Exhibit 99.1

 

LOGO

   InfuSystem Holdings, Inc.

31700 Research Park Drive

Madison Heights, MI 48071
248-291-1210

INVESTOR CONTACT:

Pat LaVecchia

Vice Chairman

Info@InfuSystem.com

800-962-9656

FOR IMMEDIATE RELEASE

Thursday, August 11, 2011

InfuSystem Holdings, Inc. Reports $13.1 Million of Revenues and $3.8 Million of Adjusted

EBITDA for the Second Quarter of 2011

 

   

Revenues for the quarter increased 25% year over year

 

   

Adjusted EBITDA for the quarter increased to $3.8 million

 

   

Significant new account wins

 

   

Fifteenth straight quarter of year over year growth

MADISON HEIGHTS, MICHIGAN, August 11, 2011—InfuSystem Holdings, Inc. (NYSE Amex: INFU), the leading provider of infusion pumps and related services, today reported results for the second quarter ended June 30, 2011.

Revenues for the second quarter of fiscal 2011 were $13.1 million compared with $10.5 million for the prior year, up 25 percent. Adjusted EBITDA for the second quarter of fiscal 2011 was $3.8 million, versus $3.2 million a year ago.

Mr. Sean McDevitt, Chief Executive Officer and Chairman, commented, “We performed well against many of our internal business metrics this past quarter to achieve our growth. While our growth was 25% above last year’s quarterly results, we did fall below our targeted growth due to the unanticipated impact of the nationwide generic oncology drug shortage. Specifically, we experienced lower growth this past quarter primarily due to the prolonged shortage of the chemotherapy drug Leucovorin and to a lesser extent the chemotherapy drug, 5FU, which meaningfully limited oncologists’ ability to prescribe our pumps. Presently, it is the combined effect of these two product shortages that is causing an impact. Drug shortages are not uncommon, and are typically brief and a product shortage of both drugs is extremely rare. It has been more than ten years since a shortage of either of these drugs has had a meaningful impact on our business and, based on manufacturer’s estimates of when supplies will become widely available, we expect the impact of these shortages on InfuSystem to work itself out by late Q3/early Q4.


Mr. McDevitt continued, “I am very encouraged that in every respect, our aggressive growth in the number of significant new account wins has helped to offset the impact of the drug shortage at individual oncology practice sites. Looking at the number of practices and the volume of pumps we have deployed to generate revenue, we remain optimistic about our future prospects.”

“Also, while sharing, with our stockholders, the frustration with the headwinds in the markets and our stock price,” Mr. McDevitt continued, “InfuSystem remains committed to its core vision of becoming a significant leader in the infusion and pre-owned equipment markets, increasing revenue, maintaining attractive EBITDA margins, generating substantial free cash flow, paying down debt, thus improving our financial profile.”

“Lastly, while we would have hoped to have announced another acquisition by this time, we remain extremely disciplined in our approach and have made considerable strides in acquisition discussions that would leverage our penetration in our markets, are synergistic, diversify our revenue streams, and maintain our historical EBITDA margins. Our goal remains to achieve top line revenues of several hundred million dollars in our target markets over the next several years and additive, synergistic acquisitions will be a key part of that growth,” Mr. McDevitt concluded.

Revenues for the second quarter ending June 30, 2011 were $13.1 million, up 25 percent from $10.5 million in the prior year period. The increase in revenues is related to obtaining business at new customer facilities and expansion into new product lines associated with our acquisitions.

Gross profit for the three months ending June 30, 2011 was $9.0 million, up 20 percent from $7.5 million in the prior year period. It represented 68 percent of revenues for the latest year compared with 72 percent in the prior year period. The decrease in the gross margin percentage was primarily related to a higher mix of pump sales, services, and rentals as compared to third party billings.

Selling, general and administrative expenses (SG&A) for the second quarter of 2011 were $8.2 million, excluding a goodwill and intangible assets impairment charge of $43.7 million, 5 percent higher than the prior period’s $7.8 million. The increase was due to the added expenses associated with the acquired businesses, investments made in the sales organization, and amortization of intangibles which was partially offset by the decreases in stock based compensation, acquisition related expenses, and bad debt expenses. As a percent of revenues, SG&A was 62 percent compared to 74 percent for the prior period.

As of June 30, 2011, the company determined that there may be market conditions relating to the stock price, elimination of warrants, and business forecasts to conclude that there may be impairment. Based upon the preliminary impairment analysis performed as of June 30, 2011, the company concluded there was an impairment of goodwill and intangible assets that resulted in a non-cash charge of $43.7 million, the majority relating to the original purchase in 2007. Although the analysis is preliminary and will need to be finalized, we do not anticipate further adjustments.

