021 Q1 2020 Q1 2021
% Margin 15.6% 17.5% % Margin 6.5% 9.0%
(1) Adjusted EBITDA and Adjusted EBITDA – Patient Equipment Capex are non-GAAP measures. See Appendix for a reconciliation to net income.
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©2021 Apria Healthcare Group Inc.Apria Historical Financial Performance
Apria has consistently demonstrated volume growth and margin expansion by focusing on product and payor mix and
operating efficiency
Net Revenue(1) Adjusted EBITDA(3)
($ in millions)
$1,079 $1,089 $1,109
$227
$174
$156
2018 2019 2020 2018 2019 2020
(3)
Total 4.7% 0.9% 1.8% Adjusted EBITDA Margin
Core(2) 5.7% 3.6% 3.8% 14.4% 16.0% 20.5%
• Core(2) business of Home Respiratory, Obstructive Sleep • Margin improvement from focus on payor and product mix,
Apnea, and Negative Pressure Wound Therapy continue to continued process improvement and resultant reduced costs, and
grow strategic initiatives including Project Simplify
• Strong growth in 2020 primarily due to increased volume of • 2020 reflects higher rates, lower administrative burden and lower
home respiratory patients and growth in sleep supplies cost structure resulting from Project Simplify, and reduction of
variable costs during COVID
• 2020 Adjusted EBITDA up 30.4% YoY
(1) Net revenue for 2018 restated for the impact of adopting Topic 842. See appendix for net revenue reconciliation.
(2) Core includes the Home Respiratory Therapy, OSA Treatment, and NPWT service lines.
(3) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Adjusted EBITDA margins are calculated based on restated net revenues. See Appendix for a reconciliation to net income.
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©2021 Apria Healthcare Group Inc.Historical Net Revenue by Service Line
Apria’s strategy has been to focus payor mix on higher priced managed care business, drive OSA and sleep resupply
growth, grow NIV, and further establish its eCommerce presence while strategically de-emphasizing non-core,
unprofitable businesses
(in $mm) $1,079 $1,089 $1,109
$173 $158
$195
$42 $43
$40
$439 $454
$421
$269 $275
$423 $436 $454 $40 $10 $37 $10
$109 $114
$110 $114
2018 2019 2020 Three Months Ended Three Months Ended
Mar. 31, Mar. 31,
2020 2021
Home Respiratory Therapy Obstructive Sleep Apnea NPWT Other Equipment and Services
Three Months Ended
Year Ended December 31,
March 31,
% Net Revenue Growth 2019 2020 ‘18 - ’20 CAGR 2021
Home Respiratory Therapy 3% 4% 4% 4%
Obstructive Sleep Apnea 4% 4% 4% 4%
NPWT 5% 2% 3% 0%
Core Products 4% 4% 4% 4%
Other Equipment and Services (11)% (9)% (10)% (8)%
Total 1% 2% 1% 2%
Note: Net revenue for 2018 has been restated for the impact of adopting Topic 842 for comparability. See appendix for net revenue reconciliation.
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©2021 Apria Healthcare Group Inc.Patient Equipment Capex Overview
Patient Equipment Capex Adj. EBITDA – Patient Equipment Capex
(in $mm) (in $mm)
$110
$93 $93
2018 2019 2020
Patient Equipment Capex % of Net Revenue Adj. EBITDA – Patient Equipment Capex % of Net Revenue
10% 9% 8% 4% 7% 12%
• Home Respiratory Therapy and Obstructive Sleep Apnea comprise the majority of Patient Equipment Capex mix
• Investment in sleep units (i.e., CPAP) enables related growth in less capital-intensive sleep supplies
• Strong improvement in Adj. EBITDA less PSE Capex driven by implementation of strategic initiatives, like Project Simplify,
coupled with lower levels of capital expenditures beginning in 2019 due to the effective management of asset utilization
and capex spend
Note: Net revenue for 2018 has been restated for the impact of adopting Topic 842 for comparability. Patient Equipment Capex margins are calculated based on restated net revenues. See appendix for net revenue
reconciliation
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©2021 Apria Healthcare Group Inc.Conclusion ©2021 Apria Healthcare Group Inc.
