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 that it
has acquired At Home Health Equipment, Inc. (“
At Home
Health Equipment”), 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 (defined below) of $2.9 million (22%
margin) post integration. As a reminder all figures stated are in
USD.
Acquisition
Details
The acquisition creates Quipt’s single largest
market from a revenue standpoint, covering the entire coverage
sphere of Indianapolis. At Home Health Equipment has been a leader
in the respiratory home care services space for over 25 years and
has several difficult to obtain insurance contracts that
significantly enhance Quipt’s presence in the region. With a new
location, covering an entire service area of Indianapolis, the
acquisition adds to Quipt’s active patient count by over 15,000,
bringing Quipt’s total to approximately 170,000 active patients. At
Home Health Equipment has a strong management team in place, and
like Quipt, offers high-quality service, equipment and supplies.
The expansionary operating footprint aligns closely with regions
that have a high prevalence of Chronic Obstructive Pulmonary
Disease (“COPD”), a key target patient group;
Indiana is among the highest prevalence U.S. States. According to
the National Institutes of Health (NIH), about 443,000 people in
Indiana have COPD.
Moreover, At Home Health Equipment has a strong
revenue base, with over 30% stemming from exclusive contracts in
the hospice segment, opening a new vertical for Quipt to
strategically build throughout 2022. Additionally, there is solid
diversification amongst referral sources, and a payor base, with
exposure to less than 20% from Medicare. Furthermore, At Home
Health Equipment does not have current exposure to ventilation
therapy, providing Quipt a significant growth opportunity to
introduce its clinical ventilation therapy program as well as
complimentary clinical respiratory products and services. In
addition, At Home Health Equipment provides Quipt the opportunity
to add patients to Quipt’s existing subscription-based resupply
program, and Quipt expects that it would derive strong revenue
synergies from this initiative.
Under the terms of the definitive purchase
agreement, Quipt acquired the business for approximately $13.1
million in cash. It is expected the acquisition will increase
Quipt’s annual revenues by approximately $13 million, and, post
integration, Adjusted EBITDA by $2.9 million (22% margin).
The non-binding letter of intent for the
acquisition by Quipt of At Home Health Equipment was announced by
Quipt on November 16, 2021.
Reiteration of Outlook for Calendar End
2022 (Fiscal Q1 2023)
As originally 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
“This is a significant acquisition as it creates
the largest single market for us in a very attractive region
allowing us the ability to strengthen our overall interconnected
healthcare network in the state of Indiana. Our operating engine
and proven ability to integrate acquired assets allows us to
continue the strong pace of closing larger strategic acquisitions
during this exciting growth period,” said Greg Crawford, Chairman
and CEO of Quipt. “This acquisition is very powerful as it services
the significant metro hub of Indianapolis, and we plan on quickly
integrating their business operations and leveraging Quipt’s payor
contracts across our existing Midwest locations. We see a
tremendous number of synergies and believe our strong sleep
re-supply business presents us with significant upside as we deploy
our technology therein. We have a goal of increasing overall
efficiencies, as well as adding on our clinical ventilation therapy
program as an extension to their existing respiratory product mix,
representing an immediate cross selling opportunity for us. We are
also excited to enter the hospice segment, with over 30% of At Home
Health Equipment’s revenue coming from this high growth area and we
will strategically work to build this vertical out over the course
of 2022.”
Chief Financial Officer, Hardik Mehta added,
“This acquisition allows us to build out our operating footprint as
we reach 170,000 active patients, adds $13 million in revenue, a
meaningful EBITDA and net income contribution as well as providing
us significant infrastructure. This exciting respiratory care
company strategically assists us in gaining market share in this
favorable Midwest region, where there is a high prevalence of COPD
patients and a significant opportunity to leverage our service
intensive model. As we look to our strategic growth path, we
continue to have an extremely deep pipeline, and expect to remain
on an aggressive pace as we move through the first half of the year
and are excited to execute on our vision for 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.
Reader Advisories
Readers are cautioned that the financial
information regarding the acquisition disclosed herein is unaudited
and derived as a result of the Company’s due diligence, including a
review of the acquisition’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: post integration financial results (revenue and Adjusted
EBITDA) of At Home Health Equipment; 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
acquisitions; the Company’s outlook for calendar 2022; the Company
being extremely confident in its acquisition pace staying strong
through the remainder of 2022; Quipt expecting that it would derive
strong revenue synergies from the acquisition; Quipt expecting to
achieve additional revenue generated from organic growth, cross
selling and corporate synergies with the acquisition; Quipt
anticipating that this acquisition would be immediately accretive
to Quipt’s Adjusted EBITDA, overall profitability and would add
approximately $13 million to the top-line and $1.6 million in net
income; and Quipt expecting to remain very active in 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
achieving results at least as good as historical performances; the
financial information regarding the acquisition 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 $32 million in new
revenue in order to meet 2022 outlook. 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 StevensVP of Corporate Development
859-300-6455cole.stevens@myquipt.com
Gregory CrawfordChief Executive OfficerQuipt Home Medical
Corp.859-300-6455investorinfo@myquipt.com
Quipt Home Medical (TSXV:QIPT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Quipt Home Medical (TSXV:QIPT)
Historical Stock Chart
From Apr 2023 to Apr 2024