Exhibit 99.1

 

LOGO

 

InfuSystem Holdings, Inc.

 

31700 Research Park Drive

Madison Heights, MI 48071

248-291-1210

 
 
 

FOR IMMEDIATE RELEASE

Tuesday, August 13, 2013

 

CONTACT:  

Rob Swadosh / Patrick Malone

The Dilenschneider Group

212-922-0900

INFUSYSTEM HOLDINGS, INC. REPORTS

PROFIT IN SECOND QUARTER 2013

Three and Six Month Results Show Year-to-Year Improvements

MADISON HEIGHTS, MICHIGAN, August 13, 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 that net income in the second quarter was $0.1 million, equal to $0.00 per diluted share, compared to a $0.8 million net loss, or $0.04 loss per diluted share, in the prior year period. Net income for the six months ended June 30, 2013 was $0.2 million, equal to $0.01 per diluted share, compared to a $1.7 million net loss, or $0.08 per diluted share, in the prior year period.

The Company continues to strengthen its overall performance and we expect to build on these results in the second half of 2013, said Eric Steen, Chief Executive Officer. “Organic growth will drive the business as well as build shareholder value. InfuSystem’s strong market share and highly-differentiated customer service capabilities position us well to take advantage of a consolidating market. In particular, we are experiencing strong growth in the commercial payor market. We also expect to generate revenue growth from new therapies and services,” he concluded.

Revenues in the second quarter of 2013 were $14.7 million, up 4% from $14.1 million in the second quarter of 2012. Revenues for the six months ended June 30, 2013 were $29.4 million, a 3% increase, compared to $28.4 million for the same prior year period. The increase in revenues was primarily related to a 5% increase in rental revenue compared to prior year periods. Sales revenue was down 5% from prior year for the second quarter and down approximately 9% from prior year-to-date period. The increase in rental revenues was primarily


related to the addition of larger customers, increased penetration into existing customer accounts, the increase in the colorectal cancer and other cancer patients treated with the Company’s services and the continuation of the revision to claims processing guidelines by a major group of third-party payors.

Gross profit for the three months ended June 30, 2013 was $10.3 million, which was consistent with the same period in the prior year. It represented 70% of revenues in the current period compared to 73% in the prior year. Gross profit for the six months ended June 30, 2013 was $20.8 million, which was also consistent with the same period in the prior year. It represented 71% of revenues in the current period compared to 73% in the prior year. The decrease in the gross margin as a percentage of revenue in 2013 was primarily related to a decrease in rental gross margins from direct pay customers.

Operating Results

SG&A decreased to $9.5 million from $10.2 million, down approximately 8%, when compared to the second quarter of 2012. For the six months ended June 30, 3012, SG&A decreased to $19.2 million from $21.2 million, down approximately 9%, when compared to the same prior year period.

During the three months ended June 30, 2013, general and administrative expenses were $5.0 million compared to $6.1 million for the same prior year period. General and administrative expenses have decreased from 44% to 34% of revenues for the second quarter of 2013 compared to the same period in the prior year. The decrease was primarily attributed to prior year costs of $2.4 million pertaining to the additional legal, accounting and outside services fees as a result of the special meeting, changes in the composition of the Board of Director’s, and severance costs associated with the Settlement Agreement offset by previously recognized stock compensation expense of $1.3 million, for which the requisite service was not rendered last year.

During the six months ended June 30, 2013, general and administrative expenses were $10.0 million compared to $12.4 million for the same six month period in 2012. The decrease between these periods was primarily related to prior year professional service and other costs for the Concerned Stockholder Group which totaled approximately $2.3 million; severance payments for a former CEO amounted to $1.0 million; $0.6 million was recorded during the three months ended March 31, 2012 for retention payments to key employees; and $1.3 million of previously recognized stock compensation expense was reversed due to the forfeiture and failure to meet the requisite service period.


Other expenses for the three months ended June 30, 2013 were $0.9 million compared to $1.2 million for the comparable prior year period. This decrease was mainly attributed to an increase of $0.2 million of additional interest expense due to the cost of the new debt facility offset by a prior year loss on the extinguishment of debt of $0.6 million.

Other expenses for the six months ended June 30, 2013 were $1.5 million compared to $1.8 million for the comparable prior year period. This decrease was mainly attributed to an increase of $0.5 million of additional interest expense due to the cost of the new debt facility offset by a prior year loss on the extinguishment of debt of $0.6 million and a one-time cash receipt of $0.3 million related to a mutual insurance policy we received in the first quarter of 2013.

Jonathan P. Foster, Chief Financial Officer, noted, “The combination of effective, on-going cost management practices, meaningful debt reduction of more than $2.5 million since December 31, 2012, and increasing free cash flow allows us to actively take advantage of growth opportunities. In particular, the increase of $1.3 million from medical equipment in rental service since year-end builds a strong base from which to generate even further rental revenue growth.”

Selling and marketing expenses were $2.5 million, which was consistent with the second quarter of 2012. For the six months ended June 30, 2013, selling and marketing expenses were $4.9 million compared to $5.3 million. The decrease in selling and marketing expenses was mainly attributed to lower travel, entertainment and salaries and commissions.

For the three months ended June 30, 2013, Adjusted EBITDA was $3.3 million for the second quarter of 2013 compared to $3.6 million in 2012. For the six months ended June 30, 2013, Adjusted EBITDA was $7.0 million, which was consistent with the same prior year period. 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 the six months ended June 30, 2013 was $2.2 million compared to $2.3 million for the prior year. Although net income is significantly improved from a year ago, increases in A/R are offsetting any cash improvement at June 30, 2013 when compared to the prior year.

