Greetings, and welcome to the Viemed Healthcare, Inc. Year End 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. Please note that this conference is being recorded. I will now turn the conference over to our host, Trey Fitzgerald, Chief Financial Officer. Thank you. You may begin.

Thank you, and good morning, everyone. We appreciate you joining us today. Please note before we begin that these remarks 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, that 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 disclosed in our disclosure documents filed with the SEC or the security 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 obligations to update or revise any forward-looking statements except as required by law. Fourth quarter financial news release, including the related financial statements, are available on the SEC's website. I will now turn it over to our CEO, Casey Hoyt.

Okay. Thank you, Trey. And good morning, everyone. We appreciate you joining us today for sharing some terrific performance results. I want to recognize and thank our dedicated Viemed family for their relentless efforts as we finished strong in 2024 delivering another record quarter. Our nearly twelve hundred employees' focus and desire to do what's best for our patients, providers, and partners is what sets us apart as more individuals choose Viemed as their in-home clinical care provider of post-acute respiratory equipment services. Thank you, team, for all that you do. Based on the year we just completed and now another strong one we're outlining for you for 2025, I think it's worth spending a moment on the demand we're seeing within our business and why we're so confident in this outlook. Provide some context on what we often refer to as the blue ocean of opportunity for business growth. There's a massively underserved patient population that needs to be treated for complex respiratory care. COPD alone, there are an estimated twenty-five million patients struggling in the US with this disease. Nearly two point five million people are already at the last stage of the disease and one point two five million have already reached chronic respiratory failure requiring the life-changing ventilation therapy we provide. The industry's market penetration is only in the high single digits at this point, with only a handful of national players like us working hard to address these complex respiratory needs. In our sleep sector, an estimated eighty million individuals are suffering from sleep apnea and remain undiagnosed. With increased awareness and engagement happening due to the widening adoption of GLP-1 drugs, the industry is seeing a more positive correlation to patients beginning path therapy. Downstream, this, of course, leads to higher resupply rates and a longer-term treatment period for these patients. I don't think I have to push too hard to convince anyone on this call of the growing behavioral health crisis we're facing in this country. Rates of clinical anxiety and depression are at an all-time high. In our business, over half the patients who are in complex respiratory care struggle with symptoms of anxiety and depression. In many cases, they are being readmitted to the hospitals for respiratory issues, but due to behavioral health challenges. In response, we've set up a behavioral health offering providing licensed clinical social workers that go out into the field or can get on a telehealth visit to work in tandem with our respiratory therapist. Controlling costs and improving outcomes. We are also seeing behavioral health opportunity blossom inside of our staffing division. As we have sourced a significant amount of personnel to fulfill mental health needs by state agencies around the country. In addition to these multiple sustainable demand drivers, I would layer on the ever-increasing trend of providing more clinical care in the home. With our high-touch technology-enabled clinical approach, our respiratory therapists have earned a trusted place in the home. Patients want to be treated in the comfort and safety of their home or place of residence. Hospitals, and health systems want to better manage their length of stay. And payers recognize the overall total cost of care is lower in the home versus in facility. We have become such a vital link between patients, providers, and payers in this setting for increasing patient satisfaction, improving compliance, and reducing hospitalizations. And we are considered more of an in-home clinical provider than an HME provider. That's a significant purposeful change we have been seeking reflecting our commitment to delivering comprehensive patient-centered care. We think we are helping steer the industry to meet the evolving needs and remain a leader in complete patient care. Pressure we're all seeing placed on Medicaid and Medicare programs highlights where we are and where we can continue to win. We can better manage length of stay for the hospitals through helping them create efficiencies improve outcomes, and increase patient satisfaction. Hospitals are under financial strain and increasing demands to optimize due to rate and financial performance pressures. We are here to help them succeed by offering our resources and services to help patients appropriately transition to the home. We don't yet know the impact the new administration will have in 2025, but there are a few things to keep in mind. When there's pressure to create efficiencies in health care, that plays into our capabilities. When there is transparency, overhauls, and more rules to reduce waste, that is also very good for us. Also, when more care is being delivered in the home, that continues to position us for success. With that backdrop of demand and our capabilities, I think you can now understand why we are seeing the growth in each business segment during 2024. It also underlines the confident and positive outlook we have for 2025. I'll come back to that in a moment. Let me first turn to some brief updates on the business. Our vent business has been a strong performer all year and it didn't disappoint in Q4. Vent revenue was up four point four percent sequentially on a larger base. While the number of VIT patients increased by over four hundred for three quarters in a row in 2024. We had fifteen hundred net vent adds in 2024, which is close to an all-time high and nearly fifty percent more than we added in 2023. We're seeing greater penetration of that massively underserved market as a direct result of the operational overhaul we completed earlier in the year. The sales restructuring and recruiting strategies and process we put in place have seen a fourteen percent increase in average monthly setups for sales reps in Q4. We monitor this metric very closely internally and the upward trend since implementation has given us the confidence to double down on staying the course by aggressively increasing the sales force in 2025. In our sleep business, we saw a nearly ten percent sequential increase in sleep therapy patients leading to a forty-three percent increase in 2024 compared to 2023. Seeing that sequential growth in CPAP units, resupply orders, and home sleep tests as well. As strong as our organic growth engine is, we're looking at additional opportunities that will expand our products, services, and our reach to diversify patient types. We built up a number of contracts over the years and believe that we can leverage that payer infrastructure with some diversification. The trust we've earned in the home of existing patients is also something we can leverage throughout the country. We've hit on all cylinders this year and delivered on our strategic goals, I'm proud of the team with the record revenue, performance, and growth in operational metrics. Not satisfied though. There are more patients we can serve and more hospitals and health systems that need us. For 2025, we are leaning into what worked well through 2024 with a laser focus on organic growth and a complementary focus on potential inorganic growth. We are actively ramping up the sales force at a more aggressive pace and expecting continued growth in vents, sleep, and in staffing as we capitalize on its unique positioning in behavioral health. For more on our operational and financial results for the quarter, I'll turn it over to Todd Zehnder, our Chief Operating Officer. Todd?

