In brief: AdaptHealth’s Q3, Medela’s spin-off, Braff Group’s milestone 

PLYMOUTH MEETING, Pa. – AdaptHealth reported net revenue of $804 million for the third quarter of 2023, an increase of 6.3% over the same quarter one year ago. 

Net loss was $454.1 million compared to net income of $16.1 million, largely resulting from a $511.9 million pre-tax write down of goodwill. 

Adjusted EBITDA was $161.2 million, compared to $160.2 million, an increase of 0.6%. 

“We are pleased with the results of the third quarter,” said Richard Barasch, chairman and interim CEO. “Powered by our sleep products, we generated 6.3% growth over last year, leading to record revenues for the quarter. Equally important, we generated cash flow from operations of $98.8 million and free cash flow of $21.7 million. Adjusted EBITDA fell short of our expectations largely as a result of unplanned delays in the implementation of the Humana contract. Nevertheless, we believe that this contract will prove to be profitable for AdaptHealth.” 

The company is updating previous financial guidance for fiscal year 2023 as follows: 

• Net revenue of $3.16 billion to $3.185 billion, from $3.16 billion to $3.20 billion 
• Adjusted EBITDA of $630 million to $650 million, from $650 million to $680 million 
• Total capital expenditures representing 10%-12% of net revenue, unchanged 
• Free cash flow representing 3%-4% of net revenue, unchanged 

Medela spins off wound care biz in merger with medaxis 

BAAR, Switzerland – Medela will transition its wound care business into a separate global business. 

The new standalone wound care company will continue to provide wound care solutions powered by Medela’s medical vacuum technology, including its negative pressure wound therapy line of products and services. It will also incorporate the latest technology from medaxis, a Swiss med-tech company that is part of Olle Larsson Holding. 

“I am honored and excited to lead the new wound care company,” said Jeff Castillo, who will transition from executive vice president of Medela Americas to lead the new would care company as CEO on Dec. 1. “Medela has a long legacy driven by exceptional medical vacuum technology. I look forward to working alongside these dedicated professionals to set new standards of care with wound care solutions powered by Medela’s medical vacuum technology and new medical innovations from medaxis.” 

The new wound care company will continue to use Medela’s Elgin, Ill., facility for shipping products. Current medaxis employees and leadership, as well as existing Medela wound care team members, will transition under the leadership of Castillo also on Dec. 1. 

medaxis has earned breakthrough designation from the U.S. Food and Drug Administration with its technology to help support neovascularization and tissue growth, increase cellular activity and circulation, and support bacterial load reduction.  

Cardinal Health raises outlook on strong Q1 

DUBLIN, Ohio – Cardinal Health reported revenue of $54.8 billion for the first quarter of fiscal year 2024, a 10% increase year over year. 

The company reported revenue of $3.8 billion for its medical segment, which was flat due to lower PPE volumes and pricing, offset by growth in at-Home Solutions and inflationary impacts, including mitigation initiatives. 

"With strong first quarter results, we are continuing our operating momentum into fiscal 2024," said Jason Hollar, CEO of Cardinal Health. "In Q1, we delivered significant profit growth in both the Pharmaceutical and Medical segments, which along with our favorable capital structure and opportunistic capital deployment, gives us confidence to raise fiscal 2024 non-GAAP EPS guidance. Across the enterprise, we continue to prioritize focused execution to best serve our customers and create value for our shareholders." 

Other results from the first quarter: non-GAAP net earnings attributable to Cardinal Health were $433 million vs. $328 million, and non-GAAP operating earnings were $571 million vs. $423 million. Cardinal raised its guidance for fiscal year 2024 for non-GAAP diluted earnings per share to $6.75 to $7, from $6.50 to $6.75. 

PHS buys Apple Homecare 

FORT WORTH, Texas – Pediatric Home Service based in Roseville, Minn., has acquired Apple Homecare Medical Supply based in Richardson, Texas, Vertess has announced. 

The acquisition of Apple Homecare Medical Supply, a full-service HME provider specializing in pediatrics and supplies since 1999, provides PHS with further reach into Texas. 

“The synergy between Apple and PHS was clear from the beginning of discussions,” said Brad Smith, managing director and partner at Vertess. “Both organizations recognized and appreciated the other’s dedication to improving the lives of a vulnerable population. Texas is greatly benefitting from the combined strengths of PHS and Apple.” 

PHS, which currently operates in Minnesota, Wisconsin, Iowa, Kentucky, Ohio, Indiana, Missouri, Nebraska, Kansas and Texas, has established itself as a Pediatric Center of Excellence. 

TwelveStone expands in Virginia 

MURFREESBORO, Tenn. – TwelveStone Health Partners has opened a new infusion center in Richmond, Va., its 18th. The center joins existing centers in Tennessee (Bellevue, Chattanooga, Knoxville, North Nashville, Mount Juliet, Murfreesboro, and Spring Hill), Georgia (Canton, Cumming, Duluth, Lithonia, Peachtree City and Smyrna), Virginia (Roanoke and Norfolk) and Kentucky (Lexington, Louisville.) "As we embark on our journey into Richmond, Va., we remain dedicated to our mission of enhancing health care access," said Shane Reeves, CEO of TwelveStone Health Partners. "This expansion underscores our unwavering commitment to serving the diverse and vibrant community of Richmond with personalized, top-notch medical services." TwelveStone is rapidly expanding across the Southeast anchored by spa-like infusion centers conveniently located in suburban communities supported by additional services, including package medications, home infusion, enteral and injections. 

