InfuSystem Holdings (INFU) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Company Participants Joe Dorame - Managing PartnerRichard DiIorio - CEOCarrie Lachance - President, COO & DirectorBarry Steele - Executive VP & CFO Conference Call Participants Brooks O'Neil - Senior Research AnalystTollef Kohrman - Associate AnalystJim Sidoti - AnalystAnderson Schock - Research Analyst Operator Good day, and welcome to the InfuSystem Holdings, Inc. Reports First Quarter twenty twenty five Financial Results Conference ...

InfuSystem Holdings (INFU) Q1 2025 Earnings Call May 08, 2025 09:00 AM ET Speaker0 Good day, and welcome to the InfuSystem Holdings, Inc. Reports First Quarter twenty twenty five Financial Results Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press then 1 on your touch tone phone. To ...

InfuSystems Holdings, Inc. (INFU) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.03. This compares to loss of $0.05 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 66.67%. A quarter ago, it was expected that this company would post earnings of $0.08 per share when it actually produced earnings of $0.04, delivering a surprise of -50%.Over the last four quarters, the company ...

Financial Performance - Net revenues for the year ended December 31, 2024, were $134.9 million, an increase of $9.1 million, or 7.2%, compared to $125.8 million for 2023[171]. - Gross profit for 2024 totaled $70.4 million, an increase of $7.3 million, or 11.6%, with a gross margin of 52.2%, up from 50.2% in the prior year[174]. - Operating income improved to $6,891,000, a significant increase of 68.4% compared to $4,088,000 in 2023[229]. - Net income for 2024 was $2,345,000, up 168.5% from $872,000 in 2023[229]. - Total current assets increased to $32,165,000, a rise of 5.1% from $30,620,000 in 2023[228]. - Total liabilities decreased to $46,085,000, down 8.3% from $50,613,000 in the previous year[228]. - Cash and cash equivalents at the end of 2024 were $527,000, compared to $231,000 at the end of 2023, reflecting a 128.1% increase[235]. Revenue Breakdown - Patient Services net revenue was $80.4 million, an increase of $3.8 million, or 5.0%, primarily due to additional treatment volume totaling $6.4 million[172]. - Device Solutions net revenue was $54.5 million, an increase of $5.2 million, or 10.6%, driven by higher rental revenue of $2.5 million, or 13.5%[173]. - The Oncology Business accounted for approximately 90% of total Patient Services segment revenues in 2024, with 45% from colorectal cancer treatments and 45% from non-colorectal disease states[161]. - Patient Services revenue accounted for 53.9% of total net revenues in 2024, slightly down from 54.1% in 2023[302]. - Device Solutions revenue recognized at a point in time increased to $33.495 million in 2024, up from $30.759 million in 2023, representing an increase of 8.9%[302]. Expenses and Costs - Selling and marketing expenses decreased to $11.3 million, down $1.3 million, or 11.5%, from 2023, representing 8.4% of net revenues compared to 10.1% in 2023[178]. - General and Administrative (G&A) expenses increased to $51.2 million, up $5.8 million, or 12.9%, from $45.4 million in 2023, with G&A as a percentage of net revenues rising to 38.0%[179]. - Device Solutions gross profit for 2024 was $17.6 million, an increase of $2.3 million, or 14.7%, from the prior year, with a gross margin of 32.2%[176]. - Stock-based compensation expense for the year ended December 31, 2024 was $4.46 million, compared to $4.07 million for 2023, indicating an increase of 9.6%[344]. Cash Flow and Liquidity - Net cash provided by operating activities was $20.5 million for 2024, an increase of $9.2 million, or 82.3%, from $11.2 million in 2023[193]. - Net cash used in investing activities increased to $13.2 million in 2024, up $6.5 million from $6.7 million in 2023, primarily due to increased purchases of medical equipment[195]. - Net cash used in financing activities was $6.9 million for 2024, compared to $4.4 million in 2023, mainly for net revolving line of credit repayments and stock repurchases[196]. - As of December 31, 2024, available liquidity was $51.4 million, up from $45.6 million in 2023, with cash and cash equivalents at $0.5 million[183]. Investments and Acquisitions - The acquisition of FilAMed and OB Healthcare has expanded the Device Solutions segment's capabilities in biomedical services[167]. - The company plans to expand its Patient Services segment into other cancer treatments, leveraging existing capabilities and new drug approvals[161]. - The merger with First Biomedical, Inc. is expected to enhance operational capabilities and market reach starting January 1, 2024[240]. Tax and Interest - The provision for income taxes was $2.7 million for 2024, with an effective tax rate of 53.6% on pre-tax income of $5.1 million[181]. - Interest expense for 2024 was $1.8 million, a decrease of $0.4 million from 2023, due to lower outstanding borrowings and interest rates[180]. Derivatives and Market Risks - The Company is exposed to market risk from changes in foreign currency exchange rates and short-term interest rates[208]. - The Company has entered into derivative contracts to manage financial and operational exposure from market risks[209]. - The Company recognized all derivative financial instruments as cash flow hedges, with fair values categorized as Level 2 of the fair value hierarchy[292]. Shareholder Equity and Stock Options - The Company repurchased approximately $1.2 million worth of common stock under the Share Repurchase Program as of December 31, 2024[192]. - The Company granted approximately 117,582 performance-based restricted stock units (PSUs) in 2024, up from 71,639 PSUs granted in 2023, marking a significant increase of 64.2%[348]. - By December 31, 2024, the number of outstanding stock options under the 2021 Plan increased to 1,840,786, with an average exercise price of $8.93[357]. Asset Management - The Company’s medical equipment is depreciated using the straight-line method over an estimated useful life of seven years[265]. - The Company performed its annual impairment analysis as of October 31, 2024, and determined that the fair value of trade names with indefinite lives was greater than their carrying value, resulting in no impairment[270]. - The Company’s inventories are stated at the lower of cost or net realizable value, with adjustments made for slow-moving inventory[264].

