Quipt Home Medical Corp.

but also of our dedication to meeting and exceeding the evolving needs of our patient population. Additionally, we continue to implement our long-term strategic expansion plan. Our approach of offering a full range of end-to-end respiratory solutions with our varied product mix is essential to maintaining our success and a key factor in the growth of our core markets. We can boost total volume growth, which is the key driver of organic growth by focusing on our primary sales channels. which include medical facilities like hospitals, physician's offices, long-term care facilities, home health agencies, and rehab centers. Moreover, I am pleased to provide an update on the demand trends we are seeing within our sleep business. Despite the ongoing market speculation and reaction concerning the adoption of GLP-1 diabetes and weight loss medications, I can confidently report that our sleep segment continued to remain unaffected. Demand patterns continue to exhibit strength in real time, and our anticipation is that this will persist well into the foreseeable future. Recently, the largest manufacturer of sleep devices in the industry published data from a real-world study that showed a significant positive correlation between GLP-1s and pap therapy. The findings were that patients with an OSA diagnosis and prescribed the GLP-1 are actually more likely to initiate pap therapy and order supplies more frequently. In addition, it is critical to stress that CPAP and BiPAP therapy remain the accepted gold standard of care for patients with obstructive sleep apnea. Furthermore, we firmly believe that over 20 million Americans have OSA but have not yet received a diagnosis, which represents a significant unrealized potential for future market expansion. As of right now, we think that rising awareness and more OSA diagnosis could lead to a rise in the overall addressable market. Last but not least, we still think that the most important thing is to collaborate with our sleep patients to ensure their adherence to therapy, which is the foundation of our sleep segment focused on compliance. Looking at the regulatory landscape, We continue to see ongoing stability and have seen no signs suggesting a return to competitive bidding. In the past, CMS has started all competitive bidding procedures about 18 months before contracts and prices are finalized. As we look in the past year, we have seen positive policy developments, such as the easing of restrictions for home oxygen that reduces the administrative burden on healthcare providers and opens up access to patients. Due to the nature of our business, which involves supplying patients in the home setting across the United States with vital respiratory products and services, Quip is well positioned to thrive in any potential downturns in the economy. Our proactive approach to both organic and inorganic, along with our steadfast focus on developing a strong operational foundation and infrastructure, have put us in a position of strength as we proceed through fiscal 2024. We plan to continue driving forward on the fundamental pillars of our strategic growth strategy, opening up additional attractive markets to implement our innovative go-to-market strategy throughout the country. With that commentary, I'd like to hand the call over to Hardik to discuss our fiscal first quarter 2024 financial results.

Thanks, Greg. On Wednesday evening, we announced our fiscal first quarter 2024 financial results representing the three months ended December 31, 2023. please note that all financial values are in US dollars. Here are some key highlights. The company's customer base increased 56% year-over-year to 155,434 unique patients served in Q1 2024, up from 99,420 unique patients in Q1 2023. Compared to 146,350 unique setups and deliveries in Q1 2023, the company completed 215,370 unique setups and deliveries in Q1 2024, an increase of 47%. This includes 123,190 respiratory resupply setups deliveries for the three months ended December 31, 2023, compared to 69,482 for the three months ended December 31, 2022, an increase of 77%. Revenue for fiscal Q1 2024 was $65.4 million compared to $40.8 million for fiscal Q1 2023, representing a 60% increase in revenue year over year. Recurring revenue as of fiscal Q1 2024 continues to be strong and exceeds 83% of total revenue. Adjusted EBITDA for fiscal Q1 2024 was $15.3 million or 23.5% margin compared to adjusted EBITDA for fiscal Q1 2023 of $9 million at 22% margin, representing a 71% increase year-over-year. Cash flow from continuing operations was $11.7 million for the three months ended December 31, 2023 compared to $4.8 million for the three months ended December 31, 2022, a substantial increase of 143%. For fiscal Q1, 2024, bed debt expense improved to 4.3% compared to 5.6% for fiscal Q1, 2023. This exemplifies the company's ability to scale without compromising billing collection capabilities. Operating expense for the three months ended December 31, 2023 was 45.6% compared to 47.7% in the corresponding period in 2022. The company reported $18.3 million of cash on hand at December 31, 2023, compared to $17.2 million as of September 30, 2023. The company had total credit availability of $41 million as of December 31, 2023, with $20 million available towards a revolving credit facility and $21 million available pursuant to a delayed draw-term loan facility. The company maintains a conservative balance sheet with net debt to adjusted EBITDA leverage of 1.3x. Our results in fiscal Q1 showed the continued strength in demand across our product categories, and we are very proud to have produced another record-breaking quarter. We are witnessing the solid organic growth and consistency in margin that we try to work. For fiscal Q1, our revenue reached $65.4 million, and adjusted EBITDA margin has reached 23.5%, an exciting accomplishment underpinned by our diverse respiratory product suite and dedicated service offerings. Our success in driving operational efficiency and cost management has also played a pivotal role. Looking at the annualized figures for first quarter, our run rate revenue now stands at an impressive $262 million, coupled with a run rate adjusted EBITDA of $61 million. We expect steady organic growth in fiscal 2024 of 8% to 10% on an annual basis, which comes through volume growth as we continue to pick up market share. We drive organic growth through our growing sales team, the cross-selling of products, and continued expansion of the continuum of care in adjacent markets. We continue to observe improved net cash flow from operations as we proceed to fiscal 2024. We saw our cash position grow from 18.3 million in fiscal Q1 from $17.2 million in fiscal Q4 as a result of improved free cash flow. We continue to anticipate 6% to 8% cash flow from operations following CapEx and or lease payments, but prior to any payments relating to debt service and acquisition price payable. We see this as our baseline scenario going ahead with the long-term objective of improving this as we continue to expand our business. We are confident in our ability to grow our net cash flow inclusive of our CapEx needs. 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. A cornerstone of this recurring stream is our resupply program, which has experienced significant expansion and now serves 172,000 patients as of December 31, 2023, marking an impressive growth rate of 72%. The resupply program provides us a higher margin recurring revenue stream and plays a crucial role in extending the patient life cycle with us. Our robust balance sheet with over 59 million available between cash and credit availability positions us exceptionally well to navigate through an environment of high interest rates and to strategically pursue both organic and strategic inorganic growth avenues. With the prudent leverage ratio of 1.3 times we are strategically positioned to utilize a balanced mix of debt and cash, reflecting our commitment to a disciplined approach to growth. Maintaining our capital allocation discipline is crucial to our continued financial success, and we will continue to adhere to our strict approach. We are proud of our thoughtful acquisition approach and tight and true integration process that we have developed over many years. The successful integration of assets to date has been a major contributor to our sustained growth. Coupled with our ongoing investments in organic growth, we have strengthened the company's position in the marketplace and have all the resources at our disposal to continue on our strategic path. Thank you, and with that update, I'll turn the call back to Greg.

