QIPT - Earnings call transcript Q2 2022 | Quipt Home Medical Corp.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Fiscal Second Quarter Results Conference Call for Quipt Home Medical Corp. [Operator Instructions] 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 as well as the company's MD&A, which you can find on our website, SEDAR and as may be included on EDGAR. could from performance statements. actual company's differ these materially The the like to Greg At I'd turn Crawford. call Officer, this time, Executive to over Chief Chairman and

Greg Crawford

Thank Home and I'm joining Chairman and all call. you, Officer name the thank of Executive on Quipt My Crawford, today the for Greg is Chief operator, and Medical. us you

now appreciation our I provider XX significantly Quipt begin today to respiratory Joining is Mehta, Hardik like tireless dedicated services their me for in advanced to home of XXX our extending states would from to my efforts today employees us national over a regional at across Chief strategic Financial Officer. helping expanding the by United the of in plan in States.

XXXX, expanding this focus continued company grow of fiscal we and new continuing additional to facet made As have our on employee capabilities, members significant we on front. base with team the have our talented progressed to organizational each have at through strides

begun for have be a the of organic which patients, quality centered will anticipate we around accelerated service-intensive post we growth. Quipt has additional driver consistent our life sales improving as of hiring our is have we to of growth. key future the Importantly, all model environment, of professionals, pandemic into It which the move driven

the outcomes, costs. with of partners fills The interventions. hospitals, place growing our use population for opportunities in facilities focused present, to across States, and our continued in and providers continued locations in that by trend markets. such With U.S. Americans service-driven a the constant this clear Quipt grow help the health service admissions coupled of on XX continue team long-term as it is forward suite focus out physicians tools the the tailwinds that our healthcare organization to best-in-class XX of products needed of allow and with through us our can more drive This and care all hospital model completing of fostered and patient United across patients chronic helping on as monitoring capitalize scale, numerous active of goals. will deliveries reduce multiple us than physicians. range full robust execution interconnected of early and advantage more care, growth such model platform these position compassionate XX,XXX on drive conditions the XXX,XXX remote with states share operational to services a Our the aging education, secular product Quipt our a device as robust than be services offer is need and model to and referring hundreds At year delivering and look for that and and achieve patient categories take compliance market of to care growth. is products need over improve a control home monitored operates to our delivered has of to to the to increased each thousands healthcare

we Arkansas, including momentum and the throughout Carolina, Ohio, Georgia, network Indiana, our core North We accelerating Texas have our as healthcare strategy. seen have We growth year-to-date country, executed Massachusetts, strengthened on California.

in COPD United added which all X States, top a area over enhanced have personnel, our includes that payer million coverage fear States. of significant with including United insurance We X sufferers insurance a and important an contract over national has infrastructure new the contracts, national added the in

of robust our has robust ongoing operating contributed on the technology Our utilization, our the performance. program workflow to improve efficiencies and processes focus to financial improve resupply build-out

opportunity to behind XXXX. the regulatory the environment and in decade have geographical plenty we throughout into our strongest us, a and operational resilience expand had of footprint financial markets we flexibility With existing there have, new the attractive was

current the dynamics. chain to Turning supply

allocations began. highest with We signs improvement of to leading since early our recall the see CCAP have start inventory to begun timely fiscal level QX to

continue aware, voluntary related to real June announced The recall of continue not remained chain fiscal Respironics be calendar used to the respiratory through positive backlog believe pressure as year. as setups trend driving those through about continuing patient XXXX, devices certain is a We For Philips to of foam to move in we inventory ease has supply optimistic reason we in the cautiously the QX. those and alleviate time, there devices. we in polyurethane the

suppliers, fostering Moreover, a has a strengthened drive our navigate the challenges setups new other financial organic growth mitigate we with to product in supply support striving chain categories quarter-over-quarter. plans are to foundation sequential the consisting of return as better to is and the the recall, of our impact have which constantly results to X% us relationships seen supply expansion which chain normalizes. our to to pleased allowed are also our We while future record

