What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-04 compared with 2020-05-05 · 268 added, 162 removed, 323 unchanged (57% of the section changed)

36 unchanged sentences

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

June 30, 2020 and 2019

By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, including those identified under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and the other documents we file with the SEC, including under “Item 1A.

35 unchanged sentences

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms the "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc.

and its wholly-owned subsidiaries, Viemed Inc., Home Sleep Delivered, L.L.C.

("HSD"), and Sleep Management, L.L.C.

dba Viemed ("Viemed").

We were incorporated on December 14, 2016 pursuant to the Business Corporations Act (British Columbia), and qualify as a "foreign private issuer," as defined in Rule 12b-2 of the Exchange Act, for the purposes of the informational requirements of the Exchange Act.

Although, as a foreign private issuer, we would not be required to do so, we will file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC, instead of filing the reporting forms available to foreign private issuers.

and its wholly-owned subsidiaries.

We were incorporated on December 14, 2016 pursuant to the Business Corporations Act (British Columbia).

As of June 30, 2020, we determined that we no longer qualify as a "foreign private issuer," as defined in Rule 3b-4 of the Exchange Act, for the purposes of the informational requirements of the Exchange Act.

As a result, effective January 1, 2021, we will become subject to the proxy solicitation rules under Section 14 of the Exchange Act and Regulation FD, and our officers, directors, and principal shareholders will become subject to the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will continue to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"), and as such, we have elected to comply with certain reduced U.S.

5 unchanged sentences

Our services include respiratory disease management (through the rental of various durable medical equipment ("DME") devices), in-home sleep testing and sleep apnea treatment, oxygen therapy, and the sale of associated supplies.

We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 78.9% and 89.5% of our revenue for the three months ended March 31, 2020 and 2019 , respectively.

We combine the benefits of home ventilation support with licensed Respiratory Therapists ("RTs") to drive improved patient outcomes and reduce costly hospital readmissions.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

June 30, 2020 and 2019

We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 86.1% of our traditional revenue, excluding the COVID-19 response sales, and 86.4% of our revenue for the three months ended June 30, 2020 and 2019, respectively, and 84.3% and 87.9% for the six months ended June 30, 2020 and 2019, respectively.

We combine the benefits of home ventilation support with licensed Respiratory Therapists ("RTs") to drive improved patient outcomes and reduce costly hospital readmissions.

We expect to use an organic growth model whereby expansion is accomplished through existing service areas as well as in new regions through a cost efficient launch that reduces location expenses.

1 unchanged sentence

We expect to continue to employ more RTs in order to assure our high service model is accomplished in the home.

As of March 31, 2020 , we employed more than 255 licensed RTs, representing more than 54% of our company-wide employee count.

As of June 30, 2020, we employed more than 249 licensed RTs, representing more than 52% of our company-wide employee count.

By focusing overhead costs on personnel that service the patient rather than physical location costs, we anticipate efficiently scaling our business in regions that are currently not being effectively serviced.

7 unchanged sentences

These measures do not appear to be negatively impacting our patient attrition rate at this time.

In addition, our current ability to assess potential patients in hospitals varies by hospital and city, but overall our business of setting up new patients in the home is continuing.

As a result, to date there has been minimal disruption to our normal operations, though it is possible that more significant disruptions could occur if the COVID-19 pandemic continues for a prolonged period of time.

In addition, our current ability to assess potential patients in hospitals varies by hospital and city, but overall our business of setting up new patients in the home is continuing although at lower levels than in recent periods.

In late May and early June, many state governments began a phased reopening of their economies while adhering to new guidelines and enhanced safety measures, including social distancing and face mask protocols.

However, certain states have paused or reversed plans to reopen their economies as new cases of COVID-19 have been on the rise in recent weeks.

To date there has been minimal disruption to our normal operations, though it is possible that more significant disruptions could occur if the COVID-19 pandemic continues for a prolonged period of time.

The COVID-19 pandemic has resulted in a significant economic downturn in the United States and globally and has also led to significant disruptions and volatility in capital and financial markets.

Broad economic factors resulting from the current COVID-19 pandemic, including high unemployment and underemployment levels and reduced consumer spending and confidence, could also affect our service mix, revenue mix, payor mix and patient base, as well as our ability to collect outstanding receivables.

Business closures and layoffs in the geographic areas in which we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered.

Business closures and layoffs in the geographic areas in which we operate may lead to increases in the uninsured and under insured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered.

Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our financial results and require an increased level of working capital.

1 unchanged sentence

Staffing, equipment and supplies shortages may also impact our ability to assess potential patients in hospitals and set up and treat patients in the home.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

We believe we presently have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times, such as limiting discretionary spending across the organization.

1 unchanged sentence

The legislation provides for $100 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response to support healthcare-related expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19.

As a result, we received a payment from the Provider Relief Fund for $3.5 million in April 2020.

As a result, we received a payment from the Provider Relief Fund of $3.5 million in April 2020.

Payments from the Provider Relief Fund are intended to compensate healthcare providers for lost revenues and incremental expenses incurred in response to the COVID-19 pandemic and are not required to be repaid provided the recipients attest to and comply with certain terms and conditions, including limitations on balance billing and not using Provider Relief Fund funds to reimburse expenses or losses that other sources are obligated to reimburse .

In accordance with the terms of acceptance for the grant, we expect to utilize these funds to prevent, prepare for, and respond to the COVID-19 pandemic.

In accordance with the terms of acceptance for the grant, we have utilized these funds to prevent, prepare for, and respond to the COVID-19 pandemic.

The CARES Act also provides for a temporary suspension of the 2% payment sequestration adjustment currently applied to all Medicare fee-for-service claims.

