Q1 2024 Viemed Healthcare Inc Earnings Call

Greetings and welcome to the buy bad first quarter 2024 earnings call. At this time, all participants are in a listen only mode.

Operator: Greetings and welcome to the Viemed First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Todd Zehnder, Chief Operating Officer. Thank you. You may begin.

Operator: A brief question and answer session will follow the formal presentation.

Operator: Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded.

Operator: It is now my pleasure to introduce your host Todd Zehnder, Chief operating officer. Thank you you may begin.

Todd Zehnder: Thank you and good morning, everyone. Please note that our remarks in this conference call May include forward looking statements under the U S. Federal securities laws or forward looking information under applicable Canadian Securities legislation, which we collectively referred to as forward looking statements such statements reflect the company's current views and Intel.

Todd Zehnder: Thank you and good morning, everyone. Please note that our remarks in this conference call may include forward-looking statements under the U.S. federal securities laws or forward-looking information under applicable Canadian securities legislation, which we collectively refer to as forward-looking statements. Such statements reflect the company's current views and intentions with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to differ from those indicated in such forward-looking statements.

Todd Zehnder: <unk> with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to vary from those indicated in forward looking statements. Examples of such risks and uncertainties are discussed in our disclosure documents filed with the SEC or the securities regulatory authorities and <unk>.

Todd Zehnder: Examples of such risks and uncertainties are discussed in our disclosure documents filed with the SEC or with the securities regulatory authorities in certain provinces of Canada. Because of these risks and uncertainties, investors should not place undue reliance on forward-looking statements. The forward-looking statements made in this conference call are made as of today, and the company undertakes no obligation to update or revise any forward-looking statements except as required by law. The first quarter financial results and news release, including the related financial statements, are available on the SEC's website. I'll now turn it over to Casey to get things started.

Casey: Certain provinces of Canada.

Casey: Because of these risks and uncertainties investors should not place undue reliance on forward looking statements.

Casey: Forward looking statements made in this conference call are made as of today and the company undertakes no obligation to update or revise any forward looking statements except as required by law.

Todd Zehnder: The first quarter financial results news release, including the related financial statements are available on the Sec's website I'll now turn it over to Casey to get things started.

Casey Hoyt: All right. Thank you, Todd, and good morning, everyone. Thank you for joining our call today. I'm excited to share that the first quarter of 2024 has set a solid foundation for VIMED's trajectory this year. Operationally, we are ahead of schedule, despite encountering some cash flow disruptions related to the changed healthcare situation, which we'll cover later in the call. Our revenue grew by an impressive 28%, a testament to the dedication and tireless efforts of our more than 1,000 team members. At Viemed, we recognize that our employees are our most valuable asset, and investing in their development and well-being is paramount to our success. Now, on to the quarterly update.

Casey: Alright, Thank you Todd and good morning, everyone. Thank you for joining our call today.

Casey Hoyt: I'm excited to share that the first quarter of 2024 has set a solid foundation for biomass trajectory. This year operationally. We are ahead of schedule. Despite encountering some cash flow disruptions related to the change health care situation, which will cover later on in the call.

Casey Hoyt: Our revenue grew by an impressive 28% attachment to the dedication and tireless efforts of our more than 1000 team members.

Casey Hoyt: We recognize that our employees are our most valuable asset and investing in their development and wellbeing is paramount to our success.

Casey Hoyt: Onto the quarter update our new sales restructuring is showing tremendous success with sales ramp that production up over 30% from Q4, putting us ahead of schedule of achieving our internal goals for the year.

Casey Hoyt: Our new sales restructuring is showing tremendous success, with sales rep vent production up over 30 percent from Q4, putting us ahead of schedule in achieving our internal goals for the year. The structure has proven to help keep our managers and trainers closer to home, which is making them more effective in the field, working with new and existing reps. We have also been able to support more of their professional growth and ongoing skill development by offering more mentorship, oversight, and instruction.

Casey Hoyt: The structure has proven out to help keep our managers and trainers closer to home, which is making them more effective in the field working with new and existing reps. We have also been able to support more of their professional growth and ongoing skill development through offering more men towards ship oversight and instruction.

Casey Hoyt: Moreover, we are achieving a healthy work-life balance for our people, which is creating an environment for further growth within our existing infrastructure. A lot of good work was completed on our first hospital joint venture project with HomeMed at the East Alabama Medical Center, which was completed on April 1st. This partnership exemplifies our belief in leveraging synergies between Viemed's clinical expertise and business acumen with the immediate patient needs within the hospital network. This model will account for bringing more service and technology into the home for the patients of East Alabama while cultivating an improved complex respiratory program inside of the medical center.

Casey Hoyt: Moreover, we are achieving a healthy work life balance for our people, which is creating an environment for further growth within our existing infrastructure.

Casey Hoyt: A lot of good work was completed on our first hospital joint venture project with home Mad at the East, Alabama Medical Center, which was completed on April 1st.

Casey Hoyt: This partnership exemplifies I belief and leveraging synergies between by Madden clinical expertise and business acumen.

Casey Hoyt: With the immediate patient needs within the hospital networks.

Casey Hoyt: This model will account for bringing more service and technology into the home for the patients have east, Alabama, while cultivating and improved complex respiratory program inside of the medical Center.

Casey Hoyt: Our team views this opportunity as a new way of growing our business and is laser focused on making this project a success one that we will replicate around the country.

Casey Hoyt: Our team views this opportunity as a new way of growing our business and is laser focused on making this project a success, one that we will replicate around the country. Discussions with other hospital JVs are actively underway. Furthermore, our integration of the HMP acquisition is hitting its stride and driving product diversification for our business. This product diversification and talent from our H&P team have been a major driver of our success, particularly with the hospital joint venture strategy. With the help and expertise of the H&P team, we were able to offer a full suite of DME products to help support the patients in East Alabama, extending our offering to go beyond respiratory.

Casey Hoyt: Discussions with other hospital Jv's are actively underway.

Casey Hoyt: Furthermore, our integration of H M. P acquisition is hitting its stride and driving product diversification for our business is product diversification and talent from our H M. P team had been a major driver of our success, particularly with the hospital joint venture strategy with the help and expertise of H P pain.

Casey Hoyt: We were able to offer a full suite of <unk> products to help support the patients have used Alabama exceed.

Casey Hoyt: Extending our offering to go beyond respiratory.

Casey Hoyt: By joining forces, we are not only poised to revolutionize care delivery but also to drive tangible improvements in hospital profitability while significantly expanding our reach into previously untapped markets. Our merger and acquisition pipeline is gaining traction, and we are starting to see more conversations and activities from prospective targets. With that being said, we remain steadfast in our commitment to organic growth as a primary driver of our business, still pursuing strategic acquisitions and joint ventures as complementary springboards to our organic growth strategy. This strategy allows us to focus on making prudent transactions as we do not have to rely on M&A to grow the business.

Casey Hoyt: By joining forces were not only poised to revolutionize care delivery, but also to drive tangible improvements in hospital profitability, while significantly expanding our reach into previously untapped markets.

Casey Hoyt: Our merger and acquisition pipeline is gaining traction and we're starting to see more conversations and activities from perspective targets.

Casey Hoyt: With that being said, we remain steadfast in our commitment to organic growth is the primary driver of our business still.

Casey Hoyt: We still view strategic acquisitions, and joint ventures, as complementary springboard to our organic growth strategy.

