Quipt Home Medical Corp. (the “
Company” or
“
Quipt") (NASDAQ: QIPT; TSX: QIPT), a U.S. based
home medical equipment provider, focused on end-to-end respiratory
care, today announced its third quarter fiscal 2023 financial
results and operational highlights. These results pertain to the
three and nine months ended June 30, 2023, and are reported in U.S.
Dollars.
Quipt will host its Earnings Conference Call on
Tuesday, August 15, 2023, at 10:00 a.m. (ET). The dial-in number is
1 (800) 319-4610 or 1 (604) 638-5340. The live audio webcast will
be accessible on the investor section of the Company’s website
through the following link: www.quipthomemedical.com.
Financial
Highlights:
- Revenues for fiscal Q3 2023 were
$60.3 million compared to $36.7 million for fiscal Q3 2022,
representing a 64% increase year-over-year.
- Compared to Q2 2023, the Company
experienced sequential organic growth of 4% and expects continued
strong organic growth for rest of calendar 2023.
- Revenues for the nine months ended
June 30, 2023, increased to $159.2 million, representing an
increase of 60% from the nine months ended June 30, 2022.
- Recurring
Revenue (defined below) for fiscal Q3 2023 continues to be strong
and exceeded 80% of revenues.
- Adjusted EBITDA
(defined below) for fiscal Q3 2023 was $13.9 million (23% of
revenues), compared to Adjusted EBITDA for fiscal Q3 2022 of $7.7
million (21% of revenues), representing an 80% increase
year-over-year. The Company expects to continue to see strong
margin performance.
- Adjusted EBITDA for the nine months
ended June 30, 2023, increased to $36 million, representing an
increase of 73% from the nine months ended June 30, 2022, and
represented 23% of revenues.
- For fiscal Q3
2023, bad debt expense was at 4% of revenues compared to 9% in
fiscal Q3 2022. This significant decrease is primarily due to
improved collections processes and symbolizes the Company’s ability
to scale and add more revenue through acquisitions without
compromising billing capabilities.
- Cash flow from
continuing operations was $27 million for the nine months ended
June 30, 2023, compared to $19 million for the nine months ended
June 30, 2022.
- The Company
reported $20 million of cash on hand and $41 million available on
its senior credit facility as of June 30, 2023, with $20 million
available on a revolving line of credit and $21 million available
on a delayed-draw term loan.
- The Company
maintains a conservative balance sheet with net debt to Adjusted
EBITDA leverage of 1.4x.
Operational Highlights:
- The Company’s customer base
increased 58% year over year to 140,515 unique patients served in
fiscal Q3 2023, compared to 89,085 unique patients in fiscal Q3
2022.
- Compared to
133,704 unique set-ups/deliveries in fiscal Q3 2022, the Company
completed 202,587 unique set-ups/deliveries in fiscal Q3 2023, an
increase of 52%. There were 108,391 respiratory resupply
set-ups/deliveries during fiscal Q3 2023 compared to 62,815 during
fiscal Q3 2022, an increase of 73%, which the Company credits to
its continued use of technology and centralized intake
processes.
- The Company’s
product mix is 81% respiratory as of June 30, 2023.
- The Company
continues to experience robust demand for respiratory equipment,
such as oxygen concentrators, ventilators, as well as the CPAP
resupply and other supplies business.
- On June 21,
2023, the Company’s common shares commenced trading on the Toronto
Stock Exchange (the “TSX”) under the symbol “QIPT”
and were concurrently delisted and ceased trading on the TSX
Venture Exchange.
Subsequent
Highlights:
- On July 31, 2023, the Company made
an investment of $1.5 million to purchase approximately 10% of
DMEScripts LLC, an independent e-prescribe company dedicated to
improving the patient, prescriber, and provider experience by
eliminating inefficiencies and reducing paperwork.
- The investment was made to ensure
participation in the future growth of e-prescription usage within
the DME industry and align the Company with its major peers in the
industry to further collaborate and innovate. Electronic
prescribing is essential to the DME industry, as this technology
aims to boost productivity, reduce errors, boost compliance, and
improve patient outcomes.
Management
Commentary:
“We are thrilled to announce robust fiscal third
quarter results, which display record sequential organic growth and
additional margin acceleration, clearly illustrating that our
business continues to fire on all cylinders. We are also thrilled
to report that our key performance indicators have exceeded our
baseline expectations and suggest strong and sustained momentum
across the organization in real time. Our healthcare network’s key
expansion across the United States has been driven by our continued
penetration of key sales touchpoints, the successful integration
and exceptional performance of our largest acquisition to date, and
the strength of our core business. Our long-term growth strategy
will continue to focus on driving organic volume growth, focused
acquisition strategy that utilizes our proven integration process,
and by leveraging upon our acquisition pipeline,” said CEO and
Chairman Greg Crawford.
