Good day, and welcome to the Viemed Third Quarter Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Todd Zehnder, Chief Operating Officer. Please go ahead.

Thank you, John. Good morning, everyone. Please note that remarks in this conference call regarding our expectations, future plans, and intentions may constitute forward-looking information as such term is defined in applicable Canadian Securities Legislations. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the company's current views and intentions with respect to future events and current information available to the company and are subject to certain risks, uncertainties, and assumptions. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of the risks or uncertainties materialize. Examples of such risk factors are discussed or referred to in the company's disclosure documents filed with security regulatory authorities in certain provinces of Canada, and are available at sedar.com. Should any factor affect the company in an unexpected manner or should assumptions underline the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by the cautionary statement. Moreover, the company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this conference call is made as of the date hereof, and the company undertakes no obligation to publically update or revise any forward-looking information other than as required by applicable law. The third quarter financial results, news release, and related financial statements and the MD&A are now available on SEDAR. Now, I'll turn it over to Casey to get things started.

All right. Thanks Todd. Good morning and thank you for joining us on our call today. Once again I'm pleased that Todd and I have the opportunity to report to our current prospective investors on yet another record quarter at Viemed. I will spend this morning updating our audience on the many initiatives that have been responsible for driving our growth, which led to us beating our guidance. Before I begin the update on the quarter, let me first review for our first time listeners what we do here at Viemed. At Viemed, we place respiratory therapist inside the home to treat patients with very sick lungs. These first in class therapists provide around the clock care and offer education and peace of mind to a growing population of patients struggling with various chronic respiratory illnesses. Many of our patients are unfortunately at the end stage of their life, at a time when they are most likely to visit the hospital. Our service prevents these hospital readmissions from occurring. We treat patients struggling with a variety of disease states including chronic obstructive pulmonary disease, neuromuscular diseases, sleep apnea and many more. The most common piece of equipment we use is a non-invasive ventilator which allows us to ventilate the patient with a mask versus forcing them to be in the bed incubated. The U.S. healthcare system has 11,000 new people qualifying for Medicare every day for the next 19 years, which is forcing our country to find and embrace more cost effective value based health care solutions. Our company has been a position to offer this solution and as a result, we have experience rapid growth for the past 6 years. We are a very patient centered business dedicated to increasing the quality of life for our patient. This commitment…

All right. Thanks Casey. In reviewing all the financial results, the figures are in U.S. dollars and as mentioned all results are available on SEDAR. We generated revenue of $17.2 million during the third quarter of 2018 as compared to revenues of $12.5 million in the third quarter of 2017, which equates to a 37% increase. Our revenues came in slightly higher than our previously guided range for the third quarter revenues, as a result of continuing to outperform our new patient expectations and realizations per patient. Additionally, our gross margin percentage was 76% during the current quarter as compared to 75% last year. Adjusted EBITDA which excludes appreciation and stock based compensation totaled $4.4 million for the quarter, which is a 25% margin relatively consistent with the last few quarters. We have once again redeployed a significant portion of this EBITDA during the current year period as our CapEx totaled $3.1 million primarily driven by new vent purchases to support our going growing patient base. Our SG&A totaled approximately $9.5 million as compared to $5.1 million. As we have previously disclosed, our 2017 results had certain items that could not be accrued until our legal spin out was made. Therefore quarterly comparisons will have some noise in certain areas. Additionally, some of the variable compensation is tied to stock price of the company. Therefore, we have seen an increase in SG&A with the rapid increase in our stock price. We will continue to manage our cost structure as we're growing so rapidly, but we continue to expand in both sales infrastructure as well as new ways to grow. We continue to hire key positions that are setting the company up for future growth and we'll continue to invest in our people and our shareholders as evidenced by our recent…

Okay, thank you Todd. As we enter into the colder months of respiratory season, our team always tends to get really energized on achieving your end goals which usually leads to us finishing the year strong. While the majority of our folks continue down the path of organically drilling our footprint, continue to get to the 95% of the Medicare patients that need it. Myself, Todd, Mike and the rest of our executive team are really focused on additional incremental ways of growing our business in 2019 so just through acquisitions and getting another large payer on board. The VA remains on the top of the priority list as the largest payer that needs Viemed. We have market data that shows an additional 500,000 patients inside their system that qualify for our therapy but have no way of getting it. Our pursued will remain relentless until we have a way of getting our care to these military veterans. In closing, I'd like to thank our listeners and investors for joining us on the call today. As always I'd also like to thank our group of passionate employees that we call Viemed family. At the end of the day, it's our people who drive the performance that build our partnerships. I'm blessed to be leading a group of professionals whose commitment to care leads to lives being saved. Thank you. This will conclude our prepared remarks. We will now open up the floor for further questions.

