Quipt Home Medical Corp.
08/11/2025 | Press release | Distributed by Public on 08/11/2025 15:06
Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the unaudited condensed consolidated interim financial statements and the accompanying notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described in Part I, Item 1A. "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended September 30, 2024.
The condensed consolidated financial statements as of and for the three and nine months ended June 30, 2025 and 2024 (the "consolidated financial statements") of the Company were prepared in accordance with GAAP.
The consolidated financial statements, which are presented in US dollars, have been prepared under the historical cost convention, as modified by the measurement at fair values of certain financial assets and financial liabilities.
Loss of Foreign Private Issuer Status
As a result of more than 50% of the Company's outstanding voting securities being held directly or indirectly by residents of the US as of March 31, 2024 and otherwise not qualifying for foreign private issuer status under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company ceased to be a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, as of October 1, 2024. Accordingly, effective October 1, 2024, the Company was required to commence reporting on forms required by the Exchange Act of US domestic companies, such as periodic reports on Forms 10-K and 10-Q and current reports of Form 8-K and the US proxy rules. Any securities issued by the Company have become subject to certain rules and restrictions under the Securities Act of 1933, as amended (the "Securities Act"). More than 50% of the Company's outstanding voting securities continue to be held directly or indirectly by residents of the US as of June 30, 2025. As disclosed in the risk factors discussed or referred to in the Company's disclosure documents filed with the SEC and available at www.sec.gov, and with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca, compliance with the additional disclosure rules, compliance and timing requirements under the Securities Act, Exchange Act, and other applicable rules and regulations has resulted in increased expenses and require the Company's management to devote substantial time and resources to comply with the new regulatory requirements.
The impact of becoming a domestic issuer under the US federal securities laws, reporting its condensed consolidated interim financial statements in accordance with GAAP as opposed to international financial reporting standards ("IFRS"), has been reflected commencing with the annual financial statements as of and for the years ended September 30, 2024 and 2023. The primary changes relative to what was previously reported for the three and nine months ended June 30, 2024 are as follows:
| - | A reduction of revenues by approximately $3,200,000 and $8,700,000, respectively, with a corresponding elimination of bad debt expense, with no change to net loss. |
| - | A new caption in the condensed consolidated interim statement of income (loss) and the condensed consolidated interim statement of cash flows related to approximately $1,700,000 and $4,600,000, respectively, of right-of-use operating lease amortization and interest with a corresponding reduction in depreciation of approximately $1,400,000 and $3,700,000, respectively and interest expense of $300,000 and $900,000, respectively, with no change to net loss. |
| - | A new caption for the loss on derivative liability - interest rate swap of approximately ($105,000) and $170,000, respectively, which changed net loss, and was previously reflected as other comprehensive loss. |
Overview
Business objective
The growth in the number of elderly patients in the United States (US) healthcare market is creating pressure to provide more efficient delivery systems for products and services. Healthcare providers, such as hospitals, physicians, and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital
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18 |
readmissions, and help control costs. The Company seeks to fill this need by delivering a growing number of specialized products and services to achieve these goals. The Company seeks to provide an ever-expanding line of products and services over larger geographic regions within the US using several growth strategies. With over 130 offices, the Company employs more than 1,150 personnel in the US.
Future outlook
Our priorities for the year fiscal year ending September 30, 2025 and beyond are driving organic revenue growth, achieving operational net profit, generating positive cash flow, and expanding Adjusted EBITDA, a non-GAAP financial measure defined below. We are focused on expanding our presence in both existing and new markets and leveraging our scalable business platform to broaden our product offerings and service reach. To support these objectives, we continue to optimize our organizational structure, enhance operational efficiencies by reducing redundancies, and centralize back-office processes. These measures are streamlining operations, improving scalability, and positioning the business for sustainable long-term growth. Furthermore, we remain committed to exploring and pursuing all avenues to drive shareholder value.
