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InfuSystem Holdings Provides Business Update and Comments on First Quarter 2008 Financial Results

NEW YORK, May 12 /PRNewswire-FirstCall/ -- InfuSystem Holdings, Inc. (OTC Bulletin Board: INHI; INHIW; INHIU), the leading provider of ambulatory infusion pumps and associated clinical services, today announced financial results and provided a business update for the first quarter of 2008.

Mr. Steve Watkins, chief executive officer, commented, "We are pleased with the results of our first full quarter of operations as a stand-alone public company, and have already begun to benefit from some of our early initiatives, as evidenced by an approximate 8 percent increase in revenues for the quarter, compared to results of InfuSystem, Inc. for the first quarter of last year, while under its prior ownership. Among of our first steps following the acquisition were adding key personnel; setting new quotas, incentive plans and training for the sales force; and beginning a rebranding and redesign of our marketing materials. We also continue to explore potential acquisition candidates that would complement our existing products and services, and benefit from our strong distribution across the U.S., which includes approximately 60% penetration of oncologist practices, and contracts with managed care organizations covering over 125 million managed care lives."

"With those first steps in place we look forward to the next phase of our strategy which includes building the awareness of InfuSystem by educating the payors, physicians, and patients, all of whom stand to benefit from our ambulatory infusion pumps and associated clinical services. Specifically, ambulatory infusion of chemotherapy is advantageous to payors, including managed care organizations, because it is generally less expensive than homecare or hospitalization and may help lower the costs incurred to treat the side-effects that may accompany traditional bolus treatment. Ambulatory infusion also benefits the patients through improved efficacy of the drugs as well as greater patient comfort compared to traditional bolus treatment."

"Protocols involving continuous infusion therapy are widely recognized as the standard of care for treatment of advanced or metastatic colorectal cancer (CRC). One of the primary focuses of our sales force is educating oncologists and nurses about the benefits of treating patients with CRC in the adjuvant setting, as well as treating patients with other cancers where continuous infusion protocols have been approved. In addition to the economic advantages to patients and payors, ambulatory infusion provides patients greater freedom and mobility than continuous infusion delivered in an in-patient setting. In the outpatient setting, there are over 1,500 facilities across the United States already using our services. We believe that expansion of continuous infusion chemotherapy regimens into additional tumor types will result in the opportunity to extend our services into additional markets at low-cost."

"In addition to resuming our organic growth, we also generated very strong cash flow and now have over $6 million of cash and cash equivalents as of March 31, 2008. We achieved approximately $2 million of Adjusted EBITDA for the quarter, which excludes a $5.2 million gain on derivative financial instruments. We also incurred unusually high auditing, legal and other expenses related to the filing of our first post-acquisition 10-K. We expect these expenses to normalize heading into the second quarter, resulting in improved operating results going forward. At the same time, we expect our margins to improve as we drive top-line growth and leverage our existing infrastructure."

Financial Results

Revenue for the first quarter ended March 31, 2008 was $8.5 million, versus $0 for the same period in 2007, which reflects the revenues recognized by InfuSystem Holdings, Inc. following the acquisition of InfuSystem, Inc. from I-Flow Corporation.

Operating income for the first quarter of 2008 was $521,000 versus an operating loss of ($1.2 million) for the same period in 2007. The increase in operating income for the first quarter of 2008 reflects revenue and operating expenses recorded for InfuSystem, Inc. following the acquisition. The Company also incurred unusually high auditing, legal and other expenses related to the Form 10-K filing during the first quarter, due to the fact this was the Company's first annual report as an operating company, as well as the requirement to include in the Form 10-K certain pre-acquisition financial statements and footnotes of InfuSystem, Inc. (while under I-Flow ownership).

The net income for the first quarter of 2008 was $4.8 million, or $0.29 per diluted share, compared to net income of $1.8 million or $0.08 per diluted share, for the same period in 2007. The net income for the first quarter of 2008 included a $5.2 million gain on derivative financial instruments, compared to a $2.0 million gain for the first quarter of 2007.

Adjusted EBITDA for the first quarter ended March 31, 2008 was $2.0 million, as compared to an Adjusted EBITDA loss of approximately ($566,000) for the same period of 2007. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes both gain/loss on derivative financial instruments, as well as stock-based compensation. Adjusted EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), and should not be considered in isolation of, or as a substitute for, earnings as an indicator of operating performance, or cash flows from operating activities as a measure of liquidity. The Company believes the presentation of Adjusted EBITDA is relevant and useful by enhancing the readers' ability to understand the Company's operating performance. The Company's management utilizes Adjusted EBITDA as a means to measure performance. The Company's measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The table below reconciles Adjusted EBITDA, a non-GAAP measure, to net income for the three months ended March 31, 2008 and 2007.

