Viemed Healthcare, Inc. (the “Company” or “Viemed”) (TSX: VMD.TO
and NASDAQ:VMD), a home medical equipment supplier that provides
post-acute respiratory care services in the United States,
announced today that it has reported its financial results for the
three and nine months ended September 30, 2019.
Operational highlights (all dollar
amounts are USD):
- Revenues for the quarter ended September 30, 2019 were
approximately $23.5 million and gross margin was $17.2 million, or
73%. Revenues and gross margin increased 37% and 32%, respectively,
as compared to the quarter ended September 30, 2018.
- The Company grew its ventilator patient count by approximately
36% as compared to the prior year’s comparable quarter and 4% over
the second quarter of 2019.
- Net income for the quarter ended September 30, 2019
totaled approximately $3.0 million, a 22% increase as compared to
the quarter ended September 30, 2018. Adjusted EBITDA for the
quarter ended September 30, 2019 totaled approximately $5.0
million, a 14% increase as compared to the quarter ended
September 30, 2018. A reconciliation of reported non-GAAP
financial measures to their most directly comparable GAAP financial
measures can be found in the tables accompanying this press
release.
- The Company entered into an amendment to its loan agreement to
provide for a $5 million term loan during the quarter, which is in
addition to its undrawn $10 million line of credit. The term loan
gives the Company access to additional capital as its capital
expenditures have increased with the expansion of additional
product lines, and positions the Company for future growth.
- The Company expects to generate total revenues of approximately
$24.7 to $25.2 million during the fourth quarter of 2019
(approximately $21.8 to $22.2 million after netting out expected
bad debt). Beginning with the fourth quarter, the Company is
planning on presenting all adjustments as reductions of revenue
instead of presenting both revenue reductions and bad debt expense
to better align with other healthcare providers. The mid-point of
the revenue guidance represents a 35% increase over the quarter
ended December 31, 2018.
“I am delighted to have posted another record
breaking quarter in gross revenue and active vent patients,” said
Casey Hoyt, Viemed CEO. “The continued success of treating patients
in the home is evident with each new area that we enter and we are
excited to continue our expansion throughout the lower 48 over the
next 12 months. Additionally, our diversification efforts continue
as we enter new areas, new payors and new products, all while
growing our core business.”
Conference Call Details
The Company will host a conference call to discuss Q3 2019
results on Tuesday, November 5, 2019 at 11:00 a.m. EST.The call-in
numbers for participants are:
US Toll Free: 1-800-239-9838International Toll Free:
1-323-794-2551Meeting ID Number: 7888235
Following the conclusion of the call, an audio recording and
transcript of the call can be accessed on the Company's
website.
ABOUT VIEMED HEALTHCARE, INC.
Viemed, through its indirect wholly-owned
subsidiaries Sleep Management, L.L.C. and Home Sleep Delivered,
L.L.C., is a home medical equipment supplier that provides
post-acute respiratory care services in the United States. Sleep
Management, L.L.C. focuses on disease management and improving the
quality of life for respiratory patients through clinical
excellence, education, and technology. Its service offerings are
based on effective home treatment with respiratory care
practitioners providing therapy and counseling to patients in their
homes using cutting edge technology. Home Sleep Delivered, L.L.C.
focuses on providing in-home sleep testing for sleep apnea
sufferers. Visit our website at www.viemed.com.
