QIPT - Earnings call transcript Q3 2022 | Quipt Home Medical Corp.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Fiscal Third Quarter Results Conference Call for Quipt Home Medical Corp.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analyst to ask questions. you are remarks and subject remind forward-looking will uncertainties. We that statements to Instructions] that today our include [Operator important risks

the the like SEDAR release materially Greg At as over For uncertainties, and as could MD&A, call bottom these differ on can well to The the reader find this Chief Company's you see performance on of news more statements. the EDGAR. Chairman advisory point, from Officer, results risks Company's turn these which I'd at and information to please Executive and actual Crawford.

Greg Crawford

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

and Executive President Joining me today is Hardik Officer, Roehrig, of Vice Thomas Mehta, Finance. Financial our our Chief

winning leader It extremely a respiratory our our success particular a for strong to a reason care in across been key another over dedicated of tireless is and margin and growth quarter offering XXX,XXX today's end-to-end and the key call efforts my record sequential serving is states, operational for factor that making by markets. like whole continued single us begin every active country. showcasing that us respiratory members strong X% produced over growth patients. excellence, of leading into threaded are their to clinical XXX clear heels It extending suite the Quipt is to On team which across products organic award XX being stability. a in not day our category would a I continued gratitude has

provider a services. at-home vision has been team focused Our respiratory strategic executing our of of into expanding national on

progressed continued significant XXXX, through made. to have see have we As progress we

functions. new our expanded corporate each members at including talented of team base We grow additional many continuing the employee vital Company, organizational facet to with our have capabilities,

by robust driver which a anticipate Additionally, we of will additional as professionals, hiring key have built The quality of growth. has operating model of we record is results. and are life catered The differentiator quarter, the our improving the model for future the enthused consistent sales Quipt very growth, patients. the for we we have all for disclosed track the and marketplace to high-touch last organic be of service we in continued accelerated utilize a key

need Our model results. the supply improving will long-term for third and partners a outcomes, with core range service-driven improve model organically of our delivering the landscape, remote health us this wins solution interventions to the U.S. the is look focus call has scaling control focus on share patient patient a has multiple in facilities use extremely coupled having with the to for on chronic for impact as XXXX care population is through summary costs. Americans economically platform financial trend device grow today, our our scale continued we hospital focus help and business by care The robust can our and Quipt of that products products fills environment on with and and significant and one-stop inorganically and offering the and and admissions of. goals. continued health a focused business delivered and to monitored touch is activities care stress alleviating provide need The record-breaking on health sales reduce on providers strong constant I proud traditional monitoring, suite points which regulatory helping care clear offer continued as full hospitalizations, our growth, achieve this This are of which chain these that on services hospitals, compliance and a clinical our a fostered of services to on our growth been drive market operating such physicians, system. very health education, On early update reducing be care we a year-to-date with current positive a results. of secular conditions home are quarter growing and update as aging fiscal bullish excellence achieving organically a such

contract health We organic our advance throughout to in care have including growth as provider we growth we country. this To pillars UnitedHealth significantly this the out on UnitedHealthcare, seen end, of States. investing and were the for we the attractive make expanded as access strategy, awarded in synergy insurance and accelerating further momentum United another largest key applicable with future our to national accessibility can national scale where expand acquisitions acquisitions, contract year-to-date executing our health patient This continues growth aggressive building making patient the care our Moreover, us. a path. contract network leverage

contract Our to contract continuum meaningful growth This Quipt recently provides with supply additional the in after to initiatives Cardinal for ability go care it extremely meaningful on focused future. Health. produce expanding opportunities, including lines the product us continued is the as announced of cross-selling with our

Additionally, stronger able any the disposable to medical across this give will synergies at new power locations further acquisition contract country, the will the buying expectation contract new with supplies. us immediately benefit leverage providing from being for

current chain dynamics. the Turning to supply

through of QX. signs fiscal improvement We into CPAP of with and allocations devices have real-time QX continued fiscal steady to timely see