Financial Data and Key Metrics Changes - InfuSystem Holdings, Inc. reported a net revenue of $33.8 million for Q4 2024, representing a 7% increase from the prior year [18] - Operating income increased by 69% year-over-year to $6.9 million, while adjusted EBITDA rose 13% to $25.3 million, with an adjusted EBITDA margin of 18.8% for the full year [9][10] - Gross margins improved by 2% year-over-year to 52.2% [8] Business Line Data and Key Metrics Changes - Revenue growth in 2024 was driven by oncology and pain management, which increased by 6.1% and 14.7% respectively [11] - Equipment rentals in device solutions grew by 13.6%, and equipment sales increased by 20.6% [11] - Advanced wound care revenue surged by 342%, totaling $700,000, while the wound care segment faced challenges due to a pause in onboarding new initiatives [12][19] Market Data and Key Metrics Changes - The patient services segment led revenue growth with an 8% increase, while the device solutions segment saw a 4% increase [18] - The company noted a significant opportunity in the wound care space, focusing on partnerships with regional DME companies to leverage payer contracts [12] Company Strategy and Development Direction - The company aims for revenue growth of 8% to 10% in 2025, with adjusted EBITDA margins expected to exceed 18.8% [34] - InfuSystem is focusing on less capital-intensive revenue sources, such as biomedical services and advanced wound care supplies, to improve free cash flow [13][26] - The launch of the Chemo Mouthpiece is a strategic initiative to address an unmet need in oncology, with expectations for broad adoption following clinical studies [30][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth across all business lines in 2025, particularly in advanced wound care and biomed [43] - The company anticipates a ramp-up in revenue as new projects scale throughout the year, including initiatives with Smith and Nephew and Chemo Mouthpiece adoption [35][36] - Management acknowledged the impact of technology system upgrades on costs but expects overall profitability to improve [34][75] Other Important Information - The effective tax rate for Q4 2024 was 59%, primarily due to tax deduction shortages on equity compensation [22] - Operating cash flow for Q4 totaled $7.9 million, a 70% increase from the prior year, contributing to a record annual operating cash flow of $20.5 million [25][27] - The company reduced its net debt to $23.3 million, despite stock repurchases totaling $1.2 million during the year [27][28] Q&A Session Summary Question: Growth in Advanced Wound Care Products - Management confirmed that advanced wound care will drive growth in 2025, with many DME partners seeking referrals [41][43] Question: Feedback on Chemo Mouthpiece - Management noted growing interest and small orders for Chemo Mouthpiece, with significant potential pending clinical trial results [46][50] Question: Referral Process Improvements - Management indicated that improvements in the referral process will ramp throughout the year, with some benefits expected in Q1 [53][56] Question: Addressable Market for Chemo Mouthpiece - The addressable market for Chemo Mouthpiece is estimated to be in the hundreds of millions, with significant excitement from healthcare providers [67][70] Question: Factors Contributing to EBITDA Margin Improvement - Key contributors to improved EBITDA margins include efficiencies in biomed, growth in advanced wound care, and the impact of Chemo Mouthpiece [72][75]

InfuSystem Holdings, Inc. (NYSE:INFU) Q4 2024 Results Conference Call March 4, 2025 9:00 AM ET Company Participants Joe Dorame - Managing Partner Rich Dilorio - Chief Executive Officer Barry Steele - Chief Financial Officer Carrie Lachance - President and Chief Operating Officer Conference Call Participants Matt Hewitt - Craig-Hallum Capital Group Kyle Bauser - B. Riley Securities Jim Sidoti - Sidoti & Company Operator Good day, and welcome to the InfuSystem Holdings, Inc. Reports fourth quarter and full ye ...

