What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-06 compared with 2023-11-01 · 166 added, 236 removed, 201 unchanged (67% of the section changed)

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Accordingly, readers should not place undue reliance on forward-looking statements.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

September 30, 2023 and 2022

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.

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the general business, market and economic conditions in the regions in which the we operate;

the impact of the COVID-19 pandemic and the actions taken by governmental authorities, individuals and companies in response to the pandemic on our business, financial condition and results of operations, including on our patient base, revenues, employees, and equipment and supplies;

significant capital requirements and operating risks that we may be subject to;

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volatility in the market price of our common shares;

our novel business model;

the state of the capital markets;

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critical accounting estimates and changes to accounting standards, policies, and methods used by us;

our status as an emerging growth company and a smaller reporting company;

and the occurrence of natural and unnatural catastrophic events or health epidemics or concerns, such as the COVID-19 pandemic, and claims resulting from such events or concerns, as well as other general economic, market and business conditions;

our status as an emerging growth company;

and the occurrence of natural and unnatural catastrophic events

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

March 31, 2024 and 2023

or health epidemics or concerns, and claims resulting from such events or concerns, as well as other general economic, market and business conditions;

and other factors beyond our control.

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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 and with the relevant Canadian securities regulatory authorities on the System for Electronic Document Analysis and Retrieval (SEDAR).

We are an "emerging growth company," as defined in the JOBS Act and a "smaller reporting company" under Rule 12b-2 of the Exchange Act, and as such, we have elected to comply with certain reduced U.S.

We no longer qualify as a “smaller reporting company” and are required to comply with the larger company disclosure obligations (subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies) beginning in this Quarterly Report on Form 10-Q.

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

public company reporting requirements.

Unless otherwise noted herein, all references to "$" or "USD" are to the currency of the United States and references to "CAD$" or "Canadian dollars" are to the currency of Canada.

We provide an array of home medical equipment, services and supplies, specializing in post-acute respiratory care services in the United States.

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Our services include respiratory disease management (through the rental of various HME devices), neuromuscular care, 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 57.3% and 66.7% of our traditional revenue, excluding COVID-19 response sales and services, for the three months ended September 30, 2023 and 2022, respectively, and 59.9% and 68.8% for the nine months ended September 30, 2023 and 2022, respectively.

We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 57.7% and 63.6% of our revenue for the three months ended March 31, 2024 and 2023, 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.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

September 30, 2023 and 2022

We expect to grow through expansion of existing service areas as well as in new territories through a cost efficient launch that reduces location expenses.

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

As of September 30, 2023, we employed 374 licensed RTs, representing approximately 38% of our company-wide employee count.

As of March 31, 2024, we employed 373 licensed RTs, representing approximately 36% of our company-wide employee count.

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

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Trends Affecting our Business

On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic.

Various policies and initiatives were implemented to reduce the transmission of COVID-19, including travel bans and restrictions, the postponement of non-essential medical surgeries, limiting access to medical facilities, and adoption of social distancing and remote working policies.

Employee and patient safety is our first priority, and as a result, we put preparedness plans in place for our employees, especially our clinical personnel, and modified our clinical protocols to limit unnecessary patient encounters.

On May 11, 2023, the COVID-19 Public Health Emergency declared by the Secretary of HHS under Public Health Service Act section 319 ("COVID-19 PHE") ended.

Food and Drug Administration has announced in the Federal Register that the Emergency Use Authorization for certain ventilators and PAP and RAD devices will be in effect until November 7, 2023, 180 days beyond the end of the COVID-19 PHE.

At the end of the COVID-19 PHE, many waivers and flexibilities available during the COVID-19 pandemic will become unavailable.

While COVID-19 related measures have not had a material impact on our consolidated operating results for the nine months ended September 30, 2023, we cannot predict at this time the impact that the end of the COVID-19 PHE will have on our business and financial condition.

Accordingly, we cannot assure you that demand for our products and services will continue or that we will be able to maintain operations necessary to satisfy such demand, including sufficient personnel, supply chains and distributions channels.

The COVID-19 pandemic has 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 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.

In addition, we may experience supply chain disruptions, including delays and price increases in equipment and supplies.

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.

If COVID-19 intensifies or if the response to contain the COVID-19 pandemic is unsuccessful, we could experience a material adverse effect on our business, financial condition, and results of operations.

For additional information, see Part II - Item 1A.

“Risk Factors.”

The CARES Act, which was signed into law on March 27, 2020, provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments.

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.

CMS and other federal agencies have and are likely to issue rules and regulations to implement the CARES Act.

The impact of these rules and regulations are unknown and may affect us.

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

In 2019, CMS announced the inclusion of non-invasive ventilator products on the list of products subject to the competitive bidding program in Round 2021 which covers the period of January 1, 2021 through December 31, 2023.

On March 9, 2020, CMS announced that due to the COVID-19 pandemic, the United States President’s exercise of the Defense Production Act, public concern regarding access to ventilators, and the non-invasive ventilators product category being new to the competitive bidding program, non-invasive ventilators were removed as a product category from Round 2021.

On October 27, 2020, CMS announced that it had removed 13 of the 15 remaining product categories from Round 2021, including oxygen and PAP devices, because the payment amounts did not achieve expected savings.

As a result of these announcements, we retain the ability to continue to furnish non-invasive ventilators and oxygen and PAP devices for all of our Medicare accredited areas, however, we are uncertain if non-invasive ventilators, oxygen, and PAP devices will be included in future competitive bidding programs.

