InfuSystem Reports Second Quarter 2022 Financial Results
InfuSystem Holdings reported Q2 2022 net revenues of $27 million, marking a 9% increase year-over-year. Integrated Therapy Services (ITS) revenues grew 6% to $17.2 million, while Durable Medical Equipment (DME) revenues surged 15% to $9.8 million. Despite revenue growth, gross profit fell 1% to $14.9 million with a gross margin decline to 55.1%. The company posted a net loss of $0.2 million or $(0.01) per diluted share. Adjusted EBITDA was $5.5 million, a 6% decrease. Full-year revenue guidance was revised to 10%-13% growth.
- Net revenues increased 9% to $27 million.
- DME revenues grew 15% to $9.8 million.
- Cash from operations improved by 8% to $9.5 million.
- Gross profit decreased 1% to $14.9 million.
- Gross margin declined to 55.1%, down 5.5% year-over-year.
- Net loss of $0.2 million, compared to net income of $0.8 million in Q2 2021.
- Adjusted EBITDA decreased by 6% to $5.5 million.
Net Revenues increased
2022 Second Quarter Overview:
-
Net revenues totaled
, an increase of$27.0 million 9% vs. prior year.-
Integrated Therapy Services ("ITS") net revenue was
, an increase of$17.2 million 6% vs. prior year. -
Durable Medical Equipment Services ("DME Services") net revenue was
, an increase of$9.8 million 15% vs. prior year.
-
Integrated Therapy Services ("ITS") net revenue was
-
Gross profit was
, a decrease of$14.9 million 1% vs. prior year. -
Gross margin was
55.1% , a decrease of5.5% vs. prior year. -
Net loss of
, or$0.2 million per diluted share.$(0.01) -
Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) (non-GAAP) was
, a decrease of$5.5 million 6% vs. prior year. -
Net cash provided by operations was
for the six-month period, an increase of$9.5 million 8% vs. the same prior year period.
Management Discussion
“While the quarter was solid, we are experiencing headwinds in ramping some of our important new business initiatives. Early in the quarter, our Pain Management business was impacted by lingering COVID-related supply chain challenges preventing us from onboarding new accounts. Fortunately, we believe these issues to be largely behind us, as we obtained sufficient inventory during the quarter to resume new account starts. We finished June on a strong note, with record patient treatments and a growing pipeline of new business that will keep us busy through the rest of the year, hopefully setting the stage for a record second half in Pain Management.”
“During the second quarter, we initiated work under a new master services agreement to provide biomedical services to a tier-one healthcare technology company. We have been working with this partner through a very deliberate onboarding process which has slowed the early stages of the ramp up period; however, we believe it will result in a better long-term partnership. Starting this month, we began rapidly scaling up the deployment of services under this agreement, which we expect to continue throughout the remainder of 2022. Although this resulted in forecasted revenue under this agreement being pushed out to future quarters, we believe the short-term impact will be outweighed by the potential expanded scope of the project, which involves more than 300,000 pumps located in 1,200 medical facilities, including 800 hospital systems in the
“In Wound Care, two large lease opportunities were placed on hold during the quarter because of our inability to secure the medical devices necessary to move those projects forward. We are working to resolve this supply chain issue by, among other things, establishing a new distribution agreement with a different supplier to source medical devices. We expect to soon be able to share information concerning new products and an expanded service offering in our Wound Care business.”