Core Insights - InfuSystems Holdings, Inc. reported quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.08 per share, representing an earnings surprise of -50% [1] - The company posted revenues of $33.85 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.61%, compared to year-ago revenues of $31.77 million [2] - InfuSystems Holdings shares have declined approximately 14.1% since the beginning of the year, while the S&P 500 has decreased by -0.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $33.8 million, and for the current fiscal year, it is $0.31 on revenues of $146.6 million [7] - The estimate revisions trend for InfuSystems Holdings is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Products industry, to which InfuSystems Holdings belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Ayr Wellness Inc., another company in the same industry, is expected to report a quarterly loss of $0.29 per share, reflecting a year-over-year change of +19.4% [9]

Summary of Key Points Core Perspective - The article discusses the investment outlook for InfuSystem Holdings (NYSE: INFU), emphasizing the author's focus on identifying market opportunities that have not yet been recognized by investors [1]. Company Expectations - The author previously highlighted three primary expectations for InfuSystem Holdings, indicating a proactive approach to investment analysis [1]. Investment Strategy - The investment strategy involves fundamental analysis, seeking discrepancies between a company's intrinsic value and its current share price, which suggests a long-term investment perspective [1].

Financial Data and Key Metrics Changes - InfuSystem reported record net revenue of $35.2 million for Q3 2024, representing an 11% increase year-over-year and nearly 5% sequential growth [11] - Adjusted EBITDA margins improved to 22.3%, with adjusted EBITDA of $7.9 million, an increase of over $1.7 million from the prior year [14] - Operating cash flow for the quarter was $9.8 million, more than double the amount from the prior year [15] Business Line Data and Key Metrics Changes - The Device Solutions segment saw a year-over-year revenue increase of $1.9 million or 15.3%, driven by a $1.1 million increase in medical equipment sales [11][12] - The Patient Services segment reported a revenue increase of $1.5 million or 7.7%, with oncology net revenue up nearly $1.8 million or 11% [12] Market Data and Key Metrics Changes - The company signed three new initiatives, including a distribution agreement with Smith & Nephew for negative pressure wound therapy and a joint venture with Sanara MedTech for the Chemo Mouthpiece [7][28] - The oncology market is expected to see increased utilization of the Chemo Mouthpiece, which aims to reduce oral mucositis in chemotherapy patients [29] Company Strategy and Development Direction - InfuSystem is focusing on a device-agnostic and patient-centric approach to increase access to quality healthcare [8] - The company is expanding its biomedical services and advanced wound care products, leveraging existing relationships with healthcare providers [20][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, reaffirming annual guidance for high single-digit revenue growth and adjusted EBITDA margins in the high teens [32] - The potential impact of the NOPAIN Act on the pain management business remains uncertain, with management focusing on emerging opportunities in wound care and biomedical services [26][27] Other Important Information - InfuSystem's net debt decreased by $6.4 million to $27.6 million during Q3 2024, with available liquidity totaling nearly $47 million [18] - The company is positioned to fund continued revenue growth with strong cash flow from operations and manageable debt service requirements [17] Q&A Session Summary Question: Is the GE business on autopilot? - Management indicated that while the GE business is stable, it requires ongoing management and execution [35] Question: What is the revenue magnitude for Dignitana? - The revenue from Dignitana is under $1 million, but management expects more similar deals in the future [36] Question: Will cash flow remain positive going forward? - Management expects positive operating cash flow, though free cash flow may fluctuate based on growth and capital expenditures [38] Question: What is the expected size of the Chemo Mouthpiece opportunity? - The total addressable market for the Chemo Mouthpiece is estimated at $0.5 billion, with significant potential for growth [43] Question: How will Chemo Mouthpiece revenues be recorded? - Revenue from the Chemo Mouthpiece will be included in the top line, with profits reflected in the equity investment line with Sanara [54]