The current Round 2021

Home medical equipment markets are witnessing sustained expansion, with a notable focus on the complex respiratory and Obstructive Sleep Apnea ("OSA") device segments.

Analysts in the industry anticipate a consistent and robust growth trajectory, projecting Compound Annual Growth Rates ("CAGR") of approximately 6% for respiratory devices and 8% for OSA devices.

This upward trend underscores the increasing demand for innovative solutions in respiratory care and sleep apnea management, highlighting the industry's responsiveness to evolving healthcare needs.

As technological advancements and awareness drive the adoption of these specialized devices, we believe the HME markets, particularly in respiratory and OSA, are positioned for continuous expansion, offering promising opportunities for both providers and consumers alike.

VIEMED HEALTHCARE, INC.

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

September 30, 2023 and 2022

contracts expire on December 31, 2023 and CMS has not announced a new round of competitive bidding.

Historically, CMS announces new rounds of competitive bidding and starts the process approximately 18 months prior to the contract start date.

The CARES Act introduced a new blended rate for HME furnished in non-rural or contiguous non-competitive bidding areas that is based on 75% of the adjusted fee schedule amount and 25% of the unadjusted fee schedule amount.

The Consolidated Appropriations Act, 2023 further extended the 75/25 blended Medicare reimbursement rate in non-competitive bidding/non-rural areas through the end of the COVID-19 PHE or December 31, 2023, whichever is later, after which it will revert to 100% of the Medicare fee schedule.

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

In December 2021, President Biden signed into law legislation that extended the suspension on the 2 percent payment sequestration through March 31, 2022.

The payment sequestration adjustment was fixed at 1 percent from April 1, 2022 to June 30, 2022 and it returned to 2 percent on July 1, 2022.

The Statutory Pay-As-You-Go Act of 2010 ("PAYGO") required that automatic payment cuts of 4% be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years.

The enactment of the American Rescue Plan Act in 2021 would have triggered PAYGO sequestration in 2021.

In the Protecting Medicare & American Farmers from Sequester Cuts Act, Congress delayed the PAYGO sequestration until January 1, 2023.

The Consolidated Appropriations Act, 2023 further prevented implementation of the PAYGO Medicare 4% sequester through the end of 2024.

If not renewed, the PAYGO payment adjustment could have an adverse effect on our business, financial condition and results of operations.

In its 2023 DMEPOS Fee Schedule, CMS also announced the fee schedule adjustment based on the annual change to the Consumer Pricing Index for all urban areas.

March 31, 2024 and 2023

The aging population remains a pivotal driver for the industry, as the elderly, constituting a substantial portion of HME patients, are expected to represent a higher percentage of the overall population.

Projections from industry analysts indicate a consistent annual growth in the number of Medicare beneficiaries, contributing to ongoing patient volume growth.

A significant contributing factor to the industry's growth is the rising incidence of chronic diseases.

Factors such as increasing obesity rates, consequences of past smoking prevalence, under-diagnosis of certain health conditions, and higher diagnosis rates for chronic diseases collectively shape the industry.

There is a notable shift towards home-based treatment for these conditions.

The industry is undergoing a transition to value-based healthcare, with both government and commercial payors increasingly adopting models that emphasize the transition of patients from acute care settings to home care.

We believe HME providers are well-positioned to benefit from this industry shift.

Advancements in technology and medical equipment have led to an increased prevalence of in-home treatments.

The broader range of treatments administered in patient homes is expected to continue growing.

Projections from industry analysts indicate that U.S.

home healthcare spending will increase, reaching $250 billion by 2031, with a CAGR of approximately 7%.

Market consolidation is a notable trend favoring larger, financially stable players.

The decline in the number of smaller regional players is attributed to the capital investment and scale required to compete effectively.

This has led to a more consolidated and competitive landscape in the DME market.

Despite these positive trends, the industry faces challenges such as cost containment efforts of payors.

The consolidation of managed care payors into larger purchasing groups has increased negotiating power, resulting in pricing pressure on HME providers.

In addition to ongoing negotiations relating to contract management with third party payors to secure fair reimbursement, HME providers are engaging in value-based contracting, focusing on outcomes and patient satisfaction.

These value-based contracts leverage data analytics to demonstrate the cost-effectiveness and quality of durable medical goods and provide evidence-based data to payors demonstrating the long-term benefits and cost savings associated with the use of certain medical goods.

Impact of Inflation

The Company faces current and potential future inflationary pressures driven by factors such as general cost increases, supply chain disruptions, and governmental policies.

The manufacturing and distribution costs of Viemed's patient equipment are affected by rising material, labor, and transportation expenses, including fuel costs.

Persistent inflation may impact overall demand, increase operating costs, and affect profit margins, potentially adversely affecting Viemed's business and financial performance.

In its 2024 DMEPOS Fee Schedule, CMS announced the fee schedule adjustment based on the annual change to the Consumer Pricing Index for all urban areas.

Items that were subject to the competitive bidding program in former competitive bidding areas will receive a 2.9% reimbursement rate increase.

Items that were subject to the competitive bidding program in non-competitive bidding areas received a 3.0% reimbursement rate increase.

Items not subject to the competitive bidding program received an 8.7% reimbursement rate increase.

While we cannot predict what Medicare payment rates or coverage determinations will be in effect in future years, changes to payment rates or benefit coverages may materially impact its financial condition and results of operations.

Items not subject to the competitive bidding program received a 2.6% reimbursement rate increase.