As of June 30 2013, we had cash and cash equivalents of $0.1 million and $5.1 million of availability on the Credit Facility compared to $2.3 million and $4.7 million, respectively, at December 31, 2012. During the six months ended June 30, 2013, the Company paid down $2.5 million of total debt.


Conference Call

The Company will conduct a conference call for investors on Tuesday, August 13, 2013 at 9:00 a.m. Eastern Time to discuss second quarter performance and results. Eric Steen, 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 (877) 261-8992 inside the U.S. and (847) 619-6548 outside the U.S and use the confirmation number 35310595.

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

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     June 30,     December 31,  

(in thousands, except share data)

   2013     2012  
     (Unaudited)        

ASSETS

    

Current Assets:

    

Cash and cash equivalents

   $ 102      $ 2,326   

Accounts receivable, less allowance for doubtful accounts of $3,811 and $3,136 at June 30, 2013 and December 31, 2012, respectively

     9,440        8,511   

Inventory

     1,379        1,339   

Other current assets

     713        684   

Deferred income taxes

     1,986        1,971   
  

 

 

   

 

 

 

Total Current Assets

     13,620        14,831   

Medical equipment held for sale or rental

     3,155        2,626   

Medical equipment in rental service, net of accumulated depreciation

     14,005        13,071   

Property & equipment, net of accumulated depreciation

     798        867   

Deferred debt issuance costs, net

     2,106        2,362   

Intangible assets, net

     24,221        25,541   

Deferred income taxes

     17,689        17,806   

Other assets

     157        419   
  

 

 

   

 

 

 

Total Assets

   $ 75,751      $ 77,523   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current Liabilities:

    

Accounts payable

   $ 3,833      $ 2,135   

Accounts payable - related party

     —          9   

Current portion of long-term debt

     3,124        3,953   

Other current liabilities

     2,782        4,098   
  

 

 

   

 

 

 

Total Current Liabilities

     9,739        10,195   

Long-term debt, net of current portion

     25,204        27,315   
  

 

 

   

 

 

 

Total Liabilities

   $ 34,943      $ 37,510   
  

 

 

   

 

 

 

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 22,088,731 and 21,891,041, respectively, as of June 30, 2013 and 21,990,000 and 21,802,515, as of December 31, 2012, respectively

     2        2   

Additional paid-in capital

     89,381        88,742   

Retained deficit

     (48,575     (48,731
  

 

 

   

 

 

 

Total Stockholders’ Equity

     40,808        40,013   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 75,751      $ 77,523   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  

(in thousands, except share data)

   2013     2012     2013     2012  

Net revenues:

        

Rentals

   $ 13,618      $ 12,973      $ 27,061      $ 25,878   

Product sales

     1,044        1,099        2,302        2,542   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     14,662        14,072        29,363        28,420   

Cost of revenues:

        

Cost of revenues - Product, service and supply costs

     2,845        2,148        5,424        4,383   

Cost of revenues - Pump depreciation and loss on disposal

     1,487        1,650        3,186        3,327   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     10,330        10,274        20,753        20,710   
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expenses:

        

Provision for doubtful accounts

     1,327        893        2,987        2,140   

Amortization of intangibles

     652        674        1,324        1,358   

Selling and marketing

     2,482        2,541        4,890        5,286   

General and administrative

     5,008        6,137        10,039        12,410   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total selling, general and administrative:

     9,469        10,245        19,240        21,194   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     861        29        1,513        (484

Other (expense) income:

        

Interest expense

     (924     (663     (1,798     (1,264

Loss on extinguishment of long term debt

     —          (552     —          (552

Other income

     24        —          336        2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expense

     (900     (1,215     (1,462     (1,814
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (39     (1,186     51        (2,298

Income tax benefit

     144        358        105        555   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 105      $ (828   $ 156      $ (1,743
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

Basic

   $ 0.00      $ (0.04   $ 0.01      $ (0.08

Diluted

   $ 0.00      $ (0.04   $ 0.01      $ (0.08

Weighted average shares outstanding:

        

Basic

     21,860,866        21,196,085        21,802,515        21,164,315   

Diluted

     22,015,499        21,196,085        22,238,160        21,164,315   


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

     Six Months Ended  
     June 30,  

(in thousands)

   2013     2012  

NET CASH PROVIDED BY OPERATING ACTIVITIES

     2,233        2,274   
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Purchases of medical equipment and property

     (2,564     (2,964

Proceeds from sale of medical equipment and property

     1,726        2,545   
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (838     (419
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Principal payments on term loans and capital lease obligations

     (16,918     (4,318

Cash proceeds from bank loans and revolving credit facility

     13,340        2,500   

Common stock repurchased to satisfy statutory withholding on stock based compensation

     (41     (32
  

 

 

   

 

 

 

NET CASH USED IN FINANCING ACTIVITIES

     (3,619     (1,850
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (2,224     5   

Cash and cash equivalents, beginning of period

     2,326        799   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 102      $ 804   
  

 

 

   

 

 

 


INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION

(UNAUDITED)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
(in thousands)    2013     2012     2013     2012  

Net income (loss)

   $ 105      $ (828   $ 156      $ (1,743

Adjustments:

        

Interest Expense

     924        663        1,798        1,264   

Income Tax Benefit

     (144     (358     (105     (555

Depreciation

     1,343        1,458        2,645        2,903   

Amortization

     652        674        1,324        1,358   
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 2,880      $ 1,609      $ 5,818      $ 3,227   

Concerned Stockholder Group and Retention

     —          1,111        —          2,577   

Early extinguishment of debt

     —          552        —          552   

Stock compensation

     221        292        679        633   

Strategic alternative costs (including transition costs)

     247        —          519        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA - Adjusted

   $ 3,348      $ 3,564      $ 7,016      $ 6,989