Viemed(VMD) - 2020 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements Viemed Healthcare, Inc.'s unaudited condensed consolidated financial statements and notes are presented for the specified periods Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets show the company's financial position, with total assets increasing significantly to $112.2 million at June 30, 2020, from $82.6 million at December 31, 2019 Condensed Consolidated Balance Sheet Highlights (in thousands of U.S. Dollars) | Metric | June 30, 2020 (Unaudited) | December 31, 2019 (Audited) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $29,707 | $13,355 | | Accounts receivable, net | $11,029 | $11,534 | | Inventory, net | $6,580 | $1,360 | | Total current assets | $49,207 | $27,811 | | Total assets | $112,178 | $82,596 | | Total current liabilities | $31,770 | $25,912 | | Total liabilities | $41,050 | $38,897 | | Total shareholders' equity | $71,128 | $43,699 | - Total assets increased by $29.6 million (35.8%) from December 31, 2019, to June 30, 2020[8] - Cash and cash equivalents more than doubled, increasing by $16.3 million (122.5%) over the six-month period[8] Condensed Consolidated Statements of Income and Comprehensive Income The Condensed Consolidated Statements of Income and Comprehensive Income reveal substantial growth in revenue and net income for both the three and six months ended June 30, 2020, compared to the prior year Key Income Statement Data (in thousands of U.S. Dollars, except per share amounts) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $42,854 | $20,325 | $66,660 | $38,440 | | Cost of revenue | $16,927 | $5,686 | $25,180 | $10,727 | | Gross profit | $25,927 | $14,639 | $41,480 | $27,713 | | Income from operations | $12,859 | $1,664 | $17,474 | $3,980 | | Net income | $19,412 | $1,326 | $23,655 | $3,284 | | Basic EPS | $0.50 | $0.04 | $0.62 | $0.09 | | Diluted EPS | $0.48 | $0.03 | $0.59 | $0.08 | - Revenue increased by 110.8% for the three months and 73.4% for the six months ended June 30, 2020, compared to the prior year[10] - Net income surged by 1363.9% for the three months and 620.3% for the six months ended June 30, 2020, primarily due to increased sales, gains on equipment disposal, and Provider Relief Funds[10] Condensed Consolidated Statements of Changes in Shareholders' Equity The Condensed Consolidated Statements of Changes in Shareholders' Equity show an increase in total shareholders' equity from $43.7 million at December 31, 2019, to $71.1 million at June 30, 2020 Shareholders' Equity Changes (in thousands of U.S. Dollars) | Metric | December 31, 2019 | June 30, 2020 | | :-------------------------------------- | :---------------- | :------------ | | Total Shareholders' Equity | $43,699 | $71,128 | | Common Stock (Amount) | $3,366 | $8,414 | | Additional paid-in capital | $6,377 | $5,448 | | Retained earnings | $34,113 | $57,768 | | Common Shares Issued and Outstanding | 37,952,660 | 39,082,932 | - Net income contributed $19.4 million to retained earnings for the three months ended June 30, 2020, and $23.7 million for the six months ended June 30, 2020[12] - Stock-based compensation (options and restricted stock) added $1.2 million for the three months and $2.3 million for the six months ended June 30, 2020, to additional paid-in capital[12] Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows show a significant increase in net cash provided by operating activities to $22.0 million for the six months ended June 30, 2020, compared to $6.0 million in the prior year Key Cash Flow Data (in thousands of U.S. Dollars) | Cash Flow Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $21,988 | $5,963 | | Net cash used in investing activities | $(620) | $(7,487) | | Net cash used in financing activities | $(5,016) | $(1,198) | | Net increase (decrease) in cash and cash equivalents | $16,352 | $(2,722) | | Cash and cash equivalents at end of period | $29,707 | $7,691 | - Operating cash flow significantly improved, driven by higher net income and non-cash adjustments, including a $3.5 million receipt from Provider Relief Funds[15][181] - Investing activities used less cash in 2020 due to $5.1 million in proceeds from the sale of property and equipment related to COVID-19 response[15][185] Notes to the Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements, covering the company's business, accounting policies, debt, equity, and other financial commitments 1. Nature of Business and Operations Viemed Healthcare, Inc. is a provider of in-home durable medical equipment (DME) and post-acute respiratory healthcare services across over 35 U.S. states - Viemed Healthcare, Inc. provides in-home durable medical equipment (DME) and post-acute respiratory healthcare services in over 35 states in the United States[17] - As of June 30, 2020, the Company no longer qualifies as a 'foreign private issuer' and will become subject to U.S. domestic issuer rules effective January 1, 2021[18] - The Company is an 'emerging growth company' and has elected to comply with certain reduced U.S. public company reporting requirements[19] 2. Summary of Significant Accounting Policies This section outlines the accounting principles, including GAAP compliance for interim reporting, the use of estimates, functional currency, and basis of consolidation - Financial statements are prepared in accordance with GAAP for interim financial information and SEC rules, reflecting management's estimates and assumptions[20][24] - The COVID-19 pandemic's impacts on business, financial condition, and results of operations remain uncertain and difficult to predict, potentially affecting future estimates[25] Allowance for Doubtful Accounts (in thousands of U.S. Dollars) | Metric | June 30, 2020 | June 30, 2019 | | :---------------------- | :------------ | :------------ | | Balance, beginning of year | $7,782 | $4,266 | | Provision for bad debts | $5,578 | $3,859 | | Amounts written off | $(4,015) | $(1,251) | | Balance, end of period | $9,345 | $6,8