“Given the above developments, we are revising our full-year 2022 revenue growth guidance to be in the range of
2022 Second Quarter Financial Review
Net revenues for the quarter ended
ITS net revenue of
DME Services net revenue of
Gross profit for the second quarter of 2022 of
ITS gross profit was
DME Services gross profit during the second quarter of 2022 was
Selling and marketing expenses for the second quarter of 2022 were
General and administrative (“G&A”) expenses for the second quarter of 2022 were
Net loss for the second quarter of 2022 was
Adjusted EBITDA, a non-GAAP measure, for the second quarter of 2022 was
Balance sheet, cash flows and liquidity
During the six-month period ended
On
Full Year 2022 Guidance
The revised full year 2022 guidance reflects management’s current expectation for operational performance, given the current market conditions. The Company and its businesses are subject to certain risks, including those risk factors discussed in our most recent annual report on Form 10-K for the year ended
Conference Call
The Company will conduct a conference call for all interested investors on
To participate in this call, please dial (833) 366-1127 or (412) 902-6773, or listen via a live webcast, which is available in the Investors section of the Company’s website at https://ir.infusystem.com/. A replay of the call will be available by visiting https://ir.infusystem.com/ for the next 90 days or by calling (877) 344-7529 or (412) 317-0088, confirmation code 2011678, through
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP financial information. Non-GAAP financial measures presented in this press release include EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, net debt and Adjusted EBITDA to net debt ratio. The Company believes that the non-GAAP financial measures presented in this press release provide useful information to the Company’s management, investors and other interested parties about the Company’s operating performance because they allow them to understand and compare the Company’s operating results during the current periods to the prior year periods in a more consistent manner. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP, and similarly titled non-GAAP measures may be calculated differently by other companies. The Company calculates those non-GAAP measures by adjusting for non-recurring or non-core items that are not part of the normal course of business. A reconciliation of those measures to the most directly comparable GAAP measures is provided in the accompanying schedule, titled "GAAP to Non-GAAP Reconciliation" below. Future period non-GAAP guidance includes adjustments for items not indicative of our core operations, which may include, without limitation, items included in the accompanying schedule below. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual or unanticipated changes, expenses or gains or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP guidance to the most comparable GAAP measures.
About
Forward-Looking Statements
The financial results in this press release reflect preliminary results, which are not final until the Company’s quarterly report on Form 10-Q for the quarter year ended
Additional information about
FINANCIAL TABLES FOLLOW
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(UNAUDITED) |
|||||||||||||||
|
Three Month Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
(in thousands, except share and per share data) |
