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Thank you for standing by. This is the conference operator. Welcome to the Protech Home Medical Second Quarter 2020 Financial Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Greg Crawford, Chairman and CEO. Please go ahead.
Thank you, operator, and thank you all for joining us today on the call. My name is Greg Crawford, and I'm the Chairman and Chief Executive Officer of Protech Home Medical. Joining me today is Hardik Mehta, our Chief Financial Officer. On this call, I would like to outline our core business, review our progress year-to-date with a focus on the last quarter and provide you with our updated outlook for 2020. However, before we jump in, let me first take a moment to thank our incredibly talented and dedicated employees who have stepped up in an unprecedented way during the COVID-19 pandemic. It is our employees that have enabled Protech to assist and relieving the strain placed on the traditional health care system by helping to move non-COVID-19 related patients out of the hospital system and into the home. Thereby freeing up beds to manage the large influx of patients that have contracted the virus. Without these hard-working individuals, Protech would not be able to share with you the results we have today. As we walk through these financial results, I hope it will be clear that Protech is in a strong and secure position with respect to our financial performance, our operations, our balance sheet, and the improving organic growth being derived from our first rate infrastructure. We have seen extraordinary resilience in our business model, which this pandemic has underscored as an accelerated tailwind towards in-home health care has become even more prevalent in the health care industry during this period of time. We believe this bodes very well for Protech over the immediate and long term, given our scale, our operating leverage and our key differentiator, the exceptional service capabilities we showcase when working with our patients. We remind you that our remarks today will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please see the reader advisory at the bottom of our results news release as well as our MD&A, which you can find on our website and on SEDAR. The company's actual performance could differ materially from these statements. Yesterday evening, we announced our second quarter financial results for fiscal 2020 and the 3 months ended March 31, 2020. More on these results in a moment, but first, let me provide a brief background on our company. Protech Home Medical provides a diverse offering of home respiratory services and medical equipment for treating in-home patients with chronic conditions in the United States. The company provides a range of products, including oxygen therapy, sleep apnea treatment, certain medical equipment and custom power mobility products. We operate in 10 states with more than 40 locations across the Midwest and the East Coast region, completing hundreds of thousands of deliveries each year to more than 85,000 active patients. With that background, I'd like to hand the call over to Hardik to discuss our second quarter fiscal 2020 financial results.
Thanks, Greg. In reviewing the second quarter fiscal 2020 numbers, please note that all financial values are in Canadian dollars and the full results are available on SEDAR. As discussed on our year-end fiscal 2019 and first quarter fiscal 2020 conference calls and the associated filings, in the fourth quarter fiscal 2019, the company sold Patient Home Monitoring, Inc. also called PHM, an asset we determined as being noncore. As per IFRS, operating results of PHM, Inc. are reported under discontinued operations. As a result, please note that all the numbers for year-to-date and for second quarter of fiscal 2019 have been adjusted for this divestiture and are reported for continuing operations only. In the second quarter, fiscal 2020, Protech completed 63,956 setups or deliveries compared to 51,676 in the corresponding period last year, an increase of 24%. The company generated revenue of $24.1 million in second quarter fiscal 2020, up 15.7% from second quarter fiscal 2019 and up 4% from the first quarter of fiscal 2020. Majority of this was organic growth. Gross margin increased to 73% in the second quarter fiscal 2020 from 70.8% in second quarter of fiscal 2019. Adjusted EBITDA for the second quarter of fiscal 2020 was $4.9 million compared to adjusted EBITDA for second quarter of fiscal 2019 of $3.8 million, representing a 30% increase year-over-year. Adjusted EBITDA margins for the second quarter of fiscal 2020 increased to 20.4% compared to 18.2% for the second quarter of fiscal 2019. SG&A for the second quarter of fiscal 2020 was $12.7 million compared to SG&A for the first quarter of fiscal 2020 of $12.5 million, representing a 2% decrease quarter-over-quarter. This highlights our ability to deliver additional margins on incremental revenue growth. Net income for second quarter of fiscal 2020 was $1.6 million compared to a loss of $0.5 million for second quarter of fiscal 2019, representing a 402% increase year-over-year. This gain was attributed to the change in fair value of debentures. At the end of second quarter fiscal 2020, cash balance was $6.2 million compared to $12.8 million at fiscal year-end 2019. The use of cash is approximately broken down as follows: $4.3 million towards acquisition, $1 million towards net paydown of equipment leases, and about $1.4 million towards working capital, which includes significant increase in inventory, to plan, prepare and respond to the pandemic. At the