On in regulatory the an bullish environment. continue we operate extremely front, to

in the to One industry this by administrative major and bidding ensure September, our of the has a will some us finalized provided program the that potentially driving XX the clear coverage oxygen patient determination load. coverage CMS reduce future. made expand of of across outlook mix The stability competitive program product for from margin cancel cancellation a Medicare XXXX decision the for the for and tailwinds comes our product foreseeable national categories. Moreover,

and over the to adjustment recent put the the than adjustment CMS Typically, Turning Medicare developments. for The to prevalent more X% cut X% Last delayed been of equipment pandemic. was created hold importance the in delay are passed increases has never medical a the on due cut Medicare these legislation was also have to X%. DME positive pleased XXXX. announced was we has but to triggered past to law a to two sequestration, has the see under for plus regulatory a XXXX. actions until to less continued X% by price pay-as-you-go industry that reimbursement CPI index payments been DME been Moreover, consumer home year, attention inflation X% our X%. years Congress

underlying the to business. Turning

robust financial are performance XXXX, which of margin organic thrilled to QX $XX.X operating adjusted fiscal XX%. with revenue million, We acceleration in fiscal cash improving EBITDA saw QX, strong flow growth seen over the and

been results has therapy the sales recently a national our factor laser-focused our continued continued receiving on outcomes our momentum insurance team efficiency of of was our patient us Moreover, Our in satisfaction into this. organic our move on superior highlighted strong move a we respiratory seeing care post-pandemic chain have hiring also operations, landscape major and to future and generation. the professionals, performance is no key announced. was weighted our therapy. heavily leveraging are focus oxygen of we in driven The the up by There a and contract to capabilities value-based and our growth as mix strength actively doubt resumed product ventilation reflect by

growth the extremely on, growth us. home positioned ahead industry encouraged about carving care are to are are We seize path and special well the segment the we of we out a opportunity of

remains we discuss that that call stringent the active term. hand at range the Looking second very very current to to commentary, it and expect to over With our results. of acquisition targets exciting near over with remain criteria, Hardik meet like our our wide I'd quarter a to pipeline, financial

Hardik Mehta

fiscal months fiscal In and representing SEDAR are EDGAR. the are numbers, please quarter the all quarter dollars that ended March financial values available U.S. results, announced XXXX just our Thanks, second in full and XXXX. results XX, reviewing Greg. three XXXX second note We the on financial

XXXX. $XX.X strong million revenue key of X% was some generated XX.X% The organic factoring Not up organic XXXX, approximately fiscal in very quarter the quarter-over-quarter company fiscal highlights. growth and are second sequentially X%. a acquisitions, was Here of quarter second growth year-over-year from

more the to As to the X,XXX up devices approximately was range in compared backlog sleep company's XX, patients queue X,XXX XXXX, to typical X,XXX in on historically. be March backlog of the a set of

setups Greg began will a fiscal in in XXXX, last quarter the since $X.X completed to QX period XX%. ended the revenue through deliveries we Revenue quarter margin ended fiscal of $X.X year-over-year. to the allocations of March March XXXX increased in fiscal increase Adjusted of million revenue strong XX, cautiously ended six respiratory fiscal months of it setups compared have to fiscal we million XXXX, or revenue. $X that $X second second the or of fiscal XX% to an sleep the the XXX,XXX which second compared year, corresponding sleep ended to all the QX we've the very six six most the XX.X% representing continues week six of second was in As XXXX, last March for the deliveries quarter. XX% is lift XXXX, EBITDA device The company's XXXX, In second year, compared for impact this for XXXX, the months optimistic will million XX,XXX Adjusted for about of million segment for increase $XX to million quarter fiscal to or release quarter an at period the EBITDA increased XX%. XXXX. recurring months from EBITDA quarter and represented the company segment was XX.X% Adjusted with of the XX, or generating the to months compared increase completed the capped $XX.X backlog, and the X,XXX are inventory XX, increase the for XXXX In XXXX. XX% revenue The approximately half the began, business. million impacted XX,XXX grow, a resupply XX%. was XX, compared mentioned, XXXX, and corresponding with XXXX March

months the in add to compromising debt our compared X for acquisitions to without same revenue expense ending add-on through March and billing ability the exemplifies scale X.X% XXXX. bad period For our more capabilities. This was XXXX, X.X%

