Quipt Home Medical Corp. (the “
Company”)
(NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical
equipment industry, focused on end-to-end respiratory care, today
announced its third quarter fiscal 2021 financial results and
operational highlights. These results pertain to the three and six
months ended June 30, 2021 and are reported in U.S. Dollars.
Quipt will host its Quarterly Earnings
Conference Call on Tuesday, August 24, 2021 at 10:00 a.m. (ET). The
dial-in number is 1 (800) 309-4610 or 1 (604) 638-5340.
Financial
Highlights:
- Revenue for Q3 2021 was $26.2
million compared to $18.6 million for Q3 2020, representing a 41%
increase in revenue year-over-year. Compared to Q3 2020, the
Company experienced organic growth of 7%. For YTD 2021 the Company
experienced 11% organic growth as compared to the corresponding
period in 2020.
- Recurring revenue as of Q3 2021
continues to be strong and exceeds 75% of total revenue.
- Adjusted EBITDA (defined below) for
Q3 2021 was $5.3 million (20.2% margin), compared to Adjusted
EBITDA for Q3 2020 of $4.4 million, representing a 21% increase
year-over-year. Adjusted EBITDA margin was impacted by one-time
costs related to the Company’s NASDAQ listing. On May 27, 2021, the
Company commenced trading on NASDAQ.
- Net income for Q3 2021 was $6.3
million or $0.19 per fully diluted share, compared to a loss of
$2.5 million for Q3 2020 or $(0.12) per fully diluted share.
- Cash flow from continuing
operations was $11.9 million for the nine months ended June 30,
2021 compared to $9.7 million for the nine months ended June 30,
2020.
- For the nine months ending June
2021, bad debt expense was 8% compared to 10% for the corresponding
period in 2020, an improvement of 2%. This exemplifies our ability
to scale and add more revenue through add-on acquisitions without
compromising our billing capabilities.
- The Company reported $30.6 million
of cash on hand as at June 30, 2021 compared to $27.2 million as at
March 31, 2021.
- The Company has an undrawn credit
facility of $20 million as at June 30, 2021.
Operational
Highlights:
- Through the Company’s continued use
of technology and centralized intake processes, respiratory
resupply set-ups and/or deliveries increased to 40,580 for the
three months ended June 30, 2021, compared to 14,436 for the same
period ended June 30, 2020, an increase of 181%.
- The Company’s customer base
increased 74% year over year to 64,578 unique patients served in Q3
2021 from 37,128 unique patients in Q3 2020.
- Compared to 57,551 unique
set-ups/deliveries in Q3 2020, the Company completed 95,192 unique
set-ups/deliveries in Q3 2021, an increase of 65%.
- The Company is expanding its sales
reach across fifteen U.S. states by the addition of experienced
sales personnel.
- The Company changed its name from
Protech Home Medical Corp. to Quipt Home Medical Corp. in May 2021
and is focused on expansion into a national homecare provider
throughout the United States, with a patient centric model to meet
the one-of-a-kind needs of every patient in its ecosystem.
Acquisition Related
Update:
- The Company acquired three separate
entities with combined operations in California, Missouri, Arkansas
and Mississippi, reporting combined unaudited trailing 12-month
annual revenues of approximately $5.5 million and Adjusted EBITDA
of $550,000 prior to integration. The Company expects the margin
profile to be in line with the overall business, post
integration.
- On August 20, 2021, the Company
acquired a business with operations in Missouri, reporting
unaudited trailing 12-month annual revenues of approximately $5.5
million, and Adjusted EBITDA of $1.1 million, post
integration.
- The Company is pleased to announce
the addition of David Chester to lead the Company’s M&A and
Integration team. David is a healthcare executive with 21 years’
experience with a specific focus on the Home Medical Equipment and
Services Industry. David comes from one of the largest home medical
equipment companies in the industry, where he served as Director of
Acquisitions.
- The Company has reached 145,000
active patients, 18,500 referring physicians and 59 locations
throughout 15 states.
Management
Commentary:
“We continue to produce exceptional results,
highlighted by our robust organic growth, driven by the strong
execution displayed across the organization, comprised of over 600
dedicated team members. Our record third quarter financial and
operating results are a direct result of our ability to leverage
ongoing technology implementation and workflow processes to improve
our operations. Strength in the underlying business combined with
secular tailwinds and a bullish regulatory landscape provide us
extraordinary opportunity to scale aggressively,” said CEO and
Chairman Greg Crawford. “We have been extremely busy this year,
entering five new states (Florida, California, Missouri, Arkansas
and Mississippi), as we expand from a regional homecare provider
into a national provider, within the United States. For the first
time, we will utilize the Quipt brand name post-integration of
acquisitions where it makes sense, marking the start of a
longer-term plan to transition certain local market brands to
Quipt, which we strongly believe will be a driver of future organic
growth. The platform we have allows for organic and inorganic
growth to be efficiently layered on to generate economies of scale.
We have the substantial financial resources and operating expertise
to build on the highly scalable platform we have, and we expect to
be active on the acquisition front over the remainder of the
year.
As many of you are aware, in mid-June, Philips
Respironics issued a product recall for a large portion of their
CPAPs, BiPaps and ventilators. Philips has been a fantastic partner
to us over the years, and we are committed to working through the
recall united together. As it relates to our supply chain, it is
worth noting, Philips represents a minority percentage of the
impacted category for us, and we have not experienced any material
impact to date. The Quipt clinical team has done an excellent job
working with patients and physicians to manage this complex process
and we will continue to work diligently to minimize any future
impact. Our focus on delivering superior patient care positions us
well to drive future growth.”