end of second quarter fiscal 2020, cash flow from operations for the 6 months ending March 2020 was $6 million compared to $4.1 million in the corresponding 6 months period ending March 2019. Current assets totaled more than $30.2 million compared to $23.4 million in net short term liabilities, demonstrating continuing strength in our liquidity. Subsequent to the quarter end, in April 2020, the company received over $7.5 million of payments related to 2 separate provisions of U.S. Coronavirus Aid Relief and Economic Securities Act, also referred to as CARES Act. One provision was to assist company in maintaining their workforce and the second provision was to support health care providers such as Protech. $5.9 million is reflected by the Payment Protection Provision of the CARES Act. As it relates to COVID-19, to echo Greg's point from earlier, we have seen our business model continue to be extremely resilient during these unprecedented times. Our supply chain remains stable, and we continue to see increase from our referral network that are actively seeking to discharge patients from the hospitals into the home. Our balance sheet is in excellent condition, and our operating performance continues to improve. In this quarter, we again posted record revenue and continued to post industry-leading margins. We are confident in our abilities to continue with this trajectory. Our focus remains on accelerating revenue growth, process improvement and cost rationalization. In closing, the industry and company-specific tailwinds continues to present us with an opportunity to seize market share and continue to improve our financial performance, and we are confident in our capabilities to do so aggressively on a go-forward basis. Thank you. And with that update, I will turn the call back to Greg.
Thanks, Hardik. We are extremely pleased to share another record-breaking quarter with strong operating performance and solid organic growth continued to improve through 2020. Our company has been a true growth story in the at-home health care industry prior to COVID-19, and this pandemic has only magnified the point that in-home health care and telehealth are absolutely vital to our overall health care system. And we are excited to help educate, assist and provide exceptional service to our current and future patients. I am pleased with the quick response of the Centers for Medicare & Medicaid Services to remove noninvasive ventilators from the 2021 competitive bidding program. This segment represents 17% of our revenue and continues to grow. This announcement is very comforting to us as it provides a great boost to our patient-centric clinical services, allows us to access our supply chain confidently and gives us greater clarity into the margin outlook on the provision of such equipment for many years to come. Another event that took place subsequent to quarter end, as Hardik mentioned, was the PPP loan we received. This loan helped us protect our employees and allow us to prepare and respond to the pandemic by ensuring that our supply chain continues to operate smoothly as Protech is on the front lines of the United States healthcare industry serving over 85,000 in-home respiratory patients. The alleviation of the strain on the traditional system is imperative, and Protech is uniquely suited to help combat this growing problem. Now I want to take a moment to explain a little more in-depth what we are doing differently and why we have been able to achieve the results we have and why we continue to be so excited about the future. Protech uses unique, efficient delivery cost models and technology to change the way in which home medical equipment is delivered to a growing aging U.S. population. This segment of the market, known as durable medical equipment, or DME providers, is estimated to approximate $60 billion. This is underlined by the fact that over 10,000 people in the U.S. will turn 65 every day for the next 15 years. This is our core market. In the last 12 months, we have set up or delivered just under 0.25 million pieces of equipment to over 85,000 patients. We operate out of over 40 locations in 10 states and now have over 17,000 referring physicians. Our core product offering is for chronic illnesses that are treatable at home. Using streamlined logistics and distribution, Protech can offer home delivery and maintenance on this equipment, which is a first for many of these patients. Given COVID-19 is a respiratory illness, there has been a spotlight on the need for our equipment and our expertise as it relates to the treatment of respiratory illnesses as well as the overarching need for in-home health care with extraordinary patient care, which is where we thrive. There are very few companies like Protech that have the balance sheet, scale and competitive advantages, including those from technology and logistics to benefit from such structural changes that have come from previous reimbursement cuts and now the COVID-19 pandemic. I would now like to review with you the 3 components of our growth strategy. First, we are laser-focused on capturing market share economically and profitably. Our industry growth rate is about 3% to 5% per year. However, we believe we can continue to achieve well more than double the growth rate of the industry by focusing on significantly increasing our market share in key target regions within the markets we serve. To execute on this, we are continuously hiring and training new sales representatives and will continue to expand our product base. It is important to remember that 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. These benefits