in nonrecurring was ending months for due same months higher corporate $XX.X of an million Cash compared strength undrawn XXXX. expense, than was continuing second operating in fiscal costs and of flows some fiscal XX%. has liabilities, the to in the period Current ending short-term revenue the six million quarter March XXXX end compared million. expenses, end the The was March to of assets of increase demonstrating for fuel ending credit bad acquisitions. XXXX, company XXXX inflation, our quarter operations totaled to million. expense, $XX an XX% onetime in compared the cash At $XX.X more March six including expenses corresponding from and facility XXXX, the related revolving second net $X.X million of of period was liquidity. balance XX% to For debt excluding At XXXX, the $XX.X to fiscal increase million $XX

to is to its significantly acquisition strategy. our accelerate the further increase addition to company In actively facility this, working credit

supply position allows us the well second flexibility therapy fiscal to quarter costs. today the We see the EBITDA we to a assets. market businesses leading driven to acquisitions. process are continuing elevated business organization, continue momentum add revenue the in we us strong and The pleased efficiently to volumes support strong larger positive reaching the adjusted with as seeing our to for as and home have XX% performance very The respiratory with infrastructure oxygen through organically recent I'm at ventilation gives as lower acquired million place platform, $XX.X at integrated demand other was our operating our in across as leader and and to margin ourselves through integration a of care for locations

revenue from cycle collections our to We to solid management continue resulting effort second with quarter also a see better cash process. continuous

to continue attractive Going our to base will streamline markets and forward, ways our platform. we continuing penetrate to operational while find patient grow

stability Our approximately recurring as remains This base we model consistency revenue. strong outlook, look and our our XXXX provides revenue with of XX% revenue representing revenue financial growth reporting. overall during fiscal further base QX business and us at recurring

success extremely also financial our the strategy. strategic the and ongoing strong pleased to pace it the key is ongoing integration continue we efforts are results operating allows to the today. us acquisitions, with growing as acquisition We have Integration been of our of with and enthused

and trailing operations $XX $X.X patients of with on January coverage Health adjusted from of approximately net reflective million of income X, margin anticipated we covering largest million, acquisition created at per Indiana, Home post transactions of a annual market active the reporting XX% PRIPs revenue the our At of revenues integration. XX-month Equipment, most EBITDA a two single in standpoint, The announced added in a XX,XXX Indianapolis. recent million, business and entire $X.X XXXX, acquisition Looking

California. Massachusetts, $X.X contracts. states states, Home. display process, for million, with U.S. million our We U.S. integration. Cutlite On for and approximately annual basis. Ohio, we growth and At of of Massachusetts, Carolina, We EBITDA are Medical, Medical nearing our X criteria integration full margin of prudent, Arkansas, include revenues business new XX, Texas, announced Georgia, underway. XXXX, we locations driver across reflective acquisition XX% April along adjusted anticipated been important a states, Texas revenue trailing including operations with $X an post commercial insurance well XX-month Carolina integration across acquisition added of stringent reporting annual the The fit of X North acquisition U.S. and our new North are consistent ensuring remain has efforts extremely the which and Goodnight Integration of our proven follow on a

to current scale, we targets wide which and help will a reviewing existing pipeline, in our our to are to size relates penetrate and range currently states. it of of new drive continue opportunity As terms

product synergistic offering. service and end-to-end into verticals looking will are our We opportunities expansionary also enhance of service that at potential

proposition We targets the United having come sellers increasing the in and are that Greg. about across value closing, and with forward our exciting funnel potential And you. through our the update, back to the States. incredibly marketplace Thank to turn call excited I'll scale to look

Greg Crawford

Thanks, to challenging continue driving through chain navigate we solid in successfully operations performance. significant supply the growth midst of environment operating is Hardik. experience as Quipt and a our

revenue We national ongoing progressing as continue run effort. proud our expansion have to rate are reached a $XXX of million on we

to expanding our our grown to in driven We while footprint to coverage our leader to as strategy continuing across strategic date, and To services and XX sphere synergistic initiatives, organic ongoing home of serve leveraging a infrastructure we acquisition on into platform. States. growth attractive with the invest adding now in have respiratory verticals goal model grow have executed operating by significant into that care service-intensive United states continuing our of including the regions

opportunities results. We cost assets growth financial our are drive revenue resilient integrating synergies meaningful to laser-focused on drive and acquired efficiently that

new patient-centric by have we markets. share an We grow the and created, platform, and this to driven market ecosystem is in us unparalleled strategy scalable have allowing existing

