QUIPT CONTINUES NATIONAL
EXPANSION WITH
CLOSING OF STRATEGIC ACQUISITION
IN CENTRAL ILLINOIS AND ONGOING BUSINESS
MOMENTUM AS RESPIRATORY EQUIPMENT DEMAND REMAINS ELEVATED INTO
FISCAL Q1 2022
$2.5 MILLION IN ANNUALIZED REVENUES, 25% PROJECTED ADJUSTED EBITDA MARGIN
POST INTEGRATION, AND ADDS OVER 3,700 ACTIVE
PATIENTS
QUIPT HAS COMPLETED 6
ACQUISITIONS FOR OVER $16 MILLION IN REVENUE, ADDING OVER 30,000
ACTIVE PATIENTS SINCE JULY
Cincinnati, Ohio – November 9, 2021 -- InvestorsHub
NewsWire -- Quipt Home Medical Corp.
("Quipt" or the "Company")
(NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical
equipment industry, focused on end-to-end respiratory care, is
pleased to announce that it has recently acquired a business with
operations in
Illinois, reporting unaudited trailing 12-month annual revenues of approximately
$2.5 million. Post integration, Quipt expects an Adjusted EBITDA
(defined below) for the acquisition target of $0.6 million. As a
reminder all figures stated are in USD.
Acquisition Details
The acquisition adds a strategic location servicing Central
Illinois, 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.
The acquisition further expands Quipt's operations in Illinois
after the Company entered the market in August of 2020 and provides
Quipt a coverage sphere between the major markets of St. Louis,
Missouri and Chicago, Illinois. With the recent acquisitions, the
expansionary operating footprint aligns closely with regions that
have a high prevalence of COPD, a key target patient group; this
includes Arkansas, Mississippi, Missouri, and Illinois, which are
among the highest prevalence U.S. States. According to the NIH,
about 570,000 people in Illinois have COPD.
The management team in place at the acquisition target has
historically focused on a robust service intensive model, centered
around patient education and compliance which is highly compatible
with Quipt's operating premise. This acquisition provides immediate
cross selling and patient growth opportunities and adds patients to
Quipt's existing subscription-based resupply program.
Under the terms of the definitive purchase agreement, Quipt acquired the
DME operation of the business for approximately $1.7 million
in cash, and the real estate for $0.5 million. It is expected that
post integration the acquisition will increase Quipt's annual
revenues by approximately $2.5 million and Adjusted EBITDA by $0.6
million.
Management Commentary
"Our robust operating engine and proven ability to integrate
acquired assets allows us to continue the strong pace of closing
strategic acquisitions. Since July we have now completed 6
acquisitions with combined revenues of over $16 million. Combining
these newly acquired entities provides us a pathway to scale into
new states with each business having a proven track record in the
markets they serve and diversified product mixes. In this short
period of time, we have amassed infrastructure in 4 new states and
further penetrated existing states such as Illinois," said Greg
Crawford, Chairman and CEO of Quipt. "Given the favorable
regulatory environment, we have been able to accelerate our
expansion efforts by economically acquiring smaller respiratory
focused home medical providers throughout the United States that
fit our stringent acquisition criteria. This newest transaction in
Illinois is another example of our strategy to make tuck-in
acquisitions to fill in attractive geographies, obtain important
insurance contracts, add to our active patient base, and build out
our referring physician network. Our current pipeline consists of
companies reflective of all three tiers of our previously disclosed
acquisition strategy and we are extremely optimistic we will
maintain momentum in closing targets that fit the mold."
"I also want to take this opportunity to reiterate how strongly
the underlying business continues to perform amongst the challenges
presented from the global pandemic and supply chain constraints.
Demand for respiratory equipment continues to be robust, and we
have not seen any signs of that slowing. We are extremely excited
with the operating excellence we have been able to display to date
and look forward to carrying the strong momentum into 2022."
Chief Financial Officer, Hardik Mehta added, "We continue on our
strategic mission of growing into a national provider of
respiratory focused homecare in the United States, and this
acquisition once again showcases how we can lather on our existing
platform to convert low margin businesses into high margin
businesses through operating efficiencies and cost savings
synergies. The transaction is reflective of this model and adds
$2.5 million in revenue with an expectation that
post integration it will have a 25% Adjusted EBITDA margin, with a
heavily respiratory weighted product
mix, and provides us additional infrastructure in
Illinois. We continue to invest in technology to improve our
operating efficiencies, whether through the ongoing use of our data
driven tools, revenue cycle management or through our automated
subscription-based resupply program. These actions drive sustained
value to the company and allows us to continue to increase our
productivity. Moreover, we have a robust balance sheet with over
$30 million in cash, and a $20 million undrawn credit facility
allowing us to strategically work through our acquisition pipeline,
which includes larger revenue opportunities that meet our criteria,
and I am extremely confident in our pace staying strong through the
remainder of 2021 and into 2022."
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.
There can be no assurance that any of the potential acquisitions in
the Company's pipeline or in negotiations will be completed as
proposed or at all and no definitive agreements have been executed.
Completion of any transaction will be subject to applicable
director, shareholder and regulatory approvals.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statement
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" and similar
expressions as they relate to the Company, including: post
integration financial results (revenue and Adjusted EBITDA) of the
acquisition target; the Company's acquisition approach; the Company
adding patients to its existing subscription-based resupply
program; the Company being extremely optimistic that it will
maintain momentum in closing additional targets; the Company
converting low margin businesses into high margin businesses
through operating efficiencies and cost savings synergies; and the
Company being extremely confident in its acquisition pace staying
strong through the remainder of 2021 and into 2022; are intended to
identify forward-looking information. All statements other than
statements of historical fact may be forward-looking information.
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, including: the acquisition targets achieving results
at least as good as historical performances; and the Company
successfully identified, negotiating and completing additional
acquisitions, including accretive acquisitions. Many factors could
cause the actual results, performance or achievements that may be
expressed or implied by such forward-looking information to vary
from those described herein should one or more of these risks or
uncertainties materialize. Examples of such risk factors include,
without limitation: credit; market (including equity, commodity,
foreign exchange and interest rate); liquidity; operational
(including technology and infrastructure); reputational; insurance;
strategic; regulatory; legal; environmental; capital adequacy; the
general business and economic conditions in the regions in which
the Company operates; the ability of the Company to execute on key
priorities, including the successful completion of acquisitions,
business retention, and strategic plans and to attract, develop and
retain key executives; difficulty integrating newly acquired
businesses; the ability to implement business strategies and pursue
business opportunities; 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 to the Company or its affiliates; the impact of new and
changes to, or application of, current laws and regulations;
decline of reimbursement rates; dependence on few payors; possible
new drug discoveries; a novel business model; dependence on key
suppliers; granting of permits and licenses in a highly regulated
business; the overall difficult litigation environment, including
in the U.S.; increased competition; changes in foreign currency
rates; increased funding costs and market volatility due to market
illiquidity and competition for funding; the availability of funds
and resources to pursue operations; critical accounting estimates
and changes to accounting standards, policies, and methods used by
the Company; the occurrence of natural and unnatural catastrophic
events and claims resulting from such events; and risks related to
COVID-19 including various recommendations, orders and measures of
governmental authorities to try to limit the pandemic, including
travel restrictions, border closures, non-essential business
closures, quarantines, self-isolations, shelters-in-place and
social distancing, disruptions to markets, economic activity,
financing, supply chains and sales channels, and a deterioration of
general economic conditions including a possible national or global
recession; as well as those risk factors discussed or referred to
in the Company's disclosure documents filed with United States
Securities and Exchange Commission and available at www.sec.gov,
and with the securities regulatory authorities in certain provinces
of Canada and available at www.sedar.com. Should any factor affect
the Company in an unexpected manner, or should assumptions
underlying the forward-looking information prove incorrect, the
actual results or events may differ materially from the results or
events predicted. Any such forward-looking information is expressly
qualified in its entirety by this cautionary statement. Moreover,
the Company does not assume responsibility for the accuracy or
completeness of such forward-looking information. The
forward-looking information included in this press release is made
as of the date of this press release and the Company undertakes no
obligation to publicly update or revise any forward-looking
information, other than as required by applicable law.
Non-GAAP Measures
This press release refers to "Adjusted EBITDA" which is a
non-GAAP and non-IFRS financial measure that does not have a
standardized meaning prescribed by GAAP or IFRS. The Company's
presentation of this financial measure may not be comparable to
similarly titled measures used by other companies. This financial
measure is intended to provide additional information to investors
concerning the Company's performance. Adjusted EBITDA is defined as
EBITDA excluding stock-based compensation. Adjusted EBITDA is a
Non-IFRS measure the Company uses as an indicator of financial
health and excludes several items which may be useful in the
consideration of the financial condition of the Company, as
applicable, including interest expense, income taxes, depreciation,
amortization, stock- based compensation, goodwill impairment and
change in fair value of debentures and financial derivatives.
For further information please visit our website at www.Quipthomemedical.com, or contact:
Cole Stevens
VP of Corporate Development
859-300-6455
cole.stevens@myquipt.com
Gregory Crawford
Chief Executive Officer
Quipt Home Medical Corp.
859-300-6455
investorinfo@myquipt.com
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