NASDAQ:VMD Viemed Healthcare Q1 2023 Earnings Report $7.07 +0.09 (+1.29%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$7.07 0.00 (0.00%) As of 04/25/2025 04:43 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Viemed Healthcare EPS ResultsActual EPS$0.04Consensus EPS $0.07Beat/MissMissed by -$0.03One Year Ago EPSN/AViemed Healthcare Revenue ResultsActual Revenue$39.56 millionExpected Revenue$38.40 millionBeat/MissBeat by +$1.16 millionYoY Revenue GrowthN/AViemed Healthcare Announcement DetailsQuarterQ1 2023Date5/8/2023TimeN/AConference Call DateTuesday, May 9, 2023Conference Call Time11:00AM ETUpcoming EarningsViemed Healthcare's Q1 2025 earnings is scheduled for Wednesday, May 7, 2025, with a conference call scheduled on Thursday, May 8, 2025 at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress ReleaseEarnings HistoryCompany ProfilePowered by Viemed Healthcare Q1 2023 Earnings Call TranscriptProvided by QuartrMay 9, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:14As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Todd Zehnder, Chief Operating Officer. Please go ahead, sir. Speaker 100:00:24Thank you, Kevin. Good morning, everyone. Please note that our remarks in this conference call may include forward looking statements under the U. S. Federal securities laws or forward looking information under applicable Canadian securities legislation, which we collectively refer to as forward looking statements. Speaker 100:00:41Such statements reflect the company's current views and intentions with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to vary from those indicated in forward looking statements. Examples of such risks and uncertainties are discussed in our disclosure documents follow the SEC or the securities regulatory authorities in certain provinces of Canada. Because of these risks and uncertainties, investors should not place undue reliance on forward looking statements. The forward looking statements made in this conference call are made as of today, The company undertakes no obligation to update or revise any forward looking statements, except as required by law. The Q1 financial results, news release, including the related financial statements are available on the SEC's website. Speaker 100:01:29I'll now turn it over to Casey to get things started. Speaker 200:01:32All right. Speaker 300:01:33Thank you, Todd. Speaker 100:01:34Good morning, everyone, and thank you for joining our Q1 2023 earnings call. Today we're extremely excited to report on how our core business is really clicking on all cylinders and certainly driving these record setting 1st quarter results. We will also review our most recent pending acquisition of Home Medical Products, HMP. Lastly, I'll spend some time providing our current view and outlook of the industry. First, I'd like to take a moment to acknowledge and thank our dedicated team of respiratory therapists, behavioral health specialists, Staffing professionals and administrative support staff who work continuously to deliver the best in class care to the patients we are privileged to serve. Speaker 100:02:17Our outstanding quarter is a direct result of their hard work. At the end of the Q1, our Viemed family grew to 7 70 employees We are incredibly excited to soon welcome the H and P team into our family, which is expected to increase our headcount by approximately 180 employees. The Q1 of 2023 was an exceptionally strong example of our organic growth success. Our revenue results exceeded the top end of our guided range and confirm that despite being a larger company, we clearly have the ability to maintain our impressive pre pandemic year over year growth rates. The strategy of having Biomed Healthcare Staffing find the right people to expand our organic business has proven to be successful. Speaker 100:03:03BHS has contributed to our ability to optimize our hiring efforts, while our back office refines our training and culture. Our training will help drive continued organic growth throughout the year and we are probably most excited to share it with our new employees onboarding With open access to our referral sources restored post pandemic, we only see positive forces ahead to support future growth. Furthermore, our respiratory equipment supply chain is stronger than ever before, with many new manufacturers competing for our business. The increased competition is driving down cost of our purchases of equipment and ensuring that we will have adequate We expect to leverage our volume purchases in the near term upon closing the H and P transaction. The purchase of H and P will launch our acquisition growth initiatives with a stellar organization that has an extraordinary reputation with patients, payers and physicians. Speaker 100:04:05Above all, the team at HMP shares our same culture and driving passion for treating each other with respect, while delivering innovative patient focused care. Upon close of the transaction, the acquisition will provide immediate geographic, product and payer diversification to the combined organization. HMP is a major provider in Tennessee, Northern Alabama and Northern Mississippi and currently serves over 44,000 active patients. In 2022, H and P had annual revenues of approximately $28,000,000 and the expected purchase price of the transaction is approximately $31,000,000 subject to customary closing adjustments. While the transaction is expected to be immediately accretive, we are most excited about the opportunity to share our mature complex model with a strong team at H and P. Speaker 100:04:59Their organization already has an impressive foothold in the sleep business and strong relationships with pulmonologists and local physicians. We are certain that we can complement their existing revenues by integrating our complex respiratory model. In the past, we have invested heavily in our scalable training, proprietary technologies and sound clinical protocols. Our biggest constraint to growth has always been our ability to recruit talented individuals that can go out and put our model into practice. Based on our long standing relationships with the H and P team, we are confident that we have identified 180 incredibly talented individuals that We expect substantial revenue synergies as a result of the combination. Speaker 100:05:47We plan to carefully integrate the organizations over the coming months as we also continue to recruit and train a robust pipeline of organically sourced hires. We expect our acquisition growth to be strategically measured. We have developed comprehensive integration plans based on our recently hired M and A executives' deep experience with the acquisitions. Our strategy is not to simply roll up companies and cut costs. We never want to impair or impede our strong organic both, we are careful to execute transactions with organizations that we believe will continue to grow at impressive rates and are confident that well executed acquisitions can create an accelerator to our organic growth model. Speaker 100:06:31Regulators and legislators also continue to work in collaboration with the home medical equipment industry to find practical solutions that ensure providers can deliver care to patients. For example, reimbursement relief legislation was recently introduced in the Senate that would extend the 70 fivetwenty 5 blended Medicare reimbursement rate for suppliers in non rural, non competitive bidding areas throughout the end of 2024. These common sense steps provide increased stability and predictability in the reimbursement environment, in contrast to previous initiatives such as competitive bidding. Historically, Any competitive bidding activities are initiated by CMS approximately 18 months prior to implementation of contracts and pricing. Although CMS has not announced plans related to future competitive bidding rounds, the timeline for around 2024 competitive bidding process has effectively lapsed and around 2025 is becoming increasingly unlikely as CMS has provided no signal that a return to the program will provide any savings. Speaker 100:07:37We remain confident that all current indicators promote a strong reimbursement