Exhibit 99.1
For Immediate Release
Investors:
David K. Waldman or Klea K. Theoharis
Crescendo Communications, LLC
Tel: (212) 671-1020
InfuSystem Holdings Reports 14.5% Revenue Increase and
Approximately $3.6 Million of Adjusted EBITDA for the Third Quarter of 2008
Madison Heights, Michigan—November 5, 2008 – InfuSystem Holdings, Inc. (OTCBB: INHI; INHIW; INHIU), the leading provider of ambulatory infusion pumps and associated clinical services, today announced financial results and provided a business update for the third quarter ended September 30, 2008.
Mr. Steve Watkins, chief executive officer, commented, “We are pleased to report a solid 14.5% increase in revenue for the third quarter of 2008, compared to the results of InfuSystem, Inc. for the same period last year, while under its prior ownership. Since our acquisition of InfuSystem, Inc. during the fourth quarter of 2007, we have generated very strong cash flow. During the third quarter alone, we achieved $3.6 million of adjusted EBITDA and now have approximately $10.8 million of cash and cash equivalents as of September 30, 2008.”
“During the third quarter, we signed agreements with 9 new managed care organizations. Our increasing number of contracts and covered lives is further evidence of our overall market penetration and acceptance. We are the only nationwide provider of ambulatory infusion pumps with contracts in place with most national and regional insurance providers. We see this as a significant competitive advantage, since physicians prefer to work with a single provider that can accept insurance from most or all of their patients. Other competitive advantages include: our vast pump selection; our nationwide sales force; and most importantly, our 24-hour staffed nurse hotline for patient questions and assistance. Given these strengths, we continue to explore acquisitions and strategic partnerships that should enable us to expand our product and service offering in order to leverage our deep penetration into oncologist practices across the U.S.”
Mr. Watkins concluded, “We are also continuing to make headway on a number of operational initiatives designed to boost revenue and enhance efficiency within the organization. These initiatives include upgraded computer systems and software to: support our sales initiatives; improve inter-departmental communication; and streamline billing. In response to our customers’ requests, we have also implemented an on-line ordering system whereby oncology practices can order pumps directly through our website. This simplifies the ordering process for our customers while providing operational benefits to our company.”
Financial Results
Revenue for the third quarter ended September 30, 2008 was $9.0 million, versus $0 for the same period in 2007, which reflects the revenues recognized by InfuSystem Holdings, Inc. following the acquisition of InfuSystem, Inc. from I-Flow Corporation.
Operating income for the third quarter of 2008 was $1.6 million versus an operating loss of ($699,000) for the same period in 2007. The increase in operating income for the third quarter of 2008 reflects revenue and operating expenses recorded for InfuSystem, Inc. following the acquisition.
The net income for the third quarter of 2008 was $5.7 million, or $0.30 per diluted share, compared to net loss of ($505,000) or $(0.03) per diluted share, for the same period in 2007. The net income for the third quarter of 2008 included a $5.4 million gain on derivative financial instruments, which is predominantly attributable to the decrease in the publicly traded value of the Company’s warrants during the quarter, compared to a ($675,000) loss for the third quarter of 2007.
Adjusted EBITDA for the third quarter ended September 30, 2008 was $3.6 million, as compared to an Adjusted EBITDA loss of approximately ($435,000) for the same period of 2007. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes gain (loss) on derivative financial instruments, and stock-based compensation. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States (“GAAP”), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance, or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of Adjusted EBITDA is relevant and useful by enhancing the readers’ ability to understand the Company’s operating performance. The Company’s management utilizes Adjusted EBITDA as a means to measure performance. The Company’s measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The tables below reconcile Adjusted EBITDA, a non-GAAP measure, to net income for the three and nine months ended September 30, 2008 and 2007.
