Thanks everyone for joining us. Oh, a little loud. Thank you, as always, but I especially want to thank the team from Modivcare for joining us. Heath Sampson, President and CEO, and Barbara Gutierrez, who's Chief Financial Officer. Welcome to the team. Welcome to the presentation and thank you both again for joining us as always. I was just talking to Barbara, and I figured best place to start, just to level set us, is a review of the kind of recent, the quarter, and just kind of an overview of maybe some of the parameters initiatives within each of the three business lines and where you see them today, and maybe a little, and we can kind of jump off from there, if you will. Yeah, you bet. Well, thanks for having us as well. Good to see many people, faces. So yeah, it's a great time to be here. We'll probably get into this a little bit more detail if necessary, but last quarter was strong and in line with everything that we said we're gonna do. Thanks to all the people that we have and the, the changes we put in place, it's taking hold, and we were able to generate, you know, $40+ million of free cash flow, as said. Exceeded our EBITDA targets, showing strong sales growth across the business. So you keep going through, and we did what we said we're gonna do and probably more, so it was something very excited about. So how a little bit more generically on the business, you know, for us, we're really the only platform company that has this suite of supportive care services. So I'll start with that because it is a suite. You think about, supportive care, people need trips to the doctor. People need help in their home, specifically now for long-term care, which is supportive care, where technology's going and the needs of payers and providers, devices are necessary. So we have this broad suite of services, and together, we have a unique access that nobody has, the payers or providers don't have. We can. We drive people, we're in their home four hours to all day, or we have a device nonstop. So that unique access that really cuts across is, is what we're really proud about at Modivcare. But underneath that, and a lot of the focus and questions is around those individual services, because right now, our growth and our benefit happen at this point solution way. So that's Transportation. We're by far the largest, have about 40% of the share. A lot of efforts in that business to ensure that we're doing the right thing from a transportation perspective but also adding value to our payers around understanding their members. We have a Personal Care business. We're kind of one of the largest in personal care in primarily the Northeast, and the Northeast is very supportive of personal care, so we're growing in that market as well. And of course, we have devices, whether that's emergency devices or other devices like blood pressure. And then we also have these services where we're connecting to people in their home or on the phone, but this layer of technology that will help support and facilitate that. So our caregivers or our drivers or our contact center people are more knowledgeable and educated to push information or pull information. And that could happen to facilitate the service and even do more for our members and our providers and payers. So we have this touch point coupled with data, coupled with access, that has really put us in a unique point. Okay, great. NEMT, I have one quick question I get, and I think one of the questions you probably get is, kind of the mix and understanding the business a little bit- Mm-hmm. digging into NEMT in particular, the contractual structure, the at-risk versus- Mm-hmm ... you know, shared guidance, so forth. Can you explain how that drives your model in NEMT and drives the margin profile? Mm-hmm. Are you trying to move that mix one dial, you know, one way or the other- Mm-hmm Kind of post-COVID, if you will? Yeah. So the NEMT or non-emergency medical transportation or mobility business segment, which is just over 60% of our EBITDA, is a critical part for our business, and there, over these last 24 months and really over the last 12 months, there's been a shift in how we engage with our customers and how we contract with our customers. And it really gets back in line with the strategy of where our customers wanna go. It really is, the trip is important- Yeah ... critically important to healthcare. So ensuring that we do that with the right quality, is important. Mm-hmm ... but really, it's what you do more, and that's what we're doing now, and that's why we're able to move these contracts to where, you know, 20% are full risk- Yeah ... so more of the traditional capitated model. Yep. 15% are fee- for- service, and in the middle of that is the shared risk or win-win- Mm-hmm ... where utilization or costs, we share in that with our customers, and that's the common way now of contracts- It is ... primarily with managed Medicaid. So that mix, I expect to stay. It's shifted a lot over the last- Mm ... 12 months. I expect it to be in line for at least the next, call it 12-24 months. Yep. So we're at the right structure, we have the right profile, we have the right relationships in all our contracts that we have, whether that's full risk, fee- for-s ervice or managed Medicaid, all in line with our expectations now. Other than through COVID, that was a big push, right? That was a big push, yeah. Yeah. But today, if you look at the contract snapshot today, is there a material difference in the margin profile among those contracts? In the full- risk contracts, just by the nature, just like in, because we're taking risk, those margins are higher. Yeah. But we give the blended for that. So they're in line with what we expect the future to be. So a lot of these contracts have been repriced or will be repriced to be in line with- Right … post-COVID, post-redetermination. We're comfortable with that- Yeah ... margin profile, which is higher, and then the shared risk and fee for service margins are relatively similar. They are. So and you talked about the, I believe it's $338 million new contract, I think you said- Yeah ... recently. Would you prefer to be in the shared services structure in that contract, in a new contract, so to speak? It's a new contract, new Medicaid contract. Yeah. So that, that $138 million that we disclosed last quarter, that was total contract value. That's on top of $108 million from the previous quarter. Right. And then even incremental to that $108 million and $138 million, which is getting total contract value, so think about dividing that by three for annual. We also retained in one more Medicaid, which, state business as well. So our go-to-market strategy, and our historical win rate and new win rate is definitely accelerating, which is- Mm ... we're really proud of. Though a lot of that, so the next question that may come under that, when does that come on? Right, the sales cycle is about 12 months. The implementation is anywhere from six to 12 months. So a lot of those wins that we're having now, which are great, and we expect to continue to do that, a lot of those start coming on in 2024, whether that's early or late. So coming out of 2024, all these will be fully baked in, and you'll see the full run rate exiting 2024. 