Net revenues totaled $17.6M, an increase of 2.1%, versus the third quarter of 2016 of $17.2M.
AEBITDA increased 13%, compared to the third quarter of 2016 and 26%, compared to the second quarter of 2017
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| [10-November-2017] |
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MADISON HEIGHTS, Mich., Nov. 10, 2017 /PRNewswire/ -- InfuSystem Holdings, Inc. (NYSE American: 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 financial results for the quarter ended September 30, 2017. Third Quarter 2017 Overview:
Management Discussion Dr. Lehman continued, "On a sequential basis, our performance metrics are reflecting meaningful progress. For the third quarter of 2017, general and administrative expenses are down $0.8 million, or 13.4%; cash collections were up $0.7 million, or 7%, for our commercial payors; and adjusted EBITDA (a non-GAAP performance metric) increased $0.8 million, or 26.2%, all compared to the second quarter of 2017. Gross margin for the quarter hit 62.8% as we continue to manage expenses aggressively. "I am pleased with the traction that we are beginning to gain as we continue to effectively implement our new strategic initiatives. Our focus will continue to be to more efficiently manage our pump fleet, reduce operating expenses and better manage our working capital. Based on improved operational performance, we were able to reduce debt by an additional $2.9 million during the third quarter of 2017. On a year-to-date basis, we have reduced our net debt by $4.7 million. For the second consecutive quarter, I am pleased with our adjusted EBITDA at $3.9 million, an increase of 26.2%, from $3.1 million in the second quarter of 2017. As I have indicated on previous occasions, we have embarked on a process to recalibrate this business that will take some time. That said, the improving operational results lead me to believe we are heading in the right direction," concluded Dr. Lehman. Third Quarter Results Net collected rental revenues, or net revenues from rentals less provision for doubtful accounts (a non-GAAP financial measure), was $14.0 million in the third quarter of 2017, an increase of 3.7%, compared to $13.5 million in the third quarter of 2016. Bad Debt for the quarter ended September 30, 2017 was $1.3 million, an increase of $0.2 million, compared to the quarter ended September 30, 2016. Bad Debt was 7.2% of revenues for the third quarter of 2017, compared to 6.4% for the same prior year period. This change is largely due to a higher mix of patient payors in our rental business, which generally have higher uncollectible rates than commercial payors. This was offset by a decrease in bad debt reserves related to our revised billing practices for Medicare accounts as required by SE1609. We now directly bill providers and not third-party payors for SE1609 related services. Because this is a dramatic change from prior practices, we have experienced a delay in providers acknowledging and paying under the new model. We continue to see improvements in collections from SE1609 providers since the initial implementation in July 2016, but nonetheless, we have adopted the practice of reserving for all SE1609 accounts receivable aged greater than 120 days. We believe the strategic shift to focusing additional resources on collection efforts will deliver a positive impact with respect to these SE1609 accounts receivables. Gross profit for the third quarter of 2017 was $11.0 million, an increase of 6.3%, compared to $10.4 million for the same prior year period. As a percentage of net revenues, gross profit equaled 62.8% of total net revenues in the third quarter of 2017, compared to 60.3% in the prior year's comparable quarter. The increase in gross profit for the third quarter of 2017 was largely attributed to the increase in net revenues of $0.4 million for the period, as well as a decrease of $0.7 million in costs of pumps sold, offset by an increase of $0.5 million in product and supply costs. For the third quarter of 2017, G&A expenses were $5.6 million, an increase of $0.3 million, or 5.6%, compared to the same prior year period. The increase in G&A expense versus the same prior year period was mainly attributable to stock compensation expense of $0.2 million and outside services of $0.1 million. Other expenses for the third quarter of 2017 were $0.4 million, which was consistent with the same period in 2016. Selling and marketing expenses for the third quarter of 2017 were $2.3 million, a decrease of $0.2 million, or 9.2%, compared to the third quarter of 2016. Net loss in the third quarter of 2017 was $0.1 million, or $(0.01) loss per diluted share, compared to net income of $0.1 million, or $0.00 income per diluted share, in the same prior year period. Adjusted net loss, excluding non-recurring items (a non-GAAP financial measure), was $0.2 million, or $(0.01) loss per diluted share, compared to adjusted net income of $0.1 million, or $0.00 income per diluted share, for the same prior year period. For the third quarter of 2017, adjusted EBITDA (a non-GAAP financial measure) was $3.9 million, an increase