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net revenues |
$ |
27,042 |
|
|
$ |
24,834 |
|
|
$ |
53,805 |
|
|
$ |
49,297 |
|
Cost of revenues |
|
12,141 |
|
|
|
9,784 |
|
|
|
23,537 |
|
|
|
19,671 |
|
Gross profit |
|
14,901 |
|
|
|
15,050 |
|
|
|
30,268 |
|
|
|
29,626 |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses: |
|
|
|
|
|
|
|
||||||||
Provision for doubtful accounts |
|
(41 |
) |
|
|
(39 |
) |
|
|
6 |
|
|
|
(109 |
) |
Amortization of intangibles |
|
711 |
|
|
|
1,096 |
|
|
|
1,421 |
|
|
|
2,139 |
|
Selling and marketing |
|
3,083 |
|
|
|
2,680 |
|
|
|
6,402 |
|
|
|
5,056 |
|
General and administrative |
|
10,941 |
|
|
|
10,617 |
|
|
|
22,757 |
|
|
|
20,971 |
|
|
|
|
|
|
|
|
|
||||||||
Total selling, general and administrative |
|
14,694 |
|
|
|
14,354 |
|
|
|
30,586 |
|
|
|
28,057 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
207 |
|
|
|
696 |
|
|
|
(318 |
) |
|
|
1,569 |
|
Other expense: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(314 |
) |
|
|
(317 |
) |
|
|
(591 |
) |
|
|
(639 |
) |
Other expense |
|
(30 |
) |
|
|
(37 |
) |
|
|
(58 |
) |
|
|
(106 |
) |
|
|
|
|
|
|
|
|
||||||||
(Loss) Income before income taxes |
|
(137 |
) |
|
|
342 |
|
|
|
(967 |
) |
|
|
824 |
|
(Provision for) benefit from income taxes |
|
(27 |
) |
|
|
478 |
|
|
|
435 |
|
|
|
657 |
|
Net (loss) income |
$ |
(164 |
) |
|
$ |
820 |
|
|
$ |
(532 |
) |
|
$ |
1,481 |
|
Net (loss) income per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.01 |
) |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
0.07 |
|
Diluted |
$ |
(0.01 |
) |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
0.07 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
20,583,928 |
|
|
|
20,487,845 |
|
|
|
20,596,580 |
|
|
|
20,413,416 |
|
Diluted |
|
20,583,928 |
|
|
|
22,065,486 |
|
|
|
20,596,580 |
|
|
|
22,017,455 |
|
|
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
SEGMENT REPORTING |
||||||||||||
(UNAUDITED) |
||||||||||||
|
|
Three Month Ended June 30, |
|
Better/ (Worse) |
||||||||
(in thousands) |
|
2022 |
|
2021 |
|
|||||||
|
|
|
|
|
|
|
||||||
Net revenues: |
|
|
|
|
|
|
||||||
ITS |
|
$ |
17,244 |
|
|
$ |
16,334 |
|
|
$ |
910 |
|
DME Services (inclusive of inter-segment revenues) |
|
|
11,560 |
|
|
|
10,098 |
|
|
|
1,462 |
|
Less: elimination of inter-segment revenues |
|
|
(1,762 |
) |
|
|
(1,598 |
) |
|
|
(164 |
) |
Total |
|
|
27,042 |
|
|
|
24,834 |
|
|
|
2,208 |
|
Gross profit (inclusive of certain inter-segment allocations) (a): |
|
|
|
|
|
|
||||||
ITS |
|
|
10,113 |
|
|
|
10,451 |
|
|
|
(338 |
) |
DME Services |
|
|
4,788 |
|
|
|
4,599 |
|
|
|
189 |
|
Total |
|
$ |
14,901 |
|
|
$ |
15,050 |
|
|
$ |
(149 |
) |
(a) Inter-segment allocations are for cleaning and repair services performed on medical equipment. |
|
|
Six Month Ended June 30, |
|
Better/ (Worse) |
||||||||
(in thousands) |
|
2022 |
|
2021 |
|
|||||||
|
|
|
|
|
|
|
||||||
Net revenues: |
|
|
|
|
|
|
||||||
ITS |
|
$ |
33,885 |
|
|
$ |
32,245 |
|
|
$ |
1,640 |
|
DME Services (inclusive of inter-segment revenues) |
|
|
23,170 |
|
|
|
20,096 |
|
|
|
3,074 |
|
Less: elimination of inter-segment revenues |
|
|
(3,250 |
) |
|
|
(3,044 |
) |
|
|
(206 |
) |
Total |
|
|
53,805 |
|
|
|
49,297 |
|
|
|
4,508 |
|
Gross profit (inclusive of certain inter-segment allocations) (a): |
|
|
|
|
|
|
||||||
ITS |
|
|
20,851 |
|
|
|
20,454 |
|
|
|
397 |
|
DME Services |
|
|
9,417 |
|
|
|
9,172 |
|
|
|
245 |
|
Total |
|
$ |
30,268 |
|
|
$ |
29,626 |
|
|
$ |
642 |
|