For we backlog announced related positive has ease devices. in fiscal trend aware, QX. driving June used not devices certain inventory those time, through foam those a in real is of being of to creates setups 'XX, and continue The at resupply revenue down stands respiratory we the continue headway peak polyurethane to make note a on patient X,XXX a after as which X,XXX, move even a in remained joins to The of up to in the voluntary It in Respironics backlog. over we recall important from as three lag patient approximately a fiscal program months now the on QX. device, backlog set Philips

that Over year, alleviate a represents any continue have pressure our in the at the from to is us. We this through coming moreover, backlog nice supply in not Philips for we tailwind and chain there time we continues the about optimistic to believe calendar as be quarters, a as factored reason continuing forecasting. ease, the supply to

for foreseeable future. the Last On best over in DME DME our inflation X% announced for had our year, CPI consumer environment XXXX. to been to stability in X%. the the operate was less index in cancelizations increases X%. adjustments across price CMS regulatory adjustment the front, ensured Typically, decade. between the X% Furthermore, a has for than XXXX a us well we and program provided The a margin patient continue bid outlook of product mix competitive clear

are importance see positive XXXX, a have equipment our the a the which We these favorable CPI never profile. The significant also has in industry anticipating been on developments. pleased medical prevalent home continued margin of increase more to regulatory and adjustment are impact for we would

business. underlying the to Turning

organic supply strong on financial strength margin in Our flow X% hiring to and led margin of continued by operating another the chain robust continued team operating clinical growth the turned have high-inflation fiscal this as on progressed to seen through the I inflationary fiscal led have we services have adjusted environment. and saw record EBITDA of XX%. solid These in impact. seen $XX.X cash particular, margin which Strong believe maintained am QX, team trends momentum the profile operators, In our from revenue our positive and well, navigate performance sequential worst in year. operators have environment corner at our we extremely and have initiatives of resilience the QX. continued we proud also our continued a positive we side, million, the of

Our a oxygen suite therapy. result highlighted of robust of overall ventilation products therapy by full performance the demand our is for and respiratory

more demand have growth improve, will seeing devices. pandemic of out be assist access also sources, strong will which nice in for are we to continues unrestricted a seen organic therapy, as to anticipate environment the Moreover, very as we allowing which have more the to referral supply initiatives. our also sleep moved environment, We tailwind chain we place

of also receiving care National contract our us our on patient major continue to reflect satisfaction in move the recently a focus This and results the this. chain superior value-based Insurance and outcomes to leverage announced. was continued factor We up capabilities

current remains stringent it active year. discuss deep criteria call that commentary, With very we like very our targets the with over to of meet to results. Looking our expect that at I'd pipeline, fiscal hand third year remain and acquisition to over the our the Hardik quarter to remainder

Hardik Mehta

results Thanks, dollars third third results XXXX representing the announced our quarter available XX, months and numbers, and financial three and all SEDAR the in are fiscal financial full XXXX. In values months ended evening, on that please note are reviewing quarter June nine Greg. EDGAR. XXXX Last U.S. the we fiscal

in million $XX.X of revenue sequential fiscal third up fiscal XXXX generated Company The third highlights. of key from some XX% of are growth the quarter-over-quarter Here quarter of X%. quarter the and XXXX,

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

of period setups compared XX% nine XXXX backlog, increase period of to year, the completed the deliveries XX.X% XXX,XXX ended revenue. in XX.X% of Adjusted XX%. The quarter the $X.X revenue a allocations XXXX, third last the or of third deliveries months relieve is the compared completed EBITDA million an will for corresponding EBITDA for nine we the fiscal the for lift year-over-year. June continue XX, are for and the cautiously $X.X XX%. continues increase XXXX, XXXX set-ups XX,XXX the $XX.X nine allocations year Quipt business. to about third in a resupply devices XXXX, XX, million, months million the Quipt compared ended June revenue significant quarter nine XX, year, the QX June this XXXX, In months CPAP EBITDA grow, very respiratory progressing As sleep the for XXXX, June Revenue the recurring $XX.X of in to XX.X% quarter margin it unique fiscal fiscal for In Greg and to mentioned, represented compared XXXX. quarter fiscal through that seen of fiscal will have Company's XX% device ended of to XXXX compared months XX, generating XX,XXX increase to strong, segment was the increase of was ended an the increase and third quarter XX%. to or fiscal a Adjusted timely the optimistic in of which of corresponding increased remainder last to third representing XX,XXX million the impacted from increase quarter. to Adjusted of increased