of 13.2%, compared to $3.4 million for the same period in 2016. The Company utilizes adjusted net (loss) income and adjusted EBITDA as a means to measure its operating performance. A reconciliation from GAAP operating measures to adjusted net (loss) income and adjusted EBITDA, both non-GAAP measures, can be found in the appendix attached to this press release. Adjustments during the third quarter of 2017 included, among other adjustments, expenses for severance and early termination fees from paying down capital leases. Financial Condition Net cash provided by investing activities was $0.7 million for the nine months ended September 30, 2017, compared to $4.7 million used in the nine months ended September 30, 2016. This $5.4 million increase was largely due to $2.8 million less investment in IT, reduced purchases of medical equipment of $1.3 million and an increase in proceeds from the sale of medical equipment of $1.0 million, and increased pump sales during the third quarter of 2017. Net cash used in financing activities for the nine months ended September 30, 2017, was $7.4 million, compared to net cash provided by financing activities of $1.2 million for the same prior year period. This change is primarily attributable to the cash proceeds received from our decision to borrow from the revolving credit line under our Credit Facility during the nine months ended September 30, 2016, as well as, our decision to pay down a majority of our capital lease obligations during the first half of 2017. As of September 30, 2017, we maintained cash and cash equivalents of $0.8 million and $9.0 million of net availability under our revolving credit facility, compared to $3.4 million of cash and cash equivalents and $9.9 million of net availability, respectively, at December 31, 2016. Conference Call Non-GAAP Measures About InfuSystem Holdings, Inc. Forward-Looking Statements Additional information about InfuSystem Holdings, Inc. is available at www.infusystem.com. FINANCIAL TABLES FOLLOW INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
-----
September 30, December 31,
(in thousands, except share data) 2017 2016
-------------------------------- ---- ----
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $803 $3,398
Accounts receivable, less allowance for
doubtful accounts of $6,847 and $4,989
at September 30, 2017 and December 31,
2016, respectively 10,971 11,581
Inventory 1,873 2,166
Other current assets 1,121 949
Deferred income taxes - 2,675
--- -----
Total Current Assets 14,768 20,769
Medical equipment held for sale or rental 1,200 1,642
Medical equipment in rental service, net
of accumulated depreciation 24,301 28,036
Property & equipment, net of accumulated
depreciation 1,711 1,997
Intangible assets, net 26,951 31,239
Deferred income taxes 16,334 12,436
Other assets 70 225
--- ---
Total Assets $85,335 $96,344
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $4,093 $5,315
Capital leases 584 2,938
Current portion of long-term debt 2,849 5,314
Other current liabilities 2,427 2,872
----- -----
Total Current Liabilities 9,953 16,439
Long-term debt, net of current portion 26,535 26,577
Capital leases 101 2,573
Other long-term liabilities - 66
--- ---
Total Long-Term Liabilities 26,636 29,216
Total Liabilities $36,589 $45,655
------- -------
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 22,978,398 and
22,780,738,respectively, as of September
30, 2017 and 22,867,335 and 22,669,675,
respectively, as of December 31, 2016 2 2
Additional paid-in capital 92,383 91,829
-
Retained deficit (43,639) (41,142)
------- -------
Total Stockholders' Equity 48,746 50,689
------ ------
Total Liabilities and Stockholders'
Equity $85,335 $96,344
======= =======
INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
(in thousands, except share and per share
data) September 30 September 30
----------------------------------------- ------------ ------------
2017 2016 2017 2016
---- ---- ---- ----
Net revenues:
Rentals $15,322 $14,640 $45,228 $47,370
Product Sales 2,266 2,586 6,956 6,273
----- ----- ----- -----
Net revenues 17,588 17,226 52,184 53,643
Cost of revenues:
Cost of revenues -Product, service and supply
costs 4,452 4,018 13,612 12,313
Cost of revenues -Pump depreciation and
disposals 2,095 2,819 6,541 7,241
----- ----- ----- -----
Gross profit 11,041 10,389 32,031 34,089
------ ------ ------ ------
Selling, general and administrative expenses:
Provision for doubtful accounts 1,274 1,098 4,456 3,912
Amortization of intangibles 1,384 958 4,182 2,792
Selling and marketing 2,262 2,490 7,443 7,629
General and administrative 5,561 5,267 18,451 18,328
----- ----- ------ ------
Total selling, general and administrative 10,481 9,813 34,532 32,661
------ ----- ------ ------
Operating income (loss) 560 576 (2,501) 1,428
Other (expense) income:
Interest expense (354) (384) (1,015) (1,016)
Other (expense) income (8) (6) (111) 21
--- --- ---- ---
Total other expense (362) (390) (1,126) (995)
Income (loss) before income taxes 198 186 (3,627) 433
Income tax (expense) benefit (327) (130) 914 (183)
---- ---- --- ----
Net (loss) income $(129) $56 $(2,713) $250
===== === ======= ====