Casey Hoyt: Strategy allows us to focus on making prudent transactions because we did not have to rely on M&A to grow the business.

Casey Hoyt: We also focused a good portion of our efforts in Q1 around innovating our care delivery model.

Casey Hoyt: We also focused a good portion of our efforts in Q1 around innovating our care delivery model. We've implemented innovative technology processes that harness the power of machine learning capabilities, which are evolving our operations, particularly in streamlining time-consuming back-office tasks such as reauthorization submissions. By automating these processes, we've not only enhanced efficiency but also freed up valuable resources, allowing our team to redirect their efforts towards delivering high-quality care to our patients. We work closely with two of our vent manufacturers to connect their devices to Engage Care Manager 2.0, our proprietary clinical and operational platform.

Casey Hoyt: We've implemented innovative technology processes at harnessed the power of machine learning capabilities.

Casey Hoyt: We're evolving our operations, particularly in streamlining time consuming back office tasks, such as re authorization submissions.

Casey Hoyt: By automating these processes, we've not only enhanced efficiency, but also freed up valuable resources allowed our team to redirect their efforts towards delivering high quality care to our patients.

Casey Hoyt: We work closely with two of our manufacturers to connect their devices to engage care manager to point out our proprietary clinical and operational platform.

Casey Hoyt: Effective care delivery in the modern healthcare landscape necessitates the seamless integration of exceptional service with cutting-edge technology. Our technology-centric approach enables us to seize data-driven opportunities, capitalize on emerging trends, and strengthen our ability to deliver value-driven solutions for our payers and hospital partners. As legacy manufacturers, such as Philips, are gradually exiting certain product categories, the industry is paving the way for the emergence of a new generation of manufacturers, equipped with the expertise to develop and deliver more improved technologies and enhance connected capabilities.

Casey Hoyt: Fact of care delivery and the modern health care landscape necessitates the seamless integration of exceptional service with cutting edge technology.

Casey Hoyt: Our technology centric approach enables us to seize data driven opportunities capitalize on emerging trends and strengthen our ability to deliver value driven solutions for our payers and hospital partners.

Casey Hoyt: As legacy manufacturers, such as Philips or gradually exiting certain product categories. The industry is paving the way for emergence of for the emergence of new generation of manufacturers.

Casey Hoyt: <unk> with the expertise to develop and deliver more improved technologies and enhance connected capabilities.

Casey Hoyt: Furthermore, we're poised to capitalize on incentive programs related to Philips trade-ins and remediation on the Trilogy 100 ventilators, enabling us to significantly lower the age of our ventilator asset base in an extremely cost-competitive manner. ResMed has also completed a few studies on the effects of GLP-1 drugs for sleep apnea patients. The latest data are showing that there is a 10.5% higher propensity to start PAP over those not using the GLP-1 drug.

Casey Hoyt: Furthermore, we're poised to capitalize on incentive programs related to Philips trade ins and remediation on the trilogy, 100, ventilators, enabling us to significantly lower the age of our ventilator asset base and an extremely cost competitive manner.

Casey Hoyt: Yeah.

Casey Hoyt: Ross Med has also completed a few studies on the effects of G. L. P. One drugs for sleep apnea patients.

Casey Hoyt: The latest data is showing that there is a 10, 5% higher propensity to start path over those not using the G. L. P. One drug.

Casey Hoyt: More patients are going to see their physicians about their weight problems, and the data shows that while the drug does help reduce AHI 59-63%, the patients are still left with moderate sleep apnea, which means they will suffocate every 3 minutes of sleep after treatment of the drugs is administered. We also saw an announcement that the Samsung Galaxy Watch is now de novo approved by the FDA to detect signs of sleep apnea, which should pave the way for the Google Fitbit and Apple Watch to follow suit.

Casey Hoyt: More patients are going to see the physician about their weight problems and the data shows that while the drug does help produce a child, 59% to 63%. The patients are still left with moderate sleep apnea, which means they will suffocate every three minutes of sleep after treatment of the drugs are administered.

Casey Hoyt: We also saw an announcement that the Samsung Galaxy watch is now de novo authorized by the FDA to detect signs of sleep apnea, which should pave the way for the Google Fitbit and Apple watch to follow suit.

Casey Hoyt: The emergence of these technological advancements stands to streamline the diagnosis of sleep therapy into the mainstream population. We expect this development will be significant to grow in our sleep and resupply beds. On the regulatory front, Viemed continues to navigate the evolving landscape of healthcare policy and reimbursement. Despite industry efforts, the government has yet to resolve a regulatory relief package for the expiration of the 75-25 blended rate, a last remnant of the COVID-related relief measures stemming from the pandemic.

Casey Hoyt: The emergence of these technological advancements stands to streamline the diagnosis of sleep therapy into the mainstream populations.

Casey Hoyt: We expect this development would be significant to grow in our sleep and resupply business.

Casey Hoyt: Yeah.

Casey Hoyt: On the regulatory front, if I may continues to navigate the evolving landscape of health care policy and reimbursement.

Casey Hoyt: Despite industry efforts the government has yet to resolve our regulatory relief package for the exploration of the 70 525 blended rate the last remnant of the Covid related related relief measures stemming from the pandemic.

Casey Hoyt: As a reminder, our comprehensive analysis suggests that the long-term impact on our business is expected to be minimal thanks to a combination of factors including our diversified product mix and strategic rural concentration. Looking ahead, we remain optimistic about the reimbursement environment and the stability of rates indexed to inflation. The indexing mechanism serves as a natural hedge for our operation, providing a degree of predictability and financial security.

Casey Hoyt: As a reminder, our comprehensive analysis suggests that the long term impact on our business is expected to be minimal. Thanks to a combination of factors, including our diversified product mix and strategic rural concentration.

Casey Hoyt: Looking ahead, we remain optimistic about the reimbursement environment and by the stability of the rates indexed to inflation. The indexing mechanism serves as a natural hedge for our operations, providing a degree of predictability and financial security.

Todd Zehnder: Moreover, our proactive approach to monitoring regulatory developments and engaging with policymakers positions us to adapt swiftly to changes and capitalize on emerging opportunities. With more financial and operational updates on the quarter, I will now hand the call over to our Chief Operating Officer, Todd Zehnder.

Casey Hoyt: Moreover, our proactive approach to monitoring and regulatory developments and engaging with policymakers positions us to adapt swiftly to changes and capitalize on emerging opportunities.

Todd Zehnder: With more financial and operational updates on the quarter I'll now hand, the call over to our Chief operating Officer, Todd Zehnder, Todd Thanks, Casey and reviewing the financial results. All figures are in U S dollars and the full results had been made available on the Sec's website.

Todd Zehnder: Thanks, Casey. In reviewing the financial results, all figures are in U.S. dollars, and the full results have been made available on the FCC's website. Our core business generated net revenue of $50.6 million during the first quarter of 2024, as compared to net revenues of $39.6 million in the first quarter of 2023, which equates to a 28% increase. However, our revenue was relatively flat sequentially, which is not uncommon when comparing 4Q to 1Q.

Todd Zehnder: Our core business generated net revenue of $56 million during the first quarter of 2024 as compared to net revenues of $39 6 million in the first quarter of 'twenty, three which equates to a 28% increase.

Todd Zehnder: The revenue was relatively flat sequentially, which is not uncommon when comparing <unk> and as we will discuss later, we expect rapid sequential growth throughout the year.

