Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to the Viemed’s Fourth Quarter 2022 Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instruction] As a reminder, this conference is being recorded. pleasure [sic] your [Chief my Chief Todd now Officer Financial Operating is to host, introduce Zehnder, It Officer]. Thank you.

You may begin.

Todd Zehnder

Please uncertainties, actual are include the collectively and future refer Thank conference applicable Canadian results Such or Doug. note or as which to remarks under our subject certain you, vary statements we indicated legislation, in forward-looking call respect information may federal to forward-looking forward-looking reflect U.S. under from to cause securities intentions in the statements with which securities laws that risks this events to forward-looking and company's results events and could views those or statements. statements.

are of place undue Examples uncertainties, in regulatory disclosure in not authorities our with these investors provinces should forward-looking the on of and documents Canada. of risks securities such certain uncertainties and Because discussed statements. the risks reliance filed SEC or

made and revise no The call year-end in this statements made release, conference financial are statements results forward-looking the any to today, as by obligation related on website. as news SEC's except forward-looking law. of are financial the required The undertakes company update statements including the available or

Casey I'll over things it to get now turn started. to

Casey Hoyt

care by patients acknowledging tirelessly support health are worked as to thanking staff I'd fourth year-end our current always, behavioral administrative and best-in-class view everyone, you Thank Good specialists, to of serve. results, as we well on operational you, deliver industry. as to providing Todd. morning, like and therapists, our the and earnings I'll commentary the of to for quarter joining be privileged thank dedicated professionals, Today, our and call. continued the begin, and our strong team outlook staffing respiratory who

XXX At year-end, our family to employees. grew Viemed

We are momentum positive tremendous we as currently XXXX. enter experiencing

industry, access OIG desperately a care. was the more but only not Viemed, of win for to successful who need recent significant this for and appeal our importantly, Our findings patients

company this in at company right all record right audited Viemed set reversal the that overall audit provides charts straight time to a our therapy really The of that been the allows patients. always for the has

a validate We in with further capabilities. confidence sense communicating value help our of these results based network payer and to have positive renewed urgency

preliminary environment we of seen regulatory it be as in stable including our in Trends Furthermore, reimbursement continues December unlikely rates between our is of round X.X%. X.X% CPI-related inception. schedule, view rate increases fee implement XXXX activities program. planning to the bidding are the the have the CMS' to we and January due believe extremely competitive X, the as since reimbursement announcement Also, necessary to of reflecting positive, a timing for

the positive about contribute continues trends data margin optimistic reimbursement our which support innovative expansion. makes our future maturing business. business, us and of to should incredibly industry the rates as respiratory see complex We These

chain remains secondary. many At Our is manufacturers scene strong service being the supply and equipment products primary in XXXX. additional Viemed, devices and excellent with with to coming on our

We have always device been agnostic.

our space. drives improved equipment in technology more healthy creates having a one and So, further and competitive options environment, and quality that pricing manufacturers

sales pre-pandemic robust in in with levels. quarter maturing we core most new for their importantly Perhaps of business the revenue our our fourth many approaching saw roles our growth reps

XXXX subside. Our promote to and continue operating growth headwinds continue pandemic to strong from current should through as environment the beyond the

more means customary sooner. able Viemed again fashion, our which patients to were We get a in

ventilation of we hospitalizations recent impactful rates study more most implementing earlier by therapy. cost and proves utilization improve be non-invasive overall published can savings by mortality As and the reducing

across pulmonologists large industry Officer, Our study and Chief been has Dr. experts published country. the Frazier, Medical most with audiences actively sharing the results William recently the of of and

is driving and our and network sources payers data active of network. to value. awareness in been also distributing force the new our fresh This our referral development sales Our have amongst teams the

We with growth strategic are to acquisitions. also opportunities well-positioned organic on our execute supplement to incredibly

sheet, position upsized execution the transactions. the immediately all on debt access and refinanced, for are repaid significantly in to now we the of fourth funds credit commitments quarter, the During balance facilities on and our

we of As our valuations acquisitions our point target strategic negotiations companies that provide that investment. continue indicate an to on reached have for thresholds strict can our fall, of identification inflection in return