will further magnify themselves as we continue to grow both organically and through acquisitions. Secondly, we continue to lead the industry in technology deployment and in our use of data mining tools to drive efficiencies and profitability. A patient's ability to order a piece of equipment, a service call or other ancillary option via the touch of a button is where the industry is headed. We have made significant investments in developing these tools and we'll continue to invest in them to continue to maintain our technological advantages over our competitors. Providing exceptional service to our patients through technology will continue to separate us from our competitors who are simply unable to implement technology-based solutions due to their lack of scale and financial capabilities. The third component of our growth strategy is acquisitions. The key focus for our acquisition program is to focus on geographies where we already operate, so that we are best able to integrate acquisition targets onto our platform by consolidating distribution channels, driving efficiencies and substantially improving overall profitability. We have made 2 acquisitions in the last calendar year, which have been successfully integrated. I am very confident in our abilities to continue to integrate acquisitions as we find and execute on them. In light of the current environment, our stance is not wavered. We remain patient and prudent as it comes to our acquisition strategy. We expect to see opportunities with favorable deal terms presenting themselves over the coming months and have the balance sheet to pull the trigger when the right opportunity presents itself. We will not waver from making the right acquisition at the right time for the right consideration. Given the backdrop of the home health care industry, our well-defined 3 pronged strategy and our strong financial position, we will continue to propel our company towards sustained financial growth and continued profitability. On the capital markets front, I am thrilled to announce that the addition of 3 new research analysts covering Protech, including Echelon Wealth Partners, Industrial Alliance Securities and Stifel Nicolaus Canada. This brings our total to 5 analysts that will accelerate and assist us in engaging with new investors to share our exciting story. During the pandemic, we continue to be active in educating investors about the importance of our company, especially in times like this. In this regard, we continue to actively market our company to the investor community through virtual meetings and virtual conferences and will continue to do so. Furthermore, we are excited for our highly anticipated dual listing on the OTCQX. We are currently working through DTC eligibility process to a company our U.S. listing. DTC eligibility will allow current and prospective Protech shareholders in the United States, a more reliable, cost-efficient and timely clearing and settlement for common shares. This is a key milestone towards increasing our market presence in the United States and engaging with shareholders. As for a time line update, given the impact of COVID-19 on staffing levels at various entities involved, the time frame for completion has been lengthened, but we are confident we have the listing completed in the coming weeks. We firmly believe that this makes sense for a company headquartered in the U.S. and deriving 100% of its revenues from U.S. customers. I believe this is the first step towards fulfilling our ambitions of a dual listing on the NASDAQ or the NYSE. At the same time, I want to make it clear that we will remain active in the Canadian Capital markets and expect to do so going forward. I believe that Protech continues to be highly undervalued on a relative basis when compared to its peers. As such, we are committed to tirelessly share and promote our story to close this valuation gap. While we do not release detailed forecast, I continue to stand by our previously stated objective of attaining an annualized revenue run rate of $100 million at some point during 2020, which would equate to an increase of at least 20% on a run rate basis. Finally, as investors think about Protech Home Medical today, I would highlight to them our exceptionally strong balance sheet, our expanding margins and our improving cash flows, all of which have put us in a position to quickly respond to organic growth initiatives and strategic acquisition opportunities. All of this, I believe, makes Protech a truly dynamic home health care company operating in a compelling and growing industry and therefore a truly unique investment opportunity. Once again, I'd like to take a moment to thank the entire Protech team for its tireless efforts and its stakeholders for all of their continued support. We look forward to continuing to demonstrate strong financial results and will continue to communicate with our retail and institutional shareholders, the progress we are making towards our goal.This concludes our prepared remarks and we will now open for questions.
[Operator Instructions] Our first question comes from Doug Cooper with Beacon Securities.
Congratulations on the results, and that was a very thorough recap of the business. So you've gone through a lot of my questions actually. I just want to talk a little bit about the pandemic itself, and you mentioned, obviously, it's a respiratory disease. Can you talk about what impact it's had specifically as we've gone through this, maybe post the quarter end in April and into May? The impact it's had on your ventilator business or your respirator business or oxygen or -- we'll start there.