Todd Zehnder: And as we'll discuss later, we expect rapid, sequential growth throughout. Operationally, the first quarter was extremely strong, but as we've indicated in the past, it also brings seasonal challenges due to re-offs and patients switching or resetting insurance plans. When comparing 1Q24 to 4Q23, our AR reserves were approximately $2.5 million higher in the current quarter, which shows how operationally strong the quarter was and why we're excited about the rest of this year.

Todd Zehnder: Operationally the first quarter was extremely strong, but as we've indicated in the past. It also bring seasonal challenges due to re offs and patient switching or resetting insurance plans.

Todd Zehnder: When comparing <unk> 24 to <unk> 23, or our reserves were approximately $2 $5 million higher than the current quarter, which shows how op really operationally strong the quarter was and why we're excited about the rest of this year.

Todd Zehnder: As in the past, we continue to stay optimistic that we will be able to continue our high organic growth rates as well as additional inorganic opportunities on top of the recent joint venture. Our first quarter revenue from VINs was approximately 58%, as compared to 65% in the first quarter of 2023.

Todd Zehnder: As in the past we continue to stay optimistic that we will be able to continue our high organic growth rates as well as additional inorganic opportunities on top of the recent joint venture.

Todd Zehnder: Our first quarter revenue from Vince was approximately 58%.

Todd Zehnder: As compared to 65% in the first quarter of 2023.

Todd Zehnder: Our gross and EBITDA margins are still strong as we are focused on both margin and diversification.

Todd Zehnder: Our gross and EBITDA margins are still strong as we are focused on both margin and diversification. We continue to be successful in managing our cost structure this year, and it is showing in both gross and EBITDA contributions. Consistent with prior years, our first quarter margins were lower than other periods due to higher bad debt reserves as well as cyclical costs that tend to be higher earlier in the year. Our gross and EBITDA margins during the quarter came in at 59% and 20%, respectively.

Todd Zehnder: We continue to be successful in managing our cost structure. This year and it is showing in both gross and EBITDA contribution.

Todd Zehnder: Consistent with prior years, our first quarter margins are lower than other periods due to higher bad debt reserves as well as cyclical cost that tend to be higher earlier in the year.

Todd Zehnder: Our gross and EBITDA margins during the quarter came in at 59 and 20% respectively.

Todd Zehnder: Our first quarter growth in EBITDA amounts came in at $29.8 and $10.1 million, respectively. We are once again very excited about the beginning of the year from an operational perspective and know that the fast start will translate into solid financial performance throughout the year. Our SG&A for the quarter totaled approximately $24.8 million, as compared to $19.8 million in the first quarter of 2023. GNA as a percentage of revenue decreased from 50% during the first quarter of 2023 to 49% during 2024, and this continues our theme of managing our GNA well. As mentioned, certain items, such as payroll taxes and PTO accruals, reset in the first quarter each year. Therefore, the sequential comparison from 4Q to 1Q is always a challenge.

Todd Zehnder: Our first quarter gross and EBITDA amounts came in at 29, eight and $10 1 million respectively.

Todd Zehnder: We were once again very excited to the beginning of the year from an operational perspective and know that the fast start will translate into solid financial performance throughout the year.

Todd Zehnder: Our SG&A for the quarter totaled approximately $24 8 million as compared to $19 8 million in the first quarter of 2023.

Todd Zehnder: G&A as a percentage of revenue decreased from 50% during the first quarter of 23% to 49% during 2024 and continues our theme of managing our GNL G&A well.

Todd Zehnder: As mentioned certain items, such as payroll taxes, and PTO accruals reset in the first quarter each year. Therefore, the sequential comparison from for Q2 <unk> is always a challenge.

Todd Zehnder: We expect our annual margins to approximate prior years as these items normalize throughout the year. We will continue to invest in our patient and employee experiences and once again expect to grow revenues at a faster rate than expected. For the quarter, we invested approximately $5.8 million in capital expenditures spread out amongst our various respiratory products.

Todd Zehnder: We expect our annual margins to approximate prior years as these items normalized throughout the year.

Todd Zehnder: We will continue to invest in our patient and employee experiences and once again expect to grow revenues at a faster rate than expenses.

Todd Zehnder: For the quarter, we invested approximately $5 8 million of capital expenditures spread out amongst our various respiratory products.

Todd Zehnder: We continue to allocate capital across a diverse supplier network and once again have had no problems with procuring the equipment necessary to service our growing patient base. We have once again funded our CapEx out of discretionary cash flow and continue to manage the business in order to drop free cash flow onto the balance sheet. Our percentage of CapEx to EBITDA was healthy at 57%. We will continue to disclose our annual discretionary free cash flow, but the quarterly fluctuations in that metric make it less relevant.

Todd Zehnder: We continue to allocate capital across a diverse supplier network and once again have had no problems with procuring the equipment necessary to service our growing patient base.

Todd Zehnder: We have once again funded our capex out of discretionary cash flow and continue to manage the business in order to drop free cash flow onto the balance sheet.

Todd Zehnder: Our percentage of Capex to EBITDA was healthy at 57%.

Todd Zehnder: We will continue to disclose our annual discretionary free cash flow, but the quarter fluctuations in that metric make it less relevant.

Todd Zehnder: This quarter, in particular, saw a lower cash build and a significant increase in our accounts receivable. As most everyone is aware, the cyber attack on changed health care during February put some operational and financial stresses on the health care system.

Todd Zehnder: This quarter in particular saw a lower cash build in significant increase in our accounts receivable.

Todd Zehnder: As most everyone is aware of the cyber attack on change healthcare during February has put some operational and financial stresses on the health care system.

Todd Zehnder: As we briefly discussed during our last call, our team began to redirect certain claims during March to alternate payment clearinghouses. While we were able to move swiftly on some of our larger carriers, the process to redirect all of our payers remains ongoing. We are confident that we have moved the majority of the dollars and have seen payments pick up over the last few weeks. We are optimistic that the vast majority of the delayed cash deposits should be caught up by the end of the second quarter. Our goal currently is to make sure that the change situation turns out only to be a delay in cash collection.

Todd Zehnder: As we briefly discussed during our last call. Our team began to redirect certain claims during March to alternate payment clearinghouses.

Todd Zehnder: While we were able to move swiftly on some of our larger carriers the process to redirect all of our payers remains ongoing.

Todd Zehnder: We are confident that we have moved the majority of the dollars and have seen payments pick up over the last few weeks.

Todd Zehnder: We are optimistic that the vast majority of the delayed cash deposits should be caught up by the end of the second quarter.

Todd Zehnder: Our goal currently is to make sure the change situation turns out only to be a delay in cash collections and in order to do that our team is working diligently to make sure. All claims are filed and accepted through alternate options.

Todd Zehnder: And in order to do that, our team is working diligently to make sure all claims are filed and accepted through alternate options. I'm very proud of the revenue cycle team, along with our workflow partner Bonafide, and the diligence that we have shown in this process. Our capital allocation opportunities remain consistent with last year, and we will reiterate that our organic growth is the highest priority. Our inorganic growth, debt paydown, and then equity buybacks continue to fall into the two through four slots as superiority.

Todd Zehnder: I'm very proud of the revenue cycle team, along with our workflow partner Bonafide and the diligence that we have shown in this process.

Todd Zehnder: Our capital allocation opportunities remain consistent with last year, and we will reiterate that our organic growth is the highest priority.