environment for the coming years. As a result, our business is well insulated from recession As the reimbursement environment evolves through Medicare Advantage trends and value based arrangements, We are optimistic that our high quality, cost effective service offerings can continue to thrive. As health plan administrators become more sophisticated in their use of data and technology, we are well positioned as a leading provider of high-tech and high touch care in the home. We proactively invest in technology and protocols that create a seamless administrative process, capture data, improve benefits to patients, physicians and payers. In order to solve more problems for our customers as we scale, we are expanding our ventilation adjacent offerings and diversifying our product and service mix. Speaker 100:08:31Not only does our growing portfolio provide a robust continuum of care solution for pulmonologists and patients, but our ability to partner with patients sooner in their progressive disease state allows us to treat their underlying conditions at the right time. Adoption of innovation and technologies such as portable oxygen concentrators and remote setups of TAP devices have enabled us to expand these portfolios quickly and in a cost effective manner. These ventilator adjacent offerings have the ability to increase the length of our patient relationships. For example, A COPD patient that is provided with oxygen solutions by Viemed may ultimately become a ventilator patient as their disease state progresses. Similarly, when a young CPAP patient with sleep apnea is properly cared for and kept comfortable and compliant, they typically remain a resupply patient requiring fresh masks, tubing and filters for decades. Speaker 100:09:28Most importantly, our peer reviewed published medical research continue to demonstrate that clinical and financial benefits of non invasive ventilation in the home are greatest when therapy begins immediately following the diagnosis. Recruitment services offered through Viemed Healthcare Staffing. In addition to continuously improving the quality and volume of internal hires, Viemed Healthcare Staffing is a solution for our external customers and strengthens our relationships with those partners, including the VA. BHS and our SVB OSB partners, Solvett, have been placing many clinicians throughout the VAs across the country. With more on our financial results, capital activities and regulatory updates, I'll now turn the call over to our Chief Operating Officer, Todd Denton. Speaker 100:10:24Thanks again, Casey. In reviewing the financial results, all figures are in U. S. Dollars and full results have been made available on the SEC website as well as SEDAR. Our core business generated net revenue of $39,600,000 during the Q1 of 2023 as compared to net revenues of $30,200,000 in the Q1 of 2022, which equates to a 31% increase. Speaker 100:10:48Our sequential growth for the core business was 6%, Which is especially exciting as the Q1 presents seasonal challenges with insurance changes for many beneficiaries. We remain optimistic that we will be able to continue our high organic growth rates as we are still seeing open access around the country. Our growth and EBITDA margin percentages continue to be strong as we have focused on both margin and diversification. We have followed on our second half of twenty twenty two mantra of diversification, but also being laser focused on the bottom line. We continue to see our margin percentage be influenced by our product mix and continue to be pleased by the notional growth. Speaker 100:11:30Our gross and EBITDA margins during the quarter came in at 61% 21%, respectively. Our first quarter gross and EBITDA amounts came in at $24,000,000 $8,300,000 respectively. Our first quarter revenue from Vince was approximately 65% of our core revenue as compared to 71% in the Q1 of 2022. Our SG and A for the quarter totaled approximately $19,800,000 as compared to $15,800,000 in the Q1 of 2022. We are continuing the efforts of managing costs around across the board, but as we have always said, we are investing in the growth of our business and the patient experience. Speaker 100:12:12We expect to continue to grow revenues at a faster pace than expenses, which should yield ongoing margin expansion. For the quarter, we invested approximately $4,700,000 on capital expenditures. The CapEx continues to be spent across all of our major product lines and once again has been done through a diversified supplier network. As was the case last year, our vent and oxygen products had the most CapEx during the current period. We continue to see an ample opportunity to procure inventory and have not had to turn away any business as a result of supply chain issues. Speaker 100:12:50We have once again funded all of our CapEx with discretionary cash flow during a quarter of extreme growth and we were also able to expand our liquidity. We are very proud of the pristine balance sheet where we actually grew our cash balance by $6,600,000 at March 31 to $23,500,000 Additionally, we ended the quarter with an overall working capital $23,300,000 We remain debt free at quarter end with a fully undrawn credit facility. Our capital allocation strategy has shifted over the last 6 months. We still have our first priority on CapEx to service new patients. Our organic growth through new patient service has and will likely always be our first priority. Speaker 100:13:35Last year, we focused our secondary capital allocation efforts on buying stock and paying off the limited debt that we had. This year, we will prioritize the M and A growth as our second use of capital. As Casey mentioned, we are moving forward with the first deal and expect to close that in the Q2. The acquisition of HMP will be funded through some cash and draws on the credit facility. We will determine the exact mix as we approach the closing date and the final amounts that will get funded. Speaker 100:14:06Moving on to the Q2, we have provided net revenue guidance in the $40,200,000 to $41,200,000 range related to our core business. The midpoint of our revenue guidance is up 23% over the core revenue in the Q2 of 2022. We remain active in our discussions with existing and potentially new investors. We recently participated in another in person conference, we are continuing to see interest from new shareholders. We're excited to tell our story, but we're even more excited to continue to build out our footprint to new patients through our organic and now inorganic growth strategies. Speaker 100:14:45At this time, I'll turn it back over to Casey to wrap things up. Okay. Thanks, Todd. In summary, we witnessed and executed on a ton of positive momentum driven by our proven organic business model during the Q1. Our country is experiencing trends with more health insurers moving to Medicare Advantage Plans We are seeing these commercial insurers accumulate quality of care for patients who are on these plans. Speaker 100:15:33Regardless, the competitive payer environment is pointing towards adopting more cost efficient care, Our collaborations with these health systems and payers are well underway and Viemed is leading the effort in human interaction coupled with The macro tailwinds throughout the industry give us the confidence to expand at a faster rate than we ever have before. With an underserved population of respiratory patients still in need, a recipe of proven organic growth and a new inorganic growth strategy underway, We couldn't be more elated for what the future holds of Viemed. We want to thank all of our investors who have joined us on this ride and we look to welcome new investors as we take the company into a new era of growth in 2023 and beyond. This concludes our prepared remarks. We will now open up the floor for further questions. Operator00:16:53Our first question is coming from Brooks O'Neil from Lake Street Capital. Your line is now live. Speaker 300:17:04I have a couple of questions. The first one, I saw a thing that I think might have been generated by something somebody calls artificial intelligence That suggested you guys missed estimates this