Sure. The pandemic, in that, I mean business has remained strong and robust respiratory referrals in that throughout the pandemic and has even continued into May here, with special attention to a lot of home oxygen prescribed in that for patients and that more than we would typically see. As far as our ventilator business, nothing has really been related to COVID-19 in that, that is not really treating patients at home with a ventilation in that due to COVID-19 that we've seen yet. But we've seen a robust increase in our ventilator business year-over-year. In that -- and really, year-to-date and our revenues increased approximately about 11%. So we continue to see that line of business and that the revenue increase. As far as the percentage of our overall revenue, it stayed relatively flat just due to the 2 most recent acquisitions. We've really just started our program of selling that product in that within those business units. So we expect that as an overall percentage of revenue to increase, but on same-store sales, we're very pleased to announce that we've seen a double-digit increase year-to-date.
Great. You mentioned, obviously, home health care, telehealth is clearly the buzzword going around. And particularly, obviously, a broad client base. Is the billing codes in place? And how specifically bear in mind that the shift to telehealth, how do you take advantage of that through acquisitions or technology? Maybe you can just talk a little bit about that.
Yes. So telehealth in our space, and that is more of a communication and that of a way that we can get patients set up on equipment. And I'm happy to say that we've been on the telehealth front in that for over 2 years now, we've had that as an option. We've seen an increased demand in that for patients that want to utilize a telehealth platform and either to be trained on their equipment or to troubleshoot. And we think we'll continue to see that trend in that, especially with the potential of the virus and that taking a second wave through the U.S.
And Hardik, just one for me, $6.2 million or so cash at the end of March, the $7.5 million came in subsequent. So is your current cash position around $13 million?
Yes.
Okay. And can you talk about the terms? I know you put it in a press release, but the terms of that the government subsidy, are they repayable, forgivable? What are the chances there that you have to repay that?
So as per the terms of the PPP loan, I think we qualify, and we are very optimistic that we would be able to forgive most of it under the terms and condition of the PPP loan.
Okay. And maybe just one final one for me. You had very strong flow-through to EBITDA from sequentially. The G&A, you think that's pretty well, we should be outside of acquisitions, obviously, but are you pretty much fixed on that G&A front, around $12.5 million. So further improvements in revenue is going to drop to EBITDA. So 20.4% margin. What do you think you can get that to from an EBITDA perspective? And I'll leave it there.
So on the SG&A front, we are very confident that it's steady, and we are optimistic that it's going to see a further decline as a percentage of revenue as we are able to push more revenue through the same infrastructure. We are very confident about that heading into the right direction. What was the second question, Doug?
Just the EBITDA margin, where do you think it can reach?
I mean we've always said it, we have a potential to go into the 22% to 25% range, and we are optimistic about going in those directions. Again, we need to continue working towards that, and we are confident that we are heading in the right direction.
Our next question comes from Doug Loe with Echelon Wealth Partners.
My congratulations on the quarter as well. Just a couple -- well, let's start -- let me follow-up on Doug's questions with regard to EBITDA margins. Maybe just ask it a slightly different way. Have most of the sort of integration synergies that could have been achievable to the Cooley and Acadia acquisitions in fact transpired? Or are there any other incremental EBITDA margin lift that could be achieved just based on additional integration, perhaps SG&A compression there?
A lot -- most of that acquisition-related synergies have been realized at this point. There might be some danglers out there, but nothing major. We -- again, as I mentioned earlier, we feel our SG&A is kind of steady, and we are optimistic that it would further decrease as a percentage of revenue as we process more revenue through the infrastructure.
Got it. Okay. And then if you addressed this in your commentary, apologize, I missed it, but just on bad debt provision, it came in at around 2.1 essentially Q1 '20 levels, strikes me as though there could be a little bit of upward escalation just based on the pandemic macro environment. Do you think that can be sort of stable in some subsequent quarters? Or where do you think that could sort of shift here, say, within the next quarter or 2 when the overall economic macro environment can still continue to be challenging, notwithstanding your own business?
So far, we are not seeing any challenges when it comes to billing. There was a little slowdown early in the quarter on the payment side, but I think we are catching up. We are having some robust collection months. In Q3 so far. So we see that a bad debt percentage steady or decreasing, we really don't see much fluctuations there.
Awesome. That's great. And then thirdly, and then I'll hop back in the queue myself. So just -- congratulations on...