Todd Zehnder: Our inorganic growth debt pay down and then equity buybacks continue to fall into the two to four slots as your priority.

Todd Zehnder: We're happy to have recently announced our first joint venture and also remain very proud of our pristine balance sheet.

Todd Zehnder: We are happy to have recently announced our first joint venture and also remain very proud of our pristine balance. We ended the quarter in a net cash positive position once again and have total long-term debt of $5.9 million. Our working capital at the end of the quarter was $8.4 million.

Todd Zehnder: We ended the quarter in a net cash cash positive position once again and have total long term debt of $5 9 million.

Todd Zehnder: Our working capital at the end of the quarter was $8 4 million.

Todd Zehnder: All in all, we remain excited and proud about all of our metrics and continue to look forward to upcoming quarterly results. Moving on to the second quarter, we have provided net revenue guidance in the 53.8 to 54.8 million dollar range related to our core business, which includes approximately $1 million related to the recent joint venture. The midpoint of our net revenue guidance is up 25% over core revenue in the second quarter of 2023 and is showing extremely impressive sequential growth.

Todd Zehnder: All in all we remain excited and proud about all of our metrics and continue to look forward to upcoming quarterly results.

Todd Zehnder: Moving on to the second quarter, we have provided net revenue guidance in the 53.8 to $54 $8 million range related to our core business, which includes approximately $1 million related to the recent joint venture.

Todd Zehnder: The midpoint of our net revenue guidance is up 25% over the core revenue in the second quarter of 2023, and it's showing extremely impressive sequential growth.

Todd Zehnder: As stated last quarter, the first quarter brings some seasonality challenges, but our operational success during the quarter has set up a path to rapid growth throughout the year. We remain active in our discussions with investors and analysts, and once again have seen our U.S. institutional ownership increase over the last couple of quarters. We remain excited about telling our story of growth and see the current market as an opportunity to attract new investors. At this time, I'm going to turn the call back over to Casey to wrap things up. Thank you, Todd.

Todd Zehnder: As stated last quarter, the first quarter bring some seasonality challenges, but our operational success during the quarter has set up a path to rapid growth throughout the year.

Casey Hoyt: We remain active in our discussions with investors and analysts and once again has seen our U S. Institutional ownership increase over the last couple of quarters.

Casey Hoyt: We remain excited about telling our story of growth and see the current market as an opportunity to attract new investors.

Todd Zehnder: At this time I'm going to turn the call back over to Casey to wrap things up Thank you Todd.

Casey Hoyt: As we reflect on the remarkable achievements of the first quarter of 2024, we're filled with a profound sense of optimism and enthusiasm for our journey ahead. Throughout the call, we discussed our robust financial performance, strategic initiatives, and the resilience of our team in the face of challenges. Our view of the emergence of GLP-1 drugs is aligned with the data available and should be a major opportunity for us. The technological advancements of mainstream wearables hold the potential to revolutionize the diagnosis and management of home sleep studies and drive tremendous patient volume our way.

Casey Hoyt: As we reflect on the remarkable achievements of the first quarter of 2024 were filled with a profound sense of optimism and enthusiasm for our journey ahead.

Casey Hoyt: Throughout the call, we discussed our robust financial performance and strategic initiatives and the resilience of our team in the face of challenges.

Casey Hoyt: Our view of the emergence of <unk> drugs is aligned with the data available and should be a major opportunity for us the technological advancements of mainstream wearables hold the potential to revolutionize the diagnosis and management of home sleep studies and drive tremendous patient volume our way.

Casey Hoyt: Despite encountering some cash flow disruptions related to the change healthcare situation, our unwavering commitment to operational excellence has propelled us forward, ensuring that <unk> remains well positioned for sustained growth and success.

Casey Hoyt: Despite encountering some cash flow disruptions related to the changed healthcare situation, our unwavering commitment to operational excellence has propelled us forward, ensuring that VIMED remains well positioned for sustained growth and success. The first quarter of 2024 marked a significant milestone for Viemed, with our net revenue growing by an impressive 28% compared to the same period last year. Looking ahead to the second quarter and beyond, we remain extremely optimistic about our prospects for continued growth and success in all of our core products.

Casey Hoyt: First quarter of 2024 marked a significant milestone provides <unk> with our net revenue growing by an impressive 28% compared to the same period last year.

Casey Hoyt: Looking ahead to the second quarter and beyond we remain extremely optimistic about our prospects for continued growth and success in all of our core products are.

Casey Hoyt: Our guidance for net revenue reflects our confidence in the strength of our core business and the effectiveness of our growth strategy. As we embark on this exciting journey, we are deeply grateful for the ongoing support and confidence of our investors, analysts, employees, and partners. Together, we will continue to push the boundaries of innovation, drive positive change, and deliver superior value to all stakeholders. Thank you once again for your continued trust and support. We look forward to sharing our progress with you in the quarters to come. This concludes our prepared remarks. Thank you. We'll now open up for the, Thank you. We'll now conduct our questions.

Casey Hoyt: Our guidance for net revenue reflects our confidence in the strength of our core business and the effectiveness of our growth strategies.

Casey Hoyt: As we embark on this exciting journey, we are deeply grateful for the ongoing support and confidence of our investors analysts employees and partners together, we will continue to push the boundaries of innovation drive positive change and deliver superior value to all stakeholders.

Casey Hoyt: Thank you once again for your continued trust and support we look forward to sharing our progress with you in the quarters to come. This concludes our prepared remarks. Thank you. We'll now open up for further questions.

Speaker Change: Thank you, we'll now conduct a question and answer session if you'd like to ask a question. Please press star one on your telephone keypad.

Operator: Thank you. We will now conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press the star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our first question comes from Brooks O'Neill with Lake Street Capital Markets. Please state your question.

Brooks O'Neill: A confirmation tone will indicate that your line is in the question queue.

Brooks O'Neill: You May press the Star key followed by the number two if you would like to remove your question from the queue for.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Brooks O'Neill: Our first question comes from Brooks O'neil with Lake Street Capital markets. Please state your question.

Brooks O'Neill: Thank you. Good morning everyone. I just want to welcome Glenn. I'm glad to see new faith there. I think he'll help a lot to attract new investors out there.

Brooks O'Neill: Thank you good morning, everyone just want to welcome Glenn I'm glad to see.

Brooks O'Neill: <unk>.

Brooks O'Neill: There I think he will help a lot to attract new investors out there.

Speaker Change: I just wanted to start off by.

Brooks O'Neill: So I just want to start off by asking you a little bit. I know it's not your job, guys, to match my style. My modeling, you know, who the heck knows. But the expenses were a little bit higher than we were modeling for Q1, and if I was listening correctly, you would attribute the majority of that to the seasonal effects in Q1. But are there any expense items you'd call out as... you know, maybe more of a trend or something than just a one-cue seasonal factor?

Brooks O'Neill: It's getting a little bit I know, it's not your job guys to match my model.

Brooks O'Neill: My modeling you know who the heck knows but.

Brooks O'Neill: Expenses were a little bit higher than we were modeling for Q1, and if I was listening correctly you would attribute the majority of that to the seasonal effect in Q1, but is there are there any expense item you'd call out.

Brooks O'Neill: Maybe more of a trend or something then.

Brooks O'Neill: <unk> seasonal factor.

Speaker Change: No no not at all Glen.

