Quipt Home Medical Corp.

Thank you for standing by. This is the conference operator. Welcome to the third quarter 2025 earnings results conference call for Quift 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 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.

Thank you, Operator, and thank you to everyone joining us today. I'm Greg Crawford, Chairman and CEO of QuickToll Medical. I'm pleased to be joined today by our Chief Financial Officer, Hardik Mehta, and our Chief Accounting Officer, Tom Rarick. Let me begin by expressing our appreciation to the entire Quick team for their continued execution and commitment, and to our shareholders for their support. QuipTone Medical is a healthcare services company delivering a comprehensive range of home medical equipment and services to patients across the United States. We operate with a mission to deliver high-quality, technology-enabled care that allows patients to remain in the comfort of their homes with a particular focus on chronic respiratory conditions. As we look at the improved results for fiscal third quarter, we saw clear revenue stabilization across the business and a return to positive organic growth driven by strength in our core therapies, consistent activity in our sleep resupply channel after the seasonal weakness experienced in fiscal Q2, and a return to more balanced overall referral volumes. We believe the most difficult period is behind us, and our operating engine is well positioned to scale again. During the quarter, we continued to demonstrate a strong and consistent adjusted EBITDA margin performance coming in at 23.5%. Despite a dynamic environment, we have delivered steady margin results quarter after quarter, a direct outcome of the structural improvements we began implementing in late 2024. Subsequent to quarter end, we made significant strategic progress on our healthcare system expansion strategy. Following the end of the quarter, we announced a milestone transaction with Ballad Health, a prominent integrated health system comprised of 20 hospitals serving 29 counties of the Appalachian Highlands in Tennessee, Virginia, North Carolina, and Kentucky. This transaction embeds Quick directly into Ballot's discharge pathway, positioning us as their preferred provider across their network. While it's early, the operational momentum coming out of the deal has been promising, and it validates our broader strategy to scale through value-based relationships. Then, earlier this morning, we announced a definitive agreement to form a joint venture anchored by three powerhouse health systems, Henry Ford Health, McLaren Health, and Blanchard Valley Health. These partnerships embed us into the discharge process of a significant number of hospitals and affiliated care sites, giving us the ability to serve patients at the exact point their care transitions to the home. That's an incredibly valuable position in today's healthcare environment. This joint venture strengthens our Midwest presence and formally launches us into Michigan, one of the most important markets in our expansion strategy. Just as important, it creates a scalable blueprint for future health system partnerships across the country. PART's two-decade reputation for clinical excellence and their alignment with health system care coordination perfectly complement our mission of delivering high-quality respiratory and home medical equipment solutions nationwide. Heart has built a best-in-class reputation for quality patient care and operational excellence with over 60,000 patients served monthly and direct alliances with some of the Midwest's largest integrated health systems. These partnerships are deeply embedded in Heart's operation and hospital discharge processes, providing a steady and reliable flow of patient referrals. This joint venture with three major health systems marks QIP's formal entry into Michigan, extending our geographic footprint into one of the Midwest's most attractive and strategically important healthcare markets. Moreover, the transaction expands us in Ohio and surrounding markets. This joint venture exemplifies our strategy of scaling through healthcare system integration, and we see tremendous opportunity to leverage Heart's infrastructure with its 29 branch locations highly experienced management team, and a strong cultural alignment with Quip, Heart will serve as a cornerstone in our evolution as a national leader in the respiratory-focused home medical equipment. We have entered the second half of 2025 with confidence, backed by the firming of our operating metrics, recent healthcare system transaction, and a clear roadmap for growth. Revenue stabilization is evident across our business, underpinned by resilient demand in our core rental segment and resupply program, which remains the foundation of our recurring revenue profile. As the environment normalizes, we are seeing referral activity return to more predictable patterns and setup activity rise accordingly. Importantly, our product portfolio has proven durable. Demand for our core offerings, particularly oxygen, sleep therapy, ventilator services, and sleep resupply continues to be stable and well diversified. Our infrastructure is purpose-built for scalability and efficiency, allowing us to support a growing patient population while preserving operational leverage. The structural improvements we implemented in late 2024 are yielding results. We are now positioned with a more agile cost structure, a reinvigorated sales effort, and a broader base of healthcare relationships. These factors reinforce our confidence in delivering consistent operating performance. Before I turn the call over to Hardik, I want to reiterate that the board and management remain laser-focused on making thoughtful decisions that we believe are in the best interest of maximizing long-term shareholder value. With that, I'll turn the call over to Hardik to walk through our fiscal third quarter 2025 financial results.

