Quipt Home Medical Corp.

Thank you for standing by. This is the conference operator. Welcome to the first quarter 2025 earnings results conference call for Quip Home Medical Corporation. 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 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 these statements. At this point, I'd like to turn the call over to Chairman and Chief Executive Officer, Greg Crawford.

Greg Crawford Thank you, Operator, and thank you to everyone joining us today. I'm Greg Crawford, Chairman and CEO of QuipTone Medical. I'm pleased to have Hardik Mehta, our Chief Financial Officer, and Tom Rierich, our Chief Accounting Officer, joining me today. QuipTone Medical is a diversified healthcare services company delivering a comprehensive range of home medical equipment and services patients across the United States. Our commitment to clinical excellence powered by a patient-centric model and advanced technology-enabled solutions. These, combined with our specialized respiratory programs, allow us to effectively meet patient needs in the comfort of their own homes. At present, QIPP has expanded to 135 locations across 26 states with over 314,000 active patients, which has enabled us to strengthen our coast-to-coast reach. Our go-to-market strategy is rooted in providing an integrated end-to-end respiratory care solution complemented by a diverse portfolio of durable medical equipment. As a trusted partner for patients and healthcare providers alike, we have developed a scalable model that addresses the complexities and evolving demands of the durable medical equipment ecosystem. Respiratory care comprises approximately 77% of our product mix, demonstrating our unwavering commitment to patients with pulmonary and cardiovascular conditions. This strategic focus aligns with critical macro trends such as the aging population, the rising prevalence of chronic respiratory disease like COPD, and the significant untapped opportunities in the sleep apnea market. These drivers, combined with our operational expertise and expanding scale, position QIPP to meet the growing demand for high-quality, in-home respiratory care solution. On today's call, we will review our fiscal first quarter 2025 performance, as well as provide insights into emerging demand trends, operational highlights, and strategic initiatives shaping our growth trajectory for the remainder of fiscal 25. For the first quarter of fiscal 25, we experienced consistent demand across all major product categories and steady referral patterns. We achieved stable revenue generation of $61.4 million alongside a strong sequential improvement in adjusted EBITDA margin, which reached 22.8%, leading to adjusted EBITDA of $14 million. We are particularly encouraged by the meaningful improvement in our adjusted EBITDA margin sequentially during fiscal Q1 2025. This progress reflects the proactive steps we've taken to streamline our operations and optimize our organizational structure. These enhancements are enabling us to operate more efficiently while maintaining our commitment to high-quality patient care. As we continue to execute on our growth initiatives, we expect this operational discipline to support steady margin expansion throughout the year. Shifting the focus to our sleep business, we are pleased to report that GLP-1 medications continue to have no impact on demand. Referral activity for new device setups remained solid, while replacement supply volumes continued to demonstrate strong and consistent performance. Recent real-world data shared by the leading sleep device manufacturer involving nearly 1.2 million patients underscores the positive effects of GLP-1s on treatment adherence. The study found that individuals with an obstructive sleep apnea OSA diagnosis who were prescribed the GLP-1 were 10.7% more likely to start positive airway pressure therapy compared to those not on GLP-1s. Additionally, these patients exhibited higher resupply order rates over both 12 and 24-month periods. These data points have now been steady with the same trend, plus or minus a couple of tenths of a basis points as the leading manufacturer has grown their analysis from a year ago with approximately 300,000 patients to now tracking nearly 1.2 million patients. On January 17, 2025, the American Academy of Sleep Medicine released a quick reference guide for providers discussing the use of novel pharma therapies in the treatment of OSAs. The AASM continues to emphasize positive airway pressure therapy as the frontline treatment for OSA. Additionally, the guide suggests that weight loss medications may serve as useful adjunctive or combination therapies. We believe GLP-1 medications will serve as a long-term tailwind for our sleep business, introducing more motivated patients into the healthcare system as they focus on improving their overall health. Additionally, the regulatory environment remains stable and we are not seeing any significant headwinds over the near term. This stability allows us to operate with greater efficiency and confidence, supporting both margin performance and continued strategic execution. With this regulatory clarity, we are well positioned to sustain long-term growth as we expand our footprint and deepen partnerships across the healthcare ecosystem. We continue to manage our balance sheet prudently with net leverage at 1.5 times, which gives us the flexibility to invest in strategic initiatives. As we move forward, we are confident in our ability to deliver exceptional patient care, strengthening relationships with payers, and execute on a disciplined, scalable growth strategy. Through these efforts, we are well positioned to drive consistent long-term value for our shareholders. With that commentary, I'd like to hand the call over to Hardik to discuss our fiscal first quarter 2025 financial results.