Todd Zehnder: No, not at all, Brooks. If you look back to the first quarter of last year, we kind of had the same trend. Things just reset at the beginning of the year, and if you look at our margins in conjunction with first quarter to first quarter, it's not really out of bounds. We are completely confident that expenses as a percentage of revenue will be in line or, likely, very much better than last year.

Todd Zehnder: Brooks. If you are if you look back to the first quarter of last year, we kind of had the same trend.

Todd Zehnder: Trend things just reset at the beginning of the year and if you look at our margins in conjunction with core like first quarter to first quarter is not really out of bounds. We completely are confident that expenses as a percentage of revenue will be in line or likely very much better than last year and then like.

Todd Zehnder: I said in my prepared remarks, we think margins will once again kind of state stay flat depending on diversification of lot of different things, but we're confident that theres nothing that is setting up a bad trend if you will.

Todd Zehnder: And then, like I said in my prepared remarks, we think margins will once again kind of stay flat, depending on diversification, a lot of different things. But we're confident that there's nothing that is setting up a bad trend, if you will.

Speaker Change: Yeah, that's great thank for that.

Todd Zehnder: Yeah. That's great, Todd. Thanks for that.

Todd Zehnder: That.

Casey Hoyt: Let me just ask you this. I don't think I recall hearing or thinking a lot about Salesforce's restructuring. Are there any notable things you'd call out that you did that you think truly will drive it? You know, I mean, obviously, 30% improvement in productivity is pretty good, so that's fantastic. But what is it exactly that you guys did that you think has unlocked some of the productivity of the sales organization?

Speaker Change: Let me just ask you this.

Casey Hoyt: Don.

Casey Hoyt: I recall hearing or thinking a lot about sales force restructuring.

Casey Hoyt: Are there any notable things you'd call out that you did that you can truly will drive.

Casey Hoyt: I mean, obviously, 30% improvement in productivity is pretty good so that's fantastic, but what is it exactly that you guys did that you think.

Casey Hoyt: Unlike some of the productivity of the sales organization.

Speaker Change: Well I think the most important driver right now is the fact that we've extended our reach with.

Casey Hoyt: Well, I think the most important driver right now is the fact that we've extended our reach by promoting 12 more territory managers. Those 12 managers are now out in the field working with veteran reps and new reps, helping them with training and development and so on and so forth. If you think about last year, we had three sales trainers and three managers doing that same work. So we've doubled the ability to get our experienced people out into the field. That's producing at a higher rate.

Casey Hoyt: Promoting 12 more territory managers those 12 managers are now out in the field working with veteran reps and new reps, helping them with training and development and so on and so forth. If you think about last year last year, we had three sales trainers and three manager.

Casey Hoyt: Or is doing that same work. So we've we've doubled the ability to get our experienced people out into the field that is producing at a higher rate. So we're actually doing some cleanup work. So the good news is as we're doing all of this growth with a little bit with less reps than we did last year. However, we are set up.

Casey Hoyt: We're actually doing some cleanup work, so the good news is we're doing all this growth with a little bit less reps than we did last year. However, we are set up to grow at a higher rate now and expand with new reps. We just saw a major opportunity in the restructuring, and really, the main thesis was, let's get our middle-tier reps up to top-tier reps, and that's working now. So we're very excited about it. And I think the best is yet to come because we're really just getting started with it.

Casey Hoyt: We are set up to grow at a higher rate now and expand with new reps. We are we just saw a major opportunity in the restructuring and really the main thesis was let's get our middle tier reps up to top tier reps and that's working now so we're we're very excited about.

Casey Hoyt: And I mean, I think the best is yet to come because we're really just getting started with it.

Casey Hoyt: Great, great. So my last question is, you guys hit on two of the big buzz topics going on in healthcare today, the GLP-1s and the change healthcare thing. So I guess I'd be remiss if I didn't ask you about, is there going to be any impact on your business from AI?

Speaker Change: Alright, great.

Casey Hoyt: So my last question is.

Casey Hoyt: You guys hit on two of the big.

Casey Hoyt: Topics.

Casey Hoyt: Going on in health care today, the GOP ones and the change healthcare.

Casey Hoyt: So again I'd.

Casey Hoyt: I'd be remiss, if I didn't ask you about.

Casey Hoyt: Is there going to be any impact in your business from AI.

Casey Hoyt: There already is some machine learning.

Casey Hoyt: There is already some machine learning; we're hesitant to call it AI, but we should call it machine learning. We've developed our own tool here in-house that goes through some of the HIE exchanges, Health Information Exchanges, that are with Epic and Cerner and have all the hospital info into them to find some of the missing data that we require for our reauthorization.

Casey Hoyt: I didn't call it AI that Michel call. It machine learning, we've developed our own tool here in house that is going through some of the H I exchanges health information exchanges that are.

Casey Hoyt: With the epic and Cerner and I have all the hospital info into them to find some of the missing data with that we require for our re authorizations and that's exciting because it's it's getting smarter every day and it's starting to help us operationally.

Casey Hoyt: And that's exciting because it's getting smarter every day and starting to help us operationally. Now, back into that, in terms of just exploring AI solutions, we've asked all of our head lieutenants, all of our VPs to go out and uncover solutions that will help us. And I will say that we're vetting a number of them right now that stand to improve operations and efficiency. So I'm excited about this movement. We've got our own tools in the house, and we've got others that we're going to lean on through various vendors. Great. Guys,

Casey Hoyt: Now on the.

Casey Hoyt: The back into that in terms of in terms of just exploring AI solutions, we passed all of our Heddlu tenants all of our V piece to go out and uncover solutions that will help us and I will say that we're vetting a number of them right now that stand too.

Casey Hoyt: Improve operations and efficiency. So we're I'm excited about this movement. It's we got our own tool in house and we've got others that we're going to lean on through through various vendors.

Brooks O'Neill: Great. Guys, thanks a lot for taking my questions. Congratulations on the great start to the year, and I'm looking forward to the balance to see all you can accomplish.

Speaker Change: Alright, guys. Thanks, a lot for taking my questions. Congratulations on the great start to the year and I'm looking forward to the balance the all you can accomplish.

Speaker Change: Thanks Russ.

Brooks O'Neill: Thank you and our next question comes from Doug Cooper with Beacon Securities. Please state your question.

Doug Cooper: Thank you. And our next question comes from Doug Cooper with Beacon Securities. Please state your question.

Doug Cooper: Good morning, everybody. Let's just talk about the sequential growth, 7% sequentially, very strong. Is there one particular product that's driving that growth, i.e., whether it be sleep, or is it on the NIVs, or sort of an equally split.

Doug Cooper: Hey, good morning, everybody.

Doug Cooper:

Doug Cooper: Let's just talk about the trends are growing.

Doug Cooper: 7% sequentially very strong.

Doug Cooper: Is there.

Doug Cooper: The other product.

Doug Cooper: That's driving that growth are you whether it be sleep there.

Doug Cooper: These are sort of equally split.

Doug Cooper: This quarter I would say this the strongest performers were Vince and sleep.

Todd Zehnder: This quarter, I would say the strongest performers were Vince and Sleek, just from a 40,000-foot view. Resupply had a really good start to the year, and Vince, like Casey said, had 30 percent higher productivity this quarter than we did. So, you know, everything performed well across all the product lines, but those are the ones that stand out to us as the ones that led the charge.

Todd Zehnder: A 40000 foot view.

Todd Zehnder: Recent while I had a really good start to the year and this like Casey said, 30% higher productivity. This quarter. Then we have so everything performed well across all the product lines, but those are the ones that stand out to kind of buzz that led the charge.