(a) Inter-segment allocations are for cleaning and repair services performed on medical equipment. |
|
||||||||||||||||
GAAP TO NON-GAAP RECONCILIATION |
||||||||||||||||
(UNAUDITED) |
||||||||||||||||
NET (LOSS) INCOME TO EBITDA, ADJUSTED EBITDA, NET (LOSS) INCOME MARGIN AND ADJUSTED EBITDA MARGIN: |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
(in thousands) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net (loss) income |
|
$ |
(164 |
) |
|
$ |
820 |
|
|
$ |
(532 |
) |
|
$ |
1,481 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
314 |
|
|
|
317 |
|
|
|
591 |
|
|
|
639 |
|
Income tax provision (benefit) |
|
|
27 |
|
|
|
(478 |
) |
|
|
(435 |
) |
|
|
(657 |
) |
Depreciation |
|
|
2,689 |
|
|
|
2,563 |
|
|
|
5,395 |
|
|
|
5,090 |
|
Amortization |
|
|
711 |
|
|
|
1,096 |
|
|
|
1,421 |
|
|
|
2,139 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP EBITDA |
|
$ |
3,577 |
|
|
$ |
4,318 |
|
|
$ |
6,440 |
|
|
$ |
8,692 |
|
|
|
|
|
|
|
|
|
|
||||||||
Stock compensation costs |
|
|
1,123 |
|
|
|
1,372 |
|
|
|
2,170 |
|
|
|
3,007 |
|
Medical equipment reserve (1) |
|
|
721 |
|
|
|
(54 |
) |
|
|
891 |
|
|
|
414 |
|
Acquisition costs |
|
|
— |
|
|
|
109 |
|
|
|
— |
|
|
|
147 |
|
SOX readiness costs |
|
|
70 |
|
|
|
18 |
|
|
|
110 |
|
|
|
18 |
|
Management reorganization/transition costs |
|
|
23 |
|
|
|
25 |
|
|
|
37 |
|
|
|
28 |
|
Certain other non-recurring costs |
|
|
12 |
|
|
|
91 |
|
|
|
20 |
|
|
|
(267 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Adjusted EBITDA |
|
$ |
5,526 |
|
|
$ |
5,879 |
|
|
$ |
9,668 |
|
|
$ |
12,039 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Net Revenues |
|
$ |
27,042 |
|
|
$ |
24,834 |
|
|
$ |
53,805 |
|
|
$ |
49,297 |
|
Net (Loss) Income Margin (2) |
|
|
(0.6 |
) % |
|
|
3.3 |
% |
|
|
(1.0 |
) % |
|
|
3.0 |
% |
Non-GAAP Adjusted EBITDA Margin (3) |
|
|
20.4 |
% |
|
|
23.7 |
% |
|
|
18.0 |
% |
|
|
24.4 |
% |
(1) |
Amounts represent a non-cash expense recorded to adjust the reserve for missing medical equipment and is being added back due to its similarity to depreciation. |
(2) |
Net (Loss) Income Margin is defined as GAAP Net (Loss) Income as a percentage of GAAP Net Revenues. |
(3) |
Non-GAAP Adjusted EBITDA Margin is defined as Non-GAAP Adjusted EBITDA as a percentage of GAAP Net Revenues. |
|
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(UNAUDITED) |
||||||||
|
|
As of |
||||||
(in thousands, except par value and share data) |
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
311 |
|
|
$ |
186 |
|
Accounts receivable, net |
|
|
15,839 |
|
|
|
15,405 |
|
Inventories |
|
|
4,876 |
|
|
|
3,939 |
|
Other current assets |
|
|
1,936 |
|
|
|
2,535 |
|
|
|
|
|
|
||||
Total current assets |
|
|
22,962 |
|
|
|
22,065 |
|
Medical equipment for sale or rental |
|
|
2,278 |
|
|
|
1,742 |
|
Medical equipment in rental service, net of accumulated depreciation |
|
|
39,581 |
|
|
|
39,871 |
|
Property & equipment, net of accumulated depreciation |
|
|
4,310 |
|
|
|
4,523 |
|
|
|
|
3,710 |
|
|
|
3,710 |
|
Intangible assets, net |
|
|
9,509 |
|
|
|
10,930 |
|
Operating lease right of use assets |
|
|
4,718 |
|
|
|
4,241 |
|
Deferred income taxes |
|
|
10,191 |
|
|
|
10,033 |
|
Other assets |
|
|
1,558 |
|
|
|
471 |
|
|
|
|
|
|
||||
Total assets |
|
$ |
98,817 |
|
|
$ |
97,586 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
9,434 |
|
|
$ |
7,862 |
|
Current portion of long-term debt |
|
|
— |
|
|
|
349 |
|
Other current liabilities |
|
|
4,991 |
|
|
|
4,685 |
|
|