2024. Okay. But the pipeline remains, you saw the pipeline of- Yeah. We also disclosed that we have about, so in just the MCO Medicaid side, we're at about $700 million of pipeline. And the TAM is much larger, but that $700 million is real deals that we're in discussions with- Right ... feel really good about continuing this, quarterly win rate that we are at. Right. Mm. It's really the mobility business, because of where we are, we feel good about what we've done. It really is about us growing on top of that. Yeah. And this is why we're so proud and why we'll continue to disclose the sales wins that we get. And to that end, can you speak to the NEMT business within that, the competitive landscape, like, who are you competing with? Yeah. Is it tapped to the state legacy contracts? Mm-hmm. Or is it, you know, what does that competitive landscape look like? Yeah. So, it's the right way to think about it is to break out state business first- Yeah ... versus Managed Medicaid and MA. Managed Medicaid and MA are different than state business from a competitive perspective. From a state perspective, there's not a lot of competitors, mainly because you need to be large and have scale and have reputation. Yeah. It's primarily you'll get the whole state or a good chunk of a state. Mm-hmm. There's only a few players that are in that market. Yeah. The Managed Medicaid and MA space, there are other competitors that have led for the last five to 10 years on the tech side, and they do have kinda bespoke market share in certain regions. The companies that win in NEMT, one, have that technology to facilitate this- Right ... member engagement, have lower costs, and then also have scale. And then the third component, this is really what's driving a lot of our wins, that you can do more with that member and provide insight. So, so people that have scale and tech and this are continuing to grow. Right. Will continue to win in this market space. I always get this question, but the Uber and Lyft model does not really factor in it from a competitive balance perspective. They're partners with that. Yeah. and we've grown heavily- Yeah ... with Uber and Lyft, and they view us that same way. They're not in the business of claims management, call centers, billing. Right. They're in the business of, in certain areas- Mm-hmm ... for certain types of illnesses, to help us with that transportation. So I expect them to be partners and continue to grow with us, in line with us. So not a competitor, a partner. Okay, great. Yeah. So is it fair to say that the competitive balance is more of a local, regional player? Yeah ... typically? Yeah. Yeah. It typically is. On the state side, there's a couple of other big players, but there's more than enough that TAM on the state side is $1.8 billion, so there's more than enough- For the guys. ... for the big guys to stay big. We expect to continue to grow there and retain in that business as well. That's just the stateside? That's just the stateside. Okay. Margins, Mm-hmm ... I think you're up 130 basis points- Yeah ... actually, in NEMT. Yep. I know technology plays into this equation, and managing services expenses- Mm-hmm ... is very important, is vital to the structure. Mm-hmm. Can you talk about those dynamics and how- Mm-hmm ... how that can lead you to expand margin going forward? Yeah. So from a margin perspective, you know, we're just around between 6% and 7% right now. Yeah. To get that back up, there's two things that need to happen. The normal automation of engagement with our members, whether that's text messages, whether that's, apps, whether that's facility, facilities integration, customer integration, there's many things that are common that will allow us to take the manual nature out. So that cost structure- Mm-hmm getting out, coupled with continuing these sales. So these sales that start coming on, you're gonna get leverage. Yeah. So those two things, you'll start seeing our margin continue to increase in line with- Right those cost savings and in line with those services coming online. Can it run north of 6% or 7%? Yeah, it will. In the 30s or north of 7%. So the range that we gave a couple years ago, kind of that 9%-12% margin, I expect that coming out of 2024- You kept that. will be on the lower end of that. Yeah exiting. Okay. Last question, my last question on NEMT. I know you've highlighted Medicaid redetermination. Is that kind of playing out with in line with your expectations, the $20 million or $40 million that you've kind of highlighted? Mm-hmm. Has anything changed or anything different in that dynamic relative to what you anticipated? Yeah, for the country and us, as each- Yeah Month goes by, everyone gets tighter and tighter what it means to their specific business. What we said in 2023 was $5 million-$10 million, and it's right there, so it's right in line. Right. What we've said, I know this is a broad range for 2024, it's an incremental $20 million-$40 million. So we gave those ranges to ensure you all can model it, but we have deep understanding on how that membership flows through our specific contracts. Yeah - and what dates there are. So I feel really good about, about that range still. Yeah. So. Okay. Anyone in the audience on to get any questions on NEMT? Go ahead, Jane, go ahead, ask your question. I was just gonna ask more generally about Matrix. For those of us who don't have access to the site, can you talk a little bit about issues that they've had and what's been successful in the turnaround and what the outlook is near term? Thanks. Yeah. So, the Matrix team, over these last 12 months, too, have a little bit more, 18 months, have been tremendous on focusing on the valuable business, which is the risk adjustment, risk assessment business. Yeah. We're number two from a size perspective, and our performance is really strong. But in the historical numbers, there were restructuring. We had three other businesses that benefited in COVID, that we divested or closed down and restructured. So that noise in the P&L is gone, and the management team is performing very well with new tech, new process. So I feel really good about the performance of that team and their position and ability to grow and do well in that. So it's a great business, and like I said, the last quarter, sometime, and I gave the range of 2024, that we would monetize that. Why I haven't given any specifics, 'cause the most important thing is the value to the company as a whole. Because it's performing, if we need to wait a quarter, we'll wait a quarter, and it's to get the best value, the highest value out of that. But the main reason why, it's performing and growing, so this is the right time to start the process sometime in 2024. So you're thinking you could monetize that potentially in- Yeah ... 