QIPT.TO - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Fiscal Second Quarter 2024 Earnings Results Conference Call for Quipt Home Medical Corp. [Operator Instructions] And the conference is being recorded. [Operator Instructions] We remind you that the remarks today will include forward-looking statements that are subject to important risks and uncertainties.

these the uncertainties, results bottom on reader see news information at advisory of more risks please and the release. For the company's statements. actual company's performance differ from The could these materially

turn At the Chief this Officer, Please Crawford. ahead. Greg would point, like Executive call to Chairman I over and go to

Gregory Crawford

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

Officer. home Quipt Hardik health patients is Mehta, and across Financial States. setting a providing our today the services home Medical me diversified Home Chief care a Joining is full medical to company, services the United spectrum in of equipment

through our ecosystem. technology-enabled our conjunction our way solutions at in model with needs. patient-centric in centered suits equipment a in Quipt, patients clinical that effectively clinical treat is best to this their respiratory excellence home programs specialized delivering Leverage At drive around and we

for our people respiratory cardiovascular with approximately of Currently, diseases. XX% pulmonary needs demonstrating accounts product our to the of care and serving commitment mix,

team, strength consists core incredible which our is individuals. of over Our X,XXX

on the care expanding care to ongoing and capitalize care we need achieving, adults need significantly With driven an sleep we million home to market poised for patient United are underpenetrated respiratory the setting. a XX apnea significant XX the aging Americans delivered COPD population, million are target respiratory OSA States. is in scale, This dedication and by the for across over patient group of with impacting

business strategic strategy. quarter updates insights fiscal capital flexible provide allocation XXXX and we and call, On new will second provide our our this into our core performance on

this for to look ways issuer through capital share public we quarter normal capital end As effect, NCIB repurchase a bid allocation allocate XX% flexible To program are up and growth strategy, our our our it create to pleased float. or initiated at value. after relates have all we to promote a to of to course

cash in continued The and not the and NCIB our of valuation program fundamentals business. commitment ongoing reflects shows strong operating create value that confidence our to ongoing our our the belief marketplace does business flow the reflect generation model, in shareholder

revenue year-over-year XXXX, while saw maintaining million, marking XX.X%. a adjusted fiscal $XX.X of In of million, resulted robust representing margin XX%. QX of $XX in we increase growth EBITDA XX% a This of an

Our margin strategy our economies focusing scale on profile. enabled and generating cost to effective of management strengthen

challenges us pleased relief overall of was XX/XX and range a we of impacted with absorbed of certain end in our providing underlying the which quarter, relief with rate the discontinued. profile been margin that strength QX fiscal January X, Medicare our which for performance. had While the we presented geographies are operations, of The financial as negatively

cessation under legislative is immediate its change Although and still a this could negative the review was impact on return quarter.

certain agreement withdrawal experienced the in a of members with Medicare we Advantage to regions, in providers engaged Also, on industry. other due capitated

adjudicated in adjudicated and this to the back manner. significantly cyber industry in to are recently claims Healthcare, ability claims months to in we short-term submitted collections time, half the and through build of timely being the and of drag quarter, thousands backlogs care in Additionally, expect continue process the impacted times of a the cash flow. with the a hindered our diligently In which the on work as creating normalize recent tech cash future we Change are real claims coming health

several a positive trends observed for remainder the Despite indicating we recovery these of path the year. have setbacks,

with make our favorable in relationships up are Moreover, no remain benefit in diligently revenue care referral change the growth quarters working solid. to in provide ongoing We in initiatives, we continue will and come. to there setups patterns which payers lost we providers been hope organic see strong time, health to real with the and for equipment the has

be at capital the strategy. XX% growth updated objective to of we remains and Our an annualized incorporation primary X% allocation believe to our be can enhanced organic rate, attained with which

cross-selling on of model. capabilities, achieving Our been our has positioning focused annualized towards provides resources organic our and our internal growing confidence which growth and into a of remains in continuing organic business growth, strategy product XX% our markets, strength crucial strategy in our target our of marketplace. the in X% barrier our entry enhancing portfolio, insurance offerings expanding reflecting of to This core

consistency economies margin have Our and of been scale utilizing emphasis to infrastructure fruit. our bearing generate on current

any continue management. demonstrating flexible capital strong to a to thanks all drive As operating our a we approach to in ability environment, and margin profile careful

