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VIEMED HEALTHCARE, INC.

VIEMED HEALTHCARE, INC.VMDEarnings & Financial Report

Nasdaq · Health Care · Services-Misc Health & Allied Services, NEC

Viemed Healthcare, Inc. is a medical technology firm specializing in respiratory care solutions. It develops, manufactures and distributes portable ventilators, respiratory therapy devices and related support services, catering to acute care, post-acute care and home care segments across North America, Europe and key Asia-Pacific markets for patients with respiratory conditions.

What changed in VIEMED HEALTHCARE, INC.'s 10-K — 2023 vs 2024

Top changes in VIEMED HEALTHCARE, INC.'s 2024 10-K

185 paragraphs added · 192 removed · 138 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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While Viemed plans to continue investigating and introducing new complementary products and services and further expanding the coverage of existing products, home ventilation (both invasive and non-invasive) is expected to continue to represent the substantial majority of Viemed’s revenue.
While Viemed plans to continue investigating and introducing new complementary products and services and further expanding the coverage of existing products, home ventilation (both invasive and non-invasive) is expected to continue to represent the majority of Viemed’s revenue.
Ventilators are also included in Medicare’s Frequently & Substantially Serviced payment category and are reimbursed under the Healthcare Common Procedure Coding System (“HCPCS”) codes E0465 (invasive ventilation), E0466 (non-invasive ventilation) and E0467 (multi-function ventilation). Viemed’s patients are served by RTs who are each licensed members of the American Association for Respiratory Care (“AARC”).
Ventilators are also included in Medicare’s Frequently & Substantially Serviced payment category and are reimbursed under the Healthcare Common Procedure Coding System (“HCPCS”) codes E0465 (invasive ventilation), E0466 (non-invasive ventilation), E0467 (multi-function ventilation) and E0468 (dual-function ventilation). Viemed’s patients are served by RTs who are each licensed members of the American Association for Respiratory Care (“AARC”).
Significant Customers For the years ended December 31, 2023 and 2022, Viemed had no customers that accounted for 10% or more of its consolidated revenue streams. Viemed earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments.
Significant Customers For the years ended December 31, 2024 and 2023, Viemed had no customers that accounted for 10% or more of its consolidated revenue streams. Viemed earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments.
In December 2008, we became a Durable, Medical Equipment, Prosthetics, Orthotics, and Supplies accredited Medicare supplier by the Accreditation Commission for Health Care for our solutions. Our Medicare accreditation must be renewed every three years through passage of an on-site inspection. We last renewed our accreditation with Medicare in August 2021.
In December 2008, we became a Durable, Medical Equipment, Prosthetics, Orthotics, and Supplies accredited Medicare supplier by the Accreditation Commission for Health Care for our solutions. Our Medicare accreditation must be renewed every three years through passage of an on-site inspection. We last renewed our accreditation with Medicare in August 2024.
Item 1. Business Company Overview Viemed Healthcare, Inc. (the "Company" or "Viemed"), through its subsidiaries, is a provider of home medical equipment ("HME") and post-acute respiratory healthcare services in the United States. The Company’s service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technologies.
Item 1. Business Company Overview Viemed Healthcare, Inc. (the "Company" or "Viemed"), through its subsidiaries, is a provider of home medical equipment ("HME") and post-acute respiratory healthcare services in the United States. The Company’s primary service offerings are focused on effective in-home treatment with clinical practitioners providing therapy and counseling to patients in their homes using cutting edge technology.
Two principal governmental third-party payors in the United States are Medicare and Medicaid. Medicare is a federal program that provides certain medical insurance benefits to persons age 65 and over, certain disabled persons and others.
Two principal governmental third-party payors in the United States are Medicare and Medicaid. Medicare is a federal program that provides certain medical insurance benefits to persons aged 65 and over, certain disabled persons and others.
This list identifies items that could potentially be subject to prior authorization as a condition of Medicare payment. CMS has added home ventilators used with a non-invasive interface to the Master List of Items Frequently Subject to Unnecessary Utilization. If CMS requires prior authorization requirements for noninvasive home ventilation, it could materially impact our business. Page 7 VIEMED HEALTHCARE, INC.
This list identifies items that could potentially be subject to prior authorization as a condition of Medicare payment. CMS has added home ventilators used with a non-invasive interface to the Master List of Items Frequently Subject to Unnecessary Utilization. If CMS requires prior authorization requirements for noninvasive home ventilation, it could materially impact our business.
Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts that apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. In some states, these laws apply and we believe that we are in compliance with such laws.
Page 9 State fraud and abuse provisions . Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts that apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. In some states, these laws apply and we believe that we are in compliance with such laws.
Third-party payors include private insurance plans and governmental programs. As with other medical devices, reimbursement for our products can differ significantly from payor to payor, and our products are not universally covered by third-party commercial payors. Further, third-party payors continually review existing technologies for continued coverage and can, with limited notice, deny or reverse coverage for existing products.
As with other medical devices, reimbursement for our products can differ significantly from payor to payor, and our products are not universally covered by third-party commercial payors. Further, third-party payors continually review existing technologies for continued coverage and can, with limited notice, deny or reverse coverage for existing products.
Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $13,946 to $27,894 for each false claim in violation of the Federal False Claims Act (as of 2023, and subject to annual adjustments for inflation) and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.
Although we believe that we are in compliance with the Federal False Claims Act as well as the Civil Monetary Penalties Law, if we are found in violation of the same, we could be subject to various liabilities and penalties, including fines ranging from $14,308 to $28,619 for each false claim in violation of the Federal False Claims Act (effective 2025, and subject to annual adjustments for inflation) and varying amounts based on the type of violation of the Civil Monetary Penalties Law, plus up to three times the amount of damages that the federal government sustained because of the act of that person.
The RT licensure and AARC membership ensure that Viemed is able to provide patients with in-home respiratory care services, equipment setup, training, and on-call services with state-of-the-art clinical protocols. Additionally, Viemed’s Chief Medical Officer, Dr. William Frazier, is a board certified pulmonary disease specialist and oversees clinical protocols.
The RT licensure and AARC membership ensure that Viemed is able to provide patients with in-home respiratory care services, equipment setup, training, and on-call services with state-of-the-art clinical protocols. Additionally, Viemed’s Chief Medical Officer, Dr. William Frazier, is a board-certified pulmonary disease specialist and oversees clinical protocols. Viemed sources hardware from vendors and pairs them with industry leading respiratory therapy.
Dollars, except per share amounts) December 31, 2023 and 2022 The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity, including a company that furnishes DME, in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
Page 8 The Ethics in Patient Referrals Act, commonly known as the “Stark Law,” prohibits a physician from making referrals for certain “designated health services” payable by Medicare to an entity, including a company that furnishes DME, in which the physician or an immediate family member of such physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement, unless a statutory exception applies.
Dollars, except per share amounts) December 31, 2023 and 2022 Competitive Bidding Process The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Secretary of Health and Human Services ("HHS") to establish and implement programs under which competitive acquisition areas are established throughout the United States for purposes of awarding contracts for the furnishing of competitively priced items of durable medical equipment.
Page 7 Competitive Bidding Process The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Secretary of Health and Human Services ("HHS") to establish and implement programs under which competitive acquisition areas are established throughout the United States for purposes of awarding contracts for the furnishing of competitively priced items of durable medical equipment.
Viemed sources hardware from vendors and pairs them with industry leading respiratory therapy. The emerging nature of the market presents risks that vendors may not be able to provide equipment to satisfy demand. Viemed has historically funded patient related capital expenditures through cash generated from operations or financing through an affiliate of its primary vendors.
The emerging nature of the market presents risks that vendors may not be able to provide equipment to satisfy demand. Viemed has historically funded patient related capital expenditures through cash generated from operations or financing through an affiliate of its primary vendors.
Dollars, except per share amounts) December 31, 2023 and 2022 Products and Services Viemed’s services include the following: • Home Medical Equipment : Viemed provides respiratory and other home medical equipment solutions (primarily through monthly rental arrangements), including home ventilation (invasive and non-invasive), BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) devices, percussion vests, oxygen concentrators, and other medical equipment.
Page 5 Products and Services Viemed’s services include the following: • Home Medical Equipment : Viemed provides respiratory and other home medical equipment solutions (primarily through monthly rental arrangements), including home ventilation (invasive and non-invasive), BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) devices, percussion vests, oxygen concentrators, and other medical equipment.
These reports and other information are also available, free of charge, at www.sec.gov. Information contained on any website referred to in this Annual Report on Form 10-K is not part of this Annual Report on Form 10-K. Page 5 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
These reports and other information are also available, free of charge, at www.sec.gov. Information contained on any website referred to in this Annual Report on Form 10-K is not part of this Annual Report on Form 10-K.
Medicare Administrative Contractors responsible for processing durable medical equipment claims have issued LCDs for Respiratory Assist Devices (“RADs”) which contain language describing an overlap in conditions used to determine coverage for RADs and ventilator devices.
Monthly rental revenue from ventilators represented approximately 56% and 59%, respectively, of revenue for 2024 and 2023. Medicare Administrative Contractors responsible for processing durable medical equipment claims have issued LCDs for Respiratory Assist Devices (“RADs”) which contain language describing an overlap in conditions used to determine coverage for RADs and ventilator devices.