For further information, please contact:
Glen AkselrodBristol Capital905-326-1888glen@bristolir.com
Todd ZehnderChief Operating OfficerViemed Healthcare,
Inc.337-504-3802investorinfo@viemed.com
Forward-Looking Statements
Certain statements contained in this press
release may constitute “forward-looking statements” within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 or “forward-looking information” as such term is defined in
applicable Canadian securities legislation (collectively,
“forward-looking statements”). Often, but not always,
forward-looking statements can be identified by the use of words
such as “plans”, “expects”, “is expected”, “budget”, “potential”,
“scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or
“believes”, “projects”, or the negatives thereof or variations of
such words and phrases or statements that certain actions, events
or results “will”, “should”, “may”, “could”, “would”, “might” or
“will be taken”, “occur” or “be achieved” or the negative of these
terms or comparable terminology. All statements other than
statements of historical fact, including those that express, or
involve discussions as to, expectations, beliefs, plans,
objectives, assumptions or future events or performance, including
the Company's guidance for the fourth quarter, and the Company’s
plans to expand to the lower 48 U.S. states, are not historical
facts and may be forward-looking statements and may involve
estimates, assumptions and uncertainties that could cause actual
results or outcomes to differ materially from those expressed in
the forward-looking statements. 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. Many
factors could cause the actual results, performance or achievements
that may be expressed or implied by such forward-looking statements
to vary from those described herein should one or more of these
risks or uncertainties materialize. These factors include, without
limitation: the general business, market and economic conditions in
the regions in which the Company operates; the Company may be
subject to significant capital requirements and operating risks;
the ability of the Company to implement business strategies and
pursue business opportunities; volatility in the market price of
shares in the capital of the Company; the Company’s novel business
model; the risk that the clinical application of treatments that
demonstrate positive results in a study may not be positively
replicated or that such test results may not be predictive of
actual treatment results or may not result in the adoption of such
treatments by providers; the state of the capital markets; the
availability of funds and resources to pursue operations; decline
of reimbursement rates; dependence on few payors; possible new drug
discoveries; dependence on key suppliers; granting of permits and
licenses in a highly regulated business; competition; 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; difficulty integrating
newly acquired businesses; the impact of new and changes to, or
application of, current laws and regulations; the overall difficult
litigation environment; increased competition; changes in foreign
currency rates; increased funding costs and market volatility due
to market illiquidity and competition for funding; critical
accounting estimates and changes to accounting standards, policies,
and methods used by the Company; the Company’s status as an
emerging growth company and a foreign private issuer; and the
occurrence of natural and unnatural catastrophic events and claims
resulting from such events; as well as those risk factors discussed
or referred to in Viemed’s disclosure documents filed with the U.S.
Securities and Exchange Commission (the “SEC”) available on the
SEC’s website at www.sec.gov, including the Company’s Form 10 filed
with the SEC on August 1, 2019, and with the securities regulatory
authorities in certain provinces of Canada available at
www.sedar.com. Should any factor affect the Company in an
unexpected manner, or should assumptions underlying the
forward-looking statements prove incorrect, the actual results or
events may differ materially from the results or events predicted.
Any such forward-looking statements are expressly qualified in
their entirety by this cautionary statement. Moreover, the Company
does not assume responsibility for the accuracy or completeness of
such forward-looking statements. The forward-looking statements
included in this press release are made as of the date of this
press release and the Company undertakes no obligation to publicly