Moreover, to very been X Massachusetts, To provider contracts. accelerating occurring, multistate have on and as insurance leverage top gives announced up end, United Quipt in a this such active have April of XX,XXX meaningful XX, expansion added a the contract we year-to-date we Texas. new Carolina, with We states States. is national patients milestone execution for including across more active a picked North as it we national when efforts. we us with capture the as country the significant the This expansion scale a ability payer patients the a to immediately contract eligible acquire insurance

we all connected to with or interventions, cash of treatment We structural management patients. or we to subscription-based to underway understand also referral through to has them effectiveness, feel to also payers payers payers is early value program. a and Moreover, a focusing hospitalization monitor scalable continue benefits across in continuum platform, more to treated us organic margin encourages healthcare for it us a well expansion of our optimal contracts, patients organization strong demonstrated care large we is a this other and order there pandemic generation, and our Whether benefit ongoing into These to is can generation. care. ways and medical is revenue sources, the actions model here. are to Moreover, drive care secure company home patient-centric outcomes relationships help drive patients, patients our seeing increase COVID-XX is as resupply This acquisitions, improved care of portion additional model us drive grow patient respiratory These sustained It continue for continue and sources, clear investments the invest sales national a finding ensure with our important which will continue use reduce on home referral with the and the automated platform, is serves technology the our The engagement health whether compliance, commercial to productivity. benefits cycle our to improve at plan targeted allow lawmakers, by be and drive to payers. efforts the ordering opportunity in of crucial it operating and the to focus alike. we whenever that through efficiencies, in better setting work shift to automated accretive possible. our the with

growth the growth core three the As we we in move pace like organic with to into pandemic on review a the environment, post-pandemic you our of put reps, are much for future. accelerated help hiring components of would I of sales enthused was our strategy. hold the on front which will now

it laser-focused profitably on organic centers. opportunities This systems, new on as includes the are the and are team, processes. economically and verticals our such and physicians' de quick market initiatives. opening which novo that we Moreover, continuously touch makes expanding growing First, locations ground, adding key reaching leveraging cross-selling growth hospital our points rehab our offices share optimizing sales sense, where through numerous boots of service exist,

continue we respiratory meaningful Secondly, technology the provides for us resupply deployment in to synergies lead our which on the industry by acquisition robust platform, revenue driven front.

our expect driver of to program for continued be We growth us. resupply a

is component The growth acquisitions. third our strategy of

that operations We platform. into for our seamlessly be turnkey highly are looking scalable can integrated respiratory

we three we approach. to M&A, acquisition facets our look at have As

companies million which XX% consistent and can between in a The to by platform. first annual the volume, scale hence, leveraged our million focus be being of large XX% margins on EBITDA $X revenue and and targeting range distribution $XX

across footprint segment provider. our goal ambition on our fastest expanding strategic targets new states. expanding payer revenue acquiring being mix second national focused our with of sub-million of the on The and geographical focused being a This

meaningful EBITDA, patient-based and geographical larger would The a focus third reach be towards from facet revenue, standpoint. more that a opportunities being

XXXX, Quipt conferences, remained that opportunity We getting to strong front, historic $XXX most $XXX attended operations, for performance and outlook of grow non-deal our commencement coverage to feel the reiterating story Once tireless in $XX run $XX significant Quipt which roadshows our to and is a of and take we on million the time, again, of based have this the vision have diligently outlook May extremely our we research completed trading I plenty on after provides and with I early for there, and our the trends completing a market we investment continued echoed current efforts XXXX On million prospective cap industry-leading end to of out acquisitions, NASDAQ continued with small milestone base. grown annual to run the At community. fiscal Since in million team our reiterate have calendar to its shareholder late working for QX to to we want its active ensure are for our our very their year would million capital adjusted rate and thank date like representing rate support. time, moment base XXXX. markets are all to in EBITDA. are the for us stakeholders entire revenue

Operator

comes Instructions] from Cooper question ahead. [Operator Doug first Please The with Beacon Securities. go

