Liberator Medical Holdings, Inc. Reports Record First Quarter Results

STUART, FL--(Marketwire - February 09, 2009) - Liberator Medical Holdings, Inc. (PINKSHEETS: LBMH) announces net revenues of $5.45 million for the first fiscal quarter ended December 31, 2008. This represents an annual run rate of $21.8 million. Quarter-over-quarter net revenue growth was up 281% for the quarter ended December 31, 2008 compared to net revenues of $1.43 million for the quarter ended December 31, 2007. This increase was due to a substantial advertising campaign to obtain new mail order customers.

First Quarter 2009 Highlights

--  Net revenues totaled $5.45 million, up 281% quarter-over-quarter
--  Gross profit was $3.6 million, up $2.7 million or 297% from the
    quarter ending December 31, 2007
--  Operating expenses were up only 106% from quarter ending December 31,
    2007
--  Net income was $376,766, or $0.01 per basic and fully diluted share
    

Mark Libratore, Liberator Medical's CEO, stated: "We believe that we have successfully put into place an infrastructure that is capable of supporting a substantially higher sales volume with lower associated incremental costs. Looking forward, we think that the outlook for the demand for Company's products and services remains strong. Over the next twelve months, we will focus on increasing advertising, increasing our customer base, continuing to service our current customer base, thereby increasing our return on advertising dollars. In summary, we are confident that our proven advertising and marketing efforts will continue to drive strong sales growth and profitability."

Bob Davis, Liberator Medical's CFO, said, "Net income for the 1st quarter of FY 2009 rose to 6.9% of net sales compared to net income for the 4th quarter of FY 2008 being 3.1% of net sales. The increase in net income for the first quarter was $243,660 or 20% of the increase in net sales of $1,203,975. Thus, the incremental net income was approximately 20% of incremental sales demonstrating significant economies of scale and expansion of profit margins."

Financial Condition

As of December 31, 2008, the Company had cash of $3,761,607, an increase of $2,588,589 from September 30, 2008. Working capital as of December 31, 2008 was $4,359,658 compared to working capital of $1,730,700 at September 30, 2008. This increase in cash was due to the Company's closing a $2.5 million convertible debt placement in October 2008 plus positive cash flows generated from operating activities during the quarter. The Company incurred interest expense of $272,512 for the three months ended December 31, 2008 compared to interest of $51,258 for the three months ended December 31, 2007, an increase of $221,254, primarily due to the issuance of convertible debt.

Results of Operations

The Company's gross profit for the three months ended December 31, 2008 was up $2,697,363, or 297%, to $3,605,203 from $907,840 for the three months ended December 31st, 2007. Operating expenses for the three months ended December 31, 2008 were $2,963,798, or 54% of revenue, compared to $1,435,757, or 100% of revenue for the three months ended December 31, 2007. The increase in operating expenses is primarily attributable to increased spending levels for employees, professional fees, advertising, and allowance for bad debts to support the increase in revenues.

The Company's net income for the three months ended December 31, 2008 increased $955,941 to $376,766 compared to a net loss of $579,175 for the three months ended December 31, 2007 due to substantially higher sales volumes at substantially lower incremental operating expense.

Stay up-to-date with current events by joining Liberator Medical's E-Mail Alert List. Join by clicking the following link: http://www.b2i.us/irpass.asp?BzID=1556&to=ea&s=0

About Liberator Medical Holdings, Inc.

Liberator Medical Holdings, Inc.'s subsidiary, Liberator Medical Supply, Inc., established the Liberator brand as a leading national direct-to-consumer provider of quality medical supplies to Medicare-eligible seniors. An Exemplary Provider™ accredited by The Compliance Team, its unique combination of marketing, industry expertise and customer service has demonstrated success over a broad spectrum of chronic conditions. Liberator is recognized for offering a simple, reliable way to purchase medical supplies needed on a regular, ongoing, repeat-order basis, with the convenience of direct billing to Medicare and private insurance. Approximately 85% of its revenue comes from supplying products to meet the rapidly growing requirements of general medical supplies, personal mobility aids, diabetes, urological, ostomy and mastectomy patients. Liberator communicates with patients and their doctors on a regular basis regarding prescriptions and supplies. Customers may purchase by phone, mail or internet, with repeat orders confirmed with the customer and shipped when needed.

