VMD Viemed Healthcare Inc

Viemed Healthcare, Inc. (the “Company” or “Viemed”) (NASDAQ:VMD and TSX: VMD.TO), a national leader in respiratory care and technology-enabled home medical equipment services, today announced its financial results for the three months ended March 31, 2023.

Operational highlights (all dollar amounts are USD):

• Net revenues attributable to the Company’s core business for the quarter ended March 31, 2023 were $39.6 million, a new Company record, and an increase of $9.4 million, or 31%, over the quarter ended March 31, 2022. Net revenues for the quarter ended March 31, 2023 were up approximately 6% over the quarter ended December 31, 2022.

• Net income for the quarter ended March 31, 2023 totaled $1.5 million. Adjusted EBITDA for the quarter ended March 31, 2023 totaled $8.3 million, a 15% increase as compared to the quarter ended March 31, 2022 which benefited from COVID-19 related revenue and Provider Relief Fund income. 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 increased its cash balance by approximately 39% to $23.5 million at March 31, 2023 compared to $16.9 million at December 31, 2022, and increased its overall working capital balance to $23.3 million at March 31, 2023 compared to $20.9 million at December 31, 2022. The Company had no long term debt outstanding as of March 31, 2023.

• The Company recently announced that it has entered into a definitive agreement to acquire Tennessee based Home Medical Products, Inc. (“HMP”), a large regional provider of respiratory focused home medical solutions, which generated annual net revenues of approximately $28 million in 2022.

• The Company expects to generate net revenues attributable to its core business of approximately $40.2 million to $41.2 million during the second quarter of 2023, excluding the impact from any acquired revenues during the period.

“Our recently announced operating results demonstrate that the core business is firing on all cylinders,” said Casey Hoyt, Viemed’s CEO. “We are excited to amplify our robust organic growth through accretive acquisitions that create powerful revenue synergies, diversify our offerings, and build upon strong relationships with stakeholders. Our recent acquisition initiatives are the natural progression of strategic investments that create a better experience for patients, physicians, and payors, and will ultimately allow us to expand care to those in need.”

Conference Call Details

The Company will host a conference call to discuss first quarter results on Tuesday, May 9, 2023 at 11:00 a.m. ET.

Interested parties may participate in the call by dialing:

877-407-6176 (US Toll-Free)201-689-8451 (International)

Live Audio Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Zob0C97p

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 AkselrodBristol Capital905-326-1888glen@bristolir.com

Todd ZehnderChief Operating OfficerViemed Healthcare, Inc.337-504-3802investorinfo@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 second 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, revenues, employees, and equipment and supplies; significant capital requirements and operating risks that the Company may be subject to; the ability of the Company to implement business strategies and pursue business opportunities; volatility in the market price of the Company’s common shares; the Company’s novel business model; the state of the capital markets; the availability of funds and resources to pursue operations; reductions in reimbursement rates and audits of reimbursement claims by various governmental and private payor entities; dependence on few payors; possible new drug discoveries; dependence on key suppliers; granting of permits and licenses in a highly regulated business; competition; 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; 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; 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 Company’s status as an emerging growth company and a smaller reporting company; and the occurrence of natural and unnatural catastrophic events or health epidemics or concerns, such as the 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)
		AtMarch 31, 2023			AtDecember 31, 2022
ASSETS
Current assets
Cash and cash equivalents		$	23,544		$	16,914
Accounts receivable, net of allowance for doubtful accounts of $11,040 and $8,483 at March 31, 2023 and December 31, 2022, respectively			16,320			15,379
Inventory			3,447			3,574
Income tax receivable			—			26
Prepaid expenses and other assets			3,394			3,849
Total current assets		$	46,705		$	39,742
Long-term assets
Property and equipment, net			68,438			68,437
Equity investments			1,994			2,155
Debt investment			2,057			2,000
Deferred tax asset			3,844			3,119
Other long-term assets			1,596			1,590
Total long-term assets		$	77,929		$	77,301
TOTAL ASSETS		$	124,634		$	117,043
LIABILITIES
Current liabilities
Trade payables		$	4,262		$	2,650
Deferred revenue			4,698			4,624
Income taxes payable			1,247			—
Accrued liabilities			12,817			11,092
Current portion of lease liabilities			397			495
Total current liabilities		$	23,421		$	18,861
Long-term liabilities
Accrued liabilities			1,010			889
Long-term lease liabilities			162			199
Total long-term liabilities		$	1,172		$	1,088
TOTAL LIABILITIES		$	24,593		$	19,949
Commitments and Contingencies			—			—
SHAREHOLDERS’ EQUITY
Common stock - No par value: unlimited authorized; 38,276,389 and 38,049,739 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively			17,096			15,123
Additional paid-in capital			12,087			12,125
Retained earnings			70,858			69,846
TOTAL SHAREHOLDERS’ EQUITY		$	100,041		$	97,094
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	124,634		$	117,043

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 EndedMarch 31,
		2023				2022
Revenue	$	39,556			$	32,255
Cost of revenue		15,552				12,512
Gross profit	$	24,004			$	19,743
Operating expenses
Selling, general and administrative		19,762				15,776
Research and development		780				632
Stock-based compensation		1,391				1,305
Depreciation		240				237
Gain on disposal of property and equipment		(22	)			(14	)
Other (income) expense, net		(81	)			(441	)
Income from operations	$	1,934			$	2,248
Non-operating income and expenses
Income from equity method investments		(35	)			(323	)
Interest (income) expense, net		(49	)			64
Net income before taxes		2,018				2,507
Provision for income taxes		501				745
Net income	$	1,517			$	1,762
Other comprehensive income
Change in unrealized gain/loss on derivative instruments, net of tax		—				163
Other comprehensive income	$	—			$	163
Comprehensive income	$	1,517			$	1,925
Net income per share
Basic	$	0.04			$	0.04
Diluted	$	0.04			$	0.04
Weighted average number of common shares outstanding:
Basic		38,156,777				39,621,741
Diluted		40,016,693				40,363,456