Reconciliation from Net Income to Three Months Ended

Adjusted EBITDA: March 31

2008 2007

Net Income $4,797 $1,775


Interest expense 958 -

Interest income (3) (1,151)

Income tax expense - 220

Depreciation -- Pumps 963 -

Depreciation -- Other 41 -

Amortization 457 -

EBITDA $7,213 $844


Gain on derivatives (5,231) (2,025)

Stock based compensation - 615

Adj. EBITDA $1,982 $(566)

Adj. EBITDA EPS - basic 0.12 (0.03)

Adj. EBITDA EPS - diluted 0.12 (0.03)

About InfuSystem Holdings, Inc.

InfuSystem is the leading provider of ambulatory infusion pumps and associated clinical services for oncology practices and their patients in the U.S. These pumps allow for the gradual delivery of a drug over a period of days in the privacy of one's home, compared to bolus infusion chemotherapy treatments that are given in a single high dose over a short period of time. Improved efficacy of the drugs, patient comfort, reimbursement to doctors for appropriate services and continuity of care all play a role in the growing trend toward this form of treatment. InfuSystem's pumps are primarily used for colorectal cancer, but they have been approved for other forms of cancer, thereby greatly enhancing the market opportunity for InfuSystem.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in InfuSystem's publicly filed documents.

InfuSystem Holdings, Inc.


March 31, December 31,

(in thousands, except share data) 2008 2007

ASSETS (Unaudited)

Current Assets:

Cash and cash equivalents 6,430 3,960

Accounts receivable, less allowance for

doubtful accounts of $1945 and $1638 at

March 31, 2008 and December 31, 2007,

respectively; March 31, 2008 and

December 31, 2007 include $47 and $103

due from I-Flow, respectively 5,256 6,304

Inventory supplies 302 364

Prepaid expenses and other current assets 522 1,263

Deferred income taxes 4 4

Total Current Assets 12,514 11,895

Property & equipment, net 12,903 13,504

Deferred debt issuance costs, net 1,738 1,918

Goodwill 56,572 56,544

Intangible assets, net 32,108 32,565

Total Assets 115,835 116,426


Current Liabilities:

Accounts payable 2,467 1,076

Other current liabilities 747 1,886

Derivative liabilities 7,176 12,407

Current portion of long-term debt payable

to I-Flow 2,453 2,044

Total Current Liabilities 12,843 17,413

Long-term debt payable to I-Flow, net

of current portion 29,432 30,250

Deferred income taxes 4 4

Total Liabilities 42,279 47,667

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 18,315,430 and

21,041,918, respectively; outstanding

16,824,295 and 18,625,252, respectively 2 2

Additional paid-in capital 79,437 79,437

Retained deficit (5,883) (10,680)

Total Stockholders' Equity 73,556 68,759

Total Liabilities and Stockholders' Equity 115,835 116,426

InfuSystem Holdings, Inc.



Three Months Ended

March 31

(in thousands, except per share data) 2008 2007

Net revenues $8,530 $-

Operating expenses:

Cost of Revenues -- Product and

supply costs 1,465 -

Cost of Revenues -- Pump depreciation 963 -

Provision for doubtful accounts 861 -

Amortization of intangibles 457 -

Selling and marketing 1,077 -

General and administrative 3,186 1,181

Total Operating Expenses 8,009 1,181

Other income (expense):

Gain on derivatives 5,231 2,025

Interest income 3 1,151

Interest expense (958) -

Total other income (expense) 4,276 3,176

Income before income taxes 4,797 1,995

Income tax expense - (220)

Net income 4,797 1,775

Net income per share:

basic 0.29 0.10

diluted 0.29 0.08

Weighted average shares outstanding:

basic 16,824,295 18,625,252

diluted 16,824,295 22,417,488

InfuSystem Holdings, Inc.



Three Months Ended

March 31

(in thousands) 2008 2007


Net Income 4,797 1,775

Items included in net income not

requiring cash:

Gain on derivative liabilities (5,231) (2,025)

Provision for doubtful accounts 861 -

Depreciation 1,004 -

Amortization of intangible assets 457 -

Amortization of deferred debt

issuance costs 180 -

Loss on disposal of assets 225 -

Interest Income on Investments Held

in Trust - (1,147)

Stock-based compensation - 615

Changes in current assets and liabilities:

Decrease (increase) in accounts receivable 187 -

Decrease (increase) in prepaid

expenses and other current assets 803 154

Increase (decrease) in accounts

payable and other current liabilities 140 354




Payment of deferred acquisition costs (97) (92)

Capital Expenditures (447) -



Payments on term loan (409) -



Net change in cash and cash equivalents 2,470 (365)

Cash and cash equivalents, beginning

of period 3,960 427

Cash and cash equivalents, end of period 6,430 62


Cash paid for interest (including

swap payments/proceeds, $778 $-

and excluding capitalized interest)

Cash paid for income taxes $442 $169


Additions to property (a) $537 $-

(a) Amounts consist of current liabilities for net property that have not

been included in investing activities. These amounts have not been

paid for as of March 31, but will be included as a cash outflow from

investing activities for capital expenditures when paid.

SOURCE InfuSystem Holdings, Inc.
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