Viemed(US:VMD)2019-08-10 04:46Financial Data and Key Metrics Changes - The company generated revenue of $22.5 million in Q2 2019, a 45% increase from $15.5 million in Q2 2018 [26] - Active vet patients increased by 12% sequentially, reaching 7,130 by the end of the quarter [27] - Gross margin percentage rose to 75% from 73% in the prior year's second quarter [27] - Adjusted EBITDA totaled $4.6 million for the quarter, representing a 20% margin [27] Business Line Data and Key Metrics Changes - The percussion vest product line contributed to 11% of new patient growth [15] - The company launched a new oxygen business model, which is expected to drive more orders [16] - Compression therapy for lymphedema patients is being beta tested, with a U.S. market potential of over $4 billion, currently less than 20% penetrated [18] Market Data and Key Metrics Changes - The company is now licensed to operate in 44 states and Medicare approved in 38 states [11] - The company aims to expand its coverage to the lower 48 states within the next year [12] Company Strategy and Development Direction - The company is focused on organic growth through geographical expansion and enhancing its product offerings [14] - Plans to diversify payor mix and engage in value-based contracts are underway [23] - The company is preparing for competitive bidding zones expected in 2021 [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities driven by an aging population and increased patient volumes [42] - The company is investing in technology and new product lines to enhance service delivery and patient care [43] - Management anticipates revenue and gross margin to increase at a higher pace than SG&A expenses as investments normalize [33] Other Important Information - The company is now listed on both the Toronto Stock Exchange and NASDAQ, marking a significant milestone [24] - The company has invested in its workforce to support expanding programs, including new employees for the VA and pediatric division [29] Q&A Session Summary Question: Expansion Plans - The company is focusing on hiring qualified personnel within existing coverage areas to drive organic growth and prepare for competitive bidding zones [49] Question: SG&A Investments - Management indicated that some costs related to NASDAQ listing and technology investments are one-time, while ongoing costs will be associated with marketing and new product rollouts [53] Question: Economics of New Business Lines - The oxygen business is expected to have a margin profile around 20%, while compression therapy is projected to have gross margins in the 70% range [60][62] Question: VA Opportunities - Management is optimistic about penetrating the VA market, especially with the pilot study funded by the VA [68] Question: Bad Debt and Financial Metrics - Bad debt decreased to 7.7% from 10.4%, attributed to investments in billing and collections [72] Question: Future EBITDA Margins - Management expects adjusted EBITDA margins in the back half of the year to return to prior year levels, driven by organic revenue growth [75]