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Viemed Healthcare Announces Second Quarter 2020 Record Financial Results

/EIN News/ -- LAFAYETTE, La., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Viemed Healthcare, Inc. (the “Company” or “Viemed”) (TSX: VMD.TO and NASDAQ:VMD), a home medical equipment supplier that provides post-acute respiratory care services in the United States, announced today that it has reported its financial results for the three and six months ended June 30, 2020.

Operational highlights (all dollar amounts are USD):

  • Net revenues for the quarter ended June 30, 2020 were $42.9 million, an increase of 111% over net revenues reported for the comparable quarter ended June 30, 2019. Current quarter revenues included approximately $19.7 million of product sales related to the ongoing COVID-19 pandemic. The Company also recognized an additional $2.5 million in sales proceeds in gain/loss on sale of equipment which represents another portion of the equipment sales related to the pandemic.
     
  • Net income for the quarter ended June 30, 2020 totaled approximately $19.4 million, a Company record, compared to $1.3 million for the quarter ended June 30, 2019. Net income for the six months ended June 30, 2020 totaled approximately $23.7 million, compared to $3.3 million for the six months ended June 30, 2019. 
     
  • Adjusted EBITDA for the quarter ended June 30, 2020 totaled approximately $16.3 million, a Company record, and a 296% increase as compared to the quarter ended June 30, 2019. Adjusted EBITDA for the six months ended June 30, 2020 totaled approximately $24.2 million, a 181% increase as compared to the six months ended June 30, 2019. A reconciliation of reported non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures can be found in the tables accompanying this press release.
     
  • The Company had a current cash balance of $29.7 million at June 30, 2020  ($13.4 million at December 31, 2019) and an overall working capital balance of $17.4 million ($1.9 million at December 31, 2019). Total long-term debt as of June 30, 2020 was $8.3 million.
     
  • In addition to its core rental business, the Company is continuing to pursue additional purchase orders to provide support during the COVID-19 pandemic as well as sourcing equipment and PPE to fulfill these opportunities. The Company expects to generate net revenues of approximately $31 million to $35 million during the third quarter of 2020, including approximately $6.8 million to $9.8 million of revenue related to the ongoing COVID-19 pandemic.

“We have once again demonstrated our ability to create value while serving as a resource for those in need during the COVID-19 pandemic,” said Casey Hoyt, Viemed's CEO. “We continue to adapt to the ongoing changes in the healthcare system and are developing new ways to collaborate with referral sources to ensure that all eligible patients can obtain our quality care and service.”

Conference Call Details

The Company will host a conference call to discuss second quarter results on Wednesday, August 5, 2020 at 11:00 a.m. EST.

The call-in numbers for participants are:

US Toll Free: 1-877-407-0784
International Toll Free: 1-201-689-8560
Meeting ID Number: 13707099
Live Event Call me™ Link (Available 15 minutes prior to start time for participant entry)
https://callme.viavid.com/?callme=true&passcode=13707099&h=true&info=company-email&r=true&B=6 

Following the conclusion of the call, an audio recording and transcript of the call can be accessed on the Company's website.

ABOUT VIEMED HEALTHCARE, INC.

Viemed is a provider of in-home medical equipment and post-acute respiratory healthcare services in the United States.  Viemed’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technology. Visit our website at www.viemed.com.

For further information, please contact:

Glen Akselrod
Bristol Capital
905-326-1888
glen@bristolir.com

Todd Zehnder
Chief Operating Officer
Viemed Healthcare, Inc.
337-504-3802
investorinfo@viemed.com