3 unchanged sentences

Our company evaluated the PPP extensively and after evaluation, decided not to submit a PPP loan application.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

We are continuing to monitor any effects or requirements that may result from the CARES Act as many of the provisions in the CARES Act are temporary and may require us to modify our operations and compliance procedures.

2 unchanged sentences

To the extent these provisions will expire as stated in the CARES Act, we will be required to unwind any changes.

While the overall impact of COVID-19 on our consolidated results of operations for the three months ended March 31, 2020 has resulted in an overall increase in revenues related to additional product sales during the period, the overall impact that COVID-19 will have on our consolidated results of operations throughout 2020 remains uncertain and difficult to predict and will depend on, among other factors, the duration and severity of the pandemic, as well as any negative economic conditions arising from the pandemic, our ability to assess potential patients in hospitals and set up and treat patients in the home and the impacts of government actions and administrative regulations on the healthcare industry and broader economy, including through existing and any future stimulus efforts.

While the overall impact of COVID-19 on our consolidated results of operations for the six months ended June 30, 2020 has resulted in an overall increase in revenues related to additional product sales during the period, the overall impact that COVID-19 will have on our consolidated results of operations throughout 2020 remains uncertain and difficult to predict and will depend on, among other factors, the duration and severity of the pandemic, as well as any negative economic conditions arising from the pandemic, our ability to assess potential patients in hospitals and set up and treat patients in the home and the impacts of government actions and administrative regulations on the healthcare industry and broader economy, including through existing and any future stimulus efforts.

We will continue to evaluate the nature and extent of these potential impacts to our business, consolidated results of operations, liquidity and capital resources.

7 unchanged sentences

As a result of this announcement, we retain the ability to continue to furnish non-invasive ventilators for all of our Medicare accredited areas, however, we are uncertain if vents will be included in future competitive bidding programs.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

The below table highlights summary financial and operational metrics for the last eight quarters.

1 unchanged sentence

Dollars, except vent patients)

For the quarter ended

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

For the quarter ended June 30,

2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018

Financial Information:

Revenue $ 42,854 $ 23,806 $ 21,448 $ 20,368 $ 20,325 $ 18,115 $ 18,363 $ 16,930

Gross Profit 25,927 15,553 14,243 14,050 14,639 13,074 13,519 12,829

Gross Profit % 61 % 65 % 66 % 69 % 72 % 72 % 74 % 76 %

Net Income 19,412 4,243 2,388 2,853 1,326 1,958 2,968 2,219

Cash (As of) 29,707 8,409 13,355 12,630 7,691 7,410 10,413 10,174

Total Assets (As of) 112,178 86,801 82,596 79,981 71,014 58,718 53,653 49,240

Adjusted EBITDA (1)

16,287 7,869 5,569 4,883 4,116 4,466 4,896 4,155

Operational Information:

Vent Patients (2)

7,705 7,965 7,759 7,421 7,130 6,393 5,905 5,444

(1) Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.

(2) Vent Patients represents the number of active ventilator patients on recurring billing service at the end of each calendar quarter.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Results of Operations

Comparison of the Three Months Ended March 31, 2020 and 2019 :

The following table summarizes our results of operations for the three months ended March 31, 2020 and 2019 :

Three Months Ended March 31,

% of Total Revenue

Comparison of the Three Months Ended June 30, 2020 and 2019:

The following table summarizes our results of operations for the three months ended June 30, 2020 and 2019:

Three Months Ended June 30,

2020 % of Total Revenue 2019 % of Total Revenue $

Revenue $ 42,854 100.0 % $ 20,325 100.0 % $ 22,529 110.8 %

Cost of revenue 16,927 39.5 % 5,686 28.0 % 11,241 197.7 %

Gross profit 25,927 60.5 % 14,639 72.0 % 11,288 77.1 %

Selling, general and administrative 16,428 38.3 % 11,516 56.7 % 4,912 42.7 %

1 unchanged sentence

Stock-based compensation 1,196 2.8 % 1,034 5.1 % 162 15.7 %

Loss (gain) on disposal of property and equipment

Depreciation 205 0.5 % 138 0.7 % 67 48.6 %

(Gain) loss on disposal of property and equipment (1,458) (3.4) % 85 0.4 % (1,543) NM

Other (income) expense (3,574) (8.3) % (1) — % (3,573) NM

Income from operations 12,859 30.0 % 1,664 8.2 % 11,195 672.8 %

1 unchanged sentence

Unrealized (gain) loss on warrant conversion liability — — % 268 1.3 % (268) (100.0) %

Loss from equity investment

Interest expense, net

(Gain) loss from equity investment (42) (0.1) % 26 0.1 % (68) NM

Interest expense, net 135 0.3 % 20 0.1 % 115 NM

Net income before taxes 12,766 29.8 % 1,350 6.6 % 11,416 845.6 %

Provision for income taxes

The following table summarizes our revenue for the three months ended March 31, 2020 and 2019 :

Three Months Ended March 31,

% of Total Revenue

(Benefit) provision for income taxes (6,646) (15.5) % 24 0.1 % (6,670) NM

Net income $ 19,412 45.3 % $ 1,326 6.5 % $ 18,086 NM

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

The following table summarizes our revenue for the three months ended June 30, 2020 and 2019:

Three Months Ended June 30,

2020 % of Total Revenue 2019 % of Total Revenue $

Net revenue from rentals under Topic 842

6 unchanged sentences

Total net revenue $ 42,854 100.0 % $ 20,325 100.0 % $ 22,529 110.8 %

For the three months ended March 31, 2020 , revenue totaled $23.8 million , an increase of $5.7 million (or 31.4% ) from the comparable period in 2019 .

The revenue growth was primarily driven by a $2.6 million (or 16.0% ) increase in ventilator rental revenue.

Our active ventilator patient base grew from 6,393 as of March 31, 2019 to 7,965 as of March 31, 2020 , an increase of 25% .

