Legal Fees Swell Loss At InfuSystem Holdings Inc.
MADISON HEIGHTS — InfuSystem Holdings Inc. (NYSE: INFU) this week reported a loss of $915,000 or 4 cents a share on revenue of $14.3 million in the first quarter ended March 31, compared to a loss of $171,000 or 1 cent a share on revenue of $13 million in the first quarter of 2011.
The company said the larger loss was the product of higher selling, general and administrative expenses in the quarter vs. a year earlier — expenses of $1.5 million related primarily to legal fees and other costs associated with a settlement agreement with a concerned stockholder group and a fifth amendment to the company’s credit facility.
The settlement agreement and fifth amendment to the credit facility are described in the 8-K the Company filed with the United States Security and Exhcange Commission April 26. Additional related fees and expenses are expected in the second quarter of 2012.
Ryan Morris, the company’s newly appointed executive chairman, said the first quarter results provide a solid foundation for the new management team that took office in late April, and whose strategy for achieving growth and increasing shareholder value should begin to be reflected in subsequent quarterly results. Since mid-March, the Company has welcomed the arrival of Interim CEO Dilip Singh, CFO Jonathan P. Foster, as well as five new board members.
“It’s been a very eventful quarter for the company and I am proud that our employees and operational management continued the top line revenue growth while these board and management changes took place,” Morris said.
The new management team has already begun building on those efforts, starting first with a series of operational improvements, integration of past acquisitions to generate new synergies for the Company and cost-savings initiatives – some of which will be announced soon and some of which are already underway.
Singh said these operational improvements are just the first steps the company will implement as part of a broader strategy to achieve long-term growth.
“Our initial focus is to maximize cash generation with EBITDA for sustained financial stability while achieving growth by continuing to take market share in our core markets,” Singh said. “Over the long-term, we see significant, recurring opportunity for organic growth, notably by enhancing customer service solutions that make it easier for our various partners, channels and customers to rent, lease or buy new and reconditioned pumps with just in time inventory; entering other vertical medical markets disciplines; and, in time, expanding our franchise model globally.”
The 11 percent increase in revenues relative to the first quarter of 2011 is primarily related to the addition of new customers with larger patient bases, increased penetration into existing customer accounts and the resolution of the oncology drug shortage affecting certain products.
Earnings before interest, taxes, depreciation and amortization, commonly referred to cas cash flow, was $1.6 million, compared to $2.4 million a year ago. Excluding the one-time fees EBITDA would have been $3.1 million.
Net cash provided by operations for the first quarter ending March 31 was $0.1 million, compared to $2.1 million in the prior period. The latest quarter’s results reflected increased professional fees associated with the concerned stockholder group and employee compensation costs. In addition, the company reported capital expenditures of $1.2 million, a decrease of $1.2 million compared to the prior period.
To listen to a replay of a conference call discussing the results, visit www.infusystem.com.
InfuSystem also reported that it had received a letter from the New York Stock Exchange regarding a late notification to the NYSE Amex stock exchange of the record date for its 2012 annual shareholder meeting. The company previously set April 30 as the record date of ownership of shares to vote at the meeting, which is scheduled for May 25.
A company listed on the NYSE Amex is required to provide the exchange with notice of the record date for its Annual Stockholders’ meeting at least 10 days prior to the record date. InfuSystem provided late notice of the record date to the NYSE Amex. As a result, InfuSystem received a letter from NYSE Regulation on May 18, advising the company that it did not comply with Section 703 of the NYSE Amex Company Guide, which required that the Company provide the NYSE Amex with 10 days prior notice of the April 30 record date.
InfuSystem said it is confirming the April 30 record date. The company filed its proxy statement in connection with the 2012 Annual Meeting on May 7, and mailed the proxy and annual report materials to stockholders on or about May 8.