Doug Cooper

Hi, congratulations things. of Greg. good Hardik, quarter. a couple great morning, A on

of First margin gross XX% the to it like margin. all, looks gross side, me on just

for Is is bit. a platform it going that to? little can as if Maybe I'm think far expand on company, I record back. at kicking that I see the What in scale? not resupply a you going attribute back do you least can as mistaken, just the

Hardik Mehta

This to in out margins look the have We at last way maybe last Hardik. not place that that months our sure things took some had average those are we going the -- moment here is would understands some look one. this profit to everybody to being gross are. six definitely margins make a forward or months continue take we what would We the gross Resupply they favorable to I But forward. quarter. anticipating favorable the quarter. encourage totality nine things Yes, Sure. that in did people

Doug Cooper

Okay.

anticipate last $X.XX you what -- in build? side, do fees QX level On professional attribute there going anticipate you versus Is the year. professional would And that OpEx what forward? QX, do $XXX,XXX of in fees million -- $XXX,XXX to

Hardik Mehta

if almost certainly quarter, don't quarter. in we had we about had We expect additional previous to to Yes, those quarter. Sure. that be expensed were $XXX,XXX not in continued, about -- the within almost professional compare a you fees

we were again, related acquisitions legal of to of public, do being some we year. over proportion of do going a you expense the preparation Some market kind typically to in out expect of forward them kind at expect attributed be on would of to activities, southern this audit things and fees, What don't expenses were overages capital be in that this smaller other that spread that level.

definitely was quarter This hit anomaly. an

Doug Cooper

Okay.

Have OpEx increase from started already? XX.X% on Just the of XXX basis you So points maybe XX reflective to revenue of expenses. hiring was points up up maybe that The is payroll and payroll sticking or in growth QX basis of people year-over-year. come?

Hardik Mehta

our adding started side. additional management then operations we Yes, sales and the within also on

additional kind to number plus that that payroll with get more we the wasn't in that had integrated. that, expect So yet back that come fully within acquisitions and we that realized and are once businesses normalized of also quarter that

Doug Cooper

question or a should And little just Is that my year. $X.XX all transitory other million there bit. expand of Okay. versus on sort that million in nature just be million last $X.X in $X we of something OpEx last

Hardik Mehta

Can was unclear. time? little I Sure. a you question repeat more more the one

Doug Cooper

there's line of an The OpEx last million $X.X year. other versus million expense, $X all

$XXX,XXX just. So it's year-over-year up

Hardik Mehta

Sure. a of a Yes, combination it's things. few

are stuff and really the the in were million that. and terms of $X.X pressure was One also driver you pressure in is the in auto fuel D&O of reconcile $X terms both some like seeing literally To that expenses, biggest and between driver -- alps. that Matt the stuff and the there insurance, of D&O two some Those like fuel would but from of million on that. inflationary repairs biggest inflationary auto

Doug Cooper

just Okay. And regulatory on environment. one, my final the Greg,

any few weeks be which Is going in XXXX. canceled competitive I your your you of as ago to is have group call that scheduled bidding the I that? guess, for next maybe well. that it that hearing guess, indicated Do thoughts One program, peer on or insight on on a they're their

Greg Crawford

our entire being time That's kind thought. and permanently. canceled the of would The end program up been is that that

We rates actually have and in been than thinking early were came and when through they in rationally that that higher. 'XX, should implemented to have says kind that that published can nothing where have they that out the significantly just that point would that we really other of the they program, and

So that's look indication I think the to best towards.

Operator

next comes Manochehry with Capital. go Please ahead. question Eight The from Sepehr

Sepehr Manochehry

morning. Congrats quarter. on Good the

or from Obviously, outcomes. First, updates you key more for seeing to if a patient question me. in acquisitions guys of And have you partnerships if the you're potential compliance also given as was more acquisition that's see side, you developments terms a your enabling terms broadly, in pulled that have feature strategy. your the that health I any back, wondering health for in do tech a valuations monitoring? of equipment And on tech remote are maybe

Greg Crawford

to months how in with technology Greg. any deployed that that we new utilize monitoring so that those actually we're over seeing the XX do say, haven't already our as far XX sure. We're here remote We as data and continue what side. is or This not enhance and we to past, program that outcomes. Yes, doing the on

looking the on like different for in can our anything front. As always as We've of us acquisition there that vertical is and improve that I listening to that kind ears some opportunities of that, what a help and can be that far got down possible. out ground mean,