update or revise any forward-looking statements, other than as
required by applicable law.
VIEMED HEALTHCARE,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Expressed in thousands of U.S. Dollars,
except share amounts)(Unaudited)
|
|
At September 30, 2019 |
|
At December 31, 2018 |
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
12,630 |
|
|
$ |
10,413 |
|
Accounts receivable, net of allowance for doubtful accounts of
$7,664 and $4,266 at September 30, 2019 and December 31, 2018,
respectively |
|
11,729 |
|
|
8,839 |
|
Inventory, net |
|
1,266 |
|
|
2,887 |
|
Prepaid expenses and other assets |
|
2,078 |
|
|
824 |
|
Total current
assets |
|
$ |
27,703 |
|
|
$ |
22,963 |
|
Long-term
assets |
|
|
|
|
Property and equipment |
|
52,161 |
|
|
30,562 |
|
Other assets |
|
17 |
|
|
— |
|
Total long-term
assets |
|
$ |
52,178 |
|
|
$ |
30,562 |
|
TOTAL
ASSETS |
|
$ |
79,881 |
|
|
$ |
53,525 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade payables |
|
$ |
4,072 |
|
|
$ |
5,884 |
|
Income taxes payable |
|
28 |
|
|
152 |
|
Accrued liabilities |
|
8,600 |
|
|
7,551 |
|
Current portion of lease liabilities |
|
8,767 |
|
|
3,031 |
|
Current portion of long-term debt |
|
1,728 |
|
|
— |
|
Warrant conversion liability |
|
— |
|
|
363 |
|
Total current
liabilities |
|
$ |
23,195 |
|
|
$ |
16,981 |
|
Long-term
liabilities |
|
|
|
|
Accrued liabilities |
|
2,213 |
|
|
1,117 |
|
Long-term lease liabilities |
|
2,813 |
|
|
394 |
|
Long-term debt |
|
8,076 |
|
|
— |
|
Total long-term
liabilities |
|
$ |
13,102 |
|
|
$ |
1,511 |
|
TOTAL
LIABILITIES |
|
$ |
36,297 |
|
|
$ |
18,492 |
|
Commitments and
Contingencies |
|
— |
|
|
— |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
Common stock - No par value: unlimited authorized; 37,952,660 and
37,500,815 issued and outstanding as of September 30, 2019 and
December 31, 2018, respectively |
|
3,366 |
|
|
71 |
|
Additional paid-in capital |
|
5,470 |
|
|
5,390 |
|
Accumulated other comprehensive loss |
|
(236 |
) |
|
— |
|
Retained earnings |
|
34,984 |
|
|
29,572 |
|
TOTAL SHAREHOLDERS'
EQUITY |
|
$ |
43,584 |
|
|
$ |
35,033 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
$ |
79,881 |
|
|
$ |
53,525 |
|
VIEMED HEALTHCARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME(Expressed in
thousands of U.S. Dollars, except outstanding shares and per share
amounts)(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
|
2018 |
|
2019 |
|
2018 |
Revenue |
$ |
23,525 |
|
|
$ |
17,163 |
|
|
$ |
66,515 |
|
|
$ |
46,782 |
|
|
|
|
|
|
|
|
|
Cost of revenue |
6,318 |
|
|
4,101 |
|
|
17,045 |
|
|
11,845 |
|
|
|
|
|
|
|
|
|
Gross
profit |
$ |
17,207 |
|
|
$ |
13,062 |
|
|
$ |
49,470 |
|
|
$ |
34,937 |
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
Selling, general and administrative |
13,281 |
|
|
9,490 |
|
|
38,117 |
|
|
24,698 |
|
Research and development |
208 |
|
|
— |
|
|
645 |
|
— |
|
Stock-based compensation |
1,064 |
|
|
672 |
|
|
2,978 |
|
|
1,898 |
|
Depreciation |
193 |
|
|
128 |
|
|
460 |
|
|
458 |
|
Loss on disposal of property and equipment |
167 |
|
|
23 |
|
|
308 |
|
|
111 |
|
Other expense |
27 |
|
|
33 |
|
|
76 |
|
|
41 |
|
Income from
operations |
$ |
2,267 |
|
|
$ |
2,716 |
|
|
$ |
6,886 |
|
|
$ |
7,731 |
|
|
|
|
|
|
|
|
|
Non-operating
expenses |
|
|
|
|
|
|
|
Unrealized (gain) loss on warrant conversion liability |
(800 |
) |
|
220 |
|
(363 |
) |
|
414 |
|
Interest expense, net of interest income |
56 |
|
|
37 |
|
|
102 |
|
|
151 |
|
|
|
|
|
|
|
|
|
Net income before
taxes |
3,011 |
|
|
2,459 |
|
|
7,147 |
|
|
7,166 |
|
Provision for income taxes |
51 |
|
|
35 |
|
|
213 |
|
|
35 |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
2,960 |
|
|
$ |
2,424 |
|
|
$ |
6,934 |
|
|
$ |
7,131 |
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income |
|
|
|
|
|
|
|
Change in unrealized loss on
derivative instruments, net of tax |
(88 |
) |
|
— |
|
|
(236 |
) |
|
— |
|
Other Comprehensive
Loss |
$ |
(88 |
) |
|
$ |
— |
|
|
$ |
(236 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
Comprehensive
Income |
$ |
2,872 |
|
|
$ |
2,424 |
|
|
$ |
6,698 |
|
|
$ |
7,131 |
|
|
|
|
|
|
|
|
|
Net income per
share |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
|
$ |
0.06 |
|
|
$ |
0.18 |
|
|
$ |
0.19 |
|
Diluted |
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.17 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
37,812,921 |
|
|
37,911,054 |
|
|
37,775,775 |
|
|
37,910,109 |
|
Diluted |
40,051,422 |
|
|
39,945,189 |
|
|
39,768,877 |
|
|
39,526,742 |
|
VIEMED HEALTHCARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Expressed in thousands of U.S.