Selected Quarterly and Interim Information ($ amounts in thousands, except per share amounts)
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As of or for the |
As of or for the |
As of or for the |
As of or for the |
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three months |
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three months |
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nine months |
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nine months |
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ended June 30, |
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ended June 30, |
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ended June 30, |
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ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Number of patients serviced |
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151,000 |
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153,000 |
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271,000 |
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270,000 |
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Number of equipment set-ups or deliveries |
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210,000 |
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216,000 |
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635,000 |
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642,000 |
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Respiratory resupply set-ups or deliveries |
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119,000 |
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120,000 |
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354,000 |
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359,000 |
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Adjusted EBITDA |
$ |
13,683 |
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$ |
14,195 |
$ |
41,022 |
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$ |
44,432 |
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Net cash flow provided by operating activities |
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$ |
9,668 |
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$ |
10,509 |
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$ |
27,914 |
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$ |
25,404 |
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Total revenue |
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$ |
58,289 |
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$ |
60,759 |
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$ |
177,046 |
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$ |
184,583 |
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Net loss |
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$ |
(3,025) |
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$ |
(1,596) |
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$ |
(7,151) |
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$ |
(3,823) |
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Net loss per share - basic |
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$ |
(0.07) |
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$ |
(0.04) |
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$ |
(0.17) |
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$ |
(0.09) |
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Net loss per share - diluted |
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$ |
(0.07) |
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$ |
(0.04) |
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$ |
(0.17) |
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$ |
(0.09) |
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Total assets |
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$ |
236,092 |
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$ |
249,784 |
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Total long-term liabilities |
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$ |
73,711 |
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$ |
76,051 |
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Shareholders' equity |
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$ |
102,536 |
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$ |
109,801 |
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Operating results
The fiscal year ended September 30, 2024 and the nine months ended June 30, 2025 presented us with a range of challenges that have impacted our financial performance for the three and nine months ended June 30, 2025 as compared to the three and nine months ended June 30, 2024. These challenges prevented us from achieving our target of 8% to 10% annualized organic growth.
The Medicare 75/25 blended rate ("Medicare 75/25"), which had been providing rate relief for certain geographies, was discontinued as of January 1, 2024. Medicare 75/25 was introduced in 2020.This rate adjustment, named after its 75%/25% allocation model, aimed to protect access to medical equipment products and services in non-rural, non-competitive bid areas by temporarily increasing Medicare reimbursement rates for providers serving those areas. This legislative action was designed to ensure that medical equipment suppliers could continue providing essential products and services. This blended rate was implemented to counter the decline in reimbursement rates experienced in the years prior to 2020. The discontinuance is still under legislative review, and Medicare 75/25 could return, but the cessation on January 1, 2024 had a negative impact on our revenue and operating results.
During the fiscal year ended September 30, 2024, we also experienced the withdrawal of Medicare Advantage members due to a capitated agreement moving to other providers in the industry. Further, in November 2024, a disposable supply contract which the Company was a party to was not renewed.
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19 |
The Company uses Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to certain non-Medicare payors for payment. UnitedHealth Group announced that on February 21, 2024, Change Healthcare's information technology systems were impacted by a cybersecurity incident (the "Change Healthcare Incident"). This incident significantly impacted the healthcare industry and hindered the ability to process and bill claims in the three months ended March 31, 2024 and June 30, 2024, creating a reduction in our cash flow, including collections of claims not directly impacted by the Change Healthcare Incident that were slowed by the diversion of normal collection efforts to address the Change Healthcare Incident.
The cumulative impact of these events on total revenue is estimated to be approximately $3,000,000 and $7,000,000 for the three and nine months ended June 30, 2025 compared to the three and nine months ended June 30, 2024, respectively.