quarter. And I'm just curious because you clearly beat my estimates. Is there anybody out there who had estimates that were higher that you missed? Speaker 100:17:30No, not that we've seen. Really, what we have to focus on is we look at revenue, right? That's the only thing that we really got. And We came in, I guess, $600,000 above the top end of our $38,000,000 to $39,000,000 guidance range. So There's your miss, Brooks. Speaker 100:17:52We missed high. Speaker 300:17:54You missed high. That's a good miss except if you're shooting ducks. So I know your aim is good for Doug, so I'm not worried about it. Let me ask you this. Todd mentioned, I think, the mix shift and I think he said 65% Vince this quarter versus 71% in the past. Speaker 300:18:16Does that shifting mix concern you at all? Do you think it causes any margin pressure in particular? Speaker 100:18:28No, it's not concerning, but the second part of the question is something that we obviously remain laser focus on the ventilation piece of the business does carry a better margin. And I think that's why we're extremely proud the fact that we've kept our gross margin static over the last 8 quarters effectively, while we have diversified our business. So, it may not show in individual quarters, but the operational efficiencies that we're making up and down throughout the company are real. I think I've said it in the past, we don't expect to change the vent Contribution as much as we have historically because vents are back to growing. And so that's what's not concern rollout of Papan02 is still relatively young and the staffing business is still relatively young. Speaker 100:19:27So although much smaller piece of our business, They do grow at a faster rate. But no, everything from the diversification and where the margins are coming in is meeting or exceeding our expectations as we've laid out, as a management team and Board. So we are extremely excited about the results. Speaker 300:19:48Great. That's extremely helpful. So let me just ask one more. I understand that one acquisition does not a trend make. I like what I see from HMP and it seems like a great model. Speaker 300:20:04But would you comment at all about how you're thinking about the profile of potential future acquisitions and whether we should think of HMP as Sort of the classic Viomed acquisition target. Speaker 100:20:21Yes, that's a good question. HMP is definitely They checked the box with a few payers that we don't have as well. So it was really just a perfect fit for us In terms of what we got for our first one, it doesn't mean that every single transaction you see us do in the future will be we'll look exactly like HMP. I've always explained it, if you see us do maybe a smaller one of some sort, it might be us just going out and trying to expand our payer coverage and so on and so forth. And so that could happen. Speaker 100:21:06But right now, I mean, we're looking for other H and Ps and there's plenty of them out there in the pipeline. We're really focused on similar to H and P. Speaker 300:21:29Cool. I totally get that. So let me I lied. I'll just ask one more. So H and P, Kind of how you see the sleep business developing going forward? Speaker 100:21:59Yes. So The H and P business, I think they are at what, 45% sleep and 13% Ventilation. That excites us, Brooks. You're saying call points for sleep, typically a pulmonologist or even a family practice doc can treat respiratory diseases that will lead to a ventilator patient in need. So we really like The call points in the hospital systems that they're already in with their growing sleep business. Speaker 100:22:30We know sleep very well and we can certainly help each other with refining our processes to just better one another and sleep. But more importantly, where we see the major revenue synergy opportunity is for us to get in there and help teach them our organic growth and so forth. So I see a lot of good people in their sales force, a lot of and they're hungry to receive There's education and training that we're going to bring to them, and we're excited to start this kumbaya and learning from one another. And I'll follow-up on that real quick, Brooks, and it kind of parlays into what Casey was talking about in his prepared remarks. About 50% of their sleep revenue is coming from the resupply piece the business and that's something that we're starting to benefit from as well. Speaker 100:23:28We're probably we're not there yet because our sleep business from a national rollout is a little younger, but that's the real game is to get these patients that are compliant that stay on and just order resupply for every 3 or 6 months, whatever it might be. So we're excited about that. We have similar systems that we're going to be merging in that use the Same call center and so forth and the same software. So we see a lot of efficiencies there and maybe we'll learn some things from what they're doing on the resupply business as well. Operator00:24:08Thank you. Next question is coming from Michael Freeman from Raymond James. Your line is now live. Speaker 400:24:14Hey, Casey and Todd. Thanks very much for taking our questions and congratulations on the Following on Brook's question here, Wondering about the integration timeline for HMP. It looks like you are looking to work very closely with the sales team, which you see a lot of promise in. Wondering how you would describe that integration process should this deal close and its estimated timeline? And then moving forward from that, what we should expect for acquisition cadence moving forward? Speaker 100:24:59Well, what I'd say is the integration has already begun even though we're expected to close this thing, I guess, at the beginning of June. After we had the deal signed and announced and so forth, we immediately began integration efforts. And some of those integration efforts can start now, some have sales, whether it's how we train them. So it's across my guess probably through the end of the year before we have fully integrated. So that's our goal is to have this fully integrated during the current year. Speaker 100:25:40And we find that to be very important with The way we're going to do these because this is this acquisition, like Casey said, is sort of a playbook for future and that we really want the revenue synergies to carry The excitement and we want to continue to make sure that that's the theme of what we're going to acquire going forward. As it relates to the cadence, It's really going to be dependent on what we see, how much we like it. We're not we were pretty upfront with The Street. We didn't have to do a deal on any timeline. We grew 31% this quarter organically. Speaker 100:26:15We're set to grow based on guidance mid-20s again this quarter before acquisition. So We're not pressured to do deals, but we're out there searching pretty aggressively. Our M and A team is working hard to get this one done and integrated, but also Building the pipeline. So we don't want to set an expectation that we're going to do a certain number a year or a certain number a quarter. We're just going to wait for the right one to come along. Speaker 100:26:39And once we do, we'll probably act on it pretty quickly. Speaker 400:26:44Yes. Okay. We can appreciate that. Just to be clear, would you like to have this acquisition fully integrated before doing your next acquisition? Or are you agnostic and depending on the opportunity? Speaker 100:26:59Yes, I think we're agnostic to that. What we don't want to do is sacrifice the integration The first one because we're working on the second one, we'll be mindful of both of those at the same time. Speaker 400:27:12Okay. All right. That's very helpful. And now if you would, just one more for me. I'd like to talk about payer mix And penetrating different payers. Speaker 400:27:24One I'm interested in is the VA and another is Medicare Advantage specifically, I wonder if you could talk about your plans to penetrate those two areas. Speaker 100:27:36Yes. I mean, I'm seeing a major opportunity with The increasing adoption of MA plans, there's a lot of work to do with MA plans to get them fixed, I