Future volatility in general price inflation and its impact on material availability, shipping, warehousing, and operational overhead could further impact financial results.

Viemed attempts to address these pressures through its inflation-linked reimbursement contracts, negotiation, leveraging its purchasing power and embracing technology, such as its proprietary clinical management platform.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

March 31, 2024 and 2023

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

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Dollars, except vent patients)

For the quarter ended September 30,

2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021

For the quarter ended March 31,

2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022

Financial Information:

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(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)

September 30, 2023 and 2022

Results of Operations

Comparison of the Three Months Ended September 30, 2023 and 2022:

The following table summarizes our results of operations for the three months ended September 30, 2023 and 2022:

Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2024 and 2023:

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

2024 % of Total Revenue 2023 % of Total Revenue $

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Stock-based compensation 1,432 2.8 % 1,391 3.5 % 41 2.9 %

Depreciation 419 0.8 % 291 0.8 % 128 44.0 %

Depreciation and amortization

415 0.8 % 240 0.6 % 175 72.9 %

Loss (gain) on disposal of property and equipment

Other expense (income) (41) (0.1) % (57) (0.2) % 16 (28.1) %

213 0.4 % (22) (0.1) % 235 (1068.2) %

Other income, net

(26) (0.1) % (81) (0.2) % 55 (67.9) %

Income from operations 2,204 4.4 % 1,934 4.9 % 270 14.0 %

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Income from equity method investments (67) (0.1) % (35) (0.1) % (32) 91.4 %

Interest expense, net (237) (0.5) % (42) (0.1) % (195) 464.3 %

Interest expense (income), net

150 0.3 % (49) (0.1) % 199 (406.1) %

Net income before taxes 2,121 4.2 % 2,018 5.1 % 103 5.1 %

Provision (benefit) for income taxes 1,320 2.7 % 456 1.3 % 864 189.5 %

Net income $ 2,919 5.9 % $ 1,055 3.0 % $ 1,864 176.7 %

The following table summarizes our revenue for the three months ended September 30, 2023 and 2022:

Three Months Ended September 30,

2023 % of Total Revenue 2022 % of Total Revenue $

Net revenue from rentals

Ventilator rentals, non-invasive and invasive $ 28,322 57.3 % $ 23,869 66.7 % $ 4,453 18.7 %

Other durable medical equipment rentals 11,119 22.5 % 5,882 16.5 % 5,237 89.0 %

Net revenue from sales and services

Equipment and supply sales 7,742 15.7 % 3,649 10.2 % 4,093 112.2 %

Service revenues 2,219 4.5 % 2,359 6.6 % (140) (5.9) %

Total net revenue $ 49,402 100.0 % $ 35,759 100.0 % $ 13,643 38.2 %

For the three months ended September 30, 2023, net revenue totaled $49.4 million, an increase of $13.6 million (or 38.2%) from the comparable period in 2022.

The net revenue growth was associated with an increase in ventilator rental revenue of $4.5 million (or 18.7%) which can be primarily attributed to the organic expansion of our active ventilator patient base.

In addition to the ventilator rental revenue growth, net revenue growth was also driven by an increase in rental revenue from other DME of $5.2 million (or 89.0%), consisting of rental revenue from oxygen therapy, PAP, and percussion vest activities associated with our continued national organic expansion of services and the acquisition of HMP.

Equipment and supply sales increased by $4.1 million (or 112.2%), primarily driven by the continued growth of the PAP resupply program and other sleep offerings.

While ventilator rentals continue to make up the majority of our revenue, the growth of PAP and oxygen related sales and services is contributing significantly to the diversity of our overall revenue mix.

As we continue to expand geographically into new territories and further expand our presence in our existing territories, we expect continued growth in our active ventilator patient base and our other respiratory offerings.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

September 30, 2023 and 2022

Cost of revenue and gross profit

For the three months ended September 30, 2023, cost of revenue totaled $18.8 million, an increase of $4.7 million (or 33.5%) from the comparable period in 2022.

Overall gross profit percentage increased from 60.5% in the three months ended September 30, 2022 to 61.9% in the three months ended September 30, 2023.

The change in gross profit percentage is primarily attributable to the migration of our revenue mix, which reflects our deliberate organic and inorganic efforts towards product and service diversification, aimed at further enhancing our market position.

Gross profit percentage is expected to remain relatively stable through the end of 2023 due to subsiding inflationary cost pressures and the positive effects of seasonality in collection rates, partially offset by the impacts of continued product and service diversification.

Selling, general and administrative expense

Selling, general, and administrative expenses as a percentage of revenue decreased to 47.9% for the three months ended September 30, 2023 compared to 49.4% for the three months ended September 30, 2022.

Selling, general and administrative expenses totaled $23.7 million for the three months ended September 30, 2023, an increase of $6.0 million (or 33.8%) from the comparable prior period.

The increase in overall selling, general and administrative expense as compared to the prior period is primarily attributable to additional employee related expenses to accommodate the overall growth of the Company.

Our full time employee count increased from 722 on September 30, 2022 to 988 on September 30, 2023, an increase of 36.8%, which was partially due to the acquisition of HMP on June 1, 2023.

Employee compensation expenses increased $2.4 million (or 22%) as a result of the increase in our employee headcount and increases in incentive and volume based compensation.

We expect that current year selling, general and administrative expenses as a percentage of revenue will continue to improve through the end of 2023 due to increased efficiencies and costs stabilization relative to revenue growth.

Research and development

For the three months ended September 30, 2023, research and development expense totaled $0.6 million, a decrease of $0.1 million (or 11.5%) from the comparable period in 2022.

