Protech reports increases, amid cyber attack

Friday, May 24, 2019

CINCINNATI – Protech Home Medical is “laser focused” on capturing market share and its balance sheet is sound, despite a recent cyber attack, CEO Greg Crawford said during a May 21 earnings call.

Protech, which currently operates 33 locations in 12 states primarily in the Midwest and on the East Coast, has doubled its sales force and will continue to expand its product base as it targets key regions within its existing territory, says Crawford.

“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 scale,” he said.

Protech, which offers respiratory, medical supplies, power mobility and Coumadin home monitoring, reported revenues of $21.9 million for the second quarter of 2019, an increase of 17% compared to the same period in 2018. Year-to-date revenue was $43.6 million, a 17.1% increase. Adjusted EBIDTA was $4 million.

One of the company’s key strategies for growth is acquisition. It made three buys in 2018, including Riverside Medical and Central Oxygen in December.

Another component of its growth strategy: technology, including the use of data mining tools, says Crawford.

“A patient’s ability to order a piece of equipment, a service call or other ancillary options via the touch of a button is where this industry is headed,” he said. “We have made significant investments in developing these tools and will continue to invest, so we continue to maintain our cutting-edge advantage.”

Cyber attack

Technology can come with vulberabilities, though, and on May 3, Protech discovered it had been the victim of a cyber attack—a breach of its email system that led to the theft of approximately $9 million.

Crawford made a personal loan to the company of $3.6 million to allow it to meet debenture commitments, leaving the company with “sufficient working capital.” Crawford says he is cautiously optimistic the company could recover the stolen funds, but says it will not be easy or quick, and there is no guarantee that will happen.

“We believe we were able to jump on the situation quickly,” he said. “We commit to keep the market informed as our legal counsel actively and aggressively work toward recovery.”