For the three months ended June 30, 2020, revenue totaled $42.9 million, an increase of $22.5 million (or 110.8%) from the comparable period in 2019.

The revenue growth was primarily driven by COVID-19 response sales of $19.7 million.

In response to the COVID-19 pandemic, we have been working in close cooperation with state agencies and hospital systems to source urgently needed medical equipment such as ventilators, ventilator supplies, other respiratory equipment, and personal protective equipment.

During the three months ended June 30, 2020, the $19.7 million of COVID-19 response sales consisted primarily of PAPs, ventilators and associated supplies and personal protective equipment.

We expect further COVID-19 response sales during the remainder of 2020, but the quantity and impact of such sales remains uncertain and dependent on the length and intensity of the COVID-19 pandemic and the availability of such equipment and supplies from other suppliers.

Excluding the COVID-19 response sales, net revenue increased $2.8 million (or 13.9%) from the comparable period in 2019.

The increase was primarily driven by increased ventilator rental revenue of $2.3 million (or 13.3%) coinciding with our active ventilator patient base growing from 7,130 as of June 30, 2019 to 7,705 as of June 30, 2020, an increase of 8%.

Rental revenue from other DME grew $1.2 million (or 97.4%) quarter over quarter.

This growth was largely attributable to our percussion vests and to a lesser extent our many other respiratory-related products (PAPs, oxygen concentrators, nebulizers).

This growth was largely attributable to our percussion vests, PAPs, and oxygen concentrators.

As we continue to expand geographically into new states and further expand our presence in our existing territories, we expect continued growth in our active ventilator patient base and ventilator rental revenue, as well as in our other respiratory products, though in the short term we anticipate growth to occur at a slower rate than in recent periods as a result of the pandemic.

Non-COVID-19 related equipment sales and services combined decreased by $0.7 million (or 46.5%) year over year as the majority of our sales force shifted its focus to assist state agencies and hospitals in their efforts to procure respiratory equipment and supplies in response to the COVID-19 pandemic.

We expect that such equipment sales and services will continue to be impacted for the duration of the pandemic.

Cost of revenue and gross profit

For the three months ended June 30, 2020, cost of revenue totaled $16.9 million, an increase of $11.2 million (or 197.7%) from the comparable period in 2019.

COVID-19 response sales accounted for $9.2 million (or 54.3%) of these costs.

For the three months ended June 30, 2020 and 2019, gross profit percentage decreased from approximately 72.0% to approximately 60.5%.

The decreased margins were primarily the result of the above mentioned COVID-19 response sales which contributed a weighted average gross profit percentage of 53.4%.

Excluding COVID-19 response sales, gross profit percentage for the three months ended June 30, 2020 was 66.6%.

The reduction in gross profit percentage is also due in part to direct labor cost for respiratory therapists.

While our active ventilator patient base growth was impacted by the current pandemic in the short term, we have not experienced a corresponding change in the number of respiratory therapists employed.

We believe it to be in the long term interest of our patients and the business to continue to employ these essential employees.

We expect our gross profit percentage for our normal operations (non-COVID-19 related) to remain relatively consistent with the current quarter through the end of 2020.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

During the three months ended March 31, 2020 , we had $1.0 million of COVID-19 response related sales consisting primarily of ventilators and associated supplies.

We expect further COVID-19 related sales during the remainder of 2020, but the quantity and impact of such sales remains uncertain and dependent on the length and intensity of the COVID-19 pandemic and the availability of such equipment and supplies from other suppliers.

Additionally, non-COVID-19 related equipment sales grew $0.8 million (or 97.0% ) year over year primarily as a result of higher supply orders for our PAP patients.

June 30, 2020 and 2019

Selling, general & administrative expense

For the three months ended June 30, 2020, selling, general and administrative expenses totaled $16.4 million, an increase of $4.9 million (or 42.7%) from the comparable prior period.

Selling, general, and administrative expenses as a percentage of revenue decreased to 38.3% for the three months ended June 30, 2020 compared to 56.7% for the three months ended June 30, 2019.

Excluding the impact of the COVID-19 response sales, selling, general, and administrative expenses as a percentage of revenue was 71.0% for the three months ended June 30, 2020.

The increase in overall selling, general and administrative expense as compared to the prior year period is attributable to additional employee related expenses to accommodate the overall growth of the Company, as well as additional public company expenses relating to our NASDAQ listing in August 2019, partially offset by a decrease in travel, meals, and entertainment due to COVID-19 related restrictions.

Employee compensation expenses increased $3.9 million (or 44.7%) as our full time employee count increased to 459 on June 30, 2020 from 357 on June 30, 2019, an increase of 28.6%.

Additionally, $1.6 million of the employee compensation expense increase was the result of the impact of our phantom stock plan.

Our phantom stock plan is measured at fair value as of the reporting period and is driven primarily by the number of eligible employees and our stock price.

On June 30, 2020, our stock price closed at $13.01 (CAD$), versus $8.93 (CAD$) on June 30, 2019, driving higher comparable expenses related to these awards in the current period.

Professional fees also increased $0.5 million (or 93%) for the comparable period, driven by higher legal and consulting fees relating to the COVID-19 pandemic.

As we continue to respond to the COVID-19 pandemic, grow new markets and increase our employee count, we expect selling, general, and administrative expenses will trend accordingly.

We expect that selling, general and administrative expenses, in absolute terms, will remain relatively consistent with the current quarter through the end of 2020.

(Gain) loss on disposal of property and equipment

For the three months ended June 30, 2020, we recorded a gain on disposal of property and equipment of $1.5 million, compared to a loss of $0.1 million during the comparable period in 2019.

As a result of our efforts for the COVID-19 response as described above, certain of our previously placed in service property and equipment was sold.