Results of Operations
Three and nine months ended June 30, 2025 and 2024
The following table summarizes our results of operations for the three and nine months ended June 30, 2025 and 2024 (amounts in thousands, except per share amounts):
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Three months |
Three months |
Nine months |
Nine months |
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ended June 30, |
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ended June 30, |
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ended June 30, |
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ended June 30, |
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2025 |
2024 |
2025 |
2024 |
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Revenue |
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$ |
58,289 |
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$ |
60,759 |
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$ |
177,046 |
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$ |
184,583 |
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Cost of inventory sold |
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14,873 |
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16,694 |
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47,776 |
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51,260 |
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Operating expenses |
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31,041 |
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30,593 |
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91,333 |
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91,096 |
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Depreciation |
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9,758 |
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9,573 |
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29,061 |
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28,474 |
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Amortization of intangible assets |
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1,481 |
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1,519 |
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4,548 |
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4,570 |
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Right-of-use operating lease amortization and interest |
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1,585 |
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1,660 |
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4,753 |
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4,612 |
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Stock-based compensation |
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2,120 |
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483 |
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2,625 |
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2,154 |
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Acquisition-related costs |
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126 |
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188 |
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222 |
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393 |
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Gain on disposals of property and equipment |
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(872) |
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(51) |
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(896) |
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(51) |
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Interest expense, net |
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1,494 |
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1,602 |
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4,642 |
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4,857 |
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Change in fair value of derivative liability - interest rate swaps |
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182 |
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(105) |
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(442) |
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170 |
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Loss (gain) on foreign currency transactions |
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(610) |
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128 |
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231 |
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145 |
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Share of loss in equity method investment |
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101 |
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71 |
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245 |
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243 |
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Provision for income taxes |
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35 |
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- |
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99 |
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483 |
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Net loss |
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$ |
(3,025) |
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$ |
(1,596) |
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$ |
(7,151) |
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$ |
(3,823) |
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Net loss per share |
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Basic loss per share |
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$ |
(0.07) |
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$ |
(0.04) |
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$ |
(0.17) |
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$ |
(0.09) |
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Diluted loss per share |
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$ |
(0.07) |
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$ |
(0.04) |
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$ |
(0.17) |
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$ |
(0.09) |
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Revenue
For the three months ended June 30, 2025, revenue totaled $58,289,000, a decrease of $2,470,000, or 4.1%, from the three months ended June 30, 2024. This decrease is primarily due to a reduction of approximately $3,000,000 from the challenges discussed in Operating Results above, which was partially offset by gains in other areas.
For the nine months ended June 30, 2025, revenue totaled $177,046,000, a decrease of $7,537,000, or 4.1%, from the nine months ended June 30, 2024. This decrease is primarily due to a reduction of approximately $7,000,000 from the challenges discussed in Operating Results above.
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20 |
Cost of inventory sold
For the three months ended June 30, 2025, cost of inventory sold totaled $14,873,000, or 25.5% of revenue, and decreased from $16,694,000, or 27.5% of revenue, for the three months ended June 30, 2024. The decrease in dollars was due to the decline in revenue, with the percentage of revenue improving due to negotiated cost reductions with certain vendors during calendar 2025.
For the nine months ended June 30, 2025, cost of inventory sold totaled $47,776,000, or 27.0% of revenue, and decreased from $51,260,000, or 27.8% of revenue, for the nine months ended June 30, 2024. The decrease in dollars was due to the decline in revenue, with the percentage of revenue improving due to negotiated cost reductions with certain vendors during calendar 2025.
Operating expenses
For the three months ended June 30, 2025, operating expenses were $31,041,000, an increase of $448,000, or 1.5%, from $30,593,000 from the three months ended June 30, 2024, due primarily to a $585,000 increase in certain professional fees related to the CID, the loss of private issuer status, and proxy contests and other actions of activist shareholders. This was partially offset by a reduction in payroll expenses.
For the nine months ended June 30, 2025, operating expenses were $91,333,000, an increase of 0.2% from $91,097,000 for the nine months ended June 30, 2024. Billing expense increased $994,000 related to the consolidation and integration of the Company's billing systems, and certain professional fees related to the CID, the loss of private issuer status, proxy contests and other actions of activist shareholders, increased $880,000. These were mostly offset by a reduction in payroll expenses of $929,000 from reduced headcount and incentive compensation, and all other expenses of $696,000 from controls on discretionary spending such as marketing and travel.
