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InfuSystem Holdings Reports 12.9% Revenue Increase and $3.3 Million of Adjusted EBITDA for the Fourth Quarter of 2008
Date:3/3/2009

MADISON HEIGHTS, Mich., March 3 /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 fourth quarter ended December 31, 2008.

Mr. Steve Watkins, chief executive officer, commented, "We are pleased to report a 12.9% increase in revenue to $9.1 million for the fourth quarter of 2008, versus the comparable period in 2007 (which included the results of InfuSystem, Inc. under its prior ownership and InfuSystem Holdings as a stand-alone entity). Initiatives put in place earlier this year continue to fuel our growth and market penetration. These included enhanced sales training, restructured sales incentive programs and realigned sales territories to maximize coverage. As a result, we have succeeded in gaining market share and adding managed care contracts. We also continue to generate strong cash flow and increased cash reserves. During the fourth quarter, we achieved adjusted EBITDA of $3.3 million and had approximately $11.5 million of cash and cash equivalents as of December 31, 2008, allowing us to maintain a solid foundation during the current economic environment."

"InfuSystem's leading market position, favorable sales trends and improved operational efficiencies bode extremely well for 2009. Looking ahead, we see organic growth continuing in 2009, as physicians further expand the use of continuous infusion pumps to administer chemotherapy for other cancers in addition to stage III colorectal cancer. We have also built a highly scalable business model as a result of our national managed care contracts covering over 150 million lives and relationships with more than 60% of oncologist practices nationwide. We have made it a priority to leverage this extensive network by distributing complementary products and introducing key new services in 2009."

Financial Results

Revenue for the fourth quarter ended December, 31 2008 was $9.1 million, versus $6.6 million for the same period in 2007. Revenue for the fourth quarter of 2007 reflects the revenues recognized by InfuSystem Holdings, Inc. following the acquisition of InfuSystem, Inc. from I-Flow Corporation on October 25, 2007. The increase in revenue reflects the full quarter of reported revenue in 2008 versus a partial quarter in 2007, and revenue growth for the comparable 67 day period in which InfuSystem was a standalone entity.

Operating income for the fourth quarter of 2008 was $1.5 million versus an operating income of $1.0 million for the same period in 2007. The increase in operating income for the fourth quarter of 2008 reflects the full quarter of revenue and operating expenses recorded for InfuSystem, Inc. in the fourth quarter of 2008 and improved operating income for the comparable periods in which InfuSystem was a standalone entity.

The net income for the fourth quarter of 2008 was $1.3 million, or $0.07 per diluted share, compared to net loss of ($1.9 million) or $(0.11) per diluted share, for the same period in 2007. The net income for the fourth quarter of 2008 included a $1.1 million gain on derivative financial instruments, which is predominantly attributable to the decrease in the publicly traded value of the Company's warrants during the quarter, compared to a ($2.6 million) loss for the fourth quarter of 2007. The fourth quarter of 2007 also included a $0.3 million charge for stock-based compensation, $0.8 million of expenses related to the acquisition of InfuSystem, Inc., and a $0.3 million gain from interest income.

Adjusted EBITDA for the fourth quarter ended December, 31 2008 was $3.3 million. Adjusted EBITDA is not provided for the fourth quarter ended December 31, 2007. As Adjusted EBITDA is a measure of operating performance, and as that time period was made up of 25 days as a pre-acquisition shell company and 67 days as an operating entity, Adjusted EBITDA would not be meaningful. 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 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 operating performance. The table below reconciles Adjusted EBITDA, a non-GAAP measure, to net income for the three months and year ended December 31, 2008.

