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 very pleased to announce record
preliminary financial results for the fourth quarter of 2021,
ending September 30, 2021 as well as a business update with respect
to recent announcements.
Record Preliminary Financial Results –
Fourth Quarter Ended September 30, 2021
- Revenue in the range of $27.6 million to $28.1 million
- Adjusted EBITDA (defined and reconciled below) in the range of
$5.3 million to $5.6 million
- Cash (and cash equivalents) was $34.6 million as of September
30, 2021
Business Updates
- On October 1, 2021, the Company
acquired a business with operations in Mississippi, reporting
unaudited trailing 12-month annual revenues of approximately $2.7
million, anticipated $0.5 million in Adjusted EBITDA post
integration, and 4,000 active patients. See October 5, 2021 press
release. Integration is well underway.
- On November 1, 2021, the Company
acquired a business with operations in Central Illinois reporting
unaudited trailing 12-month annual revenues of approximately $2.5
million, anticipated $0.6 million in Adjusted EBITDA post
integration, and 3,700 active patients. See November 9, 2021 press
release. Integration is well underway.
- On November 16, 2021, the Company
executed a non-binding letter of intent to acquire an arm’s length
private respiratory care company in a major metropolitan hub within
the Midwestern United States reporting unaudited trailing 12-month
annual revenues of approximately $13 million, $1.6 million in net
income, positive Adjusted EBITDA and over 15,000 active patients.
Closing is on track to occur within the provided timeline in the
original press release (November 16, 2021).
- On November 17, 2021, the Company
acquired a privately held biomedical services company, with
operations in the Southeastern United States, reporting unaudited
trailing 12-month annual revenues of approximately $1.5 million,
and $225,000 in net income. 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. The Company is now able to assist
healthcare providers to improve the operational efficiency of their
respiratory equipment program. See November 17, 2021 press
release.
- On November 22, 2021, the Company
executed a non-binding letter of intent to acquire an arm’s length
private comprehensive respiratory care company within the long-term
care setting servicing seven states throughout the U.S. reporting
unaudited trailing 12-month annual revenues of approximately $14
million, $1 million in net income, and positive Adjusted EBITDA.
Closing is on track to occur within the provided timeline in the
original press release (November 22, 2021).
Reiteration of Outlook for Calendar End
2022 (Fiscal Q1 2023)
As disclosed on November 16, 2021, based on the
current operations, market trends and completed and prospective
acquisitions, the Company is reiterating it 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.
Management
Commentary
“Our efforts in building a national clinical
respiratory organization focused on superior patient care are being
realized, and our continued robust preliminary financial results
are a testament to the ongoing operational progress made throughout
the year. During the second half of the year, we have continued to
strategically scale our business throughout the United States with
7 completed acquisitions representing combined revenue of over
$17.5 million since July, propelling our active patient count to
well over 150,000. Moreover, we have two outstanding executed
non-binding LOI’s representing an aggregate potential new revenue
of approximately $27 million, net income of $2.6 million, positive
Adjusted EBITDA and over 15,000 active patients progressing us
further to our stated financial goals exiting calendar 2022,” said
Greg Crawford, Chairman and CEO of Quipt. “Our team is focused on
integration efforts across our recently acquired businesses, and we
are pleased with the progress to date. We have a robust platform
that allows for organic and inorganic growth opportunities to be
efficiently layered on to generate economies of scale, and we will
continue to stay nimble with the opportunities in front of us.”
Chief Financial Officer, Hardik Mehta added, “We
are extremely proud of the record preliminary results we are seeing
in our fiscal fourth quarter and are excited about the positioning
we have built within the industry landscape as we continue to
strategically grow both organically and inorganically. The two
LOI’s announced on November 16 and 22, 2021, are both expected to
be closed using cash on hand and our existing debt facility.