Doug Cooper: Okay, you're obviously early in the game here; we're not even halfway through Q2, but do you see that 76-7% sequential growth continuing for the balance of the year? That would put you pretty far in advance of where we're modeling right now.

Todd Zehnder: Okay.

Doug Cooper: Obviously early in the game here, we're not even halfway through Q2, but do you see that 76, 7% sequential broke continuing for the balance of the year that would put you pretty much farther in advance of where we're modeling right now.

Todd Zehnder: I think we, I mean, just looking. I know we did the numbers for the call. I believe q2 over q1 was five and a half percent sequential growth, so we're very bullish on the way things are set up right now.

Doug Cooper: I think we I mean, just looking I know we did the the numbers.

Todd Zehnder: For the call I believe Q2 over Q1 was five 5% sequential growth. So we're very bullish on the way things are set up right now.

Todd Zehnder: Yeah.

Doug Cooper: Okay, the expiration of the 7525. What was the actual impact of that? And then that was offset by what CPI increases and obviously just some growth in the business. Can you segment those items?

Todd Zehnder: Okay.

Todd Zehnder: The exploration of the 70 525.

Doug Cooper: No.

Doug Cooper: What was the actual impact of that and then that was offset by CPI increases and then obviously some great business segment.

Doug Cooper: Segment, we those.

Doug Cooper: Items.

Speaker Change: So I'll keep growth in the business outside of the calculation and just tell you that roughly a million dollars a little bit shy of a million dollars was going to be the 70 525.

Todd Zehnder: So I'll keep growth in the business outside of the calculation and just tell you that roughly a million dollars, a little bit shy of a million dollars, was going to be the 75-25 impact across the VIMED HMP complex combined. And then the CPI adjustment was slightly higher than that. So I bet you we got probably somewhere between less than a quarter of a million dollars benefit when it comes to rate changes. And then everything else would just be normal operations.

Todd Zehnder: Impact across the Biomet HMP complex combined and then the CPI adjustment was slightly higher than that so I bet, you, we got probably somewhere between less than a quarter of a million dollars benefit when it comes to rate changes and then everything else would just be normal operations.

Doug Cooper: So I pointed it out. While we stayed flat revenue-wise on a net revenue basis, I look at it on a gross number and say that we booked about $2.5 million more in the allowance this quarter. And that would be the growth piece, the last piece that you're asking about.

Todd Zehnder: I pointed it out while we stayed flat revenue wise.

Doug Cooper: On a net revenue basis.

Doug Cooper: I look at it on a gross number and say that we at we booked about two and a half million dollars more to the allowance this quarter that would be the growth piece that you're the last piece that you're asking about.

Doug Cooper: Okay.

Doug Cooper: You guys talked about, obviously, the GFP-1 drugs and referenced ResMed's study. I guess, subsequent to the ResMed study that they talked about, Eli and Lily came out with their drug and some trials that were directly for sleep apnea as opposed to weight loss. Any thoughts on that?

Doug Cooper: You guys talked about obviously the GOP one drug in there for reference gain resume study.

Doug Cooper: I guess subsequent to resume the study that they talked about Eli Lilly came out with their drug obviously some trials in February.

Doug Cooper: Directly.

Doug Cooper: Sleep apnea as opposed to weight loss any thoughts on that.

Casey Hoyt: I mean, I didn't, I didn't, you're talking about the, um..., the clinical trial that compared the safety of their drug to GLP-1 receptors and that. I didn't really get a chance to dig into that study yet, Doug, so I don't want to comment. I don't think it's released yet. Yeah, I don't think it's released yet. I think they just put the

Speaker Change: I mean, I didn't I didn't you're talking about the.

Casey Hoyt: The clinical trial that compared the safety of.

Casey Hoyt: <unk>, two <unk>, one receptors and not.

Casey Hoyt: Hum.

Casey Hoyt: I didn't really get a chance to dig into that study yet Doug. So I don't want to comment I don't think it's really yeah, I don't think its released yet.

Casey Hoyt: I think the 40 beta Jeremiah.

Doug Cooper: Yeah, Yeah, it's underway I mean, I think look here's the most important piece that we got just from the resume comments in their analysis of their 600000 patients that were on path.

Casey Hoyt: I think the study's out in July. Yeah, it's underway. I mean, I think, look, here's the most important piece that we got just from the ResMed comments and their analysis of their 600,000 patients that were on PAP. And it does show that it reduces AHI, which, you know, may bring a CPAP patient from severe down to moderate. But what they're seeing is a spike in the volume of patients that are going in to analyze their weight gain or weight loss, you know.

Casey Hoyt: And it does show that it reduces a chi which you know it may bring a CPAP patient from severe down to moderate but what they're seeing is a spike in volume of the patients that are going into analyze their weight gain or weight loss scenario Dr.

Casey Hoyt: Doctors are still saying, look, we can put you on this drug and we'll get you down to 40-50 pounds, but you're still going to have moderate sleep apnea, and sleep apnea will be a part of your program in conjunction with the GLP-1 drug. So ResMed and our view as well, because of our numbers and because of the growth that we've been experiencing in sleep. You know, throughout the country, for the last year and a half, two years since these drugs have been out, it's kind of proven that these things are going to help with our growth versus be against us, And so we're excited about that.

Casey Hoyt: Doctors are still say I love you can we can put you on this drug and we will get you down.

Casey Hoyt: <unk> 40, 50 pounds, but you're still gonna have moderate sleep apnea and sleep apnea will be a part of your program in conjunction with the G. L. P. One drug so.

Casey Hoyt: RASM AD and and our view as well because of our numbers and because of the growth that we've been experiencing in sleep.

Casey Hoyt: Throughout the country for the last year and a half two years since these drugs have been out it's kind of proven that these things are going to help with our growth versus be against us.

Casey Hoyt: And so we're excited about that and I think that all the technology on the Bakken and I was talking about in the call with making home sleep testing more mainstream through Wearables is going to just drive more and more patients into addressing their sleep concerns, which should play into our hand down the road as well.

Casey Hoyt: And I think that all the technology on the back end that I was talking about in the call with making home sleep testing more mainstream through wearables is gonna just drive more and more patients into addressing their sleep concerns, which should play into our hand down the road as well.

Speaker Change: So two to come up with I'm not sure Casey.

Doug Cooper: So, as two co-authors of that, Casey, you know, what do you think the regulatory reimbursement will be there? Will there be any change in that given what's happening in the industry? Part A. B., your M&A strategy going forward, is it focused on respiratory, still, or sleep, or other areas? And have you seen multiples come down that people want to pay for? Obviously, the public companies have taken it to, you know, pretty big multiple hits over the past few months.

Doug Cooper: Yeah.

Doug Cooper: What do you think the regulatory reimbursement will be there will there be any.

Doug Cooper: Change in that given what's happening in the industry.

Casey Hoyt: Yeah, I mean, we haven't seen much of a shift in multiples. However, our respiratory focus is still at the top of mind whenever we're strategizing M&A targets. There are other bolt-on products that we are intrigued about that some of these targets have that are different than what we have. I comment on H&P and how their additional business that makes them a full-line DME was a key driver in our conversations with landing our first joint venture.

Doug Cooper: B are your M&A strategy going forward is it focused on respiratory stellar sweep.

Casey Hoyt: Or other areas and have you seen multiples come down.