M&A expect With two addition recent a to we XXXX. companies, fully drive of strong pipeline have transactions the experienced which key executives, target of during we

necessary planning diligently, processes efficiently Our management companies. developing and team new integrate to has been working integration

In acquisitions. have XX accretive facilities up to credit from available of new addition to to we hand, cash our fund on million unused capacity

We our [ph] are home strong Viemed advantage, leverage quality are culture. high medical typically strong equipment fit our for and have acquisitions, and payers are referrals targets which and Viemed’s expand competitive a providers with targeting and reputation sources. [screening] geographic footprint, These

platforms. We that also well e-prescribing, benefit as real-time maturing operations, high-tech from as including the of target our and e-ordering companies patient connectivity, can significantly scale efficiency processes, and our

frictionless progression facilitated ModoHealth. and provider one more and strategic into technological our investment in patient complemented quarter XXXX certainly fourth growth a Our that experience,

and of A health connected overall care our to flows. stands care Engage, leverages outcomes connected management healthcare proprietary coupled with automated costs. process software, our health health lower model a platform has to Due high-tech adopted care organization improve that connected to development

progression that based Viemed, data which enabled our supporting our our evidence arrangements. confident healthcare towards large and reach populations incredibly ModoHealth, are with the expediting of [ph], of to centric we We through value are excited can patients companies like data relationships. aggregates the new we with payer [VA-Pilot] continued Along launch partner tech-enabled with evolution

increase active year. our hard to growth relationship representatives are expand are was network a existing during the payers Our in our with we Included strong sales XX% headcount and through in contract development. working further

highest of Staffing. by continues recruiting our growth net division, turnout, it Viemed our history. substantial in supported of healthcare force headcount was Healthcare sales making the specialized Our sales expansion to be company's The our

demand and recruiting data VHS and use is internal labor quality the sophisticated of analysis. proprietary quantity improving the and through our hires tools of

about which needs that our is patient a recruiting tactically areas are data highest As our organic in is engine labor [ph]. and in and the the and stability specialized labor, informed With business increasing we new line excited growth result, targeting [build] available. payers of we strategically supply and

is Staffing Monthly revenues, diversification revenues and to compared to in with growth strong lines. of along our XXXX. Healthcare of oxygen the product in also growth ventilators sleep represented non-vent XXXX, Viemed from in rental revenues contributing and overall XX% XX%

the our disease [ph] are our and products and other pleased and of remains to growth pulmonologists very and of become expansion The referring broader across respiratory in of services, a for care trusted portfolio strong serve physicians. services allowing complex [state] products the incredibly respiratory and with of a rapid us we extension patients partner

able on service. remains create with high Through technology-enabled focus of level within space, respiratory with medical our Our a complex our products we and relationships disease home patients are of that diversification fleet states. earlier their strong to quality in services

diversity and between to which portfolio, in throughout services a XXXX. faster products expanding the of cross-selling synergies recurring to and longer-term resupply revenues, rate the products addition In contributes we see at

financial With activities, over to now capital I more our Todd and Operating will updates, regulatory our turn Zehnder. Officer, results, on Chief the call

Todd Zehnder

well full available U.S. all on financial figures the website, as In as reviewing SEDAR. the and dollars in the have made results Thanks, results, been are SEC Casey.

quarter of as the Our increase. fourth a core of to XX which revenue million quarter net net XX% compared to $XX.X during business XXXX, XXXX, generated the of million revenues of equates fourth in

sequential growth for was Our X%. business core the

core indicator to approximately back rates we which related that the before business growth increased revenues to pandemic. the that our is Annual are XX%, a levels great saw

as high future growth continue we We’re optimistic therapies continue rates our into to the patients country. our that we organic able to more will the be getting around

very percentages core business. are again COVID margin business not EBITDA from just Our gross once healthy impacted and remain and lines, by our

of margins margin later and During profile. we made XXXX progress mid-year on during our turning we great our update, expressed our around the goal

notional to We our mix by being see growth. to pleased our continue influenced percentages margin continue product be and the by

came Our and EBITDA at XX% the gross margins and quarter during respectively. XX%, in

