QUIPT HOME MEDICAL CORP. Exhibit 99.2
3rd Quarter 2023
Management's Discussion and Analysis
For the Three and Nine months Ended June 30, 2023
Quipt Home Medical Corp.
MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2023 and 2022
(Tabular dollar amounts expressed in thousands, except per share amounts)
The following Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of Quipt Home Medical Corp. and its subsidiaries ("Quipt" or the "Company"), prepared as of August 14, 2023 and should be read in conjunction with the unaudited consolidated financial statements for the three and nine months ended June 30, 2023, including the notes therein. These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting", using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Unless otherwise specified, all financial data is presented in US dollars. The words "we", "our", "us", "Company", and "Quipt" refer to Quipt Home Medical Corp. and/or the management and employees of the Company.
Additional information on the Company is available for review on SEDAR at www.sedar.com. Such information is not considered a part of this MD&A.
Table of Contents | |
Page 2 | |
Page 4 | |
Page 5 | About Our Business and Operating Results |
Page 6 | Operating Results |
Page 11 | Financial Position |
Page 15 | Accounting and Disclosure Matters |
Page 19 | Financial Instruments and Risk Management |
Page 20 | Risk Factors |
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MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2023 and 2022
(Tabular dollar amounts expressed in thousands, except per share amounts)
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This MD&A contains certain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based upon the current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, and other future conditions of the Company. Forward-looking statements can be identified by the words such as "expect", "likely", "may", "will",, "would", "could", "should", "continue", "contemplate", "intend", or "anticipate", "believe", "envision", "estimate", "expect", "plan", "predict", "project", "target", "potential", "proposed", "estimate" and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other statements that are not statements of fact. Such forward-looking statements are made as of the date of this MD&A.
Forward-looking statements in this MD&A therein include, but are not limited to, statements with respect to: operating results; profitability; financial condition and resources; anticipated needs for working capital; liquidity; capital resources; capital expenditures; milestones; licensing milestones; information with respect to future growth and growth strategies; anticipated trends in the industry in with the Company operates; the Company's future financing plans; timelines; currency fluctuations; government regulation; unanticipated expenses; commercial disputes or claims; limitations on insurance coverage; availability and expectations regarding of cash flow to fund capital requirements; the product offerings of the Company; the competitive conditions of the industry; the competitive and business strategies of the Company; on-going implications of the novel coronavirus ("COVID-19"); statements relating to the business and future activities of, and developments related to, the Company, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company's business, operations and plans; and other events or conditions that may occur in the future.
Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of the Company's management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. The Company believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. The material factors and assumptions used to develop the forward-looking statements contained in this MD&A, without limitation: the Company's ability to successfully execute its growth strategies and business plan; the ability to successfully identify strategic acquisitions; the Company's ability to realize anticipated benefits, synergies or generate revenue, profits or value from its recent acquisitions into existing operations; management's perceptions of historical trends, current conditions and expected future developments; the ability of the Company to take market share from competitors; the Company's ability to attract and retain skilled staff; market conditions and competition; the products, services and technology offered by the Company's competitors; the Company's ability to generate cash flow from operations; the Company's ability to keep pace with changing regulatory requirements; ongoing ability to conduct business in the regulatory environments in which the Company operates and may operate in the future; that the Company's ability to maintain strong business relationships with its suppliers, service provides and other third parties will be maintained; COVID-19 and recall related supply chain issues will be resolved within the near future; the Company's ability to fulfill prescriptions for services and products; the anticipated growth of the niche market of home equipment and monitoring; the anticipated increase in demand for various medical products and equipment; demand and interest in the Company's products and services; the ability to deploy up front capital to purchase monitoring and treatment equipment; anticipated and unanticipated costs; the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; the general economic, financial market, regulatory and political conditions in which the Company operates and the absence of material adverse changes in the Company's
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MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2023 and 2022
(Tabular dollar amounts expressed in thousands, except per share amounts)
industry, regulatory environment or the global economy; and other considerations that management believes to be appropriate in the circumstances.