Thanks, Hardik. Our main objective is to deliver exceptional patient care and establish alliances with payers and referral sources in order to increase the number of patients we can assist. and gain access to desired geographic areas. Our expanded market share and overall reach allow us to take advantage of the economies of scale within the business to drive margin growth and free cash flow generation. Our sustained growth trajectory is a testament to the successful implementation of key facets of our expansion strategy. To date, we have focused on under-penetrated markets, made accretive acquisitions, committed to fueling our future organic development and have significantly extended our healthcare network nationwide through strategic national insurance contracts, regional insurance contracts, and the expansion of continual markets. Moreover, we are confident that our adeptness in seamlessly integrating new acquisitions is a driving force that further propels our organic growth plans. We constantly look for ways to improve our operational efficiencies through automation, such as ordering systems, revenue cycle management, and our automated resupply program. These activities assist us to increase productivity and produce long-term value. Investments in our scalable healthcare platform generate strong cash flow and margin expansion. In looking at our core growth strategy, we have three foundational pillars, which include the following. First is driving organic growth with the objective of eight to 10% annually. We have continued growing our sales team, which is one of the core initiatives on this front. This is how we connect with key touch points like hospital networks, doctor's offices, long-term care facilities, and rehab centers. Furthermore, while examining the operating environment, the aging population and the noticeable rise in the number of Americans suffering from several chronic illnesses are extremely favorable demographic trends for QIPT. As the population ages, there is an increasing need for in-home medical equipment and services, which presents a very viable long-term growth opportunity. Furthermore, a great deal of work is being done to ensure that patients receive care at home whenever possible. Second, we are steadfast in our resolve to use technology to further enhance our operational efficiency and promote automation as we grow our company. Our primary focus is on optimizing our workflow procedures to generate tangible benefits and eliminate friction points. For instance, enhanced procedures throughout our billing and collections department of the company have led to a noticeable decrease in our bed debt expense and an increase in our net cash flow. Furthermore, we are focused on the long-term growth of e-prescribing in our industry and have positioned ourselves well with our investments in this area in fiscal 2023. Electronic prescribing is essential to the industry as this technology can serve to boost productivity, cut down on errors, boost compliance, and improve patient outcomes. As of now, less than 5% of our orders come from ePrescribe, and we anticipate this will grow significantly over time, giving us an opportunity to improve the patient, prescriber, and provider experience by eliminating inefficiencies and reducing paperwork. Our automated resupply platform is another excellent illustration of how we use technology. It not only helps us achieve higher margins, recurring revenue, and organic growth, but it also offers us significant revenue synergies when we make strategic acquisitions. The resupply program also plays a crucial role in extending the patient lifecycle with us. The third component of our growth strategy is scaling up through strategic accretive acquisitions in combination with our proven integration approach. Since 2018, we have successfully integrated 19 acquisitions totaling more than $150 million in revenue. We focus on respiratory businesses that are well suited to be successfully integrated into our scalable infrastructure. Our strategy is to expand both our payer base and our geographic reach into attractive regions. Because of our strong balance sheet, we will be able to seize opportunities to expand our patient base, revenue, EBITDA, and geographic reach when they arise. We will remain disciplined with our capital allocation approach and believe this to be one of the cornerstones of our ongoing financial success. Despite quadrupling the size of the business since 2019 in terms of revenue and adjusted EBITDA, as well as continuous growth of our key operating metrics, our current public valuation represents one of the lowest multiples we have traded at in at least five years. Given that continued strong performance of our business in real time and that disconnect, we are actively engaging with investors from the United States and Canada to share our ongoing financial and operating achievements and discuss our long-term growth objectives. In calendar 2024, we have already attended two conferences, completed two roadshows, and expect to be very active meeting with investors throughout 2024. Our prudent capital management is reflected in our conservative balance sheet characterized by a modest leverage of 1.3 times and bolstered by over $59 million in liquidity, positions us advantageously to capitalize on both inorganic and organic growth opportunities throughout fiscal 2024. Given the recurring nature of our business model and strong financial foundation, we believe we are well insulated from any potential economic challenges that may arise. Our strategic approach, driven by our flexible capital structure, positions us well to continually seek ways to enhance shareholder value. Finally, I would like to take this chance to thank the entire QIP team for their tireless work and our stakeholders for their continued support.