Exhibit 99.1

 

LOGO    InfuSystem Holdings, Inc.
  

31700 Research Park Drive

Madison Heights, MI 48071

FOR IMMEDIATE RELEASE

Thursday, March 28, 2013

   248-291-1210

 

CONTACT:

   Rob Swadosh / Patrick Malone   
   The Dilenschneider Group   
   212-922-0900   

INFUSYSTEM HOLDINGS, INC. REPORTS

HIGHER FOURTH QUARTER 2012 REVENUES AND SECOND STRAIGHT

QUARTERLY PROFIT

Company Improves Liquidity Position

MADISON HEIGHTS, MICHIGAN, March 28, 2013—InfuSystem Holdings, Inc. (NYSE MKT: INFU) (“InfuSystem” or the “Company”), a leading national provider of infusion pumps and related services for the healthcare industry in the United States, today reported its second consecutive quarter of profitability in the fourth quarter ending December 31, 2012.

Net income in the fourth quarter was $0.2 million, equal to $0.01 per diluted share, compared to a $0.8 million net loss, or $0.04 loss per diluted share, in the prior year period. For the full year ended December 31, 2012, the Company’s net loss was $1.5 million, or $0.07 per diluted share, versus a net loss of $45.4 million, or $2.16 per diluted share, in 2011. The prior-year period included a $67.6 million asset impairment charge.

Gross profit for the three months ending December 31, 2012, was $12.0 million, up 48% from $8.1 million in the fourth quarter of 2011. Gross profit for the full year 2012 was $42.9 million, an increase of 21% compared to $35.4 million in 2011.

Revenues in the fourth quarter were $16.2 million, up 16% from $14.0 million in the fourth quarter of 2011. Total revenues for the year ended December 31, 2012, were $58.8 million, an 8% improvement from $54.6 million in 2011. The increase in revenues is primarily related to the addition of larger customers, increased penetration into existing customer accounts, and the resolution of the oncology drug shortage from 2011. Also, during the fourth quarter of 2012, a major group of third party payors revised their claim processing guidelines that affected all durable medical equipment providers, which pushed some claims to be billed at higher out-of-network rates directly to patients.


SG&A increased to $10.4 million from $8.8 million, in addition to other expenses of $1.2 million compared with $0.5 million of other income a year ago. Adjusted EBITDA for the latest quarter was $3.8 million, up from the $1.5 million for the prior-year period, as adjusted on a comparable basis.

“We are very pleased with our improved fourth quarter performance and fiscal year-over-year growth for the Company,” said Dilip Singh, Interim Chief Executive Officer. “The Company has accumulated annualized cost-savings of approximately $1.6 million since the current management team took control in April of 2012. That, combined with our securing a new debt facility during the fourth quarter, has helped restore the Company’s liquidity and create a far stronger balance sheet. Equally important, we have generated sufficient momentum to increase the number of third-party payor relationships and expand our provider footprint while delivering best in class service and patient satisfaction. Our efforts are now clearly focused on sustaining long-term growth,” Singh added.

Operating Results

Gross profit for the year ended December 31, 2012 was $42.9 million, an increase of 21% compared to $35.4 million in the prior year. It represented 73% of revenues in the current year compared to 65% in the prior year. The increase in the gross margin as a percentage of revenue in 2012 was primarily related to the increase in rental revenue, specifically third party billings, which generally have a higher gross profit margin.

Selling and marketing expenses were $9.9 million compared to $9.4 million for the year ended December 31, 2011. The increase in selling and marketing expenses is primarily related to expenses incurred by the increase in associated revenues as well as increased retention and travel costs. Compared to the prior year, these expenses remained consistent at 17% of revenues.

During the year ended December 31, 2012, general and administrative expenses were $23.1 million, compared to $18.0 million for the year ended December 31, 2011. General and administrative expenses have increased from 33% to 39% of revenues for the year ended December 31, 2012 compared to the same period in the prior year. The increase was primarily due to an increase in professional service costs related to the Concerned Stockholder Group. Additional legal, accounting and outside service fees of $2.2 million were incurred during the year relating to this matter and the related early extinguishment of debt; severance payments for


the former CEO amounted to $1.0 million; $0.6 million was recorded for retention payments to key employees during this ongoing matter; and we incurred $0.6 million associated with our decision to evaluate potential strategic alternatives.

