Quipt Home Medical Corp.

Thank you for standing by. This is the conference operator. Welcome to the Fiscal Fourth Quarter and Unaudited Full Year 2023 Earnings Results Conference Call for Quipt Home Medical Corp. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll 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, then 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. The company's actual performance could differ materially from both these statements. At this point, I'd like to turn the call over to Chairman and Chief Executive Officer Greg Crawford. Please go ahead.

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. Quip Home Medical is a diversified healthcare services company providing a full spectrum of home medical equipment and services to patients in the comfort of their own homes across the United States. At Quip, our model is centered around delivering clinical excellence, and we drive this through our patient-centric ecosystem, leveraging technology-enabled equipment solutions in conjunction with our specialized clinical respiratory programs to effectively treat patients at home in a way that best suits their needs. Our core focus is on clinical respiratory care, serving patients with cardio and pulmonary conditions, with over 80% of our product mix being considered respiratory in nature. The consistent financial and operating success of our business seen through Finschool 2023 is a result of our targeted go-to-market strategies and end-to-end respiratory solution we offer in the marketplace. Our team of over 1,200 carries out our vision every day, working tirelessly to fulfill our company's central objective of providing exceptional patient care. Our ability to successfully implement our differentiated service model is driving Quip's record-setting growth and emergence as a growing force in the industry. On this call, we will update you on our record-breaking fourth quarter and full-year fiscal 2023 performance, the strong demand trends we are continuing to see across all our product categories, the favorable regulatory landscape, and our strategic insights on the continued success of our core business. At present, Quip has expanded to 125 locations across 26 states with over 287,000 active patients, which has enabled us to strengthen our coast-to-coast reach. This continued scaling of our infrastructure throughout fiscal 2023 has allowed us to monitor our rapidly growing patient base, effectively decrease organizational redundancy, and grow our margins. Through fiscal Q4, And in real time, we are experiencing consistent demand for all of our key product categories, continued success in the ongoing penetration of our primary sales touchpoints, and are thrilled with the integration and performance of our largest acquisition that began the calendar year, all of which has led us to a year of significant financial and operating milestones for Quipt. During FIDS Gold 2023, we recorded record revenue of $221.7 million or 58.5% year-over-year growth, with strong margin acceleration to 22.8%, equating to adjusted EBITDA of $50.6 million or growth of 73.5%. For fiscal Q4 2023, we saw adjusted EBITDA margins continue to accelerate, reaching 23.5%. This can be attributed to the operational scale we have achieved and our ability to leverage the platform we have built when adding revenue. Due to our focus on growing the continuum of care across selling product categories, taking advantage of the benefits of normalized supply chain, and operating in a favorable regulatory environment, we have the opportunity to increase our organic growth performance. We have been focusing our efforts on regions with a high COPD prevalence and expanding our key sales touch points in the continual markets to meet our organic growth objectives. We expect steady and continuous organic growth in fiscal 2024 with the objective of 8% to 10% on an annualized basis. Furthermore, our strategy of providing a complete range of end-to-end respiratory solutions with our diverse product mix is crucial to sustaining our success and a major component in the expansion of our core markets as we continue to carry out our long-term strategic expansion strategy. By concentrating on our primary sales channels, which are medical facilities such as hospital systems, physicians' offices, long-term care facilities, home health agencies, rehab centers, we can increase overall volume growth, which is the main driver of organic growth. Moreover, I would like to provide insights into the demand trends within our sleep business given the recent market speculation and reaction related to the adoption of GLP-1 diabetes and weight loss medications. Our sleep segment has experienced business as usual with absolutely no impact. Demand continues to exhibit strength in real time and our anticipation is that this robust demand will persist well into the foreseeable future. It is important to emphasize that CPAP and BiPAP therapy continued to be the established gold standard of care for individuals diagnosed with obstructive sleep apnea. Furthermore, leading manufacturers of sleep equipment are also reporting no findings of any decline related to GLP-1 drugs. In addition to that, we hold the firm belief that there are over 20 million Americans who haven't yet been diagnosed with OSA that have it, representing a substantial untapped opportunity for future market growth to this point We believe it is possible that the total addressable market may grow as a result of more awareness and increased diagnosis of obstructive sleep apnea. Lastly, we continue to believe the key is to work with our sleep patients to ensure their compliance as it relates to the therapy, which is the heart of our patient-centric ecosystem. Moving to the regulatory environment, we see continued stability and there have been no indications of the return of the competitive bidding. Historically, CMS has begun any competitive bidding process roughly 18 months before contracts and price takes effect. The likelihood of this happening is decreasing because CMS hasn't indicated how returning to the program will result in savings. Additionally, CMS has recently announced a headline CPI increase of 3% to the Medicare fee schedule beginning on January 1, 2024. Prior to 2022, our product categories were not subject to CPI adjustments while included in the competitive bidding program. Over the past year, we have seen positive developments such as the easing of restrictions through the elimination of the longstanding requirement for providers to obtain certificates of medical necessities for home oxygen, which reduces the administrative burden on healthcare providers. Moreover, we have witnessed the opening of access for patients who visit the emergency care setting and are identified as having either acute or chronic respiratory diseases, and these now can be ordered for home oxygen equipment. Throughout Fiscal 2023, we executed on the fundamental pillars of our growth strategy, building out our operational footprint into six new states, providing us additional attractive markets to implement our innovative go-to-market strategy. Moreover, in fiscal 2023, we continued making technological advancements, such as in e-prescribing and expanded our commercial insurance capabilities with the addition of Aetna to our national contract roster. Quick is in a strong position to withstand any potential economic downturns due to the nature of our business, providing necessary respiratory products and services to patients in the home setting throughout the United States. Our unwavering focus on building a robust operational foundation and infrastructure, combined with our proactive approach to both organic and inorganic growth, has uniquely positioned us to seize the multitude of opportunities for expansion that lie ahead. With that commentary, I'd like to hand the call over to Hardik to discuss our fiscal fourth quarter and full year 2023 financial results.

