Quipt Home Medical Reports Second Quarter Fiscal 2024 Financial Results Posting Revenue Growth of 10% and Adjusted EBITDA Growth of 14%
Quipt Home Medical (NASDAQ: QIPT; TSX: QIPT) announced its Q2 fiscal 2024 results, reporting a 10% increase in revenue to $64.0 million and a 14% increase in adjusted EBITDA to $14.9 million. Despite the expiration of the Medicare 75/25 blended rate and withdrawal of some Medicare Advantage members, the company maintained a strong adjusted EBITDA margin of 23.3%. Net income was a loss of $1.4 million, or $0.03 per diluted share. Cash flow from operations grew to $17.1 million for the six months ended March 31, 2024. Operational highlights include an 8% increase in unique patients served and a 6% increase in unique set-ups/deliveries. The company also announced a Normal Course Issuer Bid (NCIB) for share repurchases worth up to $5.0 million. Management highlighted resilience amid industry challenges and a strong balance sheet with $32.9 million in liquidity.
- Revenue increased by 10% to $64.0 million in Q2 2024.
- Adjusted EBITDA grew by 14% to $14.9 million, maintaining a strong margin of 23.3%.
- Cash flow from operations increased to $17.1 million for the six months ended March 31, 2024.
- Operational growth with an 8% increase in unique patients served and a 6% increase in unique set-ups/deliveries.
- Implementation of a Normal Course Issuer Bid (NCIB) for share repurchases worth up to $5.0 million.
- Strong balance sheet with $32.9 million in liquidity, including $14.6 million cash on hand and total credit availability of $39.3 million.
- Continued strong demand trends for respiratory equipment and supplies.
- Use of technology and centralized intake processes credited for operational efficiencies.
- Net income was a loss of $1.4 million, or $0.03 per diluted share.
- Decline in cash on hand to $14.6 million as of March 31, 2024, from $17.2 million as of September 30, 2023.
- Impact from the expiration of the Medicare 75/25 blended rate and withdrawal of some Medicare Advantage members.
- Cyber-attack on Change Healthcare affected claim processing and billing, contributing to cash flow issues.
Insights
Quipt Home Medical has demonstrated a commendable revenue growth of
However, the company reported a net loss of
For retail investors, the announced Normal Course Issuer Bid (NCIB) to repurchase up to
The company’s strong demand trends for respiratory equipment, as evidenced by the increase in unique set-ups/deliveries and respiratory resupply set-ups/deliveries, reflect a robust market demand. The 8% increase in unique patients and the use of technology and centralized intake processes demonstrate operational effectiveness and market penetration strategies. Quipt’s focus on expanding into continuum markets and cross-selling their respiratory solutions points towards a strategic approach in tapping new opportunities for organic growth.
The NCIB is a strategic move to potentially improve EPS by reducing the number of outstanding shares, which might be perceived positively by the market. For retail investors, understanding these operational highlights indicates a company positioned well in its niche market with a solid growth strategy. However, the external challenges like the cyber-attack and Medicare rate adjustments must be considered as risks that the company needs to navigate effectively.
• Posts Adjusted EBITDA Margin of
• Announced Normal Course Issuer Bid (“NCIB”) Subsequent to Quarter End
CINCINNATI, May 15, 2024 (GLOBE NEWSWIRE) -- Quipt Home Medical Corp. (the “Company”) (NASDAQ: QIPT; TSX: QIPT), a U.S.-based home medical equipment provider, focused on end-to-end respiratory care, today announced its second quarter fiscal 2024 financial results and operational highlights. These results pertain to the three and six months ended March 31, 2024, and are reported in United States dollars ("$", "dollars" and "US$") and have been rounded to the nearest hundred thousand.
Quipt will host its Earnings Conference Call on Thursday, May 16, 2024, at 10:00 a.m. (ET). The dial-in number is 1 (844) 763 8274 or 1 (647) 484 8814. The live audio webcast can be found on the investor section of the Company’s website through the following link: www.quipthomemedical.com.