Sepehr Manochehry

new came earlier need codes those? open do acquisition? through new And opportunities this that online to Or something is that you it. does the entered you? staffing Or you changes implement up Got for billing year any

Greg Crawford

that of actually we're something providing directly services of in something acquisition. involved. would build likely sort through position would doing of some that can third where be to or party monitoring enter That None to the a we currently the without of apply those and some we that that

Sepehr Manochehry

most dense me is I growth on your the one Massachusetts population Understood. on that recent you. is The stay that noticed brings in acquisition third the for next that, the congrats that for country.

adjacent on are service kind on during costs. if with looking your if this population near-term you're was also can period? focusing at I the entering regions states of you new that maybe So you where or centers have pressures near-term and it more wondering footprint through existing still do where density fuel distribution

Greg Crawford

Yes.

So we're our definitely we've that looking existing out locations acquired. to build

For recurring example, of May operations New in Massachusetts being a and continuum area Hampshire.

being to able add area. excited pretty we're a that continuum as about So

to as So on we focus into hiring reps those our of that new sales with we'll continue additional expand areas.

Sepehr Manochehry

Got for it. me. a have there the terms any outcomes. work? gain contracts And that know scaling I example? of service that payers? partner, Is last something exposed better just that kind be for value-based yourself of a Or Are this is sort of in that that Or that Advantage be of partner new could payer to relationships? securing does that compliance through you then KPIs a patient on side? Medicare health you be with you'd how you could Would obviously like to contracts one around and and form something you'd out get some of sort leads

Greg Crawford

Yes.

national remote providing we're increasing allowed services outside in in the remote capabilities, we payers patient's that in in in will has that So successful. remote with work the monitoring. we're to our that just equipment that half services monitoring home. different our work putting do that, eligible us different length for the of to that towards of contracts, that to kind obtain the recently We that, year of inside and of stay our monitoring come us that from and these expect some displaying things of insurance of devices that of and It's for out are also been piece that in we've the that utilizing that have the data which second

Sepehr Manochehry

[indiscernible]? Yes. I X update months on mentioning from there that for an KPI, example, months. Is you for And XX like to recall

Greg Crawford

on this time. update point that at to Nothing in

Sepehr Manochehry

the quarter outlook continued Okay. growth and on looks the favorable. Congrats

So be story. in involved the happy to

Greg Crawford

Thank you, Sep.

Operator

The next Armstrong-Whitworth with question ahead. Please comes go from Tania Canaccord Genuity.

Tania Armstrong-Whitworth

gentlemen. morning, Good

Just a couple me. for

to getting their hiring what in QX. started So like wondering new Board talked since of if can competitiveness salespeople about seeing we're the I'm for based new much in already market? in sales you and how terms on you compensation-wise fiscal on availability to you've labor representatives your talk

Greg Crawford

sure. Yes,

we and looking we've of that So the us long-term clinicians, because clinicians actually to for healthcare are that really targeting refers, pretty and into kind really for a well being a have career. that been setting worked new and nurses it's get out example, that of lot out and caught of on

candidates are been those of that types So the we've onboarding.

of salaries in all increasing opened. that, that across as seen in we've far and all absolutely, As spectrums positions salaries we have that

Tania Armstrong-Whitworth

And you mentioned you. give us you guess, or look could targeting Can I your prepared service remarks would look can like? synergistic of I you in to and our some examples services then acquire product M&A think you're -- verticals. Thank what to Perfect. products that

Greg Crawford

Yes.

think, we that November I had the repair for 'XX in that, in service. required example, BioMed in had recently So

line something on -- lines. So other we of as those being that good particular along business things monitoring the and tissue with look do remote potentially would side tech that or at also that wound lines have a such in to vertical potentially care product

Tania Armstrong-Whitworth

those that you grade perhaps no you payers, extend de Excellent. targets you. UnitedHealth That's into, at but potentially color. acquire. now states additional you And Thank new states potential to wanted lastly, add Could the there what are novo have contract highlight expansion? look there and then were to are this great any national could given that to