Reconciliation from Net Income to Adjusted EBITDA:
| Three Months Ended September 30 | ||||||||||||||
| (in thousands, except per share data)
|
2008 | 2007 | I-Flow Predecessor 2007 |
|||||||||||
| Net Income |
$ | 5,704 | $ | (505 | ) | $ | 1,308 | |||||||
| Adjustments: |
||||||||||||||
| Interest expense |
937 | 18 | — | |||||||||||
| Interest income |
(11 | ) | (1,210 | ) | — | |||||||||
| Income tax expense |
399 | 323 | 936 | |||||||||||
| Depreciation - Pumps |
978 | — | 1,032 | |||||||||||
| Depreciation - Other |
47 | — | 39 | |||||||||||
| Amortization |
456 | — | — | |||||||||||
| EBITDA |
$ | 8,511 | $ | (1,374 | ) | $ | 3,315 | |||||||
| Adjustments: |
||||||||||||||
| (Gain) loss on derivatives |
(5,381 | ) | 675 | — | ||||||||||
| Stock based compensation |
479 | 264 | 159 | |||||||||||
| Adj. EBITDA |
$ | 3,609 | $ | (435 | ) | $ | 3,474 | |||||||
| Adj. EBITDA EPS - basic |
0.20 | (0.02 | ) | N/A | ||||||||||
| Adj. EBITDA EPS - diluted |
0.19 | (0.02 | ) | N/A | ||||||||||
| Reconciliation from Net Income to Adjusted EBITDA: | ||||||||||||||
| (in thousands, except per share data)
|
Nine Months Ended September 30 | |||||||||||||
| 2008 | 2007 | I-Flow Predecessor 2007 |
||||||||||||
| Net Income |
$ | 8,700 | $ | (928 | ) | $ | 3,604 | |||||||
| Adjustments: |
||||||||||||||
| Interest expense |
2,828 | 33 | (237 | ) | ||||||||||
| Interest income |
(14 | ) | (3,534 | ) | — | |||||||||
| Income tax expense |
399 | 752 | 2,460 | |||||||||||
| Depreciation - Pumps |
2,908 | — | 2,307 | |||||||||||
| Depreciation - Other |
133 | — | 125 | |||||||||||
| Amortization |
1,370 | — | — | |||||||||||
| EBITDA |
$ | 16,325 | $ | (3,677 | ) | $ | 8,259 | |||||||
| Adjustments: |
||||||||||||||
| (Gain) loss on derivatives |
(8,665 | ) | 675 | — | ||||||||||
| Stock based compensation |
1,166 | 1,490 | 305 | |||||||||||
| Adj. EBITDA |
$ | 8,826 | $ | (1,512 | ) | $ | 8,564 | |||||||
| Adj. EBITDA EPS - basic |
0.50 | (0.08 | ) | N/A | ||||||||||
| Adj. EBITDA EPS - diluted |
0.47 | (0.08 | ) | N/A | ||||||||||
About InfuSystem Holdings, Inc.
InfuSystem is the leading provider of ambulatory infusion pumps and associated clinical services for oncology practices and their patients in the U.S. These pumps allow for the gradual delivery of a drug over a period of days in the privacy of one’s home, compared to bolus infusion chemotherapy treatments that are given in a single high dose over a short period of time. Improved efficacy of the drugs, patient comfort, reimbursement to doctors for appropriate services and continuity of care all play a role in the growing trend toward this form of treatment. InfuSystem’s pumps are primarily used for colorectal cancer, but they have been approved for other forms of cancer, thereby greatly enhancing the market opportunity for InfuSystem.
Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in InfuSystem’s publicly filed documents.
(Tables follow)
InfuSystem Holdings, Inc.
