Exhibit 99.1

 

 

 

 

InfuSystem Holdings, Inc.

31700 Research Park Drive

Madison Heights, MI 48071

248-291-1210

 

CONTACT:

Joe Dorame, Joe Diaz & Robert Blum

Lytham Partners, LLC

602-889-9700

 

 

InfuSystem Holdings, Inc. Reports FOURTH QUARTER AND FULL YEAR 2018 Financial REsults

 

Generates $11.4 million in Operating Cash Flow in 2018, an increase of 48% vs. prior year.

 

MADISON HEIGHTS, MICHIGAN, March 7, 2019—InfuSystem Holdings, Inc. (NYSE American LLC: INFU) (“InfuSystem” or the “Company”), a leading national provider of infusion pumps and related services for the healthcare industry in the United States and Canada, today reported financial results for the fourth quarter and full year ended December 31, 2018.

 

Fourth Quarter and Full Year Highlights:

 

Cash flows provided by operating activities were $11.4 million for the year ended December 31, 2018, up $3.7 million or 47.6% from the same period of 2017.

 

2018 stock repurchases totaled $10.4 million, approximately 14.6% of the outstanding shares at December 31, 2017.

 

Net revenues for the quarter and year ended December 31, 2018 were $17.6 million and $67.1 million, respectively, a 7.0% and 5.5% decrease, respectively, from the same prior year periods. Prior to the effect of adopting ASC 606, this would have represented a net increase of $0.2 million or 1.0% increase and $2.4 million or 3.3% increase, respectively, from the same prior year periods.

 

Net loss for the quarter and year ended December 31, 2018 was $0.3 million and $1.1 million, respectively, a 98.5% and 94.7% decrease, respectively, from the net loss for the same prior year periods.

 

Adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) (a non-GAAP financial measure) for the quarter and year ended December 31, 2018 was $3.7 million and $13.8 million, respectively, an increase of 12.5% and 17.7%, respectively, from the same prior year periods and represented 21.3% and 20.5% of net revenues, respectively. 

 

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Commenting on the fourth quarter and full year, Richard DiIorio, chief executive officer of InfuSystem, said, “I am pleased to announce that our improved efficiencies and strategic initiatives continue to favorably impact our financials.  We will continue working to improve our operations in 2019, with emphasis on managing our pump utilization, improving logistics, and managing our expenses.  This, along with an initiative to improve our revenue cycle management practices, should continue the positive trend in cash generation into 2019.”

 

Mr. DiIorio continued, “The InfuSystem team will continue the company’s agenda of superior patient care and customer service into the new fiscal year. This, we believe, will help to drive significant market share gains in our core oncology business and customer adoption of our new InfuSystem Mobile patient-care application.”

 

Implementation of ASC 606:

Effective January 1, 2018, InfuSystem adopted, on a modified retrospective approach, Accounting Standards Codification Topic 606: Revenue from Contracts with Customers (“ASC 606”). The effect of this change is to remove from reported revenue, in this and future periods, the amount the Company recorded as a provision for doubtful accounts during such period. The adoption on a modified retrospective approach means that the Company will not restate its financials for the periods prior to the adoption of ASC 606.

 

The adoption of ASC 606 resulted in a reclassification of $1.5 million and $6.3 million for the three months and full year ended December 31, 2018, respectively. These amounts, which previously would have been reported as provision for doubtful accounts on the Company’s income statement, are instead reflected as reductions in reported net revenues - rentals.

 

Results for the Quarter and Year Ended December 31, 2018

Gregory Schulte, chief financial officer, commented, “Our significant increase in operating cash flows in 2018 was primarily due to:

 

Profitability, after adjustments to reconcile net loss to net cash provided by operating activities excluding the change in the provision for doubtful accounts, improved by $2.8 million, primarily attributable to net revenue growth and decreased selling, general and administrative costs; and,

 

Improved working capital net inflows of $0.9 million, primarily due to increased accounts receivable collections, including the change in the provision for doubtful accounts, and vendor management impact on accounts payable and other liabilities, partially offset by higher inventory levels.

 

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These improved cash flows, plus net borrowings from our amended bank credit facility, allowed us to repurchase $10.4 million of our common stock during 2018. Also, in the second half of 2018, we used our improved cash flows from operations and equipment line borrowings to ramp up capital expenditure purchases of pumps to meet the demand of favorable oncology market growth in the foreseeable future and to make other necessary additions to our fleet.”

 

Conference Call

The Company will conduct a conference call for investors on Thursday, March 7, 2019 at 9:00 a.m. Eastern Time to discuss fourth quarter and full year 2018 results. The conference call may also include a discussion of Company developments, forward-looking statements and other material information about business and financial matters. To participate in this call, please dial in toll-free (833) 366-1127 or (412) 902-6773. Additionally, a Web replay will be available on the Company’s website for 90 days or by calling (877) 344-7529 or (412) 317-0088, confirmation code 10129264, through March 14, 2019.

