stockfy wrote: Pathological liar a.k.a. besttobe alias, I'm sorry for your huge losses from VMD. This is how VMD benefits from Phillips. Facts and excerpts from the latest CC are below.
"The oxygen and sleep business continues to expand across the country due to hiring of direct and Home Sleep Delivered reps, who are specifically focused on selling sleep, oxygen, and View. We are up to 14 Home Sleep reps spread out across seven states with many in the training pipeline. Also, with the Viemed reps being trained on how to sell sleep and oxygen in a unique way through project Next Level, the stage is set for significant growth in these product sectors throughout the remainder of 2021.
The sleep industry was rock in the second quarter with Philips announcing a recall on one of their most popular sleep apnea machines, the DreamStation 1. The recall of these machines has put the entire country in dire need of sleep apnea equipment with Philips roughly supplying approximately 50% of the marketplace. While Philips has been slow with rolling out their plans for a solution to the recall, Viemed has been proactively acquiring replacement inventory from alternative manufacturers.
The recall is currently creating mass disruption in the sleep industry, such disruption that may cause many companies to consolidate or go under. While we have not seen significant supply disruption for vents because they are not going to be replaced by CPAPs, we are taking necessary steps to make sure that vent supply and relationships for alternative vendors are established and nurtured.
We have always been a device diagnostic company focused on service rather than equipment. And there couldn't be a more pertinent time to be positioned to capitalize on opportunities presented by the recall. At Viemed, we tend to shine when change, disruption, and uncertainty are upon us as evidenced by our ability during the pandemic to stand up a contact tracing call center for the state of Arizona."
and:
"Yes. I mean our margins are getting back to historical numbers where we were pre-pandemic from a percentage basis. And so that's a good sign that our business has not fundamentally changed while there may be ebbs and flows in costs that may come. The Next Level cost is inconsequential when you look at the productivity increases that the sales reps should come out of it. As it relates to the recall specifically, our dialogue thus far with Philips is that entire cost structure will be pushed on to them. All of the PAP trade outs will be handled by Philips. We have delivered a list of active patients and they will be handling that. And any change out on the vents, there won't be a full machine change out, there may be a back part change out. Philips is actually going to bear the cost of that.
So from a P&L standpoint, you should see no negative impact, and sort of like Casey alluded to in his prepared remarks, we're seeing the sleep business as an opportunity just being a larger player and being able to secure some different supply sources. Early in the pandemic, we see thus far, it's been a net-net positive, and we're going to be very opportunistic in the event that people either need strategic partnerships or if there's businesses that need a lifeline from a company like ours."