CONSOLIDATED BALANCE SHEETS
| (in thousands, except share data)
|
September 30, 2008 |
December 31, 2007 |
||||
| (Unaudited) | ||||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash and cash equivalents |
10,795 | 3,960 | ||||
| Accounts receivable, less allowance for doubtful accounts of $1,935 and $1,638 at September 30, 2008 and December 31, 2007, respectively; September 30, 2008 and December 31, 2007 include $40 and $103 due from I-Flow, respectively |
4,132 | 6,304 | ||||
| Inventory supplies |
397 | 364 | ||||
| Prepaid expenses and other current assets |
394 | 1,263 | ||||
| Deferred income taxes |
4 | 4 | ||||
| Total Current Assets |
15,722 | 11,895 | ||||
| Property & equipment, net |
11,232 | 13,504 | ||||
| Deferred debt issuance costs, net |
1,424 | 1,918 | ||||
| Deferred Income Taxes |
— | — | ||||
| Goodwill |
56,580 | 56,544 | ||||
| Intangible assets, net |
31,195 | 32,565 | ||||
| Total Assets |
116,153 | 116,426 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| Current Liabilities: |
||||||
| Accounts payable |
1,213 | 1,076 | ||||
| Other current liabilities |
776 | 1,886 | ||||
| Derivative liabilities |
3,742 | 12,407 | ||||
| Current portion of long-term debt; September 30, 2008 and December 31, 2007 include $3,270 and $2,044 payable to I-Flow, respectively |
3,348 | 2,044 | ||||
| Total Current Liabilities |
9,079 | 17,413 | ||||
| Long-term debt, net of current portion; September 30, 2008 and December 31, 2007 include $27,798 and $30,250 payable to I-Flow, respectively |
28,159 | 30,250 | ||||
| Deferred income taxes |
403 | 4 | ||||
| Total Liabilities |
37,641 | 47,667 | ||||
| Stockholders’ Equity |
||||||
| Preferred stock, $.0001 par value: authorized 1,000,000 shares; none issued |
— | — | ||||
| Common stock, $.0001 par value; authorized 200,000,000 shares; issued 18,426,421 and 18,315,430, respectively; outstanding 17,192,377 and 16,824,295, respectively |
2 | 2 | ||||
| Additional paid-in capital |
80,490 | 79,437 | ||||
| Retained deficit |
(1,980 | ) | (10,680 | ) | ||
| Total Stockholders’ Equity |
78,512 | 68,759 | ||||
| Total Liabilities and Stockholders’ Equity |
116,153 | 116,426 | ||||
InfuSystem Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
| (in thousands, except per share data)
|
2008 | 2007 | I-Flow Predecessor 2007 |
2008 | 2007 | I-Flow Predecessor 2007 |
||||||||||||||||||||||
| Net revenues |
$ | 8,958 | $ | — | $ | 7,822 | $ | 26,323 | $ | — | $ | 23,528 | ||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Cost of Revenues - Product and supply costs |
1,340 | — | 1,159 | 4,182 | — | 3,746 | ||||||||||||||||||||||
| Cost of Revenues - Pump depreciation |
978 | — | 1,032 | 2,908 | — | 2,307 | ||||||||||||||||||||||
| Provision for doubtful accounts |
702 | — | 619 | 2,477 | — | 3,278 | ||||||||||||||||||||||
| Amortization of intangibles |
456 | — | — | 1,370 | — | — | ||||||||||||||||||||||
| Selling and marketing |
1,131 | — | 1,036 | 3,401 | — | 3,030 | ||||||||||||||||||||||
| General and administrative |
2,703 | 699 | 1,732 | 8,737 | 3,002 | 5,340 | ||||||||||||||||||||||
| Total Operating Expenses |
7,310 | 699 | 5,578 | 23,075 | 3,002 | 17,701 | ||||||||||||||||||||||
| Other income (expense): |
||||||||||||||||||||||||||||
| Gain (loss) on derivatives |
5,381 | (675 | ) | — | 8,665 | (675 | ) | — | ||||||||||||||||||||
| Interest income |
11 | 1,210 | — | 14 | 3,534 | — | ||||||||||||||||||||||
| Interest expense |
(937 | ) | (18 | ) | — | (2,828 | ) | (33 | ) | 237 | ||||||||||||||||||
| Total other income |
4,455 | 517 | — | 5,851 | 2,826 | 237 | ||||||||||||||||||||||
| Income (loss) before income taxes |
6,103 | (182 | ) | 2,244 | 9,099 | (176 | ) | 6,064 | ||||||||||||||||||||
| Income tax expense |
(399 | ) | (323 | ) | (936 | ) | (399 | ) | (752 | ) | (2,460 | ) | ||||||||||||||||
| Net income (loss) |