 

Condensed Consolidated Financial Statements

Certain balances in the condensed consolidated financial statements for the quarter and year ended December 31, 2017 have been reclassified to be consistent with the quarter and year ended December 31, 2018 presentation in accordance with GAAP.

 

Non-GAAP Measures

This press release contains information prepared in conformity with GAAP as well as non-GAAP financial information. The Company believes that the non-GAAP financial measures presented in this press release provide useful information to the Company's management, investors, and other interested parties about the Company's operating performance because they allow them to understand and compare the Company's operating results during the current periods to the prior year periods in a more consistent manner. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP, and similarly titled non-GAAP measures may be calculated differently by other companies. The Company calculates those non-GAAP measures by adjusting for non-recurring items that are not part of the normal course of business and that the Company’s management does not believe will have similar comparable year-over-year items. A reconciliation of those measures to the most directly comparable GAAP measures is provided below.

 

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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, Massachusetts and Ontario, Canada. The Company’s stock is traded on the NYSE American LLC under the symbol INFU.

 

Forward-Looking Statements 

The financial results in this press release reflect preliminary results, which are not final until the Company's Form 10-K for the year ended December 31, 2018 is filed. In addition, certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, such as statements relating to future actions, business plans, objectives and prospects, future operating or financial performance. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “strategy,” “future,” “likely,” variations of such words, and other similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Forward-looking statements are subject to factors, risks and uncertainties that could cause actual results to differ materially, including, but not limited to, our dependence on estimates of collectible revenue, potential litigation, changes in third-party reimbursement processes, changes in law and other risk factors disclosed in the Company’s most recent annual report on Form 10-K and, to the extent applicable, quarterly reports on Form 10-Q. All forward-looking statements made in this press release speak only as of the date hereof. We do not undertake any obligation to update any forward-looking statements to reflect future events or circumstances, except as required by law.

 

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

 

FINANCIAL TABLES FOLLOW

 

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   

December 31,

   

December 31,

 

(in thousands, except share and per share data)

 

2018

   

2017

 
                 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 4,318     $ 3,469  

Accounts receivable, net

    9,593       11,284  

Inventories

    2,254       1,764  

Other current assets

    1,372       1,150  

Total current assets

    17,537       17,667  

Medical equipment held for sale or rental

    1,601       1,567  

Medical equipment in rental service, net of accumulated depreciation

    23,488       23,369  

Property & equipment, net of accumulated depreciation

    1,445       1,633  

Intangible assets, net

    19,865       24,514  

Other assets

    137       131  

Total assets

  $ 64,073     $ 68,881  
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Current liabilities:

               

Accounts payable

  $ 7,091     $ 5,516  

Capital lease liability, current

    33       505  

Current portion of long-term debt

    4,903       3,039  

Other current liabilities

    2,763       3,414  

Total current liabilities

    14,790       12,474  

Long-term debt, net of current portion

    28,842       25,352  

Capital lease liability, long-term

    -       33  

Deferred income taxes

    -       62  

Other long-term liabilities

    -       7  

Total liabilities

  $ 43,632     $ 37,928  
                 

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 23,095,513 and 19,577,024, as of December 31, 2018, respectively, and issued and outstanding 22,978,398 and 22,780,738, as of December 31, 2017, respectively.

    2       2  

Additional paid-in capital

    83,167       92,584  

Retained deficit

    (62,728 )     (61,633 )
                 

Total stockholders’ equity

    20,441       30,953  
                 

Total liabilities and stockholders’ equity

  $ 64,073     $ 68,881  

 

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

   

December 31,

 

(in thousands, except share data)

 

2018

   

2017

   

2018

   

2017

 
                                 

Net revenues:

                               

Rentals

  $ 14,338     $ 15,857     $ 56,584     $ 61,085  

Product sales

    3,225       3,036       10,554       9,992  

Net revenues

    17,563       18,893       67,138       71,077  
                                 

Cost of revenues:

                               

Cost of revenues - Product, service and supply costs

    5,152       4,755       19,332       18,367  

Cost of revenues - Pump depreciation and loss on disposal

    2,567       2,808       8,788       9,349  

Gross profit

    9,844       11,330       39,018       43,361  
                                 

Selling, general and administrative expenses:

                               

Third-party payor provision for doubtful accounts

    -       1,286       -       5,615  

Amortization of intangibles

    1,137       1,378       4,649       5,560  

Asset impairment charges

    -       993       -       993  

Selling and marketing

    2,157       2,336       9,107       9,779  

General and administrative

    6,424       6,648       24,847       25,226  
                                 

Total selling, general and administrative:

    9,718       12,641       38,603       47,173  
                                 

Operating income (loss)

    126       (1,311 )     415       (3,812 )
                                 

Other expense:

                               

Interest expense

    (439 )     (317 )     (1,420 )     (1,332 )

Other expense

    (18 )     (2 )     (37 )     (113 )
                                 

Total other expense

    (457 )     (319 )     (1,457 )     (1,445 )
                                 

Loss before income taxes

    (331 )     (1,630 )     (1,042 )     (5,257 )

Benefit from (provision for) income taxes

    56       (16,364 )     (53 )     (15,450 )
                                 

Net loss

  $ (275 )   $ (17,994 )   $ (1,095 )   $ (20,707 )
                                 

Net loss per share:

                               

Basic and diluted

  $ (0.01 )   $ (0.79 )   $ (0.05 )   $ (0.91 )

Weighted average shares outstanding:

                               

Basic and diluted

    19,561,272       22,780,737       21,417,628       22,739,651  

 

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   

Year Ended

   

Year Ended

 
   

December 31,

   

December 31,

 

(in thousands)

 

2018

   

2017

 

OPERATING ACTIVITIES

               

Net loss

  $ (1,095 )   $ (20,707 )

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

               

Provision for doubtful accounts

    6,104       5,641  

Depreciation

    6,659       6,963  

Loss on disposal of medical equipment

    434       207  

Gain on sale of medical equipment

    (1,340 )     (1,662 )

Amortization of intangible assets

    4,649       5,560  

Asset impairment charges

    -       993  

Amortization of deferred debt issuance costs

    33       28  

Stock-based compensation expense

    957       682  

Deferred income tax expense (benefit)

    (62 )     15,389  

Changes in Assets - (Increase)/Decrease:

               

Accounts receivable

    (4,413 )     (5,344 )

Inventories

    (490 )     402  

Other current assets

    (222 )     (201 )

Other assets

    (6 )     119  

Changes in Liabilities - Increase/(Decrease):

               

Accounts payable and other liabilities

    183       (352 )

NET CASH PROVIDED BY OPERATING ACTIVITIES

    11,391       7,718  

INVESTING ACTIVITIES

               

Purchases of medical equipment

    (8,022 )     (2,652 )

Purchases of property and equipment

    (281 )     (104 )

Purchases of intangible assets

    -       (192 )

Proceeds from sale of medical equipment

    3,319       3,866  
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES     (4,984 )     918  

FINANCING ACTIVITIES

               

Principal payments on term loans and capital lease obligations

    (6,319 )     (37,466 )

Cash proceeds from bank loans and revolving credit facility

    11,162       28,866  

Debt Issuance Costs

    (27 )     (38 )

Cash Proceeds - Stock Plans

    91       131  

Common stock repurchased as part of Repurchase Program

    (10,395 )     -  

Common stock repurchased to satisfy taxes on stock based compensation

    (70 )     (58 )

NET CASH USED IN FINANCING ACTIVITIES

    (5,558 )     (8,565 )

Net change in cash and cash equivalents

    849       71  

Cash and cash equivalents, beginning of year

    3,469       3,398  

Cash and cash equivalents, end of year

  $ 4,318     $ 3,469  

 

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(UNAUDITED)

 

NET LOSS TO ADJUSTED EBITDA:

   

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

    December 31,    

(in thousands)

 

2018

    2017     2018     2017  
                                 

GAAP net loss

    (275 )     (17,994 )     (1,095 )     (20,707 )

Adjustments:

                               

Interest expense

    439       317       1,420       1,332  

(Benefit from) provision for income taxes

    (56 )     16,364       53       15,450  

Depreciation

    1,780       1,797       6,659       6,963  

Asset impairment

    -       993       -       993  

Amortization

    1,137       1,378       4,649       5,560  
                                 

Non-GAAP EBITDA

  $ 3,025     $ 2,855     $ 11,686     $ 9,591  
                                 

Stock compensation costs

    278       232       957       682  

Restatement costs

    -       -       -       28  

Early termination fees for capital leases

    98       -       98       292  

Exited facility costs

    -       -       44       -  

Management reorganization/transition costs

    41       76       250       737  

Contested proxy and other shareholder costs

    17       -       251       200  

Certain other non-recurring costs

    279       160       476       160  
                                 

Non-GAAP Adjusted EBITDA

  $ 3,738     $ 3,323     $ 13,762     $ 11,690  
                                 

GAAP Net Revenues

  $ 17,563     $ 18,893     $ 67,138     $ 71,077  

Non-GAAP Adjusted EBITDA Margin

    21.3 %     17.6 %     20.5 %     16.4 %

 

 

Non-GAAP Adjusted EBITDA Margin is defined as Non-GAAP Adjusted EBITDA as a percentage of GAAP Net Revenues.

 

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