2024? Yeah. That's the right way to think about it. Yeah. Have you provided a framework of what that EBITDA target is? Yeah, we've been similar questions, and we got these last: "Heith, why is the range so broad? Yeah. Was $50 million-$100 million? Yeah. That was two quarters ago that I gave that. Mm-hmm. I'm gonna just be consistent with that. The most important thing is for me and my partners to ensure that we keep as much information to ourselves- Yeah ... so we don't mess up, or hurt, our ability to monetize. So I'm consistent with that. Mm. You can pick a point in that and show whether that's at that low end, high end, middle point, that it is. It provides a lot of value to us. Okay, but that is a range, the target range, and that becomes the, I don't know, called the trigger for monetizing? Yeah. That's the way to think about it. Yeah. Okay. Timeframe could be as early as 2024. Yes. Okay. Can you talk about the proceeds? Yeah. So for us, the 3, net 3 leverage is an important long-term target for us. So it depends on where we are, right? Because we're generating cash flow and able to pay down our line. If it happened earlier and our line wasn't paid down, we'd use it to pay off that. Then we'd be also in the spot to, what do we do with the, all those other proceeds on our other debt structure? Our goal is to get the 3 x. How we do that and when we do that, I think we're in a good spot to be patient, but the priority is to get to that 3 x. Is that your goal? Is that three-year goal, a five-year goal? It is not a five-year goal. It's probably not a one-year goal, considering where we are, but it's three years is the right way to think about it. I don't— There's a lot that we have done that we're proud of, and it's shown up in the numbers, it's shown up in the execution. So for me, what we do in middle of 2024, if these proceeds, there's lots of options for us. Getting the leverage down to the right point is a top priority for us, but there may be something else that I do in the middle of 2024. Good, could acquisitions play into that? Yeah. So until our leverage is in the right spot, It's likely not any acquisitions. Longer term, absolutely, it makes sense, but in 2024, it is about us executing- Okay. and continuing to do what we've been doing. Okay, great. Personal Care segment. Mm-hmm. Relatively small, I guess you'd Mm-hmm by definition. Is that scalable? Is that—what, what is the kinda- Yeah - longer term outlook, and can you scale that business? Yeah. I, so personal care in general, and this is not just us, by the way, but this may be helpful for everybody else. That industry is continuing to mature. Yeah. It's really important to the healthcare ecosystem. So there's other public companies and other large companies out there that are doing the same thing we are from a standpoint of scaling. And the scaling is really centralizing and automating the back office, revenue cycle management, and that gives you a lot of leverage to focus on investing in that caregiver because it really is about recruiting and retaining. There's a higher demand for the services than the caregivers we can provide. So it's not a sales issue or a competitive issue. It really is, have you centralized and standardized and built for scale to reinvest into growth? So that's what we have been doing, and we're halfway through that journey. And we expect that to be the focus of 2024. So right now we're growing. It's great. The market's great, and we're continuing to grow in line with the market. I expect that we will outpace the market as we finish off this centralization, standardization process. Is there anyone out there from competitive landscape that does it well, that is kind of the- Um - the model in personal care, so to speak? I like to think we are with that. Yeah. This, there's other public companies. Great. There's other companies that aren't public that I think do a good job as well. For us, really, it's about how it's a unique spot to be. Yeah. I want them to do well. It's good for the industry that we get better, more sophisticated, even regulated, to ensure that we're doing the right stuff, because there's such a large market opportunity and such a need for our customers. So I think there's probably three or four of us that are kind of all right in line with doing the right stuff. Okay. In that respect, I'd like to ask kind of the same question, the ability to scale and the opportunity and kind of the remote base monitoring. Yeah. Does that share a similar landscape? Does it need investment? Does it need infrastructure? Yeah. So for the core services of monitoring, which is primarily personal emergency device, that's a big, most part of our business, and that model's in place, team's in place, sales growth in place. That in itself can grow in line with the, within the margins that we've given, as well as in those double-digit revenue side. So that's wonderful. Really, where the, even the continued broader opportunity is this engagement with the member. The technology and system behind this engagement that is driven by monitoring, is gonna allow us to do a lot more, whether that's with Transportation or Personal Care, other devices that you think where technology is going, and other device from a scale to a glucometer and everywhere in between. That's what we are doing now as well. That's gonna allow us to really accelerate growth. But it's not at the expense of the current market, which is growing and scalable right now. Okay, great. Thank you. Larry? Yeah. Okay. Just looking ahead, what's important to you when looking at a refi? Timing? Yeah. Do you want all unsecured structure? Do you want prepayability through a TLB? Just how do you think about it? Yeah. Well, Barb, do you want to touch, and I can add? Is that okay? Yeah. Yeah, I think all of those things, you know, so the timing, the flexibility, the options, just the right timing. And so we are very actively, you know, engaged, looking at our options. We feel confident we'll get those refinanced before they go current. We've got a lot of options. We have options today, but we're just trying to make the best decision that's, you know, good for the company and economically the best decision. So all those options are on the table. Yeah, just a little bit more on that. We have the secured capacity. If we wanted to do that, there's other options. It really is... So we performed in Q2. We expect to continue to perform. We have Matrix, so that improves the credit profile, right? So it really is all the timing of that. When is the right, the right thing? We're not naive to the market, right? You know, we're not gonna wait till November 2024, but we have some time, but we're not waiting. We're engaged and active in evaluating. Barb, it's just a new role. Mm. Congratulations. Thank you. Um, what- Yeah, very happy. What, what do you view as kind of the challenges and opportunities that you've