Filter News

InfuSystem Holdings, Inc. Reports 2014 Financial Results

Published: Mar 10, 2015

MADISON HEIGHTS, Mich., March 9, 2015 /PRNewswire/ -- InfuSystem Holdings, Inc. (NYSE MKT: INFU),  a leading national provider of infusion pumps and related services for the healthcare industry in the United States and Canada, reported financial results today for the fourth quarter and full year ended December 31, 2014.

Highlights for full year 2014 included:

  • Net revenue increased 7% in 2014, primarily driven by a 5% increase in Rentals revenue and a 23% increase in Product Sales;
  • "Net Collected Revenues" for 2014 increased 9% to $60.7 million;
  • Gross Profit for 2014 increased approximately 8% versus 2013;
  • Net Income for the year increased 101% to $3.3 million, or $0.15 per share, versus Net Income of $1.7 million, or $0.08 per share, in the prior year;
  • InfuSystem's electronic connectivity now includes 30 electronic medical record integrations with oncology infusion centers; 1,500 iPads deployed and more than 2,000 clinics connected to the InfuSystem Pump Portal;
  • Total rental pump fleet at December 31, 2014 stood in excess of 46,000 pumps, a 6,000 unit increase from 2013.

Revenue for the full year ended December 31, 2014 was $66.5 million, a 7% increase over 2013.  Net revenue from rentals in 2014 increased 5% while net revenue from product sales increased 23% over 2013.  Gross profit margin for the year increased to 71%, up from 70% in 2013.  The number of billings for the year increased 9%, with the mix of in- and out-of-network billings versus patient-pay and payor mix impacted by the Affordable Care Act, and consequently, inhibiting revenue growth.  Product sales for full year were positively impacted by a large pump sale during the first quarter of 2014 which resulted in additional revenues of approximately $0.9 million.  Revenues less bad debt, or "net collected revenues", for 2014 was $60.7 million compared to last year's $55.7 million, an increase of 9%.  Net Income for the year increased 101% to $3.3 million, or $0.15 per share, versus net income of $1.7 million, or $0.08 per share, in the prior year.

Eric K. Steen, chief executive officer of InfuSystem, said, "We are pleased that we continued to make significant operational and financial progress in 2014.  The conclusion of the fiscal year and the fourth quarter represented our 10th consecutive profitable quarter.  During the year, we made substantial headway on our primary strategic initiative of connecting electronically with our customers.  We ended the year with electronic medical records (EMR) connectivity at 30 oncology infusion centers throughout North America, up from zero in the prior year.  Providing our customers with connectivity solutions has led to approximately 52% of all orders now being received electronically, dramatically increasing operational efficiencies and productivity.  During the year we expanded our mix of products and services, including new treatment areas, we added to our portfolio of payor contracts, we invested in our pump fleet and expanded our sales force in new service areas.  All of this was accomplished as we continued growing our business in all areas, including rentals, service, leasing, and the sales of both equipment and disposable products.

"During the year, we expanded our pump rental fleet by almost 6,000 pumps and added sales and servicing personnel in our new post-surgical Pain Management service area with the goal of driving revenue growth.  We have increased our focus on Managed Care and Federal Exchange contracting, with the end result of our net collected revenue for rentals increasing 12% in 2014."

Mr. Steen concluded, "With the changing landscape of our payor mix, we have shifted to a more focused approach on net collected revenues versus total revenues.  We successfully executed on a key strategic initiative of driving profitable growth in 2014.  Net collected revenues for 2014 was $60.7 million compared to last year's $55.7 million, an increase of 9%.  We are pleased with the operational progress that was achieved in 2014 and we look forward to building on that momentum in 2015 and the coming years."

For the twelve months ended December 31, 2014, Adjusted EBITDA increased $0.1 million to $16.1 million compared to the same prior year period, despite the increased investments in IT and Pain Management, the write-off of pumps, and severance - all totaling $1.3 million.  The Company utilizes Adjusted EBITDA as a means to measure its operating performance.  A reconciliation table for Adjusted EBITDA, a non-GAAP measure, to net income can be found in the appendix.

Fourth quarter 2014 revenue was $16.3 million, compared to $17.2 million in the fourth quarter of 2013, primarily due to a large one-time pump sale in the fourth quarter of 2013.  Improvements in payor contracts and collections pushed bad debt down $0.8 million from the prior period, bringing net collected revenues for the fourth quarter 2014 to $15.3 million, in line with the prior year period's amount of $15.4 million. 

Gross profit for the fourth quarter 2014, was consistent with the same prior year period.  For the year ended December 31, 2014, gross profit was $47.4 million, an increase of $3.7 million, or 8%, over the same prior year period, largely attributable to the increase in rental and product sales revenue during the year.  Offsetting these additional revenues was the aforementioned low margin and opportunistic pump sale made during the first quarter of 2014.  The increase in gross profit from 70% to 71% of revenues for the period is mainly due to decreases in costs mainly in depreciation due to the change in depreciable lives for pumps from five to seven years offset by the aforementioned changes in revenue mix.

Selling and marketing expenses were $2.0 million compared to $2.4 million for the three months ended December 31, 2013.  Year-to-date selling and marketing expenses were up $0.1 million over the same prior year period, but as a percentage of total revenues such expenses are down from 16% to 15% for the same comparable periods, continuing our leverage on selling expenses.  Adjusted EBITDA was $4.6 million for the fourth quarter of 2014 compared to $4.7 million in the same prior year period.

The change in the estimated useful life of the Company's medical equipment, which occurred in the first quarter of this year, was accounted for as a change in accounting estimate, on a prospective basis, effective January 1, 2014.  The change in estimated useful life resulted in $0.5 million less in depreciation expense for the quarter ended December 31, 2014 than otherwise would have been recorded.  As a result, cost of revenues in fourth quarter 2014 is $0.5 million less than the same prior year period and is $1.9 million less for the full year 2014 compared to 2013.

Financial Condition

Net cash provided by operations for the full year ended December 31, 2014 was $7.3 million compared to cash generated of $7.5 million for the prior year period. 

As of December 31, 2014, the Company had cash and cash equivalents of $0.5 million and $6.6 million of availability on its revolving line-of-credit compared to $1.1 million of cash and cash equivalents and $5.9 million of availability on its revolving line-of-credit as of December 31, 2013. 

To read full press release, please click here.

Help employers find you! Check out all the jobs and post your resume.

Back to news