Financial Highlights:
- Revenue for Q2 2024 was
$64.0 million compared to$58.1 million for Q2 2023, representing a10% increase. Organic growth contributed approximately$3.3 million , or6% on an annual basis.- The Company absorbed a revenue impact in the quarter resulting from expiration of the Medicare 75/25 blended rate as of January 1, 2024. The Medicare 75/25 blended rate had been providing rate relief in certain geographies. Additionally, in certain regions, the Company experienced the withdrawal of Medicare Advantage (“MA”) members due to the capitated agreement engaged on with other providers in the industry.
- The Company remains focused on the ongoing objective of returning to an 8
-10% annualized organic revenue growth pace and continues to implement its strategic growth initiatives on this front.
- Revenues for the six months ended March 31, 2024, increased to
$129.3 million , representing an increase of31% from the six months ended March 31, 2023. - Recurring Revenue (Non-IFRS financial measure or ratio, see “Non-IFRS Financial Measures”) for Q2 2024 continued to be strong, representing
79.6% of total revenue, driven by overall growth in new equipment set-ups. - Adjusted EBITDA (Non-IFRS financial measure or ratio, see “Non-IFRS Financial Measures”) for Q2 2024 was
$14.9 million (23.3% of revenue) compared to$13.1 million (22.5% of revenue) for Q2 2023, representing a14% increase. - Adjusted EBITDA for the six months ended March 31, 2024, increased to
$30.2 million , representing an increase of37% from the six months ended March 31, 2023, and represented23.4% of revenues. - Net income (loss) for Q2 2024 was
$(1.4) million , or ($0.03) per diluted share, as compared to$(0.7) million , or$(0.02) per diluted share for Q2 2023. - Cash flow from operations was
$17.1 million for the six months ended March 31, 2024, compared to$14.8 million for the six months ended March 31, 2023. - For Q2 2024, bad debt expense as a percentage of revenue improved to
4.2% , compared to4.3% for Q2 2023. - The Company reported cash on hand of
$14.6 million as of March 31, 2024, compared to$17.2 million as of September 30, 2023. The decline in cash was primarily the result of the recent cyber-attack on Change Healthcare, which impacted the ability to process and bill claims in the back half of the quarter. The Company expects cash collections to normalize in the coming months as the backlog of claims are resolved and future claims are adjudicated in a timely manner like they have been historically. - The Company had total credit availability of
$39.3 million as of March 31, 2024, with$18.3 million available on its revolving credit facility and$21.0 million available pursuant to a delayed-draw term loan facility. - The Company maintains a conservative balance sheet with a net debt to Adjusted EBITDA Leverage Ratio (Non-IFRS financial measure or ratio, see “Non-IFRS Financial Measures”) of 1.4x.
Operational Highlights:
- The Company served 148,874 unique patients in Q2 2024 compared to 137,748 in Q2 2023, an increase of
8% year over year. - Compared to 198,101 unique set-ups/deliveries in Q2 2023, the Company completed 210,279 unique set-ups/deliveries in Q2 2024, an increase of
6% . This includes 116,023 respiratory resupply set-ups/deliveries for the three months ended March 31, 2024, compared to 106,486 for the three months ended March 31, 2023, an increase of9% , which the Company credits to its continued use of technology and centralized intake processes. - The Company continues to experience very strong demand trends for respiratory equipment, including CPAPs, BiPAPs, oxygen concentrators, ventilators, as well as the CPAP resupply and other supplies business.
- The Company has 287,500 unique active patients that were served at least once in the last twelve months, 34,400 referring physicians, and 125 locations.
Subsequent Highlights:
- The Company announced the implementation of a normal course issuer bid (the “NCIB”). Under the NCIB, the Company may purchase for cancellation up to 3,626,845 common shares, or up to
$5.0 million , of the Company (each, a “Common Share”) from time to time in accordance with applicable securities laws, representing approximately10% of the Company’s public float (as defined by the TSX). - The NCIB commenced on May 6, 2024 and will terminate upon the earliest of (i) April 30, 2025, (ii) the Company purchasing the maximum number of Common Shares or dollars, and (iii) the Company terminating the NCIB. As of April 30, 2024, the Company had 42,571,523 Common Shares issued and outstanding.
Management Commentary:
“We are very proud of the resilience of our business and our ability to maintain our strong margin profile amid certain industry-related challenges experienced during fiscal Q2. We have observed several positive trends with respect to equipment set-ups, including within our sleep segment, and we have seen no change in favorable referral patterns. To facilitate a return to our historical revenue growth trajectory, we are working diligently to enhance our ongoing organic growth initiatives, such as expanding into continuum markets, and cross selling our end-to-end respiratory solution, which provides a unique go to market approach. Our objective remains to return to an 8
“Our continued financial and operational performance is a result of our ongoing commitment to cost discipline and prudent capital allocation, exemplified by strong and consistent Adjusted EBITDA margin over the years and Adjusted EBITDA margin of
The Company's full financial statements and related management's discussion and analysis for the three and six months ended March 31, 2024 is available under the Company's profile on SEDAR+ (www.sedarplus.com) and posted on the Company's web site at https://quipthomemedical.com/financials.
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.
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 anticipating solid and robust organic growth, with the goal of achieving 8
Non-IFRS Measures
This press release refers to “Recurring Revenue”, “Adjusted EBITDA” and “Leverage Ratio”, which are non-IFRS financial measures that do not have standardized meanings prescribed by 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 Q2 is calculated as rentals of medical equipment of
Adjusted EBITDA is calculated as net income (loss), and adding back depreciation and amortization, interest expense, net, provision for income taxes, stock-based compensation, professional fees related to civil investigative demand, acquisition-related costs, share of loss of equity method investment, and loss (gain) on foreign currency transactions. The following table shows our non-IFRS measure, Adjusted EBITDA, reconciled to our net income (loss) for the following indicated periods (in $millions):
Three | Three | Six | Six | ||||||||||||
months | months | months | months | ||||||||||||
ended March | ended March | ended March | ended March | ||||||||||||
31, 2024 | 31, 2023 | 31, 2024 | 31, 2023 | ||||||||||||
Net loss | $ | (1.4 | ) | $ | (0.7 | ) | $ | (2.0 | ) | $ | (0.4 | ) | |||
Add back: | |||||||||||||||
Depreciation and amortization | 12.0 | 9.6 | 24.3 | 16.4 | |||||||||||
Interest expense, net | 1.9 | 2.0 | 3.8 | 2.7 | |||||||||||
Provision for income taxes | 0.3 | — | 0.5 | 0.3 | |||||||||||
Stock-based compensation | 0.7 | 1.3 | 1.7 | 1.9 | |||||||||||
Professional fees related to CID | 1.0 | — | 1.5 | — | |||||||||||
Acquisition-related costs | 0.0 | 0.9 | 0.2 | 1.2 | |||||||||||
Share of loss in equity method investment | 0.1 | — | 0.2 | — | |||||||||||
Loss on foreign currency transactions | 0.3 | 0.0 | 0.0 | 0.0 | |||||||||||
Adjusted EBITDA | $ | 14.9 | $ | 13.1 | $ | 30.2 | $ | 22.1 | |||||||
Adjusted EBITDA Margin for Q2 2024 is calculated as Adjusted EBITDA of
Leverage Ratio is calculated as long-term debt less cash, divided by (Adjusted EBITDA for Q2 times four), and is reconciled as follows (in $millions):
As of and for | ||
the three months | ||
ended March 31, | ||
2024 | ||
Senior credit facility, principal | $ | 66.4 |
Equipment loans | 12.8 | |
Lease liabilities | 19.0 | |
Cash | (14.6) | |
Long-term debt less cash | 83.6 | |
Adjusted EBITDA for Q2 times four | 59.6 | |
Leverage Ratio | 1.4x | |
For further information please visit our website at www.Quipthomemedical.com, or contact:
Cole Stevens
VP of Corporate Development
Quipt Home Medical Corp.
859-300-6455
cole.stevens@myquipt.com
Gregory Crawford
Chief Executive Officer
Quipt Home Medical Corp.
859-300-6455
investorinfo@myquipt.com
FAQ
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