Quipt Home Medical Corp.

Thank you for standing by. This is the conference operator. Welcome to the fourth quarter and year-end 2021 Financial Results Conference Call and Webcast for Equipped Home Medical Corp. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. We remind you that the remarks today will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please see the reader advisory at the bottom of the company's results news release, as well as the company's MD&A, which you can find on the website, CDAR, and as may be included on EDGAR. The company's actual performance could differ materially from these statements. At this point, I'd like to turn the call over to Chairman and Chief Executive Officer Greg Crawford.

Thank you, Operator, and thank you all for joining us today on the call. My name is Greg Crawford, and I'm the Chairman and Chief Executive Officer of Quip Home Medical. Joining me today is Hardik Mehta, our Chief Financial Officer. I would like to begin by praising the over 700 Quip employees for their continued dedication to providing superior patient care to improve the quality of life for all our patients served. QIP specializes in end-to-end respiratory care, utilizing our interconnected healthcare platform, which leverages a sophisticated technology infrastructure and strong regional distribution footprint to streamline all phases of the delivery process. Known for our service-intensive model, ongoing patient education, and in-home respiratory therapy services, we are able to operate a successful patient-centric ecosystem throughout the organization. Healthcare providers such as hospitals, physicians, long-term care facilities are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control cost. QIP fills this need by delivering a growing number of specialized products and services to achieve these goals. The QIPP motto is, Exceeding Expectations, Enriching Lives. As providing exceptional service isn't just something we do, it's who we are, and it's who we will always be. It is the clinical services we provide that have allowed us to grow our market share and begin to implement our strategic vision of growing into a national home care provider in the United States. The continued compassionate care coupled with secular tailwinds of healthcare being delivered and monitored in the home has fostered continued robust growth, including impressive organic growth of 10% as compared to fiscal 2020. We continue to focus on expanding our organizational capabilities, including the addition of talented new team members and have made significant strides on this front through 2021. With a best-in-class service model in place and all the tools needed to position our organization to capitalize on our increased scale, it is the execution of our robust team that will continue to drive growth forward and allow us to take advantage of the opportunities across our product categories and our markets. At present, Quip operates out of 76 locations in 15 states across the United States, concentrated in the Midwest and the Southeast and East Coast regions, completing hundreds of thousands of deliveries each year to more than 170,000 active patients with over 19,000 referring physicians. We have seen continued momentum throughout the year as we executed on our strategic three-pronged growth strategy through a focus on technology utilization, improved workflow processes to improve our operating efficiency, and the build-out of our robust resupply program, all of which continue to yield consistent performance across the business. With the financial flexibility we have, the operational resilience, and strongest regulatory environment we have had in well over a decade behind us, there is plenty of opportunity to expand our geographical footprint into attractive markets throughout 2022. On this call, I will provide an update on the supply chain the continued bullish regulatory landscape, and update our core business, which continues to be very strong, with a focus on our record-breaking fourth quarter and full-year fiscal 2021 results. As many of you are aware, in June, Phillips Respironics announced the voluntary recall of certain respiratory devices related to polyurethane foam used in those devices. In September, Phillips began the remediation process for CPAP and BiPAP units, and the process of repairing and or replacing those units is well underway. The recall, amongst other factors, has created supply chain challenges industry-wide. Despite the recall, we have not experienced significant amounts of patients stopping the therapy, either CPAP BiPAP, or ventilation. In fact, we continue to see elevated levels of demand compared to historical run rates and did not experience a material financial impact to our Q4 financials. We are striving to drive new setups and other product categories to mitigate the future impact due to the recall. Our clinical teams continue to operate at a high level and has done an excellent job working with patients and physicians to manage this