As we continue to invest in research and development related projects to support our technology initiatives, we expect that associated costs will remain consistent in 2023 relative to 2022 costs.

Stock-based compensation

For the three months ended September 30, 2023, stock-based compensation totaled $1.5 million, an increase of 11.0% from the comparable period in 2022.

We anticipate that as we expand our workforce, incorporating stock-based awards as a component of employee compensation, stock-based compensation expenses will correspondingly rise.

Historically, revenue growth has outpaced the growth in stock-based compensation, and as a result, the percentage of stock-based compensation relative to revenue is expected to continue declining.

Interest expense, net

For the three months ended September 30, 2023, net interest expense totaled $0.2 million, As a result of continued paydowns on debt issued to fund the acquisition of HMP, we expect quarterly net interest expense to decrease for the remainder of 2023.

Provision for income taxes 518 1.0 % 501 1.3 % 17 3.4 %

For the three months ended September 30, 2023, the provision for income taxes was a $1.3 million expense, compared to $0.5 million during the comparable period in 2022.

The increase in income tax expense was primarily due to the increase in pre-tax income.

Our annual estimated effective tax rate for 2023 is 29.4%.

For the three months ended September 30, 2023, net income was $2.9 million, an increase of $1.9 million (or 176.7%) from the comparable period in 2022.

Net income as a percentage of net revenue increased from 3.0% for the three months ended September 30, 2022 to 5.9% for the three months ended September 30, 2023, primarily due to improvements in selling, general, and administrative expenses associated with increased efficiencies and stabilizing costs.

Net income $ 1,603 3.2 % $ 1,517 3.8 % $ 86 5.7 %

VIEMED HEALTHCARE, INC.

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

September 30, 2023 and 2022

Comparison of the Nine Months Ended September 30, 2023 and 2022:

The following table summarizes our results of operations for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

2023 % of Total Revenue 2022 % of Total Revenue $

Revenue $ 132,269 100.0 % $ 101,324 100.0 % $ 30,945 30.5 %

Cost of revenue 51,597 39.0 % 39,540 39.0 % 12,057 30.5 %

Gross profit 80,672 61.0 % 61,784 61.0 % 18,888 30.6 %

Selling, general and administrative 63,979 48.4 % 50,989 50.3 % 12,990 25.5 %

Research and development 2,131 1.6 % 1,974 1.9 % 157 8.0 %

Stock-based compensation 4,315 3.3 % 3,885 3.8 % 430 11.1 %

Depreciation 957 0.7 % 771 0.8 % 186 24.1 %

Loss (gain) on disposal of property and equipment 373 0.3 % 168 0.2 % 205 NM

Other expense (income) (124) (0.1) % (721) (0.7) % 597 (82.8) %

Income from operations 9,041 6.8 % 4,718 4.7 % 4,323 91.6 %

Non-operating expenses

Income from equity method investments 442 0.3 % 853 0.8 % (411) NM

Interest expense, net (168) (0.1) % (165) (0.2) % (3) 1.8 %

Net income before taxes 9,315 7.0 % 5,406 5.3 % 3,909 72.3 %

Provision for income taxes 2,549 1.9 % 1,622 1.6 % 927 57.2 %

Net income $ 6,766 5.1 % $ 3,784 3.7 % $ 2,982 78.8 %

The following table summarizes our revenue for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

March 31, 2024 and 2023

The following table summarizes our revenue for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

2024 % of Total Revenue 2023 % of Total Revenue $

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Ventilator rentals, non-invasive and invasive $ 29,187 57.7 % $ 25,147 63.6 % $ 4,040 16.1 %

Other durable medical equipment rentals 26,441 20.0 % 15,153 15.0 % 11,288 74.5 %

Other home medical equipment rentals 10,934 21.6 % 6,906 17.5 % 4,028 58.3 %

Net revenue from sales and services

Equipment and supply sales 6,138 12.1 % 4,764 12.0 % 1,374 28.8 %

COVID-19 response sales and services — — % 2,278 2.2 % (2,278) NM

Service revenues 4,334 8.6 % 2,739 6.9 % 1,595 58.2 %

Total net revenue $ 50,593 100.0 % $ 39,556 100.0 % $ 11,037 27.9 %

For the nine months ended September 30, 2023, revenue totaled $132.3 million, an increase of $30.9 million (or 30.5%) from the comparable period in 2022.

Excluding COVID-19 response sales and services revenue, net revenue increased $33.2 million (or 33.5%) from the comparable period in 2022.

The net revenue increase was comprised of an increase in ventilator rental revenue of $11.1 million (or 16.2%), rental revenue from other DME of $11.3 million (or 74.5%), equipment and supply sales of $9.4 million (or 94.2%), and service revenue of $1.5 million (or 26.0%).

The growth in other durable medical equipment rentals has been primarily driven by the continued national expansion of PAP, oxygen therapy, and percussion vest activities and the acquisition of HMP.

For the three months ended March 31, 2024, revenue totaled $50.6 million, an increase of $11.0 million (or 27.9%) from the comparable period in 2023.

The net revenue increase was comprised of increases in ventilator rental revenue of $4.0 million (or 16.1%) , rental revenue from other HME of $4.0 million (or 58.3%) , equipment and supply sales of $1.4 million (or 28.8%) , and service revenues of $1.6 million (or 58.2%) .

The growth in other home medical equipment rentals has been primarily driven by the continued national expansion of PAP, oxygen therapy, and percussion vest activities and the acquisition of HMP.