Forward-looking statements speak only as at the date they are made and are based on information currently available and on the then current expectations. Readers are cautioned that forward-looking statements are not based on historical facts but instead are based on reasonable assumptions and estimates of management of the Company at the time they were provided or made and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, but not limited to, known and unknown risks, uncertainties, assumptions and other factors, including those listed under "Risk Factors", which include: credit risks, market risks (including those related to equity, commodity, foreign exchange and interest rate markets), liquidity risks, operational risks (including those related to technology and infrastructure), and risks relating to reputation, insurance, strategy, regulatory matters, legal matters, environmental matters and capital adequacy. Examples of such risk factors include: the Company may be subject to significant capital requirements and operating risks; changes in law, the ability to implement business strategies, growth strategies and pursue business opportunities; state of the capital markets; the availability of funds and resources to pursue operations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key suppliers; granting of permits and licenses in a highly regulated business; competition; difficulty integrating newly acquired businesses; low profit market segments; disruptions in or attacks (including cyber-attacks) on 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; the failure of third parties to comply with their obligations; the impact of new and changes to, or application of, current laws and regulations; the overall difficult litigation environment, including in the United States; risks related to infectious diseases, including the impacts of COVID-19; increased competition; changes in foreign currency rates; loss of foreign private issuer status; risks relating to the deterioration of global economic conditions; 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; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events, as well as other general economic, market and business conditions, amongst others, as well as those risk factors described under the heading "Risk Factors" and elsewhere in this MD&A and therein and as described from time to time in documents filed by the Company with Canadian securities regulatory authorities including, without limitation, the Company's audited annual financial statements and the Company's Annual Information Form ("AIF"). Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Readers are cautioned that the above list of cautionary statements is not exhaustive. A number of factors could cause actual events, performance or results to differ materially from what is projected in forward-looking statements. The purpose of forward-looking statements is to provide the reader with a description of management's expectations, and such forward- looking statements may not be appropriate for any other purpose. You should not place undue reliance on forward-looking statements contained in this MD&A. Although the Company believes that the expectations reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2023 and 2022
(Tabular dollar amounts expressed in thousands, except per share amounts)
THIRD QUARTER 2023 HIGHLIGHTS
- Increased revenues for the three months ended June 30, 2023 to $60.3 million, an increase of 64% from the three months ended June 30, 2022.
- Increased the number of equipment set-ups to 202,587 for the three months ended June 30, 2023, an increase of 51.5% from the three months ended June 30, 2022.
- Increased the number of respiratory resupply set-ups to 108,391 for the three months ended June 30, 2023, an increase of 72.6% from the three months ended June 30, 2022.
- Generated Adjusted EBITDA (defined below) of $13.9 million for the three months ended June 30, 2023, an 80% increase from the three months ended June 30, 2022. This represents 23.0% of revenue for the three months ended June 30, 2023, an increase from 21.0% for the three months ended June 30, 2022. Adjusted EBITDA is a non- IFRS measure and is reconciled to net income (loss) on pages 6 and 7.
- In April 2023, completed a public offering, generating $27.9 million of net proceeds.
SELECTED QUARTERLY INFORMATION
For the three | For the three | As of or for the | As of or for the | |||||||||
months | months | nine months | nine months | |||||||||
ended June 30, | ended June 30, | ended June 30, | ended June 30, | |||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Number of patients serviced(1) | 140,515 | 89,085 | 239,146 | 153,867 | ||||||||
Number of equipment set-ups or | ||||||||||||
deliveries | 202,587 | 133,704 | 547,038 | 373,142 | ||||||||
Respiratory resupply set-ups or | ||||||||||||
deliveries | 108,391 | 62,815 | 284,359 | 164,665 | ||||||||
Total revenues | $ | 60,284 | $ | 36,692 | $ | 159,219 | $ | 99,770 | ||||
Net income (loss) | $ | (1,034) | $ | 163 | $ | (1,460) | $ | 3,069 | ||||
Adjusted EBITDA(2) | $ | 13,877 | $ | 7,698 | $ | 35,971 | $ | 20,750 | ||||
Basic earnings (loss) per share | $ | (0.03) | $ | 0.00 | $ | (0.04) | $ | 0.09 | ||||
Diluted earnings (loss) per share | $ | (0.03) | $ | 0.00 | $ | (0.04) | $ | 0.08 | ||||
Total assets | $ | 242,385 | $ | 110,526 | ||||||||
Total long-term liabilities | $ | 75,634 | $ | 16,301 | ||||||||
Shareholders' equity | $ | 110,984 | $ | 65,710 |
- The nine-month periods do not equal the sum of the three respective three-month periods due to some patients being serviced in multiple three-month periods.
- Refer to pages 6 and 7 for definition of Adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA")
Reporting entity
The Company's shares are traded on the TSX Exchange in Canada and on NASDAQ in the United States, both under the symbol QIPT.
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Disclaimer
Quipt Home Medical Corp. published this content on 14 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2023 14:10:05 UTC.
