InfuSystem(INFU) - 2024 Q4 - Annual Report

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].