“Furthermore, as disclosed in a separate press
release today, due to the accelerated timeline to complete the
filing of our audited financials as a result of the listing of our
common shares on Nasdaq Capital Markets (90 days, as opposed to 120
days), our auditors have informed us that they will unfortunately
be unable to complete the audit within the compacted time period.
We will continue to work diligently and expeditiously with them to
complete the audit on or before January 28, 2022.”
Closing of the two acquisitions is subject to
final due diligence, final negotiation and execution of definitive
purchase agreements, all closing conditions being satisfied or
waived and all necessary approvals.
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.
Reader Advisories
Readers are cautioned that the financial
information regarding the targets subject to the two LOI’s
disclosed herein is unaudited and derived as a result of the
Company’s due diligence, including a review of the target’s bank
statements and tax returns.
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.
Unless otherwise specified, all dollar amounts
in this press release are expressed in U.S. dollars.
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
Statements
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",
"outlook", and similar expressions as they relate to the Company,
including: Quipt’s preliminary financial results; Quipt’s
expectations of closing the acquisitions; Quipt’s expectations for
the results upon closing and integration; Quipt expecting to close
the acquisitions using cash and debt; the acquisitions increasing
Quipt’s annual revenues by approximately $27 million, net income by
approximately $2.6 million; the acquisitions having positive
Adjusted EBITDA and adding over 15,000 active patients; the
Company’s guidance for calendar 2022 (fiscal Q1 2023); 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; the financial information regarding the target being
verified when included in the Company’s consolidated financial
statements prepared in accordance with generally accepted
accounting principles in Canada as set out in the CPA Canada
Handbook – Accounting under Part I, which incorporates
International Financial Reporting Standards as issued by the
International Accounting Standards Board; the Company successfully
identified, negotiating and completing additional acquisitions,
including accretive acquisitions; the Company organically growing
at a rate of 10% and completing acquisitions that add at least $45
million in new revenue in order to meet 2022 outlook; and the
Company completing the negotiation and execution of agreements for
the increase in its debt facility. 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, including interest expense, income taxes,
depreciation, amortization, stock-based compensation, and change in
fair value of debentures and financial derivatives. The following
table shows our non-IFRS measure (Adjusted EBITDA) reconciled to
our net income for the indicated period:
($ in millions) |
|
Three months endedSeptember 30, 2021 |
|
Net income (loss) |
|
$ (2.8) – (2.5 |
) |
Add back: |
|
|
|
Depreciation and amortization |
|
5.4 – 5.4 |
|
Interest expense, net |
|
0.5 – 0.5 |
|
Change in fair value of debentures and derivative |
|
(1.0) – (1.0 |
) |
Provision for income taxes |
|
0.0 – 0.0 |
|
EBITDA |
|
$ 2.1 – 2.4 |
|
Litigation settlement |
|
0.3 – 0.3 |
|
Stock-based compensation |
|
2.9 – 2.9 |
|
Adjusted EBITDA |
|
$ 5.3 – 5.6 |
|
Preliminary Financial Metrics
This press release contains certain pre-released
fourth quarter financial metrics. The fourth quarter financial
metrics contained in this press release are preliminary and
represent the most current information available to the
Company's management, as financial closing procedures for the
fiscal year ended September 30, 2021 are not yet complete. The
Company's actual consolidated financial statements for such period
may result in material changes to the financial metrics summarized
in this press release (including by any one financial metric, or
all of the financial metrics, being below or above the figures
indicated) as a result of the completion of normal quarter and year
end accounting procedures and adjustments, and also what one might
expect to be in the final consolidated financial statements
based on the financial metrics summarized in this press
release. Although the Company believes the expectations
reflected in this press release are based upon reasonable
assumptions, the Company can give no assurance that actual
results will not differ materially from these
expectations.
For further information please visit our website
at www.Quipthomemedical.com, or contact:
Cole StevensVP of Corporate Development
859-300-6455cole.stevens@myquipt.com
Gregory CrawfordChief Executive OfficerQuipt Home Medical
Corp.859-300-6455investorinfo@myquipt.com
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