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, announced today that it has reported its financial results for the three and six months ended June 30, 2023.

Operational highlights (all dollar amounts are USD):

• Net revenues attributable to the Company's core business for the quarter ended June 30, 2023 reached a new Company record of $43.3 million, representing an increase of $10.2 million, or 31%, over core net revenues reported for the comparable quarter ended June 30, 2022. Net revenues for the quarter ended June 30, 2023 included approximately $2.5 million of revenues related to the HMP acquisition and were up approximately 9% over the quarter ended March 31, 2023.
• Net income for the quarter ended June 30, 2023 totaled $2.3 million. Adjusted EBITDA for the quarter ended June 30, 2023 totaled $9.8 million, a 52% increase as compared to the quarter ended June 30, 2022. 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.
• On June 1, 2023, the Company completed its acquisition of Home Medical Products, Inc. ("HMP"), which operates in Tennessee, Alabama, and Mississippi. Viemed acquired 100% of the equity ownership of HMP in exchange for approximately $28 million in cash at closing, subject to post-closing net working capital and other adjustments. The results of HMP’s operations have been included in the consolidated financial statements since the date of acquisition and were immediately accretive to net income and earnings per share.
• As of June 30, 2023, the Company maintains a strong cash balance of $10.2 million ($16.9 million at December 31, 2022) and an overall working capital balance of $4.4 million ($20.9 million at December 31, 2022). Long term debt as of June 30, 2023 amounted to $12.1 million (the Company had no long term debt at December 31, 2022) and the Company has $47 million available under existing credit facilities.
• The Company expects to generate net revenues of approximately $49.0 million to $50.2 million during the third quarter of 2023.

“We find ourselves in an exceptional position, leveraging the prevailing tailwinds in the operating environment to extend our reach and impact on more patients than ever before,” said Casey Hoyt, Viemed's CEO. "The foundation of our success lies in our robust and resilient business model, which has consistently demonstrated its strength in meeting challenges head-on and driving sustainable growth. We are now taking our growth to new heights by executing on strategic and accretive acquisitions that complement our existing capabilities. These acquisitions serve as powerful catalysts, accelerating the expansion of our comprehensive respiratory offerings."

Conference Call Details

The Company will host a conference call to discuss second quarter results on Thursday, August 10, 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=COGHUH2E 

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 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, 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)
		AtJune 30, 2023			AtDecember 31, 2022
ASSETS
Current assets
Cash and cash equivalents		$	10,224		$	16,914
Accounts receivable, net			17,893			15,379
Inventory			4,476			3,574
Income tax receivable			1,029			26
Prepaid expenses and other assets			2,327			3,849
Total current assets		$	35,949		$	39,742
Long-term assets
Property and equipment, net			72,884			67,743
Finance lease right-of-use assets			538			—
Operating lease right-of-use assets			516			694
Equity investments			1,942			2,155
Debt investment			2,110			2,000
Deferred tax asset			3,844			3,119
Identifiable intangibles, net			688			—
Goodwill			29,759			—
Other long-term assets			887			1,590
Total long-term assets		$	113,168		$	77,301
TOTAL ASSETS		$	149,117		$	117,043
LIABILITIES
Current liabilities
Trade payables		$	6,167		$	2,650
Deferred revenue			5,960			4,624
Accrued liabilities			15,509			11,092
Finance lease liabilities, current portion			375			—
Operating lease liabilities, current portion			395			495
Current debt			3,169			—
Total current liabilities		$	31,575		$	18,861
Long-term liabilities
Accrued liabilities			637			889
Finance lease liabilities, less current portion			143			—
Operating lease liabilities, less current portion			143			199
Long-term debt			12,114			—
Total long-term liabilities		$	13,037		$	1,088
TOTAL LIABILITIES		$	44,612		$	19,949
Commitments and Contingencies			—			—
SHAREHOLDERS' EQUITY
Common stock - No par value: unlimited authorized; 38,400,422 and 38,049,739 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively			17,850			15,123
Additional paid-in capital			13,488			12,125
Retained earnings			73,167			69,846
TOTAL SHAREHOLDERS' EQUITY		$	104,505		$	97,094
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	149,117		$	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 Ended June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
Revenue	$	43,311			$	33,310			$	82,867			$	65,565
Cost of revenue		17,205				12,920				32,757				25,432
Gross profit	$	26,106			$	20,390			$	50,110			$	40,133
Operating expenses
Selling, general and administrative		20,563				17,536				40,325				33,312
Research and development		758				672				1,538				1,304
Stock-based compensation		1,471				1,271				2,862				2,576
Depreciation		298				243				538				480
Loss (gain) on disposal of property and equipment		117				(110	)			95				(124	)
Other (income) expense, net		(2	)			(223	)			(83	)			(664	)
Income from operations	$	2,901			$	1,001			$	4,835			$	3,249
Non-operating income and expenses
Income from equity method investments		137				446				172				769
Interest income (expense), net		20				(59	)			69				(123	)
Net income before taxes		3,058				1,388				5,076				3,895
Provision for income taxes		728				421				1,229				1,166
Net income	$	2,330			$	967			$	3,847			$	2,729
Other comprehensive income (loss)
Change in unrealized gain/loss on derivative instruments, net of tax		—				59				—				222
Other comprehensive income (loss)	$	—			$	59			$	—			$	222
Comprehensive income	$	2,330			$	1,026			$	3,847			$	2,951
Net income per share
Basic	$	0.06			$	0.02			$	0.10			$	0.07
Diluted	$	0.06			$	0.02			$	0.10			$	0.07
Weighted average number of common shares outstanding:
Basic		38,324,249				38,773,580				38,240,902				39,195,317
Diluted		40,676,951				39,752,928				40,383,616				40,056,953

