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 fourth quarter and fiscal year 2021 financial results
and operational highlights and filing of its annual financial
statements. These results pertain to three months and year ended
September 30, 2021 and are reported in U.S. Dollars.
Quipt will host its Quarterly Earnings
Conference Call on Tuesday, February 1, 2022 at 10:00 a.m. (ET).
The dial-in number is 1 (800) 309-4610 or 1 (604) 638-5340.
Financial
Highlights:
- Revenue for
fiscal year 2021 was $102.4 million compared to $72.6 million for
fiscal year 2020, representing a 41% increase in revenue
year-over-year. Compared to fiscal year 2020, the Company
experienced organic growth of 10%.
- Recurring
revenue as of fiscal year 2021 continues to be strong and exceeds
77% of total revenue.
- Adjusted EBITDA
(defined below) for fiscal year 2021 was $21.4 million (21.1%
margin), compared to Adjusted EBITDA for fiscal year 2020 of $15.5
million, representing a 38.3% increase year-over-year. Adjusted
EBITDA margin was impacted by one-time costs related to the
Company’s NASDAQ CM listing. On May 27, 2021, the Company
commenced trading on NASDAQ CM.
- Revenue for Q4
2021 was $29.1 million compared to $19.7 million for Q4 2020,
representing a 48% increase in revenue year-over-year. Compared to
Q3 2021, the Company experienced strong organic growth of 14%,
excluding new acquisitions, in the fourth quarter.
- Adjusted EBITDA for Q4 2021 was
$5.6 million (19.2% margin). Adjusted EBITDA margin was impacted by
the expenses related to acquisitions completed in fiscal Q4 as well
as lower pre-integration margins than the Company’s overall margin
profile. The Company anticipates margins normalizing above 20% when
full integration is completed.
- Operating
Expense for fiscal year 2021 was 51.55% compared to 53.18% for
fiscal year 2020.
- Cash flow from
continuing operations was $18.7 million for the year ended
September 30, 2021 compared to $14.1 million for the year
ended September 30, 2020.
- For
fiscal year 2021, bad debt expense was 8% compared to 9% for
fiscal year 2020, an improvement of 1%. This exemplifies our
ability to scale and add more revenue through add-on acquisitions
without compromising our billing capabilities.
- The Company
reported $34.6 million of cash on hand as at September 30,
2021 compared to $29.2 million as at September 30, 2020.
- The Company has
an undrawn credit facility of $20 million as at September 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 158,072 for the year ended September 30, 2021, compared to
61,468 for the year ended September 30, 2020, an increase of
157.2%.
- The Company’s customer base
increased 53.8% year over year to 140,996 unique patients served in
fiscal year 2021 from 91,650 unique patients in fiscal year
2020.
- Compared to
253,113 unique set-ups/deliveries in fiscal year 2020, the Company
completed 364,367 unique set-ups/deliveries in fiscal year 2021, an
increase of 44%.
- 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.
- The Company has
expanded its sales reach across fifteen U.S. states by the addition
of experienced sales personnel.
- Added two
exceptionally experienced Healthcare executives with a specific
focus on the Home Medical Equipment and Services Industry to serve
as EVP of Operations and VP of Acquisitions and Integration, both
coming from two of the largest home medical equipment companies in
the industry, further complementing Quipt’s robust leadership
team.
- Completed six
acquisitions during fiscal year 2021.
- The Company has
reached 170,000 active patients, 19,000 referring physicians and 76
locations throughout 15 U.S. states.
Acquisition Related Updates Subsequent
to Fiscal Year 2021:
- On October 1,
2021, the Company acquired a business with operations in
Mississippi, reporting unaudited trailing 12-month annual revenues
of approximately $2.7 million, anticipated $0.5 million in Adjusted
EBITDA post integration, and 4,000 active patients. In addition, on
November 1, 2021, the Company acquired a business with operations
in Central Illinois reporting unaudited trailing 12-month annual
revenues of approximately $2.5 million, anticipated $0.6 million in
Adjusted EBITDA post integration, and 3,700 active patients.
Integration on both acquisitions is well underway.
- On November
17, 2021, the Company acquired a privately held biomedical services
company, with operations in the Southeastern United States,
reporting unaudited trailing 12-month annual revenues of
approximately $1.5 million, and $225,000 in net income. The
acquisition provides the Company a synergistic opportunity to
expand into a brand-new service line of biomedical repair services
for respiratory equipment including preventative maintenance. The
Company is now able to assist healthcare providers to improve the
operational efficiency of their respiratory equipment program.
- On December
31, 2021, the Company acquired At Home Health Equipment, Inc, a
business with operations in Indiana, reporting unaudited trailing
12-month annual revenues of approximately $13 million and $1.6
million in net income with anticipated Adjusted EBITDA of $2.9
million (22% margin) post integration. The acquisition adds over
15,000 active patients. Integration is underway.