If we are unable to expand coverage of our products by additional commercial payors, or if third-party payors that currently cover or reimburse for our products reverse or limit their coverage in the future, our business and results of operations could be adversely affected. Page 12 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
If we are unable Page 12 to expand coverage of our products by additional commercial payors, or if third-party payors that currently cover or reimburse for our products reverse or limit their coverage in the future, our business and results of operations could be adversely affected. Competition The respiratory care industry is highly competitive.
Because Medicare criteria is extensive, we have a team dedicated to educating prescribers to help them understand how Medicare policy affects their patients and the medical record documentation needed to meet both NCD and LCD requirements.
Revenues from Medicare and Medicaid accounted for 43% and 46%, respectively, of revenue for the years ended December 31, 2024 and 2023. Because Medicare criteria is extensive, we have a team dedicated to educating prescribers to help them understand how Medicare policy affects their patients and the medical record documentation needed to meet both NCD and LCD requirements.
Viemed's services include respiratory disease management, neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, respiratory equipment rentals, and healthcare staffing services. Viemed expects to use a growth model whereby expansion is effectuated through existing service areas as well as in new regions through a cost efficient launch that reduces location expenses.
Viemed's services include respiratory disease management (through the rental of various HME devices), neuromuscular care, in-home sleep testing and sleep apnea treatment, oxygen therapy, the sale of associated supplies, and healthcare staffing services. Viemed expects to grow through expansion of existing service areas as well as in new territories through a cost efficient launch that reduces location expenses.
Page 6 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Government Regulation We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government and commercial programs and preventing fraud and abuse, as more fully described below.
Page 6 Government Regulation We are subject to extensive government regulation, including numerous laws directed at regulating reimbursement of our products and services under various government and commercial programs and preventing fraud and abuse, as more fully described below.
Any penalties, damages, fines, exclusions, curtailment or restructuring of our operations could adversely affect our ability to operate our business, our financial condition and our results of operations. Page 8 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Any penalties, damages, fines, exclusions, curtailment or restructuring of our operations could adversely affect our ability to operate our business, our financial condition and our results of operations.
Page 10 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 In 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (“ARRA”) which included sweeping changes to HIPAA, including an expansion of HIPAA’s privacy and security standards.
Page 10 In 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (“ARRA”) which included sweeping changes to HIPAA, including an expansion of HIPAA’s privacy and security standards.
Viemed expects to continue to be a solution to the rising healthcare costs in the United States by offering more cost effective home based solutions while increasing the quality of life for patients fighting serious respiratory diseases. Viemed focuses on disease management and improving the quality of life for respiratory patients through clinical excellence, education and technology.
Viemed expects to continue to be a solution to the rising health costs in the United States by offering more cost-effective, home-based solutions while increasing the quality of life for patients fighting serious respiratory diseases. Corporate Information Viemed Healthcare, Inc. is a holding company incorporated in British Columbia under the Business Corporations Act in December 2016.
Viemed’s primary objective is to focus on the growth of its business and thereby solidify its position as one of the largest providers of home therapy for patients suffering from respiratory diseases that require a high level of service, with such programs being designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care.
Viemed’s primary objective is to focus on the organic growth of the business and thereby solidify its position as one of the United States' largest providers of in-home therapy for patients suffering from respiratory diseases.
Page 11 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Third-Party Reimbursement In the United States and elsewhere, sales of medical devices depend in significant part on the availability of coverage and reimbursement to providers and patients from third-party payors.
Page 11 Third-Party Reimbursement In the United States and elsewhere, sales of medical devices depend in significant part on the availability of coverage and reimbursement to providers and patients from third-party payors. Third-party payors include private insurance plans and governmental programs.
Employees At December 31, 2023, Viemed had 996 permanent employees, in addition to temporary employees and independent contractors engaged through the Company's healthcare staffing and recruitment services to supplement the workforce needs of third party healthcare facilities. Page 13 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022
Employees At December 31, 2024, Viemed had 1,179 permanent employees, in addition to temporary employees and independent contractors engaged through the Company's healthcare staffing and recruitment services to supplement the workforce needs of third-party healthcare facilities. Viemed's human capital resources are a critical component of its business strategy.
Viemed expects that it will continue to employ more respiratory therapists ("RTs") in order to assure the high service model is accomplished in the home. By focusing overhead costs to personnel that service the patient rather than physical location costs, Viemed anticipates continuing to efficiently scale its business in regions that are currently not being effectively serviced.
Beyond fulfilling its internal staffing needs, Viemed also provides healthcare staffing and recruitment services, offering tailored workforce solutions to external healthcare institutions and partners seeking qualified clinical professionals. By focusing overhead costs on personnel that service the patient rather than physical location costs, Viemed anticipates continuing to efficiently scale its business in territories that are currently not being effectively serviced.
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The Company currently serves patients in all 50 states of the United States.
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Viemed's respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care.
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Its service offerings are based on effective home treatment with respiratory care practitioners providing therapy and counseling to patients in their homes using cutting edge technologies. Viemed also provides in-home sleep testing for sleep apnea sufferers and health care staffing services for healthcare facilities.
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The Company currently serves patients in all 50 states of the United States. Viemed anticipates expanding its workforce of respiratory therapists ("RTs") to support the Company's growth and ensure the high service model is maintained in the home. As of December 31, 2024, we employed 404 licensed RTs, representing approximately 34% of our company-wide employee count.
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Viemed is one of the largest independent non-invasive ventilator providers in the United States with a service coverage area of all 50 states of the United States and intends to continue to grow rapidly through increased market penetration. Corporate Information Viemed Healthcare, Inc. is a holding company incorporated in British Columbia under the Business Corporations Act in December 2016.
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While the NCD for the DME Reference List has been updated, no separate NCD has been issued for ventilators. On September 11, 2024, CMS initiated a national coverage analysis (NCA) for noninvasive positive pressure ventilation (NIPPV) in the home for treating chronic respiratory failure (CRF) due to COPD. A decision is anticipated in 2025, though delays are possible.
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Revenue derived from the rental and sale of home medical equipment represented a combined 94.2% and 93.8%, respectively, of Viemed’s 2023 and 2022 traditional revenue, excluding COVID-19 response sales and services.
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We have actively participated in the coverage analysis process, including submitting a comment letter to CMS, and will continue to engage with CMS, HHS, and Congress on ventilator coverage issues. A new NCD that clearly defines the medical necessity criteria for ventilator devices could significantly impact our business.
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Monthly rental revenue from ventilators represented approximately 59% and 68%, respectively, of Viemed's 2023 and 2022 traditional revenue, excluding COVID-19 response sales and services.
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The Company focuses on several key human capital measures and objectives to manage its workforce effectively, including: • Development: Viemed invests in continuous training and professional development programs to enhance the skills and knowledge of its employees. • Recruiting: The Company implements competitive compensation packages and benefits to recruit top talent in the healthcare industry. • Retention: Viemed prioritizes employee satisfaction and engagement through various initiatives, such as wellness programs, career advancement opportunities, and a supportive work environment.
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Page 9 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 State fraud and abuse provisions .
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These measures ensure that Viemed can maintain a high service model in the home and continue to grow its business efficiently. Page 13
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While the NCD for the DME Reference List has been updated, no separate NCD has been issued for ventilators. Monthly rental revenue from ventilators represented approximately 59% and 68%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for 2023 and 2022.
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Revenues from Medicare and Medicaid accounted for 46% and 56%, respectively, of traditional revenue, excluding COVID-19 response sales and services, for the years ended December 31, 2023 and 2022.
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Dollars, except per share amounts) December 31, 2023 and 2022 Emerging Growth Company Status We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).
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For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.
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We will remain an “emerging growth company” until the earliest of (i) the last day of our fiscal year in which we have total annual gross revenues of $1.07 billion (as such amount is indexed for inflation every five years by the SEC to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest $1 million) or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); (iii) the date on which we have, during the prior three-year period, issued more than $1 billion in non-convertible debt; and (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
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We cannot predict if investors will find our common shares less attractive to the extent we rely on the exemptions available to emerging growth companies. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.
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In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
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An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We may choose to take advantage of such extended transition period. Competition The respiratory care industry is highly competitive.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Such occurrences could result in damage to property, inventory, facilities, personal injury or death, damage to our properties, or the properties of others, monetary losses and possible legal liability. We may be subject to product liability and medical malpractice claims, which may adversely affect our operations.
Such occurrences could result in damage to property, inventory or facilities, personal injury or death, damage to our properties or the properties of others, monetary losses and possible legal liability. We may be subject to product liability and medical malpractice claims, which may adversely affect our operations.
The federal government and all states in which we currently operate regulate various aspects of our business. Our operations also are subject to state laws governing, among other things, distribution of medical equipment and certain types of home health activities, and we are required to obtain and maintain licenses in each state to act as a DME supplier.
Page 17 The federal government and all states in which we currently operate regulate various aspects of our business. Our operations also are subject to state laws governing, among other things, distribution of medical equipment and certain types of home health activities, and we are required to obtain and maintain licenses in each state to act as a DME supplier.
In addition, if we are not able to comply with changing requirements in a timely manner, the market price of our common shares could decline and we could be subject to sanctions or investigations by the stock exchanges on which our common shares are listed, the SEC or other regulatory authorities, which would require additional financial and management resources.
In addition, if we are not able to comply with changing requirements in a timely manner, the market price of our common shares could decline and Page 25 we could be subject to sanctions or investigations by the stock exchanges on which our common shares are listed, the SEC or other regulatory authorities, which would require additional financial and management resources.
These payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursement for healthcare services. Additionally, from time to time our contracts with payors are terminated, amended or renegotiated, sometime unilaterally through policies.
These payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursement for healthcare services. Additionally, from time to time our contracts with payors are Page 19 terminated, amended or renegotiated, sometime unilaterally through policies.
In the future, we may attempt to obtain financing or further increase our capital resources by issuing additional shares of our common shares or by offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.
Page 24 In the future, we may attempt to obtain financing or further increase our capital resources by issuing additional shares of our common shares or by offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.
We attempt to address these pressures through our inflation-linked reimbursement contracts, negotiation, leveraging our purchasing power and embracing technology, such as our proprietary clinical management platform. Risks Relating to Government Regulation Healthcare reform legislation may affect our business. Healthcare reform laws significantly affect the U.S. healthcare services industry.
We attempt to address these pressures through our inflation-linked reimbursement contracts, negotiation, leveraging our purchasing power and embracing technology, such as our proprietary clinical management platform. Risks Relating to Government Regulation Healthcare reform legislation and/or executive action may affect our business. Healthcare reform laws significantly affect the U.S. healthcare services industry.
If we fail to establish and maintain proper disclosure or internal controls, our ability to produce accurate financial statements and supplemental information, or comply with applicable regulations could be impaired. As we grow, we may be subject to growth-related risks including capacity constraints and pressure on our internal systems and controls.
Page 23 Risks Related to our Common Shares If we fail to establish and maintain proper disclosure or internal controls, our ability to produce accurate financial statements and supplemental information, or comply with applicable regulations could be impaired. As we grow, we may be subject to growth-related risks including capacity constraints and pressure on our internal systems and controls.
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. Rental revenue from ventilator products represents a significant portion of our revenue (approximately 59.2% of total revenue in 2023).
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. Rental revenue from ventilator products represents a significant portion of our revenue (approximately 56% of total revenue in 2024).
If insurers or managed care companies from whom we receive substantial payments were to terminate, amend or renegotiate contracts or reduce the amounts they pay for services, our profit margins may decline, or we may lose patients if we choose not to renew our contracts with these insurers at lower rates. Page 19 VIEMED HEALTHCARE, INC.
If insurers or managed care companies from whom we receive substantial payments were to terminate, amend or renegotiate contracts or reduce the amounts they pay for services, our profit margins may decline, or we may lose patients if we choose not to renew our contracts with these insurers at lower rates.
The reimbursement rates offered are outside of our control. The CARES Act previously introduced a 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 reimbursement rates offered are outside of our control. The CARES Act previously introduced a 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 75/25 blended Medicare reimbursement rate expired on December 31, 2023.
In 2023, approximately 54% of our revenues were derived collectively from managed care plans, commercial health insurers, workers’ compensation payors, and other private pay revenue sources while approximately 46% of our revenues were derived from Medicare and Medicaid. Initiatives undertaken by industry and government to contain healthcare costs affect our profitability.
In 2024, approximately 57% of our revenues were derived collectively from managed care plans, commercial health insurers, workers’ compensation payors, and other private pay revenue sources while approximately 43% of our revenues were derived from Medicare and Medicaid. Initiatives undertaken by industry and government to contain healthcare costs affect our profitability.
Insurers may choose to offer supplemental benefits and impose higher plan costs on beneficiaries. Approximately one half of Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2023; a figure that continues to grow.
Insurers may choose to offer supplemental benefits and impose higher plan costs on beneficiaries. More than one half of Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2024; a figure that continues to grow.
These additional post-payment reviews may require us to incur costs to respond to requests for records and to pursue the reversal of payment denials, and ultimately may require us to refund amounts paid to us by Medicare or Medicaid that are determined to have been overpaid.
These post-payment reviews have increased as a result of government cost-containment initiatives. These additional post-payment reviews may require us to incur costs to respond to requests for records and to pursue the reversal of payment denials, and ultimately may require us to refund amounts paid to us by Medicare or Medicaid that are determined to have been overpaid.
If the Medicare program were to slow payments of our receivables for any reason, we would be adversely impacted. In addition, both governmental healthcare programs and private health insurance companies may seek ways to avoid or delay reimbursement, which could adversely affect our cash flow and revenues. Page 14 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
If the Medicare program were to slow payments of our receivables for any reason, we would be adversely impacted. In addition, both governmental healthcare programs and private health insurance companies may seek ways to avoid or delay reimbursement, which could adversely affect our cash flow and revenues.
Dollars, except per share amounts) December 31, 2023 and 2022 We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, shifting away from traditional fee-for-service models. Under the managed Medicare program, also known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
Page 22 We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, shifting away from traditional fee-for-service models. Under the managed Medicare program, also known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
We will incur increased costs as a result of operating as a U.S. public reporting company, and our management is required to devote substantial time to new compliance initiatives. As a U.S. public reporting company, we will incur, particularly after we are no longer an “emerging growth company,” significant legal, accounting and other expenses.
We will incur increased costs as a result of operating as a U.S. public reporting company, and our management is required to devote substantial time to new compliance initiatives. As a U.S. public reporting company, we will incur significant legal, accounting and other expenses.
Violations of federal and state regulations can result in severe criminal, civil and administrative penalties, damages, and sanctions, including debarment, suspension or exclusion from Medicare, Medicaid and other government reimbursement programs, any of which would have a material adverse effect on our business.
Government agencies or their contractors also periodically open investigations and obtain information from healthcare providers. Violations of federal and state regulations can result in severe criminal, civil and administrative penalties, damages, and sanctions, including debarment, suspension or exclusion from Medicare, Medicaid and other government reimbursement programs, any of which would have a material adverse effect on our business.
See “Business–Government Regulation” in Item 1 for more information. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on us is uncertain and difficult, if not impossible, to predict. That impact may be material to our business, financial condition or results of operations.
See “Business–Government Regulation” in Item 1 for more information. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on us is uncertain and difficult, if not impossible, to predict.
Furthermore, responding to governmental investigations, audits and reviews can also require us to incur significant legal and document production expenses, regardless of whether the particular investigation, audit or review leads to identification of underlying noncompliance or wrongdoing. Page 18 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Furthermore, responding to Page 18 governmental investigations, audits and reviews can also require us to incur significant legal and document production expenses, regardless of whether the particular investigation, audit or review leads to identification of underlying noncompliance or wrongdoing.
The loss of smaller reporting company status and compliance with such larger company disclosure obligations (subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies) may increase our legal and financial compliance costs and cause management and other personnel to divert attention from operational and other business matters to devote additional time to public company reporting requirements.
The loss of smaller reporting company and emerging growth statuses and compliance with such larger company disclosure obligations may increase our legal and financial compliance costs and cause management and other personnel to divert attention from operational and other business matters to devote additional time to public company reporting requirements.
As of June 30, 2023, we determined that we no longer qualify as a “smaller reporting company” and, subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies, we will be required to comply with larger company disclosure obligations beginning with our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
As of June 30, 2023, we determined that we no longer qualify as a “smaller reporting company”, and we became subject to expanded disclosure requirements, subject to certain exemptions and relief that was applicable to emerging growth companies, beginning with our Quarterly Report on Form 10-Q for the period ended March 31, 2024.
The failure of our common shares to be included in various stock indices could result in the market for our common shares to become limited and volatile and the price at which you can sell your shares to decrease.
Securities litigation could result in substantial costs and damages and divert management’s attention and resources. The failure of our common shares to be included in various stock indices could result in the market for our common shares to become limited and volatile and the price at which you can sell your shares to decrease.
Although we believe our practices are compliant with applicable safe harbors, we cannot assure you that a government regulator will not take the position that some of our practices do not meet all of the narrow criteria of an applicable safe harbor and otherwise violate the Anti-Kickback Statute. Page 21 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Although we believe our practices are compliant with applicable safe harbors, we cannot assure you that a government regulator will not take the position that some of our practices do not meet all of the narrow criteria of an applicable safe harbor and otherwise violate the Anti-Kickback Statute.
We may not be able to gain access into certain ACOs. If we are not included in these programs, or if ACOs establish programs that overlap with our services, we could experience an adverse effect on our operations and financial condition. Page 22 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We may not be able to gain access into certain ACOs. If we are not included in these programs, or if ACOs establish programs that overlap with our services, we could experience an adverse effect on our operations and financial condition.
Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2023 or be subject to an annual penalty. Page 23 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2024 or be subject to an annual penalty.
Disruptions in the credit and financial markets may have an adverse impact on our ability to obtain capital and financing for our operations. Market events and conditions, including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede our access to capital or increase the cost of capital.
Market events and conditions, including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede our access to capital or increase the cost of capital.
Dollars, except per share amounts) December 31, 2023 and 2022 The Federal False Claims Act prohibits, in part, any person from knowingly presenting or causing to be presented a false claim for payment to the federal government, or knowingly making or causing to be made a false statement to get a false claim paid.
Page 21 The Federal False Claims Act prohibits, in part, any person from knowingly presenting or causing to be presented a false claim for payment to the federal government, or knowingly making or causing to be made a false statement to get a false claim paid.
Dollars, except per share amounts) December 31, 2023 and 2022 As a result of increased post-payment reviews of claims we submit to Medicare and Medicaid for our services, we may incur additional costs and may be required to repay amounts already paid to us.