Financial Performance - Net revenues for the three months ended September 30, 2024, increased to $35,320,000, up from $31,909,000 for the same period in 2023, representing a growth of 7.8%[8] - Gross profit for the nine months ended September 30, 2024, was $52,187,000, compared to $46,398,000 for the same period in 2023, reflecting an increase of 12.4%[8] - Operating income for the three months ended September 30, 2024, was $3,265,000, compared to $1,697,000 for the same period in 2023, marking a significant increase of 92.5%[8] - Net income for the three months ended September 30, 2024, was $1,807,000, compared to $689,000 for the same period in 2023, indicating a growth of 162.5%[8] - Net income for the nine months ended September 30, 2024, was $1,412,000, compared to $800,000 for the same period in 2023, representing a 76.5% increase[13] - Cash provided by operating activities for the nine months ended September 30, 2024, was $12,528,000, up from $6,565,000 in the same period of 2023, indicating a 91.5% increase[13] Assets and Liabilities - Total current assets as of September 30, 2024, were $33,613,000, an increase from $30,620,000 as of December 31, 2023, representing an increase of 9.8%[7] - Total liabilities decreased to $49,790,000 as of September 30, 2024, from $50,613,000 as of December 31, 2023, a reduction of 1.6%[7] - Total stockholders' equity increased to $55,513,000 as of September 30, 2024, from $52,302,000 as of December 31, 2023, representing a growth of 6.3%[7] - The company’s total assets as of September 30, 2024, were $105,303,000, compared to $102,071,000 in 2023, indicating a growth of 3.3%[72] - Long-term debt decreased to $27,975,000 as of September 30, 2024, from $29,101,000 as of December 31, 2023, a reduction of 3.9%[7] Revenue Segments - Patient Services revenue accounted for 53.2% of total net revenues in Q3 2024, up from 52.8% in Q3 2023[21] - Device Solutions revenue recognized at a point in time increased to $4,731,000 in Q3 2024, a 31.7% increase from $3,593,000 in Q3 2023[21] - Total net revenues for the nine months ended September 30, 2024, reached $101,013,000, up from $93,462,000 in 2023, representing an increase of 8.5%[74] Cash and Cash Equivalents - Cash and cash equivalents increased to $380,000 as of September 30, 2024, compared to $231,000 as of December 31, 2023, reflecting a growth of 64.0%[7] - Cash and cash equivalents at the end of the period were $380,000, up from $161,000 at the end of the same period in 2023[13] Stock and Compensation - The company reported a basic net income per share of $0.08 for the three months ended September 30, 2024, compared to $0.03 for the same period in 2023, an increase of 166.7%[8] - The company has authorized a stock repurchase program of up to $20.0 million, with approximately $1.0 million repurchased as of September 30, 2024[52] - The weighted average grant date fair value of awards granted in the nine months ended September 30, 2024, was $7.51, compared to $9.25 for the same period in 2023[55] Expenses - Selling, general, and administrative expenses for the nine months ended September 30, 2024, totaled $47,912,000, compared to $43,560,000 for the same period in 2023, an increase of 10.8%[8] - Stock-based compensation expense rose to $3,276,000 for the nine months ended September 30, 2024, compared to $2,799,000 for the same period in 2023, marking a 17.0% increase[13] Debt and Credit Facilities - The 2021 Credit Agreement provides a revolving credit facility of $75 million, with $46,545 thousand available as of September 30, 2024 after accounting for outstanding draws and letters of credit[36] - As of September 30, 2024, the Company had outstanding debt of $28,255 thousand under the Revolving Facility, with a weighted average Term Benchmark loan rate of 7.43%[39] - The Company entered into a First Amendment to the 2021 Credit Agreement on April 26, 2023, extending the maturity date to April 26, 2028 and increasing the maximum incremental revolving loans from $25 million to $35 million[35] Taxation - The effective tax rate for the nine months ended September 30, 2024, was 49.5%, significantly higher than the 28.8% effective tax rate for the same period in 2023[48] - The company recorded a provision for income taxes totaling $1.4 million on pre-tax income of $2.8 million for the nine months ended September 30, 2024[48] Lease Obligations - Operating lease costs for the three months ended September 30, 2024, were $478,000, compared to $378,000 for the same period in 2023, representing a 26.4% increase[62] - Total lease costs for the nine months ended September 30, 2024, were $1,689,000, up from $1,359,000 in 2023, indicating a 24.3% increase[62] - Total undiscounted lease payments as of September 30, 2024, amounted to $9,586,000, with total lease liabilities at $6,401,000 after accounting for imputed interest[65]