seen since you've sat down, if you will? Yeah, you know, I think, one thing I want to say, just right up front is, people ask me, you know, "Were you surprised about anything? Yeah. And what I've been surprised about, in a good way, is just the amount of progress and transformation the company's really gone through over the past year and a half, Heath and team. So, you know, really, I think the opportunity is to continue that momentum, supporting the company to help deliver our services, and positioning the company for growth and performance for all of our constituents. You know, the bondholders, the shareholders, our board, our teammates. So, you know, really, that's the opportunity ahead. I think where I'm gonna focus, a couple of areas to focus on, is on that capital allocation, that capital structure. Mm-hmm. And that includes everything from the refinancing to focus on delevering, focus on working capital and cash flow, cash generation, cash preservation. So a lot of focus there. Making sure the team is really well supported, and a big focus on data analytics to help the company really make good data driven decisions. You know, you ask questions about our contracts and their profitability and, you know, just really continuing to refine that focus on those data, that process. Yeah, you know, she's cutting herself a little bit short here, too, because she's a lot of this stuff is great and great ideas right off the bat, but also just from her background, PACE background, and why this is important to bring up. PACE is a unique understanding of the healthcare world and specifically what our customers want. So, and that ties in heavily to our shared risk contracts, to even the value of getting paid differently. Right. There's a ton of healthcare value- Yep. that she brings as well. Yep. You know, just a natural extension of my experience at PACE, the supportive care services. Right. Yeah, just really thrilled to be here. Cash flow, very good in the quarter. Uh-huh. Well, I think $40+ million- Yep. of reduction on the revolver. Yep. Thoughts, and you'd laid out some prior guidance- Yep. -to that. I mean, how do we think about it both in the fourth quarter, but both go, even going into 2024? Yeah. Yeah. You know, I think contracts, you know, receivables, payables, netting to zero, more or less now. Right. So would we see a more normalized cash flow structure if, you know, the way we think about it on into 2024 and beyond now? Yeah. COVID, I don't call it COVID, but the- Yeah bubble, if you will. Yeah, so the bubble- Yeah is behind us. It really was Q2 for us, right? Right. From a COVID, paying off COVID payables, that was a- Yeah big driver, as well as our contracts were structured the right way, and our receivables up. So it was Q2 was the bubble. I might be a little bit repetitive to your question around margin- Yeah Too. So we're in a good spot now and generating cash, like you said, $40+ million. Our guide that we gave was the second half, it was $30-$50, and why we gave that second half, and just to remind everybody, we pay our interest on our bonds twice a year, Q2 and Q4. Four, yep. That's $30-ish million, right? So we wanted to make sure that we disclosed that. So that you can do that math, that you know we have $30 million going out in Q4 against our generation. Yeah. So we're back to generating cash flow in line with what we have. For that cash flow generation to be up to where we want it to be, we got to get through redetermination and these cost savings. So we're at around the 6%-7% margin range. The cash flow is proportional to that. And as we exit the year on that 9%, that cash flow will be proportional to that. So it is, it really aligned with that margin discussion- Right. -that I already had. Okay. And to that end, does the impact of Medicaid Redetermination, do you, where is that kind of, where, from a timing perspective, when do we see that kind of? Well, it's happening right now. Right. Right. It's happening right now, and it's in the numbers, and it's as expected. So each quarter, we're giving you. Right, I know it's happening right now. Yeah. It's in line with our expectations. Yeah. It's great. It's great it's in line with us. Yeah. The good thing for us, where we're exposed, is, I'm gonna say exposed 'cause this is an understanding and why we came up with our numbers, is in our risk contracts that are primarily Democratic. So their process around redetermination is very deliberate. So that gives us a lot of confidence around what the amount is, as well as the timing. Right. So when do we see the impact, though? When do we kind of wrap up that? Yeah, so, 2024? This mid-2024, I think, is the peak. Yeah. I think it's all of 2024. It is. Okay. But we'll update you on the timing- Okay, the timing. -each quarter. Okay. Any questions in the audience? We've hit our time. Any last questions in the audience? Oh, Jane Gale's got one more. Just a quick one. Can you refresh us in terms of personal care on labor? Are any of the geographies unionized? Is that the SEIU? Mm-hmm. Are there current SEIU efforts underway with any- Mm. any segment of your labor force? Thank you. Yeah. So we are unionized primarily in New York area, and partners of us. I like the union. We have a great relationship. It's performing well. So the labor side is the ultimate challenge for the entire industry. The good thing is that, like us and all other industry, it's gonna hit a normal period, so we're seeing our ability to grow. But it's still probably not growing in line with what our long-term expectations are, but I expect that will change, and we will when we can start investing back, when we finish invest, consolidating and centralizing stuff. Yeah. So it's a solid labor market. And then the relationships with the unions, it may be implicit in your question, I know we're out of time, is the regulation that came out that was really driven primarily from the unions, is this 80/20 rule, that you would 20% kind of cap the gross margin at 20%. I feel good about the broader provisions that they have. It's across the country. It's across the country. So the general consensus by the public guys, as well as the entire industry, is that won't hold, that it may be some percentage, but it's probably not the 80/20 rule. So, I'm really feel really good about that business, even if it did happen, because people that have scale and size, and the ability to deliver in these new regulations are gonna benefit, so. Okay, great. I think that about wraps this up. Thank you. Thank you. Thanks, Barbara. Appreciate it. Thank you very Thank you very much. Thanks to the team. Thanks for joining us. For the team from AdaptHealth Corp for our next presentation. Speaking on behalf of the company will be Jason Clemens, Chief Financial Officer, and Brian Scheuer. So Brian, your exact title, Vice President of- Treasurer. Trading. Okay, great. Sorry about that. I think, Jason and I were just talking, we're gonna kick it off with kind of just a level