Thanks, Greg. On Monday evening, we announced our fiscal first quarter 2025 financial results for the three months ended December 31, 2024. Please note that all financial values are in US dollars and are now reported under GAAP accounting principles with comparison periods also reported under GAAP for consistency. Here are some key highlights from the quarter. We completed 221,000 unique setups and deliveries in the fiscal first quarter 2025, an increase of 3% from 215,000 unique setups and deliveries in fiscal Q1 2024. Respiratory resupply setups and deliveries increased to 124,000 for the quarter reflecting growth of 1% year-over-year, driven by our centralized intake processes and technological innovations. The customer base grew by 1%, serving 157,000 unique patients as of December 31, 2024, compared to 155,000 unique patients as of December 31, 2023. Revenue for fiscal Q1 2025 was $61.4 million compared to $62.6 million in fiscal Q1 2024. This represents a 2% decrease year-over-year. Revenue for Q1 2025 was flat compared to Q4 2024. The Medicare 7525 blended rate, which had been providing rate relief for certain geographies, was discontinued as of January 1, 2024. Although this change is still under legislative review and could return, its immediate cessation had a negative impact on our revenue and operating results. Moreover, in certain regions, we also experienced the withdrawal of Medicare Advantage members due to a capitated agreement engaged with other providers in the industry. In November 2024, a disposable supply contract was not renewed. The cumulative annual impact of these three events is estimated to be approximately $8 million, with a reduction of approximately $1.5 million for the three months ended December 31, 2024, as compared to the three months ended December 31, 2023. Recurring revenue for Q1 2025 was very strong and was approximately 77% of total revenue. Adjusted EBITDA for Q1 2025 was 14 million at 22.8% margin, compared to 15.3 million at 24.5% margin for Q1 2024, representing an 8.7% decrease. Adjusted EBITDA sequentially increased by 4.5% from Q4 2024, in which the company reported adjusted EBITDA of 13.4 million at 21.8% margin. Net loss improved from Q1 2025 to 1.1 million or 0.03 per diluted shares compared to net loss of 1.5 million or 0.04 per diluted share for Q1 2024. Operating expenses as a percentage of revenue came in at 49.5% in fiscal Q1 2025 compared to 47.6% the corresponding period in 2024. CapEx, also known as rental equipment transferred from inventory for fiscal Q1 2025, was $9.4 million compared to $7.3 million in fiscal Q1 2024. Cash flow from continuing operations was $9.3 million for the three months ended December 31, 2024, compared to $10.6 million in the prior period. The company reported 15.5 million in cash on hand as of December 31, 2024, compared to 16.2 million in cash on hand as of September 30, 2024. The company has total credit availability of 32.4 million, including 11.4 million available on revolving credit facility and 21 million on delayed fraud term loan facility. We maintain a conservative balance sheet with a net debt to adjust EBITDA leverage of 1.5 times. Our financial performance in fiscal Q1 2025 demonstrates the stability of our business model. We delivered an improvement in adjusted EBITDA margin compared to previous quarter, reflecting the initial benefits of the structural optimization efforts we began implementing at the start of the fiscal year. These initiatives are focused on enhancing operational efficiency across the organization, reducing inefficiencies, and unlocking margin expansion opportunities. We are pleased with the results so far, and we plan to deliver steady margins throughout the year as we continue to refine our processes and optimize our cost structure. We continue to see steady referral activity demonstrating the durability of our operating model and our ability to meet evolving market needs. This consistent demand trend reinforced the strength of our business, which continues to benefit from macro tailwinds such as the aging population and the rising relevance of chronic respiratory conditions. While some headwinds persisted, we are pleased with our ability to build upon the foundation established in prior quarters and position ourselves for growth in the calendar year ahead. The strength and consistency of our revenue base was underpinned by our recurring model which accounted for over 77% of total revenue in fiscal Q1 2025. A cornerstone of this model is our resupply program, which has grown to support more than 174,000 patients as of December 31, 2024. This program not only extends the duration of each patient's relationship, but also reinforces the value of our high-touch patient-centered care model. Our financial position remains a critical driver of growth. With 47.9 million in liquidity and a net leverage ratio of 1.5, we are well equipped to advance our growth initiatives. As capital market dynamics evolve, we remain confident in our ability to see strategic opportunities that align with our long-term goals, all while safeguarding our strong financial foundation. As we progress through calendar 2025, we are energized by the opportunities before us. Our commitment to the operational excellence, discipline growth, and patient-focused care remains the cornerstone of our approach, positioning us for continued success. With that, I will now turn the call back to Greg.