Our fourth and million, quarter, at million amounts EBITDA X.X came respectively. and XX.X in gross

was compared fourth in quarter our as to of of revenue approximately core from vents fourth Our XXXX. XX% XX% the quarter revenue

XX% in margin. came EBITDA annual which million, was at XX a Our

scale growth continue should to light to of the across lines, all we product economies see our targets. even build in of aggressive As extremely of scale continue we our

the in and is the of approximately million, the XXXX quarter XX,XXXX third for from XX.X totaled SG&A of approximately down quarter XX.X fourth Our million to as compared XXXX. quarter

period. We inflationary to have mid-year call navigate on been aggressively expenses market quarter managing our during that to We our work. variable the conveyed expenses and current we testament decrease as would to we continue focus is a the the that

growth we our said, invest that that can all continue in outcomes with of the any in clinical help to With patients. measure

products and product supplier CapEx will quarter, lines expenditure. this the continues approximately a we we through capital on X.X as our all grow to million or network. to all continue of For major The be spent across diversified manage invested

inventory of supply any see to and result procure not have chain business ample We continue issues. to opportunity had a away to as turn

have of as cash We couple again have years. of where during growth our as once funded CapEx in with is all a high seen quarter a patient organic flow we discretionary

and with as that has our ended regions new in balance a of the we and happy is cash the capital facility free XX place to We our debt conjunction by were facility. closing led put Whitney lines, new December Along had in those pristine announce million Third credit of credit continue to balance participants. a year million. We we also have Fifth at where sheet of XX.X an XX, working overall

structured The positions facility the to arise. loan general give us flexibility needs feature for term is that and for $XX a million to any tremendous use revolver

is million our feature Throughout M&A there reduced exceed buyback. the through that share Additionally, $XX that XXXX, is our accessible the a our accordion in opportunistically we easily count original efforts stock event facility.

X.X back we’ve During million the quarter, we purchased approximately fourth for the and shares year shares. XXX,XXX bought

targets. not as on decided actively for sheet we have some have few last lease been We opportunistic during months to the acquisition cash the balance buying

X% balance we balance XX free, So, recapping bought and have of a sheet a year from are of approximately debt stock. cash completely back million the our perspective,

organic We and expect from business. grow additional to flow generate cash our free to continue

successfully CMS NIV day asset our Moving current were received as million our opened pleased claims ongoing related year-end was sheet. issue January through OIG a we that over the to on our The with was last held the X.X claims, extremely the process were the to and ALJ. amount to and balance resolve in

our for is access care guidelines rewarding. continue for We most advocate formulary to the is more what patients but NIV, to for

on revenue related million the Moving of mid-point of XX% to have business. XXXX. million the to we revenue core core guidance The first up to our our first net $XX quarter in is provided the $XX guidance range over quarter,

lines shareholders our and mission once in value again activity last the visited the existing Lastly, many the describe with of prop. our we over our new to few along markets, and have months

to trip some call York we held [back] New visiting a being our Our call conference is the next we'll set will on The to but unusual, but today timeline time Nasdaq and ringing with bell Friday [ph], investors. Monday, a opening next week. spend we the be accommodate on pandemic

it's that appreciate believe to continuing to and Nasdaq. been company X.X build look hard our our have. on great our years again to It's of shareholder that support a once the we listing since forward mission We on

