Viemed Healthcare Quick Update - $VMD.to & $VMD

Update after Q1 2023 financials

Continuing on with #6 in the quick and dirty post earnings update.

VMD released Q1 2023 just about a couple weeks ago.

(US Listing) Ticker: VMD 0.00%↑

Price: $10.28

Market Cap: 411 mil USD

EV: Approx 412 mil USD (after subtracting recently announced purchase of HMP)

Business Highlights

• Revenue of 39.6 mil

  • up 31% yoy and 5.5% sequentially

• Adj Ebitda of 8.3 mil

  • up from 7.2 mil yoy

• Guidance (with no contribution from HMP) of 40.2 to 41.2 mil

  • 23% growth yoy at midpoint

• Vent rentals where 63.6% of rev vs 71.3% in 2022 and 79.8% in 2021

Call Notes

• They have other companies in the M&A pipeline like HMP

• HMP is sleep heavy (45% sleep)

  • About half of that sleep revenue comes from resupply

• No real update on VA - have been waiting 4-5 years

• Continue to see gross margin pressure as they diversify away from vents into other areas

Closing Thoughts

It was a non-event quarter. The business is performing well. The acquisition of HMP validates the use of excess capital via M&A. I have been assuming that HMP will be integrated without any major issues. There is always reimbursement risk for VMD that will keep a lid on the multiple. I think you can mitigate that with diversification. They are currently trading 9-10x EV/run rate EBITDA (after HMP integration). There are some margin assumptions baked into that estimate that may be off the mark.

I like the organic growth story not tied to economic activity. I continue to hold.

Thanks,

Dean