related same wages, higher fuel to nine acquisitions. XX.X% and fiscal some ending XXXX, of million expenses the third costs compared more $XX.X for balance the due compared XXXX. XXXX, end to the June ending corporate June liabilities XX% from well for revenue XXXX months assets flow onetime to continuing ending the XXXX. was expense quarter to nine the corresponding than in period Cash demonstrating At $XX.X operations as of liquidity. For was expenses, cash period short-term as increase operating nonrecurring was including in million our the compared June $XX.X strength $XX.X net million months million. $XX.X to million fiscal was in totaled the in Current The

across our build organization, We country acquisition in significant expansion pleased acquisitions geographical third by strong recent the the and momentum and driven to margin as by remaining our very the we growth are reaching stable. organic for favorable these the structure EBITDA through at quarter strategy. margins $XX.X of integration million I'm continue areas continuing throughout fiscal adjusted revenue led anticipate with of process a XX% our to see

strong model of proving driven have continued margins by and strength where its operating ventilation strength our in elevated high inflation for rock was during program. to period The challenging performance oxygen shine, remain solid. automated our resupply further continues Our therapy continued to demand this

country. a position cash firmly better to XX quarter, Quipt have the The through to the that our processes. market management leader today care top us allows in revenue in to at-home from in We also third by cycle respiratory ourselves continue collections as the providers place see infrastructure size effort we within resulting solid continuous a

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

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

Ohio, Since closed operating the and ongoing with continue our strategy. acquisition the us a patients, Louisiana group. enthused are states, pleased U.S. the over EBIT financial and us, and California strong of state active Carolina, Louisiana. of extremely and Massachusetts, added acquisitions, been X.X Integration key across and total with represented the have We the date. service it nine over is million acquisitions represented four four integration. including area Georgia, pace locations $XX our we XXXX, allows key we XX,XXX to integration also to for over revenue have over XXth $X.X April geographical COPD across XX, as results of acquisitions, target are Arkansas, equate million the to closing North ongoing Texas, success patients adjusted Mississippi, efforts strategic in million to The adding

We an are is displayed which extremely our our basis. on driver consistent of on of all schedule. on which the integration has operating the performance acquisitions focused been financial recent It process, our proven and successful integration annual are

will successfully been at enhance across We term event, expansionary very On synergistic sheet which the future all disclosed which potential of verticals this new to future help of of in do million, believe of us convert loan of to CIT a and $X $XX we has in of be of favorable As product significant tiers We XX, committed and On Health provide it XXX% growth, facility a role product have of and new benefit our our existing drive positioning heels opportunities strengthening balance the amount to strong pipeline to going performance, our candidates potential opportunity our to Cardinal contract recently delayed a service we of million, any were a senior $XX looking who our a significant anticipate of continue offering. drawdown of debentures, service current end-to-end facility revolving secured to we a and into currently the August strategy able that's the are acquisition to $XX million offering. supply three Moreover, for notice provided. and states. comprises have relates credit credit facilities aggregate growth. facility to which up million. pipeline

to in long within growth the beyond additional continue meaning next with credit to the It current million. we expect $XX as commitment days. We the important facility is is close credit to XX increase expand covenants, are $XX this this note that facility facility we million, grow, will while as as will

With chip in operators the proposition the robust that potential to with the and market, strong commitment value solicit BME the have fresh we from we have capital we towards sellers will continue marketplace.

across about prospects enthused you. we to We increasing United And are as turn the I already scale States. with Greg. Thank continue our back our will future that, the call

Greg Crawford

Thanks, Hardik.

now XXX,XXX XX,XXX to this expansion, in During of referring has its XX over more across operating hundreds than than substantial patients continued states period completing United States active footprint of more with deliveries Quipt the thousands of locations to physicians. grown XX

heels adjusted revenue active attractive Hardik acquisitions of our million of revenue putting post EBITDA well on reached over we outlook As closed on our meet million the us April, Moreover, rate mentioned, four XX,XXX the way to $XXX financial announced in since of over million integration. July, adding now patients, to $XX year-to-date. in Hometown a approximately have over have run equating acquisition we $X.X and

and insurance significant We added have which, coverage that an important COPD added includes our all personnel, over over contracts, has X enhanced national sufferers. million of area steer infrastructure

