MADISON HEIGHTS, Mich., May 10, 2016 /PRNewswire/ -- 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 and Canada, today reported financial results for the first quarter ended March 31, 2016.
Highlights for the first quarter of 2016 included:
- Net Revenues totaled $19.0 million, an increase of 14%, versus the first quarter 2015 net revenues of $16.7 million;
- Net Collected Revenues increased 11% to $17.3 million, over last year's comparable quarter;
- Gross profit increased 10% to $13.3 million;
- Net Income increased to $0.5 million, or diluted EPS of $0.02, compared to first quarter 2015 net loss of $0.4 million, or diluted EPS loss of $(0.02);
- AEBITDA increased 5% to $4.1 million;
- Purchased $3.1 million of medical equipment in rental service to serve new rental business anticipated for the remainder of 2016.
Management Discussion
Eric K. Steen, chief executive officer of InfuSystem, said, "We are pleased with the strong financial performance in the first quarter, as we achieved double-digit top and bottom-line growth. During the quarter, we achieved records in net revenues, rental revenue, net collected revenue, gross profit, AEBITDA and net income growth. I am particularly pleased that the Company has reported profitability in 14 of the last 15 quarters. While the first quarter is historically our slowest period, infusion pump rental revenue for the first quarter of 2016 was up 14%; driven by a 34% increase in our direct rental business to hospitals, home infusion and long-term care, and a 9% increase in oncology pump rentals to third-party payors. We are off to a very good start in 2016."
Mr. Steen continued, "Our strategic initiatives to invest in information technology and to diversify our revenue stream with pain management and disposable infusion products are gaining traction and were meaningful contributors to the quarter's results. We now have 27 pain management surgical facility customers and we expect that will continue to grow in the coming quarters and years.
"During the quarter, we entered into an agreement to purchase certain assets of InfusAID, including approximately 300 infusion pumps, that will be added to our fleet of pumps, and we will inherit 18 medical facility relationships that will be converted to InfuSystem customers. The overall InfuSystem Oncology pump rental fleet currently totals more than 35,000 pumps in more than 1,700 medical facilities throughout North America and our entire fleet of infusion pumps currently totals over 64,000 pumps, which serves via rent, lease or sale, all of our customers throughout North America."
"I am extremely pleased with the smooth and rapid rollout of our new EXPRESS system," added Mr. Steen, "as we now have over 1,000 medical facilities converted to our new connectivity system. InfuSystem EXPRESS connects seamlessly into both our internal billing and pump management systems, delivering significant operating efficiencies to both our clinic and hospital customers and our billing and customer service teams by eliminating duplicate data entry and errors associated with human input. Also, we are directly integrated to the electronic medical record system with over 90 clinics - and soon to be 100 with our InfuBus integration engine. Our growing roster of customers appreciate the value and efficiency that our state of the art systems bring to their operations."
Mr. Steen concluded, "We turned in a very solid performance in the first quarter of 2016. I am proud of the focus of all our employees to continue to be as efficient and effective as possible in serving our existing customers and welcoming new customers with the kind of high touch service that sets InfuSystem apart. We look forward to building on these outstanding results throughout the rest of the year."
First Quarter Results
Revenues in the first quarter of 2016 were $19.0 million, up $2.3 million, or 14%, from $16.7 million in the first quarter of 2015. Rental revenue increased 14% to $17.2 million; revenue from product sales increased 14% to $1.8 million from the first quarter of 2015. The increase in revenues can be attributed to greater rental volume with new and existing sites of therapy and additional revenue of approximately $0.9 million from our Ciscura acquisition.
Net Collected Rental Revenues increased 11% to $15.5 million versus $14.0 million in the comparable quarter of 2015. Bad debt increased slightly to $1.7 million for the first quarter based on $2.1 million of additional revenue.
The net income in the first quarter of 2016 was $0.5 million, equal to $0.02 per diluted share, compared to a net loss of $0.4 million, or a loss of $(0.02) per diluted share, in the same prior year period. Adjusted net income, excluding non-recurring items was $0.6 million, or $0.02 per diluted share, compared to $0.7 million, or $0.03 per diluted share for the same prior year period.
Gross profit for the first quarter of 2016 was $13.3 million, an increase of 10%, compared to $12.1 million for the same prior year period. As a percentage of revenues, gross profit equaled 70.0% of total revenues in the first quarter compared to 72.0% in the prior year's comparable quarter.
For the first of quarter of 2016, general and administrative ("G&A") expenses were $6.7 million, an increase of $0.7 million, or 12%, compared to $6.0 million for the same prior year period. The increase in G&A expenses versus the same prior year period was mainly attributable to increases in spending on information technology of $0.5 million and increases in depreciation and professional fees of $0.1 million each.
Other expenses for the first quarter of 2016 were $0.3 million compared to $2.3 million for the same period in 2015. This decrease was mainly attributable to expenses of $1.6 million related to the write-off of deferred financing costs, of which $1.1 million was a noncash charge, as a result of the extinguishment of long-term debt. Selling and marketing expenses for the 2016 first quarter were $2.8 million compared to $2.7 million for the first quarter of 2015.
Adjusted EBITDA was $4.1 million, an increase of 5% for the first quarter of 2016 compared to $3.9 million for the same period in 2015. The Company utilizes Adjusted Net Income and Adjusted EBITDA as a means to measure its operating performance. A reconciliation from GAAP operating measures to Adjusted Net Income and Adjusted EBITDA, both non-GAAP measures, can be found in the appendix.
Financial Condition
Net cash provided by operations for the three months ended March 31, 2016, was $0.3 million compared to net cash used of $1.4 million for the same prior year period. The increase in cash is primarily due to higher amounts of non-cash expenses (such as the provision for doubtful accounts, deferred income taxes and depreciation and amortization) in the current period, as well as an increase in accounts payable and other liabilities. The company invested approximately $3.1 million in medical equipment during the quarter in anticipation of additional rental business throughout the remainder of 2016.
As of March 31, 2016, the Company maintained cash and cash equivalents of $0.6 million and $6.2 million of net availability under the Revolver compared to $0.8 million and $9.9 million, respectively, at December 31, 2015. Jonathan P. Foster, chief financial officer of InfuSystem, said, "We are extremely pleased with the increase in recurring rental revenues by 14%. However, such growth will result in lower liquidity as we invest for even more growth - as evidenced by purchasing $3.1 million of pumps in the first quarter. Management is focused on reducing working capital needs and will continue to try to match long-term assets with long-term debt."
Guidance
The Company maintains its guidance for the year of high single digit net collected revenue growth.
Conference Call
The Company will conduct a conference call for investors on Wednesday, May 11, 2016 at 11:00 a.m. Eastern Time to discuss first quarter results. Eric K. Steen, chief executive officer, Jan Skonieczny, chief operating 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 (800) 446-1671 and use the confirmation number 42429277. The release will be available on most financial websites. Additionally, a Web replay will be available on the Company's website for 30 days.
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management's intent to provide non-GAAP financial information in order to enhance readers' understanding of its consolidated financial information as prepared in accordance with GAAP. 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. Each non-GAAP financial measure and the corresponding GAAP financial measures are presented so as to not imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies. Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included later in this release.
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, Texas, Georgia and Ontario, Canada. The Company's stock is traded on the NYSE MKT under the symbol INFU.
Forward-Looking Statements
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 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.
To read full press release, please click here.