of of our strategy core markets our providing respiratory playing end-to-end critical a solutions Our our of out our expansion success expansion range role sustaining strategic is diverse and major to comprehensive product mix we in plan. a with the long-term carry as

and on as of offices, we increase systems our which driver growth. concentrating growth, main sales physician volume the channels, such organic is main hospital By overall our can

shows another our to new impact Referral Now sleep setups replacement sleep and highlighting and device patients sleep I those with not start recent their reference adherence. manufacturer treatment on leading for would you likely PAP real-time patterns remained supplies on the on device to more positive therapy involving provide GLP-Xs those from to XX.X% compared update GLP-Xs, shared GLP-Xs. on XXX,XXX business data like strong to are

apnea wearables. showed patients resupply over we orders are more XX consumer-driven for Additionally, that new Furthermore, these a significant XX and tracking of promote believe frequent months. will trend data more diagnosis sleep

see We phone to their screen are world clearance watch. of the FDA novo one for sleep receive manufacturers in de excited on apnea the largest to very

from that other major become tech hope available is similar Our companies. capabilities

to these of to million it's a illness We think a Furthermore, XX% the and market number undiagnosed medications estimated and for adults remain in million over XX U.S. the remember severe have have OSA. whom that that PAP rise of of diagnosed to cases availability OSA rise sleep of significant is OSA, with It of that of the moderate may untreated. apnea lead cases in obstructive treatment XX demand in therapy. the for the

market addressable total business We allows their sleep patients developments this large modalities. tailwind can early motivated the goals, GLP-Xs based believe, for care is system time. health and of of for on The more health and for they the towards entering positive multiple treatment data segment be over a of patient introduction work our as extremely

to in which the facts that our CID CID before, we note a are to relates a regulatory civil an as companies gather necessary industry I want authorities a the for about time from for investigative while make known information, it CID As is not CIDs subject And received that demand, to ongoing decision have designed violation request is occurred. informed time. has whether are to to to

manner requested. In believe a and not And compliance the time, in at provide occurred. around billing that real procedures we internal practices. time, confident conclusion reached information our controls are have place a we this government any continue transparent to timely We effective and working in has in has wrongdoing and

are possible, Our do matter we quickly working as as to priority to this is diligently resolve so. and

business. back the Turning to

value us enables drive managing leveraging to long-term for strong approach pursue our sheet debt balance initiatives strategic shareholders. to and Our our that

growth patient consistent alliances care, and continue and we confident establish our exceptional strategy, our achieve strategic deliver implement we strong growth. sustained are to to payer As in ability

over the to discuss XXXX to like quarter I'd commentary, fiscal hand financial that Hardik second With call to results. our

Hardik Mehta

values all On second XXXX. financial March ended we Please Greg. dollars. fiscal results Wednesday that XX, financial Thanks, our the note evening, announced U.S. are representing XXXX quarter X months in

ended to year-over-year QX increase and credits setup the of key of use and increased ended XXX,XXX processes. completed Compared company XXXX, an are the for XX, in the X%, in compared through unique Here unique increase includes technology for XX, XXX,XXX intake served highlights. XXX,XXX months in and up This in unique XXX,XXX its to months some from company The customer the setups XXX,XXX X.X% XXXX, resupply patients XXX,XXX of QX XXXX. company's an QX QX unique X March XXXX, XXXX, deliveries deliveries continued March setups deliveries patients which centralized base XXXX, to respiratory X.X%. X

XXXX XX% March million, $XXX.X representing million XXXX, X.X% Organic was for the QX $X.X for or X $XX compared of to million fiscal $XX.X a approximately for QX months in an contributed for growth Revenues year-over-year. million XX% increased Revenue year-over-year. revenue representing ended increase XXXX, fiscal months ended increase to X XX, XX, March XXXX. the

of QX XX.X% Recurring compared XX% be revenue total revenue. strong is as year-over-year. continues million margin, EBITDA was QX for XXXX XX.X% or increase margin of a XX% $XX.X $XX.X approximately EBITDA XXXX QX Adjusted fiscal million for to fiscal fiscal of adjusted or and a representing XXXX to