Additional increases were mainly attributed to an increase in finance and accounting staff and several other general and administrative accounts. These costs were partially offset by the reversal of previously recognized stock compensation expense of $1.4 million.

Adjusted EBITDA was $13.1 million for the latest fiscal year. This compares to 2011’s adjusted EBITDA, adjusted on a comparable basis, of $10.3 million. The Company utilizes Adjusted EBITDA as a means to measure its operating performance. A reconciliation from Adjusted EBITDA, a non-GAAP measure, to net income can be found in the appendix.

Financial Condition

Net cash provided by operations for fiscal 2012 was $5.5 million, down from the $6.7 million for the prior year. This decrease is mainly attributed to higher accounts receivable levels due to the higher revenue in the fourth quarter of 2012. As of December 31, 2012, we had cash and cash equivalents of $2.3 million and $4.7 million of availability on the revolving line-of-credit compared to $0.8 million and $4.9 million of availability on the revolving line-of-credit at December 31, 2011. This increase is due to the new credit facility and better cash management during the year.

Conference Call

The Company will conduct a conference call for investors on Thursday, March 28, 2013 at 9:00 a.m. Eastern Time to discuss fourth quarter performance and results. Dilip Singh, Interim Chief Executive Officer, and Jonathan P. Foster, Chief Financial Officer, will discuss the Company’s financial performance and answer questions from the financial community. To participate in this call, please dial in toll-free (888) 895-5479 and use the confirmation number 34394082.

About InfuSystem Holdings, Inc.

InfuSystem Holdings, Inc. is a 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 MKT 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)

   December 31,
2 0 12
    December 31,
2 0 11
 

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 2,326      $ 799   

Accounts receivable, less allowance for doubtful accounts of $3,136 and $1,773 at December 31, 2012 and December 31, 2011, respectively

     8,511        7,350   

Accounts receivable - related party

     —          98   

Inventory

     1,339        1,309   

Other current assets

     684        934   

Deferred income taxes

     1,971        682   
  

 

 

   

 

 

 

Total Current Assets

     14,831        11,172   

Medical equipment held for sale or rental

     2,626        2,013   

Medical equipment in rental service, net of accumulated depreciation

     13,071        14,732   

Property & equipment, net of accumulated depreciation

     867        927   

Deferred debt issuance costs, net

     2,362        421   

Intangible assets, net

     25,541        28,221   

Deferred income taxes

     17,806        18,187   

Other assets

     419        590   
  

 

 

   

 

 

 

Total Assets

   $ 77,523      $ 76,263   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current Liabilities:

    

Accounts payable

   $ 2,135      $ 4,004   

Accounts payable - related party

     9        59   

Derivative liabilities

     —          258   

Current portion of long-term debt

     3,953        6,576   

Other current liabilities

     4,098        2,235   
  

 

 

   

 

 

 

Total Current Liabilities

     10,195        13,132   

Long-term debt, net of current portion

     27,315        22,551   

Other liabilities

     —          415   
  

 

 

   

 

 

 

Total Liabilities

   $ 37,510      $ 36,098   
  

 

 

   

 

 

 

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 and outstanding 21,990,000 and 21,802,515, as of December 31, 2012 and issued and outstanding 21,330,235 and 21,132,545 as of December 31, 2011, respectively

     2        2   

Additional paid-in capital

     88,742        87,541   

Accumulated other comprehensive loss

     —          (136

Retained deficit

     (48,731     (47,242
  

 

 

   

 

 

 

Total Stockholders’ Equity

     40,013        40,165   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 77,523      $ 76,263   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     (Unaudited)              

(in thousands, except share data)

   2012     2011     2012     2011  

Net revenues:

        

Rentals

   $ 14,568      $ 11,933      $ 53,471      $ 46,795   

Product sales

     1,665        2,109        5,357        7,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     16,233        14,042        58,828        54,637   

Cost of revenues:

        

Cost of revenues - Product, service and supply costs

     2,405        2,465        9,165        9,128   

Cost of revenues - Pump depreciation and loss on disposal

     1,824        3,495        6,752        10,154   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     12,004        8,082        42,911        35,355   
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expenses:

        

