Quipt Reveals Record Q1 Financial Results, Posts Revenue Growth Of 30% And Adjusted EBITDA Growth Of 16%

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Quipt Home Medical Corp. QIPT QIPT announced its first quarter fiscal 2022 financial results and operational highlights. These results pertain to the three-month period ended December 31, 2021 and are reported in U.S. Dollars.

Financial Highlights:

Revenue for Q1 2022 was $29.5 million compared to $22.8 million for Q1 2021, representing a 30% increase in revenue year-over-year.
As of December 31, 2021, the Company’s backlog increased to approximately 8,000 patients in the queue to be set up on sleep devices, compared to a more typical 1,000 patients historically. The Company is cautiously optimistic that sleep device allocations will increase in the second half of 2022, which will relieve some of the backlog, generating a lift in revenue from this impacted segment of the business.
The sleep segment revenue impact was approximately $1 to $1.5 million in Q1 2022.
Recurring Revenue as of Q1 2022 was 77% of total revenue.
Adjusted EBITDA for Q1 2022 was $6 million (20.3% margin), compared to Adjusted EBITDA for Q1 2021 of $5.2 million, representing a 16% increase year-over-year.
Cash flow from continuing operations was $5.3 million in Q1 2022 compared to $2.8 million in Q1 2021, an increase of 90%.
The Company reported $30.1 million of cash on hand as at December 31, 2021, compared to $23.6 million as at December 31, 2020.
The Company has an undrawn credit facility of $20 million as at December 31, 2021.

Operational Highlights:

Through the Company’s continued use of technology and centralized intake processes, respiratory resupply set-ups and/or deliveries increased to 51,137 for the three months ended December 31, 2021, compared to 34,996 for the same period ended December 31, 2020, an increase of 46%.
The Company’s customer base increased 45% year over year from 51,836 unique patients served in Q1 2021 to 75,309 unique patients in Q1 2022.
Compared to 118,100 unique set-ups/deliveries in Q1 2022, the Company completed 76,691 unique set-ups/deliveries in Q1 2021, an increase of 54%.
The Company continues to experience robust demand for respiratory equipment, such as Oxygen Concentrators, Ventilators, as well as the CPAP resupply and other supplies business.
The Company operates out of 76 locations in fifteen states across the United States, concentrated in the Midwest, Southeast and East coast regions, completing in fiscal 2021 over 350,000 deliveries to more than 170,000 active patients, with over 19,000 referring physicians.

Acquisition-Related Updates:

Completed three acquisitions during the three months ended December 31, 2021:

On October 1, 2021, the Company acquired a business with operations in Mississippi adding over 4,000 active patients, more than 10,000 unique orders, and 590 unique referring physicians. Moreover, the acquisition provides Quipt important insurance contracts and decades of operating experience, with an over 30-year operating track record in the markets served. The business has a diverse payor mix and full suite of products with a focus on respiratory care, representing over 65% of the mix.
On November 1, 2021, the Company acquired a business with operations in Central Illinois. The acquisition has a heavily weighted respiratory product mix, and over 3,700 active patients. Moreover, the acquisition provides Quipt important insurance contracts and decades of operating experience, with an over 40-year operating track record in the markets served. The business has a diverse payor mix and full suite of products with a focus on respiratory care, representing over 85% of the mix.
On November 9, 2021, the Company acquired a privately held biomedical services company, with operations in the Southeastern United States. 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.

Subsequent Events to the Three Months Ended December 31, 2021:

On January 1, 2022, 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.

Quipt’s current revenue run-rate (unaudited), including At Home Health Equipment, Inc., is $135 million.

On February 3, 2022, the Company announced that Mr. Brian J. Wessel has joined the Board of Directors of the Company as an Independent Director and Chair of the Audit Committee. Mr. Wessel is a senior business executive with over 34 years of global client service, operational and financial expertise. As a former senior partner at Ernst & Young, Mr. Wessel provided audit and advisory services to public, private, and private-equity-owned companies across multiple industry sectors.
The Company is not hosting a Fiscal Q1, 2022 earnings conference call given the close proximity to the recent FY21 conference call which included up to date business commentary held on Tuesday, February 1, 2022. The Company will resume hosting quarterly earnings conference calls for Fiscal Q2, 2022 results. However, management anticipates it may host an investor update call prior to Fiscal Q2, 2022, if ‎appropriate, given the active nature of the current acquisition strategy and full acquisition pipeline.

Reiteration of Outlook for Calendar End 2022 (Fiscal Year Q1 2023):

Based on the current operations (including sleep device impact), 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.

“The continued momentum across the business shown through our record first quarter results exemplifies our ability to successfully navigate our operations through a challenging supply chain environment driving consistent business performance,” said CEO and Chairman Greg Crawford.

“Demand continues to remain at robust levels surpassing historical run-rates for respiratory equipment and services, evidenced by strength in our oxygen and ventilation therapy service lines. Inclusive of the sleep device supply constraints we remain on track for our calendar end 2022 financial outlook and anticipate a further lift as the sleep device patient backlog subsides in the second half of the year.”

Chief Financial Officer Hardik Mehta added, “We are pleased to see our revenue run-rate near $120 million as of the end of our fiscal first quarter, as well as seeing a solid lift in our Adjusted EBITDA margin, returning to over 20% as we continue through the integration process of our recent acquisitions.”

He added, “The robust performance was driven through strong demand leading to larger volumes, higher cash collections and continuing to support the business with lower operating costs. The infrastructure we have in place today allows us to position ourselves as a market leader and gives us the flexibility to add locations organically to the platform, as well as efficiently integrate acquired assets. On the acquisition front, we have never been more excited with the targets we have in our pipeline. We are also looking at potential expansionary opportunities into synergistic verticals of service that would enhance our end-to-end product and service offering.”

The financial statements of the Company for the three months ended December 31, 2021 and 2020 and accompanying Management Discussion & Analysis (MD&A) are available at www.sedar.com.