As a result of increased post-payment reviews of claims we submit to Medicare and Medicaid for our services, we may incur additional costs and may be required to repay amounts already paid to us. We are subject to regular post-payment inquiries, investigations and audits of claims we submit to Medicare and Medicaid for payment for our services.
These disruptions could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. Access to additional capital may not be available to us on terms acceptable to us, or at all. Page 16 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
These disruptions Page 16 could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. Access to additional capital may not be available to us on terms acceptable to us, or at all. Our strategic growth plan, which involves the acquisition of other businesses, may not succeed.
To ensure compliance with Medicare and Medicaid requirements and other federal and state regulations, government agencies or their contractors often conduct routine audits and request customer records and other documents to support our claims submitted for payment of services rendered. Government agencies or their contractors also periodically open investigations and obtain information from healthcare providers.
These include specific requirements imposed by the DME MAC Supplier Manuals. To ensure compliance with Medicare and Medicaid requirements and other federal and state regulations, government agencies or their contractors often conduct routine audits and request customer records and other documents to support our claims submitted for payment of services rendered.
(Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 We face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business.
We face inspections, reviews, audits and investigations under federal and state government programs and contracts. These audits could have adverse findings that may negatively affect our business.
We insure some of our risk with respect to security breaches but the occurrence of any of the foregoing events could have a material adverse effect on our business, results of operations and our financial condition. Page 20 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We insure some of our risk with respect to security breaches but the occurrence of any of the foregoing events could have a material adverse effect on our business, results of operations and our financial condition. Page 20 Our products may be subject to future rounds of Medicare's Competitive Bidding Program, which may negatively affect our business and financial condition.
Our development and the business (including acquisitions) may require additional financing, which may involve high transaction costs, dilution to shareholders, high interest rates or unfavorable terms and conditions. Failure to obtain sufficient financing may result in the delay or indefinite postponement of our business plans and our business, financial condition, results of operations and prospects may be adversely affected.
Our development and the business (including acquisitions) may require additional financing, which may involve high transaction costs, dilution to shareholders, high interest rates or unfavorable terms and conditions.
Dollars, except per share amounts) December 31, 2023 and 2022 Our dependence on key suppliers puts us at risk of interruptions in the availability of the equipment we need for our services, which could reduce our revenue and adversely affect our results of operations.
Our dependence on key suppliers puts us at risk of interruptions in the availability of the equipment we need for our services, which could reduce our revenue and adversely affect our results of operations. We require the timely delivery of a sufficient supply of equipment we use to perform our home treatment of patients.
If we have information system problems or issues that arise with Medicare or Medicaid or private health insurers, we may encounter delays in our payment cycle. Such timing delays may cause working capital shortages. Working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity.
If we or other providers involved in claims submission reimbursement processes have information system problems or issues that arise with Medicare or Medicaid or private health insurers, we may encounter delays in our payment cycle. Such timing delays may cause working capital shortages.
No assurance can be given that individuals with the required skills will continue employment with us or that replacement personnel with comparable skills can be found. Page 15 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 We have significant ongoing capital expenditure requirements.
No assurance can be given that individuals with the required skills will continue employment with us or that replacement personnel with comparable skills can be found. We have significant ongoing capital expenditure requirements.
We depend in part upon reimbursement by third-party payors. A substantial portion of our revenues are derived from private and governmental third-party payors.
There are often timing delays when attempting to collect funds from Medicaid programs. Delays in receiving reimbursement or payments from these programs may adversely impact our working capital. We depend in part upon reimbursement by third-party payors. A substantial portion of our revenues are derived from private and governmental third-party payors.
As a result of this election, our financial statements may not be comparable to public companies that comply with new or revised accounting standards.
As a result, our historical financial statements may not be comparable to those of companies that fully adopted public company accounting standards on the standard effective dates.
Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
As a result of any of these factors, the market price of our common shares at any given point in time may not accurately reflect our long-term value. Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation.
System problems, Medicare or Medicaid issues or industry trends may extend our collection period, adversely impact our working capital. Our working capital management procedures may not successfully negate this risk. There are often timing delays when attempting to collect funds from Medicaid programs. Delays in receiving reimbursement or payments from these programs may adversely impact our working capital.
Working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity. System problems, Medicare or Medicaid issues or industry trends may extend our collection period, adversely impact our working capital. Our working capital management procedures may not successfully negate this risk.
Dollars, except per share amounts) December 31, 2023 and 2022 As a healthcare provider participating in governmental healthcare programs, we are subject to laws directed at preventing fraud, waste, and abuse, which subject our marketing, billing, documentation and other practices to government scrutiny. These include specific requirements imposed by the DME MAC Supplier Manuals.
Additionally, accreditation is required by many payors. If we fail to obtain or maintain any required accreditation, it could have an adverse impact on our business. As a healthcare provider participating in governmental healthcare programs, we are subject to laws directed at preventing fraud, waste, and abuse, which subject our marketing, billing, documentation and other practices to government scrutiny.
In addition, the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period for complying with new or revised accounting standards. We have elected to take advantage of the extended transition period, which allows us to delay the adoption of new or revised accounting standards until those standards apply to private companies.
Additionally, we ceased to qualify as an “emerging growth company” on December 31, 2024. While we qualified as an emerging growth company, we elected to use the extended transition period under the Jumpstart Our Business Startups Act of 2012 to delay the adoption of new or revised accounting standards until those standards were applicable to private companies.
We require the timely delivery of a sufficient supply of equipment we use to perform our home treatment of patients. Our dependence on third-party suppliers involves several additional risks, including limited control over pricing, availability, quality and delivery schedules.
Our dependence on third-party suppliers involves several additional risks, including limited control over pricing, availability, quality and delivery schedules. In the coming months and/or years, limitations on control over pricing and limited availability of materials may create uncertainty if the new Presidential administration proceeds with implementing tariffs that apply to U.S. trading partners.
We must also maintain effective internal control over financial reporting or, at the appropriate time, our independent auditors will be unwilling or unable to provide us with an unqualified report on the effectiveness of our internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act.
Further, as we are no longer an emerging growth company, our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.
Removed
The 75/25 blended Medicare reimbursement rate expired on December 31, 2023, reverting to rates in place prior to the implementation of the 75/25 blend, adjusted for inflation. This change may lead to reduced reimbursement for competitive bid products and services in specific markets where we operate.
Added
Efforts to extend the blended rate through H.R. 5555 and S. 1294 gained strong bipartisan support and advanced through key congressional committees. However, these provisions were ultimately excluded from the legislative package passed at the end of the 118th Congress.
Removed
Dollars, except per share amounts) December 31, 2023 and 2022 Our strategic growth plan, which involves the acquisition of other businesses, may not succeed.
Added
As a result, reimbursement rates for affected products have reverted to rates in place prior to the implementation of the 75/25 blend, adjusted for inflation, leading to lower reimbursement levels in certain markets where we operate. Industry stakeholders, including leading advocacy organizations, continue to push for legislative relief in the 119th Congress.
Removed
Additionally, accreditation is required by many payors. If we fail to obtain or maintain any required accreditation, it could have an adverse impact on our business. Page 17 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Added
Given that the most recent government funding package extends only through March 14, 2025, future opportunities may arise to reintroduce Medicare reimbursement relief as part of broader healthcare negotiations. However, there is no certainty that such efforts will succeed, or that reimbursement rates will be restored to previous levels.
Removed
We are subject to regular post-payment inquiries, investigations and audits of claims we submit to Medicare and Medicaid for payment for our services. These post-payment reviews have increased as a result of government cost-containment initiatives.
Added
Historically medical equipment has been exempted from tariffs, but it is unclear if that will continue to be the case. To the extent Page 14 tariffs create challenges on sourcing medical equipment from foreign manufacturers, we can attempt to source equipment from domestic manufacturers when practicable.
Removed
Dollars, except per share amounts) December 31, 2023 and 2022 Our products may be subject to future rounds of Medicare's Competitive Bidding Program, which may negatively affect our business and financial condition.
Added
Failure to obtain sufficient financing may result in the delay or indefinite postponement of our business plans and our business, financial condition, results of operations and Page 15 prospects may be adversely affected.
Removed
Dollars, except per share amounts) December 31, 2023 and 2022 Risks Related to our Common Shares We are an "emerging growth company" and the reduced disclosure requirements applicable to "emerging growth companies" may make our common stock less attractive to investors.
Added
The integration of artificial intelligence (AI) technologies may introduce operational risks and challenges. While AI technologies, including machine learning and generative AI, offer substantial benefits such as improved efficiency, innovation, and decision-making, they also present several risks. These include the potential for unintended or biased outcomes, which could lead to operational disruptions, legal liabilities, or damage to our reputation.
Removed
As an “emerging growth company” as defined in the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
Added
The rapid pace of AI development, coupled with the current absence of comprehensive regulatory frameworks, exacerbates these risks. Furthermore, the misuse or malfunction of AI systems could attract regulatory scrutiny, resulting in potential fines or penalties. Additionally, competitors who more effectively harness AI may gain a strategic advantage, further impacting our market position.
Removed
We are an emerging growth company until the earliest of: • December 31, 2024, the last day of the fiscal year following the fifth anniversary of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act; • the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more; • the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or • the date on which we are deemed a “large accelerated filer” as defined under the federal securities laws.
Added
Failure to effectively mitigate these risks may have an adverse effect on our operations and long-term growth. Disruptions in the credit and financial markets may have an adverse impact on our ability to obtain capital and financing for our operations.