think Medicare is going through a process right now of learning about what the payers have been up to and Trying to set some regulations to align their rules with Medicare's rules, which should be a good thing How do you reduce the cost of health care? Well, you treat folks for less and that typically leads to treating them in the home, keeping patients out of the ER that do not need to be there. And that's why our behavioral health component of our business is becoming so much More important to our value prop as well, lots of folks that fled the ERs today are struggling with behavioral health issues and don't really need to be in there. And so The more that we can do in the home or through telehealth through the use of technology, I think you'll see a lot of rapid adoption to those types programs and those are the things that the hospitals want to partner with us on right now. Speaker 100:28:50As it relates to VA, 2nd largest payer in the country, Yes, we've been after them for the last 4 or 5 years, Michael, and we've got some pilot programs in place for our complex That they've reached out to us for a lot of their staffing needs and we've been building a track record of success for fulfilling the clinical labor that they've been in need of and the more you have that experience with them, the more they lean on you. And so we're reaping those benefits with The growth of VHF and Solvad as I mentioned in the script. Speaker 400:29:35Okay, great. This is tremendously helpful. Congratulations on a really great quarter and look forward to next time. Speaker 100:29:42Thanks, Eric. It's Michael. Operator00:29:48Our next question is coming from Doug Cooper from Beacon Securities. Your line is now live. Speaker 200:29:54Good morning, guys. A couple of things, I just want to focus on the SG and A line. In Q4, G and A was actually down versus Q3, 3, up a couple of $1,000,000 sequentially now. I guess driven by the increase in staffing, you just talked about 770. I think Casey now, I think it was 74 3 of our factors, the MD and A in Q4. Speaker 200:30:17How many just remind us, how many of those will be salespeople out of the ad versus Q4? And how long typically, say, would it take for a sales guy to be productive? In other words, I guess, The addition to some of those sales people in this quarter was a drag on EBITDA. And when do you expect them to be accretive to the other? Speaker 100:30:39Yes. I think I got all that Doug. It's a little muffled. But in general, probably about half of the staffing additions that we had during the quarter are sales related right now. And I'll let Hoy kind of chime in on the cadence of when they become more productive and so forth. Speaker 100:30:56But The other thing is if you look at the Q1 over Q4, when you come through a beginning of the year, especially a year where we had as many new patients about payroll taxes, 401 contributions. So there's inherently going to be a little bit more pressure on the Q1 than there is the 4th quarter when things like that have already run their course. Once again, the piece of the commission based Compensation was high this quarter just because our sales team just had a phenomenal quarter, especially Our last month of the quarter being March, it was a record across all products. So that's probably the biggest part of the G and A driver. But once again, as to your key question, the sales force made up about half of the net adds. Speaker 100:31:52Yes. And I would Say to your question about how long does it take them to get started. In maybe 2 or 3 years ago, we were giving them up to 6 months. Today, we give them up to about like 6 to 9 months because we've seen some late bloomers And we're patient with them. We're offering them the right training and support. Speaker 100:32:15But last year, we were commenting on the new areas. I think we added 25 net new areas. And just to give you an example, we've hired 28 new hires to date year to date this to the year, however, we've already let 17 from the previous year go, not unless they let them go, they usually Convert into a respiratory therapist that's going to offer support and we replace them that area with someone who might have better success. And so that's the tug and the pull on how we regulate the sales force, but we're Constantly trying to optimize and that's why I was commenting on optimization of the sales force and really getting the folks that aren't going to cut it out of there and trading the new ones in. And so that's the game that we constantly play. Speaker 100:33:08That's what we're really good at. And it's the ultimate driver of our success here and will be for 2023 as well. Doug, I'm going to add one piece of information. Just if you're looking at it on a 1Q over 1Q basis because I think that always makes a lot of sense, just to take seasonality things out. Obviously, the Q1 always has a higher challenge with collections and insurance changes and all those things. Speaker 100:33:33If you look at it over last year, while the print might not look like we had margin expansion, there was roughly $2,000,000 of benefit last year between either the Provider Relief Fund and or the COVID revenue. So we're on track. We don't have it as a formal guided number, but we're out there saying that we want to expand our EBITDA margins by between 102 100 basis points this year while growing revenue, whatever we grow it. And we can say that on the core, we did that during 1Q 'twenty three over 1Q 'twenty two. Doug, it's important to look at that. Speaker 100:34:11We're really having a lot of success finding our sales reps right now. It's the recruiting efforts. It's not about finding people, it's more about getting them up and running in the right way. So that's what we're focused on here. Speaker 200:34:27And just to be clear, just a couple of things. Commissions, they only paid once, I guess, right? And like once that patient is on, they say, I got to commission and then There will be no commission associated with that on a go forward basis, is that on a per basis? Is that fair? Speaker 100:34:43Once again, you're kind of breaking up on us a little bit, but I think the question is you just pay it. You only pay it in the 1st month of that's our structure. Speaker 200:34:53Okay. Sorry, is that better? There's some background noise at my end. Just on I just want to touch on bad debt as well. It was the same 9, I'll call it 9.5 percent in net sales, but it tends to lessen over the course of the year. Speaker 200:35:09Will that help drive margin expansion in the Speaker 100:35:13That should. Yes, that definitely should. And that's and if you look at it last year, the 4th quarter had the lowest, which is also in line with us having posting the highest margins during the Q4 last year. Speaker 200:35:25Okay. And finally, just On the Phantom shares, I think it was $700,000 the impact on G and A. Well, I just don't have it in Q4. Do you have that number off the top of your head? Speaker 100:35:37Yes. So we had it was right around $900,000 in the 4th quarter. It was actually $1,100,000 during the Q1 of 2023. Operator00:35:57We reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments. Speaker 100:36:04We want to thank everybody for listening in and calling in and follow-up with us if you have any other further questions. Have a good day. Operator00:36:12Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallViemed Healthcare Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release Viemed Healthcare Earnings HeadlinesViemed Healthcare Announces First Quarter 2025 Earnings Conference Call DetailsApril 22, 2025 | globenewswire.comViemed Healthcare, Inc. (VMD): A Bull Case TheoryMarch 28, 2025 | insidermonkey.comTrump’s Secret Social Security Plan?In less than a decade, Social Security could be out of money. But a surprising plan from Trump’s inner circle may not just save the system — it could unlock a major opportunity for savvy investors. Financial insider Jim Rickards calls it “Social Prosperity,” and says those who act now could see the biggest gains.April 26, 2025 | Paradigm Press (Ad)Viemed Healthcare, Inc. (VMD) Q4 2024 Earnings Call TranscriptMarch 11, 2025 | seekingalpha.comViemed Healthcare Announces Record 2024 Financial ResultsMarch 10, 2025 | globenewswire.comViemed healthcare director Kaushal Nitin sells shares worth $571,200November 15, 2024 | investing.comSee More Viemed Healthcare Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Viemed Healthcare? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Viemed Healthcare and other key companies, straight to your email. Email Address About Viemed HealthcareViemed Healthcare (NASDAQ:VMD), together with its subsidiaries, provides home medical equipment (HME) and post-acute respiratory healthcare services to patients in the United States. It provides respiratory disease management solutions, including treatment of chronic obstructive pulmonary disease (COPD), which include non-invasive ventilation, percussion vests, and other therapies; and invasive and non-invasive ventilation and related equipment and supplies to patients suffering from COPD. The company leases non-invasive and invasive ventilators, positive airway pressure machines (PAP), durable medical equipment, percussion vests, oxygen concentrators, and other medical equipment; and sells and rents HME devices. In addition, it provides neuromuscular care and oxygen therapy services; and sleep apnea management provides sleep solutions and/or equipment, such as PAP, automatic continuous positive airway pressure, and bi-level positive airway pressure machines. Further, the company offers in home sleep apnea testing services, as well as healthcare staffing and recruitment services. Viemed Healthcare, Inc. was founded in 2006 and is headquartered in Lafayette, Louisiana.View Viemed Healthcare ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:14As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Todd Zehnder, Chief Operating Officer. Please go ahead, sir. Speaker 100:00:24Thank you, Kevin. Good morning, everyone. Please note that our remarks in this conference call may include forward looking statements under the U. S. Federal securities laws or forward looking information under applicable Canadian securities legislation, which we collectively refer to as forward looking statements. Speaker 100:00:41Such statements reflect the company's current views and intentions with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to vary from those indicated in forward looking statements. Examples of such risks and uncertainties are discussed in our disclosure documents follow the SEC or the securities regulatory authorities in certain provinces of Canada. Because of these risks and uncertainties, investors should not place undue reliance on forward looking statements. The forward looking statements made in this conference call are made as of today, The company undertakes no obligation to update or revise any forward looking statements, except as required by law. The Q1 financial results, news release, including the related financial statements are available on the SEC's website. Speaker 100:01:29I'll now turn it over to Casey to get things started. Speaker 200:01:32All right. Speaker 300:01:33Thank you, Todd. Speaker 100:01:34Good morning, everyone, and thank you for joining our Q1 2023 earnings call. Today we're extremely excited to report on how our core business is really clicking on all cylinders and certainly driving these record setting 1st quarter results. We will also review our most recent pending acquisition of Home Medical Products, HMP. Lastly, I'll spend some time providing our current view and outlook of the industry. First, I'd like to take a moment to acknowledge and thank our dedicated team of respiratory therapists, behavioral health specialists, Staffing professionals and administrative support staff who work continuously to deliver the best in class care to the patients we are privileged to serve. Speaker 100:02:17Our outstanding quarter is a direct result of their hard work. At the end of the Q1, our Viemed family grew to 7 70 employees We are incredibly excited to soon welcome the H and P team into our family, which is expected to increase our headcount by approximately 180 employees. The Q1 of 2023 was an exceptionally strong example of our organic growth success. Our revenue results exceeded the top end of our guided range and confirm that despite being a larger company, we clearly have the ability to maintain our impressive pre pandemic year over year growth rates. The strategy of having Biomed Healthcare Staffing find the right people to expand our organic business has proven to be successful. Speaker 100:03:03BHS has contributed to our ability to optimize our hiring efforts, while our back office refines our training and culture. Our training will help drive continued organic growth throughout the year and we are probably most excited to share it with our new employees onboarding With open access to our referral sources restored post pandemic, we only see positive forces ahead to support future growth. Furthermore, our respiratory equipment supply chain is stronger than ever before, with many new manufacturers competing for our business. The increased competition is driving down cost of our purchases of equipment and ensuring that we will have adequate We expect to leverage our volume purchases in the near term upon closing the H and P transaction. The purchase of H and P will launch our acquisition growth initiatives with a stellar organization that has an extraordinary reputation with patients, payers and physicians. Speaker 100:04:05Above all, the team at HMP shares our same culture and driving passion for treating each other with respect, while delivering innovative patient focused care. Upon close of the transaction, the acquisition will provide immediate geographic, product and payer diversification to the combined organization. HMP is a major provider in Tennessee, Northern Alabama and Northern Mississippi and currently serves over 44,000 active patients. In 2022, H and P had annual revenues of approximately $28,000,000 and the expected purchase price of the transaction is approximately $31,000,000 subject to customary closing adjustments. While the transaction is expected to be immediately accretive, we are most excited about the opportunity to share our mature complex model with a strong team at H and P. Speaker 100:04:59Their organization already has an impressive foothold in the sleep business and strong relationships with pulmonologists and local physicians. We are certain that we can complement their existing revenues by integrating our complex respiratory model. In the past, we have invested heavily in our scalable training, proprietary technologies and sound clinical protocols. Our biggest constraint to growth has always been our ability to recruit talented individuals that can go out and put our model into practice. Based on our long standing relationships with the H and P team, we are confident that we have identified 180 incredibly talented individuals that We expect substantial revenue synergies as a result of the combination. Speaker 100:05:47We plan to carefully integrate the organizations over the coming months as we also continue to recruit and train a robust pipeline of organically sourced hires. We expect our acquisition growth to be strategically measured. We have developed comprehensive integration plans based on our recently hired M and A executives' deep experience with the acquisitions. Our strategy is not to simply roll up companies and cut costs. We never want to impair or impede our strong organic both, we are careful to execute transactions with organizations that we believe will continue to grow at impressive rates and are confident that well executed acquisitions can create an accelerator to our organic growth model. Speaker 100:06:31Regulators and legislators also continue to work in collaboration with the home medical equipment industry to find practical solutions that ensure providers can deliver care to patients. For example, reimbursement relief legislation was recently introduced in the Senate that would extend the 70 fivetwenty 5 blended Medicare reimbursement rate for suppliers in non rural, non competitive bidding