Greg Crawford

in feel that, couldn't interview that acquisition. No we state that we in particular

it. timing ready lining of and that's sell be would the to potential up they're on acquisition and ready target it's to I front, when we think the just when on close

acquire as far contract, to that immediately particular national locations. the allows in our we can to is that at that what payer that As start of not as all us the we and accepting do really ability is insurance continue

For so -- to accepted the accepting XX% And had our recent already insurance, even locations opened national and example, taking sites the of but that up around we additional the sites the start XX% of of our acquisition, this would able insurance. particular that could some payer. their that with that opened that up that immediately start be

beneficial very and an billing through standpoint separate particular So contract -- our allows is contracts, build it for to us and rather which from then regional one department. administrative than that

Operator

next ahead. James. comes Raul The Please from go with question Sarugaser Raymond

Raul Sarugaser

taking Good our morning, quarter. Thanks Hardik. Good on the so morning, Congrats questions. for much Greg.

So strategy? leverage Or you're does little that looking you singular potentially looking down at newer on this just on national the following How jurisdictions? into really your M&A the shape bit contract. to Are a jurisdictions? insurance doubling

Greg Crawford

think payer. numbers a to if And both. of it's the -- immediately combination that their to particular that be add we at in you that insurance. that the contract look When I company does M&A accept the start we would and in provider not close, able landscape, accepting that once

to that able contract without leverage of additional be location. we'd infrastructure kind the adding within really any way really that So

Raul Sarugaser

Okay. helpful. That's very to experienced. backlogs you've back And the then switching that

And you back do steady state? a result on like feel when left that of expect the a as table the get revenue backlog. So you do may to to you have

Greg Crawford

that the in allocations As increasing come timely, manufacturers than rather far half behind as to that hope in getting weeks that allocated. on the we were probably devices if key very a at back continue is that the steady We to point to of going in not X state, shipping think into which in were our one that's second see do year, X 'XX. I the

we gotten that. that on additional that So have some indication that coming that in recent could on. same the back There be in also on we've line seen devices are some seen that in come news --

would be, we're put back half of I and to in second these going that the the a year the increases tightly to be manufacturers. into sure given that will that's allocations are by on when say But normal. as hate see been going going things to of to we kind indications time anticipating exactly So

Operator

Markets. question comes with ahead. Paul go next Please IA Capital from The Stewardson

Paul Stewardson

quarter, on that congratulations calling competition potentially for in in Chelsea. -- in you're morning the any about impact looking the all just level of seeing Wondering with all the rates pipeline terms the the weakness the or rising, you of the Good are you're the on multiples? markets, and for after targets going at of either

Hardik Mehta

wouldn't a anything, of way seeing in a been one If some the potentially contemplating a pressure there taking I XX material see bit We really. cell This last the spear the probably landscape. we is people don't has over any really given change months, significant little the Not acquisitions backstep in people inflationary or and -- devices. are are say Hardik. of PEP companies But There -- shift more another. in year. some the shortage taking

Paul Stewardson

more our were one just of most And but Okay. maybe questions asked, from me.

for the and in margin of a labor to rates something terms to it's accelerating In that of well? to essentially rates year and been inflationary reset as cost fuel this inflation next going when the get inflationary reimbursement until kind out. is and -- perspective equivalent can increases reimbursement it being of we've take we again hiring professionals those seeing sales Or balance outpacing of to think as that's from that about

Hardik Mehta

Sure.

definitely focusing CPI market, mean, year, the right? I increase on But mind, a that rate be you mean, agencies, also and right? or Medicare, we get operating our do operational accordingly, do have and would where, gross last we minimize we to the what inflationary to frame our strategies, that's And and And change smarter and to reimbursement margins their and a will of we we what unless rest that would adjusts of hope we the comes So currently of they governmental also we've kind next are we be we time right? payer seeing and point, what the great and representative absorb the we how in, CPI deliver what company, that. better. index in a are of So certainly to operating the maximize right. what's it are some seeing transitionary our our that's do on here in index currently maximize in So and few as expect currently Medicaid I pool when result -- always been try it. factor the do over there was going do optimize something how costs what years. on, we what the of pressure adjustment some delivering as do we keep despite would only that have

obviously and of the challenge, it in it. take a So that's spirit we

Greg Crawford

why I'll that particularly even that plus This but seen important add build also that have not you've is and seen pressure. kind continue to it's that's XX% is you is inflationary of grow, for to maybe margin which margin the and scale us that despite adjusted Greg. that maintain EBITDA us in

that we've three also, chain XX% and the that least continue intact And at that and here. row, that at growth, very this for that we're of with think we we and the just we're or do to that where is we I to just optimistic for organic been on organic in should right track growth at that under kind years and remain would supply point that. quarter today did in regain our back are that maintain in a

will continue the our to pressure. help All maintain things of despite inflationary those us margins