I'll up. time, wrap this to it things to turn At back over Casey

Casey Hoyt

you, time Todd. exciting incredibly ringing opening Thank The Okay. bell ceremony for an at Viemed. comes

the As have stage on strength national achieved proud and horizon. the by business are be and about we on honored more of opportunities even Monday of we Nasdaq, the to the take excited all we

didn't and be the the adversity solve opportunities doing the instead storms, to in and but weather we each confronting We've to OIG proven just incredible resilient in turn recalls, into big problems we pandemic, incredibly COVID recent related report, profitably. to device years so the

focus on We respect in with early encouraging our well-positioned strength is the implementing were automated relationship business further our and and digital developing stability to models forward, a environment. regulatory efforts operating strong we and in this physicians, can place, patients. investing efficient workflows. and With in payers, adopters and infrastructure Looking with of core care our

need in every at continue for we care. of that with untreated we and day. closely published forefront are the treating to data patients the right delivery continue now services underscore to the the go eligible provide, will As medical The who research patients work and our we'll states, services XX of the remain physicians many all critical to and right care prescribing access year-end, have for but patients payers ensure to too

Viemed, their only investors company of for way. continue forward continued will Nasdaq team what innovation, in a ton do and to challenges, our thank our shareholder a but drive trust people We we culture of Viemed, further morning, not do of our ring of big at help the as resolve along and bell to want to Here best, Monday we for each look for you. driving the value all

prepared remarks. our concludes This

now you. We Thank questions. further take will

Operator

with Instructions] your of [Operator Our Capital Charlie comes Lake line from the Thank with Montang Street first Markets. question question. proceed Please you.

Charlie Montang

questions. guys. Hi, taking Thanks my for

headwinds here. quick two your growth It me ones limiting there seems Are generally are here. now. from guys for steam ahead you opportunities that like Just any significant full are

want handle a just might XXXX? to we on make So, that any be a in that have factors sure we drag

Todd Zehnder

the Not sales good got for are starting reps point training a our at at sales protocols up wind really. for where feel sure. a to a programs sales is have faster Charlie, right We've evolved guess finding and we like really and reps. We've reps got I good now recipe that rate. are good sales

trained will. up that are in the the have last that hopper if be needs field, year from still so, you to in And lot we a

that good sales to ever is that trainers, for managers, the business always just whether of that's evolving reps, model need see and tactics for be an can us [ph] and we to I challenge for people continue only growing the [grind] Viemed. and find that's just sales The organic

Regulatory, cylinders too. me reaping And been. [VIF] ever great. our doing becoming about And it. other is rolling, clicking for [ph] rolling, a is, while hear [indiscernible] all are bullish on which and I frankly Oxygen's in lines Staffing you been the business. we've it We're are [C-Paths] it's feeders on – we're are these our now, talk pretty business [ph] to them of benefit all mean, at

oxygen and world, which get event, business. they're higher eventually evolve our is the X in meeting X margin X, we patient a stage where into they guys X stage our As our

and really excited the it's us us. get mirror, just man, with yes, payers We're front name. about in for OIG in the So, our clear full another ahead just steam of reason very rearview of And XXXX. stuff to that's then kind for

black would that payers befitting that some country. was finding Despite something a throughout them never OIG really cloud all still accepting that always of a It's the XXX% we win them. with

really have the we discussion. and become go there So, with about conversation a talk in some, based and opportunity do how major more value not but the in we in relevant back just to network have another getting

about initiative super well. that So, pumped we're as

Charlie Montang

clarity Well, that's then great to quick And other that. hear the for and thanks question just for me. with one

most do now? you think beyond believe other core which non-invasive you offer As Viemed the the vent opportunity, markets opportunity

Todd Zehnder

There's than started, in the really kind in and right staffing home to better Well, throughout popping that are is, way now. being us shining offered country now opportunities we've been of there close Gulf States. us it. that staff solutions for with the is We right the get to provide