areas throughout the end of 2024. These common sense steps provide increased stability and predictability in the reimbursement environment, in contrast to previous initiatives such as competitive bidding. Historically, Any competitive bidding activities are initiated by CMS approximately 18 months prior to implementation of contracts and pricing. Although CMS has not announced plans related to future competitive bidding rounds, the timeline for around 2024 competitive bidding process has effectively lapsed and around 2025 is becoming increasingly unlikely as CMS has provided no signal that a return to the program will provide any savings. Speaker 100:07:37We remain confident that all current indicators promote a strong reimbursement environment for the coming years. As a result, our business is well insulated from recession As the reimbursement environment evolves through Medicare Advantage trends and value based arrangements, We are optimistic that our high quality, cost effective service offerings can continue to thrive. As health plan administrators become more sophisticated in their use of data and technology, we are well positioned as a leading provider of high-tech and high touch care in the home. We proactively invest in technology and protocols that create a seamless administrative process, capture data, improve benefits to patients, physicians and payers. In order to solve more problems for our customers as we scale, we are expanding our ventilation adjacent offerings and diversifying our product and service mix. Speaker 100:08:31Not only does our growing portfolio provide a robust continuum of care solution for pulmonologists and patients, but our ability to partner with patients sooner in their progressive disease state allows us to treat their underlying conditions at the right time. Adoption of innovation and technologies such as portable oxygen concentrators and remote setups of TAP devices have enabled us to expand these portfolios quickly and in a cost effective manner. These ventilator adjacent offerings have the ability to increase the length of our patient relationships. For example, A COPD patient that is provided with oxygen solutions by Viemed may ultimately become a ventilator patient as their disease state progresses. Similarly, when a young CPAP patient with sleep apnea is properly cared for and kept comfortable and compliant, they typically remain a resupply patient requiring fresh masks, tubing and filters for decades. Speaker 100:09:28Most importantly, our peer reviewed published medical research continue to demonstrate that clinical and financial benefits of non invasive ventilation in the home are greatest when therapy begins immediately following the diagnosis. Recruitment services offered through Viemed Healthcare Staffing. In addition to continuously improving the quality and volume of internal hires, Viemed Healthcare Staffing is a solution for our external customers and strengthens our relationships with those partners, including the VA. BHS and our SVB OSB partners, Solvett, have been placing many clinicians throughout the VAs across the country. With more on our financial results, capital activities and regulatory updates, I'll now turn the call over to our Chief Operating Officer, Todd Denton. Speaker 100:10:24Thanks again, Casey. In reviewing the financial results, all figures are in U. S. Dollars and full results have been made available on the SEC website as well as SEDAR. Our core business generated net revenue of $39,600,000 during the Q1 of 2023 as compared to net revenues of $30,200,000 in the Q1 of 2022, which equates to a 31% increase. Speaker 100:10:48Our sequential growth for the core business was 6%, Which is especially exciting as the Q1 presents seasonal challenges with insurance changes for many beneficiaries. We remain optimistic that we will be able to continue our high organic growth rates as we are still seeing open access around the country. Our growth and EBITDA margin percentages continue to be strong as we have focused on both margin and diversification. We have followed on our second half of twenty twenty two mantra of diversification, but also being laser focused on the bottom line. We continue to see our margin percentage be influenced by our product mix and continue to be pleased by the notional growth. Speaker 100:11:30Our gross and EBITDA margins during the quarter came in at 61% 21%, respectively. Our first quarter gross and EBITDA amounts came in at $24,000,000 $8,300,000 respectively. Our first quarter revenue from Vince was approximately 65% of our core revenue as compared to 71% in the Q1 of 2022. Our SG and A for the quarter totaled approximately $19,800,000 as compared to $15,800,000 in the Q1 of 2022. We are continuing the efforts of managing costs around across the board, but as we have always said, we are investing in the growth of our business and the patient experience. Speaker 100:12:12We expect to continue to grow revenues at a faster pace than expenses, which should yield ongoing margin expansion. For the quarter, we invested approximately $4,700,000 on capital expenditures. The CapEx continues to be spent across all of our major product lines and once again has been done through a diversified supplier network. As was the case last year, our vent and oxygen products had the most CapEx during the current period. We continue to see an ample opportunity to procure inventory and have not had to turn away any business as a result of supply chain issues. Speaker 100:12:50We have once again funded all of our CapEx with discretionary cash flow during a quarter of extreme growth and we were also able to expand our liquidity. We are very proud of the pristine balance sheet where we actually grew our cash balance by $6,600,000 at March 31 to $23,500,000 Additionally, we ended the quarter with an overall working capital $23,300,000 We remain debt free at quarter end with a fully undrawn credit facility. Our capital allocation strategy has shifted over the last 6 months. We still have our first priority on CapEx to service new patients. Our organic growth through new patient service has and will likely always be our first priority. Speaker 100:13:35Last year, we focused our secondary capital allocation efforts on buying stock and paying off the limited debt that we had. This year, we will prioritize the M and A growth as our second use of capital. As Casey mentioned, we are moving forward with the first deal and expect to close that in the Q2. The acquisition of HMP will be funded through some cash and draws on the credit facility. We will determine the exact mix as we approach the closing date and the final amounts that will get funded. Speaker 100:14:06Moving on to the Q2, we have provided net revenue guidance in the $40,200,000 to $41,200,000 range related to our core business. The midpoint of our revenue guidance is up 23% over the core revenue in the Q2 of 2022. We remain active in our discussions with existing and potentially new investors. We recently participated in another in person conference, we are continuing to see interest from new shareholders. We're excited to tell our story, but we're even more excited to continue to build out our footprint to new patients through our organic and now inorganic growth strategies. Speaker 100:14:45At this time, I'll turn it back over to Casey to wrap things up. Okay. Thanks, Todd. In summary, we witnessed and executed on a ton of positive momentum driven by our proven organic business model during the Q1. Our country is experiencing trends with more health insurers moving to Medicare Advantage Plans We are seeing these commercial insurers accumulate quality of care for patients who are on these plans. Speaker 100:15:33Regardless, the competitive payer environment is pointing towards adopting more cost efficient care, Our collaborations with these health systems and payers are well underway and Viemed is leading the effort in human interaction coupled with The macro tailwinds throughout the industry give us the confidence to expand at a faster rate than we ever have before. With an underserved population of respiratory patients still