Casey Hoyt: People want to pay obviously would be the public companies have taken it.

Casey Hoyt: Pretty big multiple.

Speaker Change: I'll turn it over the past few months.

Casey Hoyt: Yes, I mean, we haven't seen much of a shift in multiples. However, I respiratory focus is still at the top of mind whenever work. We're strategizing M&A targets. There are other bolt on products that we are intrigued about that some of these targets have the.

Casey Hoyt: That are different than the than what we have I comment on an H M P and how their additional business that make them full on D&B was was a key driver in our conversations with landing our first joint ventured and so it is.

Casey Hoyt: And so it helped us to just realize that this is the holistic offering that maybe the JV and the hospital systems need. And so we're building that model out and its entire value proposition as we speak with others. JV targets around the country. So I guess our M&A strategy has changed from the standpoint that, you know, we're not just after the respiratory DME; we're also after the hospital-owned DME that is more full-line. And we've already got those guys in the pipeline, and the conversations are teed up. OK.

Casey Hoyt: It helped US you just realize that this is a the holistic offering that maybe at the JV in the hospital systems need and so where we're building that model out and its entire value props as we speak with other.

Casey Hoyt: JV targets around the country.

Casey Hoyt: So I guess, our M&A strategy has changed from the standpoint that you know we're not just after the respiratory D. And me. We're also after the hospital owned to give me that is more full line and so.

Casey Hoyt: Well, we will and we've already got those guys in the pipeline and the conversations are teed up.

Doug Cooper: Okay, and just one last one for me if you could. Todd, the resupply revenue I think last quarter was $5 million on 33,000 patients. Do you have an update on what it was this quarter, revenue and patients?

Speaker Change: Okay, and just one last one for me if I could do it.

Doug Cooper: The supply revenue I think last quarter was $5 million and 33000 patients.

Doug Cooper: An update on what it was this quarter.

Doug Cooper: Revenue in patient.

Doug Cooper: Yeah.

Doug Cooper: It looks like.

Todd Zehnder: It looks like... I've got that at 4 million right now, so 5 might be a little heavy because I think we're up quarter over quarter, but I'll have to get back to you on that.

Todd Zehnder: I've got that at $4 million right now so five might be a little heavy because I think were up quarter over quarter, but I'll have to get back to you on that.

Todd Zehnder: Okay, so there are 10 states.

Speaker Change: Okay. Okay.

Todd Zehnder: Okay.

Todd Zehnder: Sure.

Todd Zehnder: Thank you and our next question comes from Alex graph with River Ridge Capital. Please state your question.

Alex Graff: Thank you. And our next question comes from Alex Graff with River Ridge Capital. Please state your question.

Alex Graff: Thanks for taking my question.

Alex Graff: Thanks for taking my question. I just had a quick one on the automation of reauthorization. Could you maybe give us a better sense of, you know, a little bit more granularity in terms of what resources will be freed up and how Viemed intends to use those resources?

Alex Graff: Just had a quick one on the.

Alex Graff: The automating of reauthorization.

Alex Graff: Could you maybe give us a better sense of a little bit more granularity in terms of what resources will be freed up and how <unk> intends to use those resources.

Alex Graff: Yeah, I mean, what we're piloting at this point is using.

Todd Zehnder: Yeah, I mean, what we're piloting at this point is using our Engage software, which is proprietary, to pull downloads for compliance, and then using another tool that we've developed internally that will go and scour the HIEs that Casey was talking about earlier. And in the event that we can match up a good download with good notes, it will free up a variety of people. We have a corporate office team that works on the gathering of data in certain circumstances.

Todd Zehnder: Our engage software, which is proprietary to pull downloads for compliance and then using another tool that we've developed internally that will go and scour. The hie's that Casey was talking about earlier and in the event that we can match up a a good download with good notes it will free up a variety of <unk>.

Todd Zehnder: People, we have and back office and our corporate office team that works on the gathering of data in certain circumstances it might free up.

Todd Zehnder: It might free up a service respiratory therapist who doesn't have to go to the house to pull a download from the machine. It could potentially free up a salesperson who doesn't have to go and call a physician's office to get notes if we're having trouble at the corporate office. So it's a variety of people. It hasn't hit full scale yet to where we're really getting a full benefit, but it's something we've been working on.

Todd Zehnder: Service respiratory therapists, who doesn't have to go to the house to pull a download from the machine it could potentially free up a salesperson who doesn't have to go and call on a physician's office to get notes, if we're having trouble from the corporate office. So its a variety of people it hasn't hit full scale, yet to where we're really getting a full benefit but.

Todd Zehnder: It's something we've been working on and then at that point, what what you could do as you're keeping the salespeople are selling or keeping our therapists out there servicing new patients and more patients and then you're back office can just turned more orders around so it's a variety.

Todd Zehnder: And then at that point, what you could do is you're keeping salespeople selling, you're keeping therapists out there servicing new patients and more patients, and then your back office can just turn more orders around. So it's a variety.

Speaker Change: Understood. That's helpful. So I guess overall.

Alex Graff: I understand that's helpful. So I guess overall, you know, the takeaway should be that that largely should help kind of build revenue and become more efficient from a cost perspective. So in terms of, you know, costs as a percentage of sales, this initiative should lead to an improvement in that or not?

Alex Graff: The takeaway should be that.

Alex Graff: That largely should help kind of.

Alex Graff: Build revenue and become more efficient from a cost perspective, so in terms of.

Alex Graff: Cost as a percentage of sales. This initiative do you guys think should should lead to an improvement of that or a continued improvement.

Todd Zehnder: Yeah, and I also think that if we're able to do it on a more timely basis, we can turn around reauthorizations on a faster basis, which keeps people off of hold for less time, which should help with overall realizations. So that's something, whether we're using our technological tools or just trying to staff up to make sure that those patients aren't on hold as long, we're always trying to make improvements understood. understood.

Speaker Change: Yeah, and I also think that if we were able to do it on a more timely basis. We can turnaround reauthorization is on a faster basis, which keeps people off of hole.

Todd Zehnder: For lesser time, which should help with overall realizations. So that's something whether we're using our technological tools are just trying to staff up to make sure that those patients arent as arent on hold as long, we're always trying to make improvements in.

Alex Graff: I understand. Got it. That's helpful. Thank you so much.

Speaker Change: Understood got it that's helpful. Thank you so much.

Speaker Change: Sure thing out.

Speaker Change: Thank you and just a reminder to ask a question press star one on your phone.

Jeff Bronchek: Thank you. And just a reminder, to ask a question, press star 1 on your phone. Our next question comes from Jeff Bronchek with Cove Street Capital. Please state your question.

Jeff Bronchek: Our next question comes from Jeff Project with Cove Street Capital. Please state your question.

Jeff Bronchek: Hey guys, how are you? Hey, just, could you go over, you made a sort of a comment about the receivables from the UNH situation, and are you worried, or is there a sense that... This is so messy that there's a write-off? You know, not a material one, but this is saying... How does this progress financially?

Jeff Bronchek: Hey, guys how are you.

Jeff Bronchek: So just could you go over sort of a comment about the receivables from the UNH situation.

Jeff Bronchek: Hi.

Jeff Bronchek: Are you worried or is there a sense that.

Jeff Bronchek: This is so messy that theres a write off.

Jeff Bronchek: Not a material thing.

Jeff Bronchek: How does this progress financially.

Jeff Bronchek: Yeah. So at this point that is our like our entire focus is to make sure there isn't a write off.