Notably, large accumulated valuable strong our future physician and existing us significant created the organically expansion a a new working the payers benefits health by have that contract we scalable national strong a have approach we to accelerating and capture to patient-centric With better ecosystem in able allowing to referring the us and commercial in and patient and give to commercial we them allows eligible market share on payers and patients markets. to work model opportunity provider the is we insurance We this more and are contract, patient-centric growth. acquire are UnitedHealth will when patients continue care National with our leverage for expansion the Moreover, help efforts. network grow aggressive inorganically, to have to driven contracts, built understand platform securing other strategy take we base, additional state alike. we land-and-expand towards

the for and treated setting seeing a ways our with the focusing like grow As core by organization current home look there to components a sources, benefits the whenever efforts of three relationships to referral in you I we It we across are strategy. now would with review at is us continue to care our this is here. to push ensure is important optimal finding patient significant underway possible. landscape, the of

First, we growing key and organic contracts further leveraging such offices and physicians' share novo the as health sense, are on the reaching optimizing infrastructure on adding de Moreover, systems, payers rehab touch boots that de signing includes national cross-selling laser-focused our opening makes patient with This across our locations expanding looking initiatives. additional at our which States, economically to and exist, opening ground, in processes, hospital commercial growth team it existing our through Quipt's sales our expanding novo where centers. points market of service locations numerous new verticals complement opportunities insurance United accessibility, the continuously markets. care profitably major

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

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

component strategy third acquisition. is The our of

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

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

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

target focuses payer on mix segment our of new is a The the acquiring provider. expanding ambition sub-$X on focused across second footprint and our states. being becoming our goal geographical revenue million strategic This with national facet expanding of

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

for On to in have has we industry of opportunity returned conferences. the in-person road States a to on capital United XXXX. NASDAQ the with the meet front, person, Company XXXX to be This exciting of time represented listing investors heels first as in continued the May markets in and has very investor the shows, our

year, benchmarks being Our Russell the XXXX. the the Indexes reconstitution conclusion widely Index annual ongoing Approximately the as on story attend of we Through covering to indexes. strategies. and non-deal funds XX, June in Indexes quality by can. Russell We on investors as The feel investment conferences benchmarked Russell Microcap trillion name active analysts and institutional plenty Russells very exciting we many Quipt road base. are remainder out in diversity to are investment to provides of against are in leading small-cap grow opportunity will in and managers the Quipt we XXXX participating success get work our included U.S. and geographic with index for for getting our the led used which continue assets at as $XX us to the front of the early there, of shows of our eyeballs shareholder

again, and the increase automated productivity. sales sustained continue in scalable into program. investing platform and compliance, our management subscription-based all which accretive remain drive As organic to hospitalizations a the through our would targeted the to and to Quipt ordering efforts These to tireless actions our and outcomes all generation. its the value connected cycle order will investments a effectiveness, in through improved engagement continued their top patients. treatment moment reduce Moreover, stakeholders our serves use I to resupply This monitor These expansion allows its platform of Once support. for early healthcare also us drive like were the automated technology-driven revenue through our plan drive interventions, with for entire drive operating and we payers. priorities take thank to ongoing team and of platform, move encourages balance generation, year, benefit as margin improve model we can efficiencies acquisitions, our cash

Operator

Thank you.

first session. ahead. Please from Doug is go begin the Instructions] question-and-answer now [Operator Cooper Beacon question will with The We Securities.

Doug Cooper

quarter. nice a on Congratulations

sales? First of might start about Cardinal you all, or that Greg the to talk Hardik, generate when can relationship

Greg Crawford

for Doug, today. joining Hi, us Yes. thanks

in So, or the excited that. organization just that pretty We we're and so. in implemented throughout that contract got that the about Cardinal month the past over

So be that locations our we're in passing that start really that disposable of to that to typically certain looking able for on. providing business products things and we're and forward in

to help expect the for of into arm we backside our products of So, some providing lot for as those great we contract as National and that and call inbound Cardinal of especially types would a is Insurance with with us. revenue and a starting supply, see go growth, could 'XX organic for UnitedHealthcare distribution that these on we're

Doug Cooper

be And do you all XX that through available have? think those you will locations

Greg Crawford

Yes, that's our intent.