|
|
|
|
||||
Total current liabilities |
|
|
14,425 |
|
|
|
12,896 |
|
Long-term debt, net of current portion |
|
|
33,687 |
|
|
|
32,748 |
|
Operating lease liabilities, net of current portion |
|
|
4,208 |
|
|
|
3,670 |
|
|
|
|
|
|
||||
Total liabilities |
|
|
52,320 |
|
|
|
49,314 |
|
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
|
|
|
|
|
|
outstanding as of |
||||||||
|
2 |
2 |
||||||
Additional paid-in capital |
|
|
104,146 |
|
|
|
101,905 |
|
Accumulated other comprehensive income |
|
|
1,140 |
|
|
|
268 |
|
Retained deficit |
|
|
(58,791 |
) |
|
|
(53,903 |
) |
|
|
|
|
|
||||
Total stockholders’ equity |
|
|
46,497 |
|
|
|
48,272 |
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity |
|
$ |
98,817 |
|
|
$ |
97,586 |
|
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(UNAUDITED) |
||||||||
|
|
Six Months Ended |
||||||
(in thousands) |
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
OPERATING ACTIVITIES |
|
|
|
|
||||
Net (loss) income |
|
$ |
(532 |
) |
|
$ |
1,481 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
||||
Provision for doubtful accounts |
|
|
6 |
|
|
|
(109 |
) |
Depreciation |
|
|
5,395 |
|
|
|
5,090 |
|
Loss on disposal of and reserve adjustments for medical equipment |
|
|
1,101 |
|
|
|
640 |
|
Gain on sale of medical equipment |
|
|
(883 |
) |
|
|
(375 |
) |
Amortization of intangible assets |
|
|
1,421 |
|
|
|
2,139 |
|
Amortization of deferred debt issuance costs |
|
|
37 |
|
|
|
114 |
|
Stock-based compensation |
|
|
2,170 |
|
|
|
3,007 |
|
Deferred income taxes |
|
|
(435 |
) |
|
|
(658 |
) |
Changes in assets - (increase)/decrease: |
|
|
|
|
||||
Accounts receivable |
|
|
(924 |
) |
|
|
(329 |
) |
Inventories |
|
|
(937 |
) |
|
|
(647 |
) |
Other current assets |
|
|
599 |
|
|
|
138 |
|
Other assets |
|
|
(19 |
) |
|
|
(70 |
) |
Changes in liabilities - (decrease)/increase: |
|
|
|
|
||||
Accounts payable and other liabilities |
|
|
2,496 |
|
|
|
(1,607 |
) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
9,495 |
|
|
|
8,814 |
|
|
|
|
|
|
||||
INVESTING ACTIVITIES |
|
|
|
|
||||
Acquisition of business |
|
|
— |
|
|
|
(7,490 |
) |
Purchase of medical equipment |
|
|
(6,669 |
) |
|
|
(4,943 |
) |
Purchase of property and equipment |
|
|
(336 |
) |
|
|
(334 |
) |
Proceeds from sale of medical equipment, property and equipment |
|
|
2,081 |
|
|
|
1,503 |
|
|
|
|
(4,924 |
) |
|
|
(11,264 |
) |
|
|
|
|
|
||||
FINANCING ACTIVITIES |
|
|
|
|
||||
Principal payments on long-term debt |
|
|
(20,665 |
) |
|
|
(53,982 |
) |
Cash proceeds from long-term debt |
|
|
21,218 |
|
|
|
47,913 |
|
Debt issuance costs |
|
|
— |
|
|
|
(386 |
) |
Cash payment of contingent consideration |
|
|
(750 |
) |
|
|
— |
|
Common stock repurchased to satisfy statutory withholding on employee stock-based compensation plans |
|
|
(639 |
) |
|
|
(1,141 |
) |
Common stock repurchased as part of share repurchase program |
|
|
(4,356 |
) |
|
|
— |
|
Cash proceeds from stock plans |
|
|
746 |
|
|
|
562 |
|
|
|
|
(4,446 |
) |
|
|
(7,034 |
) |
|
|
|
|
|
||||
Net change in cash and cash equivalents |
|
|
125 |
|
|
|
(9,484 |
) |
Cash and cash equivalents, beginning of period |
|
|
186 |
|
|
|
9,648 |
|
Cash and cash equivalents, end of period |
|
$ |
311 |
|
|
$ |
164 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005309/en/
602-889-9700
Source:
FAQ
What were InfuSystem's Q2 2022 earnings results?
How did InfuSystem's revenue grow in 2022?
What is InfuSystem's revised revenue guidance for 2022?