Forward-Looking Statements

Certain statements contained in this press release may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 or “forward-looking information” as such term is defined in applicable Canadian securities legislation (collectively, “forward-looking statements”). Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “potential”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or “projects”, or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “will”, “should”, “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. All statements other than statements of historical fact, including those that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance, including the Company's net revenue guidance for the third quarter, are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking statements to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include, without limitation: the general business, market and economic conditions in the regions in which the Company operates; the impact of the COVID-19 pandemic and the actions taken by governmental authorities, individuals and companies in response to the pandemic on our business, financial condition and results of operations, including on the Company's patient base and revenues, employees, and equipment and supplies; the Company may be subject to significant capital requirements and operating risks; the ability of the Company to implement business strategies and pursue business opportunities; volatility in the market price of shares in the capital of the Company; the Company’s novel business model; the risk that the clinical application of treatments that demonstrate positive results in a study may not be positively replicated or that such test results may not be predictive of actual treatment results or may not result in the adoption of such treatments by providers; the state of the capital markets; the availability of funds and resources to pursue operations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; dependence on key suppliers; granting of permits and licenses in a highly regulated business; competition; low profit market segments; disruptions in or attacks (including cyber-attacks) on the Company's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations; difficulty integrating newly acquired businesses; the impact of new and changes to, or application of, current laws and regulations; the overall difficult litigation and regulatory environment; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; the impact of the previously disclosed restatement and correction of the Company's previously issued financial statements; the previously disclosed identified material weakness in the Company's internal control over financial reporting and the Company's ability to remediate that material weakness; the initiation of legal or regulatory proceedings with respect to the restatement and corrections; the adverse effects on the Company's business, results of operations, financial condition and stock price, as a result of the restatement and correction process; the Company’s status as an emerging growth company and a foreign private issuer; and the occurrence of natural and unnatural catastrophic events or health epidemics or concerns, such as the recent COVID-19 pandemic, and claims resulting from such events or concerns; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with the U.S. Securities and Exchange Commission (the “SEC”) available on the SEC’s website at www.sec.gov, including the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and with the securities regulatory authorities in certain provinces of Canada available at www.sedar.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking statements prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking statements are expressly qualified in their entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking statements. The forward-looking statements included in this press release are made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statements, other than as required by applicable law.

 

VIEMED HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars, except share amounts)
(Unaudited)

         
    At
June 30, 2020
  At
December 31, 2019
ASSETS        
Current assets        
Cash and cash equivalents   $ 29,707        $ 13,355     
Accounts receivable, net of allowance for doubtful accounts of $9,345 and $7,782 at June 30, 2020 and December 31, 2019, respectively   11,029        11,534     
Inventory, net   6,580        1,360     
Prepaid expenses and other assets   1,891        1,562     
Total current assets   $ 49,207        $ 27,811     
Long-term assets        
Property and equipment   55,087        54,772     
Equity method investment   59        13     
Deferred tax asset   7,825        —     
Total long-term assets   $ 62,971        $ 54,785     
TOTAL ASSETS   $ 112,178        $ 82,596     
         
LIABILITIES        
Current liabilities        
Trade payables   $ 5,375        $ 4,700     
Deferred revenue   3,279        3,315     
Income taxes payable   1,490        86     
Accrued liabilities   14,365        8,968     
Current portion of lease liabilities   5,467        7,093     
Current portion of long-term debt   1,794        1,750     
Total current liabilities   $ 31,770        $ 25,912     
Long-term liabilities        
Accrued liabilities   1,030        2,317     
Long-term lease liabilities   1,527        3,039     
Long-term debt   6,723        7,629     
Total long-term liabilities   $ 9,280        $ 12,985     
TOTAL LIABILITIES   $ 41,050        $ 38,897     
         
Commitments and Contingencies   —        —     
SHAREHOLDERS' EQUITY        
Common stock - No par value: unlimited authorized; 39,082,932 and 37,952,660 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively   8,414        3,366     
Additional paid-in capital   5,448        6,377     
Accumulated other comprehensive loss   (502 )     (157 )  
Retained earnings   57,768        34,113     
TOTAL SHAREHOLDERS' EQUITY   $ 71,128        $ 43,699     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 112,178        $ 82,596     
 
 

VIEMED HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  AND COMPREHENSIVE INCOME
(Expressed in thousands of U.S. Dollars, except outstanding shares and per share amounts)
(Unaudited)

       
  Three Months Ended June 30,   Six Months Ended June 30,
  2020     2019   2020   2019
Revenue $ 42,854       $ 20,325       $ 66,660       $ 38,440    
               
Cost of revenue 16,927       5,686       25,180       10,727    
               
Gross profit $ 25,927       $ 14,639       $ 41,480       $ 27,713    
               
Operating Expenses              
Selling, general and administrative 16,428       11,516       27,005       20,976    
Research and development   271         203       445       437    
Stock-based compensation 1,196       1,034       2,347       1,914    
Depreciation 205       138       410       267    
(Gain) loss on disposal of property and equipment (1,458 )     85       (2,627 )     141    
  Other (income) expense (3,574 )     (1 )     (3,574 )     (2 )  
Income from operations $ 12,859       $ 1,664       $ 17,474       $ 3,980    
               