Doug Cooper

Okay.

has access those Can about a can add This what do And up full operating two high or the over from steadily Hometown past from Medical. do margin include would quarters, a EBITDA ticked little quarter, that how get few you didn't the you quarters? respiratory and quarter talk you quarters obviously, none over bit think a few going contribution think forward? two leverage you the next

Hardik Mehta

for Thanks acquisition the we acquisition the inflationary and XX% would the is market, be is we we pressures the believe contributed longer we've depression keeping the to in the in EBITDA the mind for just mentioned if Hardik. quarters. the revenue. that for could always would margins question. short in in run, encourage something I there anything from in slight the run, an market overall, a be uncertainty short run, This But the when few next new guess make Sure. range XX.X% for to XX%, everyone

Doug Cooper

market. at business is can the their resupply you quickly set the general up you growing market. is and business. just the And their one resupply guessing than masks that's make Okay. guys -- program their of program? And double guess, sort on for. I I'm on particular, so and general talking my resupply almost Masks resupply, XX% conference can when acquisition, question, an get about guys How was I growth that in call ResMed question? greater hoses the a last guess, you for on clip your

Greg Crawford

integrated that resupplies It type that an acquisition Yes, on for get the that in that that it far different factors of and frame. of time targets typically depends and platform good that as fully in to in the six-month our to in just a target of system is onto lot that what on. and question as three-

We setup. that And I really base. think that on to the as we and that's piece get the and missing we we're would of that, is backlog And the out into of are for that missed seeing also environment and current in 'XX now level that really and that that's 'XX lag our underserved kind resupply expect grow of in really resupply. that that in our right in look in at that our opportunities and in that the macro into and resupply setups setups device that we have then kind some from boost that going of

Operator

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

Sepehr Manochehry

your or the in locations. leverage on ability new organic My novo locations. contracts opportunities being to question continued your payer establish about where growth. national Congrats to we is and these think operate think growth currently states in be you locations states? Should would your about comment When new on we basically these on de

Greg Crawford

Yes, get operating we able we're footprint to currently they of be operate so would geographical would is that we best states the expand this They in, in can in where primarily that leverage. kind our that -- Greg.

Sepehr Manochehry

Understood.

Okay.

So putting to adjacent that your basically, you -- in end more you markets just more sense? essentially giving

Greg Crawford

I most having that in states in X COPD in new people. just the so fall of targeting high-acuity mind states that we've over the top million and kind that, really of the highest in been we've that absolutely. patients in that yes, entered And mean, COPD prevalence that XX have and Yes, in keep

target our that's So, market.

very been selective on So, that we've front.

Sepehr Manochehry

some that? sales characteristics historically? of Or experienced of you've adding. personnel that you similar are on you sales adding Are And target you those segments? personnel additional in recent personnel color on are Can touched to new focus. these had you've customer focusing with Or us areas of been qualifications kind give they on Understood. the and

Greg Crawford

and that. it backgrounds We but similar That's Yes. whether Yes, inside, the do health lot they've home really somewhere sales in experience hire or HME also that experienced a our got field, the clinicians. we care in hire have representatives of health do target, industry. be

Sepehr Manochehry

Understood.

Okay. do of And payer last then the one understand have focus. just certain I national regions national payers on some contracts, one

necessarily do you of national expansion hand? not does go hand your additional business for potential So think about contracts being waves next payer to in or that linked

Greg Crawford

hand it in with We definitely over contracts. could medium the think that feel and these national in be there's additional near timing do that insurance We we've to contracts hand that hard goes that. coming type that had that, put regional on of that, signed. example, in in It's it. lot also There's a for adjacent contract think patients other added contracts And to on smaller the term for driving don't growth, we national we other that these the patients our payers. with well a things in that state still additional hospice bodes for of that of but in of have continue really in very some some in Those part a what's put us. we to organic that's we states. to runway add lot that additional we

Operator

is Please with The next Rahul Raymond ahead. from question James. go Sarugaser

Rahul Sarugaser

on quarter. prolific really Congrats a

higher improving a little that inflation us the significantly bit be terms how gross in a Could you you talking then how were adjustments being margin CMS peer think more of you and likely impacted profile believe I and sort some please than other we will about would little thinking of Cardinal So contracts? with have been margins, going by your time? margins also positively combine And over insurance flow X%. sort should around Greg, about into So, be of forward? your been bit of how that give prior color which

Hardik Mehta

you we your mentioned is where of repeat this Rahul, Hardik. Could question couldn't first Hey, numbers hear you part it? the because some

Rahul Sarugaser

Sure.

me Greg. that has said, it you around got I if wrote that down I I what CMS adjustment Sorry. And because inflation believe wrong is X% been forgive

through, if margins So the maybe your the directionality going you well including the forward? flow please gross benefit Cardinal from that as you'll of from see to could contracts as insurance

