INFU - Earnings call transcript Q4 2019 | InfuSystem Holdings, Inc.

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Operator

Good morning. And welcome to the InfuSystem Holdings, Inc. Fourth Quarter Fiscal Year 2019 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.

to Partners. conference like Dorame to now Lytham from would turn over the Joe I ahead. go Please

Joe Dorame

Financial Thank newly you, of DiIorio, are morning, year today to Officer; for Anita. on Good Executive fourth President XXXX review appointed us for the Barry Officer. representing XXXX. and the and today ended joining the December Chief financial With and call Rich results quarter InfuSystem Chief XX, Inc. and Holdings, Steele, full thank us you Company the

After participating conclusion remarks, have websites. will call or the it of today’s of we retrieve the question-and-answers not can copy from open prepared www.infusystem.com a numerous for Company’s the other session. the you at press a does on financial call full text If release, anyone today’s website

I statements with during of of the team would to begin the made forward-looking remind InfuSystem the statements XXXX. Securities we Reform prepared constitute everyone, within by call like Act certain Before of Litigation management Private meaning this conference remarks,

Except of Securities may that the uncertainties, Company filed the contain the and this Commission, involve Exchange Form under risks for ended forward-looking some conference call by historical XX, annual year statements XXXX. are Factors in report December statements detailed with Risk documents for the including on XX-K and which fact, of the

not result give otherwise. events does assurance whether as such InfuSystem forward-looking statements, that Forward-looking information, statements prove of to and speak The be update only new future as any of obligation correct. the no forward-looking made. Company statements date the specifically a statements or can any were to disclaims will undertake

of Rich? and over call Chief the turn Executive Rich to to like DiIorio, I’d President InfuSystem. Officer Now,

Rich DiIorio

full-year call. good fourth quarter And XXXX to our Joe. morning welcome Thanks, earnings and and

families the this get related to your In light I unprecedented hope safe taking as thank ways we to coronavirus the you to and through this find all the you healthy, morning join and for I are remain all significant us. time pandemic, of event. disruptions

our record our $XX in to and I'm that our team XX% performance. in full our revenue EBITDA with our XX% of the model progress revenue year. of and grew plan increased and of quarter XXXX pleased QX the strength respectively. on achieved platform in generated revenue extremely delivered for million, strategic executed both XX% drove financial XX% and Turning Adjusted we growth fourth The as profitability. XXXX, full year, the and successfully and

in increase efficiencies delivering disciplined by Our adjusted cash operational for EBITDA throughout managing full results fourth XXXX, XX% and year the an is XX% the year. and solid and approach to Company of margins flow with growth improved quarter and operations provided XX% the net of of

margins. making continue our We progress adjusted XX% achieving goal of substantial towards EBITDA

modified platforms: Services, our of and Services, Medical reporting Therapy segment Equipment DME. visibility the Durable We Integrated two into operations to have business our improve ITS;

provider. features (sic) of insurance ITS therapies payor services management paid ITS be seek Our our patient's platform The segment wound where pressure medical we by high-margin model are in our to third-party comprised turnkey utilizes and therapy. the and is pain compromised negative oncology,

logistic providing provide biomedical support, to most we equipment, and addition handle In clinical issues. services

we focusing our providers is platform return healthcare take Our strong where on biomedical direct pump and a relative margin business payor lower is margins and comprised DME by DME of paid to the model concierge seek DME where services. sales consumable Services rentals, be a and high-turn approach, assets. directly. higher opportunities, utilizes direct we delivering on

margin a of of DME revenues with XXXX, XX.X%. year gross accounted of with ITS segment for the revenues and a XX% full segment accounted net net XX.X% margin XX% the For for of gross

well the during evidenced leading in oncology. as the growth great as capturing direct The from market our progress by the our largest in of contribute share gains. provider, to exits made share our market year-over-year year, Our XX% market as oncology elastomeric competitor pump team

year, contracts payors, X,XXX business now more XX% we clinics and relationships than payor with America. have For nearly our in XXX to North increased the outpatient oncology

solid for year. traction growth the Pain management continues gain to with

team The estimated list. is in block we therapy prior peripheral Revenue similar continues care a have large and versus nerve hospitals doubled acute growing approximately possible pain to $XXX to Our is post-surgical XXXX. XXXX market in customer million year, for believe annually. for management growth the

a have game-changer a to the which believe will significant begun with addition ITS the moving year We platform, we forward. be

