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InfuSystem Holdings Reports $9.2 Million of Revenue and 45% Increase in Adjusted EBITDA for the First Quarter of 2009
Date:5/5/2009

MADISON HEIGHTS, Mich., May 5 /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 ended March 31, 2009.

Mr. Steve Watkins, chief executive officer, commented, "We achieved $9.2 million of revenue during the first quarter of 2009, despite a nationwide shortage of Leucovorin, a compound frequently used in association with ambulatory pump chemotherapy, which has since been resolved. At the same time, we increased gross margins by 560 basis points and continue to gain operating leverage as we held our costs in line. As a result, we generated $2.9 million of adjusted EBITDA, a 45% increase compared to the first quarter of 2008. This contributed to the Company's continued strong operating cash flow and ample cash reserves, allowing us to improve the balance sheet by aggressively paying down debt. Shortly following the first quarter, we made a $5.3 million payment on our term loan, resulting in the Company having lowered its term loan balance by over $6.1 million year-to-date."

Mr. Watkins concluded, "We remain encouraged by the near- and long-term outlook for the ambulatory infusion services market. Drug companies are incorporating continuous infusion as part of their drug treatment regimens and promoting these to oncologists. The American Cancer Society estimated that there were about 148,810 new cases of colorectal cancer in 2008 in the United States. Moreover, the combined benefits to the patient, physician and insurance provider support the expanded use of ambulatory infusion pumps to administer chemotherapy beyond stage III colorectal cancer, including esophageal, head and neck, gastric and other cancers. In order to best capitalize on this market opportunity, we continue to enhance our sales organization, including the recent addition of Bryan Russo as chief commercial officer. We look forward to his contributions as we focus on accelerating and deepening our penetration of oncology practices nationwide. Looking ahead, we anticipate continued organic revenue growth, greater operational efficiencies, and continued strong cash flow to allow for paying down additional debt in 2009."

Financial Results

Revenue for the first quarter ended March, 31 2009 was $9.2 million, an 8.2% improvement compared to $8.5 million for the same period in 2008. The increase in revenue was primarily due to obtaining business at new customer facilities, increased reimbursement, as well as improved collection efficiencies. Operating income for the first quarter of 2009 was $1.3 million versus operating income of $521,000 for the same period in 2008. The increase in operating income for the first quarter of 2009 was due, in part, to increased sales and lower product and supply costs, which were partially offset by an increase in selling and marketing expenses.

The net loss for the first quarter of 2009 was ($2.5 million), or $(0.14) per diluted share, compared to net income of $4.8 million or $0.29 per diluted share, for the same period in 2008. The net income for the first quarter of 2009 included a ($2.6 million) loss on derivative financial instruments, which was predominantly attributable to the increase in the publicly traded value of the Company's warrants during the quarter, compared to a $5.2 million gain for the first quarter of 2008.

Adjusted EBITDA for the first quarter ended March 31, 2009 was $2.9 million, compared to $2.0 million for the same period in 2008. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and excludes gain (loss) on derivative financial instruments and stock-based compensation. Adjusted EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). The Company believes the presentation of Adjusted EBITDA is a relevant and useful measure to assist a reader's ability to understand the Company's operating performance. The Company's management likewise utilizes Adjusted EBITDA as a means to measure its operating performance. The table below reconciles Adjusted EBITDA, a non-GAAP measure, to net income.

                                                 Three Months Ended
     Reconciliation from Net                          March 31
      Income to Adjusted EBITDA:

                                               2009             2008
     Net Income                             $(2,507)          $4,797
     Adjustments:
       Interest expense                         989              958
       Interest income                           (3)              (3)
       Income tax expense                       140                -
       Depreciation -- Pumps                    840              963
       Depreciation -- Other                     32               41
       Amortization                             457              457
     EBITDA                                    $(52)          $7,213
     Adjustments:
       Loss (gain) on derivatives             2,642           (5,231)
       Stock based compensation                 278                -
     Adj. EBITDA                             $2,868           $1,982

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.
                         CONSOLIDATED BALANCE SHEETS