Reiteration of Outlook for Calendar End
2022 (Fiscal Year Q1 2023):
Based on the current operations, market trends
and completed and prospective acquisitions, the Company is
reiterating its outlook for its annual run-rate revenue by the end
of calendar 2022 (Fiscal Q1 2023) to be $180-$190 million with
$38-$43 million in Adjusted EBITDA.
Management
Commentary:
“The record results experienced in the fourth
quarter and fiscal year 2021 are a direct result of the significant
expansion of our patient centric ecosystem into favorable
geographies, through organic and inorganic activities across the
United States. Our robust interconnected operating platform we have
built, and dedicated integration team drives our ability to
transform lower margin business units we acquire into higher margin
businesses that more closely align with our overall margin profile.
It is consistent and steady integration efforts that will allow us
to maintain over 20% margins for calendar 2022 amid an aggressive
acquisition pace,” said CEO and Chairman Greg Crawford. “There is
no question that Quipt is in the strongest position in the history
of the Company, with a distinct industry position as a leader in at
home clinical respiratory care, now serving 170,000 active patients
across fifteen states. Tailwinds driven by a favorable regulatory
landscape, continued heightened demand for respiratory products and
services, bullish demographic trends, as well as ongoing execution
displayed across the organization, we see 2022 as another record
year. We have the financial resources and operating expertise to
leverage the scalable service intensive model we have, and we
expect to be extremely active on the acquisition front throughout
2022, focused on the growing need for at home clinical respiratory
care.”
Chief Financial Officer Hardik Mehta added, “We
are extremely proud of breaching the $100 million mark in annual
revenue for fiscal year 2021, whilst maintaining an above 20%
Adjusted EBITDA margin, a major milestone. Our continued progress
in strategically building scale utilizing the infrastructure we
have in place is producing consistent financial results, inclusive
of over 77% of our revenue being classified as recurring. Driven
through higher volumes, stronger cash collections and continuing to
support the business with lower operating costs, we have begun to
see what more meaningful scale will look like for our financial
model. Moreover, organic growth has been a top priority for the
team, and the 10% organic growth achieved year-over-year signifies
the ongoing execution company-wide. Our deep acquisition pipeline
consists of a wide range of targets, in terms of size and scale and
the exemplary financial position we have provides us the ability to
target more meaningful acquisition candidates that work
significantly to move the needle throughout favorable geographical
regions in the United States. We are extremely excited for 2022 and
look forward to driving shareholder value with continued operating
excellence.”
The financial statements of the Company for the
year ended September 30, 2021, and 2020 and accompanying
Management Discussion & Analysis (MD&A) are available
at www.sedar.com.
With the filing of these documents, and the CEO
and CFO certificates, all as required by National Instrument
51-102, the Company has now filed the documents which were late
which resulted in the management cease trade order issued by the
British Columbia Securities Commission on December 30, 2021, and
such filing represents the Company’s application for revocation of
the management cease trade order.
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 recent 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 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 anticipating
margins normalizing above 20% when full integration of fiscal Q4
acquisitions are completed; the anticipated Adjusted EBITDA of
acquisitions completed since the end of fiscal year 2021; the
Company’s outlook for calendar 2022; the Company maintaining over
20% margins for calendar 2022 amid an aggressive acquisition pace;
the Company expecting fiscal year 2022 to be another record year;
and the Company expecting to be extremely active on the acquisition
front throughout 2022; 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: acquisitions achieving results at
least as good as historical performances; the financial
information regarding acquisitions 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; the
Company successfully identified, negotiating and completing
additional acquisitions, including accretive acquisitions; the
Company organically growing at a rate of 10% and completing
acquisitions that add at least $32 million in new revenue in order
to meet 2022 outlook. 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
Year ended |
|
|
September |
|
September |
|
|
30, 2021 |
|
|
30, 2020 |
|
Net income (loss) from
continuing operations |
|
$ |
(6,174 |
) |
|
$ |
(3,703 |
) |
Add back: |
|
|
|
|
|
|
Depreciation and
amortization |
|
|
17,786 |
|
|
|
14,538 |
|
Interest expense, net |
|
|
1,853 |
|
|
|
1,837 |
|
Gain (loss) on foreign
currency transactions |
|
|
173 |
|
|
|
(454 |
) |
Change in fair value of
debentures and warrants |
|
|
5,703 |
|
|
|
2,635 |
|
Transaction costs bought
deal |
|
|
— |
|
|
|
210 |
|
Provision (benefit) for income
taxes |
|
|
(3,155 |
) |
|
|
128 |
|
EBITDA |
|
|
16,186 |
|
|
|
15,191 |
|
Stock-based compensation |
|
|
4,952 |
|
|
|
171 |
|
Acquisition-related costs |
|
|
233 |
|
|
|
89 |
|
Adjusted EBITDA |
|
$ |
21,371 |
|
|
$ |
15,451 |
|
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.
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.859-300-6455 investorinfo@myquipt.com
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