Safe Harbor Statement

This release contains "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including those related to the earnings and cash flow, leased space and number of employees. Forward-looking statements are subject to known and unknown risks and uncertainties which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this press release. Such risks and uncertainties may include, but are not limited to, the Company's need to raise equity capital and its ability to obtain equity financing on acceptable terms, if at all, regulatory limitations on the medical industry in general, working capital constraints, fluctuations in customer demand and commitments, fluctuation in quarterly results, introduction of new services and products, commercial acceptance and viability of new services and products, pricing and competition, reliance upon subcontractors and vendors, the timing of new technology and product introductions, the risk of early obsolescence of our products and the other factors detailed in our annual report on Form 10-KSB for the fiscal year ended September 30, 2008 and our other filings with the Securities and Exchange Commission. We assume no obligation to update the information contained in this news release.

            Liberator Medical Holdings, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets


                                                December 31,  September 30,
                                                    2008          2008
                                                ------------- -------------
                                                 (Unaudited)
                     Assets
Current Assets
Cash                                           $   3,761,607 $   1,173,018
Accounts receivable, net of allowance for
 doubtful accounts of $1,512,786 and
 $1,055,606, respectively                          3,029,627     2,405,102
Prepaid expenses                                     209,545       321,182
Inventory, net of allowance for obsolete
 inventory of $50,000 and $50,000, respectively    1,030,507       785,884
Deferred advertising, current portion                977,740       769,851
Other                                                  4,463         1,848
                                               ------------- -------------
Total Current Assets                               9,013,489     5,456,885
                                               ------------- -------------

Property and Equipment
Property and Equipment, net of accumulated
 depreciation of $780,952 and $714,641,
 respectively                                        796,111       815,833

Other Assets
Deferred advertising, net of current portion         841,586       660,524
Deferred loan costs                                  699,302       492,821
Deposits                                             129,759       100,089

Total Other Assets                                 1,670,647     1,253,434
                                               ------------- -------------
Total Assets                                   $  11,480,247 $   7,526,152
                                               ============= =============

      Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable                               $   1,828,484 $     900,448
Accrued liabilities                                  229,945       289,848
Stockholder loan                                   1,664,649     1,664,649
Convertible notes payable, net of unamortized
 discount of $26,786 and $56,833, respectively       825,708       772,163
Capital lease obligations, current portion            54,125        50,816
Deferred rent liability, current portion              50,920        48,261
                                               ------------- -------------
Total Current Liabilities                          4,653,831     3,726,185
                                               ------------- -------------

Long-Term Liabilities
Convertible notes payable, net of unamortized
 discount of $789,709 and $748,921,
 respectively                                      5,242,603     2,788,704
Capital lease obligations, net of current
 portion                                              80,594        82,155
Deferred rent liability, net of current portion      199,449       214,215
                                               ------------- -------------
Total Long-Term Liabilities                        5,522,646     3,085,074
                                               ------------- -------------
Total Liabilities                                 10,176,477     6,811,259
                                               ------------- -------------

Stockholders’ Equity
Common stock, $.001 par value, 200,000,000
 shares authorized, 32,050,366 shares issued,
 32,043,766 and 32,050,366 shares outstanding
 at December 31, 2008 and September 30, 2008,
 respectively                                         32,050        32,050
Additional paid-in capital                        11,392,700    11,177,266
Accumulated deficit                              (10,117,657)  (10,494,423)
                                               ------------- -------------
                                                   1,307,093       714,893
Less: Treasury stock, at cost (6,600 shares)          (3,323)           --
                                               ------------- -------------

Total Stockholders’ Equity                         1,303,770       714,893
                                               ------------- -------------

Total Liabilities and Stockholders’ Equity     $  11,480,247 $   7,526,152
                                               ============= =============

See accompanying notes to unaudited condensed consolidated financial
statements.