Adjusted EBITDA was $3.8 million for the second quarter of 2011 versus $3.2 million in the prior period. The company utilizes Adjusted EBITDA as a means to measure its operating performance. A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net income can be found in the appendix.


Other loss for the second quarter of 2011 was $0.5 million versus $0.3 million other loss in the prior period, reflecting reduced interest expense and no gain on extinguishment of long term debt as incurred in the prior period. The provision for income taxes was a benefit of $15.8 million for the quarter compared to a benefit of $717 thousand in the prior period. As a result, the second quarter net loss was $27.6 million, equal to $1.31 per diluted share, versus a $144 thousand net income, equal to $0.01 per diluted share in the prior period.

Financial Condition

Net cash provided by operations for the six months ending June 30, 2011 was $2.9 million, compared to $3.4 million for the prior period. Principle and interest payments of $1.6 million were paid during the quarter and the company ended the quarter with a cash balance of $1.7 million with $25.1 million in long-term debt, net of current.

Conference Call

InfuSystem Holdings, Inc. will host a conference call to share the results of its second quarter fiscal 2011 results on Thursday, August 11, at 10:00 a.m. Eastern Time. Chairman and Chief Executive Officer Sean McDevitt and Jim Froisland, Chief Financial Officer, will discuss the company’s financial performance and answer questions from the financial community.

The company invites interested investors to listen to the presentation, which will be carried live on the company’s Web site: www.infusystem.com in the Investors section. To participate by telephone, the dial-in number is 800-447-0521 with confirmation number 30085852. Those who wish to listen should either dial in or go to the web site several minutes prior to the call to register. A replay of the call can be accessed by dialing 888-843-7419, passcode 30085852#. An online archive of the conference call will remain on the company’s website for the following 30 days.

About InfuSystem Holdings, Inc.

InfuSystem Holdings, Inc. is the leading provider of infusion pumps and related services to hospitals, oncology practices and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, the company delivers local, field-based customer support, and also operates Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. The company’s stock is traded on the NYSE Amex under the symbol INFU.

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 the company’s publicly filed documents.

Additional information about InfuSystem Holdings, Inc. is available at www.infusystem.com.

FINANCIAL TABLES FOLLOW


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except share data)

   June 30,
2011
    December 31,
2010
 
     (Unaudited)        

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 1,723      $ 5,014   

Accounts receivable, less allowance for doubtful accounts of $1,812 and $1,796 at June 30, 2011 and December 31, 2010, respectively

     6,727        6,679   

Inventory

     1,406        1,699   

Prepaid expenses and other current assets

     976        750   

Deferred income taxes

     1,209        1,147   
  

 

 

   

 

 

 

Total Current Assets

     12,041        15,289   

Property & equipment, net

     16,934        16,672   

Deferred debt issuance costs, net

     536        658   

Goodwill

     21,824        64,092   

Intangible assets, net

     31,469        33,252   

Deferred income taxes

     10,243        —     

Other assets

     851        401   
  

 

 

   

 

 

 

Total Assets

   $ 93,898      $ 130,364   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current Liabilities:

    

Accounts payable

   $ 1,716      $ 2,016   

Other current liabilities

     2,579        4,631   

Derivative liabilities

     195        183   

Current portion of long-term debt

     6,419        5,551   
  

 

 

   

 

 

 

Total Current Liabilities

     10,909        12,381   

Long-term debt, net of current portion

     25,099        26,646   

Deferred income taxes

     —          5,788   

Other liabilities

     403        406   
  

 

 

   

 

 

 

Total Liabilities

   $ 36,411      $ 45,221   
  

 

 

   

 

 

 

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 21,185,028 and 21,163,337, respectively; outstanding 21,052,269 and 21,117,516, respectively

     2        2   

Additional paid-in capital

     87,103        87,004   

Accumulated other comprehensive loss

     (98     (64

Retained deficit

     (29,520     (1,799
  

 

 

   

 

 

 

Total Stockholders’ Equity

     57,487        85,143   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 93,898      $ 130,364   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

     Three Months Ended
June 30
    Six Months Ended
June 30
 

(in thousands, except share data)

   2011     2010     2011     2010  

Net revenues

   $ 13,133      $ 10,487      $ 26,090      $ 21,421   

Cost of revenues:

        

Cost of revenues — Product, service and supply costs

     2,174        1,719        4,316        3,394   

Cost of revenues — Pump depreciation, sales and disposals

     1,971        1,248        3,732        2,387   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     8,988        7,520        18,042        15,640   
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expenses:

        

Provision for doubtful accounts

     927        1,076        2,149        2,469   

Amortization of intangibles

     663        534        1,309        991   

Asset impairment charges

     43,668        —          43,668        —     

Selling and marketing

     2,326        1,595        4,769        3,036   

General and administrative

     4,251        4,569        8,767        7,905   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total sales, general and administrative:

     51,835        7,774        60,662        14,401   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income

     (42,847     (254     (42,620     1,239   

Other loss:

        

Gain (loss) on derivatives

     83        (71     83        (460

Interest expense

     (564     (1,366     (1,105     (2,172

Gain on extinguishment of long term debt

     —          1,118        —          1,118   

Other income

     2        —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other loss

     (479     (319     (1,022     (1,514
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) before income taxes

     (43,326     (573     (43,642     (275

Income tax benefit

     15,776        717        15,920        407   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (27,550   $ 144      $ (27,722   $ 132   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share:

        

Basic

   $ (1.31   $ 0.01      $ (1.32   $ 0.01   

Diluted

   $ (1.31   $ 0.01      $ (1.32   $ 0.01   

Weighted average shares outstanding:

        

Basic

     21,059,292        18,566,748        21,080,683        19,353,638   

Diluted

     21,059,292        18,943,962        21,080,683        19,922,468   


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

     Six Months Ended
June 30
 

(in thousands)

   2011     2010  

OPERATING ACTIVITIES

    

Net (loss) income

   $ (27,722   $ 132   

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

    

(Gain) loss on derivative liabilities

     (83     460   

Gain on extinguishment of long-term debt

     —          (1,118

Provision for doubtful accounts

     2,149        2,469   

Depreciation

     3,167        2,380   

Loss on disposal of pumps

     794        179   

Amortization of intangible assets

     1,309        991   

Asset impairment charges

     43,668        —     

Amortization of deferred debt issuance costs

     122        834   

Stock-based compensation

     502        997   

Deferred income taxes

     (16,031     (814

Changes in assets and liabilities, exclusive of effects of acquisitions:

    

(Increase) in accounts receivable, net of provision

     (2,197     (2,682

Decrease (increase) in other current assets

     67        (404

(Increase) in other assets

     (166     (860

(Decrease) increase in accounts payable and other liabilities

     (2,651     1,165   

Decrease in derivative liabilities from termination of interest rate swap

     —          (365
  

 

 

   

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

     2,928        3,364   
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Capital expenditures

     (2,383     (343

Acquisition of intangible assets

     (942     (400

Cash paid for acquisition, net of cash acquired

     —          (16,418
  

 

 

   

 

 

 

NET CASH (USED IN) INVESTING ACTIVITIES

     (3,325     (17,161
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Principal payments on term loan

     (2,061     (20,568

Cash proceeds from term loan

     —          30,000   

Common stock repurchased to satisfy statutory witholding on stock based compensation

     —          (38

Treasury shares repurchased

     (248     —     

Principal payments on capital lease obligations

     (585     (331
  

 

 

   

 

 

 

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

     (2,894     9,063   
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (3,291     (4,734

Cash and cash equivalents, beginning of period

     5,014        7,750   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 1,723      $ 3,016   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

GAAP RECONCILIATION

(UNAUDITED)

 

     Three Months Ended
June 30
    Six Months Ended
June 30
 

(in thousands, except share data)

   2011     2010     2011     2010  

Net (loss) income

   $ (27,550   $ 135      $ (27,722   $ 123   

Adjustments:

        

Interest expense

     564        1,366        1,105        2,172   

Income tax (benefit) expense

     (15,776     (708     (15,920     (398

Depreciation

     1,609        1,209        3,167        2,380   

Amortization

     663        534        1,309        991   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     (40,490     2,536        (38,061     5,268   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments:

        

Asset impairment charges

     43,668        —          43,668        —     

(Gain) loss on derivatives

     (83     71        (83     460   

Stock based compensation

     254        897        502        997   

Sales and other incentives

     308        —          699        —     

Acquisition related expenses

     62        785        247        785   

Severance

     65        —          65        —     

Gain on debt extinguishment

     —          (1,118     —          (1,118
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 3,784      $ 3,171      $ 7,037      $ 6,392