Quipt Home Medical (QIPT) 17 Dec 242024 Q4 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Fiscal Fourth Quarter and Audited Full Year 2024 Earnings Results Conference Call for Quipt Home Medical Corp. [Operator Instructions]

We remind you that the remarks today will include forward-looking statements that are subject to important risks and uncertainties.

these the uncertainties, results bottom on reader see news information at advisory of more risks please and the release. For the company's statements. At to actual point, Executive to Officer, company's performance differ Chief from The Crawford. could Chairman and I'd the turn these like Greg call over materially this

Accounting Roehrig, to Officer; and Hardik Medical. today. I'm to joining have I'm and joining of services Greg is delivering home also Chief States. a diversified you, operator, to a of everyone Medical CEO our today. Quipt Home United Home Thank services Officer, Crawford, our Quipt me Financial range Chief Mehta, Tom across and thank you us health Chairman company medical and the patients pleased care equipment comprehensive

to and own excellence patient-centric to with clinical These, combined effectively a by the advanced their homes. in specialized needs solutions. comfort is respiratory allow model our powered of meet Our programs, us technology-enabled commitment patient

states locations has Quipt strengthen reach. present, At enabled us which our XX expanded XXX,XXX to coast-to-coast over XXX active patients, has across with to over

health one-stop end-to-end for complex is medical to and offerings. an diverse the ecosystem. a in of operating delivering DME portfolio solution, the providers, care equipment a care built scalable go-to-market strategy model as by Our of supported and anchored durable patients we've meet respiratory By a solution designed evolving needs

today's fiscal XXXX factors, operational strategic untapped patients position our of with approximately potential care meet significant review as population, trajectory apnea high-quality trends, represents into trends, income focus our XX% of year well scale, increased aging product initiatives fourth COPD provide serving macro our full cardiovascular for quarter highlights with These pulmonary with sleep the and XXXX. and the solutions. On mix, commitment demand conditions. the results emerging and and into demand the the shaping rising care market. we to growth fiscal including Respiratory our powerful our will as in combined insights aligns respiratory highlighting and to us call, expertise the prevalence the This

of $XX.X gains year-over-year For of major alongside primary year. over increase of our channels. are all revenue consistent record fiscal XXXX, million, a we notable we In sales with in million, EBITDA real achieved XX% to an adjusted consistent growth EBITDA margin of last experiencing representing demand product time, XX.X%, adjusted $XXX.X categories leading XX% across

as industry-wide We X%, improvement organic sequential several growth with QX, particularly positive of progress that meaningful we our achieved to the through fourth returned pleased are a of to challenges. in reflects unique the navigate fiscal quarter, In continue we business. resilience

GAAP previous with As officially standards, transitioned our we IFRS us to discussed on U.S. have conference reporting from peers. calls, aligning

bad expense and and GAAP. a does Bad its under as the debt expense a adjustment sudden line this It's within reported of inclusion reduces As adjustment to that is figure. part this which of emphasize debt this revenue within reported now line, in loss revenue simply reflects the inherently previously revenue always a represents item, change separate not been the change, reported important presentation revenue. represent has

XXXX. growth X%. achieve to mentioned, well positive consistent to our in approximately Year-over-year growth Real-time sustained As growth. we organic returned us positioned offerings product organic revenue in sequential has strength activity across referral calendar was

Turning to our sleep business.

device We been demand. setups volumes on continue are activity steady, report negative pleased Referral to supply impact replacement medications no GLP-X have have strong. while to that remains new for

start a study more treatment GLP-X adherence. not is device of to The to GLP-X GLP-Xs. were likely data real-world shared compared were found involving positive sleep patients with manufacturer on leading Recent diagnosis an the XX.X% obstructive who individuals apnea therapy on that those by sleep underscores XXX,XXX OSA effects CPAP the prescribed

as XX-month improving for care a and focus patients the more rates on will serve our as into over overall system business, order sleep periods. We GLP-X health resupply long-term these exhibited XX- tailwind their both health. they higher motivated medications Additionally, introducing believe patients