in need, a recipe of proven organic growth and a new inorganic growth strategy underway, We couldn't be more elated for what the future holds of Viemed. We want to thank all of our investors who have joined us on this ride and we look to welcome new investors as we take the company into a new era of growth in 2023 and beyond. This concludes our prepared remarks. We will now open up the floor for further questions. Operator00:16:53Our first question is coming from Brooks O'Neil from Lake Street Capital. Your line is now live. Speaker 300:17:04I have a couple of questions. The first one, I saw a thing that I think might have been generated by something somebody calls artificial intelligence That suggested you guys missed estimates this quarter. And I'm just curious because you clearly beat my estimates. Is there anybody out there who had estimates that were higher that you missed? Speaker 100:17:30No, not that we've seen. Really, what we have to focus on is we look at revenue, right? That's the only thing that we really got. And We came in, I guess, $600,000 above the top end of our $38,000,000 to $39,000,000 guidance range. So There's your miss, Brooks. Speaker 100:17:52We missed high. Speaker 300:17:54You missed high. That's a good miss except if you're shooting ducks. So I know your aim is good for Doug, so I'm not worried about it. Let me ask you this. Todd mentioned, I think, the mix shift and I think he said 65% Vince this quarter versus 71% in the past. Speaker 300:18:16Does that shifting mix concern you at all? Do you think it causes any margin pressure in particular? Speaker 100:18:28No, it's not concerning, but the second part of the question is something that we obviously remain laser focus on the ventilation piece of the business does carry a better margin. And I think that's why we're extremely proud the fact that we've kept our gross margin static over the last 8 quarters effectively, while we have diversified our business. So, it may not show in individual quarters, but the operational efficiencies that we're making up and down throughout the company are real. I think I've said it in the past, we don't expect to change the vent Contribution as much as we have historically because vents are back to growing. And so that's what's not concern rollout of Papan02 is still relatively young and the staffing business is still relatively young. Speaker 100:19:27So although much smaller piece of our business, They do grow at a faster rate. But no, everything from the diversification and where the margins are coming in is meeting or exceeding our expectations as we've laid out, as a management team and Board. So we are extremely excited about the results. Speaker 300:19:48Great. That's extremely helpful. So let me just ask one more. I understand that one acquisition does not a trend make. I like what I see from HMP and it seems like a great model. Speaker 300:20:04But would you comment at all about how you're thinking about the profile of potential future acquisitions and whether we should think of HMP as Sort of the classic Viomed acquisition target. Speaker 100:20:21Yes, that's a good question. HMP is definitely They checked the box with a few payers that we don't have as well. So it was really just a perfect fit for us In terms of what we got for our first one, it doesn't mean that every single transaction you see us do in the future will be we'll look exactly like HMP. I've always explained it, if you see us do maybe a smaller one of some sort, it might be us just going out and trying to expand our payer coverage and so on and so forth. And so that could happen. Speaker 100:21:06But right now, I mean, we're looking for other H and Ps and there's plenty of them out there in the pipeline. We're really focused on similar to H and P. Speaker 300:21:29Cool. I totally get that. So let me I lied. I'll just ask one more. So H and P, Kind of how you see the sleep business developing going forward? Speaker 100:21:59Yes. So The H and P business, I think they are at what, 45% sleep and 13% Ventilation. That excites us, Brooks. You're saying call points for sleep, typically a pulmonologist or even a family practice doc can treat respiratory diseases that will lead to a ventilator patient in need. So we really like The call points in the hospital systems that they're already in with their growing sleep business. Speaker 100:22:30We know sleep very well and we can certainly help each other with refining our processes to just better one another and sleep. But more importantly, where we see the major revenue synergy opportunity is for us to get in there and help teach them our organic growth and so forth. So I see a lot of good people in their sales force, a lot of and they're hungry to receive There's education and training that we're going to bring to them, and we're excited to start this kumbaya and learning from one another. And I'll follow-up on that real quick, Brooks, and it kind of parlays into what Casey was talking about in his prepared remarks. About 50% of their sleep revenue is coming from the resupply piece the business and that's something that we're starting to benefit from as well. Speaker 100:23:28We're probably we're not there yet because our sleep business from a national rollout is a little younger, but that's the real game is to get these patients that are compliant that stay on and just order resupply for every 3 or 6 months, whatever it might be. So we're excited about that. We have similar systems that we're going to be merging in that use the Same call center and so forth and the same software. So we see a lot of efficiencies there and maybe we'll learn some things from what they're doing on the resupply business as well. Operator00:24:08Thank you. Next question is coming from Michael Freeman from Raymond James. Your line is now live. Speaker 400:24:14Hey, Casey and Todd. Thanks very much for taking our questions and congratulations on the Following on Brook's question here, Wondering about the integration timeline for HMP. It looks like you are looking to work very closely with the sales team, which you see a lot of promise in. Wondering how you would describe that integration process should this deal close and its estimated timeline? And then moving forward from that, what we should expect for acquisition cadence moving forward? Speaker 100:24:59Well, what I'd say is the integration has already begun even though we're expected to close this thing, I guess, at the beginning of June. After we had the deal signed and announced and so forth, we immediately began integration efforts. And some of those integration efforts can start now, some have sales, whether it's how we train them. So it's across my guess probably through the end of the year before we have fully integrated. So that's our goal is to have this fully integrated during the current year. Speaker 100:25:40And we find that to be very important with The way we're going to do these because this is this acquisition, like Casey said, is sort of a playbook for future and that we really want the revenue synergies to carry The excitement and we want to continue to make sure that that's the theme of what we're going to acquire going forward. As it relates to the cadence, It's really going to be dependent on what we see, how much we like it. We're not we were pretty upfront with The Street. We didn't have to do a deal on any timeline. We grew 31% this quarter organically. Speaker 100:26:15We're set to grow based on guidance mid-20s again this quarter before acquisition. So We're not pressured to do deals, but we're out there searching pretty aggressively. Our M and A team is working hard to get this one done and integrated, but also Building the pipeline. So we don't want to set an expectation that we're going to do a certain number a year or a certain number a quarter. We're just going to wait for the right one to come along. Speaker 100:26:39And once we do, we'll probably act on it pretty quickly. Speaker 400:26:44Yes. Okay. We can appreciate that. Just to be clear, would you like to have this acquisition fully integrated before doing your next acquisition? Or are you agnostic and