$XXX device with combination an ITS annual This Cardinal's will this as partnered have wound pressure potential demonstrates home partnership, and enter our Health estimated platform in unique platform. market negative addressable of capabilities our be ITS million. be Cardinal has therapy, we significant partnered new We believe with which I powerful care to market. in health a

significant into coming for expect a within negative pressure contribution stage growth in was expand therapies is years We platforms. as a from the future setting both

Officer to provide results. financial And to of new review our with would Steele, that, I a Financial welcome like Chief our Barry

Barry Steele

job, And results Rich. mutually you you, robust InfuSystem. namely days join the and attracted team you [ph] the company platform customer-centric team are here spirit. thank me on a Thank that at qualities to visible, growth and few very me strong inviting a culture, the the most importantly, opportunity for incredible for and oriented supportive built only After to the

strong strong to Company's combination finish Company. of ability A fourth us for margin growth, put to the our has a in impacts quarter position, flow a to fund through financial manage a and future growth strong improved record increased and strengthen the cash position health in The represented any top-line year crisis. the current

contributor $XX.X by $X.X XXXX or year fourth the fourth Services Services over in of Medical prior or revenues Net greatest top-line. Equipment XX% million increased quarter. Therapy X%. an million million a Integrated segment $XXX,XXX to respectable Durable was The represented the topping the of increase with or the growth, having of increase XX%, quarter Starting this for $X.X

Services from growth was an Therapy increased number segment and in Equipment management favorable continued increased dynamics Integrated sales The Services customers. revenue from by payor pumps. pain competitive penetration of net landscape, benefited of led infusion third-party Durable Medical the in

the or the Higher grew to operating $XX.X quarter, both current the XX% XX.X% higher adjusted million leverage. XX.X% into a mix, margin EBITDA, to which during $X.X translated compared year, by prior adjusted driven by which gross in cost quarter both margin, and during million to higher revenues and EBITDA -- favorable expense the adjusted increased coverage fixed

On net a an the XXXX. XX% cash flow year year-to-date operating big This or basis, we improvement represented full XXXX million and cash $XX.X in million of over of which had for $X.X a favorable totaled increase flow, $X.X primarily along our fleet, with net borrowing increases our supported million capital of $XX.X million. infusion pump increased of mainly generating bank capacity. facility in expenditures totaling were revenue which expenditures our comprised from Capital

position the improved also financial year. Our during

decreased XX, December end to funded times times of debt at the adjusted X.X to of ratio XXXX. As EBITDA versus of X.XX XXXX, our

Our million total and $X.X available of a of capital on to which availability million is consisted facility, that liquidity, sufficient to $X.X our an growth credit, open of and $X.X million current find be believed amount million expenditure totaled operating revolving needs. an available in $XX.X of December cash, as XXst, plans line under our

to Rich. turn With back it that, I'll

Rich DiIorio

Thanks, Barry.

and to the cash will what XXXX preparations might take. in to designed we healthcare We minimal plus been from adjusted know keep We actively and we targets steps up cannot plus continuity early in what what on within might the system engaged business know coronavirus has running. previously in our of and impact far need million $XX too communicated million $XX.X operations. operations EBITDA U.S. are million and the occur But our revenue, It to-date, impact have however is $XX of have disruptions additional business. to

couple a with and our things higher direct need maintaining platform. non-essential on responsive that utmost during come some early, developing the from increased still than We we and we flu DME platform know normal their will it's are personnel We customer restrict there rental do do normal and years clinics while and know. of processes workarounds readiness sees generally Although ITS continue do our in business facilities. hospitals demand our conditions, we to be services will particularly that know requests entering as executing our to and business to the

also of surgeries for COVID-XX as know of their will reserve resources elective We decrease all the amount handling hospitals cases.

there'll challenges dramatically and to it it's Still, would forward. facilitates don't allow be too likely impacted. know numbers oncology know if early to and us core be support to ahead, life-saving we is moving more don't treatments we we service circumstances our believe our While know

