Protech has 'robust pipeline of acquisition targets'

CINCINNATI - Protech Home Medical is poised to grow in a “fragmented and shrinking” home respiratory market, company execs said on an earnings call last week.

“Demand for services continues to rise, but the supply side is fragmented and shrinking, as significant reimbursement cuts have reduced the number of providers,” said CEO Greg Crawford. “This is an industry of scale and Protech is still at the early stages of reaping the full benefits of being one of the only companies that can benefit from that, given our relative size.”

Protech reported revenues of $19.5 million for the fourth quarter ended Sept. 30, 2019, an 8% increase year over year. For the full year, it reported revenue of $81 million, a 15% increase year over year, and recurring revenue of $55.1 million, a 26% increase.

A key part of Protech's growth strategy: acquisitions. It remains focused on companies with annual revenues of $4 million to $12 million, said Crawford.

Protech acquired Kentucky-based Cooley Medical, with six locations, and Maine-based Acadia Medical, with four locations, in the fourth quarter of 2019. It aims to have both companies integrated by April.

Going forward, Protech has a “robust pipeline of acquisition targets,” says Crawford.

“I'm very optimistic that you will see the pace of acquisitions continue or even accelerate in the quarters to come,” he said.

Also in 2019, Protech sold its Patient Home Monitoring division, which provided Coumadin monitoring services, for $4.5 million.

Company execs also commented on non-invasive ventilators, which are included in Round 2021 of the competitive bidding program, and which account for about 17% of Protech's overall revenue. Crawford says he expects bid rates will affect “less than 5% or so” of revenue for the product category.