Right-of-use operating lease amortization and interest
For the three months ended June 30, 2025, right-of-use operating lease amortization and interest expense decreased by $75,000 to $1,585,000 as compared to $1,660,000 for the three months ended June 30, 2024, due to the timing of lease renewals.
For the nine months ended June 30, 2025, right-of-use operating lease amortization and interest expense increased by $141,000 to $4,753,000 as compared to $4,612,000 for the nine months ended June 30, 2024, due to the timing of lease renewals.
Depreciation expense
Depreciation expense increased 1.9% to $9,758,000 for the three months ended June 30, 2025 compared to $9,573,000 for the three months ended June 30, 2024 due to the increase in the additions to property and equipment, specifically rental equipment.
Depreciation expense increased 2.1% to $29,061,000 for the nine months ended June 30, 2025 compared to $28,474,000 for the nine months ended June 30, 2024 due to the increase in additions to property and equipment, specifically rental equipment.
Stock-based compensation
Stock-based compensation increased to $2,120,000 for the three months ended June 30, 2025 from $483,000 for the three months ended June 30, 2024, due to the share-based long-term incentives granted in March 2025.
Stock-based compensation increased to $2,625,000 for the nine months ended June 30, 2025 from $2,154,000 for the nine months ended June 30, 2024, due to the share-based long-term incentives granted in March 2025.
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Gains on disposal of property and equipment
Gain on disposals of property and equipment increased to $872,000 for the three months ended June 30, 2025 from $51,000 for the three months ended June 30, 2024, primarily as a result of proceeds received from the return of recalled ventilators to the manufacturer.
Gain on disposals of property and equipment increased to $896,000 for the nine months ended June 30, 2025 from $51,000 for the nine months ended June 30, 2024, primarily as a result of proceeds received from the return of recalled ventilators to the manufacturer.
Interest expense, net
Interest expense, net for the three months ended June 30, 2025 decreased $108,000 to $1,494,000 from $1,602,000 for the three months ended June 30, 2024, due to lower interest rates on the senior credit facility, including the benefit of swaps entered into in September 2024 and lower average equipment loan balances.
Interest expense, net for the nine months ended June 30, 2025 decreased $215,000 to $4,642,000 from $4,857,000 for the nine months ended June 30, 2024, due to lower interest rates on the senior credit facility, including the benefit of swaps entered into in September 2024 and lower average equipment loan balances.
Change in fair value of derivative liability - interest rate swaps
The change in fair value of derivative liability - interest rate swap for the three months ended June 30, 2025 was a loss of $182,000 as compared to a gain of $105,000 for the three months ended June 30, 2024. The fair value of the swap has been volatile due to varying expectations of timing and degree of interest rate changes.
The change in fair value of derivative liability - interest rate swap for the nine months ended June 30, 2025 was a gain of $442,000 as compared to a loss of $170,000 for the nine months ended June 30, 2024. The fair value of the swap has been volatile due to varying expectations of timing and degree of interest rate changes.
Loss (gain) on foreign currency transactions
The loss (gain) on foreign currency transactions is primarily related to cash that is translated into US dollars at the foreign currency spot rate as of each reporting date, with changes in the exchange rates recognized in profit or loss. During the three months ended June 30, 2025, the exchange rate for Canadian dollars to US dollars increased from 0.696 to 0.731, resulting in a gain of $610,000. During the three months ended June 30, 2024, the exchange rate for Canadian dollars to US dollars decreased from 0.756 to 0.730, resulting in a loss of $128,000.
During the nine months ended June 30, 2025, the exchange rate for Canadian dollars to US dollars decreased from 0.741 to 0.731, resulting in a loss of $231,000. During the nine months ended June 30, 2024, the exchange rate for Canadian dollars to US dollars decreased from 0.740 to 0.730, resulting in a loss of $145,000.
Net loss
Net loss for the three months ended June 30, 2025 increased to $3,025,000 from $1,596,000 for the three months ended June 30, 2024 for the reasons listed above.