Our current uninterrupted focus is providing safe, to on customers. making sure our and and team is patients our service

end, us notice. to to that concerned can deploy things to devices a To temporarily fleet added at platform and allow pumps our preparing that we prepositioned into control. about We either have moment's are and for we pump

since home significant a proactively shipped last at-risk our reserve workforce has of most and have working our supplies been from We to part of week. quantities customers,

day, have steps We disruptions. additional equipment And for lay and additional potential we operations further future personal provided team. for take plans our in protective dealing with each

forward, I service. to team Moving new enable efficiencies, years and ITS DME in last manage will improve confidence us our expand while the couple therapies, that industry-leading we've growth, and built complete into over have management operational delivering customer the

I to They're hard partners, industry-leading of work grow our operating greatly the InfuSystem provide to ever service new why opportunities, with. success reason therapies to As will existing of returns. pleasure we drive the I've our their we and we the and The ongoing due higher team leverage pursue the is and appreciate been always working of most and has net and efforts. dedicated efficiencies increased our had an patients infrastructure

said, being any to I'm that answer happy questions. with And

Operator

Instructions] comes O'Neil begin Street question-and-answer the will We now session. Lake today with question from go first Brooks Capital. ahead. Please The [Operator

Brooks O'Neil

couple whether morning. business two ongoing XXXX? the a that so a in good contributed and expect of might of benefit to see in to little you, growth hoping, I Thank just about bit much questions. was the you from have sort talk oncology I factors you unusual Rich,

Rich DiIorio

Sure.

we the share come last So, a still without doubt. to of this of customers although at market going definitely revenue And doesn't on also sign that really there's year, and until in some a the we we're some had There's lot them year, later. end that will. gain customers

addition So, get. market we share will into should believe still that XXXX, see gains in that revenue in the coming we to

Brooks O'Neil

then And just was you growth obviously business. describe having pain growth that tremendous secondly, business. Can you're what driving If you think I the in Great. the in that are correctly, are you continued now? that expect success factors strong listening

Rich DiIorio

Sure.

doubled. business the XXXX, in So,

expect XXXX. double it to again We in

market phenomenal that's they're platform growth a where blows ITS team and away market. the driving just is bit to that and information think, none. our some able that the patient And after service a in over doubt, really standpoint They've is phenomenal pain accounts. without concept the to a are service why the offering a been the job that's has management that now in or done anything share specifically, really go has itself specifically, perfected. gather competitive doctors that winning And ultimately, price. and we're for they at able five that patients, to It little the And market to in taking I the doing years we're the competitive from data last therapy. hospitals gold tweaking second built care standard getting a the four accounts a the just service at what's job team the services market is on is the and

Brooks O'Neil

Great. little bit. I apologize. want a with follow to And that on just I

here. think think see obviously core markets, your why You market. negative leverageable to you pressure story describe I'm of about wound could know the what But, you and it's new as like element just you so care you platform the additional ITS the as relatively

Rich DiIorio

Sure.

So, is really core a platform service wrapped at a around its device. ITS the

the can to So, that's It's almost to biomedical really device around be device be clean, it It can vacuum, ventilator, is that can from pump, doesn't everything negative and the services maintenance agnostic. and a repair on provide And it be service a them. an a matter. infusion maintained compression device. pressure wrapped devices

within allows Our truly so team to standard have payer those from platform. a sets third-party in the standpoint; that clinical the ITS the leverage support us telephone contracts, places, our XXX support gold we agreements

distribution ITS most So, all their it's we have when that dock usually device is because the really from once unique really where device, well But, loading that clinic wrap they're the around platform the the in. most the which customer, hospital. there kicks really you go home good manufacturers, of companies, their do getting at dock is you that from and or We to the to. patient's to that as

and on we insurance over pain company bill goes oncology problems So, with the negative just pressure, like able We the home. patient management, behalf. their phone. clean maintain the get their it. device triage it, We're We to back,

device, all that difficult came we has to clinic why that around, good and you to our and Cardinal unique to over really are in it sauce all wrap manage. the last thing what’s home as figuring the four perfecting as pressure. management us, when So, InfuSystem they patient's secret that's do, and they years And that years kind really to out that a this and start is spent great oncology it of and with with XX the things platform or negative now five pain and