Alright. Thank you, Casey. Reviewing the financial results, all figures are in US dollars, and the full results have been made on the SEC website. We have continued to incrementally evolve our disclosures to the investment community and I'd like to point out the earnings supplemental deck we provided together with our earnings release. There are some new disclosures and schedules in this document, as well as others we've added from our filings that are now putting in one place for ease of use. You can find this report on our IR site, and we encourage any ongoing feedback that you might have. Let's talk about revenue first. We are recognized for the organic revenue engine that we've built at Viemed. And it led the way once again in Q4. We set a couple of records for revenue this quarter and full year 2024. With a twenty percent increase year over year for the quarter, and a twenty-three percent increase for the year. These results were at the high end of our expectations. During 2024, acquired revenue accounted for only one point one million in Q4 and three point two million for the year. On a sequential basis, our revenue grew four point six percent. As Casey just noted, we had a very strong year with our core vent business. It accounted for fifty-five percent of revenue for this quarter and fifty-six percent for the year. The sleep business increased to seventeen percent of revenues for Q4 and sixteen percent for the year. It's worth noting here that sleep historically experiences a disproportionate amount of seasonality in Q4, which has an impact on revenues but also margin. Our oxygen and staffing businesses continue to grow as well, each contributing roughly ten percent of both this quarter's revenue and for the full year. We are also making incremental improvements with the East Alabama Medical JV. Gross margin was fifty-nine point five percent for the quarter, and fifty-nine point four percent for the year. Aligning closely with our target of approximately sixty percent based on our evolving product and service mix. We believe this remains a strong benchmark particularly as the rapid growth of our sleep and staffing businesses introduces variations in gross net adjusted EBITDA margins. Given these dynamics, year over year comparisons may not fully capture the underlying strength and profitability of our business. The one business I'd like to discuss further is staffing. Casey covered the strategic major, but staffing's financial contribution is just as important. The nature of this business and its core customers drives more variability from quarter to quarter on the top line. It also has less gross margin contribution, but a substantial positive EBITDA impact to adjusted EBITDA, and most importantly, free cash flow. We're thrilled to report that adjusted EBITDA grew eleven percent for the quarter to fourteen point two million dollars and nineteen percent for the full year driven by strong organic growth and contributions from each of our businesses. As expected, adjusted EBITDA for the quarter was twenty-three point five percent the full year margin came in at twenty-two point eight percent. Both percentages declined year over year and sequentially but primarily due to shifts in our product and service mix. Reflecting the evolving composition of our growth. We're proud of what we've accomplished with our SG and A, as investments in new sales talent, technology in the home, together with operational and process improvements have generated efficiencies as we've scaled the business. SG and A was flat sequentially in Q4 at forty-six percent of revenue and down from forty-seven percent a year ago. For the year, SG and A was forty-seven percent, nearly a sixty basis point improvement from 2023. Turning to CapEx. I want to make sure I properly frame to you what drives our gross CapEx. As we've talked about for some time, we are accelerating our VIN exchange with Phillips program but we are also seeing tremendous growth in our VIN patient. Casey noted that we had close to fifteen hundred net adds in vents this year. This growth and the timing of the acceleration to complete the purchase for the return program late in the year resulted in gross CapEx of thirteen point six million dollars for Q4. Offsetting these purchases was approximately two point nine million dollars of related sales and exchange proceeds, putting our net cash CapEx for Q4 at approximately eight point nine million dollars. For the year, our gross CapEx was thirty-seven point eight million dollars with net CapEx of twenty-seven point five million. We'll continue to sell back a significant number of vents during 2025, but it's difficult to project the total amount as that's determined by the remediation process established by Philips and the related governmental agencies. 