Net loss for the nine months ended June 30, 2025 increased to $7,151,000 from $3,823,000 for the nine months ended June 30, 2024 for the reasons listed above.
Non-GAAP financial measure
Adjusted EBITDA
Throughout this MD&A, references are made to "Adjusted EBITDA," which is a non-GAAP financial measure that does not have standardized meaning prescribed by GAAP. We believe this non-GAAP financial measure is meaningful in the
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22 |
assessment of the Company's performance. This metric is a non-standard measure under GAAP and may not be identical or comparable to similar measures reported or used by other companies. Readers are cautioned that the disclosure of this item is meant to add to, and not replace, the discussion of financial results as determined in accordance with GAAP. The primary purpose of this non-GAAP measure is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash or unusual items on the Company's operating performance. Management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the Company's performance.
Adjusted EBITDA is defined as net loss, adjusted for net interest expense, depreciation and amortization expense, right-of-use operating lease amortization and interest, provision for income taxes, professional fees related to the CID, loss of foreign private issuer status, and proxy contests and other actions of activist shareholders, stock-based compensation, acquisition-related costs, loss (gain) on foreign currency transactions, change in fair value of derivative liability - interest rate swaps, (gain) loss on disposal of property and equipment, and share of loss in equity method investment. Adjusted EBITDA is a non-GAAP measure that the Company uses as an indicator of financial health and excludes several items which may be useful in the consideration of the financial condition of the Company.
Set forth below are descriptions of the material financial items that have been excluded from net loss to calculate Adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure.
| ● | The amount of interest expense we incur or interest income we generate, including right-of-use interest expense, may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of net interest expense to be a representative component of the day-to-day operating performance of our business. |
| ● | Depreciation and amortization expense, including right-of-use amortization, may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations and amortization of intangibles valued in acquisitions. However, we do not believe these charges necessarily reflect the current and ongoing cash charges related to our business. |
| ● | Provision for income taxes may be useful for investors to consider because it generally represents the taxes which may be payable for the period and may reduce the amount of funds otherwise available for use. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business. |
| ● | We do not consider certain professional fees, including those related to the CID, the loss of private issuer status, and proxy contests and other actions of activist shareholders, to be representative components of the day-to-day operating performance of our business. |
| ● | Stock-based compensation expense may be useful for investors to consider because it is a component of compensation received by the Company's directors, officers, employees, and consultants. However, stock-based compensation is being added back because it is non-cash and because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but rather were made for the Company's long-term benefit over multiple periods. |
| ● | Acquisition-related costs may be useful for the investors to consider because they are professional fees directly related to pursuing and completing various acquisitions. While the costs are expected to be recurring if the Company continues to make acquisitions, they are generally incurred prior to the inclusion of such acquisitions in the consolidated revenues of the Company. |
| ● | The change in fair value of derivative liability - interest rate swaps and the share of loss in equity method investment are added back because it is non-cash in the period of change in the fair value. |
| ● | The gain on disposals of property and equipment is excluded because they are a recapture of previously depreciated property and equipment. |
| ● | The loss (gain) on foreign currency transactions is excluded because they are not a representative component of our day-to-day operations. |
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The following table is a reconciliation of GAAP net loss to Adjusted EBITDA for the indicated periods (amounts in thousands):
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Three |
Three |
Nine |
Nine |
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months |
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months |
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months |
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months |
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ended June |
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ended June |
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ended June |
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ended June |
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30, 2025 |
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30, 2024 |
|
30, 2025 |
|
30, 2024 |
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Net loss |
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$ |
(3,025) |
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$ |