Hardik Mehta

Thanks Rahul. Understood. for clarifying, Understood.

that believe seeing margins that year-to-date believe you so. would number we or does CPI point we in think XXXX, minus the that it increase. That range, are I or plus factor the for the be in a for

we the For of already CPI increases year, example, inflation this in some cost increase, increase. there with were good But CPI perspective. along had our the vendors that from an to

is think I mature in you year-to-date what the seeing number number. So, a are

we be the -- a CPI we in to where of substantially look could course, that range would and X then price their are say would to is the potential stay If index at hopefully, to be be forecasting and point. just there minus we market say the decrease is But increases at continue here point, in it disclaimer then plus over inflation. or year-to-date now the the in above summarize, that gross vendor point would would right this Of we X.X our margin. terms number,

Rahul Sarugaser

Got really That's Thanks helpful. Hardik. it.

follow-on from quarters. growth So, disclosed organic that again, last your just of the foresee has quick effectively of wash and few factors the all organic and as over you the given undertaken couple rates rate X%, potentially next the activity growth in using then then changing a these of question that Do that is, upward been quarters?

Hardik Mehta

holding sleep quarter and quickly how recover the we thing the organic be we a are one That driver establish growth think the So is side. on is little back rate biggest of really on that would able the now. to I bit right us

through. devices while do able able X% continues on CPAP extent been have the We for able but help we that a contracts are get definitely the and flow to we to percentages that, loan to would would not to overall now. CPAP would the that that it good to the Obviously, points. and of So beat a insurance would devices would allocation quite Cardinal kind other Health we talked see you about steady. be and our incrementally lot growth, that but be be And of be slow providers, provider that organic may earlier,

So, I key sleep the be think the side. on would

Rahul Sarugaser

me the also That's last one question And growth. Great. helpful. inorganic then, for on

the Medical of through of I'm $XXX acquisition $XXX end annualized Hometown million end gets correctly if to the the to million the on doing the calendar math guidance that last of of based So year. bottom your you

the given kind that potentially you top pipeline at hitting that, to, guidance? you that end referred then about of thinking the bottom be you hit Or we the Greg, end should guys that end? might of Now top of actually

Greg Crawford

$XXX we're With that, the run in to million $XXX sitting most about million rate recent revenue. at acquisition

got to we've announced accelerate. that in around that level here. we -- So, revenue that ability be run facility or rate that, still our we in our high X.X the on a close the yesterday in about credit confidence and help that in so to have 'XX. We've think months that will by Recently, that just QX of

run around got So, goal towards reaching the million just to on to year revenue mentioned, be that the high a kind level of million. rate of confidence as end very a we've $XXX $XXX of

Rahul Sarugaser

makes you wrong apologize yes, it around right I'll $XXX I But the Right. if sense right numbers. had million now.

again for help that's needed. Thanks the and everything. for I Okay, all

Greg Crawford

Yes, thank you.

Operator

from next Paul Capital Stewardson Please Markets. The question ahead. go is with iA

Paul Stewardson

capital, a on but in interest margin the Calling for of to for Congratulations the credit the touch there given of kind way Chelsea. Can is a that on low facility, of you reasonable you credit I bit or quarter. cost know old a increased the was is similar times? rate is it mentioned the new facilities?

Hardik Mehta

for, would market on probably Yes, wait. sure. or to to so encourage kind taking past know all people close margin once as the you of We stuff except rate we be be say announcement the would would similar we that had to moving prime versus what the far towards but like be that. in it facility, safe would a formal definitely the certainly credit We

pattern to some related previous margin goes, the that. So a there will what But should was far similar as it be line within changes to be as

Paul Stewardson

terms is that pay see of population? not patients. that little XX% you can about If we a Great. private see a little bit? where of from do you do environment, are up these sort contracting in you very a talk the -- revenue something sensitive? of of out-of-pocket that And business end in recessionary bit Or of patients economically your Do so comes just kind the that of XX% or sensitivity the Okay. economic

Greg Crawford

those these I've supplies respiratory in of and we're Yes. kind the need traditionally years, been kind of that you of of other material business I patients look I recessions mean, back over the XX and it. haven't industry of that, and in at we the in move financials providing seen kind the in of of mean, these of when medical co-pays. kind kind some anything