Brooks O'Neil

a and Great. helpful. pressure in you make one in That's more why million. large that wound Can see put, think perspective, $XXX any a opportunity? maybe such Thanks the -- profitability, very step of to you've you can as described Can the you very a and ask just contribution it you you I'll lot. terms revenue big and market, I'll describe then market negative out. as obviously,

Rich DiIorio

Thanks, Yes. Brooks.

kind for our additional there, see accounts. an for is they're first still far X% still see last things able exactly is the change The revenue us it's $XX will exactly a it. and partner bit really in a out had of revenue percentage that and our from $XXX doesn't the early to patient little $XX conversations what It's is take significant. to to And million we million of be. the market big see a and team actually put what So, to about future the perspective. we Company. so million early, on market We've an winning with week. but revenue be it is It's --

the XXXX So, to competitive a we oncology, of accounts have And every -- this We're take think at takes more a on success more patients onboard we're from standpoint year. I going in for But beyond. and a seeing to it off day. while really the on revenue end patients. starting and sign market. some it expect you similar and in it's little it'll the after sign to But, hit contribution

you So, the as uptick into we'll we with share and market we visibility have. when see gains, the we numbers get more those in share

Brooks O'Neil

Great.

personnel just think I negative minor question. it that as more I add business that you I relatively you briefly If additional have and with pressure on correctly well? understand think expense. can you one describe quick this is Could

Rich DiIorio

Sure.

because of revenue robust. the our we So, built, team infrastructure and cycle have is there

a as some and a and have gain If minimal scalable But, that's of on people went negative to ITS people. out got wouldn't get sales a the where to biomed The team our negative market think we right that's in would we don't pressure and leverage. in we $XX tomorrow, have platform, a and where couple that's can have clinical leverage. be revenue pressure foundation our team, up so of we pours in, we'd have XXX we Our backend. we go hire such to people we million add really number in really biomed we clinical we share gain add will. now; team, rep, our more the maybe beef or team significantly But

Operator

comes Investment. go Weiss The DSW Please Douglas next from with ahead. question

Douglas Weiss

a you cash up talk doing COVID-XX? just if And are Thanks. just where a period little case you anything you're there's differently, about more Could building you in are non-operational? additional bit

Rich DiIorio

Yes.

So, the a job well. team We out field. last of really has This the kind done of weeks. couple left responded came in phenomenal

sure make our our not implemented team to but business a of first just have foremost, lot to and keep running, things, We is safe.

work and to laptops home of So, systems, we and office get running. with were workforce and up XX% that able is our about to from

distancing and we're really requirements, internally warehouse our really leadership operations entire everything we providing the service to the team, the customers donning critical and biomed, patients, PP&E, and who our well, ultimately, and are have they're team really responded can. team to has Our and business operations we our doing

seen that far our statements, far, watch going we're to no here we've But up cash, sure just foolhardy we're in with so building kind I As of my disruption money as to and not as things. make business. said

patients from on where -- Quarter-to-date, seen we haven't customers of do. what or would we're lack right we closing. We track the thought we

to was what for will We but according this everything of don't everything. bring. don't -- what plan. know tomorrow bring, yesterday, afternoon going planned will know as today March We So, XXth, we've

dynamic thrown and enough and to anything us. be and nimble the But, we what be we dynamic to what want We're speculate prepared the we'll for absolutely may we'll will happen. happens. small And great scenario, to at going and adjust We that don't we're much I team has not what control a and have on place to capability. that's in really happen, manage pretty prepared. or see But, plan we're could that anything. can see do to Worst case what I know control, may we're happens. anything

Douglas Weiss

if you it? liquidity much How you do have needed

Barry Steele

over Yes. I million, was remarks cash. year. of our of said capital that coming from It’s same a equipment a at end in little our it the line. our line now, is liquidity is my and about revolving $XX the what credit, That’s

Douglas Weiss

line? That's not capital including equipment the

Barry Steele

the capital equipment includes line. That

Douglas Weiss

capital That includes the equipment?