Thanks, Greg. On Monday evening, we announced our fiscal third quarter 2025 financial results for the three and nine months ended June 30, 2025. Please note that all financial values are in U.S. dollars and are reported under GAAP accounting principles, with comparison periods also restated under GAAP for consistency. This quarter marks a return to positive organic growth and signals clear revenue stabilization across our business. Here are the key highlights from the quarter. The company's customer base decreased modestly serving 151,000 unique patients as of June 30, 2025, compared to 153,000 unique patients as of June 30, 2024. The company completed 210,000 unique setups deliveries in Q3, 2025, compared to 216,000 in Q3 2024. Respiratory resupply setups deliveries total 119,000 in Q3 2025, a change from 120,000 in the prior year quarter. Revenue for fiscal Q3 2025 came in at 58.3 million compared to 60.8 million in Q3 2024, a decrease of 4.1%. This compares to revenue of $57.4 million in Q2 2025, reflecting a return to positive quarter-over-quarter organic growth of 1.6%. Revenue for nine months ended June 30, 2025 was $177 million compared to $184.6 million for the nine months ended June 30, 2024, a decrease of 4.1%. Recurring revenue for Q3 2025 continues to be strong at 81% of total revenue. Adjusted EBITDA for Q3 2025 was 13.7 million or 23.5% of revenue compared to 14.2 million or 23.4% of revenue for Q3 2024, representing a 3.6% decrease. Adjusted EBITDA of 41 million or 23.2% of revenue for the nine months ended June 30, 2025 compared to 44 million or 24% of revenue for nine months ended June 30, 2024, a decrease of 7.7%. Net loss for Q3 2025 was 3 million or 0.07 per diluted share compared to $1.6 million loss or $0.04 per diluted share for Q3 2024. Cash flow from operations was $27.9 million for the nine months ended June 30, 2025, compared to $25.4 million for the nine months ended June 30, 2024. The company reported $11.3 million of cash on hand as of June 30, 2025, as compared to 17.1 million of cash on hand as of March 31, 2025. Approximately 5 million of change in cash compared to the previous quarter was used to pay down the line of credit balance. Total credit availability was 35.3 million as of June 30, 2025 with 14.3 million available on a revolving credit facility and 21 million available pursuant to the delayed draw down loan facility. operating expenses as a percentage of revenue came in at 53.3% in Q3, 2025 compared to 50.4% in the corresponding period in 2024. CapEx also known as rental equipment transferred from inventory for the nine months ended June 30, 2025 was 15.2% of revenue compared to 13.3% of revenue for the same period in 2024. As previously mentioned, current Phillips recall on its ventilators has contributed to the increase in our rental equipment capex. Our net debt to adjusted EBITDA leverage ratio was 1.5x, well within our target range. We are pleased with the important progress we made during the fiscal third quarter. Our results indicate we are seeing clear revenue stabilization in the business with a return to positive organic growth quarter over quarter. These outcomes are direct results of the operational initiatives we have executed over the past three quarters. Moreover, we delivered a strong and consistent adjusted EBITDA margin of 23.5%, underpinned by structural efficiency improvements initiated in late 2024. Following quarter end, we executed our first acquisition of a healthcare system-owned DME provider, generating $6.6 million in annualized revenue in a strategic transaction completed with Ballard Health. This transaction includes a preferred provider agreement covering 20 hospitals across four states. Moreover, as Greg mentioned earlier, this morning we announced that we have entered into a joint venture to acquire 60% ownership stake in Heart Medical Equipment, nationally accredited provider of home medical equipment and supplies based in Michigan. This joint venture adds immediate scale to our platform. Heart generated approximately 60 million in revenue and 7 million in adjusted EBITDA as of June 30, 2025. And once the transaction closes, which we expect to occur by the end of fiscal Q4 2025, we anticipate reaching an annualized run rate revenue of roughly $300 million company-wide. WIPP will acquire a 60% ownership interest for total consideration in the range of $17 to $18 million. This structure allows us to preserve balance sheet flexibility while adding a strategically aligned asset. HART's 29 locations across Michigan and Ohio, along with its embedded partnership with Henry Ford Health, McLaren Health, and Blanchard Valley Health System, Wood County Hospital, and the Bellevue Hospital, create direct access to a recurring patient base of more than 67,000 patients each month. Once closed, we expect HART's adjusted EBITDA margin to align with our historical corporate averages within three quarters, driven by operational integration, shared best practices, and cost efficiencies. This transaction fits squarely into our discipline capital allocation strategy, is health system aligned, and repeatable as a template for future partnership. This is a clear validation of our strategy to partner with leading healthcare systems in the United States that are aligned in mission and values. As we progress to calendar 2025, we are energized by the opportunity before us to drive a consistent growth path. Our commitment to operational excellence, disciplined growth, and patient-focused care remains the cornerstone of our approach, positioning us for long-term success. With that, I'll now turn the call back over to Greg.