Dollars)(Unaudited)
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
Cash flows from
operating activities |
|
|
|
|
Net income |
|
$ |
6,934 |
|
|
$ |
7,131 |
|
Adjustments for: |
|
|
|
|
Depreciation |
|
4,398 |
|
|
2,606 |
|
Bad debt expense |
|
6,937 |
|
|
4,389 |
|
Share-based compensation |
|
2,978 |
|
|
1,898 |
|
Unrealized (gain) loss on warrant conversion liability |
|
(363 |
) |
|
414 |
|
Loss on disposal of property and equipment |
|
308 |
|
|
111 |
|
Net change in working
capital |
|
|
|
|
Increase in accounts receivable |
|
(9,827 |
) |
|
(3,001 |
) |
Decrease (Increase) in inventory |
|
1,621 |
|
|
(744 |
) |
(Decrease) increase in trade payables |
|
(1,813 |
) |
|
297 |
|
Increase in accrued liabilities |
|
1,909 |
|
|
1,596 |
|
Decrease in income tax payable |
|
(124 |
) |
|
(68 |
) |
Increase in prepaid expenses and other current assets |
|
(1,271 |
) |
|
(467 |
) |
Net cash provided by
operating activities |
|
$ |
11,687 |
|
|
$ |
14,162 |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase of property and equipment |
|
(10,582 |
) |
|
(3,573 |
) |
Proceeds from sale of property and equipment |
|
350 |
|
|
484 |
|
Net cash used in
investing activities |
|
$ |
(10,232 |
) |
|
$ |
(3,089 |
) |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from exercise of options |
|
136 |
|
|
— |
|
Proceeds from exercise of warrants |
|
261 |
|
|
3 |
|
Proceeds from commercial long-term note for building |
|
4,837 |
|
|
— |
|
Principal payments on notes payable |
|
(34 |
) |
|
— |
|
Proceeds from term note |
|
5,000 |
|
|
— |
|
Shares repurchased and canceled under the Normal Course Issuer
Bid |
|
(1,522 |
) |
|
— |
|
Repayments of lease liabilities |
|
(7,916 |
) |
|
(6,000 |
) |
Net cash provided by
(used in) financing activities |
|
$ |
762 |
|
|
$ |
(5,997 |
) |
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
2,217 |
|
|
5,076 |
|
Cash and cash
equivalents at beginning of year |
|
10,413 |
|
|
5,098 |
|
Cash and cash
equivalents at end of period |
|
$ |
12,630 |
|
|
$ |
10,174 |
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
Cash paid during the period for interest |
|
$ |
91 |
|
|
$ |
156 |
|
Cash paid during the period for income taxes, net of refunds
received |
|
$ |
338 |
|
|
$ |
104 |
|
Supplemental
disclosures of non-cash transactions |
|
|
|
|
Property and equipment financed through capital leases and
long-term debt |
|
$ |
14,735 |
|
|
$ |
6,186 |
|
Property and equipment financed through leases upon adoption of
FASB ASC 842 |
|
$ |
2,052 |
|
|
$ |
— |
|
Change in unrealized losses on derivative instruments, net of
tax |
|
$ |
(236 |
) |
|
$ |
— |
|
Non-GAAP Financial Measures
This press release refers to “Adjusted EBITDA”
which is a non-GAAP financial measure that does not have a
standardized meaning prescribed by U.S. GAAP. The Company's
presentation of this financial measure may not be comparable to
similarly titled measures used by other companies. Adjusted EBITDA
is defined as net income (loss) before interest expense, income tax
expense (benefit), depreciation and amortization, unrealized (gain)
loss on warrant conversion liability and stock-based compensation.
Management believes Adjusted EBITDA provides helpful information
with respect to the Company’s operating performance as viewed by
management, including a view of the Company’s business that is not
dependent on the impact of the Company’s capitalization structure
and items that are not part of the Company’s day-to-day operations.
Management uses Adjusted EBITDA (i) to compare the Company’s
operating performance on a consistent basis, (ii) to calculate
incentive compensation for the Company’s employees, (iii) for
planning purposes, including the preparation of the Company’s
internal annual operating budget, and (iv) to evaluate the
performance and effectiveness of the Company’s operational
strategies. Accordingly, management believes that Adjusted EBITDA
provides useful information in understanding and evaluating the
Company’s operating performance in the same manner as management.