     (in thousands)
                                       Year Ended   Three Months Ended
     Reconciliation from Net           December 31,     December 31,
     Income to Adjusted EBITDA:           2008             2008

     Net Income                          $9,959           $1,259
     Adjustments:
       Interest expense                   3,771              943
       Interest income                      (36)             (22)
       Income tax expense                   907              508
       Depreciation -- Pumps              3,769              861
       Depreciation -- Other                166               33
       Amortization                       1,827              457
     EBITDA                             $20,363           $4,039
     Adjustments:
       Gain on derivatives               (9,815)          (1,150)
       Stock based compensation           1,550              384
     Adj. EBITDA                        $12,098           $3,273

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.

(Tables follow)

                              INFUSYSTEM HOLDINGS, INC.
                             CONSOLIDATED BALANCE SHEETS


    (in thousands, except share data)              December 31,  December 31,
                                                       2008           2007
      ASSETS
      Current Assets:
          Cash and cash equivalents                   $11,513        $3,960
          Accounts receivable, less allowance
           for doubtful accounts of $1,552 and
           $1,638 at December 31, 2008 and 2007,
           respectively; December 31, 2008 and
           2007 include $72 and $103 due from
           I-Flow, respectively                         4,168         6,304
          Inventory supplies                              391           364
          Prepaid expenses and other current assets       676         1,263
          Deferred income taxes                             -             4

              Total Current Assets                     16,748        11,895
      Property & equipment, net                        10,878        13,504
      Deferred debt issuance costs, net                 1,276         1,918
      Goodwill                                         56,580        56,544
      Intangible assets, net                           30,738        32,565

          Total Assets                               $116,220      $116,426

      LIABILITIES AND STOCKHOLDERS' EQUITY
      Current Liabilities:
          Accounts payable                             $1,012        $1,076
          Deferred income taxes                            55             -
          Other current liabilities                       939         1,886
          Derivative liabilities                        2,592        12,407
          Current portion of long-term debt;
           December 31, 2008 and 2007 include
           $8,565 and $2,044 payable to I-Flow,
           respectively                                 8,644         2,044

              Total Current Liabilities                13,242        17,413
      Long-term debt, net of current
       portion; December 31, 2008 and 2007
       include $21,685 and $30,250 payable
       to I-Flow, respectively                         22,025        30,250
      Deferred income taxes                               880             4

      Total Liabilities                               $36,147       $47,667

      Commitments and Contingencies                         -             -
      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
       18,512,670 and 18,315,430,
       respectively; outstanding 17,278,626
       and 16,824,295, respectively                         2             2
      Additional paid-in capital                       80,792        79,437
      Retained deficit                                   (721)      (10,680)

      Total Stockholders' Equity                       80,073        68,759

      Total Liabilities and Stockholders'
       Equity                                        $116,220      $116,426

                         INFUSYSTEM HOLDINGS, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS

    (in thousands, except share and per            Year Ended    Year Ended
     share data)                                   December 31,  December 31,
                                                       2008          2007

      Net revenues                                    $35,415        $6,582

      Operating expenses:
          Cost of revenues - Product and supply costs   5,422           923
          Cost of revenues - Pump depreciation          3,769           697
          Provision for doubtful accounts               3,187           584
          Amortization of intangibles                   1,827           335
          Selling and marketing                         4,659           649
          General and administrative                   11,765         4,891

              Total Operating Expenses                 30,629         8,079

      Operating income (loss)                           4,786        (1,497)

      Other income (expense):
          Gain (loss) on derivatives                    9,815        (3,294)
          Interest income                                  36         3,879
          Interest expense                             (3,771)         (774)

              Total other income (expense)              6,080          (189)

      Income (loss) before income taxes                10,866        (1,686)
      Income tax expense                                 (907)       (1,110)

      Net income (loss)                                $9,959       $(2,796)

      Net income (loss) per share:
                  Basic                                 $0.56        $(0.15)
                  Diluted                               $0.53        $(0.15)
      Weighted average shares outstanding:
                  Basic                            17,940,952    18,299,600
                  Diluted                          18,672,321    18,299,600

                            INFUSYSTEM HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                       Three Months Ended
     (in thousands, except share and per share data)      December 31,
                                                              2008

