Mr. Greg Crawford reports

QUIPT HOME MEDICAL REPORTS RECORD FOURTH QUARTER AND FISCAL YEAR 2023 FINANCIAL RESULTS POSTING REVENUE GROWTH OF 59% AND ADJUSTED EBITDA GROWTH OF 73%

Quipt Home Medical Corp. has released its fourth quarter and fiscal year 2023 financial results and operational highlights. These results pertain to the three months and year ended Sept. 30, 2023, and are reported in U.S. dollars, and have been rounded to the nearest 100,000.

Quipt will host its earnings conference call on Tuesday, Dec. 19, 2023, at 10 a.m. ET. The dial-in number is 1-800-319-4610 or 1-604-638-5340. The live audio webcast can be found on the investor section of the company's website.

Financial highlights:

• Revenue for fiscal year 2023 was $221.7-million, compared with $139.9-million for fiscal year 2022, representing a 59-per-cent increase.
• Net loss for fiscal year 2023 was $2.8-million or seven cents per diluted share, compared with a net income of $4.8-million or 14 cents per diluted share for fiscal year 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (a non-IFRS (international financial reporting standards) measure) for fiscal year 2023 was $50.6-million (22.8 per cent of revenue), compared with fiscal year 2022 of $29.2-million (20.9 per cent of revenue), representing a 73-per-cent increase. Adjusted EBITDA as a per cent of revenue accelerated due to increased scale, resulting in better operating leverage across the business.
• Revenue for Q4 2023 was $62.5-million, compared with $40.1-million for Q4 2022, representing a 56-per-cent increase.
• Recurring revenue (a non-IFRS measure) for Q4 2023 was very strong and exceeded 83 per cent of total revenue, driven by growth in the company's resupply platform.
• Net loss for Q4 2023 was $1.3-million or three cents per diluted share, as compared with a net income of $1.8-million or five cents per diluted share for Q4 2022.
• Adjusted EBITDA for Q4 2023 was $14.7-million (23.5 per cent of revenue), compared with $8.4-million (21.0 per cent of revenue) for Q4 2022, representing a 75-per-cent increase.
• Cash flow from operations was $40.5-million for the year ended Sept. 30, 2023, compared with $26.3-million for the year ended Sept. 30, 2022.
• For fiscal year 2023, bad debt expense improved to 4.5 per cent, compared with 8.7 per cent for fiscal year 2022. This exemplifies the company's ability to scale and add more revenue through add-on acquisitions without compromising billing and collection capabilities.
• The company reported $17.2-million of cash on hand and total credit availability of $41.0-million as of Sept. 30, 2023, with $20.0-million available toward its revolving credit facility and $21.0-million available pursuant to a delayed draw term loan facility.
• The company maintains a conservative balance sheet with net debt to adjusted EBITDA leverage of 1.4 times.

Operational and recent acquisition highlights:

• The company's customer base increased 65 per cent year over year to 285,819 unique patients served in fiscal year 2023 from 173,203 unique patients in fiscal year 2022.
• Compared with 516,328 unique set-ups/deliveries in fiscal year 2022, the company completed 754,414 unique set-ups/deliveries in fiscal year 2023, an increase of 46 per cent. This includes 395,618 respiratory resupply set-ups/deliveries for the year ended Sept. 30, 2023, compared with 231,495 for the year ended Sept. 30, 2022, an increase of 71 per cent, which the company credits to its continued use of technology and centralized intake processes.
• The company's resupply program is a major proponent of the company's 83-per-cent recurring revenue base as the company has significantly scaled, now representing 47 per cent of the recurring revenue mix, driving higher-margin revenue. The program now consists of approximately 169,000 patients as of Sept. 30, 2023, compared with approximately 100,000 patients as of Sept. 30, 2022.
• The company continues to experience very strong demand for respiratory equipment, including CPAPs (continuous positive airway pressure), BiPAPs (bilevel positive airway pressure), oxygen concentrators, ventilators, as well as the CPAP resupply and other supplies business.
• The company has continued expanding its sales reach, driving organic growth, which now spans across 26 U.S. states with the addition of experienced sales personnel.
• The company has reached 287,500 active patients, 34,400 referring physicians and 125 locations.
• In September, 2023, the company acquired a multistate home medical equipment operator in Mississippi, Texas and Louisiana. The acquisition added approximately $9-million in revenue with anticipated postintegration adjusted EBITDA as a per cent of revenue similar to company's existing per cent. Integration has gone very well and the company is working on organic expansionary opportunities within those existing markets.

Management commentary

"We exited fiscal 2023 with strong momentum across the organization and substantial operating-scale achieved, posting record results, with revenue increasing by $81.8-million to $221.7-million. We saw an acceleration of our fiscal 2023 adjusted EBITDA as a percentage of revenue increase to 22.8 per cent, compared to 20.9 per cent in fiscal 2022, reduced our bad debt expense significantly and improved net operating cash flow. Our growth strategy continues to yield consistent financial and operational results, and we are pleased with the team's continuous efforts to expand our patient-centric ecosystem into strategic areas around the country. To achieve our goals for organic growth, we have been concentrating our efforts on areas where COPD prevalence is high and extending our sales efforts into continuum markets. In fiscal 2024, we anticipate solid organic growth, with the goal of achieving 8- to 10-per-cent revenue growth on an annualized basis. In real time during fiscal Q1 2024, we have seen continued strong demand for our entire diversified respiratory product mix, including sleep products, and expect this to continue through fiscal 2024," said chief executive officer and chairman Greg Crawford.

He added: "With 287,500 active patients across 26 states in the United States, Quipt is currently in the strongest market position it has ever been in. Given the favourable regulatory environment, the ongoing high demand for respiratory products and services, the robust demographic trends, and our consistent operating success across the board, we expect continued robust growth in fiscal 2024. Furthermore, we have a lot of opportunity to take advantage of the growing market for at-home clinical respiratory care thanks to our healthy balance sheet, strategic organic growth initiatives and acquisition pipeline."

"We take great pride in our record-breaking financial and operational performance in the 2023 fiscal year and are incredibly proud of our ability to post our adjusted EBITDA at 22.8 per cent of revenue," said Hardik Mehta, Quipt's chief financial officer. "In fiscal Q4, we saw further margin acceleration, with adjusted EBITDA as a percentage of revenue reaching 23.5 per cent, and we exceeded $256-million in run-rate revenue (a non-IFRS measure). We continue achieving consistent financial results as a result of our ongoing efforts to strategically develop scale with the infrastructure we already have in place and with over 83 per cent of our revenue being categorized as recurring. Our seamless integration of our largest acquisition to date to kick off 2023 has opened lots of growth opportunities for us to push in 2024. We have the resources needed to carry out our organic and inorganic plan for strategic expansion in an environment with elevated interest rates thanks to our very strong balance sheet with a very low leverage ratio of 1.4 times net debt to adjusted EBITDA, and more than $58-million between available credit and cash on hand. Given our flexible capital structure, we continue to look at different ways to create shareholder value and believe that our operational excellence and robust balance sheet provide us with all the resources necessary to execute our growth strategy."

The company's full financial statements and management's discussion and analysis for the three months and year ended Sept. 30, 2023, will be available under the company's profile on SEDAR+ and will be posted on the company's website, on or before the filing deadline of Dec. 29, 2023.

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 United States 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.

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