2025 outlook I'll cover in a moment provides some rough estimation of how we see these purchases playing out in the coming year. 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 net CapEx to adjusted EBITDA was at sixty-three percent in Q4 compared with thirty-six percent in Q3 and fifty-eight percent a year ago. Free cash flow was eleven point six million dollars in 2024 or five point two percent of revenue compared with twenty-one point seven million or eleven point nine percent of revenue in 2023, which is an achievement considering how much we grew the company this year while paying down debt and funding the VIN exchanges. In Q4, we recorded a gain of one point one million that was primarily driven by the Trilogy return program. These gains are expected to continue until the project is completed, likely sometime around the middle of this year. We have a pristine balance sheet with fifty-five million dollars available on our credit facilities. A thirty million dollar accordion if needed, seventeen point five million dollars of cash on hand at year-end, and a working capital balance of fifteen point six million. We occupy a rare space in the broader healthcare services market, with no net debt, an organic revenue engine that is essentially self-funding. Have a significant amount of dry powder to continue our vent fleet upgrade and potentially become more proactive on M&A can complement this growth. I'd like to close by highlighting an important new disclosure for this quarter. The introduction of our outlook for full year 2025. We are projecting net revenue to be in the range of two hundred fifty-four million dollars to two hundred sixty-five million dollars for the full year, which would imply sixteen percent growth over 2024 at the midpoint. Adjusted EBITDA is projected to be in a range of fifty-four million dollars to fifty-eight million which would imply ten percent growth over 2024. As this is our first time providing a full year outlook, we approach this process in a very disciplined fashion and certainly don't take this decision lightly. There are some high-level directional comments I'd like to make that should get ahead of the inevitable questions around our ranges. For future reference, these can be found in our quarterly supplement as well. First, I would note that year over year growth in each quarter is expected to be roughly consistent with the increases we experienced in 2024. Recall that typically we have Q1 that is flat to down sequentially when compared with Q4, due to lower utilizations as we get patients off of hold and through the insurance change season. We'd also typically see sequential revenue growth in Q2 through Q4, In our ranges, we built in an assumption of three percent to six percent revenue growth for these quarters. The adjusted EBITDA ranges for the year assume an adjusted EBITDA margin in the range of twenty-one percent to twenty-three percent. CapEx in the first half of 2025 is expected to be similar to what we experienced in the second half of 2024 as we continue to swap out our ventilator fleet. The second half of 2025 would then be more muted. All of these assumptions are based on the status quo of the business, no potential M&A activity assumed. I spoke last quarter about wanting to maintain the momentum we built all year in each business and finished the year strong. In a year where we've grown revenues as much as we have, we were able to fund our organic growth, expand margin, and generate strong free cash flow while improving the balance sheet. We also reported positive net income for the eighth year in a row. Quite a finish to the year. With this and the outlook for 2025, I hope you see the confidence and enthusiasm we have around the state of our business. Thank you for joining us today. This concludes our prepared remarks. We will now open the floor up to further questions.

