Quipt Home Medical Corp.

Thank you for standing by. This is the conference operator. Welcome to the second quarter 2025 earnings results conference call for Quip Home Medical Corp. As a reminder, the conference is being recorded and participants are in listen-only mode. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one 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 conference over to Chairman and Chief Executive Officer Greg Crawford. Please begin.

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 Rerich, our Chief Accounting Officer, also joining me today. Before we begin, I'd like to thank the entire QUIC team for their continued focus and execution and to extend our appreciation to our stakeholders for your ongoing support and partnership. Let me start by reiterating who we are and what we do. QUIC Home Medical is a diversified healthcare services company delivering a comprehensive range of home medical equipment and services to patients across the United States. We are driven by our commitment to clinical excellence, powered by a patient-centric model and advanced technology-enabled solutions. These strengths, combined with our specialized respiratory programs, position us effectively, support patients in the comfort of their homes. Today, QIPP operates over 130 locations across 26 states, serving over 223,000 active patients. Our scalable infrastructure and growing national presence enable us to deliver consistent, high-quality service while expanding our reach across both established and emerging markets. Respiratory care continues to be our core focus, compromising approximately 75% of our product mix. This strategic emphasis aligns with critical macro trends such as aging population, rising prevalence of chronic respiratory conditions like COPD, and ongoing demand within the sleep apnea market. These durable tailwinds paired with our operational expertise and expanding referral network strengthen our position for long-term growth. 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, we have developed a scalable model that addresses the complexities and evolving demands of the durable medical equipment ecosystem. As it relates to our key priorities for the remainder of calendar 25 and beyond, we remain committed to three key areas. First, returning to our historical levels of organic growth, Second, optimizing capital allocation to drive long-term shareholder value. To this end, we have been active with our normal course issuer bid and expect to continue to do so in the months ahead. And third, building a scalable future-ready healthcare ecosystem through strategic healthcare system-focused expansion. On today's call, We'll walk you through the details of our fiscal Q2 results, highlight our strategy to return to growth, including progress across our key growth initiatives and industry insights. In terms of performance, fiscal Q2 came in softer than expected, as we continue to feel the downstream effects of the significant patient attrition stemming from the capitated agreement that went to other providers in the industry in 2024. In addition, a disposable supply contract in which the company was a participant was not renewed, and a seasonal low in our resupply segment contributed to the overall revenue impact. Adjusted even margin came in at 23.3%, which is, we view, as a standout performance given the revenue softness. This is the result of the hard work we began in late 24 to make the organization more efficient and more responsive to market dynamics. We are seeing the benefits today, and we expect even greater leverage on this margin base as growth re-accelerates. Importantly, we are not standing still. Across the business, we are actively pulling multiple operation levers to reignite organic growth in the back half of the calendar 25 and into fiscal 26. Strategically, we are evolving beyond traditional DME acquisitions. A central pillar of our forward strategy is to pursue healthcare system-bound opportunities, leveraging our scalable, repeatable integration strategy. Our goal is to embed QIP directly within the hospital discharge ecosystem through preferred provider agreements that deliver coordinated, value-based care. We are actively engaged in multiple conversations with leading regional health systems, and we expect to have meaningful updates over the near term. These relationships are compelling not only because of their strategic fit, but also because they offer access to embedded patient volume, enhances our care continuity, and can be scaled across markets. Our team is highly focused on executing this strategy and aligning resources accordingly. We believe this approach will significantly enhance our competitive positioning while creating long-term shareholder value. Shifting 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 is steady and consistent in recent months. Recent real-world data shared by the leading device manufacturer involving nearly 1.4 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 10.8% more likely to start positive airway pressure pap therapy compared to those not on GLP-1s. Additionally, these patients exhibited higher resupply order rates over both 12- and 24-month periods. This data has now been steady with the same trend, plus or minus a couple tenths of a basis point, as the leading manufacturer has grown their analysis from a year ago with approximately 300,000 patients to now tracking nearly 1.4 million patients. During the quarter, the Lancet Respiratory Medicine published a landmark meta-analysis highlighting the significant clinical impact of CPAP therapy. This extensive study, which evaluated data from over 1 million individuals, demonstrated that CPAP therapy reduces all-cause mortality by 37% and cuts cardiovascular-related mortality by even more compelling 55%. These findings reinforce the critical role of CPAP in improving patient outcomes and further supports its value as a frontline treatment in sleep and cardiopulmonary health. 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, we continue to see a stable regulatory environment and we are not currently seeing any material headwinds in the near term. This consistency allows us to protect margins and focus on executing our strategic plan to return to growth without disruption. Moreover, we don't expect tariffs to affect our Medicare slash insurance contract products. With this clarity, we're well positioned to expand our geographic footprint, strengthen our referral relationships, and pursue long-term partnerships across the healthcare ecosystem. With that commentary, I'd like to hand the call over to Hardik to discuss our fiscal second quarter 2025 financial results.