Provision for doubtful accounts

     2,132        1,066        5,251        4,099   

Amortization of intangibles

     706        671        2,734        2,662   

Asset impairment charges

     —          —          —          67,592   

Selling and marketing

     2,229        2,283        9,864        9,371   

General and administrative

     5,374        4,759        23,062        17,987   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total selling, general and administrative:

     10,441        8,779        40,911        101,711   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     1,563        (697     2,000        (66,356

Other income (loss):

        

Gain on derivatives

     —          —          —          83   

Interest expense

     (1,105     (547     (3,340     (2,193

Loss on extinguishment of long term debt

     (119     —          (671     —     

Other (expense) income

     (7     8        (141     (111
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other loss

     (1,231     (539     (4,152     (2,221
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     332        (1,236     (2,152     (68,577

Income tax (expense) benefit

     (111     473        663        23,134   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 221      $ (763   $ (1,489   $ (45,443
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

Basic

   $ 0.01      $ (0.04   $ (0.07   $ (2.16

Diluted

   $ 0.01      $ (0.04   $ (0.07   $ (2.16

Weighted average shares outstanding:

        

Basic

     21,784,115        21,056,634        21,430,012        21,074,093   

Diluted

     22,019,393        21,056,634        21,430,012        21,074,093   


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

   Year Ended
December 31,
2012
    Year Ended
December 31,
2011
 

OPERATING ACTIVITIES

    

Net loss

   $ (1,489   $ (45,443

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Gain on derivative liabilities

     —          (83

Loss on extinguishment of long-term debt

     671        —     

Provision for doubtful accounts

     5,251        4,099   

Depreciation

     5,668        6,386   

Loss on disposal of medical equipment

     237        1,731   

Gain on sale of medical equipment

     (1,964     (2,753

Amortization of intangible assets

     2,734        2,662   

Asset impairment charges

     —          67,592   

Amortization of deferred debt issuance costs

     228        238   

Stock-based compensation

     964        1,185   

Deferred income taxes

     (906     (23,423

Changes in Assets - (Increase)/Decrease, exclusive of effects of acquisitions:

    

Accounts receivable

     (6,490     (4,419

Inventory

     (30     33   

Other current assets

     249        (184

Other assets

     664        657   

Changes in Liabilities - Increase/(Decrease), exclusive of effects of acquisitions:

    

Accounts payable and other liabilities

     (335     (1,532
  

 

 

   

 

 

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

     5,452        6,746   
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Purchases of medical equipment and property

     (6,542     (8,211

Proceeds from sale of medical equipment and property

     3,978        4,218   

Acquisition of intangible assets

     —          (625

Other asset acquisitions

     6        (509
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (2,558     (5,127
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Principal payments on term loans and capital lease obligations

     (9,631     (5,953

Payoff of bank loan and revolver

     (25,851     —     

Cash proceeds from bank loans and revolving credit facility

     37,101        2,334   

Payments on revolving credit facility

     —          (1,750

Payments for debt issuance costs

     (2,842     —     

Common stock repurchased to satisfy taxes on stock based compensation

     (144     (102

Treasury shares repurchased

     —          (363
  

 

 

   

 

 

 

NET CASH USED IN FINANCING ACTIVITIES

     (1,367     (5,834
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     1,527        (4,215

Cash and cash equivalents, beginning of period

     799        5,014   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 2,326      $ 799   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

GAAP RECONCILIATION

(UNAUDITED)

 

      Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
(in thousands)    2012      2011     2012     2011  

Net income (loss)

   $ 221       $ (763   $ (1,489   $ (45,443

Adjustments:

         

Interest expense

     1,105         547        3,340        2,193   

Income tax expense (benefit)

     111         (473     (663     (23,134

Depreciation

     1,325         1,496        5,668        6,386   

Amortization

     706         670        2,734        2,662   
  

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA

     3,468         1,477        9,590        (57,336

Asset impairment charges

     —           —          —          67,592   
  

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA - excluding impairment charges

     3,468         1,477        9,590        10,256   

Concerned Stockholder Group

     17         —          2,220        —     

Early Extinguishment of Debt

     119         —          671        —     

Strategic Alternatives

     179         —          645        —     
  

 

 

    

 

 

   

 

 

   

 

 

 

EBITDA - Adjusted

   $ 3,783       $ 1,477      $ 13,126      $ 10,256