Just Doug, to add to that point, we are -- you can see our AR build up a little bit on Q2, but we're already seeing some robust collections. So the insurance companies are up and live and they are processing our claims. So we are just having a robust collection month so far.
Perfect. Okay. Well, you anticipated my next question, actually. So I'll shift sideways to something else, and then I'll hop back in the queue. So the capital that you've secured here through the CARES Act, congratulations on that. Is most of that -- are you obligated to deploy most of that to staff retention and respiratory therapist retention? Or could part of that be deployed to tangible assets perhaps increasing your ventilator or oxygen therapy capital assets? And I'll leave it there.
So for the PPP, the rules are pretty straightforward. Majority of that has to be used towards payroll and keeping employees employed. And there is some allowance for utilities and basically real estate-related expenses, but those are really the 2 aspects that we need to use our PPP loan for.
Our next question comes from Justin Keywood with Stifel GMP.
Good to see the growth in the quarter. The news release mentioned that most of the 16% growth was organic. Are we able to get a more precise number for what that was?
Sure. So look, what the press release says was the quarter-over-quarter, most of that growth quarter-over-quarter was organic, quarter-over-quarter net of foreign exchange. Between Q1 to Q2 of 2020 was about 4%, and the majority of that 4% growth quarter-over-quarter was organic. That's what we meant on our press release.
Okay. That's helpful. And then on the M&A pipeline, there was some commentary that some of the discussions are resuming and perhaps they stalled when COVID-19 outbreak was first starting to happen. Are you able to give a sense of how many targets you're looking at right now? And if these targets are largely tuck-in opportunities?
So due to COVID, there is definitely a little bit of a slowdown on that activity. However, we have recently been seeing some uptake. We are reengaged with our referral sources, and they are just waiting for some more clarity on the seller side, whether they want to continue to pursue the opportunities in front of them. So I think what we are looking at, there are some easy tuck-ins and there are some larger deals. The larger deals are kind of, I wouldn't say are stalled, but they are kind of on a semi-pause as they run the process. But we see that going live pretty soon in at least in future.
And I'll also add, Justin, this is Greg, is that we believe as we get into the second half of 2020 and that, that we expect there to be more tuck-ins and that become available as we've seen in some of the marketplaces that we operate and in some of these smaller companies, and that just didn't have the capabilities to respond and that to the pandemic and things and had capital issues with obtaining inventory. So we expect some opportunities to potentially come out of that later in the year.
Makes sense. And just one final one. As the company's market cap is approaching $100 million, you mentioned a listing on the OTCQX. I was wondering if you're looking at possibly graduating to the TSX exchange.
Yes, we are actually -- we have reached out to TSX to see if we meet the guidelines laid out by TSX and are actually working towards that. I'll kind of leave it at that at this point.
Our next question comes from Andrew Hood with M Partners.
Great quarter. So I'll just start with the inventory. I noticed in the quarter, you spent about $4 million net on finance leases versus about $5 million last quarter. And obviously, you were spending a lot anticipating upcoming increase in demand, and you've now had that $1.5 million kind of reimbursed from the government essentially. But I was just wondering, based on the fact that about $8.8 million, $8.9 million worth of leases are due this year. Do you expect that spending level to kind of decline moving forward? In short, do you think the inventory levels are enough now is basically what I'm getting at? And can we expect the spending to kind of decline?
So I think the inventory levels are -- I think we are steady on that right now. We don't see a further spike on the inventory levels. I think we've done all the measures that we needed to take to plan and prepare for -- to respond to the pandemic. As far as, if that's the question, I think that's the answer. As far as the spending goes, I think it would be kind of aligned to what you see year-to-date. We don't -- most likely decrease slightly if once we've gone through our inventory and not have to purchase to keep up the same levels of high inventories.
And I'll also add answer to that would kind of be based on the -- that would be based on the current situation. If we would happen to see a second wave of the pandemic that could potentially flare-up again, we will be preparing for that and acting very, very quickly in that in order to maintain inventory levels and really increase those so we can anticipate demand.
Okay. Okay. So the net payment on finance leases will probably stay around $4 million a quarter then?
Yes. It's -- yes.
Okay. And then I don't know if you know this off the top of your head, but as I said, about $8.9 million of the leases were due in less than a year. I was just curious if you guys know how much of that is related to buildings. I guess maybe now you're getting to the point where some of your warehouse leases are wrapping up, and you maybe don't renew that lease?