Thank you. And at this time, we'll conduct our Q&A session. And our first question comes from Brooks O'Neil with Lake Street Capital Markets. Please state your question.

Thank you. Good morning, guys. Congratulations on the strong finish to the year. Thank you. I have a few questions, I guess. Casey mentioned that it was too early to speculate on what changes might be coming from the new Trump administration but I'm curious if you anticipate any impact at all on your business from the kind of tariffs that are being suggested. I know it's a bit of a moving target, but do you see any impact right now?

This is Todd. We haven't seen anything to date yet, Brooks. I mean, it's hard for us to say what parts of certain manufacturers could have some sort of tariff. Most of the products we have, I think, are coming, domestically. But if there are parts that they get taxed on and if they want to try to pass on things that could come. But we have not heard anything from any of our major suppliers yet.

And I'll just add that anecdotally, you're seeing the or you're feeling the pressure at the hospital what what's gonna happen to some of these Medicaid programs and and their payers of sorts. And so they're actively tightening screws down. That usually plays in our handbooks. I mean, they need to fix efficiently discharge these folks and lean on us for all the help that they can possibly get. So we're feeling that right now, and we're seeing them kinda reach out to us and our folks and having more thoughtful and collaborative conversations. Those have already begun as a result of what could happen even though they don't even know what the cuts are gonna be. If there are any at all.

Yeah. An interesting environment. For sure. And I'm guessing you're not hearing any even Tom Toms about competitive bidding? Out there right now?

No. Haven't heard a whisper about competitive bidding at all. So we're still in the same status quo. It's hard to see that it's gonna be a I guess, you know, it would be almost impossible for it to be a 2026 event at this point in time. So, you know, 2027 and beyond, the time that we hear the first whispers, I guess, is the ballpark range that I would throw at you right now. And just as a reminder, you remember the last time that it went through Medicare pulled the program because there were no cost savings, and that was pre the inflationary period that we've been through the last, I guess, five years.

Mhmm. Oh, let me ask one more, and then I'll turn it over. Obviously, there's some uncertainty of whether we're in a good M&A environment or a bad M&A environment. Nobody seems to know. I kinda thought it would get better as a result of some indications. You know, the curve people may think somewhat similar to the last people. So would you say when you look out there, no M&A's know, only a small component of your growth plans and organic growth have been the driver. But would you say to you guys it looks like a target-rich environment, a fertile environment for potential M&A, or would you say you're feeling it remains somewhat constrained as it was during the Biden years?

I would say it's more target-rich and fertile than definitely the Biden years. We're having a lot more interest activity. The pipeline is building. There are many more conversations we have many more options on the table for us to consider. You know, that's that's a positive thing for Viemed. You know how picky we are in bringing folks into the fold of this culture and our business. And we've got more interest from the right types of targets than we have in the past. And so I'm optimistic that that could possibly be of the change in the guard, but nevertheless, something's different than the how quiet it was for the past two years, if you will.

Yeah. Great. Let me just say quickly, we really appreciate the annual guidance. That's gonna help us a lot, and look forward to another great year.

Thank you. And another reminder to the audience, ask a question now, press star one on your phone. And we have another question. We have coming from Andrew Rem with Oden Partners. Please state your question.

Hey, guys. I just had one question on you guys mentioned the JV. Can you just comment on that how it's gone over the past year and any updated thoughts?

The JV is going well. We've had a successful integration and great partnership with East Alabama Medical. Here's the things that we're looking at to be perfectly candid. You know, it's taken a lot of time. For this type of integration. Such a small transaction. So that's led us down the path of if we're going to do this another one, it needs to be a substantial size that kinda worth the time and effort it takes. You know, we we're kinda weighing the way that we can get business from the complex respiratory organic offering, if you will, of us just going out and building our relationship relationships on our own versus the opportunity that we create inside of being a part of their cost. You know. And so that's what's going down. There's when you get into looking at larger joint venture targets, the then East Alabama Medical Center, they're the inventory is not as vast, but there are a handful out there that we're having conversations with and we'll just see whether or not it comes to fruition or not.

Yeah. And I guess I would add, Andrew, that it is profitable. It's been profitable out of the gate. You can actually see that on our P&L. So it's been a good accretive deal for us from a financial perspective. And it was a great one to have as our first one. And then I echo what Casey says, we're gonna do another one, we'd rather make, you know, the juice worth the squeeze.

Okay. And then your commentary relating to behavioral health, so it sounds like you're doing some staffing business, but were you also suggesting you're looking at doing behavioral health services through would it be the, like, the sleep business or the vent business or both?

