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 months ended March 31, 2020.
Operational highlights (all dollar
amounts are USD):
- Net revenues for the quarter ended March 31, 2020 were
$23.8 million, an increase of 31% over net revenues reported for
the comparable quarter ended March 31, 2019. Current quarter
revenues included approximately $1 million of product sales related
to the ongoing COVID-19 pandemic.
- The Company grew its active ventilator patient base for the
quarter ended March 31, 2020 by approximately 25% as compared
to the prior year’s comparable quarter and 3% over the fourth
quarter of 2019.
- Net income for the quarter ended March 31, 2020 totaled
approximately $4.2 million, a 117% increase as compared to the
quarter ended March 31, 2019.
- Adjusted EBITDA for the quarter ended March 31, 2020
totaled approximately $7.9 million, a Company record, and a 76%
increase as compared to the quarter ended March 31, 2019. A
reconciliation of reported non-GAAP financial measures to their
most directly comparable U.S. GAAP financial measures can be found
in the tables accompanying this press release.
- During May, the Company extended the expiration date of its
existing $10 million line of credit with Hancock Whitney Bank to
May 1, 2023.
- The Company expects to generate net revenues of approximately
$42 million to $44 million during the second quarter of 2020,
including approximately $20 million of product sales related to the
ongoing COVID-19 pandemic.
“We believe the first four months of the year
have demonstrated how important the Viemed mission is to the future
of our country’s healthcare system,” said Casey Hoyt, Viemed's CEO.
“Our clinicians have come through to share their expertise with
others to assist with COVID-19 solutions. In addition, we have
established long-term relationships with hospitals and physicians
that we expect will only be strengthened in the future as we
continue to do our part in supplying ventilators and keeping
hospital beds free for the patients who have become ill with the
coronavirus.”
Conference Call Details
The Company will host a conference call to
discuss first quarter results on Tuesday, May 5, 2020 at 11:00 a.m.
EST.
The call-in numbers for participants are:
US Toll Free: 1-800-548-4713International Toll
Free: 1-323-794-2093Meeting ID Number: 4508551
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”,
“believes”, or “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 net revenue guidance for the second
quarter, 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 impact of the COVID-19 pandemic and the actions taken
by governmental authorities, individuals and companies in response
to the pandemic on our business, financial condition and results of
operations, including on the Company's patient base and revenues,
employees, and equipment and supplies; 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 and
regulatory 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 impact of the previously
disclosed restatement and correction of our previously issued
financial statements; the previously disclosed identified material
weakness in our internal control over financial reporting and our
ability to remediate that material weakness; the initiation of
legal or regulatory proceedings with respect to the restatement and
corrections; the adverse effects on our business, results of
operations, financial condition and stock price, as a result of the
restatement and correction process; the Company’s status as an
emerging growth company and a foreign private issuer; and the
occurrence of natural and unnatural catastrophic events or health
epidemics or concerns, such as the recent COVID-19 pandemic, and
claims resulting from such events or concerns; 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 most recent Annual Report on Form 10-K, 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 March 31, 2020 |
|
At December 31, 2019 |
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
8,409 |
|
|
$ |
13,355 |
|
Accounts receivable, net of allowance for doubtful accounts of