Todd Zehnder: Yeah, so at this point, that is our like, our entire focus is to make sure there isn't a write-off. At this point, like I said, it's a cash flow impact. I want to say we're probably 4 million heavy in Q1 on AR versus cash collections. And then, you know, as I mentioned, we've worked that number down, but it takes a carrier-by-carrier change from changing healthcare to an alternate clearinghouse. So you have to have your data in order, you have to make sure that once the changes are made, they're accepted, there's not rejection.

Todd Zehnder: At this point like I said, it's a cash flow impact I want to say, we're probably 4 million heavy at Q1 on AOR versus cash collections and then you know as I mentioned, we've we've worked that number down but it takes a.

Todd Zehnder: Carrier by carrier change from change healthcare to an alternate clearinghouse. So you have to have your you have to have your data and order you have to make sure that once the changes are made that they are accepted theres not rejections. So there's more work to go in.

Todd Zehnder: So there's more work to go, but that's entirely what our team is focused on to make sure that we don't have the smaller carriers not get through to where we would have timely filing six months down the road. So at this point, we don't expect to have any additional write-offs. I'm confident in saying that. But it is work that's being done, and I think the entire industry is facing that right.

Todd Zehnder: But that's entirely what our team is focused on to make sure that we don't have.

Todd Zehnder: The smaller carriers not get through to where we would have timely filing you know six months down the road. So at this point.

Todd Zehnder: We don't expect to have any additional write offs I'm confident in saying that but it is work that's being done and I think the entire industry is facing that right now.

Jeff Bronchek: And just, again, when you recap the regulatory environment, and my guess is nothing will happen this year because it's an election year, but maybe just talk about some of the things that, aside from the 75-25, that have come up or are positive or not, you know, just an overall viewpoint.

Todd Zehnder: And just.

Jeff Bronchek: Again recap the regulatory environment and my guess is nothing happens this year, because it's an election year, but maybe just talk about some of the things that aside from the 70 525 that have come up or not a positive we're not just.

Jeff Bronchek: Just an overall viewpoint.

Speaker Change: I'll take that one.

Casey Hoyt: I'll take that one. I mean, I guess some of the positive things that we've seen on a regulatory basis have started on a state-by-state basis. You know, there's a thing called step therapy where some of the payer's medical policies are asking you to try and fail a lesser device before approving a ventilator, and it just adds another layer of authorization and burden on, frankly, the patient more or less than us. I mean, of course, our business, but more about the patient trying a lesser device and suffocating and then having to document failure before they go on That is wrong, and clinically, there's no data that proves that that is a method that we should be embracing.

Casey Hoyt: I guess some of the positive things that we've seen from a regulatory basis have have started on a state by state basis. You know, there's there's a thing called step therapy, where some of the payer's medical policies are asking you to try and fail a lesser device.

Casey Hoyt: Before approving a ventilator and it just it adds another layer of authorization and burden on frankly, the patient more or less at us.

Casey Hoyt: For sure our business, but.

Casey Hoyt: More about the patient trying a lesser device and suffocating and then having a document failure before they go into villages that is wrong and clinically theres no data that proves that that is a method that we should.

Casey Hoyt: We should be embracing.

Casey Hoyt: So, we've been able to change legislation in Oklahoma, Louisiana, and we're working on Louisiana and Mississippi, and there's really been no opposition to those efforts because it's kind of common sense. We're seeing some of that activity up on the hill in D.C. as well. AA Home Care is now one of our industry associations that's behind this movement. I just think that's an overall positive win for us. We've been dealing with that burden for the last two or three years, and to get some relief on that would be huge.

Casey Hoyt: So we've been able to change legislation around.

Casey Hoyt: Oklahoma, Louisiana, working on Louisiana, and Mississippi, and Theres really been no opposition to those efforts because it's kind of common sense, we're seeing some of that activity up on the hill and in D. C. As well a home care is now a.

Casey Hoyt: One of our industry associations, that's behind this business that's also.

Casey Hoyt: Spread in this message throughout the country.

Casey Hoyt: I just think that's a that's an overall positive win for US I mean, we're dealing with that we've been dealing with that burden for the last two to three years and to get some relief on that would be huge.

Casey Hoyt: But other than that, there's really, I mean, there's some things that don't really affect VIMED, but, you know, I mean, like with diabetes regulations and stuff like that. But really, we're pretty stable from the standpoint of the things that we're focused on or that would affect our business. There's nothing outside of 75-25 that is pressure on reimbursement, and as we've communicated, it's really not that much of a pressure on our business. So again, we couldn't be more... pleased, I guess, with the current state of affairs on the regulatory front, and frankly, it's the most stable it's ever been since I've been running the business.

Casey Hoyt: But other than that there's really I mean, you know theres. Some theres some things that don't really affect VI mad but.

Casey Hoyt: No I mean like with diabetes regulations and stuff like that but really where we're pretty stable from the standpoint of the things that we're focused on or that would affect our business. There's nothing outside of 70 525.

Casey Hoyt: Better pressures on reimbursement and as we've communicated is really not that much of a pressure for our business. So again, we couldnt be more.

Casey Hoyt: No.

Casey Hoyt: Pleased I guess with the current state of affairs with on the regulatory front and frankly, it's the most stable its ever been since I've been running the business, Yeah, and I'll add one thing I mean, the question. We always get is competitive bidding and is it coming back and while we don't have an answer to say, yes or no. It might we're at the point were getting close to the point, where we can.

Todd Zehnder: Yeah, and I'll add one thing. I mean, the question we always get is competitive bidding, and is it coming back? And while we don't have an answer to say yes or no, it might, we're at the point, we're getting close to the point where we can say that we're confident it won't be here for 2025. And generally, it gets announced, if you will, about 18 months ahead of time. So if we don't hear anything from CMS over the next few months, we're going to be at a point where we don't think it'll be around for 2026 either.

Todd Zehnder: Say that we're confident that it won't be here for 2025 and generally it gets.

Todd Zehnder: Announced if you will about 18 months ahead of time. So if we don't hear anything from CMS over the next few months, we're going to be at a point, where we don't think it'll be around for 2026, either while we don't we're not afraid to competitive bidding we bid.

Todd Zehnder: While we don't, we're not afraid of competitive bidding; we bid in the last round, which got canceled. We just don't see it coming back in the near term just because it has not been sort of rolled out properly if it, if it's coming back anytime soon.

Todd Zehnder: In the last round, which got canceled we just don't see it coming back in the near term just because it's it has not been sort of rolled out properly if it if it's coming back anytime soon.

Jeff Bronchek: All right, thanks guys.

Speaker Change: Alright, thanks, guys.

Jeff Bronchek: All right, Jeff. Thanks. Thank you.

Speaker Change: Hi, Jeff Thanks, Thank you.

Jeff Bronchek: There are no further questions at this time I'll hand, the floor over to Todd Zehnder for closing comments. Thank you.

Todd Zehnder: There are no further questions at this time. I'll hand the floor over to Todd Zehnder for closing comments. Thank you.

Todd Zehnder: Alright, we want to thank everybody for their participation, and please follow up if you have any additional questions.

Todd Zehnder: We want to thank everybody for their participation and please follow up if you have any additional questions.

Operator: Thank you. This concludes today's conference. All parties may disconnect. Have a good day.

Todd Zehnder: Thank you. This concludes today's conference all parties may disconnect have a good day.