“We are spreading our patient-centric ecosystem
across the United States by concentrating on regions with a high
prevalence of chronic obstructive pulmonary disease (COPD). Our
commitment to our clinical services model coupled with providing a
broad spectrum of respiratory and equipment solutions has been a
key factor in our success to date. Additionally, as the need for
efficient and timely home health care increases in order to ease
the strain on the traditional healthcare system, we take our role
as a major provider of these services very seriously and will
always focus on providing superior patient care. Due to the
favorable demographic trends, bullish regulatory environment,
continued strong demand for respiratory equipment, and our
consistent operational performance, we continue to have major
tailwinds at our back.”
Chief Financial Officer Hardik Mehta added,
“Throughout the year, our business has continued to strengthen, and
we are experiencing the organic growth and margin expansion that we
had been aiming for. Our heavily weighted respiratory product mix
and services, as well as our focus on operational savings and
efficient cost management, have helped our Adjusted EBITDA margin
reach 23%. Additionally, we are pleased by the acceleration of
organic growth trends, which in the fiscal third quarter grew by 4%
sequentially when compared to the fiscal second quarter. We
anticipate that this stronger organic growth versus our historical
average will persist as we continue expanding the continuum of care
in key markets. Given our operational excellence, strong balance
sheet, with a very modest net leverage ratio of 1.4x and a high
level of financial flexibility, we are in a great position to
execute our growth strategy and move quickly when the right
opportunity presents itself.”
ABOUT QUIPT HOME MEDICAL
CORP.
The Company provides in-home monitoring and
disease management services including end-to-end respiratory
solutions for patients in the United States healthcare market. It
seeks to continue to expand its offerings to include the management
of several chronic disease states focusing on patients with heart
or pulmonary disease, sleep disorders, reduced mobility, and other
chronic health conditions. The primary business objective of the
Company is to create shareholder value by offering a broader range
of services to patients in need of in-home monitoring and chronic
disease management. The Company’s organic growth strategy is to
increase annual revenue per patient by offering multiple services
to the same patient, consolidating the patient’s services, and
making life easier for the patient.
Reader Advisories
There can be no assurance that any of the
potential acquisitions in the Company’s pipeline or in negotiations
will be completed as proposed or at all and no definitive
agreements have been executed. Completion of any transaction will
be subject to applicable director, shareholder, and regulatory
approvals.
Forward-Looking Statements
Certain statements contained in this press
release constitute "forward-looking information" as such term is
defined in applicable Canadian securities legislation. The
words "may", "would", "could", "should", "potential", "will",
"seek", "intend", "plan", "anticipate", "believe", "estimate",
"expect", "outlook", and similar expressions as they relate to
the Company, including: the Company’s expectations for organic
growth; and the Company completing additional acquisitions; are
intended to identify forward-looking information. All statements
other than statements of historical fact may be forward-looking
information. Such statements reflect the Company's current views
and intentions with respect to future events, and current
information available to the Company, and are subject to certain
risks, uncertainties and assumptions, including: the Company
successfully identified, negotiating and completing additional
acquisitions; and operating and other financial metrics maintaining
their current trajectories. Many factors could cause the actual
results, performance or achievements that may be expressed or
implied by such forward-looking information to vary from those
described herein should one or more of these risks or
uncertainties materialize. Examples of such risk factors
include, without limitation: risks related to credit, market
(including equity, commodity, foreign exchange and interest
rate), liquidity, operational (including technology and
infrastructure), reputational, insurance, strategic, regulatory,
legal, environmental, and capital adequacy; the general business
and economic conditions in the regions in which the Company
operates; the ability of the Company to execute on key
priorities, including the successful completion of acquisitions,
business retention, and strategic plans and to attract, develop
and retain key executives; difficulty integrating newly acquired
businesses; the ability to implement business strategies and
pursue business opportunities; low profit market segments;
disruptions in or attacks (including cyber-attacks) on the
Company's information technology, internet, network access or
other voice or data communications systems or services; the
evolution of various types of fraud or other criminal behavior
to which the Company is exposed; the failure of third parties to
comply with their obligations to the Company or its affiliates;
the impact of new and changes to, or application of, current laws
and regulations; decline of reimbursement rates; dependence on
few payors; possible new drug discoveries; a novel business
model; dependence on key suppliers; granting of permits and
licenses in a highly regulated business; the overall difficult
litigation environment, including in the U.S.; increased
competition; changes in foreign currency rates; increased
funding costs and market volatility due to market illiquidity and
competition for funding; the availability of funds and resources
to pursue operations; critical accounting estimates and changes
to accounting standards, policies, and methods used by the
Company; the occurrence of natural and unnatural catastrophic
events and claims resulting from such events; and risks related
to COVID-19 including various recommendations, orders and
measures of governmental authorities to try to limit the
pandemic, including travel restrictions, border closures,
non-essential business closures, quarantines, self-isolations,
shelters-in-place and social distancing, disruptions to markets,
economic activity, financing, supply chains and sales channels,
and a deterioration of general economic conditions including a
possible national or global recession; as well as those risk
factors discussed or referred to in the Company’s disclosure
documents filed with United States Securities and Exchange
Commission and available at www.sec.gov, and with the
securities regulatory authorities in certain provinces of Canada
and available at www.sedar.com. Should any factor affect the
Company in an unexpected manner, or should assumptions
underlying the forward-looking information prove incorrect, the
actual results or events may differ materially from the results
or events predicted. Any such forward-looking information is
expressly qualified in its entirety by this cautionary
statement. Moreover, the Company does not assume responsibility
for the accuracy or completeness of such forward-looking
information. The forward-looking information included in this
press release is made as of the date of this press release and
the Company undertakes no obligation to publicly update or revise
any forward-looking information, other than as required by
applicable law.