Conclusion
Apria is a leading national provider well positioned for growth in the attractive home healthcare market
Leading Market Position in a Consolidating Fragmented Market
Aging population, shift to lowest cost care setting, greater access to insurance coverage, and rising
Favorable Market With Volume incidence of chronic diseases
Growth Tailwinds
U.S. DME market is expected to grow at a 6% CAGR between 2019 and 2028 by CMS
Nationwide footprint able to reach 90% of the U.S. population, with local market expertise
National Scale with Local
Presence Leveragable centralized infrastructure for adjacent healthcare products and other services offered at
home; one of the largest urban platforms nationally
High quality, clinically appropriate care across a broad spectrum of services and treatments
Expansive Product Offering Ability to offer other products and services with what we believe is minimal incremental investment in
sales, distribution, and other fixed costs
Strategic Entry Point Into the Applicable across (1) population health, (2) nursing and other homecare services, (3) chronic disease
Home management, and (4) remote patient monitoring
Strong Long-term Relationships Deep and long-standing relationships with all national and regional insurers as well as Medicare
with Payors and Referral
Sources Flexibility in payment arrangements and ability to offer geographical reach
Convenient method of distribution to existing patients, as well as additional acquisition channel for new
Patient-centric e-Commerce patients
Platform Primarily focused on lower capital intensive supplies and accessories, enabling attractive opportunity
for higher cash flow generation
Experienced Management Led by an experienced team with a track record of delivering results
Team
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©2021 Apria Healthcare Group Inc.Appendix ©2021 Apria Healthcare Group Inc.
Reconciliation of Adjusted EBITDA
(in $mm) Year Ended December 31, Three Months Ended March 31,
2018 2019 2020 2020 2021
Net Income $13 $16 $46 $6 $5
Interest Expense, net and Other 0 4 6 1 3
Income Tax 7 8 19 2 4
Depreciation and Amortization 125 112 115 29 30
EBITDA $145 $139 $186 $39 $41
Strategic Transformation Initiatives: 2 13 3 1 0
Simplify(1) -- 12 1 0 --
(2)
Financial systems -- -- 2 1 0
(3)
Other initiatives 2 1 0 0 --
Stock-based compensation one-time award at IPO(4) -- -- -- -- 2
Stock-based compensation(5) 2 9 5 1 1
Legal Settlements(6) -- 12 29 2 2
(7)
Offering Costs 6 1 3 -- 3
Adjusted EBITDA $156 $174 $227 $42 $48
Patient Equipment Capex (110) (93) (93) (24) (24)
Adjusted EBITDA less Patient Equipment Capex $46 $81 $134 $18 $25
Note: Dashed out (“—”) figures indicate an N/A adjustment, while “0” figures indicate an adjustment of less than $500,000.
1. 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.
2. Costs associated with the implementation of a new financial system.
3. 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.
4. The Company’s initial public offering (“IPO”) resulted in a one-time restricted stock (“RSU”) grant to the Company’s Chief Financial Officer (“CFO”). The RSUs vest in tranches and are classified as liability awards since each tranche of RSUs can be settled in either
cash or shares of our common stock at the CFO’s election. The first tranche of RSUs vested upon completion of the IPO and was settled in cash. Compensation expense for the remaining tranches is recognized over the requisite service period subject to continued
employment and adjusted each reporting period for changes in the fair value pro-rated for the portion of the requisite service period rendered until settlement.
5. 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. Stock compensation also includes expense related to the Company’s long-term incentive plan which will be settled in stock.
6. In 2021, the amount represents the final settlement amount of a claim brought under the Private Attorneys General Act of California. 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 2020.
7. 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.
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©2021 Apria Healthcare Group Inc.Reconciliation of Net Revenue
(in $mm) Year Ended December 31, Three Months Ended March 31,
2018 2019 2020 2020 2021
Net Revenue $1,111 $1,089 $1,109 $269 $275
Less: Provision for Doubtful Accounts 32 -- -- -- --
Net Revenue (on a comparable basis) $1,079 $1,089 $1,109 $269 $275
Note: Dashed out (“—”) figures indicate an N/A adjustment, as Topic 842 was adopted effective January 1, 2019.
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©2021 Apria Healthcare Group Inc.History of Apria
The Strategic Transformation
Since 2012
2019: Launched Project Simplify: Initiatives to transform
Apria’s Order to Billing Process, Order Fulfillment
Strategy, and Organizational Structure
• New Management Team
2014: Launched non-invasive ventilation (“NIV”) • Changed Payor and Product mix
as part of complex respiratory program • Launched NIV (2014)
• Implemented new patient
2013: Announced the sale of Coram to CVS monitoring and data collection
Caremark 2019 technology
2014 • Improved sales productivity
2013 • Formed strategic relationships with
2011
suppliers
• Streamlined management structure
2008 • Consolidated branch network &
operations
2011: Strategy identified to separate
2007 Apria into two operating companies – • Built scalable data analytics and
Respiratory and Infusion forecasting infrastructure
• Centralized Billing, Collections and
2008: Announced the sale of Apria to the Blackstone Customer Qualification
1995
Group
• Executed on 100+ operational
improvements
2007: Announced the acquisition of Coram for $350 million, a
• Reinforced “ONE Apria” culture to
privately held provider of home infusion and specialty
pharmaceutical services
improve collaboration and focus
• Re-evaluated local, regional, and
centralized activities to improve
1995: Apria created following the merger of Homedco Group with Abbey
Healthcare Group
accountability and effectiveness
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©2021 Apria Healthcare Group Inc.Improving the Quality of
Life for our Patients at Home
©2021 Apria Healthcare Group Inc.You can also read