VIEMED HEALTHCARE, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in thousands of U.S. Dollars)(Unaudited)
		Six Months Ended June 30,
		2023				2022
Cash flows from operating activities
Net income		$	3,847			$	2,729
Adjustments for:
Depreciation			9,968				7,136
Change in inventory reserve			—				(1,418	)
Stock-based compensation expense			2,862				2,576
Distributions of earnings received from equity method investments			392				612
Income from equity method investments			(172	)			(769	)
Income from debt investment			(110	)			—
Loss (gain) on disposal of property and equipment			95				(124	)
Deferred income tax (benefit) expense			(725	)			745
Changes in working capital, net of effects from acquisitions:
Accounts receivable, net			(500	)			(1,464	)
Inventory			(320	)			1,022
Prepaid expenses and other assets			2,076				(634	)
Trade payables			(488	)			(243	)
Deferred revenue			604				649
Accrued liabilities			1,593				(87	)
Income tax payable/receivable			(1,003	)			1,362
Net cash provided by operating activities		$	18,119			$	12,092
Cash flows from investing activities
Purchase of property and equipment			(10,759	)			(10,989	)
Investment in equity investments			(7	)			(121	)
Cash paid for acquisition of HMP, net of cash acquired			(27,121	)			—
Proceeds from sale of property and equipment			1,775				615
Net cash used in investing activities		$	(36,112	)		$	(10,495	)
Cash flows from financing activities
Proceeds from exercise of options			1,228				—
Proceeds from term notes			5,000				—
Principal payments on term notes			(1,357	)			(78	)
Proceeds from revolving credit facilities			8,000				—
Payments on revolving credit facilities			(1,005	)			(872	)
Shares redeemed to pay income tax			(526	)			(119	)
Shares repurchased under the share repurchase program			—				(7,001	)
Repayments of lease liabilities			(37	)			(13	)
Net cash provided by (used in) financing activities		$	11,303			$	(8,083	)
Net decrease in cash and cash equivalents			(6,690	)			(6,486	)
Cash and cash equivalents at beginning of year			16,914				28,408
Cash and cash equivalents at end of period		$	10,224			$	21,922
Supplemental disclosures of cash flow information
Cash paid during the period for interest		$	169			$	128
Cash paid (received) during the period for income taxes, net of refunds		$	3,093			$	(940	)

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	June 30, 2023			March 31, 2023			December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
Net Income	$	2,330		$	1,517		$	2,438	$	1,055	$	967	$	1,762	$	4,087	$	1,789
Add back:
Depreciation		5,207			4,762			4,373		4,120		3,740		3,397		3,120		2,867
Interest expense (income)		(20	)		(49	)		32		42		59		64		69		75
Stock-based compensation(a)		1,471			1,391			1,317		1,309		1,271		1,305		1,305		1,302
Transaction costs(b)		94			206			—		—		—		—		—		—
Income tax expense		728			501			1,146		456		421		745		968		1,386
Adjusted EBITDA	$	9,810		$	8,328		$	9,306	$	6,982	$	6,458	$	7,273	$	9,549	$	7,419

(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.

		Three Months Ended June 30, 2023				Six Months EndedJune 30, 2023
Net Income		$	2,330			$	3,847
Add back:
Depreciation			5,207				9,969
Interest expense			(20	)			(69	)
Stock-based compensation(a)			1,471				2,862
Transaction costs(b)			94				300
Income tax expense (benefit)			728				1,229
Adjusted EBITDA		$	9,810			$	18,138

(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	June 30,2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Financial Information:
Revenue	$	43,311		$	39,556		$	37,508		$	35,759		$	33,310		$	32,255		$	31,962		$	29,285
Gross Profit	$	26,106		$	24,004		$	22,896		$	21,651		$	20,390		$	19,743		$	19,662		$	18,381
Gross Profit %		60	%		61	%		61	%		61	%		61	%		61	%		62	%		63	%
Net Income	$	2,330		$	1,517		$	2,438		$	1,055		$	967		$	1,762		$	4,087		$	1,789
Cash (As of)	$	10,224		$	23,544		$	16,914		$	21,478		$	21,922		$	29,248		$	28,408		$	26,867
Total Assets (As of)	$	149,117		$	124,634		$	117,043		$	119,419		$	115,904		$	119,007		$	117,962		$	115,486
Adjusted EBITDA(1)	$	9,810		$	8,328		$	9,306		$	6,982		$	6,458		$	7,273		$	9,549		$	7,419
Operational Information:
Vent Patients(2)		10,005			9,337			9,306			9,127			8,837			8,434			8,405			8,200

(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.