Sunset, Maxtec partner to distribute oxygen analyzers 

CHICAGO – Sunset Healthcare Solutions is partnering with Maxtec to distribute a line of oxygen analyzers. Maxtec’s UltraMaxO2 is a lightweight, handheld device that allows oxygen service technicians to verify oxygen purity, flow and outlet pressure, all from a single gas sample port, helping to keep DME providers compliant, the companies say. “Both Sunset and Maxtec continually work to expand their offerings and provide solutions to the marketplace,” said PJ Ruflin, vice president of business development for Sunset. “Sunset is proud to be Maxtec’s preferred distribution partner into home care. We intend to consult with DMEs on the requirements for oxygen equipment, in addition to discussing the simple solutions offered by these products.” Maxtec’s UltraMaxO2 features a calibration verification button that eliminates the need for service technicians to conduct in-field calibration. In addition to saving time, the device saves on costs. Its built-in ultrasonic sensor is designed to last the life of the analyzer, unlike a traditional galvanic oxygen sensor. This feature reduces maintenance and minimizes the cost of ownership without the need to replace sensors over time, the companies say. 

HME Home Health sees double-digit revenue growth 

RICHMOND, British Columbia – HME Home Health ended its fiscal year on Oct. 31, 2023, with double-digit revenue growth. A key focus for HME Home Health was ensuring that margins were improved, supply chain challenges were addressed, and efficiencies were achieved to support the company’s continued growth. “During 2023, HME renegotiated key supply arrangements and left trade associations in an effort to increase margins and reduce costs,” said Robert Boscacci, CEO and co-founder. “By consolidating our purchasing in-house, we improved margins and lowered purchasing costs.” HME Home Health’s HME business saw a 14% increase in revenues during the fiscal year, even as the company went through an internal reorganization and merged overlapping departments to streamline efficiencies. During the fiscal year, the company also saw substantial growth in its Signature Series Line, a house line of products exclusively manufactured for HME and designed by HME Home Health’s in-house clinical team. In 2023, the line grew from five products to 10. “This focus will continue in 2024 as HME becomes a full distributor of products and exits smaller markets of Class 1 and Class 2 devices,” said Michelle Harvey, COO. “This exit aligns with our key growth strategy and will enable us to increase our revenue and sales team to over 50 staff by the end of 2024.” Additionally, HME Home Health saw the addition of its 7th location in the fiscal year, a new corporate headquarters in Richmond, British Columbia, and staffing levels reach more than 120 team members. 

The Braff Group hits milestone 

PITTSBURGH – The Braff Group has celebrated its 25th anniversary, marking 375 transactions in health care. The firm was founded with a simple goal in mind, it says – to amass a body of sector-specific health mergers and acquisitions experience, resources and data to give clients an edge in realizing the best deal at the best time. "We are extremely grateful to all the companies that put their faith in us to represent them and get the most from what, for many, was a lifetime of hard work, sacrifice, dedication and perseverance," said Dexter Braff, founder and president of The Braff Group. "We couldn't have done it without the incredible team of managing directors, financial analysts, research professionals, marketing and client development specialists, and other support personnel who bought into the vision of building a firm that is focused, experienced, data-driven, patient, creative and perhaps most important of all, trustworthy." The Braff Group has offices in Pittsburgh, Atlanta, Chicago, Florida and Baton Rouge, La. It has been named one of the fastest growing companies in Pittsburgh, was awarded Health Care Deal of the Year three times from the M&A Advisor and has repeatedly been ranked among the top five health care mergers and acquisition advisory firms by LSEG/Refinitiv (formerly Thomson Reuters). 

React Health adds chief medical officer 

SARASOTA, Fla. – React Health has appointed Dr. Colleen Lance, a former Cleveland Clinic exec, as its chief medical officer. Most recently, she was a staff physician at the Cleveland Clinic, serving as medical director of PAP therapies for Cleveland Clinic Home Care and medical director for the Cleveland Clinic Sleep Disorder Hillcrest Hospital. “We are proud to welcome Dr. Lance to the React Health executive leadership team,” said Tom Pontzius, president, React Health. “As React Health continues to provide solutions across Sleep and Respiratory Care, Dr. Lance’s passion for the treatment of sleep disorders and respiratory disease will allow React Health to offer innovative solutions for affected patients, the physicians providing care, and their customers as they seek better outcomes. Dr. Lance and her vast knowledge, research and respect in the sleep and respiratory field will continue to allow React Health to offer clinically validated, treatment specific innovative solutions to allow physicians and DME providers the best opportunity to help their patients achieve improved quality of life and meet desired outcomes.” Lance has practiced sleep medicine for more than 22 years and is an active member of the American Academy of Sleep Medicine, serving on numerous committees.