Our belt. under who of over XX staffing years has company runs his that experience executive

just And in And so, creatively. things very able thinks a of we're way. different he put it to

and going throughout So, grow we growth going we're around see growth We that and [ph] to see packs grow. vent we'll that's market acquisition continuing because we country. there's we're regions to just every the are and so there. We're in see see over see single OX not [PAC] geographic the admittedly and strong analyzing mean, that we're of that in. mean, west we're well. I weak as I targets targets so at kind growth looking to

then Northeast, we leads. And as pipeline already through an use we're but in them could acquisition working guys those some well, and in we the our target have and are

those we're way. in different a geographic maybe in grow So, excited apps to

Charlie Montang

hop queue. I'll back and questions my answering for thanks Well, Great. in the

Operator

with comes your Beacon question. next Securities. of Please from Our the Doug with question line Cooper proceed

Doug Cooper

first the and strong? and the that guess points, flow all was flat revenue a quarter. is through, that is Good because sequentially of strictly great I of the congratulations increased G&A and EBITDA margin XXX sequentially morning guys on Todd, of basis

Todd Zehnder

mean, I work did G&A. That's the reason. good obviously we of on lot a Doug. primary Yes,

most translate that a standpoint into cost will that and continue be quarter or The of to will Some XXXX. from fourth in continue to translate into of bad realization always going is good management better. debt a

sequential really that look look that why in least the which may you for fighting revenue cause impact some on, XX%. basis, things is muted up quarter but guidance we patients to challenges headwinds on end our people the we're It's amount changing year-over-year, if all insurances a and up the first of

want rates But that. intact. margin quarter. the a I are really the you good clear combined fourth profile So, be gives to growth still that about for all

Doug Cooper

the adjustments, March CPI X, here any And here? sitting we're see Medicare guess, I X, was you the or that you Great. January CPI us give how of impacting started can indication – that

Todd Zehnder

Yes.

we of X% to I net-net basis, it's way closed really see between and out all think it somewhere one-month across on early now that to have right out. seeing our we're we're because starting around but a X% the probably only somewhere revenue. shake

remember it of that Medicare. countrywide. contracts anywhere any are the then none tied You and to much, X.X% vents the for bids pretty like and because got it's is and competitive Medicare And those increase hits [indiscernible] only to rate

For bit what that area then our apply doesn't it say from. on depending contracted staffing that to to oxygen obviously and more or revenue. path, little isn't the it it's a revenue And comes skewed throughout

So, I gross uptick think somewhere comfortable the first quarter. revenue between saying right the now X% seeing we're to of is in X%

Doug Cooper

through And equal? little of expansion, you the things so forth, line see aside provisions, think all a to the margin debt flowing higher say but you being that maybe for that's, from the bad with QX bottom or

Todd Zehnder

cost management with some we be it, there the as well. Yes. have mean, would like see continue doing along and continue as we growth expect will do to but I that that will revenue we come hire, obviously, to we've to G&A our that – comes with been

that to its do through line. bottom see answer I long way yes, the So, flowing

Doug Cooper

quarter? you just Did a have on new [ph] us Casey, And just progressing? some of update terms geographic the idea? [VA] in the general you is just Okay. and about how this expansion talk can Maybe operations, give territories an

Casey Hoyt

territories gaps state and less we're new have. throughout, Doug. miles XX road more we It's the still I finding about it's we're Yes. coverage mean, down this in, about that which in going

the has we're changed from that nothing way really So, growing organically.

in we'll find We’re bit faster. and down territories. sales little rep new pockets Occasionally placement double where a we new find

part? going other underway mean, actually we’re a is Antonio is here. too was example. over What it VA. San VA well. Pilot, area Yes. good coming but we Again, The good some coverage dominant, another as it's been an That's your some I Oh, got and where haven't – as there it's to we market take found and really ongoing. to the reps

be to exciting. going that's So,

VA now, really mean, win, I with have material win should staffing. different The major right the inside We've network. is Doug, really number landing on-track the the of as I staffing we the VA through say, a been

conversations the just business been the we're complex other established that with have We've having and respiratory needs. contracts

because that Carolina that is And position pulmonology pilot's do South But another into saw present area. to ongoing solutions it we in them. know, yeah, another that provider our there's and territory fact for to means what you and be doing in we're the us we're for perfect says of we’re kind getting exciting the to that group so, to it just want