The following table is a reconciliation of net income (loss), the
most directly comparable U.S. GAAP measure, to Adjusted EBITDA, on
a historical basis for the periods indicated:
VIEMED HEALTHCARE,
INC.Reconciliation of Net Income (Loss) to
Non-GAAP Adjusted EBITDA(Expressed in thousands of
U.S. Dollars)(Unaudited)
For the quarter ended |
September 30, 2019 |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
Net Income
(Loss) |
$ |
2,960 |
|
$ |
1,820 |
|
$ |
2,154 |
|
$ |
3,046 |
|
$ |
2,424 |
|
$ |
2,366 |
|
$ |
2,341 |
|
$ |
(26 |
) |
Add back: |
|
|
|
|
|
|
|
|
Depreciation |
1,659 |
|
1,444 |
|
1,295 |
|
1,177 |
|
972 |
|
893 |
|
741 |
|
738 |
|
Interest expense |
56 |
|
20 |
|
26 |
|
30 |
|
37 |
|
67 |
|
47 |
|
49 |
|
Unrealized (gain) loss on warrant conversion liability |
(800 |
) |
268 |
|
169 |
|
(210 |
) |
220 |
|
123 |
|
72 |
|
158 |
|
Stock-based compensation |
1,064 |
|
1,034 |
|
880 |
|
804 |
|
672 |
|
665 |
|
561 |
|
828 |
|
Income tax expense |
51 |
|
24 |
|
138 |
|
127 |
|
35 |
|
— |
|
— |
|
130 |
|
Adjusted EBITDA |
$ |
4,990 |
|
$ |
4,610 |
|
$ |
4,662 |
|
$ |
4,974 |
|
$ |
4,360 |
|
$ |
4,114 |
|
$ |
3,762 |
|
$ |
1,877 |
|
Use of Non-GAAP Financial Measures
Adjusted EBITDA should be considered in addition
to, not as a substitute for, or superior to, financial measures
calculated in accordance with U.S. GAAP. It is not a measurement of
the Company’s financial performance under U.S. GAAP and should not
be considered as an alternative to revenue or net income (loss), as
applicable, or any other performance measures derived in accordance
with U.S. GAAP and may not be comparable to other similarly titled
measures of other businesses. Adjusted EBITDA has limitations as an
analytical tool and you should not consider it in isolation or as a
substitute for analysis of the Company’s operating results as
reported under U.S. GAAP. Adjusted EBITDA does not reflect the
impact of certain cash charges resulting from matters the Company
considers not to be indicative of ongoing operations; and other
companies in the Company’s industry may calculate Adjusted EBITDA
differently than we do, limiting its usefulness as a comparative
measure.
VIEMED HEALTHCARE,
INC.Key Financial and Operational
Information(Expressed in thousands of U.S.
Dollars, except vent
patients)(Unaudited)
For the quarter ended |
September 30, 2019 |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
March 31, 2018 |
December 31, 2017 |
Financial
Information: |
|
|
|
|
|
|
|
Revenue |
$ |
23,525 |
|
$ |
22,547 |
|
$ |
20,443 |
|
$ |
18,489 |
|
$ |
17,163 |
|
$ |
15,508 |
|
$ |
14,111 |
|
$ |
13,548 |
|
Gross Profit |
$ |
17,207 |
|
$ |
16,861 |
|
$ |
15,402 |
|
$ |
13,645 |
|
$ |
13,062 |
|
$ |
11,323 |
|
$ |
10,552 |
|
$ |
10,186 |
|
Gross Profit % |
73 |
% |
75 |
% |
75 |
% |
74 |
% |
76 |
% |
73 |
% |
75 |
% |
75 |
% |
Net Income (Loss) |
$ |
2,960 |
|
$ |
1,820 |
|
$ |
2,154 |
|
$ |
3,046 |
|
$ |
2,424 |
|
$ |
2,366 |
|
$ |
2,341 |
|
$ |
(26 |
) |
Adjusted EBITDA(1) |
$ |
4,990 |
|
$ |
4,610 |
|
$ |
4,662 |
|
$ |
4,974 |
|
$ |
4,360 |
|
$ |
4,114 |
|
$ |
3,762 |
|
$ |
1,877 |
(3) |
Cash (As of) |
$ |
12,630 |
|
$ |
7,691 |
|
$ |
7,410 |
|
$ |
10,413 |
|
$ |
10,174 |
|
$ |
8,551 |
|
$ |
4,634 |
|
$ |
5,098 |
|
Total Assets (As of) |
$ |
79,881 |
|
$ |
70,886 |
|
$ |
58,583 |
|
$ |
53,525 |
|
$ |
49,147 |
|
$ |
44,168 |
|
$ |
40,566 |
|
$ |
37,691 |
|
Operational Information: |
|
|
|
|
|
|
|
Vent Patients(2) |
7,421 |
|
7,130 |
|
6,393 |
|
5,905 |
|
5,444 |
|
5,078 |
|
4,685 |
|
4,385 |
|
(1) Refer to "Non-GAAP Financial Measures"
section above for definition of Adjusted EBITDA.
(2) Vent Patients represents the number of active ventilator
patients on recurring billing service at the end of each calendar
quarter.
(3) Fourth quarter 2017 Adjusted EBITDA was negatively impacted
by the Company’s annual performance incentive compensation program
which was recorded in full during the quarter due to the effective
date of the corporate spin-out. During the year ended December 31,
2018 and subsequent periods, the Company’s accrual for these types
of costs was recorded throughout the year. Adjusted EBITDA for the
fourth quarter 2017 would have been $4,308,000 had this
compensation been accrued throughout the year.
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