Management Talks: In-Depth with Evome Medical Technologies

Key insights from my conversation with Evome’s leadership on strategy, execution, and what’s next.

Introducing "Management Talks" – A New Section on My Substack

One of the things I’ve come to appreciate is management teams that are open to conversations with investors. As a private investor, it’s not always easy to get time with executives, but through networking, persistence, and connecting with other investors, I’ve been able to have some valuable discussions.

I want to make this a bigger part of my due diligence and investment process—actually engaging with management, asking meaningful questions, and understanding how leadership thinks about execution, challenges, and growth.

That’s why I’m starting "Management Talks"—a new section where I’ll share these conversations, break down what I learn, and provide insights beyond just filings and investor decks.

To kick things off, I recently had a detailed discussion with Evome’s (TSX-V: EVMT) leadership about their business and future direction.

Evome Medical Technologies: What’s Really Going On?

For those new to Evome’s story and looking for a deep dive into the fundamentals and why I started following it, check out my previous write-up [Link]

Over the past few weeks, I’ve had some deep-dive conversations with Evome’s leadership—Mike (CEO), Bill (COO), and Gordon (CFO)—to get a real sense of where things stand. There’s been a lot of moving pieces, and I wanted to cut through the noise and understand what’s actually happening.

Here’s my straight-up take.

Debt: Where Things Stand & What’s Changing

(All numbers in USD)

For those following Evome’s story, you already know this is a turnaround play, and debt reduction has been priority #1. Right now, the company is sitting on ~$10M in acquisition debt after the latest debt restructuring announcement with Mirion.

A quick breakdown:

• Mirion Debt Restructuring – Knocked off ~$2M and stopped interest accrual on that portion.

• If you check Mirion’s 2023 annual filing, they already took a ~$6.5M loss on Evome’s debt, meaning this was likely in the works for a while.

• Why does this matter?

  • Evome now has flexibility—they aren’t forced to use all sale proceeds (SDP/Damar) for debt repayment.

  • They now have options: balancing debt reduction vs. reinvestment in the business.

That said, my personal view—they should focus on clearing out debt first before reinvesting. A clean balance sheet = stronger position long-term. Eliminating debt risk should still be the priority.

South Dakota Partners (SDP) – A Clean Exit Coming Soon

• LOI signed with an existing customer—expected to close soon.

• Debt reduction: Under $1M, with the buyer assuming lease and equipment loans.

• Cash Drain: SDP was bleeding money, so this isn’t about maximizing sale price—it’s about cleaning up the balance sheet.

• Brutal reality: The previous management bought SDP for ~$12M in 2021, and now it’s being sold for a fraction of that—a clear example of value destruction. Mike’s team is cleaning up the mess, and while it’s not a big payout, it improves financials immediately.

Elephant in the Room – Sale of Damar

In their last investor deck (Aug 2024), they targeted a Q1 2025 sale—clearly not happening since we’re in March with no PR. At first, I thought they were struggling to find a buyer, but after speaking with management, that’s not the issue—there are interested buyers.

So why the delay?

• Damar just locked in high-margin deals set to double EBITDA from $1.2M → ~$2.4M. With 50%+ margins, holding off boosts valuation. According to management’s outside consulting, a 5x EBITDA multiple puts the price range at $10M–$12M.

• Unlike SDP (which was bleeding cash), Damar is profitable—they can keep generating cash while showcasing stronger financials to a buyer.

When will the sale happen?

Realistically, I expect this sale to land closer to $10M, likely by the end of the year to capture the full impact of these new contracts before closing a deal.

Am I disappointed the timeline will get pushed? Yeah.
But is it the right move? Also, yeah.

Selling too early leaves money on the table—by waiting, Evome could wipe out their entire acquisition debt with one deal.

Biodex – What’s Next?

On the Biodex side, Evome is rolling out two new products:

1. Spinal therapy device

2. Medical treadmills (outsourced to lower costs)

Both leverage existing sales channels, adding new revenue streams without significant overhead.

Stock Price & Insider Buying – What’s Up?

With the stock getting hammered, I had to ask—why hasn’t management stepped in to buy?

• There’s a limit on how much management can buy—they’re pushing to increase this at the next annual meeting.

• Blackout period – They legally can’t buy right now, but once this lifts, we should see insider activity.

If they believe the stock is undervalued (which I think they do), we should see management stepping in when they’re allowed to.

Final Thoughts

Short-term, I’m watching for SDP to close, Damar’s numbers to ramp, and insiders to start buying post-blackout. It’s a waiting game now, but everything I’m seeing points to a company setting itself up for a much stronger position later this year. Let’s see how it plays out.

Disclaimer

This is not financial advice. I hold positions in the stocks mentioned, which may create a conflict of interest. Please do your own research and consult a financial professional, as all investments carry risk, including potential loss of principal. I have not received any compensation from any company to write this; all opinions are solely my own.

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