Doug Cooper

Thanks, And Casey. great. sorry,

one renewed see morning, last down hit me. issuer your bit the you I see as for something with a would you Just this bid, XX% opportunistic today? a stock this stock is getting

Casey Hoyt

guess, we been we on so monitor far active now. the was that, remains robust place right potential I right buyback, – Doug. now, right forth, I as we'll leads but team as mean, clear and pretty will our in is obviously M&A hadn't remarks now because the prepared I that

we will and be the market So, accordingly. opportunistic update

Doug Cooper

the Great. congratulations on again Thanks guys and quarter.

Casey Hoyt

Doug. Thanks,

Operator

your with proceed Our question. comes line Prasath Bloom Pandurangan next Burton. Please with of from the question

Prasath Pandurangan

on Congrats morning. the Good quarter.

further First, being CMS the guidance? how quarters? do upcoming XQ If the growth the benefits you captured confirm, in in the not, see from in to pricing have new rates much just fully

Casey Hoyt

if mentioned, our quarter with higher look in Yes. and we guidance. And I the in been mean, bad year. We back typically rather have I debt and the we They assumptions. – you'll are go a as quarter first have some at see last than first reserve others rate conservative

embedded and of kinds changes take they a all us So, conservative our hit numbers. with yes, first view that. we in reauthorizations and But the things of quarter, in insurance been have that

Prasath Pandurangan

then you vent how on you on mix of up Got non-ventilator comment its the it. business, relative product size the following to And year? And side also, the side see could of the this evolving it? do throughout

Casey Hoyt

a a they're that think we mix product it as it business has the will growth higher to Yes, don't moving much sleep, see at did last call just the XX XX than year-over-year grow because and it I smaller. just because rate the faster to than But the oxygen, continue vent see months been months. ventilators lines over so drastically I as at is staffing rate back

we this XX% So, moved it year.

in were in I XXXX XXXX. me, XXXX, and think XX% or XX% the excuse numbers

grow I likely because moving the units smaller point. our XX relatively just So, a rollout. still this to year faster much, percentage don't that they're very see rate new it national at but will business

years They're probably anywhere rollout. between X X international and

benefiting business from guess still the growing, all dramatically. the pretty Prasath is, we're So, I infancy key of programs of country, them growing around are those all units the but are

fun of other one to kind to the watch, going see now. right it's outpace So, who's to

Prasath Pandurangan

that then like the is looking to [indiscernible] basis, finally does that few from the the it, you And SG&A side quarter's good. in Yes, quarters sounds normalized can looking next at we at of a – – cuts this SG&A further it? operations number that are just flat number continuing or on it on

Casey Hoyt

efforts and I clear massive the side. to some now business without stable were I between at least those that that out putting guidance new think going our to the and to inflationary that to – said, when it's With growing the impact, and we're unrealistic organically on it we're mid-year in be we new last always seen to sales have and pretty comes had there expansion. that appear slight we we're growing because year increases increase reps going think it's say just hiring a inflationary keep areas cost G&A

sales We're managing so our headcount reps, and pretty new new good. for We're forth. areas, looking

growth going but that that to the XX% some XX% line it's revenue support organic you going to grow the call we would in gross our stable, margin G&A to I forecast. always should are to think and So, relatively

Prasath Pandurangan

for Got it. taking it. questions. my Got Thanks

Casey Hoyt

Prasath. Thanks Sure.

Operator

back further There hand like to in are for remarks. call to management closing questions no the the I'd queue.

Casey Hoyt

Thanks New joining be questions, excited Monday York to very there call. appreciate on everyone we the Okay. and morning. up We all for the thoughtful are in

ring weekend. So, bell. your Enjoy we everyone look out that for us as

Operator

this and Thank teleconference. conclude your today's does you for gentlemen, Ladies participation.

may at time disconnect wonderful You your lines this a day. and have

Viemed Healthcare (VMD) 3 Mar 232022 Q4 Earnings call transcript