     Net revenues                                            $9,092

     Operating expenses:
       Cost of Revenues -- Product and supply costs           1,240
       Cost of Revenues -- Pump depreciation                    861
       Provision for doubtful accounts                          710
       Amortization of intangibles                              457
       Selling and marketing                                  1,258
       General and administrative                             3,028
         Total Operating Expenses                             7,554

     Operating income                                         1,538

     Other income (expense):
       Gain on derivatives                                    1,150
       Interest income                                           22
       Interest expense                                        (943)
         Total other income                                     229

     Income before income taxes                               1,767
     Income tax expense                                        (508)
       Net income                                             1,259

     Net income per share:
           Basic                                               0.07
           Diluted                                             0.07
     Weighted average shares outstanding:
           Basic                                         18,476,445
           Diluted                                       18,794,943


                                                      Three Months Ended
     (in thousands, except share and per share data)      December 31,
                                                              2007

     Net revenues                                            $6,582

     Operating expenses                                      (5,618)
     Operating income                                           964
     Other expense                                           (2,475)
     Loss before income t                                    (1,511)
     Income tax expense                                        (357)
     Net loss                                                (1,868)

     Net loss per share:
           basic                                              (0.11)
           diluted                                            (0.11)
     Weighted average shares outstanding:
           basic                                         17,333,261
           diluted                                       17,333,261

                               INFUSYSTEM HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS

    (in thousands)                                 Year Ended    Year Ended
                                                   December 31,  December 31,
                                                       2008          2007

      OPERATING ACTIVITIES
      Net Income (Loss)                                $9,959       $(2,796)
      Adjustments to reconcile net income
       (loss) to net cash provided by
       operating activities:
          (Gain) loss on derivative liabilities        (9,815)        3,294
          Depreciation                                  3,935           728
          Provision for doubtful accounts               3,187           584
          Amortization of intangible assets             1,827           335
          Stock-based compensation                      1,550         1,750
          Amortization of deferred debt issuance
           costs                                          642           134
          Loss on disposal of assets                      553           107
          Deferred income taxes                           935             -
          Withdrawal of interest earned on
           investments held in trust                        -         5,815
          Interest income on investments held in
           trust                                            -        (3,879)
          Changes in current assets and
           liabilities, net of effects of
           acquisitions:
             Increase in accounts receivable,
              net of provision                         (1,835)         (698)
             Decrease (increase) in prepaid
              expenses and other current assets           560          (431)
             Decrease in accounts payable and other
              current liabilities                        (601)         (566)

      NET CASH PROVIDED BY OPERATING ACTIVITIES        10,897         4,377

      INVESTING ACTIVITIES
          Capital expenditures                         (1,733)         (553)
          Payment of deferred acquisition costs          (105)       (8,690)
          Proceeds from sale of property                   10             -
          Cash from trust, excluding interest earned   96,215
          Cash received (paid) for acquisition
           from (to) I-Flow, net of cash acquired         784       (64,954)

      NET CASH (USED IN) PROVIDED BY
       INVESTING ACTIVITIES                            (1,044)       22,018

      FINANCING ACTIVITIES
          Principal payments on term loan              (2,044)         (409)
          Common stock repurchased to satisfy
           minimum statutory withholding on
           stock-based compensation                      (195)            -
          Principal payments on capital lease
           obligation                                     (61)            -
          Share conversion payments to stockholders         -       (16,359)
          Capitalized debt issuance costs                   -        (2,052)
          Payment to FTN Midwest of deferred
           underwriting fees                                -        (4,555)
          Proceeds from issuance of warrants                -           513

      NET CASH USED IN FINANCING ACTIVITIES            (2,300)      (22,862)

      Net change in cash and cash equivalents           7,553         3,533
      Cash and cash equivalents, beginning
       of period                                        3,960           427

      Cash and cash equivalents, end of period        $11,513        $3,960


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SOURCE InfuSystem Holdings, Inc.
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