Operator

comes The Keywood with Please ahead. Justin Stifel. next from question go

Justin Keywood

the Good morning. Thanks for call. taking

rate First, run that a earlier the Goodnight clarification include on of Medical? Does just mentioned XXX.

Greg Crawford

No.

Justin Keywood

Okay.

So little still but the of $XXX below higher a to million. $XXX reiterated guidance than million XXX,

the some the are of of So year? that M&A? And what are implies of factors could How opportunity the you next on confident year. of that processes that the there's a into some back executing M&A lot in half in those defer that

Hardik Mehta

Sure.

rate we to accurate be we thing that that between yes, the one or is the just rest the And of to We what so I that would we given XXXX, annualized confident have and right, to look exit into run on. the range. we and right? are make feel guidance So now that you're XXXX as pretty year, would and M&A get rate annualized an get us think able we of to growth that organic we like sure, have guidance run forecasted do expect end

pretty solid. Our pipeline is

to stall to to there we stand to won't able us be we continue execute LOIs today. for get that and enter no will as on believe or into We point And indications those. are that something

Greg Crawford

-- Greg. I is this think

I that we've of expect year be you the the and back think that if worth on and years, term. half three-plus the historically look even the it's last back active noting in near over in very go in also in here M&A the been to front

Justin Keywood

know pretty see EV continuing Is especially reasonable, in to it Understood. you discussion seems And forward We'll these the year? as range far on is look multiples, target but some acquisitions to for of there like a I been EBITDA. as back half have that. multiples the that prior, the potential would that

Greg Crawford

Yes.

doing through the this to continue substantial doing change before how -- I see see don't of material XX a here. mentioned, At and see in months. we changes we way we'll it done. any plan were we a M&A continue As next we were in to point change the to and really have time, done don't the We things previously the don't landscape substantial way do continue we what plan to

Operator

from Please Instructions] The comes with Echelon ahead. Capital Stefan [Operator next Quenneville question Markets. go

Stefan Quenneville

large questions appropriate and to contract about my of taking Obviously, insurance the have some on of contract. national national a with probably and for question you UnitedHealth. get good Thanks the do footprint congratulations quarter. for national Certainly it something other I -- enough to is handful if the players your a relationship well. a other with your as

with coming no United. in players, I what mean pass, something you've pressure in conversations next to signed national those So large be quarters. that other in trajectory the longer-term given positioning are assume here your and your of to for a has that coming couple contracts come And growth strategic but the with of dynamic those going the other something If does guys, that changed course, in marketplace?

Greg Crawford

of Yes. come that and to actively do that We're the in expect contracts through We half additional those. the second in year. working sometime

one payer their we have we contract As improving can necessarily in anything a we in as really far and things. that as do competitors more census not really patient what outcomes, we're or talk company one with leveraging positioning with that for national positioning that, of about with respiratory just a their ourselves ourselves clinical

us build that to into they talking been that accept the operations we've the leverage about. we're contract insurance of to scale which through that us a that in able don't in start national already on areas infrastructure, the and if truly again, that those accepting and to in continuum kind allows that that acquisition company, immediately insurance that in front, contracts the acquire once enter the we -- but allow when also -- So really and that

Operator

for This closing I conference any session. question-and-answer back concludes remarks. Greg like to turn to the over Crawford would the

Greg Crawford

Thank today. operator, your for participation and you all thank you,

posting transcript this As also deck. our a www.quipthomemedical.com at always, web call investor of us we be will on you can the find and where updated

On exciting products Thank on have the great day. some a developments this and you, the also discussed and site, you of view everyone, can call.

Operator

This concludes today's conference call.

You may pleasant you disconnect participating, a lines. day. your have and for Thank

Quipt Home Medical (QIPT) 17 May 222022 Q2 Earnings call transcript