Non-operating expenses              
Unrealized loss on warrant conversion liability       268             437    
(Gain) loss from equity method investment   (42 )       26       (15 )     51    
Interest expense, net of interest income 135       20       293       46    
               
Net income before taxes 12,766       1,350       17,196       3,446    
(Benefit) provision for income taxes (6,646 )     24       (6,459 )     162    
               
Net income $ 19,412       $ 1,326       $ 23,655       $ 3,284    
               
Other Comprehensive Income              
Change in unrealized loss on derivative instruments, net of tax (33 )     (148 )     (345 )     (148 )  
Other Comprehensive Loss $ (33 )     $ (148 )     $ (345 )     $ (148 )  
               
Comprehensive Income $ 19,379       $ 1,178       $ 23,310       $ 3,136    
               
Net income per share              
Basic $ 0.50       $ 0.04       $ 0.62       $ 0.09    
Diluted $ 0.48       $ 0.03       $ 0.59       $ 0.08    
               
Weighted average number of common shares outstanding:              
Basic 38,665,765       37,686,763       38,348,310       38,165,274    
Diluted 40,814,238       39,975,307       40,103,016       40,166,855    
                               
                               

VIEMED HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
(Unaudited)

     
    Six Months Ended June 30,
    2020   2019
Cash flows from operating activities        
Net income   $ 23,655       $ 3,284    
Adjustments for:        
Depreciation   4,320       2,739    
Change in allowance for doubtful accounts   5,578       3,859    
Share-based compensation   2,347       1,914    
Unrealized loss on warrant conversion liability         437    
(Gain) loss on equity investment   (15 )     51    
(Gain) loss on disposal of property and equipment   (2,627 )     141    
Deferred income taxes (benefit)   (7,825 )        
Net change in working capital        
Increase in accounts receivable   (5,073 )     (7,818 )  
Increase in inventory   (5,220 )     (825 )  
Increase in prepaid expenses and other current assets   (329 )     (109 )  
Increase in trade payables   2,044       1,934    
(Decrease) increase in deferred revenue   (36 )     690    
Increase (decrease) in accrued liabilities   3,765       (181 )  
Increase (decrease) in income tax payable   1,404       (153 )  
Net cash provided by operating activities   $ 21,988       $ 5,963    
         
Cash flows from investing activities        
Purchase of property and equipment   (5,729 )     (7,700 )  
Investment in equity method investment   (31 )        
Proceeds from sale of property and equipment   5,140       213    
Net cash used in investing activities   $ (620 )     $ (7,487 )  
         
Cash flows from financing activities        
Proceeds from exercise of options   1,772       22    
Proceeds from exercise of warrants         16    
(Principal payments) proceeds on notes payable   (67 )     4,837    
Principal payments on term note   (795 )        
Shares repurchased and canceled under the Normal Course Issuer Bid         (1,522 )  
Repayments of lease liabilities, net of proceeds   (5,926 )     (4,551 )  
Net cash used in financing activities   $ (5,016 )     $ (1,198 )  
         
Net increase (decrease) in cash and cash equivalents   16,352       (2,722 )  
Cash and cash equivalents at beginning of year   13,355       10,413    
Cash and cash equivalents at end of period   $ 29,707       $ 7,691    
         
Supplemental disclosures of cash flow information        
Cash paid during the period for interest   $ 309       $ 52    
Cash paid during the period for income taxes, net of refunds received   $ (38 )     $ 317    
Supplemental disclosures of non-cash transactions        
Property and equipment financed through finance leases   $ 2,883       $ 9,438    
Property and equipment financed through leases under FASB ASC 842   $ 57       $ 1,919    
                     

