Quipt Home Medical Corp. (“
Quipt” or the
“
Company”) (NASDAQ:QIPT; TSXV:QIPT), a U.S. based
leader in the home medical equipment industry, focused on
end-to-end respiratory care, is very pleased to announce that it
has acquired Hometown Medical, LLC (“
Hometown
Medical”), a business with operations in Mississippi,
reporting unaudited trailing 12-month annual revenues of
approximately $7 million and with anticipated Adjusted EBITDA
(defined below) of $1.4 million post integration. As a reminder all
figures stated are in USD.
Acquisition
Details
The acquisition encompasses two locations in
Mississippi, doubling Quipt’s current location count in the state,
immediately expanding its footprint providing additional patient
accessibility. The acquisition adds over 1,000 referring physicians
bringing Quipt’s referring network base to over 21,600, and
increases Quipt’s active patient count by over 11,000, bringing
Quipt’s total to over 200,000 active patients. Hometown Medical has
a heavily weighted respiratory product mix at approximately 60%
with an opportunity for Quipt to build out a strong ventilation
therapy program and integrate a best-in-class subscription-based
resupply program acting as an immediate potential revenue
synergy.
Additionally, Hometown Medical has a strong
management team in place focused on clinical excellence, and like
Quipt, offers high-quality, full-service line of equipment, and
supplies. Hometown Medical has a diversified payor mix and several
difficult to obtain insurance contracts and its expansionary
operating footprint aligns closely with regions that have a high
prevalence of Chronic Obstructive Pulmonary Disease
(“COPD”), a key target patient group; Mississippi
is among the highest prevalence U.S. States. According to the
National Institutes of Health (NIH), about 211,000 people in
Mississippi have COPD1. Moreover, according to the Centers for
Disease Control and Prevention (CDC), Mississippi is one of seven
states with the highest estimates for COPD diagnosis,
hospitalizations and death2. Quipt’s mission is well suited to
serve the needs of suffering COPD patients across the state of
Mississippi with a full-service respiratory product mix inclusive
of a robust ventilation therapy program.
The acquisition will increase Quipt’s annual
revenues by approximately $7 million and is expected to increase
Quipt’s Adjusted EBITDA, post integration, by $1.4 million. The
acquisition purchase price is in line with historical multiples
paid by the Company.
Management
Commentary
“We are extremely delighted to close the
acquisition of Hometown Medical, providing us a meaningful
expansion opportunity in the state of Mississippi. With over
200,000 COPD sufferers across the state, we are steadfast this is a
growing attractive market for us, and we are excited to be able to
build further inroads across the state on the heels of this
acquisition,” said Greg Crawford, Chairman and CEO of Quipt. “We
believe there is opportunity to leverage our ventilation and
resupply program immediately, potentially creating actionable
revenue synergies for us. Moreover, the valuable commercial
insurance contracts, strong referring physician network, and
significant patient base we have accumulated in the state give us
the opportunity to take a land and expand approach towards future
growth.”
Chief Financial Officer, Hardik Mehta added,
“Since April 1st, 2022, we have closed four attractive acquisitions
including Good Night Medical, spanning multiple states, NorCal
Respiratory in California, Access Respiratory in Louisiana,
representing a new state, and Hometown Medical further expanding
our presence in Mississippi. The four acquisitions added over
30,000 active patients, equate to over $25 million in revenue and
over $4.5 million of Adjusted EBITDA post integration. With the
closing of Hometown, we continue to possess a strong balance sheet
with significant flexibility to go after accretive acquisition
targets that fit our stringent criteria. We remain focused on
quality transactions at favorable multiples that help us continue
to create meaningful scale across the United States, with the
strategic goal of becoming a national respiratory care provider.
Lastly, looking ahead, our pipeline remains very deep with
additional opportunities that target strategic geographical areas
of coverage for our full suite of respiratory care products and
services, and we anticipate a very active second half of the year,
with more exciting targets coming through the funnel.”
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
Readers are cautioned that the financial
information regarding the acquisition disclosed herein is unaudited
and derived as a result of the Company’s due diligence, including a
review of the acquisition’s bank statements and tax returns.
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.
Unless otherwise specified, all dollar amounts
in this press release are expressed in U.S. dollars.
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.
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: post integration financial results (revenue and Adjusted
EBITDA) of Hometown Medical; Quipt adding patients to its
subscription-based resupply program; Quipt’s acquisition pipeline
and pace and timing of any further acquisitions; and Quipt’s
expectations for Hometown Medical and its impact on Quipt; 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 acquisition
achieving results at least as good as historical performances;
the financial information regarding the acquisition being verified
when included in the Company’s consolidated financial statements
prepared in accordance with generally accepted accounting
principles in Canada as set out in the CPA Canada Handbook –
Accounting under Part I, which incorporates International
Financial Reporting Standards as issued by the International
Accounting Standards Board; and the Company successfully
identified, negotiating and completing additional acquisitions,
including accretive acquisitions. 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 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 “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, as applicable, including interest expense, income
taxes, depreciation, amortization, stock- based compensation,
goodwill impairment and change in fair value of debentures and
financial derivatives.
For further information please visit our website
at www.Quipthomemedical.com, or contact:
Cole StevensVP of Corporate Development
859-300-6455cole.stevens@myquipt.com
Gregory CrawfordChief Executive OfficerQuipt Home Medical
Corp.859-300-6455investorinfo@myquipt.com
1 Source:
https://www.nhlbi.nih.gov/health-topics/education-and-awareness/copd-learn-more-breathe-better/state-prevalence2
Source:
https://www.cdc.gov/copd/features/copd-urban-rural-differences.html#:~:text=Seven%20states%E2%80%93Alabama%2C%20Arkansas%2C,highest%20percentage%20of%20rural%20populations.
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