Non-GAAP Measures
This press release refers to “Recurring Revenue”
and “Adjusted EBITDA”, which are non-GAAP and non-IFRS financial
measures that do not have standardized meanings prescribed by GAAP
or IFRS. The Company’s presentation of these financial measures
may not be comparable to similarly titled measures used by other
companies. These financial measures are intended to provide
additional information to investors concerning the Company’s
performance.
Recurring Revenue for Quipt for fiscal Q3, 2023,
as used in this press release, is calculated as rentals of medical
equipment of $25.7 million plus sales of respiratory resupplies of
$22.7 million for a total of $48.4 million, divided by total
revenues of $60.3 million, or 80%.
EBITDA is defined as net income (loss), and
adding back interest expense, net, depreciation and amortization,
and provision (benefit) for income taxes. Adjusted EBITDA is
defined as EBITDA and adding back stock-based compensation,
acquisition-related costs, gain or loss on foreign currency
transactions, loss on extinguishment of debt, other income from
government grant, and change in fair value of debentures. EBITDA
and Adjusted EBITDA are non-IFRS measures that the Company uses as
an indicator of financial health and exclude several items which
may be useful in the consideration of the financial condition of
the Company. The following table shows our Non-IFRS measures
(EBITDA and Adjusted EBITDA) reconciled to our net income (loss)
for the following indicated periods (in $millions):
|
|
Three |
|
Three |
|
Nine |
|
Nine |
|
|
months |
|
months |
|
months |
|
months |
|
|
ended June 30, |
|
ended June 30, |
|
ended June 30, |
|
ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
(1.0 |
) |
|
$ |
0.2 |
|
|
$ |
(1.5 |
) |
|
$ |
3.1 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
11.7 |
|
|
|
5.3 |
|
|
|
28.1 |
|
|
|
15.8 |
|
Interest expense, net |
|
|
1.9 |
|
|
|
0.5 |
|
|
|
4.7 |
|
|
|
1.5 |
|
Provision (benefit) for income
taxes |
|
|
(0.3 |
) |
|
|
0.2 |
|
|
|
0.0 |
|
|
|
0.5 |
|
EBITDA |
|
|
12.3 |
|
|
|
6.2 |
|
|
|
31.3 |
|
|
|
20.9 |
|
Stock-based compensation |
|
|
2.0 |
|
|
|
1.3 |
|
|
|
3.9 |
|
|
|
4.6 |
|
Acquisition-related costs |
|
|
(0.0 |
) |
|
|
0.4 |
|
|
|
1.2 |
|
|
|
0.7 |
|
Loss (gain) on foreign
currency transactions |
|
|
(0.4 |
) |
|
|
(0.0 |
) |
|
|
(0.4 |
) |
|
|
0.1 |
|
Other income from government
grant |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4.3 |
) |
Change in fair value of
debentures and warrants |
|
|
— |
|
|
|
(0.2 |
) |
|
|
— |
|
|
|
(1.2 |
) |
Adjusted EBITDA |
|
$ |
13.9 |
|
|
$ |
7.7 |
|
|
$ |
36.0 |
|
|
$ |
20.8 |
|
For further information please visit
www.Quipthomemedical.com, or contact:
Cole StevensVP of Corporate DevelopmentQuipt
Home Medical Corp.859-300-6455cole.stevens@myquipt.com
Gregory CrawfordChief Executive OfficerQuipt
Home Medical Corp.859-300-6455investorinfo@myquipt.com
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