Removed
For so long as we remain an “emerging growth company,” we will not be required to: • have an auditor report on our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; • include detailed compensation discussion and analysis in our filings under the Exchange Act and instead may provide a reduced level of disclosure concerning executive compensation; or • hold nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
Added
Additionally, the new Presidential administration has begun its term with actions aimed at reforming government, including reductions in size and funding for many executive agencies.
Removed
The exact implications of the JOBS Act are still subject to interpretations and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act.
Added
It is extremely difficult, if not impossible, to predict whether such actions will target HHS and/or CMS, how they may do so, whether they will be challenged in court, and what the consequences may be for the agencies and for health care providers.
Removed
In addition, investors may find our common stock less attractive to the extent we rely on the exemptions available to emerging growth companies for so long as we qualify as such.
Added
The impact of legislative reform and/or executive action may be material to our business, financial condition or results of operations.
Removed
If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may decline or become more volatile.
Added
For example, the replacement in 2024 of our prior claims submissions clearinghouse due to a cybersecurity incident impacting the clearinghouse has resulted in delayed claims submissions and in a temporary reduction of our operating cash flow and an increase to our accounts receivable.
Removed
Page 24 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 As a result of any of these factors, the market price of our common shares at any given point in time may not accurately reflect our long-term value.
Added
These requirements increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We no longer qualify as a “smaller reporting company” or an "emerging growth company" which may increase our costs and demands on management.
Removed
These requirements increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Page 25 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Added
As a result of our ceasing to qualify as an emerging growth company, we are no longer able to take advantage of certain exemptions and relief from disclosure and other requirements that are otherwise applicable generally to SEC reporting companies.
Removed
Dollars, except per share amounts) December 31, 2023 and 2022 We no longer qualify as a “smaller reporting company” and, subject to certain exemptions and relief from various reporting requirements that are applicable to emerging growth companies, we will be required to comply with larger company disclosure obligations beginning with our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, which may increase our costs and demands on management.
Added
Specifically, we are now required to: • Provide an auditor attestation of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • Provide audited financial statements for three fiscal years (rather than two); • Comply with requirements that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); • Comply with increased executive compensation disclosure obligations; and • Comply with the requirements on “say-on-pay” and “say-on-frequency” shareholder votes, shareholder approval of golden parachute compensation and pay ratio disclosure.
Removed
Page 26 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Item 1B. Unresolved Staff Comments Not applicable.
Added
Page 26 Item 1B. Unresolved Staff Comments Not applicable.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We strive to continually improve our information technology systems, and we prioritize enhancing our defenses through employee awareness training, specifically targeting areas such as phishing, malware, and other cyber risks. To reinforce our cybersecurity posture, we enlist independent consultants and third-party experts to assist in the establishment and enhancement of our cybersecurity program.
We strive to improve our information technology systems continually, and we prioritize enhancing our defenses through employee awareness training, specifically targeting areas such as phishing, malware, and other cyber risks. To reinforce our cybersecurity posture, we enlist independent consultants, third-party experts, and service providers to assist in the establishment and enhancement of our cybersecurity program.
The Director of Information Security holds the position of the Information Security Officer and directs cybersecurity operations. To enhance governance and oversight, we have established a Security Oversight Committee, chaired by the Information Security Officer and joined by key stakeholders such as our Chief Information Officer and General Counsel.
The CISO holds the position of the Information Security Officer and directs cybersecurity operations. To enhance governance and oversight, we have established a Security Oversight Committee, chaired by the Information Security Officer and joined by key stakeholders such as our Chief Information Officer and General Counsel.
Prior to their current roles with the Company, our CIO, CTO, and Director of Information Security held various information technology and cybersecurity positions with other healthcare services and healthcare technology companies. They have collectively obtained various industry-recognized certifications, including the Certified Security Compliance Specialist, Certified Cyber Security Architect, and Certified HIPAA Professional designations.
Prior to their current roles with the Company, our CIO, CTO, and CISO held various information technology and cybersecurity positions with other healthcare services and healthcare technology companies. They have collectively obtained various industry-recognized certifications, including the Certified Security Compliance Specialist, Certified Cyber Security Architect, and Certified HIPAA Professional designations.
Our information systems management team, comprising the Chief Information Officer (CIO), Chief Technology Officer (CTO), and Director of Information Security, collectively possesses over 50 years of extensive experience in Information Technology and cybersecurity.
Our information systems management team, comprising the Chief Information Officer (CIO), Chief Technology Officer (CTO), and Chief Information Security Officer (CISO), collectively possesses over 50 years of extensive experience in information technology and cybersecurity.
This committee convenes regularly, typically on a weekly basis, to foster alignment and cooperation on security-related issues. We have adopted a comprehensive Cybersecurity Incident Response Plan to direct our responses to cybersecurity events in a prompt, effective, and well-coordinated manner.
This committee convenes regularly, typically on a semi-monthly basis, to foster alignment and cooperation on security-related issues. We have adopted a comprehensive Cybersecurity Incident Response Plan to direct our responses to cybersecurity events in a prompt, effective, and well-coordinated manner.
We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our operations, business strategy, regulatory compliance, results of operations, or financial condition. Page 27 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our operations, business strategy, regulatory compliance, results of operations, or financial condition. Page 27
Removed
Dollars, except per share amounts) December 31, 2023 and 2022

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+2 added−0 removed2 unchanged
Our subsidiaries are restricted from making distributions or dividend payments to us by the 2022 Senior Credit Facilities (as defined below), subject to certain exceptions. See Note 6 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for further information. Recent Sales of Unregistered Equity Securities None.
Our subsidiaries are restricted from making distributions or dividend payments to us by the 2022 Senior Credit Facilities (as defined below), subject to certain exceptions. See Note 6 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K for further information.
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common shares of Viemed trade on the Nasdaq Capital Market under the symbol "VMD". Shareholders We had nine shareholders of record as of February 15, 2024.
Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common shares of Viemed trade on the Nasdaq Capital Market under the symbol "VMD". Shareholders We had thirteen shareholders of record as of February 14, 2025.
Added
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be deemed to be incorporated by reference into any future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended.
Added
The following graph compares the total cumulative return on funds invested in Common Shares of the Corporation, compared to the total cumulative return of (i) the cumulative total return of the Russell 2000 Index and (ii) the cumulative total return of the S&P Healthcare Services Select Industry Index, in each case, for the period from December 31, 2019 to December 31, 2024: Page 29 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 Dec 31, 2023 Dec 31, 2024 Viemed Healthcare, Inc. $ 100 $ 125 $ 84 $ 122 $ 127 $ 129 Russell 2000 Index $ 100 $ 118 $ 135 $ 106 $ 121 $ 140 S&P Healthcare Services Select Industry Index $ 100 $ 133 $ 146 $ 116 $ 122 $ 123 Recent Sales of Unregistered Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+23 added−23 removed38 unchanged
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 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 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 contract management with third party payors to secure fair reimbursement, HME providers are engaging in value-based contracting, focusing on outcomes and patient satisfaction.
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.
The net income adjustments primarily consisted of $21.9 million of depreciation and amortization, $5.8 million of stock-based compensation, and $1.0 million of distributions of earnings received from equity method investments, offset by a $1.4 million deferred income tax benefit.
The net income adjustments primarily consisted of $21.9 million of depreciation and amortization, $5.8 million of stock-based compensation, and $1.0 million of distributions of earnings received from equity method investments, partially offset by a $1.4 million deferred income tax benefit.
We expect to continue to be a solution to the rising health costs in the United States by offering more cost effective, home based solutions while increasing the quality of life for patients fighting serious respiratory diseases.
We expect to continue to be a solution to the rising health care costs in the United States by offering more cost-effective, home-based solutions while increasing the quality of life for patients fighting serious respiratory diseases.
The primary changes in working capital were an increase in accrued liabilities of $5.0 million, a decrease in prepaid expenses and other assets of $2.2 million, and a net increase in income taxes payable of $2.2 million, offset by an increase in net accounts receivable of $1.1 million.
The primary changes in working capital were an increase in accrued liabilities of $5.0 million, a decrease in prepaid expenses and other assets of $2.2 million, and a net increase in income taxes payable of $2.2 million, partially offset by an increase in net accounts receivable of $1.1 million.
Based on our current plan of operations, we believe this amount, 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.
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.
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.
Persistent inflation may impact overall demand, increase operating costs, and affect profit margins, potentially adversely affecting Viemed's business and financial performance. In its 2025 DMEPOS Fee Schedule, CMS announced the fee schedule adjustment based on the annual change to the Consumer Pricing Index for all urban areas.
Matching employer contributions to the 401(k) plan totaled $1.4 million and $1.1 million for the years ended December 31, 2023 and 2022, 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.
Matching employer contributions to the 401(k) plan totaled $1.6 million and $1.4 million for the years ended December 31, 2024 and 2023, 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.
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.
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 territories that are currently not being effectively serviced.
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 the financial condition or results of operations of the registrant.
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.
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 a 2.6% reimbursement rate increase.
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 a 2.4% reimbursement rate increase.
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. Stock-Based Compensation For the year ended December 31, 2023, stock-based compensation totaled $5.8 million, an increase of $0.6 million (or 12.4%) 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 the associated costs will remain consistent in 2025 relative to 2024 costs. Stock-Based Compensation For the year ended December 31, 2024, stock-based compensation totaled $6.3 million, an increase of $0.4 million (or 7.5%) from the comparable period in 2023.
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.