Thanks, Greg. On Monday evening, we announced our fiscal second quarter 2025 financial results for the three months ended March 31, 2025. Please note that all financial values in U.S. 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. The company's customer base declined 2% year-over-year, serving 146,000 unique patients as of March 31, 2025, compared to 149,000 unique patients as of March 31, 2024. The company completed 203,000 unique setups deliveries in Q2 2025, a 3% decrease from 210,000 setups deliveries in Q2 2024. Respiratory resupply setups deliveries decreased 4% year-over-year, totaling 111,000 in Q2 2025. Revenue for fiscal Q2 2025 came in at 57.4 million, down 6% year-over-year. This softer-than-expected performance reflects several key factors. Ongoing headwinds from the withdrawal of Medicare Advantage members following a capitated agreement that went to other providers in the industry. In addition, in November 2024, a disposable supply contract in which the company was a participant was not renewed, contributing to the overall revenue impact. Seasonal weakness tied to patient deductible research resulted in modestly lower resupply volumes during the first half of the quarter. However, the company has seen improved momentum in volume exiting both March and April. Revenue for the six months ended March 31, 2025 decreased to 118.8 million compared to 123.8 million for the six months ended March 31, 2024, representing a decrease of 4%. Recurring revenue for Q2 2025 continues to be strong at 81% of total revenue. Adjusted EBITDA for Q2 2025 was $13.4 million at 23.3% of revenue compared to $14.9 million at 24.3% of revenue for Q2 2024, representing a 9.5% decrease. Adjusted EBITDA of $27.4 million for the six months ended March 31, 2025 compared to $30.2 million for the six months ended March 31, 2024, a decrease of 10.4%. Net loss for Q2 2025 was 3 million or 0.07 per diluted share compared to 739,000 or 0.02 per diluted share for Q2 2024. Cash flow from operations was 18.3 million for the six months ended March 31, 2025 compared to 14.9 million for the six months ended March 31, 2024. Operating expenses, the percentage of revenue came in at 50.8% in fiscal Q2 2025 compared to 48.9% in the corresponding period in 2024. CapEx, also known as rental equipment transferred from inventory for the six months ended March 31, 2025 was 17.9 million compared to 14.4 million for the corresponding period. Turning to the balance sheet, We exited the quarter in a strong financial position with $17.1 million in cash, $9.7 million of availability under revolving credit facility, and $21 million available pursuant to the delayed drawdown loan facility. Total liquidity of $30.7 million. Our net debt to adjusted EBITDA leverage stood at 1.5 times EBITDA, well within our target range. This gives us meaningful financial flexibility to fund organic growth initiatives and pursue health care system opportunities. We are also maintaining an active share repurchase program under our NCIB, which we will continue to utilize given the current low valuation we have. One of the most important takeaways from this quarter is the strength and stability of our margin profile. Despite a decrease in revenue, we delivered an adjusted EBITDA margin of 23.3%, a direct result of the structural efficiencies initiatives we began rolling out in late 2024. These efforts included streamlining back office functions, optimizing logistics and intake operations, and driving greater cost discipline across the organization. As a result, our platform is now more scalable and resilient, allowing us to protect and sustain margin performance even in periods of lower top-line contribution. To expand on Greg's comment, while Q2 was a softer quarter for us from revenue standpoint, our underlying operating engine remains solid. We are executing across multiple fronts to restore growth, expand margins, and deliver shareholder value. Our balance sheet is strong, our recurring revenue base is solid, and we have a clearly defined strategy to grow. Moreover, Our focus has evolved beyond traditional DME acquisitions. We are actively engaging with healthcare systems to create deeper, more strategic partnerships, transactions that can come with preferred provider agreements and support integrated care delivery. As we progress through calendar 2025, we are energized by the opportunities before us to reignite growth. Our commitment to operational excellence, disciplined growth, Patient-focused care remains the cornerstone of our approach, positioning us for the long-term success. With that, I'll now turn the call back over to Greg.