The increase in equipment sales and supplies is primarily driven by the success of our PAP resupply program and other sleep offerings.

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VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

September 30, 2023 and 2022

There were no COVID-19 response sales and services during the nine months ended September 30, 2023, compared to $2.3 million during the comparable nine month period in 2022.

The magnitude and persistence of future COVID-19 response sales and services revenue remains uncertain and is dependent on the intensity and length of the COVID-19 pandemic and the demand for ongoing services from primarily governmental customers.

Cost of revenue and gross profit

For the nine months ended September 30, 2023, cost of revenue totaled $51.6 million, an increase of $12.1 million (or 30.5%) from the comparable period in 2022.

Overall gross profit percentage of 61.0% remained stable between the nine months ended September 30, 2022 and the nine months ended September 30, 2023.

For the three months ended March 31, 2024, cost of revenue totaled $20.8 million, an increase of $5.2 million (or 33.7%) from the comparable period in 2023.

Gross profit percentage decreased from approximately 60.7% in the three months ended March 31, 2023 to approximately 58.9% in the three months ended March 31, 2024.

The decrease in gross profit percentage is primarily due to migration of the revenue mix associated with product and service diversification.

Gross profit percentage is expected to remain relatively stable in upcoming periods due to subsiding inflationary cost pressures and the positive effects associated with reimbursement rates, offset by some decreases associated with product and service diversification.

Selling, general and administrative expense

Selling, general, and administrative expenses as a percentage of revenue decreased to 48.4% for the nine months ended September 30, 2023 compared to 50.3% for the nine months ended September 30, 2022.

Selling, general and administrative expenses totaled $64.0 million for the nine months ended September 30, 2023, an increase of $13.0 million (or 25.5%) from the comparable period in 2022.

The overall increase in selling, general and administrative expense as compared to the prior period is primarily due to additional employee related expenses to accommodate the overall growth of the Company and transaction costs related to the acquisition of HMP.

Our full time employee count increased from 722 on September 30, 2022 to 988 on September 30, 2023, an increase of 36.8%, which was partially due to the acquisition of HMP on June 1, 2023.

Employee compensation expenses increased $7.8 million (or 25%) as a result of the increase in our employee headcount and increases in incentive and volume based compensation.

Selling, general and administrative expenses as a percentage of revenue decreased to 49.0% for the three months ended March 31, 2024 compared to 50.0% for the three months ended March 31, 2023.

Selling, general and administrative expenses totaled $24.8 million for the three months ended March 31, 2024, an increase of $5.1 million (or 25.6%) from the comparable period in 2023 .

Our full time employee count increased from 765 on March 31, 2023 to 1,030 on March 31, 2024, an increase of 35%, which was partially due to the acquisition of HMP on June 1, 2023.

Employee compensation expenses increased $3.4 million (or 24%) a s a result of the increase in our employee headcount and increases in incentive and volume based compensation.

We expect that current year selling, general and administrative expenses as a percentage of revenue will continue to improve through the end of 2024 due to increased efficiencies and costs stabilization relative to revenue growth.

Research and development

For the nine months ended September 30, 2023, research and development expense totaled $2.1 million, an increase of $0.2 million (or 8.0%) from the comparable period in 2022.

As we continue to invest in research and development related projects to support our technology initiatives, we expect that associated costs will remain consistent in 2023 relative to 2022 costs.

For the three months ended March 31, 2023 and March 31, 2024, research and development expense totaled $0.8 million.

As we continue to invest in research and development related projects to support our technology initiatives, we expect that the associated costs will remain consistent in 2024 relative to 2023 costs.

VIEMED HEALTHCARE, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

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

March 31, 2024 and 2023

Stock-based compensation

For the nine months ended September 30, 2023, stock-based compensation totaled $4.3 million, an increase of 11.1% from the comparable period in 2022.

For the three months ended March 31, 2024, stock-based compensation totaled $1.4 million, an increase of 2.9% from the comparable period in 2023.

We anticipate that as we expand our workforce, incorporating stock-based awards as a component of employee compensation, stock-based compensation expenses will correspondingly rise.

Historically, revenue growth has outpaced the growth in stock-based compensation, and as a result, the percentage of stock-based compensation relative to revenue is expected to continue declining.

Interest expense, net

For the nine months ended September 30, 2023, net interest expense totaled $0.2 million.

As a result of continued paydowns on debt issued to fund the acquisition of HMP, we expect quarterly net interest expense to decrease for the remainder of 2023.

Provision for income taxes

For the nine months ended September 30, 2023, the provision for income taxes was a $2.5 million expense, compared to $1.6 million during the comparable period in 2022.

The resulting decrease in the overall effective tax rate as a percentage of pre-tax income was due to the impact of discrete tax benefits associated with stock-based compensation between periods.

Our annual estimated effective tax rate for 2023 is 29.4%.

For the three months ended March 31, 2023 and March 31, 2024, the provision for income taxes was $0.5 million.

Excluding discrete items, our annual estimated effective tax rate for 2024 is 29.2% .

For the three months ended March 31, 2024, net income was $1.6 million, an increase of $0.1 million (or 5.7%) from the comparable period in 2023.

Net income as a percentage of net revenue decreased slightly from 3.8% for the three months ended March 31, 2023 to 3.2% for the three months ended March 31, 2024.

VIEMED HEALTHCARE, INC.