VIEMED HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
(Unaudited)
		Three Months EndedMarch 31,
			2023				2022
Cash flows from operating activities
Net income		$	1,517			$	1,762
Adjustments for:
Depreciation			4,762				3,397
Provision for uncollectible accounts			4,131				3,445
Change in inventory reserve			—				(1,418	)
Stock-based compensation expense			1,391				1,305
Distributions of earnings received from equity method investments			196				221
Income from equity method investments			(35	)			(323	)
Income from debt investment			(57	)			—
Gain on disposal of property and equipment			(22	)			(14	)
Deferred income tax (benefit) expense			(725	)			745
Net change in working capital
Increase in accounts receivable			(5,072	)			(4,221	)
Decrease in inventory			127				1,372
Decrease (increase) in prepaid expenses and other assets			449				(68	)
Increase (decrease) in trade payables			641				(467	)
Increase in deferred revenue			74				135
Increase in accrued liabilities			1,846				58
Change in income tax payable/receivable			1,273				1,217
Net cash provided by operating activities		$	10,496			$	7,146
Cash flows from investing activities
Purchase of property and equipment			(4,681	)			(3,963	)
Investment in equity investments			—				(100	)
Proceeds from sale of property and equipment			776				256
Net cash used in investing activities		$	(3,905	)		$	(3,807	)
Cash flows from financing activities
Proceeds from exercise of options			544				—
Principal payments on notes payable			—				(39	)
Principal payments on term note			—				(433	)
Shares repurchased under the share repurchase program			—				(1,887	)
Shares redeemed to pay income tax			(505	)			(119	)
Repayments of lease liabilities			—				(21	)
Net cash provided by (used in) financing activities		$	39			$	(2,499	)
Net increase in cash and cash equivalents			6,630				840
Cash and cash equivalents at beginning of year			16,914				28,408
Cash and cash equivalents at end of period		$	23,544			$	29,248
Supplemental disclosures of cash flow information
Cash paid during the period for interest		$	42			$	66
Cash (received) paid during the period for income taxes, net of refunds		$	(40	)		$	1,217

Non-GAAP Financial Measures

This press release refers to “Adjusted EBITDA”, which is a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). 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. In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including interest, taxes, stock based compensation, and depreciation of property and equipment. Beginning with financial results reported for periods in fiscal year 2023, Adjusted EBITDA also excludes transaction costs and expenses related to acquisition and integration efforts associated with recently announced or completed acquisitions. This modification enables investors to compare period-over-period results on a more consistent basis without the effects of acquisitions. We have recast Adjusted EBITDA for prior periods when reported to conform to the modified presentation.

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 to Non-GAAP Adjusted EBITDA
(Expressed in thousands of U.S. Dollars)
(Unaudited)
For the quarter ended	March 31,2023			December 31,2022		September 30,2022		June 30,2022		March 31,2022		December 31,2021		September 30,2021		June 30,2021
Net Income	$	1,517		$	2,438	$	1,055	$	967	$	1,762	$	4,087	$	1,789	$	1,566
Add back:
Depreciation		4,762			4,373		4,120		3,740		3,397		3,120		2,867		2,716
Interest (income) expense		(49	)		32		42		59		64		69		75		83
Stock-based compensation(a)		1,391			1,317		1,309		1,271		1,305		1,305		1,302		1,236
Transaction costs(b)		206			—		—		—		—		—		—		—
Income tax expense		501			1,146		456		421		745		968		1,386		1,246
Adjusted EBITDA	$	8,328		$	9,306	$	6,982	$	6,458	$	7,273	$	9,549	$	7,419	$	6,847

(a) Represents non-cash, equity-based compensation expense associated with option and RSU awards.(b) Represents transaction costs and expenses related to acquisition and integration efforts associated with recently announced or completed acquisitions.

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 companies or 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	March 31,2023			December 31,2022			September 30,2022			June 30,2022			March 31,2022			December 31,2021			September 30,2021			June 30,2021
Financial Information:
Revenue	$	39,556		$	37,508		$	35,759		$	33,310		$	32,255		$	31,962		$	29,285		$	27,399
Gross Profit	$	24,004		$	22,896		$	21,651		$	20,390		$	19,743		$	19,662		$	18,381		$	17,625
Gross Profit %		61	%		61	%		61	%		61	%		61	%		62	%		63	%		64	%
Net Income	$	1,517		$	2,438		$	1,055		$	967		$	1,762		$	4,087		$	1,789		$	1,566
Cash (As of)	$	23,544		$	16,914		$	21,478		$	21,922		$	29,248		$	28,408		$	26,867		$	31,151
Total Assets (As of)	$	124,634		$	117,043		$	119,419		$	115,904		$	119,007		$	117,962		$	115,486		$	111,014
Adjusted EBITDA(1)	$	8,328		$	9,306		$	6,982		$	6,458		$	7,273		$	9,549		$	7,419		$	6,847
Operational Information:
Vent Patients(2)		9,337			9,306			9,127			8,837			8,434			8,405			8,200			8,103

(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.