MADISON HEIGHTS — InfuSystem Holdings,Inc. (NYSE MKT: INFU), a provider of infusion pumps and related services for the health care industry in the United States, today reported its third consecutive quarter of profitability in the first quarter ending March 31.
Net income in the first quarter was $51,000 or less than a penny a share, compared to a loss of $915,000 or 4 cents a share in the first quarter of 2012.
Revenue was $13.4 million, up from $12.9 million a year earlier.
“Our industry in general and InfuSystem in particular are well-positioned for continued growth,” said Eric Steen, who joined the company as CEO April 1. “We are firmly committed to organic growth as a means to further strengthen our position in a highly competitive environment. We remain vigilant about managing costs, and will seek to further increase free cash flow and reduce debt. Finally, as evidenced by our recent hiring of an accomplished Chief Information Officer, we will use technology to increase connectivity with all stakeholders — especially patients, who are No. 1 priority.”
Company officials said the increase in revenue is primarily related to the addition of larger customers, increased penetration into existing customer accounts, continuation of the revision to claims processing guidelines by a major group of third-party payors and a one-time delay in billing to certain payors caused by the requirement of additional paperwork.
Selling, general and administrative expense fell to $7.4 million in the quarter from $9 million in the same quarter a year earlier, a decrease of 18 percent. The decrease was mostly due to prior year costs of $1.5 million pertaining to a special shareholder meeting, changes in the composition of the board, and retention payments made to key employees in connection with the change in senior management.
Other expenses were consistent for the quarter compared to the similar period in 2012; however the breakdown included $300,000 of additional interest expense due to the cost of the new debt facility. This was offset by a one-time cash receipt of $300,000 related to a mutual insurance policy.
“We are very pleased to have further strengthened the balance sheet, especially reducing total debt by $2.8 million during the first quarter of 2013,” said Jonathan P. Foster, CFO.
Gross profit for the three months ended March 31 was $10.4 million, which was consistent with the same period in the prior year. It represented 71 percent of revenues in the current period compared to 73 percent in the prior year. The decrease in the gross margin as a percentage of revenue in 2013 was primarily related to an increase in connectivity costs with customers.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $3.7 million for the first quarter of 2013 compared to $3.4 million in 2012. The company says it uses adjusted EBITDA as a means to measure its operating performance.
Cash flow from operations in the quarter was $1.6 million, compared to a negative cash flow of $15,000 in the prior year quarter. The increase is primarily attributed to decreased general and administrative costs of $1.3 million when compared to the three months ended March 31, 2012. This includes professional fees of $0.9 million related to the special meeting and change in members of the board, and a retention payment of $600,000 million paid to employees during the major change in senior management. The decreases were partially offset by an increase of $300,000 million of expenses during the three months ended March 31, 2013 due primarily to transition costs.
As of March 31, the company reported cash and cash equivalents of $0.5 million and $7.0 million of availability on the revolving line-of-credit compared to $2.3 million and $4.7 million, respectively, at December 31, 2012. During the three months ended March 31, 2013, the Company paid down $2.8 million of total debt.
The company will conduct a conference call for investors on Tuesday, May 14, 2013 at 9 a.m. Eastern time to discuss first quarter performance and results. Steen and Foster will discuss the company’s financial performance and answer questions from the financial community. To participate in this call, dial toll-free (888) 895-5271 and use the confirmation number 34802235.
More at www.infusystem.com.