                                                 March 31, December 31,
    (in thousands, except share data)              2009         2008
                                                (Unaudited)
     ASSETS
     Current Assets:
      Cash and cash equivalents                    $11,358      $11,513
      Accounts receivable, less allowance
       for doubtful accounts of $1,680 and
       $1,552 at  March 31, 2009 and
       December 31, 2008, respectively;
       March 31, 2009 and December 31, 2008
       include $121 and $72 due from I-Flow,
       respectively                                  4,636        4,168
      Inventory supplies                               432          391
      Prepaid expenses and other current assets      1,026          676
        Total Current Assets                        17,452       16,748
     Property & equipment, net                      10,833       10,878
     Deferred debt issuance costs, net               1,133        1,276
     Goodwill                                       56,580       56,580
     Intangible assets, net                         30,282       30,738
      Total Assets                                $116,280     $116,220
       LIABILITIES AND STOCKHOLDERS' EQUITY
     Current Liabilities:
      Accounts payable                              $1,368       $1,012
      Deferred income taxes                             55           55
      Other current liabilities                      1,069          939
      Derivative liabilities                         5,235        2,592
      Current portion of long-term debt;
       both March 31, 2009 and December 31,
       2008 include $8,564 payable to I-Flow         8,645        8,644
        Total Current Liabilities                   16,372       13,242
     Long-term debt, net of current portion;
      March 31, 2009 and December 31, 2008
      include $20,868 and $21,685 payable
      to I-Flow, respectively                       21,185       22,025
     Deferred income taxes                             880          880
        Total Liabilities                          $38,437      $36,147
      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 18,537,671 and
       18,512,671, respectively;
       outstanding 18,537,671
       and 17,278,626, respectively                      2            2
      Additional paid-in capital                    81,069       80,792
      Retained deficit                              (3,228)        (721)
      Total Stockholders' Equity                    77,843       80,073
        Total Liabilities and Stockholders'
         Equity                                    $116,280    $116,220




                       INFUSYSTEM HOLDINGS, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS
                             (UNAUDITED)


                                            Three Months Ended March 31
     (in thousands, except per share data)       2009        2008

     Net revenues                               $9,227      $8,530

     Operating expenses:
     Cost of Revenues -- Product
      and supply costs                           1,270       1,465
     Cost of Revenues -- Pump depreciation         840         963
     Provision for doubtful accounts               969         861
     Amortization of intangibles                   457         457
     Selling and marketing                       1,320       1,077
     General and administrative                  3,110       3,186
     Total Operating Expenses                    7,966       8,009
      Operating income                           1,261         521
     Other (loss) income:
     (Loss) gain on derivatives                 (2,642)      5,231
     Interest income                                 3           3
     Interest expense                             (989)       (958)
     Total other (loss) income                  (3,628)      4,276

     (Loss) income before income taxes          (2,367)      4,797
     Income tax expense                           (140)          -
     Net (loss) income                          (2,507)      4,797

     Net (loss) income per share:
      Basic & Diluted                            (0.14)       0.29
     Weighted average shares outstanding:
      Basic & Diluted                       18,531,838  16,824,295



                       INFUSYSTEM HOLDINGS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (UNAUDITED)


                                       Three Months Ended March 31
     (in thousands)                           2009      2008

     OPERATING ACTIVITIES
     Net (Loss) Income                      (2,507)    4,797
    Adjustments to reconcile net
     (loss) income to net cash
     provided by operating activities:
     Loss (gain) on derivative liabilities   2,642    (5,231)
     Provision for doubtful accounts           969       861
     Depreciation                              872     1,004
     Amortization of intangible assets         457       457
     Amortization of deferred debt
      issuance costs                           143       180
     Loss on disposal of assets                109       225
     Stock-based compensation                  278         -
    Changes in current assets and
     liabilities:
     (Increase) decrease in accounts
      receivable, net of provision          (1,437)      187
     (Increase) decrease in prepaid
      expenses and other current assets       (391)      803
     Increase in accounts payable and
      other current liabilities                134       140
     NET CASH PROVIDED BY OPERATING
      ACTIVITIES                             1,269     3,423

     INVESTING ACTIVITIES
     Payment of deferred acquisition
      costs                                      -       (97)
     Capital expenditures                     (586)     (447)
     Proceeds from sale of property              1         -
     NET CASH USED IN INVESTING
      ACTIVITIES                              (585)     (544)

     FINANCING ACTIVITIES
     Principal payments on term loan          (818)     (409)
     Principal payments on capital
      lease obligation                         (21)        -
     NET CASH USED IN FINANCING
      ACTIVITIES                              (839)     (409)

     Net change in cash and cash
      equivalents                             (155)    2,470
     Cash and cash equivalents,
      beginning of period                   11,513     3,960
     Cash and cash equivalents, end of
      period                                11,358     6,430


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SOURCE InfuSystem Holdings, Inc.
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