Net (loss) income per share:
Basic $(0.01) $0.00 (0.12) 0.01
Diluted $(0.01) $0.00 (0.12) 0.01
Weighted average shares outstanding:
Basic 22,755,976 22,620,386 22,725,806 22,614,203
Diluted 22,755,976 22,995,643 22,725,806 23,059,794
INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30
------------
(in thousands) 2017 2016
---- ----
NET CASH PROVIDED BY OPERATING ACTIVITIES $4,102 $3,735
------ ------
INVESTING ACTIVITIES
Acquisition of business - (200)
Purchase of medical equipment and property (2,829) (6,997)
Proceeds from sale of medical equipment and property 3,518 2,511
----- -----
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 689 (4,686)
--- ------
FINANCING ACTIVITIES
Principal payments on revolving credit facility, term loans and
capital lease obligations (35,769) (44,197)
Cash proceeds from revolving credit facility 28,317 45,327
Debt issuance costs (38) -
Common stock repurchased to satisfy statutory withholding on
employee stock based compensation plans (27) (50)
Cash proceeds from stock plans 131 125
--- ---
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (7,386) 1,205
------ -----
Net change in cash and cash equivalents (2,595) 254
Cash and cash equivalents, beginning of period 3,398 818
----- ---
Cash and cash equivalents, end of period $803 $1,072
==== ======
INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(UNAUDITED)
NET (LOSS) INCOME TO ADJUSTED NET (LOSS) INCOME:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in thousands) 2017 2016 2017 2016
------------- ---- ---- ---- ----
GAAP net (loss) income $(129) $56 $(2,713) $250
Adjustments:
Restatement costs - - 28 -
Early termination fees for capital leases (10) - 292 -
Strategic alternatives and other costs - 109 - 304
Shareholder legal costs - - 200 -
Management reorganization 42 42 661 117
Income tax (benefit) expense 327 130 (914) 183
--- --- ---- ---
Income (loss) before income taxes -
adjusted $230 $337 $(2,446) $854
Income tax (expense) benefit relating to
adjustments (1) (380) (236) 616 (361)
---- ---- --- ----
Non-GAAP adjusted net (loss) income $(150) $101 $(1,830) $493
===== ==== ======= ====
RECONCILIATION OF GAAP NET (LOSS) INCOME PER DILUTED COMMON SHARE TO NON-
GAAP ADJUSTED NET (LOSS) INCOME PER DILUTED COMMON SHARE
GAAP net (loss) income per diluted common
share: $(0.01) $0.00 $(0.12) $0.01
Adjustments:
Early termination fees for capital leases (0.00) - 0.01 -
Strategic alternatives and other costs - 0.00 - 0.01
Shareholder legal costs - - 0.01 -
Management reorganization 0.00 0.00 0.03 0.01
Income tax (benefit) expense 0.02 0.01 (0.04) 0.01
---- ---- ----- ----
Income (loss) before income taxes -
adjusted $0.01 $0.01 $(0.11) $0.04
Income tax (expense) benefit relating to
adjustments (1) $(0.02) (0.01) 0.03 (0.02)
------ ----- ---- -----
Non-GAAP net (loss) income per diluted
common share: $(0.01) $0.00 $(0.08) $0.02
Weighted average shares outstanding:
Basic 22,755,976 22,620,386 22,725,806 22,614,203
Diluted 22,755,976 22,995,643 22,725,806 23,059,794
(1) Rate used to calculate income
tax benefit (expense) for the
periods was the Company's
effective tax rate before
adjustments.
INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (CONTINUED)
(UNAUDITED)
NET (LOSS) INCOME TO ADJUSTED
EBITDA:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in thousands) 2017 2016 2017 2016
------------- ---- ---- ---- ----
GAAP net (loss) income $(129) $56 $(2,713) $250
Adjustments:
Interest expense 354 384 1,015 1,016
Income tax expense (benefit) 327 130 (914) 183
Depreciation 1,766 1,752 5,166 5,125
Amortization 1,384 958 4,182 2,792
----- --- ----- -----
GAAP EBITDA $3,702 $3,280 $6,736 $9,366
Stock compensation 132 (16) 450 334
Restatement costs - - 28 -
Early termination fees for
capital leases (10) - 292 -
Strategic alternatives and
other costs - 109 - 304
Shareholder legal costs - - 200 -
Management reorganization 42 42 661 117
Non-GAAP Adjusted EBITDA $3,866 $3,415 $8,367 $10,121
====== ====== ====== =======
INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (CONTINUED)
(UNAUDITED)
NET COLLECTED REVENUES
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in thousands) 2017 2016 2017 2016
------------- ---- ---- ---- ----
Net Revenues:
Rentals $15,322 $14,640 $45,228 $47,370
Product sales 2,266 2,586 6,956 6,273
Total Net Revenues 17,588 17,226 52,184 53,643
Adjustments:
Less: Provision for
Doubtful Accounts (1,274) (1,098) (4,456) (3,912)
------ ------ ------ ------
Non-GAAP total - net
collected revenues -
adjusted $16,314 $16,128 $47,728 $49,731
======= ======= ======= =======
NET COLLECTED RENTAL
REVENUES
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in thousands) 2017 2016 2017 2016
------------- ---- ---- ---- ----
Net Revenues:
Rentals $15,322 $14,640 $45,228 $47,370
Adjustments:
Less: Provision for
Doubtful Accounts (1,274) (1,098) (4,456) (3,912)
------ ------ ------ ------
Non-GAAP total - net
collected rental revenues -
adjusted $14,048 $13,542 $40,772 $43,458
======= ======= ======= =======
CONTACT: Joe Dorame, Joe Diaz &
Robert Blum
Lytham Partners, LLC
602-889-9700
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Company Codes: AMEX:INFU |