Thank you. [Operator Instructions] We would take our first question from Brooks O'Neil with Lake Street Capital Markets. Please go ahead, your line is open.

Thank you very much. Good morning, guys. Congratulations on the terrific quarter.

Thank you.

I have few questions. First, I'd like to just follow-on with your comment Casey, on the VA opportunity. Obviously that's a huge number in relation to your current patient population. What do you believe are the items that the VA needs to open the door to Viemed in servicing veterans?

Yeah, the strategy has two pronged, you have to come from the - work from the top and start at the bottom as well. When you're in there talking to a case manager similar to the way we talk to case managers that any hospital Brooks, they understand the machine, they understand the benefits of therapy, but they just don't have a way of ordering it inside of their system. So when you have to go work on getting a code for treating COPD patients with a ventilator then you have to start from the top. And start from the top with the vendor relations department then you go on down to talking to the Chiefs, Medical Officers and making sure that they understand the therapy and agree with it. Having the KPMG data and report, really is already started to help fast tracks some of these conversations and meetings. We have a team built out that work in both from the top and the bottom right now. And we feel confident that it's not if it's just wins. So we're going to get to those patients, there's too many people inside of the system that really need is COPD is 15% more prevalent than the Medicare population and again we're guesstimating that there's 500,000 patients that actually qualify for our therapy. And right now, they're being mistreated, they're being put on a BiPAP and then they're circling back to the medics department, which is the division so. There's a lot of folks that are in need and there's nobody more motivated to do it really than these case managers because they're the ones that are getting burdened with all of these readmissions. So they're graciously helping us try to navigate the waters.

Well keep up the good work there. Second question I have is obviously gross margin bounced up sequentially nicely this quarter and year-over-year. And I see in the third quarter last year, it bounced up meaningfully as well. Is there's something seasonal going on then it affects gross margin mow or is it more related to the things you guys are doing to improve the health of your business?

It's really the latter Brooks. The main thing that are driving the margins up are one scale and you're going - I've mentioned this on the call before, you're not going to see it jump too drastically just because of scale, but you'll have some relative contribution. The second thing is as we continue to move out our lease operating fleet and bring in owned ventilator fleets, just the margins should improve on that. So that's the main reason, there shouldn't be much of a way in cyclical nature to the gross margin.

Okay. That's very helpful. Just speaking about that, have there been in any meaningful changes in relation to reimbursement for the services you provide?

Nothing that we've heard, there's no whispers or anything that we're hearing about reimbursement on, so all things are positive from this point.

Great. So I want to ask just a little detail question. I think you said in your release that your patient count grew 7% sequentially and you're revenue grew 11% sequentially. So I was just wanted to be sure I understood what was driving the slightly faster revenue worlds relative to patient growth?

So it's twofold if you think about it. Most of the time we're sliding vents and so in our release you see that we are talking about our vent patient growth grew 7%. So the reason there the delta is twofold. Like Casey mentioned, our network development group has had some wins this year to where we've been able to increase our realization on some of those vent contracts. And so that will drive - that will drive some inherent higher numbers. And then probably the second which may have more of an impact is some of our other product lines are growing as well and those aren't being cited. So our vent business, our PAP business and our home sleep business are growing pretty dramatically. So those go into the total revenue but they wouldn't increase to 7% growth.

Okay. That makes a ton of sense. I think that's my main questions for now. Thanks for taking my questions and again congratulations on terrific progress.

All right. Thank you. Have a good day.

[Operator Instructions] We will now take our next question from the Doug Cooper of Beacon Securities. Please go ahead your line is open.

Hi. Good morning, guys. Couple of things, first of all Casey, can you remind us how many states you're in now?

We are in 25 states right now, where license to go and there is three additional ones.

So up to 28?

Correct.

Okay. When would we expect, how quickly can you roll out to Nebraska, Utah, California, like when would we expect the first patients from those states?

We are recruiting right after. For the time that we get somebody hire, we'll usually have patience within the first two to three weeks have get them up and running. So it kind of all depends on how fast these recruits come on board. So we hope that patients in those three states by next quarter.

By this quarter you in here currently for Q4?

Yeah, we're halfway through Q4, so you know let's just say half way through calendar Q1.

Okay. Just in California, obviously the biggest state in the U.S. 40 million people. What would - maybe it's a more healthy state to if I can call it that. Like how many patients would there be in California, you know that would qualify for your therapy?