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

September 30, 2023 and 2022

For the nine months ended September 30, 2023, net income was $6.8 million, an increase of $3.0 million (or 78.8%) from the comparable period in 2022.

Net income as a percentage of revenue increased from 3.7% for the nine months ended September 30, 2022 to 5.1% for the nine months ended September 30, 2023, primarily due to improvements in selling, general, and administrative expenses associated with increased efficiencies and stabilizing costs.

March 31, 2024 and 2023

Non-GAAP Financial Measures

The Company uses Adjusted EBITDA, which is a financial measure that is not prepared in accordance with generally accepted accounting principles in the United States ("GAAP") to analyze its financial results and believes that it is useful to investors, as a supplement to U.S.

GAAP measures.

Management believes Adjusted EBITDA provides helpful information with respect to the Company’s operating performance as viewed by management, including a view of the Company’s business that is not dependent on the impact of the Company’s capitalization structure and items that are not part of the Company’s day-to-day operations.

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Accordingly, management believes that Adjusted EBITDA provides useful information in understanding and evaluating the Company’s operating performance in the same manner as management.

In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including interest, taxes, stock based compensation, and depreciation of property and equipment.

In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including net interest expense (income), taxes, stock based compensation, depreciation of property and equipment, and amortization of intangible assets.

Beginning with financial results reported for periods in fiscal year 2023, Adjusted EBITDA also excludes transaction costs and expenses related to acquisition and integration efforts associated with recently announced or completed acquisitions.

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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 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021

For the quarter ended March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022

Net Income $ 1,603 $ 3,477 $ 2,919 $ 2,330 $ 1,517 $ 2,438 $ 1,055 $ 967

Depreciation 5,975 5,207 4,762 4,373 4,120 3,740 3,397 3,120

Depreciation & amortization

6,285 5,918 5,975 5,207 4,762 4,373 4,120 3,740

Interest expense (income)

150 256 237 (20) (49) 32 42 59

Stock-based compensation (a)

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

September 30, 2023 and 2022

March 31, 2024 and 2023

Liquidity and Capital Resources

Cash and cash equivalents at September 30, 2023 was $10.1 million, compared to $16.9 million at December 31, 2022.

Based on our current plan of operations, 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 from the date of this filing.

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

Cash and cash equivalents at March 31, 2024 was $7.3 million , compared to $12.8 million at December 31, 2023.

Typically, our principal source of liquidity is the collection of our patient accounts receivable.

In addition to our collection of patient accounts receivable, from time to time, we can and do obtain additional sources of liquidity by the incurrence of additional indebtedness.

Based on our current plan of operations, we believe cash and cash equivalents, when combined with expected cash flows from operations and amounts available under our 2022 Senior Credit Facilities 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 from the date of this filing.

The Company has also historically utilized short term financing arrangements with suppliers that could be extended over a longer term if there was a need for additional liquidity.

The Company uses Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to certain non-Medicare payors for reimbursement.

UnitedHealth Group announced that on February 21, 2024, Change Healthcare’s information technology systems were impacted by a cybersecurity incident.

While the incident did not impact our day-to-day operations or the delivery of patient care, submissions of patient claims to certain payors were delayed.

As of the end of the first quarter of 2024, the Company has resumed claims submission to several affected payors and utilized alternative platforms for the majority of its claims.

However, the delayed claims submissions resulted in a reduction of our operating cash flow and an increase to our accounts receivable during the three months ended March 31, 2024.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Net Cash provided by (used in):

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Financing activities (1,340) 39

Net decrease in cash and cash equivalents $ (6,836) $ (6,930)

Net increase (decrease) in cash and cash equivalents

$ (5,530) $ 6,630

Net Cash Provided by Operating Activities

Net cash provided by operating activities during the nine months ended September 30, 2023 was $31.9 million, resulting from net income of $6.8 million, increased by net income adjustments of $20.1 million and a change in net working capital of $5.1 million.

The net income adjustments primarily consisted of $15.9 million of depreciation, $4.3 million of stock-based compensation, $0.8 million of distributions from equity method investments, and a $0.8 million change in deferred tax asset.

The primary changes in working capital were an increase in accrued liabilities of $4.1 million and a decrease in other assets of $1.2 million, offset by an increase in net accounts receivable of $0.5 million.

Net cash provided by operating activities during the nine months ended September 30, 2022 was $20.1 million, primarily resulting from net income of $3.8 million, increased by net income adjustments of $14.7 million and a change in net working capital of $1.6 million.

The net income adjustments primarily consisted of $11.3 million of depreciation, $3.9 million of stock-based compensation, $0.9 million income from equity investments and a $0.7 million change in deferred tax asset.

The primary changes in working capital were an increase in net accounts receivable of $2.2 million and an increase in other assets of $2.9 million, offset by an increase in accrued liabilities of $3.2 million and a decrease in income taxes receivable of $1.8 million.

Included in our operating cash flows for the period is the receipt of $0.4 million in Provider Relief Funds.

Net Cash Used in Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2023 was $44.6 million, primarily due to the net cash paid for the acquisition of HMP of $28.6 million.

Net cash used in investing activities during the period also consisted of $18.2 million of purchases of property and equipment, partially offset by $2.1 million of sales proceeds from the disposal of property and equipment.

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

Cash purchases of property and equipment represents a $0.8 million, or 4.8%, increase year over year.

Net cash used in investing activities during the nine months ended September 30, 2022 was $16.6 million, consisting of $17.3 million of purchases of property and equipment, partially offset by $0.9 million of sales proceeds from the disposal of property and equipment.