set, summary of recent results and talking about kind of the three, I'll call it the key business lines, you know, sleep, respiratory, diet-diabetes, and then we can kind of, kind of evolve from there, if that works. Yeah? Yeah, that works. Hey, everybody. Thanks for being here. Yeah, I guess for Q3, Larry, a couple of key trends. Within our biggest business, sleep operations, it's almost 40% of our revenue. We are the largest sleep operator in the country, putting out more CPAPs and more resupply than any other company in America. You know, that business, we've got just over 1.5 million patients on census within resupply operations, so that was a new record for the quarter. You know, the rental census is several hundred thousand more. So, you know, we've got a sleep census pushing 2 million patients. So, you know, we're touching a lot of lives every year with CPAP and the supplies that come with it. You know, growth has been very good and steady. We were coming off record setups in Q1 and Q2, so down a touch as expected in Q3. That'll continue to be down a touch in each quarter for the next few quarters as we've come out of the backlog buildup from the Philips Respironics recall. So we, we frankly, we couldn't be happier with the, with the, the results there. I'm sure we'll get to GLPs later, but, you know, we also learned that during the month of October, that 7% of our setups, you know, those patients surveyed had, had, indicated that they had been prescribed a GLP-1, which is interesting that they, despite that, still came in for a PAP setup. So I'm glad to cover that in more detail later. Within the respiratory business, you know, another stable and steady quarter of growth. You know, that product line is really focused on treating folks that have COPD. What's great about this product line is that, you know, the earlier you start a patient as they're first developing stage one and stage two of COPD, they're coming off of using an inhaler, you know, albuterol, et cetera. And they get to the stage where they really need a nebulizer and the neb meds that come with that. You know, we operate a 50-state mail order pharmacy to supply those neb meds. And so we start that patient engagement and relationship early, and it moves through the stages of COPD as a patient needs oxygen, either stationary or portable, we supply both. Later in life, you know, the patient's lungs will no longer ventilate, and so we provide the non-invasive ventilation at the home as well. So, you know, the average length of stay in that book of business is it's multi-years. It's very long, and it's just a very steady grower, as COPD is still underdiagnosed in the United States. Finally, regarding diabetes, you know, it's a couple of themes happening within this line. First, we've spoken a bit about our pump and pump supplies business. We're a very large distributor for Tandem. We also distribute Medtronic and Insulet products, and now with the new tubeless OP5 product, we do distribute that product. But as Insulet has brought, you know, tremendous disruption into the pump med tech space, look, they're taking a lot of share from Tandem, and that is hurting us. We are gliding down as we are just such a substantial Tandem operator. So that is a theme that continues in the third quarter. We expect it to continue in the fourth and to a lesser extent, in 2024. But you know, the base of that business is on CGM. So both Dexcom and Abbott, we even do some Medtronic CGM business, although it's small. You know, year to date, CGM growth has been about 2.3%, which, you know, we're frankly, is not—we're not happy with. It's not acceptable. We indicated, during the earnings call, you know, our goal of, you know, rapidly growing the sales force of, folks selling CGMs, particularly in markets that we don't operate in, at the end of the third quarter, the Five Boroughs of Manhattan. We did not, at the end of the third quarter, have sales force there, Philadelphia, Chicago, et cetera. And so our sales force through the end of the third quarter was really in the spots where we bought businesses that rolled up. You know, since the end of the third quarter, I mean, we've, you know, our sales force is up more than 50% already, and we're doing, you know, making a couple of key moves to get back to growth mode in diabetes. So the sleep side, you had referenced, I think you're up 16, 17% in the quarter. I think if that's right, Q3. You'd cited... Can you continue those trends on the sleep side? Yes. I know you highlighted. I mean, you had highlighted kind of like some, there are enhancements and some infrastructure- Yeah you were gonna deploy against that business model. Yeah, I mean, I tell you, in the sleep business, you know, we're up, we're up 17%- Yeah Year to date. You know, we think that TAM, take GLP and potential impact out for a second. Yeah. You know, we think that the TAM is growing a mid to high single digit. Okay. You know, we think that's been happening for many years, and we think that that will continue. You know, every year since I've been at the company, I mean, we've grown our market share by over 1%, you know, so we're the largest, and we're continuing to get bigger by taking share, certainly from the smaller sleep operators that frankly are having, you know, a whole lot of trouble weathering the storms of supply shortages and general inflation, et cetera, that, you know, the bigger operators obviously are built for that. Right. So is it to run in line with that type of market growth? Is more- Yes. Yeah. High single digits is kind of what you... It is. If you ask me two years, three years, four years out, yeah, that, that's what we're expecting. Okay. Now, next year, you know, will be different because of the huge comp- Right -2023. 17%, yeah. You got it. So now you're back down to potentially a lower single digit, maybe mid, and then, and then back to a normal run rate- Right in 2025. That story, the same, the trend that you posted in the quarter is obviously a pretty good quarter. Mm-hmm. Is that a matter of investing in that, in the patient census, and growing that footprint as well? Yeah, I mean, I mean, certainly, I mean, that, that's, that's a great business. It's kind of our meat and potatoes business. Yeah ... if you will. You know, currently, you know, part of the Humana transition, which I expect we'll get to, you know- Yeah ... it's brought forth thousands and thousands of patients, and depending on the market you're in, onboarding all of those patients, plus the regular organic growth that's coming from the respiratory unit, you know, the pipes are clogged, if you will. Yeah. But, you know, we're a good transition, steady state, and we're working through that transition. Thank you for that. And the diabetes side, that—can you—you had highlighted, I think, you 4Q, it's a weakness again. 