As a result, during the three months ended June 30, 2020, we recorded sales proceeds on used equipment of $2.5 million which resulted in a net gain on disposal for related equipment of $1.5 million.

We expect disposals of equipment to generally remain consistent with historical trends, with the exception of additional gains that could be realized from any additional COVID-19 response sales, but the impact of such sales remains uncertain and dependent on the length and intensity of the COVID-19 pandemic and the availability of such equipment and supplies from other suppliers.

Other (income) expense

For the three months ended June 30, 2020, other income totaled $3.6 million.

We received a payment from the Provider Relief Fund of $3.5 million in April 2020.

Stock-based compensation

For the three months ended June 30, 2020, stock-based compensation totaled $1.2 million, an increase of $0.2 million (or 15.7%) from the comparable period in 2019.

This increase is attributable to the expense of additional stock-based awards during 2020.

We expect that as we continue to increase our employee count and utilize stock-based awards as an aspect of employee compensation, stock-based compensation expense will increase accordingly.

Stock-based compensation as a percentage of revenue has historically remained under 5%.

Interest expense, net

For the three months ended June 30, 2020, net interest expense totaled $0.1 million, an increase of $0.1 million from the comparable period in 2019.

The increased interest expense results from from the Building Term Note that funded the purchase of the new corporate headquarters in May 2019 and the Term Note used for general corporate purposes that was entered in September 2019.

See "Liquidity and Capital Resources" below for additional information on the Building Term Note and Term Note.

We expect net interest expense to remain relatively consistent through the end of 2020.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

(Benefit) provision for income taxes

For the three months ended June 30, 2020, the provision for income taxes was a $6.6 million benefit, compared to a $24,000 expense during the 2019 period.

The decrease in income tax expense was primarily due to a lower effective tax rate which was caused by the release of a valuation allowance and recognition of a deferred tax asset during the current period.

As we continue to incur substantial capital expenditures to acquire medical equipment to accommodate our patient base growth, combined with the deferred tax assets, we expect most near-term cash tax payments for federal and state tax liabilities to remain relatively consistent.

For the three months ended June 30, 2020, net income was $19.4 million, an increase of $18.1 million from the comparable period in 2019.

Net income as a percentage of revenue increased from 6.5% for the three months ended June 30, 2019 to 45.3% for the three months ended June 30, 2020, driven by increased sales revenue, gains on disposal of equipment in response to COVID-19, and receipt of the Provider Relief Funds.

Comparison of the Six Months Ended June 30, 2020 and 2019:

The following table summarizes our results of operations for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30,

2020 % of Total Revenue 2019 % of Total Revenue $

Revenue $ 66,660 100.0 % $ 38,440 100.0 % $ 28,220 73.4 %

Cost of revenue 25,180 37.8 % 10,727 27.9 % 14,453 134.7 %

Gross profit 41,480 62.2 % 27,713 72.1 % 13,767 49.7 %

Selling, general and administrative 27,005 40.5 % 20,976 54.6 % 6,029 28.7 %

Research and development 445 0.7 % 437 1.1 % 8 1.8 %

Stock-based compensation 2,347 3.5 % 1,914 5.0 % 433 22.6 %

Depreciation 410 0.6 % 267 0.7 % 143 53.6 %

(Gain) loss on disposal of property and equipment (2,627) (3.9) % 141 0.4 % (2,768) NM

Other (income) expense (3,574) (5.4) % (2) — % (3,572) NM

Income from operations 17,474 26.2 % 3,980 10.4 % 13,494 339.0 %

Non-operating expenses

Unrealized (gain) loss on warrant conversion liability — — % 437 1.1 % (437) (100.0) %

Loss from equity investment (15) — % 51 0.1 % (66) (129.4) %

Interest expense, net 293 0.4 % 46 0.1 % 247 NM

Net income before taxes 17,196 25.8 % 3,446 9.0 % 13,750 399.0 %

(Benefit) provision for income taxes (6,459) (9.7) % 162 0.4 % (6,621) NM

Net income $ 23,655 35.5 % $ 3,284 8.5 % $ 20,371 620.3 %

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

The following table summarizes our revenue for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30,

2020 % of Total Revenue 2019 % of Total Revenue $

Net revenue from rentals under Topic 842

Ventilator rentals, non-invasive and invasive $ 38,710 58.1 % $ 33,777 87.9 % $ 4,933 14.6 %

Other durable medical equipment rentals 4,535 6.8 % 2,015 5.2 % 2,520 125.1 %

Net revenue from sales and services under Topic 606

Equipment and supply sales 2,072 3.1 % 1,853 4.8 % 219 11.8 %

COVID-19 response sales 20,753 31.1 % — — % 20,753 100.0 %

Service revenues 590 0.9 % 795 2.1 % (205) (25.8) %

Total net revenue $ 66,660 100.0 % $ 38,440 100.0 % $ 28,220 73.4 %

For the six months ended June 30, 2020, revenue totaled $66.7 million, an increase of $28.2 million (or 73.4%) from the comparable period in 2019.

The revenue growth was primarily driven by COVID-19 response sales of $20.8 million as described in more detail above.

Excluding the COVID-19 response sales, net revenue increased $7.5 million (or 19.4%) from the comparable period in 2019.

Ventilator rental revenue increased $4.9 million (or 14.6%) due to our organic growth in active ventilator patient base.

In addition to the ventilator rental revenue growth, rental revenue from other durable medical equipment grew $2.5 million (or 125.1%) which primary consisted of increased rentals of percussion vests and oxygen concentrators.

In the short term, we anticipate our growth to occur at a slower rate than in recent periods as a result of the pandemic.

Non-COVID-19 related equipment sales and services combined were materially consistent year over year as the majority of our sales force shifted its focus to assist state agencies and hospitals in their efforts to procure respiratory equipment and supplies in response to the COVID-19 pandemic.