Barry Steele

the equipment Yes. It's million about capital $X have we in available. line

Douglas Weiss

plus million line? in $X $XX capital equipment So, an million

Barry Steele

But, have that our capital it’s Yes. expenditures for haven't line equipment on it, for we some just used -- we made. room so, already we that existing have

Douglas Weiss

All it. right, thanks. Okay, got

Rich DiIorio

Thanks, Doug.

Operator

The Please go Warwick Capital. comes Aaron ES next with question ahead. [Ph] from

Unidentified Analyst

Nice year. quarter, impressive guys. Hey,

like some have answered things COVID-XX. you might with any you see that reaffirm medical to like But, ITS that It in understand equipment. durable the first you think, that. ask accurate, there? were Is mitigate kind you for in the with to responses some side opportunities that on guidance. might want the did from potentially It have sounds damage your about I my place to of fully the I hesitant you on question already. with looks being I previous situation track

Rich DiIorio

sure. Yes,

the are companies, see there for buy flu greater year rentals virus nine to months think the a too, seasons. and just year. that see Hospitals Every sit the on want the DME right? flu them in of don't demand. of on They side, and a infusion On business. an uptick is if devices you they early home We side necessarily

and to rent us months. come them they'll So, to three for six

So, we gear-up start and kicked hospitals states for that agencies have may what already and in to seen a little happen. of bit local as

of see there. some is multiple think definitely definitely millions but upside there we it's some So, I don't upside dollars, there.

Unidentified Analyst

you to there. partner That's Thank Okay. about Then of more pressure? leveraging negative beyond expand Cardinal talking network terms a do bit their you. little there impressive what But, in Health. see

Rich DiIorio

Yes.

obviously now, officially pressure right negative launched. So, is

our have every day. to We and I like it's patients grow on, mentioned, starting

I out options sure. revenue for think where different are with that can for happens platform, multiple off going there's layer market Cardinal, of and company to to options love significant in multiple and there DME We and where gain as to or else, the there. that's all partner leverage capture stature kinds in can there is acquisition, that fantastic. right through a it's we we exploring If of size now ITS, And share, make -- based -- that's or decision whether it's we us. it an there's But leverage, generate to somebody either and if would their of some partnership, Cardinal we're out additional operating opportunities be then therapies any well. gain

Unidentified Analyst

Sure. Makes sense.

are fruit they're front? they since you're call, getting must approached side Is what to and with you they that that that low-hanging that the of saying on on you're be today patients you well go mentioned what some seeing had started. and you. up mentioned ready now you I would some, already there, kind you approached even geared there Cardinal, As that before, that I'm of assuming

Rich DiIorio

Yes.

between, customers patients fruit think patients And ready relationships. hospitals on kick But low-hanging through relationships -- the to will are clinics there we in to fruit. the patients We're us Cardinal quick we'll then, it as those. InfuSystem portion. getting pretty the some are there yes, go the not leverage and that once as to and well So, be that goes see going because I but And off. some low-hanging we're how get

Unidentified Analyst

XX.X% or -- Final well, for adjusted guys XX.X% question, EBITDA pretty like on the you quarter.

your so there? What being expanding goal. got XX% -- the like you that could increase on Cardinal given and guys now significantly, the looks think with leverage about forth. do in you’ve before It said side, into You ITS the the

Rich DiIorio

Yes.

bit especially So, there's to DME grow ITS we in platform. a an margins, margin. lower add those definitely the if opportunity is little therapies

of that expect are absolutely -- it'll ITS we the outpaces side, grow on won't little with sure, the like it'll in, therapies that as pressure margins the next leverage. layer If down expand slow in ITS, that we So -- and bit. of side most if gain on a majority the to negative we we growth, it the

Operator

Nicoya comes [Operator from with ahead. go question instructions] next Capital. [Ph] Rimmy The Please Malhotra

Unidentified Analyst

of about months and on if correctly, I talked correctly, cost previously, I'm payback So, a about infusion if is it the $X,XXX. revenue pumps. you've the infusion then, nine unit basis understanding economics an on And sort remember pump

wondering I what -- expand understanding economics if could device? maybe So, share and you one, correct on and if reaffirm the pressure of negative my are the or that; unit

Rich DiIorio

Sure.