2024, that subsides, it sounds like. Like, how do we think about 2024 in the, I'll call it, base? Sure. Yeah, sure. Absolutely CGM. Yeah, I, you know, I'd say that, I mean, the pump business, last year was about $160 million of revenue. This year, it will be about $120 million. You know, we've said, look, ballpark, $100 million, perhaps next year. I mean, the trick in getting back to growth is, you know, our small but very rapidly growing Omnipod 5 business with Insulet, continuing to grow that and getting big enough and growing fast enough to overcome the pressures on the Tandem part of the business. So, you know, when will that cross over? It's hard to say. I think it's about a year out, which is why we've said that, you know, we'll continue to face some headwind in pumps for next year. I think on the CGM side, you know, we've grown a little over 2 points year to date. Look, although we're investing aggressively in sales force, I wouldn't count on that until we're demonstrating results. So I think a good baseline is, you know, similar year-over-year growth as what we've seen so far in this year, and obviously, the challenge is to do better than that. You made reference that the government payer is the key there, and building out that infrastructure to serve that, the government. Correct. So how do we think about that in terms of cadence getting into 2024? Yeah. And the potential impact from that? Sure. Well, I tell you that there's really two distinct strategies we're following right now. The first is, you know, maintaining your endocrinology sales force, which was- Mm-hmm ... a little over 40 people through the end of September, and continue to drive the penetration growth of CGMs into that type 1 diabetic population. Now, the problem with only following that approach is that those penetration rates are dependent, he believed, somewhere between 65%-75%. And so- Of type 1? Of type ones. And so there's still growth there, but it's slowing. You know, the real hypergrowth that you see out of Dexcom and Abbott, it's really the type 2 channel, or patient rather, you know, as well as now the basal population. So you had the multiple daily injectors, now you've got folks that are on basal, you know, injection cadence. And so that's, that has expanded the TAM. That's primarily a sales point of a primary care physician office. That's where the new sales force, you know, again, we're looking to get to 40 new reps on that side of the business and where we're pointing them in markets that we don't exist in. And so that's aimed at growing in a TAM that's still growing quite nicely and is mostly government business. And that's putting infrastructure in place in the primary care office to do that. Correct. You've got it. Type 2 diabetics. No, no, I- It's a greater population. It's a bigger population. Bigger population. Now, you know, to the pharmacy channel shift that's been happening in the market over the last couple of years, you know, today we operate a mail order pharmacy in 50 states. We are putting in new infrastructure there to get costs down on the fulfillment side of things. We've also spoken to manufacturers about, "Look, we intend to bring volumes in the pharmacy channel. In exchange, we would expect better pricing and, you know, a path towards, you know, building a business model that can really scale quite rapidly." You know, so, I mean, those are some of the things that we're working on the pharmacy front. Just, turn it over to the audience. Okay. Are there any questions in the audience? I know that you've kind of walked through kind of three primary business lines. Does anybody, anybody have any questions? Go ahead, ask her. Hi, thanks for taking my question. So can you just review, key buckets of investments that you are making, given the cash flow generation of the business, and when can we see kind of a positive inflection in free cash flows given the growth and the operational trends? Thank you. Yeah, sure. So I tell you that we've guided free cash for the full year to be between 3%-4% of revenue. So that comes out about $110 million-$112 million of free cash flow. And we reiterated that expectation on our earnings call a few weeks ago. We expect to deliver that free cash flow for 2023. Looking towards 2024, we are making key investments in, particularly in our fixed asset and inventory infrastructure. We went live with Oracle Cloud two years ago, but our latest investment that started in the third quarter is to invol... Install guns and scanners in the warehouses to track at an item level product as it's moving throughout our network and to the patient home, potentially back into our warehouses. And so as that infrastructure gets up and running, we've got some AI as well as offshore capability. We're working with a you know, large, well-known system integrator to really just install mins, maxes, running thresholds tighter. Because the reality is, without that tech infrastructure, we just have too much product sitting on our shelves in over 700 locations. And so that's investment that we're going very big after to pull cash off the balance sheet, out of not just inventory, but as well as CapEx. You know, we think next year, CapEx will be closer to 10% of revenue as opposed to 11% this year. And we expect as that Oracle work continues, that that's giving us the tools to be just more efficient buyers of capital equipment. Just, transitioning over to the, I'm sure it's a question you're getting far too often. Humana contract, a headwind in 3Q, I think it's about a $10 million headwind. Could you... I guess I'm asking less about the headwind in 3Q, more about kind of the framework of the contract itself. Sure. What opportunity it presents, you know, within Humana and even on other contracts, like contracts. Yeah. How do we frame and think about that whole? Sure. So, yeah, and so I'd say that, you know, I understand your question was not around, you know, the miss and what happened with transitions. I'd be glad to discuss it- Yeah ... but the bigger picture, look, this contract is going to be a very profitable contract. It's gonna deliver against our original pricing models and expectations, but it is delayed about six months. So, you know, we believe that, you know, the patient transitions, which we are moving 1,000 a week, from competitors to our platform, we expect to be substantially transitioned by the end of the first quarter. You know, which is the good news. That contract is for over 1.2 million covered lives in 33 states. We get paid a per member per month fee from Humana, you know, for those covered patients, in the areas of respiratory, DME, and sleep.... It excludes the supplies to the home, like wound care, ostomy, urology, incontinence, and it excludes diabetes. So- Excludes diabetes. Those are two growth areas that we would be very interested in taking more Humana business. Mm-hmm. You know, the PPO network, which we're a preferred provider, but we're not the only provider like we are on the HMO side. Look, that's business we'd love, we'd love to talk about, you know, as we continue to do a good job and, you know, show Humana that we're gonna be great partners for the years to come. And then outside of the Humana relationship, that there has been interest inbound and, you know, outbound generated because I think just the size and the complexity of the patient transition, it has changed perspective in the industry of an operator being able to get a transition of this size executed. I know it's not coming without its bumps and lessons to us- Right. But, you know, that, that is changing things. That's the bet that we're making on the, on the structure of the contract. And- So, have you had experience with a contract of this size? Not necessarily- No. -with size. No. But I mean, even in terms of structure Yes. Of this structure- Smaller level. Yes, correct. Yeah. You know- You said 1.3 million lives, is that what? Pushing that, at the- Pushing. It's only 1.2. 1.2, okay. You can only expect through the 2024 enrollment period that that'll- Okay ... that'll grow- Grow. Based on everything, you know, we're seeing. Yes, we do have experience in structuring the contract. You know, we bought several companies over the last few years that had value-based structured contracts. You know, they were priced very thoughtfully. They have been, you know, great. They've been home-run contracts with these payers. Not on a national scale, but particularly- Mm-hmm ... out west in a few key states. You know, the structure has been working great because for a payer, what it does is, it—look, there is a rate compression typically offered by the operators that are bidding, so that's a good thing. But, it's a drop in the bucket, frankly- Right ... with DME spend for a payer. What, where the value is, is take a state, and there are hundreds of DME operators in that state. Well, with DME comes, even despite a low spend, huge patient dissatisfaction and rapid escalation. If someone doesn't get their oxygen on time, you got a big problem. And, you know, it can become a real challenge at a payer level to manage all that, all that operation across hundreds of people, you know, hundreds of operators. And so what this does is, I mean, in these 30-state, 33 states, we're the only DME operator for Humana. If you're on a, if you're on a HMO Medicare Advantage plan, you know, for these 1.2 million patients, we're the only company that is in network. Okay. And are these MA patients? Yes. I assume they are- Yep, MA ... giving it to you and all the, all MA patients. And does it, I said, is this kind of a, an opportunity to see more broadly with other payers? Is it- With, without question. Longer term? Yes, we are pursuing as we speak. Yeah. You know, I mean, look, we still have a lot of integration to do on what we've already won. Right. But yeah, we're very, very interested in doing more deals like this. And to dig down a little bit, I know you talked about this in your call a little bit, but those integration challenges, what are the hurdles? I know you've talked about you're bringing, you know, multiple operators, you're bringing on, effectively, they're, those heads, those lives. It's been a little more challenging than you thought. I mean, what kind are you seeing relative to kind of- Sure ... where you were going into the contract, and now you're kind of getting into it, if you would? Yeah. I mean, I tell you that the... I mean, we predicted at a patient level transition to be tough. Mm-hmm. You know, you're relying on an expectation of the level of documentation that is available, either through the payer or via the competitor, and you're relying on expectation of which competitors might, you know, work well with you and which ones won't. You know, that hasn't been so much of a surprise. You can guess the competitors that are gonna give a hard time in. Right ... in making this tough. Yeah. I can't say I blame them, if the shoe is on the other foot. Right. Imagine if you're a local player in the space, right? Yeah, yeah. I mean, you are holding on to that covered life, that patient- Yeah ... very closely, right? Mm-hmm. Because if you operate two locations, you know, in the state of New York, I mean, you, you're gonna be hyper-focused on, you know, that dozen or two dozen patients that have been on your census in some cases many years. Mm-hmm. You know, maybe not purposely, you know, inserting it, but you're certainly not helping. Right. So that's, you know, at a patient level, it's just, it's a lot of work, it takes time, but we are converting 1,000 patients per week. Okay. And why at the end, why was diabetes not part of the... Was there a reason that it wasn't? Could it be a, could that... You know, were there drivers to bring that into the fold longer term? Look, I, I can't, I won't speak for Humana. Yeah. Look, we'd be thrilled to talk about diabetes. You know, it is a... Look, it's a triple-weighted Star Rating for Humana- Yeah ... and every other payer. There are things you can do, investments that we've already made, and and we're starting to see some return on managing the CGM data that's getting produced by the devices, which is exactly what we do in the sleep side of our business. We have hundreds and hundreds of people that all they do is help folks stay adherent to the therapy. Well, you know, that's what we're working on today. There's ways to influence the A1C. It's got to be a blood administered test that's then submitted to the payer and ultimately to Medicare to qualify for that triple star rating... but you can bet that we're very, very interested in talking about what else can be done. Right. Okay. From a competitive perspective, from a landscape perspective, were there others that had the capability to serve Humana in that regard, that had as large a platform or a footprint? Yes. You know. I would tell you, Lincare, you know, a major competitor of ours, part of Linde. Yeah. Look, they're a big operation, particularly in respiratory. They're also big in sleep. You know, not as big as us, but- Yeah ... they're big. You know, I think from an infrastructure, location, you know, footprint, the vehicles, the people you need to support the contract- Right. Look, they're a scalable player. I think Apria, part of Owens & Minor in certain parts of the country, are very scaled and very capable. Right. I'll tell you that, you know, the third largest player or the fourth largest player in the industry is Rotech, privately held entity. They did win eight states, predominantly out west, more, you know, northwest, western states, where they are denser than we are. You know, we, we didn't- They did... You're saying within that, they won 8 states? They did. Okay. They won, they won eight states, and that means we lost eight states. Yeah. And look, we didn't bid as aggressively there because we just, we don't, we don't have the footprint- Right ... that we have in the 33 states that we won. Right. Okay. I mean, and longer term, that, does that kind of drive your investment? I guess I'm trying to think about it from Humana's perspective, it makes all the sense in the world, right? You can consolidate the- Hundred percent ... your infrastructure. This is now going to be a trajectory for the other payers to embrace this concept, kind of the value-based care- Mm-hmm ... the value-based care model. I presume that it is. Yeah, without question. Now, as you'd expect, I mean, some payers are, like, built for that today. You know, they can- Right ... they can, they're set up that way. They can adjudicate the claims that way. They can, they've got the infrastructure. Many don't. You know, they, they just don't. I mean, they are built for fee-for-service model, and they'll be that way- Yeah ... for a long time. But, you know, the ones that are ready and interested to, you know, to capture the value that this kind of contract can bring to a payer, I mean, yeah, yeah, we're gonna talk to everybody. We're gonna talk to everybody. Okay, great. Does anyone have any questions in the Humana contract and kind of what that's bringing into the fold? I've got a quiet audience today. I spoke too soon. So it's a whole slot. One more question from me. So in terms of kind of, as you execute on the Humana business opportunity team, have you provided or have you quantified kind of the operational improvement that you expect as this business kind of scales? We haven't, and we'll be careful about how much we say about the arrangement, but we'll give you a few points of context. You know, we've said that, you know, the revenue from this contract, it should come in, you know, at or above the enterprise EBITDA margins. You know, I mean, that is a function of some of the, you know, the equipment that we put out. I mean, it has CapEx, and so it has patient equipment depreciation that comes with it. But when you think of an EBITDA P&L, that's out, right? And so it's naturally gonna flow at a higher margin than other products that we provide. We are reporting the Humana PMPM revenue within our other sales category. So of the 12 external lines, the six rental, six sales that we report, that's where you see that Humana revenue. So as we committed to a $5 million sequential improvement in Humana going into Q4, if we execute on that, you should see that in that line. And so we're into this another quarter, two or three, and, and you're gonna have a good sense of, you know, that business line and how it's, how it's operating. Jason, you know, historically and really go back, you've been relatively acquisitive. Today, would that prove to be the case or the things you could look at in terms of capital deployment? Would you look at acquisitions, whether it be large or small? Well, yeah. And to that end, you've talked about leverage marker 3x within, you know, within not too distant future here. Can you kind of roll that all together and kind of your mindset around capital allocation? And as part of that, does the Humana contract require kind of a unique deployment of capital, or is this it? Yes, so I'll start with the last part. No, the Humana contract, it expects a, you know, a very similar deployment of capital to respiratory, sleep, and DME. So it's, there's nothing nuanced or different about the amount of capital that we're expected to put up to support- Mm-hmm ... the business line. Okay. I would tell you that, look, in a world of, you know, the board management view of a stock price that's not hammered by GLP-1, et cetera, look, we have said our right now, our highest, best use of capital is to pay down debt. Now, could that take a form of a TLA pay down or- Yeah ... bond buyback? I, you know, we won't talk about that. Right. But that is in a stable equity world. I mean, that's where our heads are. Could we do a, you know, a deal or two of $1 million, $2 million here? Yes. Right. Very small. I mean, you know, that, that—like, we, we will continue to look at strategic scenarios where it just makes sense to buy a book. Mm-hmm. You know, multiple or grade, et cetera. But, like, we're not actively pursuing deals. Okay. You know, I'd say, you know, finally, like, the 3x expectation that we put out for 2024, you know, depending on who you believe on the street for 2024 EBITDA. Right ... it almost doesn't matter. It will require debt buy down to get there? Absolutely. We were intentional in sending that message. You are. Okay. In the last- So that is embedded in that message. Yeah. Okay. We have one minute left, and it wouldn't be a presentation without a question about, as you said, GLP-1. Sure. And then you've done a survey of your Yeah ... your patient census. Can you, your thoughts, you know, there, there's some, I know you've talked about sleep- Yeah ... and potential impact. How are we to think about it as investors in terms of how-maybe get inside your head, how do you think about it? You know, we've-the hospitals have come out with kind of this message that has some long-term potential impact- Sure ... but not a lot of clarity. I don't know what your thoughts are on that. Yeah, not a lot of clarity, I'd start with. Yeah. You know, I'd say in our diabetes business, you know, I mean, at Dexcom, Abbott, they've got out, I think, thoughtful work, some actual, you know, data. I mean, I think they were somewhat stale, maybe 2017 to 2020 data points, but indicating that you know, frankly, this could be good for the CGM business- Mm ... which at a practical level, makes sense to us. I mean, if you're gonna be thoughtful and purposeful in lowering your A1C through GLP deployment, you're probably gonna wanna measure it and use CGMing. Yeah. You know, on the sleep side of the business, look, it's unclear. We, we, you know, some have said it's a shoulder shrug. We don't think that. We think that this can impact the sleep TAM. Now, the questions are for high BMI levels and high AHI levels, you know, there's likely less impact than low BMI and low AHI. Mm ... which the Eli study is focused on, I think, bringing some data forth in the first quarter. You know, that's unclear, but there's certainly a cohort of patients that is probably very limited impact, if any, and there's a cohort of patients that, yeah, they absolutely- Right ... could have impact. You know, our jobs as the biggest operator is to continue to grow share, to grow through a potential impact. Right. We think before impact will likely incrementally more than 2023, but I don't think it's gonna come out of the blue and- Yeah ... you know, big surprise on the TAM has evaporated X%. Mm. You know, which is why we're thoughtfully gathering information on who is on a GLP-1, which type they're on, for what purpose, so we can follow that patient experience through our length of stay- Mm-hmm ... and, you know, have some real data to start talking about. Right. We're gonna need a couple of quarters of time- Right ... behind us until we can, you know, talk, talk about what we're seeing. Right. Yeah, I see what you're saying. Okay. Well, thank you very much. Thank you, Brian. Thank you, Jace. Thanks for having us. Thanks for the time. T hank you.