Yeah. So let me back up. I'll start with our entry into behavioral health. You know, I guess it was around 2021 when we or maybe before that when we cranked up iMed Clinical Services. We were putting licensed clinical social workers on top of our respiratory therapist. And that was by design to handle things that went beyond respiratory. In late 2021, we started a staffing division. That staffing division was primarily providing clinical labor for the nursing shortage around the country for our hospital partners. And so as we started to see some of those needs stabilize and normalize after post-COVID, our staffing divisions started getting a little bit more scrappy, if you will. And they were, you know, surfing the needs of all sorts of clinical labor throughout the country. What they uncovered is that, you know, there were lots of needs and RFPs throughout the country with different states that are requesting behavioral health types of services. And so with our knowledge of VCS, our knowledge of staffing, and our ability to go out and pursue those types of RFPs, we've gotten really good at it. And it's something worth acknowledging right now because that staffing becomes a more material part of our business, it's important for everyone to understand that seventy to eighty percent of it is being driven by behavioral health needs around the country. And so we'll be nimble in that space, and we'll look for many more opportunities. It's certainly a complement to our organic offering as well with from a behavioral health standpoint, but it's also some of somewhat of these one-off wins here and there throughout the country with through our staffing division.

Okay. And then if I can ask one more, just related to kind of cash flow. A year ago, you guys had talked about the opportunity to cash flow to kind of accelerate and then you're kinda hit by the health situation. I think that took maybe longer than expected to work through that. And then I think it also seems like your CapEx got accelerated, but maybe just go back and revisit that comment. Are you still thinking that maybe the CapEx situation is fine but this the business is now to the point where you should experience cash flow acceleration?

Yeah. I'll take that one. The answer is yes. But I caveat that in the case where we doubled our vent growth this year. So obviously, the faster we grow, the more we need CapEx. And we would always rather spend money on growing our organic patient base than anything. So in the event that growth stays somewhat similar year over year, the cash flow should expand. This year, while change maybe has a minor impact on us, if you look at twenty-three versus twenty-four and twenty-four think we paid three or four million dollars more in cash taxes. And we had about three million dollars that was related to the, Phillips receivable that we got during 2025 that's gonna impact that number. So if you just kinda look at, apples to apples, we probably are hit by about a six million dollar change in true cash and the growth rate just expanded. So all things being equal, we continue to think that our free cash flow is gonna increase especially as staffing grows. Especially as the resupply business grows. While those, you know, we kinda beat it up during our prepared remarks while those carry a lower gross and EBITDA margin they drop cash to the bottom line. And so that is all things pointing to additional free cash flow for us in the future. We still stand behind that.

And then unlike the saying for the ventilation, is that roughly eighteen? Is that where you guys are at? Eighteen months? It's still?

Seventeen months is kinda where we've been hanging the last several years, and it has not deviated much from that.

Have you guys talked about what it is in sleep?

We haven't necessarily, but the PAP generally caps out at a year. So our length of stay for an actual PAP patient is, call it a year, the resupply is it's a we haven't really talked about nor have we calculated that number as it continues to grow. We will probably provide some disclosure on that. But as a younger patient, if they're staying compliant, there's no reason they shouldn't stay on for a number of years.

Yeah. And to add a little color on this is Trey Andrew. To add a little color on that, we're also in our infancy of the resupply program. So our length of stay right now, as it relates to how we calculate it every single year, is probably trickling up.

Okay. And on the path, the reason that's a year is is that just how the reimbursement works on a thirteen-month schedule. Is that right?

That's right. That's right. And so, like, if you think about our the Vent is an uncapped rental. It's a life-saving device. It's a bundled rate. It's very different than the rest of them. Oxygen typically has a thirty-six-month cap. Sleep generally has somewhere around a twelve, thirteen-month cap.

Yeah. Okay. Alright. Well, thanks a lot. You guys are doing an awesome job. I can't quite figure out why you have this massive disparity in valuation, but hopefully, the market will come around in time because you've done a fantastic job executing great twenty percent, I think, is the revenue CAGR, and I think EBITDA is just slightly below that. So again, congrats on and the whole team for doing a great job executing over several years here. Thanks.

We appreciate that, and stay tuned for our new investor deck. We're gonna try to start putting some valuation metrics in there to show what we think as well. So we appreciate your feedback.

Thank you. And there are no further questions at this time. I'll hand the floor back to Casey Hoyt for closing remarks. Thank you.

Okay. Thanks, everyone. That's going to conclude our conference call. Appreciate everyone joining us today. If you've got anything else, please feel free to reach out to us at any time. Have a good day.

This concludes today's call. All parties may disconnect. Thank you.