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

Net cash provided by operating activities during the three months ended March 31, 2024 was $1.2 million, resulting from net income of $1.6 million, increased by net income adjustments of $7.9 million and offset by an increase in non-cash working capital of $8.3 million.

The net income adjustments primarily consisted of $6.3 million of depreciation and amortization and $1.4 million of stock-based compensation.

The primary changes in non-cash working capital were an increase in net accounts receivable of $6.0 million and a decrease in accrued li abilities of $3.6 million, partially offset by an increase in trade payables of $0.6 million.

The increase in accounts receivable was primarily driven by the cybersecurity incident at Change Healthcare, which resulted in delays to submissions of patient claims to certain payors.

Net cash provided by operating activities during the three months ended March 31, 2023 was $10.5 million, resulting from net income of $1.5 million, increased by net income adjustments of $5.5 million and a decrease in non-cash working capital of $3.5 million.

The net income adjustments primarily consisted of $4.8 million of depreciation and amortization and $1.4 million of stock-based compensation.

The primary changes in working capital were an increase in accrued liabilities of $1.8 million and an increase in income taxes payable of $1.3 million, partially offset by an increase in net accounts receivable of $0.9 million.

VIEMED HEALTHCARE, INC.

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

September 30, 2023 and 2022

Net Cash Provided by Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2023 was $5.9 million.

For the nine months ended September 30, 2023, proceeds from the 2022 Term Loan Facility (as defined below) were $5.0 million and proceeds from the 2022 Revolving Credit Facility (as defined below) were $8.0 million, which were used to partially fund the cash acquisition of HMP.

Subsequent to the acquisition, principal payments on the 2022 Revolving Credit Facility were $4.0 million.

Additionally, principal payments on acquired revolving and term loans were $3.8 million during the nine months ended September 30, 2023.

The Company acquired and cancelled 75,235 common shares at a cost of $0.6 million to satisfy employee income tax withholding associated with RSUs vestings while proceeds from the exercise of options during the nine months ended September 30, 2023 were $1.2 million.

Net cash used in financing activities during the nine months ended September 30, 2022 was $10.4 million.

For the nine months ended September 30, 2022, the Company repurchased and canceled 1,673,620 common shares at a cost of $8.9 million pursuant to the Share Repurchase Program authorized by the Board of Directors on March 7, 2022 (the "2022 Share Repurchase Program").

The Company also acquired and cancelled 27,712 common shares at a cost of $0.1 million to satisfy employee income tax withholding associated with RSUs vesting during the nine months ended September 30, 2022.

Net cash used in financing activities during the nine months ended September 30, 2022 also included $1.3 million in principal payments on the Term Note (as defined below).

March 31, 2024 and 2023

Net Cash Used in Investing Activities

Net cash used in investing activities during the three months ended March 31, 2024 was $5.4 million, consisting of $6.0 million of purchases of property and equipment, partially offset by $0.6 million of sales proceeds from the disposal of property and equipment.

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

Cash purchases of property and equipment represents an increase of $1.3 million, or 28.3%, year over year.

Net cash used in investing activities during the three months ended March 31, 2023 was $3.9 million, consisting of $4.7 million of purchases of property and equipment, partially offset by $0.8 million of sales proceeds from the disposal of property and equipment.

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

Net Cash Provided By (used in) Financing Activities

Net cash used in financing activities during the three months ended March 31, 2024 was $1.3 million.

During the three months ended March 31, 2024, principal payments on the 2022 Senior Credit Facilities (as defined below) were $0.1 million.

Additionally, principal payments on acquired loans were $0.5 million during the three months ended March 31, 2024.

The Company acquired and cancelled 128,362 common shares at a cost of $1.0 million to satisfy employee income tax withholding associated with RSUs vesting during the three months ended March 31, 2024.

Proceeds from the exercise of options during the three months ended March 31, 2024 were $0.3 million.

Net cash provided by financing activities during the three months ended March 31, 2023 was nil.

The Company acquired and cancelled 64,756 common shares at a cost of $0.5 million to satisfy employee income tax withholding associated with RSUs vesting during the three months ended March 31, 2023.

Proceeds from the exercise of options during the three months ended March 31, 2023 were $0.5 million .

Senior Credit Facilities

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The proceeds of the 2022 Term Loan Facility and any additional term loans established in accordance with the 2022 Senior Credit Facilities may be used to finance permitted acquisitions and to pay transaction fees, costs and expenses related to such acquisitions.

Outstanding borrowings under the 2022 Term Loan Facility and 2022 Revolving Credit Facility were $4.9 million and $4.0 million, respectively, as of September 30, 2023.

The interest rates per annum applicable to the 2022 Senior Credit Facilities are Term SOFR (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 2.625% to 3.375%, or, at the option of the Company, a Base Rate (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 1.625% to 2.375%.

The 2022 Senior Credit Facilities require the Company to comply with certain affirmative, as well as certain negative covenants that, among other things, will restrict, subject to certain exceptions, the ability of the Company to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers or consolidations and pay dividends and other restricted payments.

Outstanding borrowings under the 2022 Term Loan Facility and 2022 Revolving Credit Facility were $4.8 million and $2.0 million , respectively, as of March 31, 2024.

The interest rates per annum applicable to the 2022 Senior Credit Facilities are Term SOFR plus an applicable margin, which ranges from 2.625% to 3.375%, or, at the option of the Company, a Base Rate (as defined in the 2022 Senior Credit Facilities) plus an applicable margin, which ranges from 1.625% to 2.375%.