six, the pump. on on little -- you're on the and sometimes a devices, eight depending the seven on pumps there's some around little is oncology So, months pain, probably average, most $X,XXX payback or some good the right, on more, is device. a are that especially the depending The less, side, in pump

pressure the we pump, device to expect basically is negative be double. the but device expensive, the On side, the double more about is reimbursement a

just patient week. So, first last again, our on we put

But, to we it's is. those expect off So, to going devices reimbursement. in what because to than reimbursement the reimbursement much for a higher months, is take themselves us six pump five while pay the see a

Unidentified Analyst

to the my years. the that’s you it negative question. carried part is, is model sheet? or And And ultimately effective the infusion that Fantastic. useful is device? device then, projected your is pumps, XX life life What you XX the the same useful initially that pump the is, by of first on if balance maintain pressure understanding you second so of of And

Rich DiIorio

Yes.

tells I experience bit will but to think vacuum little the where years, of it'll for more kind for experience We long don't because it repair hate just devices. ourselves little So, it'll just have And less. a yet. don't with or XX that need be. own their And keep and clean plus We biomed -- us. say the capabilities expect get what road us that our devices down of learn manufacturer pump team would our them, first quite an into a but question? pump does will ATM the what that them, few on them, life do machine each years was to be turn the effectively a I enough is a just what to running, be extraordinary maintain -- and Rimmy, I useful a forgot, will part

Unidentified Analyst

will and buy Similar you on balance your to infusion sheet pumps, be versus these Cardinal. will these

Rich DiIorio

exact buy they'll from be sit our Cardinal. our They'll We're to Yes, sheet on and them going devices. same model. balance

Unidentified Analyst

And year. then, for cash next on

and and you share, So, pump fleet they do. that guys year, amount all largely capturing expanding of to are to good the we market went And that's this producing want a cash. things

uses year, we pressure to all over of of how buy I but of guidance word, use next roadmap that? year? cash the cash you get some of the generation devices, have in from next some is going sort pumps like, and hate -- over these Some rather operations the sort sort So, consumed to as -- do to pumps, that of infusion

Rich DiIorio

Sure.

in buyback invested because absolutely XXXX. We was best 'XX, the the you're front and fleet for In right. the So, you fuel growth use that aggressive XXXX we guys the really the on as into in even cash. have seen of 'XX, to were

to I think, we this do expect grow. obviously year,

takes the will that's case. So, there some probably hope for rest that. that's the and negative of go, I where be will used money cash the off, pressure If

with looking at of price outside going we because the us currently control. that the can circumstances invest stock side in in. And to we also of everything Sure, we we going on wait world well in? market of the Is going we're to our that. something we Probably other at side believe live that current because buybacks the kind the that still really our stuff, really, till the of of want look we’re think undervalued out right and We our are of the now team that that. is to good we're positioned come it, news I this, -- has COVID-XX

I a do a different side know much on company what And the at buying know going small addition fueling think things. growth look We'll pressure negative We're want other to in be and there's at we to that we allow think of look acquisitions, point. to team. stronger we're that I make. If management to we backs. going devices. But, us to at that'll when tighter and buy much pain

negative So, be going. the buybacks don't for where to fueling I think and but pressures anything's off had the if most would growth table, I guess, it stock of cash is

Unidentified Analyst

you to on me. guys. I’d it out. And Thank plays wholeheartedly you, agree options multiple with play. then, for how clarity that, sure have there's I'm and will I would until echo holding this cash That's

Rich DiIorio

Rimmy. Thanks, right. All

Operator

closing over be Richard I'd our the further conference There question-and-answer any session. DiIorio appears concludes to like to to remarks. no turn back questions. This for

Rich DiIorio

Thank you.

our During will adapt of partners. employees, continue our to and for and this health our wellbeing operations our the extraordinary patients we time,

I look results. again have these great XXXX you when your hope during challenging first a safe we quarter we thank remain continue every the report safety necessary taking steps and you you to of our do patients I day. And forward are We minimize and everything And can times. I call. to you to and talking our want protect on treatment to for today’s with to participating disruption. thank families

InfuSystem (INFU) 19 Mar 202019 Q4 Earnings call transcript