$10,196 and $7,782 at March 31, 2020 and December 31, 2019,
respectively |
|
15,443 |
|
|
11,534 |
|
Inventory, net |
|
1,785 |
|
|
1,360 |
|
Prepaid expenses and other assets |
|
4,514 |
|
|
1,562 |
|
Total current
assets |
|
$ |
30,151 |
|
|
$ |
27,811 |
|
Long-term
assets |
|
|
|
|
Property and equipment |
|
56,632 |
|
|
54,772 |
|
Other assets |
|
18 |
|
|
13 |
|
Total long-term
assets |
|
$ |
56,650 |
|
|
$ |
54,785 |
|
TOTAL
ASSETS |
|
$ |
86,801 |
|
|
$ |
82,596 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade payables |
|
$ |
6,380 |
|
|
$ |
4,700 |
|
Deferred revenue |
|
3,394 |
|
|
3,315 |
|
Income taxes payable |
|
281 |
|
|
86 |
|
Accrued liabilities |
|
6,886 |
|
|
8,968 |
|
Current portion of lease liabilities |
|
7,433 |
|
|
7,093 |
|
Current portion of long-term debt |
|
1,772 |
|
|
1,750 |
|
Total current
liabilities |
|
$ |
26,146 |
|
|
$ |
25,912 |
|
Long-term
liabilities |
|
|
|
|
Accrued liabilities |
|
2,350 |
|
|
2,317 |
|
Long-term lease liabilities |
|
2,330 |
|
|
3,039 |
|
Long-term debt |
|
7,179 |
|
|
7,629 |
|
Total long-term
liabilities |
|
$ |
11,859 |
|
|
$ |
12,985 |
|
TOTAL
LIABILITIES |
|
$ |
38,005 |
|
|
$ |
38,897 |
|
Commitments and
Contingencies |
|
— |
|
|
— |
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
Common stock - No par value: unlimited authorized; 38,486,772 and
37,952,660 issued and outstanding as of March 31, 2020 and December
31, 2019, respectively |
|
6,657 |
|
|
3,366 |
|
Additional paid-in capital |
|
4,252 |
|
|
6,377 |
|
Accumulated other comprehensive loss |
|
(469 |
) |
|
(157 |
) |
Retained earnings |
|
38,356 |
|
|
34,113 |
|
TOTAL SHAREHOLDERS'
EQUITY |
|
$ |
48,796 |
|
|
$ |
43,699 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
$ |
86,801 |
|
|
$ |
82,596 |
|
|
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 March 31, |
|
2020 |
|
2019 |
Revenue |
$ |
23,806 |
|
|
$ |
18,115 |
|
|
|
|
|
Cost of revenue |
8,253 |
|
|
5,041 |
|
|
|
|
|
Gross
profit |
$ |
15,553 |
|
|
$ |
13,074 |
|
|
|
|
|
Operating
Expenses |
|
|
|
Selling, general and administrative |
10,577 |
|
|
9,460 |
|
Research and development |
|
174 |
|
|
234 |
|
Stock-based compensation |
1,151 |
|
|
880 |
|
Depreciation |
205 |
|
|
129 |
|
(Gain) loss on disposal of property and equipment |
(1,169 |
) |
|
56 |
|
Income from
operations |
$ |
4,615 |
|
|
$ |
2,315 |
|
|
|
|
|
Non-operating
expenses |
|
|
|
Unrealized loss on warrant conversion liability |
— |
|
|
|
169 |
|
Loss from equity method investment |
|
27 |
|
|
|
24 |
|
Interest expense, net of interest income |
158 |
|
|
26 |
|
|
|
|
|
Net income before
taxes |
4,430 |
|
|
2,096 |
|
Provision for income taxes |
187 |
|
|
138 |
|
|
|
|
|
Net
income |
$ |
4,243 |
|
|
$ |
1,958 |
|
|
|
|
|
Other Comprehensive
Income |
|
|
|
Change in unrealized loss on
derivative instruments, net of tax |
(312 |
) |
|
— |
|
Other Comprehensive
Loss |
$ |
(312 |
) |
|
$ |
— |
|
|
|
|
|
Comprehensive
Income |
$ |
3,931 |
|
|
$ |
1,958 |
|
|
|
|
|
Net income per
share |
|
|
|
Basic |
$ |
0.11 |
|
|
$ |
0.05 |
|
Diluted |
$ |
0.11 |
|
|
$ |
0.05 |
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
Basic |
38,030,854 |
|
|
37,827,058 |
|
Diluted |
39,677,983 |
|
|
39,449,123 |
|
|
VIEMED HEALTHCARE,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Expressed in thousands of U.S.
Dollars)(Unaudited)
|
|
Three Months Ended March 31, |
|
|
2020 |
|
2019 |
Cash flows from
operating activities |
|
|
|
|
Net income |
|
$ |
4,243 |
|
|
$ |
1,958 |
|
Adjustments for: |
|
|
|
|
Depreciation |
|
2,130 |
|
|
1,400 |
|
Change in allowance for doubtful accounts |
|
2,846 |
|
|
2,125 |
|
Share-based compensation |
|
1,151 |
|
|
880 |
|
Unrealized loss on warrant conversion liability |
|
— |
|
|
169 |
|
Loss on equity investment |
|
27 |
|
|
24 |
|
(Gain) loss on disposal of property and equipment |
|
(1,169 |
) |
|
56 |
|
Net change in working
capital |
|
|
|
|
Increase in accounts receivable |
|
(6,755 |
) |
|
(4,952 |
) |
Increase in inventory |
|
(425 |
) |
|
(728 |
) |
Increase in prepaid expenses and other current assets |
|
(2,952 |
) |
|
(129 |
) |
Increase in trade payables |