as ongoing to to not make the known possible the matter diligently provide to and this updates that as civil determined occurred Moving investigative to remain and demand that quickly again wrongdoing we committed continue the transparency as point CID, want has as at government this time. resolve We will the has appropriate. any working

items areas, to rural the from bidding late positive support Centers to the Medicaid applied areas CPI relates the a while bidding announced last the adjustments of it Competitive will schedules, As adjustment X%, in program the X.X% for competitive on Services see a the fee location. the positive depending to will will portion areas further program Medicare receive in increase, the growth item rate XXXX. XX-XX former will blended X% regulatory ranging increase This adjusted and competitive In non-CBA provide calendar week, bidding X.X% with rate. organic X% CPI objectives for for to increase. XXXX and our continue environment, items

fiscal efficiencies for prioritized we During our ambitions XXXX met. our growth ensuring QX, organic additional core within operations, are creating calendar

industry-wide for value in creation. emerge exploring growth are opportunities further we actively XXXX, to and As faced we the challenges from allocate capital

head XXXX, calendar historical year return into our we we organic growth expect a rate. As see to to

dynamic highly Moving criteria. landscape, the disciplined to numerous M&A our it opportunities with acquisition with remains aligning

and synergistic scale. expanding, multiples to enhance acquisitions is focused our we executing pipeline at on remain Our attractive

X.Xx, are gives net leverage We the strategic which conservatively invest debt at our with flexibility in managing initiatives. us to

drive our our strengthen a value we execute exceptional to relationships confident long-term in strategy. payers with As for forward, patient consistent to we Through and these are deliver we shareholders. efforts, scalable move growth positioned care, disciplined ability are well

fiscal to quarter XXXX results. our over commentary, to financial discuss call hand like that and the fourth to year full Hardik I'd With

the our with fiscal comparison principles GAAP values are quarter On note in U.S. representing and that XX, fourth all results, September Monday XXXX. year full X we in periods now ended financial GAAP announced Greg. financial months evening, XX Thanks, XXXX dollars and under are months reported also consistency. the Please reported for accounting and

a increased by Respiratory ended highlights. year technology XX%, deliveries XXXX, September growth of key use XXX,XXX and and to of some our for setups processes. ended the for year XX, XXX,XXX intake driven are reflecting the September centralized compared to XXXX, XX, resupply Here

The in customer fiscal year-over-year, year XXXX. to unique completed unique XXX,XXX compared in increase fiscal fiscal XXX,XXX patients grew We year XXXX XXX,XXX from setups/deliveries XXXX, setups/deliveries fiscal year XX% in XXXX. XXX,XXX of base in unique XX% patients serving year an unique

compared a $XXX.X or for by year year-over-year XXXX X% representing in fiscal XXXX, growth. million $XXX.X driven was year Revenue million to Approximately XX.X% increase. $X.X was fiscal million organic

revenue way debt is expense its to always under been important within emphasize from difference of reported comparison and sudden now debt in financials. that bad has inclusive It's All As presenting bad a GAAP. periods our part The This not loss change figure this but revenue revenue. our revenue inclusion different existed bad in of expense. change. does of reflect debt is represent GAAP a separately now

Recurring year-over-year. revenue million XX% increase XX% of in margin a revenue XX.X% compared remained to fiscal $XX.X strong, fiscal XX.X% a a in exceeding XXXX and XXXX. was million year fiscal It $XX.X XXXX. total for Adjusted represents with year EBITDA year margin

QX ended organic a was X% to QX an was $XX $XX.X was represents growth XXXX. For XXXX, fiscal fiscal year. margin from XXXX reflecting XX, from months million, compared sequential flow $XX.X returned X.X% $XX.X continuing EBITDA in million for up positive to of million decrease QX operations We the year-over-year. Cash $XX.X million million, fiscal XXXX, in the at X%. XX.X% XX.X% This XX compared Adjusted margin revenue for $XX.X prior million in September XXXX. fiscal to QX

are Quipt improving. achieved reporting that this adjustments, the of positive of Excluding impact signaling X%, revenue business growth underlying fundamentals sequential our

that of came see in which percentage to year XXXX. in growth We at XX.X% organic calendar a fiscal in corresponding to the increase. XXXX begins with expect contributed revenue $X.X compared year rate. Operating fiscal QX approximately our XXXX, Acquisitions XXXX, return XX.X% the of historical period as a in million expenses will