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 net of these adjustments. 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.
Dollars, except per share amounts) December 31, 2023 and 2022 Senior Credit Facilities On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent that provides for an up to $30.0 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30.0 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.
Senior Credit Facilities On November 29, 2022, the Company refinanced its existing borrowings under the prior Commercial Business Loan Agreement with Hancock Whitney Bank and entered into a new credit agreement (the "2022 Senior Credit Facilities") with the lenders from time to time party thereto, and Regions Bank, as administrative agent and collateral agent, that provides for an up to $30.0 million revolving credit facility (the "2022 Revolving Credit Facility") and an up to $30.0 million delayed draw term loan facility (the "2022 Term Loan Facility"), both maturing in November 2027.
It is not a measurement of our financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of the Company's liquidity, and may not be comparable to other similarly titled measures of other companies or businesses.
It is not a measurement of our financial performance under GAAP and should not be considered as an alternative to revenue or net income, as applicable, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of the Company's liquidity.
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. Page 31 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
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.
General Matters In this Annual Report on Form 10-K, unless the context otherwise requires, the terms the "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc. and its wholly-owned subsidiaries. We were incorporated on December 14, 2016 pursuant to the Business Corporations Act (British Columbia).
General Matters In this Annual Report on Form 10-K, unless the context otherwise requires, the terms the "Company," "we," "us" and "our" refer to Viemed Healthcare, Inc. and subsidiaries in which it has a controlling financial interest. We were incorporated on December 14, 2016 pursuant to the Business Corporations Act (British Columbia).
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.
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 were $4.6 million as of December 31, 2024.
Net cash provided by operating activities during the year ended December 31, 2022 was $27.7 million, resulting from net income of $6.2 million, increased by net income adjustments of $21.7 million and a change in net working capital of $0.1 million.
Net cash provided by operating activities during the year ended December 31, 2023 was $45.2 million, resulting from net income of $10.2 million, increased by net income adjustments of $27.2 million and a change in non-cash working capital of $7.8 million.
The increase in service revenue is primarily due to the addition of our healthcare staffing offerings. While ventilator rentals continue to make up the majority of our revenue, the organic and acquired growth of PAP and oxygen related sales and services, as well as our healthcare staffing offerings, is contributing significantly to the diversity of our overall revenue mix.
While ventilator rentals continue to make up the majority of our revenue, the growth of PAP and oxygen related sales, as well as our healthcare staffing offerings, is contributing to the diversity of our overall revenue mix.
The following table presents our material contractual obligations and commitments to make future payments as of December 31, 2023: Within 12 Months Beyond 12 Months Debt Obligations, including interest $ 1,617 $ 7,911 Lease Obligations 1,130 2,666 Total $ 2,747 $ 10,577 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 December 31, 2023.
The following table presents our material contractual obligations and commitments to make future payments as of December 31, 2024: Within 12 Months Beyond 12 Months Debt Obligations, including interest $ 758 $ 4,720 Lease Obligations 1,054 2,237 Total $ 1,812 $ 6,957 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 December 31, 2024.
(2) Vent Patients represents the number of active ventilator patients on recurring billing service at the end of each calendar quarter.
(2) Vent Patients represents the number of active ventilator patients on recurring billing service at the end of each calendar quarter. (3) PAP Therapy Patients represents the number of distinct patients billed for PAP therapy services during each calendar quarter.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2023 was $52.1 million, primarily due to the net cash paid for the acquisition of HMP of $28.6 million and $26.1 million of purchases of property and equipment, partially offset by $2.6 million of sales proceeds from the disposal of property and equipment.
Net cash used in investing activities during the year ended December 31, 2023 was $52.1 million , primarily due to the net cash paid for the acquisition of HMP of $28.6 million .
Dollars, except per share amounts) December 31, 2023 and 2022 The below table highlights summary financial and operational metrics for the last eight quarters. (Tabular amounts expressed in thousands of U.S.
Page 32 The below table highlights summary financial and operational metrics for the last eight quarters (expressed in thousands of U.S. Dollars, except operational information).
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.
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 amount, an adjustment is made in the period that these payment differences are determined.
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.
The overall increase in 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, which was partially due to the acquisition of Home Medical Products, Inc. (“HMP”) on June 1, 2023.
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. Page 33 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
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 other home medical offerings.
For the year ended December 31, 2023, we generated revenues of $183.0 million and had net income of $10.2 million, compared to revenues of $138.8 million and net income of $6.2 million for the year ended December 31, 2022. Excluding COVID-19 response sales and services, net revenue increased $46.5 million (or 34.0%) from the comparable period in 2022.
For the year ended December 31, 2024, we generated revenues of $224.3 million and had net income of $11.4 million, compared to revenues of $183.0 million and net income of $10.2 million for the year ended December 31, 2023. Net revenue increased $41.2 million (or 22.5% ) from the comparable period in 2023.
Dollars, except per share amounts) December 31, 2023 and 2022 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2023 2022 Net Cash provided by (used in): Operating activities $ 45,212 $ 27,748 Investing activities (52,113) (23,976) Financing activities 2,826 (15,266) Net decrease in cash and cash equivalents $ (4,075) $ (11,494) Net Cash Provided by Operating Activities Net cash provided by operating activities during the year ended December 31, 2023 was $45.2 million, resulting from net income of $10.2 million, increased by net income adjustments of $27.2 million and a change in net working capital of $7.8 million.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 Net Cash provided by (used in): Operating activities $ 39,089 $ 45,212 Investing activities (30,699) (52,113) Financing activities (3,689) 2,826 Net increase (decrease) in cash and cash equivalents $ 4,701 $ (4,075) Net Cash Provided by Operating Activities Net cash provided by operating activities during the year ended December 31, 2024 was $39.1 million, resulting from net income of $11.4 million, increased by net income adjustments of $27.3 million and offset by an increase in non-cash working capital of $0.4 million.
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 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Net Income $ 3,477 $ 2,919 $ 2,330 $ 1,517 $ 2,438 $ 1,055 $ 967 $ 1,762 Add back: Depreciation & amortization 5,918 5,975 5,207 4,762 4,373 4,120 3,740 3,397 Interest expense (income) 256 237 (20) (49) 32 42 59 64 Stock-based compensation (a) 1,534 1,453 1,471 1,391 1,317 1,309 1,271 1,305 Transaction costs (b) 61 177 94 206 — — — — Income tax expense 1,599 1,320 728 501 1,146 456 421 745 Adjusted EBITDA $ 12,845 $ 12,081 $ 9,810 $ 8,328 $ 9,306 $ 6,982 $ 6,458 $ 7,273 (a) Represents non-cash, equity-based compensation expense associated with option and RSU awards.
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 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Net Income attributable to Viemed Healthcare, Inc. $ 4,316 $ 3,878 $ 1,468 $ 1,603 $ 3,477 $ 2,919 $ 2,330 $ 1,517 Add back: Depreciation & amortization 6,366 6,408 6,309 6,285 5,918 5,975 5,207 4,762 Interest expense (income) 147 225 254 150 256 237 (20) (49) Stock-based compensation (a) 1,521 1,712 1,620 1,432 1,534 1,453 1,471 1,391 Transaction costs (b) 11 12 221 110 61 177 94 206 Impairment of assets (c) — 125 2,173 — — — — — Income tax expense 1,881 1,594 768 518 1,599 1,320 728 501 Adjusted EBITDA $ 14,242 $ 13,954 $ 12,813 $ 10,098 $ 12,845 $ 12,081 $ 9,810 $ 8,328 (a) Represents non-cash, equity-based compensation expense associated with option and RSU awards.
If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity- Page 37 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 linked or debt financings.
If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. We may seek to raise additional funds through equity, equity-linked or debt financings.
Purchases of property and equipment during the year ended December 31, 2023 were primarily related to medical equipment rented to our patients. Cash purchases of property and equipment represents a $3.2 million, or 14.0%, increase year over year.
Net cash used for capital expenditures represents a $3.9 million, or 17%, increase year over year. Purchases of property and equipment were primarily related to medical equipment rented to our patients.
Our respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care. 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.
Our respiratory care programs are designed specifically for payors to have the ability to treat patients in the home for less total cost and with a superior quality of care.
We combine the benefits of home ventilation support with licensed RTs to drive improved patient outcomes and reduce costly hospital readmissions. 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. We currently serve patients in all 50 states.
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. We currently serve patients in all 50 states. Viemed anticipates expanding its workforce of RTs to support the Company's growth and ensure the high service model is maintained in the home.
Our annual estimated effective tax rate for 2023 is 28.8%. Net Income For the year ended December 31, 2023, net income was $10.2 million, an increase of $4.0 million (or 64.6%) from the comparable period in 2022.
Our annual estimated effective tax rate for 2024 is 29.4% . Net Income For the year ended December 31, 2024, net income was $11.4 million, an increase of $1.2 million (or 11.4%) from the comparable period in 2023. The increase in net income was primarily a result of the organic growth of the business and expansion of the patient base.
This increase is attributed to the expense of additional stock-based awards during 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.
We anticipate that as we expand our workforce, incorporating stock-based awards as a component of employee compensation, stock-based compensation expenses will rise correspondingly. Historically, revenue growth has outpaced the growth in stock-based compensation. As we transition more of our stock-based compensation from phantom stock liability awards to equity awards, we expect stock-based compensation expense to increase in 2025.
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. Page 35 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
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. Page 37 The Company had historically utilized Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to certain non-Medicare payors for reimbursement.
