Viemed(US:VMD)2021-08-04 15:55Financial Data and Key Metrics Changes - The core business generated net revenue of $26.3 million in Q2 2021, a 14% increase from $23.1 million in Q2 2020 [21] - Patient growth is returning to normal, with vent patient count reaching approximately 8,100, a 5% increase from March 31 [22] - Gross margin for the quarter was $17.6 million, with EBITDA at $6.8 million, resulting in margins of 64% and 25% respectively [23] Business Line Data and Key Metrics Changes - The oxygen business is the fastest-growing segment, more than doubling its revenue contribution over the last year [24] - The View program doubled its patient count to over 800, complementing the Home Sleep Delivered business [13] - The company added 14 new areas and representatives in Q2, bringing the year-to-date total to 28 new reps [8] Market Data and Key Metrics Changes - The recall of Philips' DreamStation 1 has created significant disruption in the sleep industry, with Philips supplying about 50% of the market [15] - The company is proactively acquiring replacement inventory from alternative manufacturers due to the recall [15] Company Strategy and Development Direction - The company views 2021 as a year of unprecedented opportunity due to industry disruption, focusing on hiring and training sales reps to enhance growth [7][8] - The company is exploring acquisition opportunities that align with its growth strategy while maintaining a strong cash position [20] - The company is positioned to capitalize on opportunities presented by the recall, emphasizing its focus on service rather than equipment [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2021, citing strong patient growth and a return to normalcy in operations [30] - The company is prepared for potential future spikes in the pandemic, with a clean balance sheet and minimal debt [31] - Management believes that in-home respiratory companies will remain a strong investment sector for years to come [27] Other Important Information - The company is actively working with CMS regarding the OIG report, with a potential exposure of approximately $9 million related to patient audits [26] - The company has successfully landed a vaccine tracing contract with the state of Louisiana, generating $600,000 in Q2 [18] Q&A Session Summary Question: What are the targets for higher organic growth in the core business? - Management indicated that targets remain unchanged, focusing on training sales reps for the new normal and maintaining access to referral sources [34][35] Question: What is the sustainability of the strong margin performance? - Management noted that margins are returning to historical levels, with costs related to training and recalls expected to be managed without negative impact on P&L [38][39] Question: How is the company addressing labor market challenges? - Management reported successful recruitment efforts, attributing this to a strong HR department and company culture [44] Question: What is the status of the VA pilot study? - Management confirmed that the pilot study is on track, despite some delays due to administrative transitions [48]