We expect such equipment sales and services will continue to be impacted for the duration of the pandemic.

Cost of revenue and gross profit

For the three months ended March 31, 2020 , cost of revenue totaled $8.3 million , an increase of $3.2 million (or 63.7% ) from the comparable period in 2019 .

For the three months ended March 31, 2020 and 2019 , gross profit percentage decreased from approximately 72.2% to approximately 65.3% .

The decreased margins were primarily the result of the above mentioned COVID-19 response sales which contributed a weighted average gross profit percentage of 45.9%.

Excluding the COVID-19 response sales, gross profit percentage for the three months ended March 31, 2020 was 66.2%.

For the six months ended June 30, 2020, cost of revenue totaled $25.2 million, an increase of $14.5 million (or 134.7%) from the comparable period in 2019.

For the six months ended June 30, 2020 and 2019, gross profit percentage decreased from approximately 72.1% to approximately 62.2%.

The lower margins are primarily the result of the high volume of COVID-19 response sales.

Historically the majority of our revenue has come from equipment rentals.

For the six months ended June 30, 2020, COVID-19 response sales accounted for 31.1% of total revenue, thus driving margin lower.

Excluding COVID-19 response sales, gross profit percentage for the six months ended June 30, 2020 was 66.4%.

The reduction in gross profit percentage is also due in part to direct labor cost for respiratory therapists.

While our active ventilator patient base growth was impacted by the pandemic in the short term, we have not experienced a corresponding change in the number of respiratory therapists employed.

We believe it to be in the long term interest of our patients and the business to continue to employ these essential employees.

We expect our gross profit percentage for our normal operations (non-COVID-19 related) to remain relatively consistent with the current quarter through the end of 2020.

Selling, general & administrative expense

For the three months ended March 31, 2020 , selling, general and administrative expenses totaled $10.6 million , an increase of $1.1 million (or 11.8% ) from the comparable prior period.

Selling, general, and administrative expenses as a percentage of revenue decreased to 44.4% for the three months ended March 31, 2020 compared to 52.2% for the three months ended March 31, 2019 .

Excluding the impact of the COVID-19 response sales, selling, general, and administrative expenses as a percentage of revenue was 46.4% for the three months ended March 31, 2020 .

The increase in overall selling, general and administrative expense as compared to the prior year period can be attributed to additional expenses to accommodate both the overall growth of the Company and an increase in associated public company expenses resulting from our August 2019 NASDAQ listing, partially offset by a decrease in employee costs, driven by the impact of our phantom stock plan.

Our phantom stock plan is measured at fair value as of the reporting period and is driven primarily by our stock price.

During the three months ended March 31, 2020 , our stock price decreased 19%, versus an increase of 26% during the three months ended March 31, 2019 , driving lower comparable expenses related to these awards in the current period.

As we continue to grow into new markets and increase our employee count, we expect selling, general, and administrative expenses will trend accordingly.

We expect that selling, general and administrative expenses as a percentage of revenue will remain relatively consistent with the current quarter through the end of 2020.

Loss (gain) on disposal of property and equipment

For the three months ended March 31, 2020 , we recorded a gain on disposal of property and equipment of $1.2 million , compared to a loss of $0.1 million during the comparable period in 2019 .

For the six months ended June 30, 2020, selling, general and administrative expenses totaled $27.0 million, an increase of $6.0 million (or 28.7%) from the comparable period in 2019.

Selling, general, and administrative expenses as a percentage of revenue decreased to 40.5% for the six months ended June 30, 2020, compared to 54.6% and for the six months ended June 30, 2019.

Excluding the impact of the COVID-19 response sales, selling, general, and administrative expenses as a percentage of revenue was 58.8% for the six months ended June 30, 2020.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

The increase in overall selling, general and administrative expense as compared to the prior year period is attributable to additional employee related expenses to accommodate the overall growth of the Company as well as additional public company expenses relating to our NASDAQ listing in August 2019, partially offset by a decrease in travel, meals, and entertainment due to COVID-19 related restrictions.

Employee compensation increased $3.3 million (or 21%) as our full time employee count increased to 459 at June 30, 2020, compared to 357 at June 30, 2019, an increase of 28.6%.

Included in employee compensation expense is $3.6 million related to of our phantom stock plan compared to $4.6 million from the comparable period in 2019.

Additionally, professional fees increased $1.0 million (or 112%) from the comparable period in 2019, driven by higher legal and consulting fees relating to the COVID-19 pandemic.

As we continue to respond to the COVID-19 pandemic, grow into new markets and increase our employee count, we expect selling, general, and administrative expenses will trend accordingly.

We expect that selling, general and administrative expenses as a percentage of revenue will trend higher towards historical percentages toward the end of 2020.

(Gain) loss on disposal of property and equipment

For the six months ended June 30, 2020, we recorded a gain on disposal of property and equipment of $2.6 million, compared to a loss of $0.1 million during the comparable period in 2019.

As a result of our efforts for the COVID-19 response as described above, certain of our previously placed in service property and equipment was sold.

As a result, during the three months ended March 31, 2020 , we recorded sales proceeds on used equipment of $2.5 million which resulted in a net gain on disposal for related equipment of $1.6 million.

We expect disposals of equipment to generally remain consistent with historical trends, with the exception of additional gains that could be realized from any additional COVID-19 response related sales, but the impact of such sales remains uncertain and dependent on the length and intensity of the COVID-19 pandemic and the availability of such equipment and supplies from other suppliers.

As a result, during the six months ended June 30, 2020, we recorded sales proceeds on used equipment of $5.0 million which resulted in a net gain on disposal for related equipment of $3.5 million.

Other (income) expense

For the six months ended June 30, 2020, other income totaled $3.6 million, an increase of $3.6 million from the comparable prior period.