As a result of continued paydowns on debt issued to fund the acquisition of HMP, we expect net interest expense to decrease in 2024 relative to 2023. Provision (Benefit) for Income Taxes For the year ended December 31, 2023, the provision for income taxes was a $4.1 million expense, compared to a $2.8 million expense during the 2022 period.
We expect to utilize positive cash flow to further reduce outstanding debt which would result in a reduction in net interest expense in 2025 relative to 2024. Page 35 Provision for Income Taxes For the year ended December 31, 2024, the provision for income taxes was a $4.8 million expense, compared to a $4.1 million expense during the 2023 period.
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 net interest expense (income), taxes, stock based compensation, depreciation of property and equipment, and amortization of intangible assets.
In calculating Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income including depreciation and amortization of capitalized assets, net interest expense (income), stock based compensation, transaction costs, impairment of assets, and taxes.
As of December 31, 2023, the Company had cash and cash equivalents of $12.8 million. Use of Funds 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.
The Company was in compliance with all covenants under the 2022 Senior Credit Facilities in effect at December 31, 2024. Page 39 Use of Funds 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.
The primary changes in working capital were an increase in net accounts receivable of $2.6 million and an increase in prepaid expenses and other assets of $2.8 million, offset by an increase in accrued liabilities of $2.5 million and a net increase in income taxes payable of $1.9 million.
The primary change in non-cash working capital was an increase in net accounts receivable of $6.1 million, partially offset by an increase in accrued liabilities of $2.9 million.
Dollars, except per share amounts) December 31, 2023 and 2022 Cost of Revenue and Gross Profit For the year ended December 31, 2023, cost of revenue totaled $70.2 million, an increase of $16.1 million (or 29.7%) from the comparable period in 2022.
Page 34 Cost of Revenue and Gross Profit For the year ended December 31, 2024, cost of revenue totaled $91.1 million, an increase of $20.8 million (or 29.7%) from the comparable period in 2023. Gross profit percentage decreased from approximately 61.6% to approximately 59.4% from the year ended December 31, 2023 to the year ended December 31, 2024, respectively.
Net cash used in investing activities during the year ended December 31, 2022 was $24.0 million, consisting of $22.9 million of purchases of property and equipment, $2.0 million in debt investments, and $0.1 million in equity investments, partially offset by $1.1 million of sales proceeds from the disposal of property and equipment.
Net Cash Used in Investing Activities Net cash used in investing activities during the year ended December 31, 2024 was $30.7 million. Net cash used for capital expenditures during the period was $27.5 million and consisted of $37.8 million of purchases of property and equipment, partially offset by $10.3 million of sales proceeds from the disposal of property and equipment.
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 year ended December 31, 2023, net interest expense totaled $0.4 million, an increase of $0.2 million from the comparable period in 2022.
Interest Expense, Net For the year ended December 31, 2024, net interest expense totaled $0.8 million, an increase of $0.4 million from the comparable period in 2023. The increase in net interest expense is primarily due to outstanding borrowings as a result of debt issued to fund acquisitions.
Outstanding borrowings under the 2022 Term Loan Facility and 2022 Revolving Credit Facility were $4.9 million and $2.0 million, respectively, as of December 31, 2023.
There were no outstanding borrowings under the 2022 Revolving Credit Facility as of December 31, 2024.
Dollars, except vent patients) For the quarter ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Financial Information: Revenue $ 50,739 $ 49,402 $ 43,311 $ 39,556 $ 37,508 $ 35,759 $ 33,310 $ 32,255 Gross Profit 32,111 30,562 26,106 24,004 22,896 21,651 20,390 19,743 Gross Profit % 63 % 62 % 60 % 61 % 61 % 61 % 61 % 61 % Net Income 3,477 2,919 2,330 1,517 2,438 1,055 967 1,762 Cash and Cash Equivalents (As of) 12,839 10,078 10,224 23,544 16,914 21,478 21,922 29,248 Total Assets (As of) 154,895 149,400 149,117 124,634 117,043 119,419 115,904 119,007 Adjusted EBITDA (1) 12,845 12,081 9,810 8,328 9,306 6,982 6,458 7,273 Operational Information: Vent Patients (2) 10,327 10,244 10,005 9,337 9,306 9,127 8,837 8,434 (1) Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.
For the quarter ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Financial Information: Revenue $ 60,695 $ 58,004 $ 54,965 $ 50,593 $ 50,739 $ 49,402 $ 43,311 $ 39,556 Gross Profit $ 36,138 $ 34,371 $ 32,892 $ 29,802 $ 32,111 $ 30,562 $ 26,106 $ 24,004 Gross Profit % 60 % 59 % 60 % 59 % 63 % 62 % 60 % 61 % Net Income attributable to Viemed Healthcare, Inc. $ 4,316 $ 3,878 $ 1,468 $ 1,603 $ 3,477 $ 2,919 $ 2,330 $ 1,517 Cash and Cash Equivalents (As of) $ 17,540 $ 11,347 $ 8,807 $ 7,309 $ 12,839 $ 10,078 $ 10,224 $ 23,544 Total Assets (As of) $ 177,069 $ 169,526 $ 163,947 $ 154,875 $ 154,895 $ 149,400 $ 149,117 $ 124,634 Adjusted EBITDA (1) $ 14,242 $ 13,954 $ 12,813 $ 10,098 $ 12,845 $ 12,081 $ 9,810 $ 8,328 Operational Information: Vent Patients (2) 11,795 11,374 10,905 10,450 10,327 10,244 10,005 9,337 PAP Therapy Patients (3) 21,338 19,478 17,349 15,726 14,900 14,788 13,313 8,097 Sleep Resupply Patients (4) 24,478 22,143 20,185 18,904 18,902 18,544 12,572 7,279 (1) Refer to "Non-GAAP Financial Measures" section below for definition of Adjusted EBITDA.
Selling, General and Administrative Expense Selling, general and administrative expenses as a percentage of revenue decreased to 48.0% for the year ended December 31, 2023 compared to 49.1% for the year ended December 31, 2022.
However, gross profit percentage is likely to be negatively impacted by the continued diversification of our product and service offerings. Selling, General and Administrative Expense Selling, general and administrative expenses as a percentage of revenue improved to 47.4% for the year ended December 31, 2024 compared to 48.0% for the year ended December 31, 2023.
Dollars, except per share amounts) December 31, 2023 and 2022 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 GAAP measures.
Page 36 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"). Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Research and Development Costs For the year ended December 31, 2023, research and development costs totaled $2.8 million, an increase of $0.1 million (or 3.2%) from the comparable period in 2022.
We expect that selling, general and administrative expenses as a percentage of revenue will continue to improve in 2025 due to increased efficiencies and costs optimization efforts. Research and Development Costs For the year ended December 31, 2024, research and development costs totaled $3.1 million, an increase of $0.3 million (or 10.3%) from the comparable period in 2023.
Dollars, except per share amounts) December 31, 2023 and 2022 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022: The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 % of Total Revenue 2022 % of Total Revenue $ Change % Change Revenue $ 183,008 100.0 % $ 138,832 100.0 % $ 44,176 31.8 % Cost of revenue 70,225 38.4 % 54,152 39.0 % 16,073 29.7 % Gross profit 112,783 61.6 % 84,680 61.0 % 28,103 33.2 % Selling, general and administrative 87,884 48.0 % 68,161 49.1 % 19,723 28.9 % Research and development 2,782 1.5 % 2,696 1.9 % 86 3.2 % Stock-based compensation 5,849 3.2 % 5,202 3.7 % 647 12.4 % Depreciation and amortization 1,391 0.8 % 1,012 0.7 % 379 37.5 % Loss on disposal of property and equipment 645 0.4 % 346 0.2 % 299 86.4 % Other income, net (98) (0.1) % (989) (0.7) % 891 (90.1) % Income from operations 14,330 7.8 % 8,252 5.9 % 6,078 73.7 % Non-operating income and expenses Income from equity method investments 485 0.3 % 935 0.7 % (450) (48.1) % Interest expense, net (424) (0.2) % (197) (0.1) % (227) 115.2 % Net income before taxes 14,391 7.9 % 8,990 6.5 % 5,401 60.1 % Provision for income taxes 4,148 2.3 % 2,768 2.0 % 1,380 49.9 % Net income $ 10,243 5.6 % $ 6,222 4.5 % $ 4,021 64.6 % Revenue The following table summarizes our revenue for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 % of Total Revenue 2022 % of Total Revenue $ Change % Change Net revenue from rentals Ventilator rentals, non-invasive and invasive $ 108,258 59.2 % $ 92,710 66.8 % $ 15,548 16.8 % Other home medical equipment rentals 38,315 20.9 % 21,446 15.4 % 16,869 78.7 % Net revenue from sales and services Equipment and supply sales 25,770 14.1 % 13,927 10.0 % 11,843 85.0 % COVID-19 response sales and services — — % 2,278 1.6 % (2,278) (100.0) % Service revenues 10,665 5.8 % 8,471 6.1 % 2,194 25.9 % Total net revenue $ 183,008 100.0 % $ 138,832 100.0 % $ 44,176 31.8 % For the year ended December 31, 2023, revenue totaled $183.0 million, an increase of $44.2 million (or 31.8%) from the comparable period in 2022.