            Liberator Medical Holdings, Inc. and Subsidiaries
              Condensed Consolidated Statements of Operations
          For the three months ended December 31, 2008 and 2007
                                (Unaudited)


                                                     Three Months Ended
                                                        December 31,
                                                 -------------------------
                                                     2008         2007
                                                 ------------ ------------
Sales                                            $  5,454,923 $  1,429,465

Cost of Sales                                       1,849,720      521,625

                                                 ------------ ------------
Gross Profit                                        3,605,203      907,840
                                                 ------------ ------------

Operating Expenses
Payroll, taxes and benefits                         1,049,589      567,485
Advertising                                           297,794       67,666
Bad debts                                             678,982      154,917
Depreciation                                           66,309       45,900
General and administrative                            871,124      599,789
                                                 ------------ ------------
Total Operating Expenses                            2,963,798    1,435,757
                                                 ------------ ------------

Income (Loss) from Operations                         641,405     (527,917)
                                                 ------------ ------------

Other Income (Expense)

Interest expense                                     (272,512)     (51,258)

Interest income                                         7,873           --
                                                 ------------ ------------
Total Other Income (Expense)                         (264,639)     (51,258)
                                                 ------------ ------------

Income (Loss) before Income Taxes                     376,766     (579,175)

Provision for Income Taxes                                 --           --
                                                 ------------ ------------

Net Income (Loss)                                $    376,766 $   (579,175)
                                                 ============ ============

Basic earnings (loss) per share:
Weighted average shares outstanding                32,049,381   31,305,895
Earnings (loss) per share                        $       0.01 $      (0.02)

Diluted earnings (loss) per share:
Weighted average shares outstanding                35,969,716   31,305,895
Earnings (loss) per share                        $       0.01 $      (0.02)

See accompanying notes to unaudited condensed consolidated financial
statements.




            Liberator Medical Holdings, Inc. and Subsidiaries
              Condensed Consolidated Statements of Cash Flows
          For the three months ended December 31, 2008 and 2007
                                (Unaudited)


                                                      2008         2007
                                                  ------------ -----------
Cash flow from operating activities:
  Net Income (Loss)                               $    376,766 $  (579,175)

  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization                      357,144     113,566
    Equity based compensation                          136,025     264,252
    Bad debt expense                                   678,982     154,917
    Non-cash interest related to convertible note
     payable                                           161,788          --
    Amortization of loan issuance costs                  9,968          --
  Changes in operating assets and liabilities:
    Accounts receivable                             (1,303,507)   (465,949)
    Prepaid expenses and other current assets           (3,815)    (94,562)
    Deposits                                           (29,670)     (2,135)
    Inventory                                         (244,623)        528
    Accounts payable                                   928,036     157,165
    Accrued expenses                                   (41,719)     (8,674)
    Deferred rent                                      (12,107)    (10,495)
    Deferred loan costs                                113,729          --
    Deferred advertising                              (679,786)   (157,031)
                                                  ------------ -----------
    Net Cash Flow Provided by (Used in) Operating
     Activities                                        447,211    (627,593)
                                                  ------------ -----------

Cash flow from investing activities:
  Purchase of property and equipment                   (29,177)    (96,122)
                                                  ------------ -----------
    Net Cash Flow Used in Investing Activities         (29,177)    (96,122)
                                                  ------------ -----------

Cash flow from financing activities:
  Proceeds from sale of stock                               --     672,700
  Proceeds from issuance of convertible notes        2,500,000          --
  Broker commissions                                  (203,056)         --
  Legal and other fees paid                           (107,404)         --
  Purchase of treasury stock                            (3,323)         --
  Payments of long-term debt and capital lease
   obligations                                         (15,662)    (66,605)
                                                  ------------ -----------

    Net Cash Flow Provided by Financing Activities   2,170,555     606,095
                                                  ------------ -----------


    Net (decrease) increase in cash                  2,588,589    (117,620)

Cash at beginning of period                          1,173,018     176,819
                                                  ------------ -----------

Cash at end of period                             $  3,761,607 $    59,199
                                                  ------------ -----------

Supplemental disclosure of cash flow information:
Cash paid for interest                            $     92,540 $    51,258

Supplemental schedule of non-cash investing and
 financing activities:
Capital expenditures funded by capital lease
 borrowings                                       $     17,410 $        --

See accompanying notes to unaudited condensed consolidated financial
statements.


Contact:

Liberator Medical Holdings, Inc.
Mark Libratore
President & CEO
772-287-2414
investors@liberatormedical.com

Investor Relations Contact
Gerald Kieft or Ryan Audin
Wall Street Resources, Inc.
772-219-7525
LiberatorIR@wallstreetresources.net
http://www.wallstreetresources.net

MORE ON THIS TOPIC