We received a payment from the Provider Relief Fund of $3.5 million in April 2020.

Stock-based compensation

For the three months ended March 31, 2020 , stock-based compensation totaled $1.2 million , an increase of $0.3 million (or 30.8% ) from the comparable period in 2019 .

This increase is attributable to the expense of additional stock-based awards during 2020.

For the six months ended June 30, 2020, stock-based compensation totaled $2.3 million, an increase of $0.4 million (or 22.6%) from the comparable period in 2019.

We expect that as we continue to increase our employee count and utilize stock-based awards as an aspect of employee compensation, stock-based compensation expense will increase accordingly.

1 unchanged sentence

Interest expense, net

For the three months ended March 31, 2020 , net interest expense totaled $158,000 , an increase of $132,000 (or 507.7% ) from the comparable period in 2019 .

For the six months ended June 30, 2020, net interest expense totaled $0.3 million, an increase of $0.2 million from the comparable period in 2019.

We expect net interest expense to increase as a result of the Building Term Note and Term Note described below.

We expect net interest expense to remain materially consistent through the end of 2020.

(Benefit) provision for income taxes

For the six months ended June 30, 2020, the provision for income taxes was a $6.5 million benefit, compared to a $0.2 million expense during the 2019 period.

For the six months ended June 30, 2020, net income was $23.7 million, an increase of $20.4 million from the comparable period in 2019.

Net income as a percentage of revenue increased from 8.5% for the six months ended June 30, 2019 to 35.5% for the six months ended June 30, 2020, driven by increased sales revenue, gains on disposal of equipment in response to COVID-19, and receipt of the Provider Relief Funds.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Provision for income taxes

For the three months ended March 31, 2020 , the provision for income taxes was $187,000 , compared to $138,000 during the 2019 period.

The current period provision is related to state income tax liabilities.

We expect to continue to benefit from the federal tax environment in the United States.

Recent tax changes allow for accelerated deductions for capital expenditures and lower corporate tax rates.

As we continue to incur substantial capital expenditures to acquire medical equipment to accommodate our rapid patient base growth, combined with the deferred tax assets, we expect most near-term tax payments will continue to result from state tax liabilities.

For the three months ended March 31, 2020 , net income was $4.2 million , an increase of $2.3 million (or 116.7% ) from the comparable period in 2019 .

Net income as a percentage of revenue increased from 10.8% for the three months ended March 31, 2019 to 17.8% for the three months ended March 31, 2020 , primarily driven by increased revenue, increased gains on disposal of equipment and reduced selling, general and administrative expenses, as described above.

June 30, 2020 and 2019

Non-GAAP Financial Measures

18 unchanged sentences

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.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

The following table is a reconciliation of Net income, the most directly comparable GAAP measure, to Adjusted EBITDA, on a historical basis for the periods indicated:

For the quarter ended

March 31, 2020

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

December 31, 2018

September 30, 2018

June 30, 2018

For the quarter ended June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018

Net Income $ 19,412 $ 4,243 $ 2,388 $ 2,853 $ 1,326 $ 1,958 $ 2,968 $ 2,219

Depreciation 2,190 2,130 2,003 1,659 1,444 1,295 1,177 972

Interest expense 135 158 212 56 20 26 30 37

1 unchanged sentence

Stock-based compensation 1,196 1,151 908 1,064 1,034 880 804 672

Income tax expense

Income tax (benefit) expense (6,646) 187 58 51 24 138 127 35

Adjusted EBITDA $ 16,287 $ 7,869 $ 5,569 $ 4,883 $ 4,116 $ 4,466 $ 4,896 $ 4,155

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

Use of Non-GAAP Financial Measures

5 unchanged sentences

Liquidity and Capital Resources

Cash and cash equivalents at March 31, 2020 was $8.4 million , compared to $13.4 million at December 31, 2019 .

Cash and cash equivalents at June 30, 2020 was $29.7 million, compared to $13.4 million at December 31, 2019.

Based on our current plan of operations, including potential acquisitions, we believe this amount, when combined with expected cash flows from operations and amounts available under our line of credit will be sufficient to fund our growth strategy and to meet our anticipated operating expenses, capital expenditures, and debt service obligations for at least the next 12 months.

The Company utilizes short term leases with a major supplier that could be extended over a longer term if there was a need for additional liquidity.

Additionally, the Company maintains a $10.0 million line of credit with Hancock Whitney Bank which was fully undrawn as of March 31, 2020 .

Additionally, the Company maintains a $10.0 million line of credit with Hancock Whitney Bank which was fully undrawn as of June 30, 2020.

The following table summarizes our cash flows for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

Net Cash provided by (used in):

2 unchanged sentences

Financing activities (5,016) (1,198)

Net decrease in cash and cash equivalents

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Net increase (decrease) in cash and cash equivalents $ 16,352 $ (2,722)

Net Cash Provided by Operating Activities

Net cash provided by operating activities during the three months ended March 31, 2020 was $0.6 million , resulting from net income of $4.2 million and non-cash net income adjustments of $5.0 million , which was partially offset by an increase in net operating assets of $10.1 million .

Net cash provided by operating activities during the six months ended June 30, 2020 was $22.0 million, resulting from net income of $23.7 million and non-cash net income adjustments of $1.8 million and an increase in net operating liabilities of $7.2 million, which was partially offset by an increase in net operating assets of $10.6 million.

The non-cash net income adjustments primarily consisted of $5.6 million in change of allowance for doubtful accounts, $4.3 million of depreciation, $2.6 million of gains on disposal of property and equipment, change in deferred tax asset of $7.8 million and $2.3 million of stock-based compensation.

The uses of cash related to changes in operating assets primarily consisted of an increase in accounts receivable of $5.1 million and an increase in inventory of $5.2 million.

