*Disclosure: I own shares in VMD
Price: $9.99 USD
MC: 403 million USD (fully diluted)
EV: 401 million
1 year performance: +10%
VMD reported Wednesday after the close and held a conference call yesterday. Results were ahead of my expectations and the stock was up 6.5% yesterday. We will see where it lands today. The guidance was weaker than I was expecting on the surface, but the call cleared a few things up.
Quarter Recap
Revenue of 50.7 million which as a bit above the midpoint of their guidance.
EBITDA 12.8 million was way above last years’ 9.3 million. Last year did not include the recent acquisition of HMP.
This was ahead of my expectations.
Expecting 49.7 to 51 million in revenue in the core business (ex HMP) in Q1 2024.
Up to 372 RTs or 37% of the total workforce.
Vent patient count up to 10,327.
Call Notes
They restructured the sales force have more localized training and a regional approach
They have multiple territory sales managers and National Sales directorship programs.
If the expiry of the 75-25 blended rates is extended then they could see some additional upside.
Not seeing any impact from GLP-1 drugs at this point.
Patient length of stay is stable at 17 months.
Expect to grow inorganically from JV partnerships or acquisition in 2024.
They have more of the business coming from sleep products hies year vs last year. This has a them a little more susceptible to deductibles and seasonality as well as insurance changes.
They didn’t lose any patients, but some friction due to the nature of the business.
They aren’t seeing a meaningful impact on the business due to the Change Healthcare (a unit of UNH) cyberattack.
Closing Thoughts
The VMD team is executing well in my opinion. Vent rental revenue was 75% of total revenue. That is down from 66% this time last year and 80% pre covid. The balance sheet is already net cash from the HMP acquisition.
I’m looking forward to seeing what they an do with the business from here. It would be great to see another acquisition like HMP, but I am expecting something more modest in 2024. Regardless, I am pleased with the business.
Thanks for reading.
Dean
* long VMD