(1,596) |
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$ |
(7,151) |
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$ |
(3,823) |
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Add back: |
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Depreciation and amortization |
|
11,239 |
|
11,092 |
|
33,609 |
|
33,044 |
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Interest expense, net |
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1,494 |
|
1,602 |
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4,642 |
|
4,857 |
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Right-of-use operating lease amortization and interest |
|
|
1,585 |
|
|
1,660 |
|
|
4,753 |
|
|
4,612 |
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Provision for income taxes |
|
35 |
|
- |
|
99 |
|
483 |
|
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Professional fees |
|
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1,308 |
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|
723 |
|
|
3,085 |
|
|
2,205 |
|
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Stock-based compensation |
|
2,120 |
|
483 |
|
2,625 |
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2,154 |
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Acquisition-related costs |
|
126 |
|
188 |
|
222 |
|
393 |
|
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Change in fair value of derivative liability - interest rate swaps |
|
|
182 |
|
|
(105) |
|
|
(442) |
|
|
170 |
|
|
Gain on disposals of property and equipment |
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(872) |
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|
(51) |
|
|
(896) |
|
|
(51) |
|
|
Loss (gain) on foreign currency transactions |
|
(610) |
|
128 |
|
231 |
|
145 |
|
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Share of loss in equity method investment |
|
|
101 |
|
|
71 |
|
|
245 |
|
|
243 |
|
|
Adjusted EBITDA |
|
$ |
13,683 |
|
$ |
14,195 |
|
$ |
41,022 |
|
$ |
44,432 |
|
Financial Position
The following table summarizes the Company's financial position as of June 30, 2025 and September 30, 2024 (amounts in thousands):
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As of |
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As of |
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|
|
June 30, 2025 |
|
September 30, 2024 |
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|
Cash |
|
$ |
11,250 |
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$ |
16,174 |
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Accounts receivable, inventory, and prepaid and other current assets |
|
57,436 |
|
56,880 |
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Property and equipment, net |
|
36,427 |
|
37,385 |
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Right-of-use assets, net |
|
|
15,427 |
|
|
16,475 |
|
Goodwill, intangible assets, and other non-current assets |
|
115,552 |
|
120,334 |
||
|
Total assets |
|
$ |
236,092 |
|
$ |
247,248 |
|
Accounts payable and other current liabilities |
|
$ |
59,845 |
|
$ |
60,850 |
|
Long-term debt and other long-term liabilities |
|
73,711 |
|
79,207 |
||
|
Total liabilities |
|
133,556 |
|
140,057 |
||
|
Shareholders' equity |
|
102,536 |
|
107,191 |
||
|
Total liabilities and shareholders' equity |
|
$ |
236,092 |
|
$ |
247,248 |
Liquidity and Capital Resources
The Company's primary source of liquidity is cash on hand and its line of credit availability. As of June 30, 2025, the Company had cash on hand of $11,250,000 and revolving credit availability under the Facility, defined in the "Notes to Condensed Consolidated Interim Financial Statements, Note 5, Long-term debt, Senior credit facility," of $14,300,000. The Company's approach in managing liquidity is to ensure, to the extent possible, that it will have enough liquidity to meet its liabilities when due. The Company will do so by continuously monitoring actual and expected cash flows and monitoring financial market conditions for signs of weakness. The Company faces minimal liquidity risk in its current financial obligations as they become due and payable. We believe that our current sources of liquidity will be sufficient to fund our operations, including expected capital expenditures, for the next twelve months.
|
|
|
|
Page |
24 |
Cash Flows
The following is a summary of the Company's unaudited cash flows for the following periods (in thousands):
|
|
|
|
|
|
|
|
|
Nine months |
Nine months |
|||
|
|
ended June 30, |
|
ended June 30, |
||
|
|
2025 |
|
2024 |
||
|
Net cash flow provided by operating activities |
$ |
27,914 |
|
$ |
25,404 |
|
Net cash flow used in investing activities |
(9,611) |
|
|
(6,950) |
|
|
Net cash flow used in financing activities |
(22,997) |
|
|
(21,115) |
|
|
Effect of exchange rate changes on cash held in foreign currencies |
|
(230) |
|
|
(145) |
|
Net increase (decrease) in cash |
$ |
(4,924) |
|
$ |
(2,806) |
Operating Activities
Net cash flow provided by operating activities was $27,914,000 for the nine months ended June 30, 2025, an increase of $2,510,000 from $25,404,000 for the nine months ended June 30, 2024. For the nine months ended June 30, 2025, the change in working capital improved $6,482,000 to a use of cash flows of ($941,000) for the nine months ended June 30, 2025 as compared to a use of cash flows of ($7,423,000) for the nine months ended June 30, 2024, due primarily to the nine months ended June 30, 2024 being negatively impacted by the Change Healthcare Incident. This was partially offset by an increase in the net loss by $3,328,000 and the variance in the gain on disposals of property and equipment of $845,000.