Chief Financial Officer Hardik Mehta added, “I
am very proud of our record breaking third quarter financial and
operating results. We reached the high end of our target run-rate
revenue range one quarter early, nearing $105 million, whilst
maintaining an above 20% Adjusted EBITDA margin inclusive of the
one-time costs related to our listing on NASDAQ. Our strong
performance was driven through higher volumes, cash collections and
continuing to support the business with lower operating costs.
Organic growth has been a top priority for the team, and the 11%
organic growth achieved year-to-date embodies the ongoing execution
company-wide. Our infrastructure allows us to scale quickly as
evidenced by the entrance into five new U.S. states so far this
year, adding over $15 million in revenue, and 35,000 active
patients. Our robust financial position provides us the ability to
target meaningful acquisition candidates that work significantly to
move the needle for our coverage sphere in the United States. Our
pipeline continues to be very strong and I am excited to welcome
David Chester to our team, to lead our acquisition and integration
initiatives. We believe David will be instrumental in driving
future growth and assist us in accelerating our acquisition
pace.”
The financial statements of the Company for the
three and six months ended June 30, 2021, and 2020 and accompanying
Management Discussion & Analysis (MD&A) are available
at www.sedar.com.
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.
There can be no assurance that any future
acquisitions 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 and United States securities
legislation. The words "may", "would", "could", "should",
"potential", "will", "seek", "intend", "plan", "anticipate",
"believe", "estimate", "expect" and similar expressions as they
relate to the Company, including: the Company expecting the
margin profile of the three new acquisitions announced on July 14,
2021 to be in line with the overall business, post integration;
the Company expecting its Missouri acquisition to have an Adjusted
EBITDA of $1.1 million post integration (meaning within
approximately six months); the Company aggressively scaling; the
Company believing that the transition in certain local market
brands to Quipt, will be a driver of future organic growth; and the
Company expecting to be active on the acquisition front over the
remainder of the year; 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. 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: credit; market (including equity, commodity, foreign
exchange and interest rate); liquidity; operational (including
technology and infrastructure); reputational; insurance;
strategic; regulatory; legal; environmental; 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 United States; 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 “Adjusted EBITDA”
which is a non-GAAP and non-IFRS financial measure that does not
have a standardized meaning prescribed by GAAP or IFRS. The
Company’s presentation of this financial measure may not be
comparable to similarly titled measures used by other companies.
This financial measure is intended to provide additional
information to investors concerning the Company’s performance.
Adjusted EBITDA is defined as EBITDA excluding stock-based
compensation. Adjusted EBITDA is a Non-IFRS measure the Company
uses as an indicator of financial health and excludes several items
which may be useful in the consideration of the financial condition
of the Company, including interest expense, income taxes,
depreciation, amortization, stock-based compensation, goodwill
impairment and change in fair value of debentures and financial
derivatives. The following table shows our Non-IFRS measure
(Adjusted EBITDA) reconciled to our net income for the indicated
periods:
|
|
Three months endedJune 30, 2021 |
Three months endedJune 30, 2020 |
Nine months endedJune 30, 2021 |
Nine months endedJune 30, 2020 |
Net income (loss) from continuing operations |
|
$ |
6,329 |
|
$ |
(2,528 |
) |
$ |
(4,677 |
) |
$ |
(3,198 |
) |
Add back: |
|
|
|
|
|
Depreciation and amortization |
|
|
4,803 |
|
|
3,648 |
|
|
12,494 |
|
|
10,594 |
|
Interest expense, net |
|
|
440 |
|
|
469 |
|
|
1,362 |
|
|
1,387 |
|
Gain (loss) on foreign currency transactions |
|
|
36 |
|
|
44 |
|
|
170 |
|
|
(552 |
) |
Change in fair value of debentures and warrants |
|
|
(7,422 |
) |
|
2,470 |
|
|
6,704 |
|
|
1,106 |
|
Transaction costs bought deal |
|
|
- |
|
|
210 |
|
|
- |
|
|
210 |
|
Provision (benefit) for income taxes |
|
|
(535 |
) |
|
36 |
|
|
(1,941 |
) |
|
69 |
|
EBITDA |
|
|
3,651 |
|
|
4,349 |
|
|
14,112 |
|
|
9,616 |
|
Stock-based compensation |
|
|
1,597 |
|
|
52 |
|
|
1,624 |
|
|
153 |
|
Acquisition-related costs |
|
|
92 |
|
|
- |
|
|
164 |
|
|
- |
|
Adjusted EBITDA |
|
$ |
5,340 |
|
$ |
4,401 |
|
$ |
15,900 |
|
$ |
9,769 |
|
Management uses this non-IFRS measure as a key
metric in the evaluation of the Company’s performance and the
consolidated financial results. The Company believes this non-IFRS
measure is useful to investors in their assessment of the operating
performance and the valuation of the Company. In addition, this
non-IFRS measure addresses questions the Company routinely receives
from analysts and investors and, in order to assure that all
investors have access to similar data, the Company has determined
that it is appropriate to make this data available to all
investors. However, non-IFRS financial measures are not prepared in
accordance with IFRS, and the information is not necessarily
comparable to other companies and should be considered as a
supplement to, not a substitute for, or superior to, the
corresponding measures calculated in accordance with IFRS.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information please visit our website
at 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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