So I think on the real estate pieces, what we have is pretty robust. There are only a few leases out there that we would not be renewing. So what you'll see from a materiality point of view is reflective of what's going to take place in the next 12 months.
Okay. This is somewhat of a minor item, but I was just looking at your discontinued operations. You had a $416,000 loss, which looks like it was just SG&A linked to PHM. I'm just curious what that was because there was nothing like that last quarter. And if that's a onetime item?
Yes. That's the -- we had a settlement on one of the litigations outstanding with that company. And so that's why you see a huge outlay related to that for the legal fees and the settlement itself.
And so that's -- obviously, if it's settled and that's done now and there's no other potential expenses like to PHM?
So PHM Inc. has -- on the MD&A we disclosed, there are a couple of more outstanding litigations on PHM, Inc. that we are continuing to monitor, but we expect those to be settled pretty soon. We are expecting somewhere in the neighborhood of $0.5 million -- up towards $0.5 million in settling those. I just wanted to -- since we brought that up. I just want to clarify that some of these litigations are really, really old, 5, 6 years old, something that's been sitting around for a while and just popping up now.
Yes. Okay. And obviously, it's not your core business either, right? I understand.
Yes, it's not in its core.
Yes. In terms of the $6 million and the $1.5 million received subsequent to year-end, through the PPP and the equipment grant as well. How is that accounted for?
So right now, we are going to keep it on our books as the HSS money that we have received, that would be used towards -- the terms and conditions of the HSS money, which is towards revenue loss and/or plan and prepare for the pandemic. So inventory and assets and stuff like that. So that's how we are going to use those funds -- that's how we are using those ones against. And as far as the HSS -- as far as the PPP goes, we are going to record that as a loan as right now and until it is forgiven it will stay as a loan.
Okay. And the final question for me. Acquisition line of credit is something you guys have mentioned in the past or some sort of other debt to fuel acquisitions. Is that still something that's ongoing?
Can you repeat that, please?
I believe you guys said in the past that you were in some sort of discussions for an acquisition line of credit or some sort of other financing. Is that still ongoing? Yes.
As you can understand through the pandemic, all financial institutions have paused pretty much accepting new applications or reviewing the ones that are in pipeline. So we are kind of going through that phase right now.
[Operator Instructions] Our next question comes from Chelsea Stellick with iA Securities.
Congrats on a great quarter. Yes, just in terms of acquisition, could you give us an update, I guess, just like what you're seeing out there or what you think you will see in terms of multiples for acquisition targets? And how much are these smaller players getting impacted by COVID-19, their ability to weather the storm? And do you foresee this like having an impact on your strategy?
So this is Hardik. On the multiple side, we expect some kind of depressions or some multiples -- some kind of a downward trend on the multiples, the market was really heating up pre-pandemic and the recent conversations we are having with our pipe -- or referral sources are suggesting that they are seeing a downward expectation on the seller side and also on the other market players, which we are one of those. So we do see a downward trend on the multiples. What I cannot tell you is how much downwards. I think once we get really active, that's when we would know, definitely a downward side.
And I think, Chelsea, on the opportunity side and that, like I had mentioned before and that we do anticipate in that, that there will be a fair amount of tuck-ins that are going to become available in the second half of 2020 and that as these smaller companies just did not have the capital needs to respond to the pandemic and didn't prepare. So we're very confident in that.
Okay. Perfect. And then just a second question for me, and that will be it. Could you just give us a sense on sort of what proportion of the increase in the patient serviced year-over-year is sort of like your base patients? And then what proportion would be the new patients that you are sort of helping with the discharge from the COVID-19 pandemic?
I think I'll refer you back to the -- what we said on our revenue growth, which is organic. I think that's kind of the uptick we are seeing on our patient count that is truly coming from -- not related to the acquisition, but from just organic growth in our referral sources, which is about 4%.
This concludes the question-and-answer session. I would like to turn the conference back over to Greg Crawford for any closing remarks.
Thank you, operator, and thank you all for your participation today. As always, you can find us on the web at www.protechhomemedical.com where we will be posting a transcript of this call and also our updated investor deck. On the site, you can also view some of the exciting products and developments discussed on this call. Thank you, and goodbye.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.