Thanks, Greg. On Monday evening, we announced our fiscal fourth quarter and full year 2023 financial results, representing the three months and 12 months and the September 30, 2023. Please note that all financial values are in US dollars. 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 395,618 for the year and the September 30, 2023. compared to 231,495 for the year end of September 30, 2022, an increase of 71%. The company's customer base increased 65% year-over-year to 285,819 unique patients served in fiscal year 2023 from 173,203 unique patients in fiscal year 2022. Compared to 516,328 unique setup deliveries in fiscal year 2022. The company completed 754,418 unique setups and deliveries in fiscal year 2023, an increase of 46.1%. Revenue for fiscal year 2023 was 221.7 million compared to 139.9 million for fiscal year 2022. representing a 59% increase in revenue year-over-year. Recurring revenue as of fiscal year 2023 continues to be strong and exceeds 83% of total revenue. Adjusted EBITDA for fiscal year 2023 was $50.6 million or 22.8% margin compared to adjusted EBITDA for fiscal year 2022 of 29.2 million or 20.9% margin, representing a 73% increase year over year. Revenue for fiscal Q4 2023 was 62.5 million compared to 40.1 million for fiscal Q4 2022, representing a 56% increase in revenue year over year. Adjusted EBITDA for fiscal Q4 2023 was 14.7 million at 23.5% margin compared to adjusted EBITDA for fiscal Q4 2022 of 8.4 million at 21% margin, representing a 74% increase year-over-year. Cash flow from continuing operations was 40.5 million for the 12 months ended September 30, 2023, compared to 26.3 million for the 12 months ended September 30, 2022, a substantial increase of 54%. For fiscal year 2023, bed debt expense improved to 4.5% compared to 8.7% for fiscal year 2022. This exemplifies the company's ability to scale and add more revenue through add-on acquisitions without compromising billing and collection capabilities. Operating expenses remain flat as a result of the year ending September 30, 2023 was 46.6% compared to 46.6% the corresponding period in 2022. The company reported $17.2 million of cash on hand and total credit availability of $41 million as of September 30, 2023. With $20 million available towards the revolving credit facility and $21 million available pursuant to the delayed draw term loan facility, the company maintains a conservative balance sheet with net debt to adjusted EBITDA leverage of 1.4x. We are very proud to have produced another record-breaking year in fiscal 2023. Real-time momentum has persisted in fiscal Q1, and we are witnessing continued organic growth and margin expansion that we have been aiming for. For fiscal 2023, our revenue reached $221.7 million, and adjusted EBITDA margin has reached 22.8% given by our diversified respiratory product mix and services, as well as focusing on operational leverage in the business and effective cost management. Annualizing our fiscal fourth quarter, our run rate revenue now sits at 255 million. In Q4, our margin acceleration continues as a result of the scale we have generated with 23.5% adjusted EBITDA margin realized in the quarter. We expect strong organic growth in fiscal 2024 will persist as we continue to drive volume to our growing sales team and the cross-selling of products and continued expansion of the continuum of care in adjacent markets. In real time, setups across our product mix are very strong, including our sleep segment, which continues to drive our resupply business as a sleep patient converts into our program, and we continue to see strong organic growth. As we move into fiscal 2024, we continue to see improving net cash flow from operations. On our last conference call, we increased our guidance to 6% to 8% net cash from operations after CapEx and or lease payments and before any debt service, and purchase price payable related payments. We are very confident in our ability to continue to grow our net cash flow inclusive of our CapEx needs and continue to see this as our base case on a go-forward basis with a long-term goal to further improve on this as we continue growing our business. The continued consistency of our revenue base is driven by our highly recurring revenue model which accounts for more than 83% of our total revenue mix Our resupply program is a major component of this recurring revenue base as we have significantly scaled the program, which now consists of 169,000 patients as of September 30, 2023. The resupply program represents an amazing growth area for us, extending a patient's life cycle with us. Our healthy balance sheet with over 58 million of liquidity gives us ample flexibility to execute our organic and inorganic plan for strategic expansion in an environment with higher interest rates. Our present net leverage is very modest at 1.4 times, giving us the ability to deploy a combination of debt and cash for the execution of our acquisition pipeline in accordance with our prudent acquisition approach. In fiscal Q4, we closed on a multi-state acquisition target, expanding our presence in Mississippi, Texas, and Louisiana, adding $9 million in revenue and $2 million in adjusted EBITDA. We were able to acquire this asset for a very favorable multiple of adjusted EBITDA on a post-integration basis. In real time, the integration has gone very well, and we are working on organic expansion opportunities within those existing markets on the heel of this acquisition. The operating footprint aligns closely with regions that have a very high prevalence of COPD, a key target patient group. According to National Institutes of Health, About 1.5 million people across the three states have COPD. We will remain dedicated to the structured acquisition approach and tried and true integration process we have developed over many years. We have a strong plan for sustained strong organic growth as well as deep acquisition pipeline. These are the things that have propelled our consistent growth, which is demonstrated annually and has strengthened the company's position in the marketplace. We have the tools needed to execute our expansion and acquisition strategy to drive value for our investors. Thank you, and with that update, I'll turn the call back to Greg.