complex process and we will continue to work diligently to minimize any future impact. On the regulatory front, we continue to operate in an extremely bullish environment. One of the major tailwinds driving the industry comes from the decision made by CMS to cancel the 2021 competitive bidding program for 13 product categories. The cancellation of this program has provided us a clear margin outlook across our product mix, and ensured our patient stability for the foreseeable future. Moreover, in September, Medicare finalized a national coverage determination for oxygen that will expand home oxygen coverage and potentially reduce some of the administrative load. Turning our attention to recent actions, CMS announced a 5% plus CPI adjustment for DME in 2022. Typically, the consumer price index increases for DME have been in the 1% to 3% range. Last year, the inflation adjustment was less than 1%. Moreover, legislation was passed to delay a 2% cut in Medicare payments that was created under sequestering but has been put on hold over the past two years due to the pandemic. Congress has also delayed a 4% cut to Medicare reimbursements triggered by the pay-as-you-go law until 2023. The importance of the home medical industry has never been more prevalent, and we are pleased to see these continued positive regulatory developments. Turning to the underlying business, our robust performance was driven through strong demand, leading to larger volumes, higher cash collections, and continuing to support the business with lower operating costs Growth was propelled by our heavily weighted respiratory product mix, highlighted by ventilation therapy and continued strength in oxygen therapy. We are pleased for the year our bad debt expense has fallen to 8% compared to 9% for the corresponding year in 2020, an improvement of 1%. This exemplifies our ability to scale and add more revenue through add-on acquisitions without compromising our billing capabilities. The infrastructure we have in place today allows us to position ourselves as a market leader and gives us the flexibility to add locations organically to the platform, as well as efficiently integrate acquired assets. Our recurring revenue base continued to be extremely solid for fiscal 2021, with recurring revenue representing 77% of overall revenue. Our recurring revenue base provides us further stability and consistency as we look at our growth outlook, business model, and financial reporting. Quip had an extraordinary year, breaching $100 million in revenue, $21 million in adjusted EBITDA, entering five new states since reaching 76 locations, and concluding a NASDAQ listing at the end of May. We are set for another milestone-filled year and are excited to execute on the path forward for us to enhance shareholder value. With that commentary, I'd like to hand the call over to Hardik to discuss our fourth quarter and full year fiscal 2021 financial results.

Thanks, Greg. Last Thursday evening, we announced our fourth quarter and audited fiscal 2021 financial results representing the three and 12 months ended September 30, 2021. In reviewing the fourth quarter and audited fiscal 2021 numbers, please note that all financial values are in U.S. dollars and the full results are available on CDAR and EDGAR. Here are some key highlights. Through the company's continued use of technology and centralized intake processes, respiratory resupply setups and or deliveries increased to 158,072 for the year ended September 30, 2021 compared to 61,468 for the year ended September 30, 2020, an increase of 157.2%. The company's customer base increased by 53.8% year-over-year to 140,996 unique patients served in fiscal 2021 from 91,650 unique patients in fiscal 2020. Compared to 253,113 unique setups and deliveries in fiscal 2020, the company completed 364,365 unique setups and deliveries in fiscal 2021, an increase of 44%. Revenue for fiscal year 2021 was $102.4 million compared to $72.6 million for fiscal year 2020. representing a 41% increase in revenue year-over-year. Compared to fiscal year 2020, the company experienced organic growth of 10% for this fiscal year. Recurring revenue as of fiscal year 2021 continues to be strong and exceeds 77% of total revenue. Adjusted EBITDA for fiscal year 2021 was 21.4 million at 21.1% margin compared to adjusted EBITDA for fiscal year 2020 of $15.5 million, representing a 38.3% increase year-over-year. Adjusted EBITDA margin was impacted by one-time costs related to company's NASDAQ listing on May 27, 2021. Revenue for Q4 2021 was $29.1 million, compared to $19.7 million for Q4 2020, representing a 48% increase in revenue year-over-year. Compared to Q4 2020, the company experienced strong organic growth of 14% year-over-year. Adjusted EBITDA for Q4 2021 was $5.6 million at 19.2% margin. Adjusted EBITDA margin was impacted by the expenses related to acquisitions completed in fiscal Q4 as well as lower pre-integration margins that the company's overall margin profile. The company anticipates margins normalizing