The 2022 Senior Credit Facilities require the Company to comply with certain affirmative, as well as certain negative covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company to incur indebtedness, grant liens, make investments, engage in acquisitions, mergers or consolidations and pay dividends and other restricted payments.

The 2022 Senior Credit Facilities also include certain financial covenants, which generally include, but are not limited to the following:

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• Consolidated Fixed Charge Coverage Ratio ( defined generally as (a) adjusted EBITDA minus capital expenditures minus cash taxes to (b) the sum of scheduled principal payments plus cash interest expense plus restricted payments) of not less than 1.25:1.0.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at September 30, 2023.

The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at March 31, 2024.

VIEMED HEALTHCARE, INC.

1 unchanged sentence

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

September 30, 2023 and 2022

Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, funding of business combinations, operations, and other working capital requirements.

March 31, 2024 and 2023

Sources of Funds

Cash provided by operating activities during the three months ended March 31, 2024 was $1.2 million compared to $10.5 million during the three months ended March 31, 2023.

Our principal uses of cash are funding the purchase of rental assets and other capital purchases, the repayment of debt, funding of acquisitions, operations, and other working capital requirements.

Our contractual obligations primarily relate to the repayment of existing debt and contractual obligations for operating and finance leases.

Total outstanding borrowings under our debt arrangements as of September 30, 2023 were $9.9 million, of which $1.8 million is due within 12 months.

Except for the funding of potential business combinations and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after September 30, 2023.

The following table presents our material contractual obligations and commitments to make future payments as of March 31, 2024:

Within 12 Months Beyond 12 Months

Debt Obligations, including interest

$ 1,131 $ 7,668

Lease Obligations

$ 2,247 $ 10,104

Except for the funding of potential acquisitions and investments, we anticipate that our operating cash flows will satisfy our material cash requirements for the 12 months after March 31, 2024.

In addition to our operating cash flows, we may need to raise additional funds to support our contractual obligations and investing activities beyond such 12 month period, and such funding may not be available to us on acceptable terms, or at all.

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Any additional equity financing may be dilutive to our stockholders.

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

Upon initial recognition, the leased asset is measured at an amount equal to the lesser of its fair value and the present value of the minimum lease payments.

Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to the asset.

The associated lease liability is drawn down over the life of the lease by allocating a portion of each lease payment to the liability with the remainder being recognized as finance charges.

Leases that do not transfer the risks and rewards of ownership to the Company are treated as operating leases and are expensed as incurred.

Retirement Plan

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 $316,000 and $259,000 for the three months ended September 30, 2023 and 2022, respectively, and $1,050,000 and $882,000 for the nine months ended September 30, 2023 and 2022, respectively.

Matching employer contributions to the 401(k) plan totaled $535,000 and $409,000 for the three months ended March 31, 2024 and 2023, respectively.

Off balance sheet arrangements

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Accounting and Disclosure Matters

Critical Accounting Principles and Estimates

Critical Accounting Estimates

We are required to disclose “critical accounting estimates” which are estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and that have had or are reasonably likely to have a material impact on our financial condition or results of operations.

We follow financial accounting and reporting policies that are in accordance with accounting principles generally accepted in the United States.

The more significant of these policies are summarized in Note 2 to our consolidated financial statements included in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Not all significant accounting policies require management to make difficult, subjective or complex judgments.

However, the policy noted below could be deemed to meet the SEC’s definition of a critical accounting estimate.

The more significant of these policies are summarized in Note 2 to our consolidated financial statements included in

VIEMED HEALTHCARE, INC.

1 unchanged sentence

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

September 30, 2023 and 2022

Allowance for Doubtful Accounts

The Company estimates that a certain portion of receivables from customers may not be collected and maintains an allowance for doubtful accounts.

The Company evaluates the net realizable value of accounts receivable as of the date of Consolidated Balance Sheets.

Specifically, we consider historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends and relevant business conditions.

Because of continuing changes in the healthcare industry and third-party reimbursement, it is possible that the estimates could change, which could have a material impact on the operations and cash flows.

If circumstances related to certain customers change or actual results differ from expectations, our estimate of the recoverability of receivables could fluctuate from that provided for in our consolidated financial statements.

A change in estimate could impact the provision for uncollectible accounts and accounts receivable.

The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a material impact on our allowance for doubtful accounts in future periods.

Our allowance for doubtful accounts was $11.6 million and $8.5 million as of September 30, 2023 and 2022, respectively, and based on our analysis, we believe the reserve is adequate for any exposure to credit losses.

March 31, 2024 and 2023

Part II, Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Not all significant accounting policies require management to make difficult, subjective or complex judgments.

However, the policy noted below could be deemed to meet the SEC’s definition of a critical accounting estimate.

Accounts Receivable

Accounts receivable are presented at net realizable values that reflect the consideration we expect to receive which is inclusive of adjustments for price concessions.

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

Management’s evaluation takes into consideration such factors as historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends and relevant business conditions.

Inherent in these estimates is the risk that they may have to be revised or updated as additional information becomes available.

It is possible that management’s estimates could change, which could have an impact on operations and cash flows.

Specifically, the complexity of many third-party billing arrangements, patient qualification for medical necessity of equipment and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded.

If the payment amount received differs from the estimated net realizable amount, an adjustment is made to the net realizable amount in the period that these payment differences are determined.

Recently Issued Accounting Pronouncements

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VIEMED HEALTHCARE, INC.

September 30, 2023 and 2022

Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

March 31, 2024 and 2023

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