Mr. Gregory Crawford reports

QUIPT HOME MEDICAL REPORTS STRONG OPERATIONAL PERFORMANCE WITH RECORD THIRD QUARTER FISCAL 2023 FINANCIAL RESULTS POSTING REVENUE GROWTH OF 64% AND ADJUSTED EBITDA GROWTH OF 80%

Quipt Home Medical Corp. has released its third quarter fiscal 2023 financial results and operational highlights. These results pertain to the three and nine months ended June 30, 2023, and are reported in U.S. dollars.

Quipt will host its earnings conference call on Tuesday, Aug. 15, 2023, at 10 a.m. ET. The dial-in number is 1-800-319-4610 or 1-604-638-5340. The live audio webcast will be accessible on the investor section of the company's website.

Financial highlights:

• Revenues for Q3 fiscal 2023 were $60.3-million compared with $36.7-million for Q3 fiscal 2022, representing a 64-per-cent increase year over year:
  • Compared with second quarter fiscal 2023, the company experienced sequential organic growth of 4 per cent and expects continued strong organic growth for the rest of calendar 2023.
• Revenues for the nine months ended June 30, 2023, increased to $159.2-million, representing an increase of 60 per cent from the nine months ended June 30, 2022.
• Recurring revenue (defined below) for Q3 fiscal 2023 continues to be strong and exceeded 80 per cent of revenues.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for Q3 fiscal 2023 was $13.9-million (23 per cent of revenues), compared with adjusted EBITDA for Q3 fiscal 2022 of $7.7-million (21 per cent of revenues), representing an 80-per-cent increase year over year. The company expects to continue to see strong margin performance.
• Adjusted EBITDA for the nine months ended June 30, 2023, increased to $36-million, representing an increase of 73 per cent from the nine months ended June 30, 2022, and represented 23 per cent of revenues.
• For Q3 fiscal 2023, bad debt expense was at 4 per cent of revenues compared with 9 per cent in Q3 fiscal 2022. This significant decrease is primarily due to improved collections processes and symbolizes the company's ability to scale and add more revenue through acquisitions without compromising billing capabilities.
• Cash flow from continuing operations was $27-million for the nine months ended June 30, 2023, compared with $19-million for the nine months ended June 30, 2022.
• The company reported $20-million of cash on hand and $41-million available on its senior credit facility as of June 30, 2023, with $20-million available on a revolving line of credit and $21-million available on a delayed-draw term loan.
• The company maintains a conservative balance sheet with net debt to adjusted EBITDA leverage of 1.4 times.

Operational highlights:

• The company's customer base increased 58 per cent year over year to 140,515 unique patients served in Q3 fiscal 2023, compared with 89,085 unique patients in Q3 fiscal 2022.
• Compared with 133,704 unique set-ups/deliveries in Q3 fiscal 2022, the company completed 202,587 unique set-ups/deliveries in Q3 fiscal 2023, an increase of 52 per cent. There were 108,391 respiratory resupply set-ups/deliveries during Q3 fiscal 2023 compared with 62,815 during Q3 fiscal 2022, an increase of 73 per cent, which the company credits to its continued use of technology and centralized intake processes.
• The company's product mix is 81 per cent respiratory as of June 30, 2023.
• The company continues to experience robust demand for respiratory equipment, such as oxygen concentrators and ventilators, as well as the CPAP resupply and other supplies business.
• On June 21, 2023, the company's common shares commenced trading on the Toronto Stock Exchange under the symbol QIPT, and were concurrently delisted and ceased trading on the TSX Venture Exchange.

Subsequent highlights:

• On July 31, 2023, the company made an investment of $1.5-million to purchase approximately 10 per cent of DMEScripts LLC, an independent e-prescribe company dedicated to improving the patient, prescriber and provider experience by eliminating inefficiencies and reducing paperwork:
  • The investment was made to ensure participation in the future growth of e-prescription usage within the DME industry and align the company with its major peers in the industry to further collaborate and innovate. Electronic prescribing is essential to the DME industry as this technology aims to boost productivity, reduce errors, boost compliance and improve patient outcomes.

Management commentary

"We are thrilled to announce robust fiscal third quarter results, which display record sequential organic growth and additional margin acceleration, clearly illustrating that our business continues to fire on all cylinders. We are also thrilled to report that our key performance indicators have exceeded our baseline expectations and suggest strong and sustained momentum across the organization in real time. Our health care network's key expansion across the United States has been driven by our continued penetration of key sales touch points, the successful integration and exceptional performance of our largest acquisition to date, and the strength of our core business. Our long-term growth strategy will continue to focus on driving organic volume growth, focused acquisition strategy that utilizes our proven integration process and by leveraging upon our acquisition pipeline," said chief executive officer and chairman Greg Crawford.

"We are spreading our patient-centric ecosystem across the United States by concentrating on regions with a high prevalence of chronic obstructive pulmonary disease (COPD). Our commitment to our clinical services model coupled with providing a broad spectrum of respiratory and equipment solutions has been a key factor in our success to date. Additionally, as the need for efficient and timely home health care increases in order to ease the strain on the traditional health care system, we take our role as a major provider of these services very seriously and will always focus on providing superior patient care. Due to the favourable demographic trends, bullish regulatory environment, continued strong demand for respiratory equipment and our consistent operational performance, we continue to have major tailwinds at our back."

Chief financial officer Hardik Mehta added: "Throughout the year, our business has continued to strengthen, and we are experiencing the organic growth and margin expansion that we had been aiming for. Our heavily weighted respiratory product mix and services, as well as our focus on operational savings and efficient cost management, have helped our adjusted EBITDA margin reach 23 per cent. Additionally, we are pleased by the acceleration of organic growth trends, which in the fiscal third quarter grew by 4 per cent sequentially when compared to the fiscal second quarter. We anticipate that this stronger organic growth versus our historical average will persist as we continue expanding the continuum of care in key markets. Given our operational excellence, strong balance sheet, with a very modest net leverage ratio of 1.4 times and a high level of financial flexibility, we are in a great position to execute our growth strategy and move quickly when the right opportunity presents itself."

About Quipt Home Medical Corp.

The company provides in-home monitoring and disease management services, including end-to-end respiratory solutions for patients in the U.S. health care market. It seeks to continue to expand its offerings to include the management of several chronic disease states focusing on patients with heart or pulmonary disease, sleep disorders, reduced mobility, and other chronic health conditions. The primary business objective of the company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The company's organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient's services and making life easier for the patient.

We seek Safe Harbor.