about 20% when these acquisitions are fully integrated. Cash flow from continuing operations was $18.7 million for the year ended September 30, 2021, compared to $14.1 million for the year ended September 30, 2020. For fiscal year 2021, bad debt expense was 8% compared to 9% for fiscal year 2020, an improvement of 1%. This exemplifies our ability to scale and add more revenue through add-on acquisitions without compromising our billing capabilities. Operating expenses for the year ending September 2021 was 51.6% compared to 53.2% the corresponding period in 2020, a substantial margin improvement resulting from scaling on our existing platforms. Considering our one-time expenses like NASDAQ listing, rebranding, initial acquisition-related costs, and the inflationary environment we are in, this has been a huge validation of our acquisition strategy. The company reported $34.6 million of cash on hands as of September 30, 2021, compared to $29.2 million as of September 30, 2020. The company has undrawn credit facility of $20 million as of September 30, 2021. The current assets total more than $57.2 million compared to $32.7 million in net short-term liabilities, demonstrating continuing strength in our liquidity. Our continued progress in economically building scale utilizing the robust infrastructure we have in place is producing consistent, strong financial results. We are proud with the continued execution displayed through the strength of our fourth quarter and full year results. We saw revenue breaching $29 million for our fiscal fourth quarter and $100 million for fiscal full year, surpassing the high end of our revenue range target, whilst seeing full year adjusted EBITDA margins remaining about 20%. We are pleased with this margin stability, whilst having a number of one-time expenses related to our NASDAQ listing and our continued acquisitions of smaller, lower margin DMA businesses, which we integrate to turn into high margin businesses, that we more accurately reflect company-wide margins post-integration. We also continue to see very strong cash collections throughout the fourth quarter, resulting from a continuous effort to better our revenue cycle management processes. Going forward, we seek to find ways to continue to grow our customer base and penetrate these markets while continuing to streamline our operational platform and generate positive cash flow and operational profits. We completed six acquisitions during the year ended September 30, 2021, and in the fiscal fourth quarter, we were very active implementing the inorganic portion of our growth strategy entering the new states of California, Missouri, Arkansas, and Mississippi. The combined entities we acquired in those new markets had trailing 12-month annual revenues of approximately $11 million and adjusted EBITDA of $1.65 million. Post-integration, we expect the margin profile to be in line with the overall business. During the fiscal fourth quarter, we added two exceptionally experienced healthcare executives with a specific focus on home medical equipment and services industry to serve as EVP of operations and VP of acquisitions and integration, both coming from two of the largest home medical equipment companies in the industry, further complementing our robust leadership team. Moreover, as we look at recent developments on January 4, 2022, we announced the acquisition of At Home Health Equipment, a business with operations in Indiana, reporting trailing 12-month annual revenues of approximately $13 million and $1.6 million in net income with anticipated adjusted EBITDA of $2.9 million, reflective of a 22% margin post-integration. The acquisition creates CRIP's single largest market from a revenue standpoint, covering the entire coverage sphere of Indianapolis. At-home health equipment has a strong revenue base with over 30% steaming from exclusive contracts in the hospice segment, opening a new vertical for us to strategically build throughout 2022. Additionally, there is solid diversification amongst referral sources and a payer base with exposure to less than 20% from Medicare. Furthermore, At Home does not have current exposure to ventilation therapy, providing us the growth opportunity to introduce our clinical ventilation therapy program as well as complementary clinical respiratory products and services. In closing, as we work towards our long-term goal of becoming a national provider of home healthcare in the United States, we remain prudent, ensuring we follow our stringent criteria alongside our proven integration processes which has been the driver of our consistent revenue growth of over 40% displayed on an annual basis. We are enthused with the deep acquisition pipeline we currently have, consisting of a wide range of targets in terms of size and scale, which will help continue to drive our opportunity to penetrate existing and new states. We expect to remain very active throughout 2022 in our growth initiatives. Thank you, and with that update, I will turn the call back to Greg.