The changes in operating liabilities primarily consisted of an increase in accounts payable of $2.0 million and an increase in accrued liabilities of $3.8 million.

The increase in our operating assets was primarily driven by accounts receivable related to COVID-19 response sales occurring during the quarter.

Included in our operating cash flows for the period is the receipt of $3.5 million in Provider Relief Funds.

Net cash provided by operating activities during the six months ended June 30, 2019 was $6.0 million, resulting from net income of $3.3 million, non-cash net income adjustments of $9.1 million, and an increase in net operating liabilities of $2.3 million, which was partially offset by an increase in net operating assets of $8.8 million.

The non-cash net income adjustments primarily consisted of $3.9 million in change of allowance for doubtful accounts, $2.7 million of depreciation and $1.9 million of stock-based compensation.

The uses of cash related to changes in operating assets primarily consisted of an increase in accounts receivable of $6.8 million , which was partially offset by a decrease in inventory of $0.4 million .

The changes in operating liabilities primarily consisted of a decrease in accounts payable of $3.6 million and increases in accrued liabilities of $2.4 million .

The increase in our operating assets was primarily driven by accounts receivable related to COVID-19 response sales occurring at the end of the quarter.

Additionally, prepaid expenses and other current assets increased as a result of deposits related to ventilator supplies.

Net cash provided by operating activities during the three months ended March 31, 2019 was $0.7 million , resulting from net income of $2.0 million , non-cash net income adjustments of $4.7 million , a decrease in net operating liabilities of $0.2 million , and an increase in net operating assets of $5.8 million .

The non-cash net income adjustments primarily consisted of $2.1 million of bad debt expense, $1.4 million of depreciation and $0.9 million of stock-based compensation.

The uses of cash related to changes in operating assets primarily consisted of an increase in accounts receivable of $7.8 million as a result of increased revenue growth and an increase in inventory of $0.8 million.

1 unchanged sentence

Net Cash Used in Investing Activities

Net cash used in investing activities during the three months ended March 31, 2020 was $1.7 million , consisting of $4.2 million of purchases of property and equipment, partially offset by $2.5 million of COVID-19 response sales proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Combining cash purchases of property and equipment of $4.2 million and equipment financed through finance leases of $3.0 million , our total capital expenditures for the three months ended March 31, 2020 were $7.2 million .

This represents a $2.6 million , or 56.3% , increase year over year, driven by our company growth.

Net cash used in investing activities during the three months ended March 31, 2019 was $92,000 , consisting of $116,000 of purchases of property and equipment, partially offset by $24,000 of proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to the medical equipment rented to patients.

Combining cash purchases of property and equipment of $116,000 and equipment financed through finance leases of $4.5 million , our total capital expenditures for the three months ended March 31, 2019 was $4.6 million .

Net Cash Used in Financing Activities

Net cash used in financing activities during the three months ended March 31, 2020 was $3.8 million , consisting of $0.4 million in proceeds from the new term note, partially offset by $3.4 million in repayments of finance lease liabilities.

Net cash used in financing activities during the three months ended March 31, 2019 was $3.6 million , consisting of $2.0 million in repayments of finance lease liabilities and $1.5 million of shares repurchased and canceled under our normal course issuer bid.

Credit Agreement

On February 20, 2018, we entered into a two year commercial business loan agreement with Hancock Whitney Bank.

Any amounts advanced will be secured by substantially all our assets and carried an interest rate of one month ICE LIBOR plus 3.00%, with a 4.00% interest rate floor.

Advances of the line of credit initially were subject to a borrowing base as determined in accordance with the loan agreement, which was based on the value of our accounts receivable balance.

On March 19, 2019, we entered into an amendment to the loan agreement increasing the available line of credit from $5.0 million to $10.0 million and extending the expiration date to March 19, 2021.

In addition, the borrowing base restriction was removed from the loan agreement.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

On September 19, 2019, in conjunction with the Term Note described below, the Company entered into a third amendment to the loan agreement, which, among other things, replaced the financial covenants in the loan agreement with the following:

Financial Covenant

Required Ratio

Total Debt to Adjusted EBITDA (Quarterly)

not more than 1.50:1.00

Fixed Charge Coverage Ratio (Quarterly)

not less than 1.35:1.00

Loan-to-Value Ratio (Quarterly)

not more than 0.85

On May 1, 2020, the Company entered into a fourth amendment to the loan agreement extending the expiration date to May 1, 2023 and modifying the interest rate on amounts advanced to be equal to the WSJ prime rate plus a margin of 0.50%, with a 3.50% interest rate floor.

The Company was in compliance with all covenants in effect at March 31, 2020 .

There were no borrowings against this line of credit at March 31, 2020 and December 31, 2019 .

June 30, 2020 and 2019

Net cash used in investing activities during the six months ended June 30, 2020 was $0.6 million, consisting of $5.7 million of purchases of property and equipment, partially offset by $5.1 million of COVID-19 response sales proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to medical equipment rented to our patients.

Combining cash purchases of property and equipment of $5.7 million and equipment financed through finance leases of $2.9 million, our total capital expenditures for the six months ended June 30, 2020 were $8.6 million.

This represents an $8.5 million, (or 49.7%), decrease year over year.

Net cash used in investing activities during the six months ended June 30, 2019 was $7.5 million, consisting of $7.7 million of purchases of property and equipment, partially offset by $0.2 million of proceeds from the disposal of property and equipment.

Purchases of property and equipment were primarily related to the purchase of our new corporate headquarters in addition to medical equipment rented to our patients.

Combining cash purchases of property and equipment of $7.7 million and equipment financed through finance leases of $9.4 million, our total capital expenditures for the six months ended June 30, 2019 was $17.1 million.