CID loss Professional in in foreign to approximately $X.X and fees private the status contributed the increase million issuer XXXX. the to fiscal related

lower find For with to resolution. objective fees CID the we anticipate fiscal professional XXXX,

XXXX during million XXXX ended also rental transfers and and CapEx, equipment million. XX.XXX, inventory was XX.XXX as Medical from years September known the XX, equipment

on As The total June company as on million $XX.X with in XX, the sheet XXXX, on has hand hand credit leverage available $XX.X and compared revolving credit of million term balance to availability facility EBITDA debt including of XXXX. of ratio adjusted the on draw the $XX.X delayed loan reported conservative million in to the $XX $XX.X net maintain million, a We X.Xx. September of XX, company million cash facility. cash

growth. year a our impacted from resilience business XX% and annualized the multiple industry-wide target marked of in financial Fiscal which negatively that we face achieving to prevented us organic observed, performance our challenges for X% our of XXXX of

scale. the Medicare the of ended XX, the as pause the January the accounts impact with relief XX-XX industry cyber The on by engaged to from Change and providers $X Healthcare withdrawal record-breaking other year members approximately agreement the Moreover, impacted of XXXX, on for XXXX. estimated million receivable of collections which our approximately efficiencies achieved demonstrate adjusted attack $XXX.X XX.X%, to revenue to periods results and of consistency is we million X, in revenue the due Medicare September an capitated estimated Advantage even and the achieved the of EBITDA results market operational in of changing million. Despite our These headwinds, adapt in at to ability $X dynamics. ability drive and reflects margin of performance our uncertainty

our across consistent product remained supported diversified service strong, mix. metrics referral patterns and and demand Our operating by trends

Importantly, resilience offset referral patients, Humana patterns business the the in the majority Medicare the of loss Advantage our highlighting strength this of model.

referral for demand transition respiratory resilience and for underlying to XXXX into showcased positioned As calendar about Fiscal strong and sustained our business, are our by this the well sustain and and optimistic stability the XXXX, we growth activity end-to-end success. ability long-term are we of positive supported solutions. trends, we

We continuum as team. expect cross-selling and sales of drive organic return of adjusted in continue care it consistent market. persist to we to continued expansion in calendar of that volume will products through XXXX The the and our organic growth

continues those loans adjusted to cash to flow repayments of The EBITDA less For capital equipment fiscal X% to be free our and both cash as guidance defines flow, XXXX, free and in leases. non-GAAP cash measure. X% company expenditures a financed for

The believes facility investors credit pay cash the and is measure repay a free for senior flow pursue it the opportunities and financial supplemental company investments, interest, and assessing acquisitions. business ability making company's useful including to in

in revenue million fiscal of free $XX.X X.X% cash For or the company flow. XXXX, reported

The model, mix. our is of revenue our revenue revenue than XX% base which driven by highly our more accounts continued for consistency total of recurring

as resupply The consists major recurring of growth program we as patients cycle this XXXX. for us, a patient's base scaled now program amazing XX, September resupply with component significantly an represents of life our have area Our XXX,XXX extending revenue is us. of

net modest of are leverage of with flexibility organic and execute provides million balanced liquidity to acquisition business of a healthy With sheet $XX.X initiatives ample scale our deploy our to growth to balance mix a we strategic positioned X.Xx, debt cash Our well thoughtfully. pipeline. both and

cost improve positions discipline. expectation enhanced ability disciplined of to on while our will growth are the financial maintaining XXXX we value of combination strategy the our scale, in for over our and time, confident With and beyond. strategic operational environment that financial shareholders opportunities to capital strength capitalize deliver The us in

our to it demand, we competitive As ability inherent meet our our Scale and and across advantages penetration long-term market a deepens as durable of enhances creates in drive strategy model will margin is increasing continue the creation. platform. value critical scale, our component enhancement our operating to efficiencies

update, turn back Thank Greg. with And that you. the I'll call to

performance that and for comprehensive highlights. of overview Hardik, financial our you, operational Thank

As Hardik industry-wide momentum business faced. and a across XXXX XXXX into our year light resilient regained fiscal that in outlined, with entered the core Quipt, challenges we we've of for fiscal was

ahead, positioning care by about success sustained of foundation think the Quipt on growth we the execute map. for As our continuing our I we're exceptional patient want road strategy. emphasize how opportunities Delivering to is to

remains other sleep their focus in receive chronic pulmonary diseases, patients homes. that and the such addressing as ensuring respiratory Our comfort of on high-quality COPD care conditions apnea,

care we to more and our referral providers. look patients sources with we by future, and As constantly markets exploring strategic entering new are health expand partnerships other reach serve and the performing ways to payers,

seamless combination have of share, growing that expertise. care leverage patient-centric our solutions. and built the competitive economies experience lies for strengths allow and scale in edge our of clinical to meets Our we These us a coast-to-coast footprint rising home-based deliver the market demand robust

as growth to map, demographic growth Looking the returning of our We're top at such with our for of the conditions growing organic road prevalence the levels driving population growth XXXX. chronic and target historical increasing in leveraging home-based organic priority to the medical meet aging solutions. tailwinds, demand is

is continuing networks, hospitals, is other referral partners, connections activity. with drive increase Our expanded sales referral to force on physicians deepening focused which and in

also These make support and improve recurring to outcomes. operational We workflows, tools not also investments inefficiencies our technologies reduce excellence, patient strategic but continue to do in streams. only streamline revenue enhance

we points. every to relates friction of making improve integrated approach, to processes, in are operational committed which the To consistently are it way true performance. real operating and representing working which workflow this since leveraging XX acquisitions, As our end, creates tried removes on conjunction our growth XXXX with can by $XXX we of focus million strategy, We to execution expand our integration we to acquisitions revenue. technology enhancing synergistic in value and effectively smart scale over annualized our our

can incorporated respiratory on weighted Our intention our be focus businesses, is which to scalable heavily successfully infrastructure. into

of high to be base our payer reach increase to continues prevalence advantageous a and geographic objective overall into with geographies COPD. Our

growth, calendar sides engage investors goals will achievements includes on ongoing growth border operating and returning the organic of XXXX, sound consistent and fundamentals which roadshows conferences to for to continue our financial clear actively to and both objectives. participate and at and share long-term we our Given our our with

fiscal our EBITDA adjusted we margins focused look and health on ahead network. XXXX, As remain our driving strengthening growth, we nationwide organic care sustainable expanding further to

a and X.Xx arise. executing provide have approach our growth opportunities sheet resources structure financial management capital strategic while they for the a initiatives, we as on balance foundation that flexible ensures to disciplined Our capitalize to leverage solid our

going confidence consistent momentum we calendar real building XXXX. demand fiscal the product Importantly, reinforcing XXXX, QX time our are during seeing into are in portfolio across we our in

and and for opportunities sharing their you results would the I like forward February. In with to our about to Quipt to tireless chance team for continued take ahead look work closing, excited this support. our QX entire are fiscal We the in stakeholders thank their

[Operator Genuity. Instructions] question from first Close with Our is Canaccord Richard

XX-XX capitation called agreement. You out the expiration, guys headwinds, Humana

I in think I you'll guess, think January. lapping about in So be -- as I those, those, the

you the we come, XQ? annual range? and the somewhat quarter similar should to So And XX% in third in about X% think that as to 'XX of in fiscal being as here, quarter X% the then the more quarter, growth organic December quarter posted just fourth second you're

Yes.

would think accurate. be I that

that -- rates been we we hopefully, past. kind in I growth start calendar go seeing we think saying with the are we are into able have should start of XXXX, that deliver what as consistent organic to

If year foreign goes CID what $X of then foreign with said issuer, I to to, fiscal cost and those cost think be fiscal respect guess, were, X 'XX? And Okay. million in you the sort would CID I last running the issuer in away, right? this year, you expect

this cost of extremely That gone we is see We questions to been is like start asked, believe a we discovery the down activity. It that trying lot that. handicap. for the to underlying have this difficult resolution have and at us the the hope we through and that point, at stuff point, comes what all versus really to

the other government no said is on have side the idea having of that, what So we it.

to even or estimate. very hard So it's project

from going from year, GAAP reporting 'XX $XX.X the that this What there? to like the you Hardik, from $XX last guess operations your treatment reporting. call Can change out? I XX-K just now in Okay. cash cash did exactly cash. was previous was And million then on filing, operations, on maybe million

It's operating. that of from related -- leases classification real Yes. estate went operating from finance really to the to

-- financing amount same literally activity it's at dollar look So you the leases that from if the change. exact would

sound you to With do And necessarily pay you're of It of down thinking Okay, generate like cash flow right 'XX, in the in business, times. Or in how acquisitions that? since are organic the out just you are credit some then fiscal imminent free you called that facility? expect you a that great. now. about focusing growth on -- couple doesn't

a We achieve. Yes. still evaluate have it's continue to while our opportunity we that the it's down necessarily for right something look something I facility we yield along still -- the mean, pay part out, to not as credit will will strived schedule. us definitely the we it's continue of come returns -- the again, to and but that called acquisition strategy always to consistently per that not is we and do

that. not wouldn't or yes. is that anything I call -- part like So acquisition It's strategy the just of

continue to debt So as down the will pay we continue that's, as -- make that But sure schedule. as the that. best our per make are to borrowing costs yes, and the facility possible. We we minimal decision so

The is Bill next The Benchmark with question Sutherland from Company.

in might fiscal What activity -- capital? targets. of more because No like -- cost of ahead So -- do shortage looking active? you question. done nothing what on M&A Or that it the Is M&A are no seems make 'XX. factors it there's the

There's there. targets certainly out no Yes. shortage of

the think pipeline work we feel the pretty us, in out for things us I will got right some for calendar price. right for and target it confident right geography will that and 'XX. we've point and the And be some at the that that in

either 'XX going Yes, the on a CID of on background, in visibility want was more which but lot -- lot are don't settled, a other certainly considerations are say the example. to perfect there I a had

So we was we visibility were cost going the environment have think better something inflationary better and into at. the XXXX, were understanding, I watching of a that capital in also we then

things we kind the going those were hoping of in direction are all they Now that would.

more lot take a visibility decision. us provides just it So to informed

just you the number What That's adjust just XQ. And Okay. was when fiscal, impact? the revenue fiscal Humana for on question XX-XX helpful. the your and then on one completed growth quick

completely I not asked. I'm followed sure as the question

XQ. year-over-year what -- for was But guess. I growth had the X%, was sequential the fiscal you So forget

would what been? impact, you if and Humana growth impact XX-XX of so eliminate the the capitation the And the have

be Humana? that what asking? growth Is we would the hit you're What the should

you limit year-over-year, X -- growth. your had those you impacts If

it, wondering the the just I'm think I -- I'm of I ballparked So curious if what because but ballpark. right just kind in

Right.

So in you just that yes, out were we million-ish we -- approximately I if $X that think called delta. about

that, of million X, kind we ] another on [ reported in by us you and XX-XX that if take terms impact So divided Humana. of the for $X top of would put what

$X -- million the impacts? captures would that So of both capture those

Yes.

Okay. That's a clarification I didn't have.

is next Stifel. Julian from Hung The with question

This the investigation a they but is Reading My any the the Justin investigation. clarification that of that still month my sitting question Is hasn't on evidence today. from for last right? just understanding, no is in the first SEC found overall concluded MD&A, DOJ wrongdoing, Julian concluded.

The the DOJ, any in CID, is relates it the and But as that that still further That is SEC that investigation. that declined correct. in to open.

So for like there what sort or look them else to left through is through?

Yes. I there them the given that not on heavy them of or point, wrongdoing is anything. feel mean was at everything kind We've decide lift this and whether we're any we there. or like waiting to

So again, we notified haven't and pretty in strong about anything. -- of practices like our Once we feel everything that. been billing that

in that up confident we at end the point. of pretty So right this we're some that, on side

then company believe couple And quarters on the you update I Okay. just that diabetes is of an and provide business. uptake? launched a Can how the ago,

Yes, sure.

it lower feel in margin effect our than is maybe this had. may margin that's on that's a to continuing come We're earlier see in we that And what growth fact, thought come that because surprised respiratory maybe up up that. some historically like of or that. we in So this in in along that kind going does have well didn't that, products have in our

question The is next Securities. Doug [Operator Cooper Beacon from Instructions] with

and EBITDA sustainability on I guess the the question margins going just had forward. I a

the to XX.X%. subtract So margin XX.X% those in QX I go on in with in QX expenses EBITDA basis, and that just XX% periods, dropping if got QX, you XX.X% reported and just now debt a revenue I your quarterly actually in adjust from EBITDA bad

fiscal margin expectations the year XX.X%. So of is the your that for your blended What front? 'XX gets on for

And Yes. we XX-XX grow that right changes for Humana. actively that, 'XX and doing that fiscal of would be the we in that need our 'XX that We that, primarily to QX, in frankly, the made business thought think now, fiscal and in out loss there are of Doug. the way we're

we that changes. just we've structure cost to have through of we So those year weren't carried able to outgrow, make lot the so a now additional

to notes, just in resupply on moving business. had that this the you program XXX,XXX guess year QX. then And in the I And Okay. on have said I you be the patients at you resupply my and ended XXX,XXX. could wrong,

it's So like that at year. look doesn't grown this all

I we -- call Yes. growing. I wouldn't it's mean it's it not --

despite is of again, I it patients. losing think, the not some growing

program is terms But So like boxes in it's of how go not of -- in in allowable of that that. average resupply metrics the the an stuff that. also of really underlying that order size and we some the in, box what's and going terms our many

So in the those underlying year. operating throughout the metrics have direction performed right

count was improvements in count. we the of on that, despite So patient that the while looks of patient side. we keep have some Again, the do see flat, underlying that loss to mind

Okay.

still Just groups. of returned underperforming a question, a growth of bit in you certainly guys the underperforming your broader terms like looks but some to of sequentially, market peer and

So What to X% to you underperformed growth. make obviously, need Because XX% you that happen? business that to do do in get happen to in the XXXX. what just historical? to You to needs back noted

back question expand a good we've that on really in I expand bring our make Doug, mean historically we seen. of to that that and have to really team organic -- there that. pushes growth to sales . lot continue Yes,

for I We've lot it in buy of really the of able watch been in think and too, a these acquisitions been them us, grow. piece that. to historically that another has companies smaller

usually in we there in of along kind bump helped that in when the levers organic make post because on the and was 'XX, I a really that with that program on that's we didn't really that integration that And weren't one to big way. we probably side. So see the the pull, acquisitions resupply able especially growth think any of

seeing it at are EBITDA, out M&A stock your What the got Xx with M&A there quite about from to guess difficult. where I it's the is But are kind prices you perspective? trading, the make of

the past. bit There a been favorable more opportunities. certainly are pricing the of are than in they think quite have I

the less of a DMEs. on the dynamics from are more out higher coming side, up larger-sized [ have that They lot different of -- hospital-based I -- smaller the kind market. a a ] the I very to on than DMEs There's it DME. think think straight in

favorable are their slightly overall, think players stuff. lesser the I involving other for slightly of also sure, But valuations better own given as competition well maybe some

So I as far mean, are as of landscape that's acquisition the kind now. right seeing goes, we what

the concludes like turn session. This question-and-answer over remarks. I'd back Mr. any Crawford to conference closing the for to

you Thank today. you, operator, thank for your all participation and

As posting Happy where site can you our always, this find call. some we also exciting this discussed and holidays, investor us on and on of would the and quipthomemedical.com, call updated goodbye. web developments at deck of on for transcript be a the products the

conference today's This concludes call.

your You for day. may a and pleasant have disconnect Thank participating, you lines.