depending on the opportunity? Speaker 100:26:59Yes, I think we're agnostic to that. What we don't want to do is sacrifice the integration The first one because we're working on the second one, we'll be mindful of both of those at the same time. Speaker 400:27:12Okay. All right. That's very helpful. And now if you would, just one more for me. I'd like to talk about payer mix And penetrating different payers. Speaker 400:27:24One I'm interested in is the VA and another is Medicare Advantage specifically, I wonder if you could talk about your plans to penetrate those two areas. Speaker 100:27:36Yes. I mean, I'm seeing a major opportunity with The increasing adoption of MA plans, there's a lot of work to do with MA plans to get them fixed, I think Medicare is going through a process right now of learning about what the payers have been up to and Trying to set some regulations to align their rules with Medicare's rules, which should be a good thing How do you reduce the cost of health care? Well, you treat folks for less and that typically leads to treating them in the home, keeping patients out of the ER that do not need to be there. And that's why our behavioral health component of our business is becoming so much More important to our value prop as well, lots of folks that fled the ERs today are struggling with behavioral health issues and don't really need to be in there. And so The more that we can do in the home or through telehealth through the use of technology, I think you'll see a lot of rapid adoption to those types programs and those are the things that the hospitals want to partner with us on right now. Speaker 100:28:50As it relates to VA, 2nd largest payer in the country, Yes, we've been after them for the last 4 or 5 years, Michael, and we've got some pilot programs in place for our complex That they've reached out to us for a lot of their staffing needs and we've been building a track record of success for fulfilling the clinical labor that they've been in need of and the more you have that experience with them, the more they lean on you. And so we're reaping those benefits with The growth of VHF and Solvad as I mentioned in the script. Speaker 400:29:35Okay, great. This is tremendously helpful. Congratulations on a really great quarter and look forward to next time. Speaker 100:29:42Thanks, Eric. It's Michael. Operator00:29:48Our next question is coming from Doug Cooper from Beacon Securities. Your line is now live. Speaker 200:29:54Good morning, guys. A couple of things, I just want to focus on the SG and A line. In Q4, G and A was actually down versus Q3, 3, up a couple of $1,000,000 sequentially now. I guess driven by the increase in staffing, you just talked about 770. I think Casey now, I think it was 74 3 of our factors, the MD and A in Q4. Speaker 200:30:17How many just remind us, how many of those will be salespeople out of the ad versus Q4? And how long typically, say, would it take for a sales guy to be productive? In other words, I guess, The addition to some of those sales people in this quarter was a drag on EBITDA. And when do you expect them to be accretive to the other? Speaker 100:30:39Yes. I think I got all that Doug. It's a little muffled. But in general, probably about half of the staffing additions that we had during the quarter are sales related right now. And I'll let Hoy kind of chime in on the cadence of when they become more productive and so forth. Speaker 100:30:56But The other thing is if you look at the Q1 over Q4, when you come through a beginning of the year, especially a year where we had as many new patients about payroll taxes, 401 contributions. So there's inherently going to be a little bit more pressure on the Q1 than there is the 4th quarter when things like that have already run their course. Once again, the piece of the commission based Compensation was high this quarter just because our sales team just had a phenomenal quarter, especially Our last month of the quarter being March, it was a record across all products. So that's probably the biggest part of the G and A driver. But once again, as to your key question, the sales force made up about half of the net adds. Speaker 100:31:52Yes. And I would Say to your question about how long does it take them to get started. In maybe 2 or 3 years ago, we were giving them up to 6 months. Today, we give them up to about like 6 to 9 months because we've seen some late bloomers And we're patient with them. We're offering them the right training and support. Speaker 100:32:15But last year, we were commenting on the new areas. I think we added 25 net new areas. And just to give you an example, we've hired 28 new hires to date year to date this to the year, however, we've already let 17 from the previous year go, not unless they let them go, they usually Convert into a respiratory therapist that's going to offer support and we replace them that area with someone who might have better success. And so that's the tug and the pull on how we regulate the sales force, but we're Constantly trying to optimize and that's why I was commenting on optimization of the sales force and really getting the folks that aren't going to cut it out of there and trading the new ones in. And so that's the game that we constantly play. Speaker 100:33:08That's what we're really good at. And it's the ultimate driver of our success here and will be for 2023 as well. Doug, I'm going to add one piece of information. Just if you're looking at it on a 1Q over 1Q basis because I think that always makes a lot of sense, just to take seasonality things out. Obviously, the Q1 always has a higher challenge with collections and insurance changes and all those things. Speaker 100:33:33If you look at it over last year, while the print might not look like we had margin expansion, there was roughly $2,000,000 of benefit last year between either the Provider Relief Fund and or the COVID revenue. So we're on track. We don't have it as a formal guided number, but we're out there saying that we want to expand our EBITDA margins by between 102 100 basis points this year while growing revenue, whatever we grow it. And we can say that on the core, we did that during 1Q 'twenty three over 1Q 'twenty two. Doug, it's important to look at that. Speaker 100:34:11We're really having a lot of success finding our sales reps right now. It's the recruiting efforts. It's not about finding people, it's more about getting them up and running in the right way. So that's what we're focused on here. Speaker 200:34:27And just to be clear, just a couple of things. Commissions, they only paid once, I guess, right? And like once that patient is on, they say, I got to commission and then There will be no commission associated with that on a go forward basis, is that on a per basis? Is that fair? Speaker 100:34:43Once again, you're kind of breaking up on us a little bit, but I think the question is you just pay it. You only pay it in the 1st month of that's our structure. Speaker 200:34:53Okay. Sorry, is that better? There's some background noise at my end. Just on I just want to touch on bad debt as well. It was the same 9, I'll call it 9.5 percent in net sales, but it tends to lessen over the course of the year. Speaker 200:35:09Will that help drive margin expansion in the Speaker 100:35:13That should. Yes, that definitely should. And that's and if you look at it last year, the 4th quarter had the lowest, which is also in line with us having posting the highest margins during the Q4 last year. Speaker 200:35:25Okay. And finally, just On the Phantom shares, I think it was $700,000 the impact on G and A. Well, I just don't have it in Q4. Do you have that number off the top of your head? Speaker 100:35:37Yes. So we had it was right around $900,000 in the 4th quarter. It was actually $1,100,000 during the Q1 of 2023. Operator00:35:57We reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments. Speaker 100:36:04We want to thank everybody for listening in and calling in and follow-up with us if you have any other further questions. Have a good day. Operator00:36:12Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.Read morePowered by