We really don't have that number because most of the data that we look at Doug is it starts with national numbers. I mean we could ballpark it, I have to guess there's at least 100,000 to maybe 200,000 throughout the state. But we don't have real good data state-by-state when it comes to the total population. We know what utilization is at least for CMS purposes in California, but we're not exactly sure what the total market is.

Right. But I guess is it fair to say that of the patients who would qualify for your therapy, would it be the biggest day-to-day potentially of all the ones you have?

Yes, it would. But I mean what you've got to remember is, it's spread out over a huge area. So just because you're in a state it doesn't mean that it is - we would rather probably go into a smaller state that has a high concentration with little competition. And that's why I mean you've heard us say we look at total population but we're really looking at COPD prevalence not just well and then utilization, other ways that we look at where we should go next. So just because we're in California, there's a lot of different areas that we can go into within California there are reps wouldn't touch each other.

Just moving on to the new payers added in this quarter, Casey, you said 24?

24 new contracts, yes.

And you said that was versus 18?

Yes, spread out across our 25 states.

Yeah. If I just look back to my notes, I had an 11 and adds in Q1 in 7 and Q2 that would get to the 18 that you had in the first half, is that right?

That's correct.

So what do you attribute, I mean this is a huge - look like a huge number obviously, is this attributable to the KPMG study or what it attributed to, this is a huge number coming on board?

KPMG definitely have to do with, that's definitely a toolbox that our team is using, but it's really the build out of our team and getting the right people with the right knowledge base, getting aggressive, calling on folks, handling the conversation a whole lot more professionally and getting organized in that department as well to hit them at the right moment in times and whatnot. We really put a large focus on building out our network development team at the beginning of the year and those guys are just finally start to get their groove. And yeah the KPMG results help and that's on the tip of their tongue as this time they got anybody on the phone.

Right. So this be mostly private payers or what?

Private payers, yes.

Yeah, okay. And I think just my last question guys. Just on the bad debt provision there was 10.5% this quarter versus 6.8% in Q2 and 10.9% of revenue in Q1. What is sort of normalized numbers to be moving around just a little bit?

Yeah, like we said in the past 9% to 13% is where we hope to be live and we wanted low as possible but we think that anywhere in the 9% to 13% range sort of is industry in line. We had a real good quarter in Q2, thereby may remember we had frozen money through the Medicare audit at the end of the year. And in the second quarter, we had the majority of that money come through. So while we always felt very comfortable that we're going to collect it, our processes and procedures are to leave bad debt allowances on that and so when it came through, we had an uplift in our profitability as a result of it. So this the 10% range where we're not content with it. We understand it's probably industry normal. We're working to get it lower every quarter. But I think it's within the range that we say is reasonable.

Okay. Sorry one last question. On the rep per patient, that was alluded to earlier just over $3,153 in the quarter, annualized $12,600, due you see that's - you talked with the vent reimbursement sort of relatively flat, the other - lacking a better word - the ancillary revenues are driving that higher, do you still - do you think that can continue to move higher if the CPAP business of the sleep business continues to grow I guess right?

Yeah, I think between the home sleep which yields much more fruit on the PAPs, I think that business is growing, we continue to see it growing and that we've been pushing hard on precautions us and we see that growing as well. So most of our ancillary product lines are in growth mode as well and so we would hope that overtime we can continue to push the realizations for per vent up as a result of that.

Okay. Great. Perfect. Thanks guys and congratulations.

Thanks, Doug.

We will now take our next question from Michael Eisner. Please go ahead, your line is open.

Hi, Great. Great quarter there.

Thank you.

All right. One question, maybe it's two parts. Why it's so long to apply for NSADAQ and do you what percent of your shareholders are U.S.?

Well the process to get listed on a U.S. exchange really starts with from our perspective of becoming an SEC registrar, and so that is what is driving that. We're not going to stay a Canadian registrar and list in the U.S. We're actually going to become an SEC registrant and move both of the listings as our - keep our Canadian listing and U.S. listing whichever that may be as a U.S. SEC Company. And the second part is the percentage of shareholder, we run that number once a year from a geographic perspective. And right now my guess would be just knowing some people that are coming in and out, I would say maybe 30% of our shareholder roughly 30%, 35% are U.S.

Back to the first part, you haven't answered why one or two years, does it really take that long?

Well, I mean to go through an SEC registration process is a long period of time. So once we decide that we're going to move to that, take that move, it does take a long period of time.

To plan and starting that now?

We are an initial discussions on that process now. But that's all on I am going to comment on it because until we actually make the application, we're going to - we're just going to tell we're putting a long range out there?

Okay. Thank you.

That concludes today's call. Thank you for your participation. You may now disconnect.