XX, to increased from XXXX, XX.X% EBITDA X of X and XXXX, the months representing ended months XX, March ended an Adjusted million the of March increase revenues. XX% for represents $XX.X

was for XX, an million operations the ended continuing March months the from increase $XX.X March flow X million compared XX.X%. $XX.X months of XX to XXXX, X for Cash ended

compared XXXX, the ability for fiscal X.X% For fiscal capabilities. to This debt to and compromising company's expense without XXXX. X.X% improved scale exemplifies QX QX bad to billing collection

deploy inventory defined assets March CapEx when XX, months the for equipment on to patients from of XXXX. fixed the serialized X rental XX.X% we was transfers as ended equipment

to remainder year. We of the the consistent expect CapEx with stay

reported Change XXXX, the bill due flat was back cash claims corresponding short-term and in for on XXXX. The the cyber quarter, the decline was March in a The XX, expenses attack creating on of process drag impacted company million December cash XX, of Operating period to $XX.X $XX.X million which compared as in in to of ending to XX, XXXX, XXXX. cash seasonality X flow. collections hand ability on the March the in the months and to XX%, compared half was recent which Healthcare,

work backlog to expects in historically. have months being coming the they company real are adjudicated timely the claims with are and through a cash in claims the thousands time, to collection of manner been submitted as the of company In future adjudicated like continues and this claims normalize

$XX.X pursuant revolving credit X.Xx. sheet of credit towards to EBITDA to of of net $XX.X million as maintains company facility. the leverage delayed-draw loan conservative XX, with facility debt a company million adjusted availability had The million with March available available The $XX balance and total XXXX, the

aims through management is to that for value commitment our prudent shareholders. our economically this our long-term capital approach scale ensure We business. Our to drive creation

maximizing balance built we emphasizes strategy out long-term strong and capabilities our date. sheet, resources, to including sales existing operating Our strengths, infrastructure have our

resilience is This and centered we repurchase that belief as around from end, the our aspects, We foundation quarter with the grow. an does which initiated our particularly our already future share to our our ongoing it consider confidence reflect Subsequent stability strategy our a on of NCIB. building NCIB program given company's focuses long-term initiation balance solid not valuation capital fundamentals. we as allocation current plan a to the accurately model, welcome growth sheet solid in addition business and rock

second end in certain due Greg we in on of agreements As impact quarter, the members certain the in Medicare Medicare the the the X of XX/XX of observed of with experience in Advantage January the industry. the relief mentioned and capitated other as engaged withdrawal geographies regions to earlier, providers

team are margin this, Despite XX.X%. the consistent strong impact and platform EBITDA a profile our the adjusted in mitigating overall operating we of our leveraging to proud post revenue of efforts of

throughout XX% achieving our basis. on annualized organic to We of our to profile fiscal have long-term on remainder full year. the Moreover, continues a confidence X% driving the be target of which margin an growth, remains priority in

define company free flow or pay equipment free the capital In as a both EBITDA flow interest looking The cash cash those less and measuring at and expenditures, cash non-IFRS senior adjusted and and to its repayment make loans company's also free available of of facility repay as financed to through acquisitions. we matter credit measure in leases. cash flow, utilizes cash

relating of $X.X X% and revenue a payments, fiscal following cash to and/or to adjustments interest flow In prior outperforming any go-forward of X% to service free lease capital basis, to working expectations. QX, million payable. continue to debt or anticipate expense free X% flow but price payments CapEx we acquisition cash prior On had and we

baseline as ahead. going this our scenario see We

With expand on business. our the improving long-term continue objective this as of we to

of inclusive are our cash CapEx confident We ability grow needs. flow, in to our net our

to success with is and strategically balanced an balance crucial our our cash to our interest debt pursue financial revolver to our cash, leverage X.Xx adhere positioned approach. discipline are commitment both robust to inorganic and a rates to and strategically continued through million in we we mix utilize prudent a sheet to disciplined reflecting with of to allocation growth. high to navigate well capital and will Maintaining approach availability ratio us $XX.X environment continue strict Our an positioned avenues in strategic growth organic of puts exceptionally and of a

Lastly, it investors. related international a would change X, qualifies has XXXX, private our financial This ending GAAP. like auditor Generally company our to upcoming no reporting company and October to Principles XXXX an XXXX, U.S. I financials standards The for the September from a longer as XX, as aka fiscal financial fourth Accounting issuer, to the and to highlight reporting foreign result, quarter GAAP. determined under financial will that will statements Accepted transition our IFRS, with prepared starting year means aka the U.S. be of effective

reports be SEC company XXXX, XX-Q X-K. reporting financial requirements effective the the the as and as as Form filing October to to and reports and well U.S. disclosure file and on that will periodic applicable domestic the XX-K means will on same also with X, applicable It to company subject required statements current be companies Form Form

forward well comparability looking as is it improving industry. with States all the peers accounting our as operations are the to our as transition United within we to this We the align in being standards of important to believe geography our

And with I'll update, that turn call back Greg. the you. Thank to

Gregory Crawford

Thanks, Hardik.

to is in This markets efficiencies and also our overall operational and creating focus enhancing objectives, agile remain we and our not only competitive strategy. efficiencies coast. we infrastructure, organic in automating investment boost on processes improve By but supports to aim long-term Our to outcomes. our coast essential ensures costs patient operational reduce growth generating productivity, our key

bad our optimizing and eliminate as generate expense our an and workflow points our By debt and have benefits friction we in billing procedures throughout seen a tangible department, to decrease net such increase cash collections notable our flow. in

to growth, and of share are business flow Our well enhancing cash as economies And reach flow driving to strategy, us and margin financial as scale free organic opportunities they overall to that advantage growth generation as seize us long-term within drive on flexibility looking allows at the focused profile we of expanded our retaining growth arise. market our core generation. and allows take cash margin our

respiratory leveraging long-term we by clinical market driving First, our growth are organic unique positioning care. in

prevalence an an Our objective XX% X% population, need organic home-delivered significant aging supported by for sleep market. to an driven underpenetrated of be will annualized expanding growth services COPD by respiratory and apnea

broaden initiatives The solution core path of is exploring continuously product our as end-to-end through market expansion our we portfolio, cross-selling and are and to opportunities sales product penetrating new markets.

relationships aimed payers initiatives deepened growth sales health volume-based drive geographic and Our targeted access to through enhanced gain providers efforts, desired areas. and care with to

to This existing team with a promising needs our portfolio offering our by segment, within increase we As represents CGMs medical value the our to base us need market provider necessitating leveraging position unmet significant not the our addition our opportunities, product to products, enhance without ecosystem. to the a familiarity to avenue This allows to comprehensive our a offering are our care This our supplies. in presents relationships in it for including strategically diabetes their cross-selling new relates move established bolsters patients. opportunity product also any patient only initiative an patient This but entering and base. address strengthens expenses. cross-sell as and SG&A related expanding home equipment of our sales

sleep sleep population shows patient diagnosed apnea as diagnosed that patient been diabetes type our looking The many people to patients, is XX% also X population. as apnea. very research have of existing diabetes And complementary with with at clinical

on into flow industry reinvestment and positive ourselves fiscal long-term area to our and our cost positioned enhance help reach initiatives growth on margin focused allow well have cash focused critical in scale as cash margins Furthermore, adoption for overall our structure with promoting achieve of generation. investment in economies will operations optimizing by flow. This aim we in are continued generating our this of are we we and improvement Second, XXXX. we and and scale streamlining e-Prescribe

the the cut outcomes. And is essential to to down compliance improve can prescribing patient serve boost errors, and as Electronic boost on technology productivity, industry.

come patient than provider to X% prescriber over eliminating by experience reducing less now, this our giving will of significantly e-prescribe an of paperwork. and and us inefficiencies we and As time, opportunity grow orders the from anticipate improve

cycle all which a patient plays as illustration resupply as helps Our also only revenue to technology. not program resupply but the automated It well The of therapy, patient. life the excellent it we us extending how another us higher in driving long-term benefits revenue rates platform acquisitions. strategic use is also margin us when role recurring compliance organic and offers the with growth, adherence we make achieve synergies significant crucial and

Third, successfully towards Since candidates synergistic is in on focus have to and they acquisition allows as acquisitions meet financial flexibility than us we totaling million criteria. our XX prudence integrated more allocate XXXX, stringent our capital $XXX revenue.

management, Our debt synergistic modest expansion our enhancing positive arise, our in cash enhancing on support strategy operating investments ability long-term offering. our and to of acquisition go-to-market will centered market to leverage, net they strategic and generation in disciplined our approach objective around as our platform focused respiratory end-to-end opportunities invest

we size Despite well of in and of represents revenue our XXXX operating of business in metrics, as the one the last as growth our years. the current valuation adjusted public have of EBITDA key X quadrupling traded the since terms lowest continuous at multiples the

our time, us capital opportunistically. business an the overall shareholder real additional and strong allow to value will Given as that avenue we consider NCIB disconnect, deploying that of in fundamentals announced enhance to

meeting with from actively be are and our investors investors expect objectives growth discuss throughout to the active with long-term United we States XXXX. Canada engaging very Moreover, to and

us to sustained organic Our our by growth, success. disciplined strategic well synergistic for on positions approach supported acquisitions emphasis

our model. business leverage scalable building to efficiencies, a to and internal resilient ability underscores operational resources Our commitment and

we to central focus As operating will environment, strategy the on is value capital our deliver to our to continue our navigate flexible shareholders. our to remain efforts allocation

fiscal is challenges, summary, well laid out. our positioned market have positioning, posed our we are scaled platform Medical operational achieve to several strength Home clear. business the model growth temporary resilience QX while of path of and overcome and sustained In the the underlying these setbacks Quipt

of expansions. are We navigate further for to challenges positioned we well extremely as these continued opportunities our seize the appreciate and support the investors

again and Finally, I work continued for to team once tireless stakeholders the to take support. thank want for their this Quipt their chance entire our

Operator

comes Instructions] Genuity. Close from first with [Operator The Richard Canaccord question

Richard Close

for and the to XX/XX of headwinds. job believe questions it the was guess, be the that some in Thanks surprised on Yes. away, the given With minimal past commentary, I good business. going of on to based a respect the I was margins, going of I and some little terms to

into, So since way is be months XX/XX about that had out, it I the factoring was impact how can any And until lapped. helpful. that's you we guess, quantify 'XX the there the second should would in That called quarter? of calendar remaining thinking be

Hardik Mehta

Yes, going is the XXXX, Richard. total going Congress to revenue. when expecting to on was we in X.X% the that of back impact sure. Thanks, XX/XX not around estimates, the to -- was current approve early our Hardik. of This We our were our this be estimated Based it.

our working was was that our so As we the actual far as that off. what internal that were working estimate -- was

are one with happened us going that, that because in the [ that's Healthcare us ] through better. to to -- a are relates not is data given far tough allow as Change not what which actual everything in, it your would little there include because and the As consulted is for to as ends coming QX very the quantify and claims impact

data of we are those we have -- of something waiting good our is resolve submitted. we from out that also of that kind coming some get eagerly claims things the and So as

to So -- but January, back going we of thought estimate Congress act our when frame it. in was that February that kind is on time not

Richard Close

growth an XX% number? on headwind the I was to you X.X% organic Okay. X% that to X% And guess, target, X.X%, was that XX/XX in provided contemplated XX%

Hardik Mehta

the number, Not we X% hopeful that included the Congress XX/XX, of would those some the Medicare we from fully. our were that be the was of with it No, away time advantage to in at anticipating the one networking was XX% were most things. going time at that likely in

at we Now be decrements say are believe bottom baseline, do least year. at the I since we do good I we don't want point rest a to that about revenue, of mean, I see talking further this a to seems this for here. like the good but think from

hit maximum the whatever it taken you've think was. I

Richard Close

Is So is growth organic you're what baseline? good the X% saying? a that

Gregory Crawford

Greg, Yes. been additional which organic baseline in quarter here what Well, that so. this that and that this start what think is reported factoring that we're is been, revenue in X% has this I and we a growth historically the saying, good to or around

Richard Close

or really Okay. pretty headwinds based some And quick. just impacts on supply aware quarter, talked stance on the respect of? some then you're guess, ResMed any talk to your about on Adapt thoughts a their resupplies with Red the just Sea supply current conservative I you seeing took whether be chain, second about supply Can chain anything environment, sleep chain.

Gregory Crawford

X-day relates that that, going supplies up in issues Just or orders kind As so, that's X- maybe delivery that days seen haven't any nothing shipment chain to we on a things really but a anything that? from have to and disposable we it time in any supply seen slowdown the XX of in devices or week, delayed. and or back to

preplan to So the rather when kind preplanning were kind historically kind we that -- we that back little and of this we a we we've going than that in industry in historically, to brought better time. in in out pandemic, of of just and kind brought had things of have we just had than really

Richard Close

coming details balance about obviously, any out, to, terms to and as more -- take in of think while normalize levels? you a respect that's see flow sheet cash how to final timing impact some Okay. back Change you And to my going or normalized of from impact, the question that with work

Hardik Mehta

Yes.

that. on working like stuff have an exchange alternative and we been So actively

like in starting we've next as half month second at and the over we here issues here expect backlog of But at it hoping would Hopefully, pretty usual. and that to claim dropping there of by point the stuff that -- kind is are some XX of to least have collections May, and would secondary and we some and we that going least of the a invoices would in work that. would those and much kind to from to days. April, out. made -- to be and be terms has progress from XX June, of getting claims resolve There claim So then it the onwards, process process kind of starting business backlog recover the like [ postdated be decent ] the patient

Operator

with The question from Doug Securities. Cooper next comes Beacon

Doug Cooper

A couple of things.

of I you to want just for that First clarify said Hardik CapEx. patient something all,

revenue, XX.X% $X.X XX.X%. Is said that roughly? so of million, You

Hardik Mehta

-- mean of look yes, right? right. about actually Yes, That's patient right. the I Yes. if on that's CapEx at balance you one is our items sheet,

Doug Cooper

Okay.

program... resupply the So

Hardik Mehta

million. $X.XXX It's

$X.XXX precise, footnotes. as of be part Just to our million

Doug Cooper

million. $X.XXX

-- are versus versus where think that's I if here, put that's numbers And did Okay. year, correct my X.X%. I last it

Hardik Mehta

right, that's right. that's that's X.X% right,

Doug Cooper

Okay.

Okay. how what was The in in resupply in how do bit quarter? the you resupply the you Can contributed little about quarter resupply a have and the that talk terms patients revenue many program. of

Hardik Mehta

that one, of or the down that be X first quarter this a typically to quarter months to I shy are was revenue just the for these very by trended supply first tend just of little really don't reasons, bit. We're seasonality really, mean think anticipating quarter-over-quarter quarter, We segment. to up there the -- this see calendar rest were the I we was coming looking month we the at dip strong really a deductible revenue. quarter in going our similar break resupply December. our But

occur. just strong very at last quarter did December for looking strong us. was and a usually quarter is And quarter-over-quarter, extremely an that So December this

quarter-over-quarter we to those X down when some decline it did so And for see resupply reasons. comes

we reason Healthcare some saw third about whatever the talking decline we the overall. then was And just are Change

didn't just more ton Advantage as we to factors. these to see -- We decline think Medicare some I the lot didn't related decline a X that. Humana was see a or it there but of relates

Gregory Crawford

year-over-year, strong our to Yes, seen beat so and year-over-year, that the have fiscal actually and we but the not QX going -- an -- that QX did was that. just increase wasn't fiscal

Doug Cooper

Okay.

the an diabetes on about Can organic -- the opportunity diabetes. your strategy. in just is expand little bit about that talked you maybe or Greg, a the Okay you on this just initiative

are the exactly moving exactly to you're -- doing? what What strips You're or going to be you selling into going diabetes. be

Gregory Crawford

Yes, we're process this kind going to CGM across the the to out and the that that already positive in we're start supplies here territories providing We've in entire rolling some patients. some the sales had in organization. team and have started and results, in of of quarter it to

Doug Cooper

margin what impact does this from Okay. And What margin bit year of would do assuming than initiative? X... you think the lower that kind profile be profile diabetes, I'm is little a

Gregory Crawford

we a number the on be sales now don't that we're to on And it absolutely. how because to put just right successful know it's Yes, going hard side.

we'll something about. think coming speak quarters able be we'll I to to talk the probably and that's in

it's far a with anything just CapEx probably As in And as lot so. But that. or there's or the it's then XX% that, range drop-ship. in the remember, of no margin XX%,

Doug Cooper

XX% EBITDA the is to basically I'm XX% what margin of gross to fall would unencumbered So [ hearing that intent kind ]...

Gregory Crawford

Correct. Yes.

Doug Cooper

Okay.

And so have with so and you relationships forth. now suppliers

opportunities So this business, CapEx real any right? this? acquisition And in is involved to get there's there no into

Gregory Crawford

the just of Yes, are patient pretty be. within the demand kind the we're into back and of results the we've for our the off calendar things positive that half past there going early just that that in Those on looks own could ecosystem that based in But that. went seeing passed and historically trend year.

Doug Cooper

a well-established I market? in competitive the obviously is for diabetes What first would it's think designed diabetes that say which market. I'll specifically Okay. is pretty the on having impact market, place. the GLP-X

Gregory Crawford

on Yes. our say, internal current or networks. into relates I any to relates as have information we're any and it don't We mean patients our I selling of kind focused should that it right experience, lot a just now, referrals. market. then as doing to know what the And requests that get system. we a current and started GLP-Xs we within receiving for of lot then the of CGM the supplies CGM also just We it's in that our -- in

market. kind to kind enter us that of I of that in think prompted that

Hardik Mehta

I away base it's an us, -- have really from not right? get it's we think Doug, like is and for GLP-X don't taking ground it. So zero, existing we the really

I us, company. cross-selling really opportunity think our into patient an growing with for untapped existing it's

Doug Cooper

get Right. But patients ease them else of clear, it's now, supply their an to a maybe assuming these I'm are just to use but stock right getting provider? be just X somewhere from

Gregory Crawford

Yes. we're it. But receiving new referrals. Yes, also of yes. part That's Yes.

Doug Cooper

for diagnosis, example. fresh From

Gregory Crawford

Brand Yes. patients. new Yes. Yes.

Operator

next question Sutherland with The from comes Company. Benchmark The Bill

William Sutherland

I initiatives, up your pointed diabetes pick maybe organic markets. interested the plans sales the expanding the of color force? kind growth As if cross-sell could out with and you provide with a bit? you Greg, wonder I was to there in and

Gregory Crawford

we kind 'XX, fiscal Yes, to that's was that the sure. because with on diabetes do we certain demand well could And in markets where coming. in testing the the see that side, that how started of CGM in that's

in good So us. for that the looked early signs pretty have

the So around process that expanding company. of of the rest we're in now the

organic growth they don't that. in side certain that, we clinical areas And the and rest and expect add on driving kind lot continue that have we in our of or that been the the in coverage into team either team of that's continuum potentially seeing supplementing to of are where throughout the that regions as that sales sales to in continue to the far year. As a mean, also new that, as what's I

items. clinical basic respiratory selling our home have but our vest not So other as the might events and equipment, such and percussion medical we somebody just related selling

William Sutherland

anything have Is you there or ongoing there time. conclusion you kind sort sure payers of all you? national reaching the Okay. some think for negotiations Is of with -- discussions I'm

Gregory Crawford

this imminent Nothing point. at

William Sutherland

fair the to then guess, and with going last Okay. the buyback for me, that And capital I say in M&A? in deployment that so much leaning place, to is towards not be

Hardik Mehta

We that. wouldn't towards say leaning

do the the make right? mean, way we were having the day, value so trading create think value, at we created, of option that at sense. to end whichever shareholder levels to the goal shareholder is that we And the I -- opportunity that I more and gets believe

strategy. -- inorganic We strategy, part M&A changed. that that opinion in still the in believe still we growth believe of So the hasn't hasn't and the

have hasn't focus where shares just the wanted optionality were given that changed. So to I more trading.

Operator

comes Sarugaser Raymond Rahul James. The question with from next

Rahul Sarugaser

before, cash Could adjusted the free we you maybe to EBITDA So that have new is flow. see -- given shift free missed financial a that talking I cash from statements in for noticed there's We may flow, flow. about cash EBITDA exhibit a can proxy generally give to color if a seen $XX maybe give we cash around color little EBITDA the peer in between us your we've adjusted also spread free see there a $X you to possible. that million us And flow. set, relative little more the more million as adjusted

Hardik Mehta

I the last was didn't What get the sentence, last please? part.

Rahul Sarugaser

peers likely do treatment? this how -- -- And treat how also this your the

Hardik Mehta

Yes, sure.

in So I have CapEx? terms our of was does to peers recurring a of years looks over question modeled guess where it this that relate way. is the a it kind And how like EBITDA,

conservative be we CapEx. way and do to less business to that of say of do most presented was PP&E, we one the has single kind question. kind the our And what the flow every peer-to-peer whatever financial a we So of I we patient at additions comes trying every our EBITDA pretty since our over the up take years, topic every the -- we and information give looking to call, have time. is under would in was publish always this single through quite over were, by conservative of presenting business where much attempted information mean been. look number. recurring frankly, PP&E a best to at way conference get most statement this here that's way been to quarter if cash on this somebody trying This comparison And a that at

as And I there's I very how and our think trend doing are mean do I always would far as others similar. -- reporting. We that accounting around peers trend, how nuances the say

do So of would be seems not on it But that. we comparable. it kind us that then comment to

Operator

Stifel. with The next Justin question from Keywood comes

Justin Keywood

be to on revenue interpret the expect the given tailwinds? year less commentary circle headwinds correctly, should and If want and revenue steady on the this it back more I around just I to offsetting or growth. we

Gregory Crawford

to baseline -- of that would of back to we that revenue sequential to the historic forward get the our we quarter-over-quarter fiscal for expect the be would in that in kind go 'XX rest this Well, X% growth.

Hardik Mehta

Yes.

is think past. I the So I growth seems like for like think I have differently, organic quarter, on this seems like baseline what put number the a I -- dollar we this we how what were done see this perspective, from guess dollar here in quarter-over-quarter, -- from a think should we hopefully

Justin Keywood

impacting opportunity or that the way. space at favorable operators acquire I some a more these Is And market headwinds of operators the assume profound some multiples? smaller win to DME potentially Okay. these are in very in an of then share

Hardik Mehta

so, speak couldn't seeing sell-side inquiries translate increased right some because necessarily inquires valuation? or into more we seeing to I are does that, some that are now. the but of the couldn't speak over sell-side We that it I sell-side Is -- last month inbound inquiries better inquiries. headwinds, to inbound

Justin Keywood

-- like growth do baseline leverage initiatives any cutting costs on you going to as have finally, far as you here improve good And forward? feel our to going Or margins? a

Gregory Crawford

Yes. We in to think we're to grow. continue built that

that's you still XX% despite would -- seeing decline you're probably if margin think the have we additional or in the strong seen you have I that. would revenue, maybe margin so. revenue, in even I plus mean very why

a margin. I of think thing strong is that one and we've got historically history delivering

the expect would to we So fiscal that continue 'XX. in that throughout rest of

Hardik Mehta

-- And and coming staffed it grow. way if question, have differently, do think Yes. growth are I maintain still it would asking to would the try you're be reflect think you that blend cost? in, we what whatever do it think margins. will just the would to react we required Greg I'll to have staffed the is we cut And I does Put and and as now, I way, our you the keeps add the we yes, as far to if is opportunity right And margins maintain said. not, to

Operator

a Canaccord Genuity. have Close follow-up We Richard from with question

Richard Close

little shifted pharmacy respect channel. encountering CGM some sales a thinking force on have that to in adding how to Adapt from about I'm you're business the with guess the been curious over are With then I was you DME diabetes, that? medical as here. channel I And couple a bit like earlier, reimbursement And and headwinds diabetes? they've

Gregory Crawford

sales the that, answer going current to sales of team. is are adding our the second sell into any in that referral part right To Yes. just -- sources we current this not with in that

they're This sources. are in currently line. For to The along us, coming the we referrals to and so customers and with asking us of that. the in we provide the of an kind in bring this that us that to the That's that to us opportunity this. kind patients just to at what's patient serve prompted referral this product are have the is look into

Hardik Mehta

got right? approach our We're to very this. simple is of an they lot amount To putting this might activity I -- what capital And we inertia did. behind big would part complex, It's more enormous one of keep comment it on mean, it but around they a that of Obviously, was I here. or competitors, think part, our have and M&A process. have not that was there a product

more do I just for thing better lack like think are cross-selling word. it's just a one in this that industry, when and it's of you you more

Richard Close

Yes.

Are Is and additional -- here appreciate those quarters. pretty impact with all Okay. that respect this arrangements. Humana capitated in to point? all won't any that. members then at much I And upcoming see the you done

Gregory Crawford

in from to of roll rolled conversion states, handful of and the a off couple we've perspective nothing material. that but say everything is but a that, has got it's off in patients wouldn't relatively still I done, a revenue

so And stopped they anyway. paying us

Operator

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

Gregory Crawford

for operator, us today. and Thank you, thanks, joining everyone,

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

Operator

This concludes today's call. conference

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

Quipt Home Medical (QIPT) 16 May 242024 Q2 Earnings call transcript