|
3,598 |
|
|
504 |
|
Increase in deferred revenue |
|
79 |
|
|
203 |
|
Decrease in accrued liabilities |
|
(2,361 |
) |
|
(856 |
) |
Increase (decrease) in income tax payable |
|
195 |
|
|
(4 |
) |
Net cash provided by
operating activities |
|
$ |
607 |
|
|
$ |
650 |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase of property and equipment |
|
(4,220 |
) |
|
(116 |
) |
Investment in equity method investment |
|
(32 |
) |
|
— |
|
Proceeds from sale of property and equipment |
|
2,541 |
|
|
24 |
|
Net cash used in
investing activities |
|
$ |
(1,711 |
) |
|
$ |
(92 |
) |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from exercise of options |
|
15 |
|
|
— |
|
Principal payments on notes payable |
|
(33 |
) |
|
— |
|
Principal payments on term note |
|
(395 |
) |
|
— |
|
Shares repurchased and canceled under the Normal Course Issuer
Bid |
|
— |
|
|
(1,522 |
) |
Repayments of lease liabilities, net of proceeds |
|
(3,429 |
) |
|
(2,043 |
) |
Net cash used in
financing activities |
|
$ |
(3,842 |
) |
|
$ |
(3,561 |
) |
|
|
|
|
|
Net decrease in cash
and cash equivalents |
|
(4,946 |
) |
|
(3,003 |
) |
Cash and cash
equivalents at beginning of year |
|
13,355 |
|
|
10,413 |
|
Cash and cash
equivalents at end of period |
|
$ |
8,409 |
|
|
$ |
7,410 |
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
Cash paid during the period for interest |
|
$ |
165 |
|
|
$ |
26 |
|
Cash paid during the period for income taxes, net of refunds
received |
|
$ |
(8 |
) |
|
$ |
143 |
|
Supplemental
disclosures of non-cash transactions |
|
|
|
|
Property and equipment financed through finance leases |
|
$ |
3,002 |
|
|
$ |
4,505 |
|
Property and equipment financed through leases under FASB ASC
842 |
|
$ |
31 |
|
|
$ |
1,267 |
|
|
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 |
March 31, 2020 |
December 31, 2019 |
September 30, 2019 |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
Net Income |
$ |
4,243 |
|
$ |
2,388 |
|
$ |
2,853 |
|
$ |
1,326 |
|
$ |
1,958 |
|
$ |
2,968 |
|
$ |
2,219 |
|
$ |
2,098 |
|
Add back: |
|
|
|
|
|
|
|
|
Depreciation |
2,130 |
|
2,003 |
|
1,659 |
|
1,444 |
|
1,295 |
|
1,177 |
|
972 |
|
893 |
|
Interest expense |
158 |
|
212 |
|
56 |
|
20 |
|
26 |
|
30 |
|
37 |
|
67 |
|
Unrealized (gain) loss on warrant conversion liability |
— |
|
— |
|
(800 |
) |
268 |
|
169 |
|
(210 |
) |
220 |
|
123 |
|
Stock-based compensation |
1,151 |
|
908 |
|
1,064 |
|
1,034 |
|
880 |
|
804 |
|
672 |
|
665 |
|
Income tax expense |
187 |
|
58 |
|
51 |
|
24 |
|
138 |
|
127 |
|
35 |
|
— |
|
Adjusted EBITDA |
$ |
7,869 |
|
$ |
5,569 |
|
$ |
4,883 |
|
$ |
4,116 |
|
$ |
4,466 |
|
$ |
4,896 |
|
$ |
4,155 |
|
$ |
3,846 |
|
|
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, 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 |
March 31, 2020 |
December 31, 2019 |
September 30, 2019 |
June 30, 2019 |
March 31, 2019 |
December 31, 2018 |
September 30, 2018 |
June 30, 2018 |
Financial
Information: |
|
|
|
|
|
|
|
Revenue |
$ |
23,806 |
|
$ |
21,448 |
|
$ |
20,368 |
|
$ |
20,325 |
|
$ |
18,115 |
|
$ |
18,363 |
|
$ |
16,930 |
|
$ |
15,208 |
|
Gross Profit |
$ |
15,553 |
|
$ |
14,243 |
|
$ |
14,050 |
|
$ |
14,639 |
|
$ |
13,074 |
|
$ |
13,519 |
|
$ |
12,829 |
|
$ |
11,023 |
|
Gross Profit % |
65 |
% |
66 |
% |
69 |
% |
72 |
% |
72 |
% |
74 |
% |
76 |
% |
72 |
% |
Net Income |
$ |
4,243 |
|
$ |
2,388 |
|
$ |
2,853 |
|
$ |
1,326 |
|
$ |
1,958 |
|
$ |
2,968 |
|
$ |
2,219 |
|
$ |
2,098 |
|
Cash (As of) |
$ |
8,409 |
|
$ |
13,355 |
|
$ |
12,630 |
|
$ |
7,691 |
|
$ |
7,410 |
|
$ |
10,413 |
|
$ |
10,174 |
|
$ |
8,551 |
|
Total Assets (As of) |
$ |
86,801 |
|
$ |
82,596 |
|
$ |
79,981 |
|
$ |
71,014 |
|
$ |
58,718 |
|
$ |
53,653 |
|
$ |
49,240 |
|
$ |
44,256 |
|
Adjusted EBITDA(1) |
$ |
7,869 |
|
$ |
5,569 |
|
$ |
4,883 |
|
$ |
4,116 |
|
$ |
4,466 |
|
$ |
4,896 |
|
$ |
4,155 |
|
$ |
3,846 |
|
Operational Information: |
|
|
|
|
|
|
|
Vent Patients(2) |
7,965 |
|
7,759 |
|
7,421 |
|
7,130 |
|
6,393 |
|
5,905 |
|
5,444 |
|
5,078 |
|
(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. |
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