We as to potentially that in state up of or that see if a don't Medicaid we've insurance they their kind in they Medicaid a co-pay it and or seen could have that. right there. goes the maybe top co-pay program they a of So, over budget pick in where something, occasionally shifts do they're to unemployed move

material see payer around. the there shift have but So, slightly, we any do a nothing we that concerns in

Paul Stewardson

know. from me. just And Okay. I guess Good one to more

the that I of terms the any In business? of Act. the pharmaceuticals regulatory legislation so got But the trend environment, did impact forth that it Inflation have your and mostly on for headlines was positive Reduction know

Greg Crawford

Yes. that CPI additional environment subject we're next now this be bid competitive would mean of I that out we increases year. and to

going to that it that. match in least with what was X% in that it's believe we So, last at year

and been even You've could could run where high inflation involved single actually it now. be digits, rate that and right in the match that match is meetings it what some

So that remains think us. months a be it's out, but few determined. very We we we to for still got find probably favorable before

Operator

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

Justin Keywood

was opening remarks, you the I provide possibly into that be? service just expanding able some if that In heard what of Are additional could mention there to verticals, around correctly. a color

Greg Crawford

remote something things whether talked someone. into that There's current supply about kind also of billable it'd of in the or monitoring it'd sell Potentially or in that all features whether that database. would some be sure. the can urological Yes, into for potentially in and and potential be a the ostomy we that type with partnership directly type some continents we've technology that supplies be business patient that

Justin Keywood

in far or the sub-$X are near-term still in pipeline as opportunities? Very larger for of medium million Would most there then some as heard interesting. that And are revenue. characterize that preference a the thought pipeline, the also I acquisitions or mix I

Greg Crawford

mean three deals mean focused most under date, all that we're on Yes. have I to million we've phases of been revenue. and or I in our $XX closed, acquisition pipeline.

we we're We in of with haven't yet. that that the our of third touched forced do conversion that with now sheet position in phase kind a debt that, believe balance But really that's in puts coming our us look here off to into place of at phases facility and that it acquisition the into all a put new strategy. position debt now that

Justin Keywood

And bid are you are willing the competing peers pretty of the perhaps little for to you favorable strategic larger multiple starting in to some as assets date point, as some for to the up higher have been acquisitions a that maybe against the far larger larger assets? run

Greg Crawford

Yes. I $XX always been competition in that playing under and or there's mean mean in now, say the in right that. in space I we've I'll that. the million

of started potentially due to and where on ensure markets and those still that's continue What that our we too and larger companies You're is front. be for are to accretive deals, have where seen we've terms shareholders. still frankly, look in to companies take that we match that very peer right, market in came they're had much that a will kind that. multiples chance a that market. favorable have kind seen public second on about on of the and with the to But We very, our adding And market, remain is. that some a those the very gotten we're the in front in here we've the that ago, year that haven't on to it that group. we've us disciplined of on for very that seen move And potentially

Operator

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

Stefan Quenneville

I to back deal. Cardinal just wanted circle the on

you to I sort I think the important of impact. just understand to longer-term want it's sure And make guys. I

much assume tailwind So the going organic of thing per margin you maybe you. me year? sort doing be little guys. this then are I detail? or growth products. sort scaled is for and of just But understand supplying more basis the up to lower And in less more and XXX help this is the margin sort XXX running an to up slightly those these of profile and point-type a on of in of of shipping, they're that Approximately, since for or just how maybe

Hardik Mehta

Sure. question. Thanks for the

of to guidance our to any ready kind what organic yet not when kind comes would it growth. provide have are to contribution of We it

We phase XX Greg are our still mentioned implementing staff training locations. are -- still across earlier, again, of and in as the our we

of to So, I be get next handle be quarters. couple this something would would on a we the think able over

that not really sleep to As are believe The questions growth are would sooner that mentioned we would ones devices rate I to other one in impact growth on like to probably conservatively, short able organic moves the the previously we of run. get the our in the materially from don't more we our if say devices the year. this analysts, substantially,

this impact that as again are margin. your these goods you're question, the As gross next to quarters. on slightly cost any second lower in of we which initially in see volumes or next margin to of here material that or really our here far couple tend be lower margin, things we given was the But don't quarter right two, again, expecting on the

Operator

to for will the now Crawford remarks. call Greg question-and-answer hand concludes closing back session. I the This

Greg Crawford

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

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

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

Operator

call. This concludes today's

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

Quipt Home Medical (QIPT) 16 Aug 222022 Q3 Earnings call transcript