Non-GAAP Financial Measures

This press release refers to “Adjusted EBITDA” which is a non-GAAP financial measure that does not have a standardized meaning prescribed by U.S. GAAP. The Company's presentation of this financial measure may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, unrealized (gain) loss on warrant conversion liability and stock-based compensation. Management believes Adjusted EBITDA provides helpful information with respect to the Company’s operating performance as viewed by management, including a view of the Company’s business that is not dependent on the impact of the Company’s capitalization structure and items that are not part of the Company’s day-to-day operations. Management uses Adjusted EBITDA (i) to compare the Company’s operating performance on a consistent basis, (ii) to calculate incentive compensation for the Company’s employees, (iii) for planning purposes, including the preparation of the Company’s internal annual operating budget, and (iv) to evaluate the performance and effectiveness of the Company’s operational strategies. Accordingly, management believes that Adjusted EBITDA provides useful information in understanding and evaluating the Company’s operating performance in the same manner as management. The following table is a reconciliation of net income (loss), the most directly comparable U.S. GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated:

 

VIEMED HEALTHCARE, INC.
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
(Expressed in thousands of U.S. Dollars)
(Unaudited)

                 
For the quarter ended June 30,
2020
March 31,
2020
December
31, 2019
September
30, 2019
June 30,
2019
March 31,
2019
December
31, 2018
September
30, 2018
Net Income $ 19,412     $ 4,243   $ 2,388   $ 2,853     $ 1,326   $ 1,958   $ 2,968     $ 2,219  
Add back:                
Depreciation 2,190     2,130   2,003   1,659     1,444   1,295   1,177     972  
Interest expense 135     158   212   56     20   26   30     37  
Unrealized (gain) loss on warrant conversion liability         (800 )   268   169   (210 )   220  
Stock-based compensation 1,196     1,151   908   1,064     1,034   880   804     672  
Income tax (benefit) expense (6,646 )   187   58   51     24   138   127     35  
Adjusted EBITDA $ 16,287      $ 7,869    $ 5,569    $ 4,883      $ 4,116    $ 4,466    $ 4,896      $ 4,155   


         
    Three Months Ended June 30, 2020   Six Months Ended June 30, 2020
Net Income   $ 19,412     $ 23,655  
Add back:        
  Depreciation   2,190     4,320  
  Interest expense   135     293  
  Unrealized (gain) loss on warrant conversion liability        
  Stock-based compensation   1,196     2,347  
  Income tax (benefit) expense   (6,646 )   (6,459 )
Adjusted EBITDA   $ 16,287      $ 24,156   
 
 
 

Use of Non-GAAP Financial Measures

Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. It is not a measurement of the Company’s financial performance under U.S. GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other businesses. Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of the Company’s operating results as reported under U.S. GAAP. Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of ongoing operations; and other companies in the Company’s industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

 

VIEMED HEALTHCARE, INC.
Key Financial and Operational Information
(Expressed in thousands of U.S. Dollars, except vent patients)
(Unaudited)

                 
For the quarter ended June 30,
2020
March 31,
2020
December
31, 2019
September
30, 2019
June 30,
2019
March 31,
2019
December
31, 2018
September
30, 2018
Financial Information:              
Revenue $ 42,854   $ 23,806   $ 21,448   $ 20,368   $ 20,325   $ 18,115   $ 18,363   $ 16,930  
Gross Profit $ 25,927   $ 15,553   $ 14,243   $ 14,050   $ 14,639   $ 13,074   $ 13,519   $ 12,829  
Gross Profit % 61 % 65 % 66 % 69 % 72 % 72 % 74 % 76 %
Net Income $ 19,412   $ 4,243   $ 2,388   $ 2,853   $ 1,326   $ 1,958   $ 2,968   $ 2,219  
Cash (As of) $ 29,707   $ 8,409   $ 13,355   $ 12,630   $ 7,691   $ 7,410   $ 10,413   $ 10,174  
Total Assets (As of) $ 112,178   $ 86,801   $ 82,596   $ 79,981   $ 71,014   $ 58,718   $ 53,653   $ 49,240  
Adjusted EBITDA(1) $ 16,287   $ 7,869   $ 5,569   $ 4,883   $ 4,116   $ 4,466   $ 4,896   $ 4,155  
Operational Information:              
Vent Patients(2) 7,705   7,965   7,759   7,421   7,130   6,393   5,905   5,444  

(1)  Refer to "Non-GAAP Financial Measures" section above for definition of Adjusted EBITDA.

(2)  Vent Patients represents the number of active ventilator patients on recurring billing service at the end of each calendar quarter.

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