Investing Activities
Net cash flow used in investing activities was $9,611,000 for the nine months ended June 30, 2025, an increase of $2,661,000 from $6,950,000 for the nine months ended June 30, 2024, due to an increase in purchases of property and equipment. This was primarily comprised of the cash portion of rental equipment transferred from inventory increasing by $3,893,000 to $8,949,000 for the nine months ended June 30, 2025 from $5,056,000 for the nine months ended June 30, 2024. The cash portion of rental equipment transferred from inventory was higher due to a reduction in additions to equipment loans. This was partially offset by the increase in proceeds from the disposals of property and equipment of $807,000.
Financing Activities
Net cash flow used in financing activities was $22,997,000 for the nine months ended June 30, 2025, an increase of $1,882,000 from $21,115,000 for the nine months ended June 30, 2024. This was primarily due to the change in the cash flow from net borrowings on the revolving credit facility of $3,511,000, to an outflow of $623,000 for the nine months ended June 30, 2025 from an inflow of $2,888,000 for the nine months ended June 30, 2024. This was partially offset by lower equipment loan repayments of $1,814,000.
Capital management
The Company considers its capital to be shareholders' equity, which totaled $102,536,000 on June 30, 2025, and the Facility, which totaled a principal amount of $64,954,000 at June 30, 2025.
The Company raises capital, as necessary, to meet its needs such as funding its working capital requirements and take advantage of perceived opportunities and, therefore, does not have a numeric target for its capital structure. Funds are primarily raised through credit facilities and other long-term debt arrangements, and the issuance of common shares. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the size of the Company, is reasonable.
|
|
|
|
Page |
25 |
The Company had the following equity instruments outstanding at June 30, 2025 and September 30, 2024 (in thousands of shares):
|
|
|
|
|
|
|
|
As of |
As of |
||
|
|
|
June 30, 2025 |
|
September 30, 2024 |
|
|
|
(000's) |
|
(000's) |
|
Common shares |
43,444 |
|
43,091 |
|
|
Options |
3,778 |
|
3,402 |
|
|
Restricted share units |
2,583 |
|
519 |
The outstanding shares as of August 8, 2025 are 43,443,972 common shares.
Contractual Commitments and Obligations
The following table summarizes the Company's contractual commitments and obligations as of June 30, 2025 (in thousands), which are primarily for debt, vehicle finance leases, real estate operating leases, and accounts payable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than |
1-3 |
3-5 |
After 5 |
|||||||||||
|
|
|
Total |
|
1 year |
|
Years |
|
Years |
|
Years |
|
|||||
|
Debt |
|
$ |
76,550 |
|
$ |
13,975 |
|
$ |
62,575 |
|
$ |
- |
|
$ |
- |
|
|
Operating leases |
|
|
16,188 |
|
|
5,449 |
|
|
7,103 |
|
|
2,924 |
|
|
712 |
|
|
Finance leases |
|
|
3,032 |
|
|
1,235 |
|
|
1,517 |
|
|
280 |
|
|
- |
|
|
Other obligations |
|
|
32,717 |
|
|
32,717 |
|
|
- |
|
|
- |
|
|
- |
|
|
Total contractual obligations |
|
$ |
128,487 |
|
$ |
53,376 |
|
$ |
71,195 |
|
$ |
3,204 |
|
$ |
712 |
|
Critical Accounting Principles and Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company's management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised. Actual results could differ from those estimates.
There have been no material changes in the Company's significant accounting policies as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended September 30, 2024.
Quipt Home Medical Corp. published this content on August 11, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 11, 2025 at 21:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]