Viemed(US:VMD)2025-11-05 21:40Revenue Performance - For the three months ended September 30, 2025, revenue totaled $71.9 million, an increase of $13.9 million (or 24.0%) from the same period in 2024[144]. - For the nine months ended September 30, 2025, total revenue was $194.1 million, an increase of $30.5 million (or 18.7%) compared to the same period in 2024[162]. - Revenue from equipment and supply sales increased by $10.8 million (or 49.0%), driven by the success of the sleep resupply program and maternal health offerings[162]. - Ventilator rental revenue increased by $3.1 million (or 9.8%) due to higher patient volumes and sustained demand for ventilation services[144]. Profitability Metrics - Gross profit for the same period was $41.3 million, with a gross profit margin of 57.5%, down from 59.3% in 2024[147]. - Gross profit margin decreased to 57.4% for the nine months ended September 30, 2025, down from 59.3% in the same period in 2024[165]. - Net income attributable to Viemed Healthcare, Inc. for the quarter was $3.5 million, a decrease of $0.4 million (or 9.4%) compared to the prior year[143]. - Net income for the nine months ended September 30, 2025, was $9.6 million, an increase of $2.6 million (or 36.9%) from the same period in 2024[178]. Expenses and Cost Management - Selling, general and administrative expenses totaled $31.9 million, an increase of $5.2 million (or 19.7%) from the comparable period in 2024[149]. - Selling, general and administrative expenses totaled $89.1 million, an increase of $11.2 million (or 14.3%) from the comparable period in 2024, but as a percentage of revenue improved to 45.9%[167]. - Research and development expenses remained consistent at $0.8 million for both the three months ended September 30, 2025, and 2024[151]. - Research and development expenses totaled $2.4 million, reflecting a $0.2 million increase from the prior year, with expectations for consistent costs in 2025[169]. - Stock-based compensation increased by 43.4% to $6.8 million, reflecting investments in employee retention and long-term incentive programs[170]. Cash Flow and Financing - Net cash provided by operating activities for the nine months ended September 30, 2025, was $33.5 million, up from $24.1 million in the same period of 2024, representing an increase of 39.5%[184][185]. - Net cash used in investing activities was $42.6 million for the nine months ended September 30, 2025, primarily due to the acquisition of Lehan for $26.3 million[187]. - Capital expenditures for the nine months ended September 30, 2025, totaled $16.2 million, a decrease of $2.3 million or 12.3% year over year[187]. - Net cash provided by financing activities was $2.7 million for the nine months ended September 30, 2025, compared to a net cash used of $4.1 million in the same period of 2024[189][190]. - Outstanding borrowings under the 2022 Term Loan Facility and 2022 Revolving Credit Facility were $13.1 million and $8.0 million, respectively, as of September 30, 2025[192][207]. Market and Growth Outlook - The home medical equipment market is projected to grow at a Compound Annual Growth Rate (CAGR) of approximately 6% for respiratory devices and 8% for Obstructive Sleep Apnea (OSA) devices[127]. - U.S. home healthcare spending is expected to reach $250 billion by 2031, with a CAGR of approximately 7%[129]. - The company expects continued growth in its ventilator patient base and further revenue growth from the expansion of existing home medical equipment offerings[146]. - The company expects continued growth in ventilator rentals and expansion of home medical equipment offerings to drive future revenue growth[163]. Regulatory and Economic Factors - The company is actively participating in the national coverage analysis initiated by CMS for noninvasive positive pressure ventilation, which may influence patient access and reimbursement patterns[132]. - The One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, introduces changes that may affect Medicaid and Medicare spending, with most provisions scheduled to take effect in 2027 and 2028[134]. - The company is facing ongoing cost pressures from rising material, labor, and transportation costs, which could impact financial results[135]. - Future volatility in general price inflation may further affect material availability and operational overhead, prompting the company to manage these pressures through various strategies[137]. Taxation - The provision for income taxes for the quarter was $1.5 million, compared to $1.6 million in 2024, with an estimated effective tax rate of 31.6% for 2025[158]. - The provision for income taxes was $4.2 million for the nine months ended September 30, 2025, compared to $2.9 million in 2024, with an estimated effective tax rate of 31.6%[177]. Workforce and Employee Contributions - The company anticipates expanding its workforce of licensed Respiratory Therapists (RTs) to support growth, with 414 RTs employed as of September 30, 2025, making up approximately 30% of the total employee count[123]. - Matching employer contributions to the 401(k) retirement plan totaled $1.4 million for the nine months ended September 30, 2025, compared to $1.2 million for the same period in 2024[198]. - The Company anticipates that operating cash flows will satisfy material cash requirements for the 12 months after September 30, 2025[196]. - The Company was in compliance with all covenants under the 2022 Senior Credit Facilities as of September 30, 2025[194].