5,704 | (505 | ) | 1,308 | 8,700 | (928 | ) | 3,604 | ||||||||||||||||||||
| Net income (loss) per share: |
||||||||||||||||||||||||||||
| Basic |
0.31 | (0.03 | ) | N/A | 0.49 | (0.05 | ) | N/A | ||||||||||||||||||||
| Diluted |
0.30 | (0.03 | ) | N/A | 0.47 | (0.05 | ) | N/A | ||||||||||||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||||||||||
| Basic |
18,442,957 | * | 18,625,252 | N/A | 17,757,075 | * | 18,625,252 | N/A | ||||||||||||||||||||
| Diluted |
18,794,182 | 18,625,252 | N/A | 18,581,789 | 18,625,252 | N/A | ||||||||||||||||||||||
| * | Includes, from April 25, 2008, the 1,234,044 shares referenced in Notes 9 and 10 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. |
InfuSystem Holdings, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| (in thousands)
|
Nine Months Ended September 30, | |||||||||||||
| 2008 | 2007 | I-Flow Predecessor 2007 |
||||||||||||
| OPERATING ACTIVITIES |
||||||||||||||
| Net Income (Loss) |
8,700 | (928 | ) | 3,604 | ||||||||||
| Items included in net income not requiring cash: |
||||||||||||||
| (Gain) loss on derivative liabilities |
(8,665 | ) | 675 | — | ||||||||||
| Provision for doubtful accounts |
2,477 | — | 3,278 | |||||||||||
| Depreciation |
3,041 | — | 2,432 | |||||||||||
| Amortization of intangible assets |
1,370 | — | — | |||||||||||
| Amortization of deferred debt issuance costs |
494 | — | — | |||||||||||
| Loss on disposal of assets |
385 | — | 241 | |||||||||||
| Interest Income on Investments Held in Trust |
— | (3,528 | ) | — | ||||||||||
| Withdrawal of interest earned on investments held in trust |
— | 422 | — | |||||||||||
| Stock-based compensation |
1,166 | 1,490 | 305 | |||||||||||
| Deferred Income Taxes |
399 | — | (517 | ) | ||||||||||
| Changes in current assets and liabilities: |
||||||||||||||
| Decrease (increase) in accounts receivable |
(305 | ) | — | (1,636 | ) | |||||||||
| Decrease (increase) in prepaid expenses and other current assets |
836 | 439 | (129 | ) | ||||||||||
| (Decrease) increase in accounts payable and other current liabilities |
(628 | ) | 768 | (953 | ) | |||||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
9,270 | (662 | ) | 6,625 | ||||||||||
| INVESTING ACTIVITIES |
||||||||||||||
| Payment of deferred acquisition costs |
(105 | ) | (252 | ) | — | |||||||||
| Capital expenditures |
(951 | ) | — | (2,664 | ) | |||||||||
| Proceeds from sale of property |
— | — | 231 | |||||||||||
| NET CASH USED IN INVESTING ACTIVITIES |
(1,056 | ) | (252 | ) | (2,433 | ) | ||||||||
| FINANCING ACTIVITIES |
||||||||||||||
| Net capital distributions to parent |
— | — | (5,147 | ) | ||||||||||
| Principal payments on term loan |
(1,226 | ) | — | — | ||||||||||
| Common stock repurchased to satisfy minimum statutory |
(113 | ) | — | — | ||||||||||
| withholding on stock-based compensation |
||||||||||||||
| Principal payments on capital lease obligation |
(40 | ) | — | — | ||||||||||
| Proceeds from issuance of warrants |
— | 514 | — | |||||||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
(1,379 | ) | 514 | (5,147 | ) | |||||||||
| Net change in cash and cash equivalents |
6,835 | (400 | ) | (955 | ) | |||||||||
| Cash and cash equivalents, beginning of period |
3,960 | 427 | 1,956 | |||||||||||
| Cash and cash equivalents, end of period |
10,795 | 27 | 1,001 | |||||||||||
| SUPPLEMENTAL DISCLOSURES |
||||||||||||||
| Cash paid for interest (including swap payments/proceeds, and excluding capitalized interest) |
$ | 2,334 | $ | 4 | $ | — | ||||||||
| Cash paid for income taxes |
$ | 478 | $ | 695 | $ | 186 | ||||||||
| NON-CASH TRANSACTIONS |
||||||||||||||
| Additions to property |
$ | 80 | $ | — | $ | 241 | ||||||||
| Property acquired with a capital lease |
$ | 480 | $ | — | $ | — | ||||||||
| Issuance of vested restricted shares (number of shares) |
150 | — | — | |||||||||||
# # #