Page 33 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023: The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 % of Total Revenue 2023 % of Total Revenue $ Change % Change Revenue $ 224,257 100.0 % $ 183,008 100.0 % $ 41,249 22.5 % Cost of revenue 91,054 40.6 % 70,225 38.4 % 20,829 29.7 % Gross profit 133,203 59.4 % 112,783 61.6 % 20,420 18.1 % Selling, general and administrative 106,199 47.4 % 87,884 48.0 % 18,315 20.8 % Research and development 3,068 1.3 % 2,782 1.5 % 286 10.3 % Stock-based compensation 6,285 2.8 % 5,849 3.2 % 436 7.5 % Depreciation and amortization 1,483 0.6 % 1,391 0.8 % 92 6.6 % Loss (gain) on disposal of property and equipment (1,905) (0.8) % 645 0.4 % (2,550) (395.3) % Other expense (income), net 173 0.1 % (98) (0.1) % 271 (276.5) % Income from operations 17,900 8.0 % 14,330 7.8 % 3,570 24.9 % Non-operating income and expenses Income (expense) from investments (954) (0.4) % 485 0.3 % (1,439) (296.7) % Interest expense, net (776) (0.4) % (424) (0.2) % (352) 83.0 % Net income before taxes 16,170 7.2 % 14,391 7.9 % 1,779 12.4 % Provision for income taxes 4,761 2.1 % 4,148 2.3 % 613 14.8 % Net income $ 11,409 5.1 % $ 10,243 5.6 % $ 1,166 11.4 % Net income attributable to noncontrolling interest 144 0.1 % — — % 144 NM Net income attributable to Viemed Healthcare, Inc. $ 11,265 5.0 % $ 10,243 5.6 % $ 1,022 10.0 % Revenue The following table summarizes our revenue for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 % of Total Revenue 2023 % of Total Revenue $ Change % Change Net revenue from rentals Ventilator rentals, non-invasive and invasive $ 124,577 55.6 % $ 108,258 59.2 % $ 16,319 15.1 % Other home medical equipment rentals 48,651 21.7 % 38,315 20.9 % 10,336 27.0 % Net revenue from sales and services Equipment and supply sales 30,896 13.7 % 25,770 14.1 % 5,126 19.9 % Service revenues 20,133 9.0 % 10,665 5.8 % 9,468 88.8 % Total net revenue $ 224,257 100.0 % $ 183,008 100.0 % $ 41,249 22.5 % For the year ended December 31, 2024, revenue totaled $224.3 million, an increase of $41.2 million (or 22.5%) from the comparable period in 2023.
Selling, general and administrative expenses totaled $87.9 million for the year ended December 31, 2023, an increase of $19.7 million (or 28.9%) from the comparable period in 2022.
Selling, general and administrative expenses totaled $106.2 million for the year ended December 31, 2024, an increase of $18.3 million (or 20.8%) from the comparable period in 2023. The improvement in selling, general, and administrative expenses as a percentage of revenue is attributable to economies of scale and improvements in operational efficiencies.
Purchases of property and equipment during the year ended December 31, 2022 were primarily related to medical equipment rented to our patients. Net Cash Provided by (Used in) Financing Activities Net cash provided by financing activities during the year ended December 31, 2023 was $2.8 million.
Net cash used for capital expenditures during the period was $23.5 million and consisted of $26.1 million of purchases of property and equipment, partially offset by $2.6 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.
However, the policies 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.
However, the policies noted below could be deemed to meet the SEC’s definition of a critical accounting estimate. Accounts Receivable Accounts receivable are recorded based upon contractually agreed-upon rates, reduced by estimated adjustments for variable consideration for implicit price concessions related to sales revenues and estimated probable losses related to rental revenues.
We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 59.2% and 67.9% of our traditional revenue, excluding COVID-19 response sales and services for the years ended December 31, 2023 and 2022, respectively.
We derive the majority of our revenue through the rental of non-invasive and invasive ventilators which represented 55.6% and 59.2% of our revenue for the years ended December 31, 2024 and 2023, respectively. We combine the benefits of home ventilation support with licensed RTs to drive improved patient outcomes and reduce costly hospital readmissions.
The net income adjustments primarily consisted of $15.6 million of depreciation and amortization, $5.2 million of stock-based compensation, $1.7 million of deferred income tax expense, and $1.1 million of distributions of earnings received from equity method investments, offset by a $1.4 million change in inventory reserve.
The net income adjustments primarily consisted of $25.4 million of depreciation and amortization, $6.3 million of stock-based compensation, and an impairment loss on debt investment of $1.3 million, partially offset by a $3.8 million change in deferred tax asset and a $1.9 million gain on disposal of property and equipment.
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.
The decrease in gross profit percentage is primarily due to migration of the revenue mix associated with product and service diversification. In 2025, gross profit in absolute dollars is expected to continue increasing, supported by overall revenue growth, subsiding inflationary cost pressures, and favorable reimbursement rate adjustments.
Our full time employee count increased from 743 on December 31, 2022 to 996 on December 31, 2023, an increase o f 34%, which was partially due to the acquisition of HMP on June 1, 2023.
Our full-time employee count increased from 996 on December 31, 2023 to 1,179 on December 31, 2024, an increase o f 18% . Employee compensation expenses increased $13.3 million (or 21% ) as a result of the increase in our employee headcount and increases in incentive and volume-based compensation.
Net income as a percentage of net revenue increased from 4.5% for the year ended December 31, 2022 to 5.6% for the year ended December 31, 2023, primarily due to improvements in selling, general, and administrative expenses associated with increased efficiencies and stabilizing costs. Page 34 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Net income as a percentage of net revenue decreased from 5.6% for the year ended December 31, 2023 to 5.1% for the year ended December 31, 2024, primarily due to non-operating investment losses and an impairment of outstanding litigation funds receivable.
Removed
As of June 30, 2023, we determined that we no longer qualify as a “smaller reporting company,” but we are not 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) until our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
Added
Discussion in this Form 10-K includes results of operations and financial condition for 2024 and 2023 and year-over-year comparisons between 2024 and 2023.
Removed
As a result, this Annual Report on Form 10-K is only required to comply with the smaller company disclosure obligations. 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.
Added
For discussion on results of operations and financial condition pertaining to 2022 and year-over-year comparisons between 2023 and 2022, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Removed
We expect to continue to employ more RTs in order to assure our high service model is accomplished in the home. As of December 31, 2023, we employed 372 licensed RTs, representing approximately 37% of our company-wide employee count.
Added
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, the sale of associated supplies, and healthcare staffing services.
Removed
Page 30 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S. Dollars, except per share amounts) December 31, 2023 and 2022 Our primary sources of capital to date have been from operating cash flows.
Added
As of December 31, 2024, we employed 404 licensed RTs, representing approximately 34% of our company-wide employee count. Beyond fulfilling its internal staffing needs, Viemed also provides healthcare staffing and recruitment services, offering tailored workforce solutions to external healthcare institutions and partners seeking qualified clinical professionals.
Removed
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. Business Combinations The Company applies the acquisition method of accounting for business acquisitions.
Added
Revenue derived from the rental and sale of home medical equipment represented a combined 91.0% and 94.2%, respectively, of Viemed’s 2024 and 2023 revenue. Page 31 Our primary sources of capital to date have been from operating cash flows.
Removed
The results of operations of the businesses acquired by the Company are included as of the respective acquisition date. The acquisition-date fair value of the consideration transferred, including the fair value of any contingent consideration, is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.
Added
(4) Sleep Resupply Patients represents the number of distinct patients who received supplies through our sleep resupply program during each calendar quarter.
Removed
To the extent the acquisition-date fair value of the consideration transferred exceeds the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill.
Added
The primary driver of this growth was our ventilator rental revenue, which increased by $16.3 million (or 15.1%) due to higher patient volumes associated with strong demand for ventilation services.
Removed
Patient relationships, medical records and patient lists are not reported as separate intangible assets due to the regulatory requirements and lack of contractual agreements, but are part of goodwill.
Added
Additionally, rental revenue from other Home Medical Equipment (HME) increased by $10.3 million (or 27.0%) due to an expanding patient base, robust demand for Positive Airway Pressure (PAP) therapy, oxygen therapy, and percussion vest services.
Removed
Customer related relationships are not reported as separate intangible assets, but are also part of goodwill as authorizing physicians are under no obligation to refer the Company’s services to their patients, who are free to change physicians and service providers at any time.
Added
Equipment and supply sales grew by $5.1 million (or 19.9%) largely attributable to the success of our sleep resupply program, which was further enhanced by the integration of resupply programs from acquisitions. Furthermore, services revenue experienced an increase of $9.5 million (or 88.8%), primarily due to the growth of healthcare staffing offerings.
Removed
The Company may adjust the preliminary purchase price allocation, as necessary, as it obtains more information regarding asset valuations and liabilities assumed that existed but were not available at the acquisition date, which is generally up to one year after the acquisition closing date. Acquisition related costs are recognized separately from the business combination and are expensed as incurred.
Added
Loss (gain) on disposal of property and equipment For the year ended December 31, 2024, gain on disposal of property and equipment totaled $1.9 million compared to loss on disposal of property and equipment of $0.6 million for the year ended December 31, 2023.
Removed
Page 32 VIEMED HEALTHCARE, INC. (Tabular amounts expressed in thousands of U.S.
Added
The gain primarily resulted from proceeds related to the sale of recalled ventilators back to the manufacturer. We anticipate additional future gains from the disposal of eligible devices, as the proceeds from these disposals are expected to exceed their net book value.

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