Net Cash Used in Financing Activities

Net cash used in financing activities during the six months ended June 30, 2020 was $5.0 million, consisting of $0.8 million in principal payments on the Term Note and $5.9 million in repayments of finance lease liabilities, partially offset by $1.8 million proceeds from the exercise of stock options.

Net cash used in financing activities during the six months ended June 30, 2019 was $1.2 million, consisting of $4.8 million in proceeds to finance the purchase of our corporate headquarters, $4.6 million in repayments of finance lease liabilities and $1.5 million of shares repurchased and canceled under our normal course issuer bid.

Line of Credit

The Company maintains a line of credit in the amount of $10.0 million that expires May 1, 2023 under the Commercial Business Loan Agreement.

Any amounts advanced on this line will be subject to an interest rate equal to the WSJ prime rate plus a margin of 0.50%, with a 3.50% interest rate floor and will be secured by substantially all of the Company's assets.

There were no borrowings against this line of credit at June 30, 2020 or December 31, 2019.

While we currently have no immediate plans to draw on this line of credit, the line of credit allows flexibility in funding our future operations subject to compliance with the covenants described above.

12 unchanged sentences

The Term Note bears interest at the rate of 4.60% per annum.

Under the terms of the Commercial Business Loan Agreement, the Company is subject to the following financial covenants:

Financial Covenant Required Ratio Ratio

Total Debt to Adjusted EBITDA (Quarterly) not more than 1.50:1.00 0.45

Fixed Charge Coverage Ratio (Quarterly) not less than 1.35:1.00 17.12

Loan-to-Value Ratio (Quarterly) not more than 0.85 0.72

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

The Company was in compliance with all covenants in effect at June 30, 2020.

Sources of funds

Our cash provided by operating activities in the three months ended March 31, 2020 was $0.6 million compared to $0.7 million in the three months ended March 31, 2019 .

As of March 31, 2020 , we had cash and cash equivalents of $8.4 million .

Our cash provided by operating activities in the six months ended June 30, 2020 was $22.0 million compared to $6.0 million in the six months ended June 30, 2019.

HHS Provider Relief Funds

The Company received $3.5 million of Provider Relief Funds from the United States Department of Health and Human Services (“HHS”) provided to eligible healthcare providers out of the $100 billion Public Health and Social Services Emergency Fund provided for in the CARES Act.

The funds are allocated to eligible healthcare providers for expenses and lost revenue attributable to the COVID-19 pandemic.

The fund payments are grants, not loans, and HHS will not require repayment, but the funds must be used only for grant approved purposes.

As of June 30, 2020, we had cash and cash equivalents of $29.7 million.

Our principal uses of cash are funding our new rental assets and other capital purchases, operations, and other working capital requirements.

5 unchanged sentences

Any additional equity financing may be dilutive to our stockholders.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Leases under which we assume substantially all the risks and rewards of ownership are classified as capital leases.

5 unchanged sentences

The Company maintains a 401(k) retirement plan for employees to which eligible employees can contribute a percentage of their pre-tax compensation.

Matching employer contributions to the 401(k) plan totaled $179,000 and $168,000 for the three months ended March 31, 2020 and 2019 , respectively.

Matching employer contributions to the 401(k) plan totaled $223,000 and $166,000 for the three months ended June 30, 2020 and 2019, respectively, and $402,000 and $335,000 for the six months ended June 30, 2020 and 2019, respectively.

Off balance sheet arrangements

The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its results of operations or financial condition.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

Accounting and Disclosure Matters

Segment Information

We have determined that we predominantly operate in a single operating segment, which is the sleep and respiratory disorders sector of the DME industry.

While we do provide some services and products outside of this operating segment, these operations, both in terms of revenue and profit, are not material to our operations and therefore have not been separately reported as a segment.

Critical Accounting Principles and Estimates

13 unchanged sentences

Certain customer co-payments are included in revenue when considered probable of payment, which is generally when paid.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Due to the nature of the industry and the reimbursement environment in which we operate, certain estimates are required to record net revenue and accounts receivable at their net realizable values.

16 unchanged sentences

The transaction price is initially constrained by the amount of customer co-payments, which are included in the transaction price when considered probable of payment and included in revenue if the product or service has already been provided to the customer.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

Due to the nature of the industry and the reimbursement environment in which we operate, certain estimates are required to record net revenue and accounts receivable at their net realizable values.

5 unchanged sentences

Any taxes due upon sale of the products or services are not recognized as revenue.

We do not have any partially or unfilled performance obligations related to contracts with customers and as such, we have no contract liabilities as of March 31, 2020 .

We do not have any partially or unfilled performance obligations related to contracts with customers and as such, we have no contract liabilities as of June 30, 2020.

Allowance for doubtful accounts

5 unchanged sentences

A change in estimate could impact bad debt expense and accounts receivable.

Our allowance for doubtful accounts was $10.2 million and $5.9 million as of March 31, 2020 and 2019 , respectively, and based on our analysis, we believe the reserve is adequate for any exposure to credit losses.

Our allowance for doubtful accounts was $9.3 million and $6.9 million as of June 30, 2020 and 2019, respectively, and based on our analysis, we believe the reserve is adequate for any exposure to credit losses.

Stock-based compensation

3 unchanged sentences

The expense of such stock-based compensation awards is recognized using the graded vesting attribution method over the vesting period.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

March 31, 2020 and 2019

Interest rate swaps

6 unchanged sentences

To the extent our interest rate swaps are determined to be ineffective, we recognize the changes in the estimated fair value of our swaps in Interest and other non-operating expenses, net on our Condensed Consolidated Statements of Income.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(Tabular amounts expressed in thousands of US Dollars, except per share amounts)

June 30, 2020 and 2019

We are subject to income taxes in numerous jurisdictions.

13 unchanged sentences

VIEMED HEALTHCARE, INC.

March 31, 2020 and 2019

June 30, 2020 and 2019

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis