INFU - Earnings call transcript Q1 2020 | InfuSystem Holdings, Inc.

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Operator

Good morning and welcome to the InfuSystem Holdings, Inc. Reports First Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I would like to turn the conference call over to Joe Dorame. ahead. go please Sir,

Joe Dorame

XX, morning, Executive the you Holdings, financial quarter Financial DiIorio, on the Good the today today are Officer. and call Inc. joining Barry to first Rich March ended XXXX review results and of With and Jamie. us for on Chief thank President us for XXXX. Officer; Thanks, of Chief InfuSystem Steele,

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

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

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

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

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

Rich DiIorio

everyone join you for XXXX morning. us and taking morning the to welcome Joe. quarter Thank to our all earnings this time call. Thanks, first Good

in and family with to It's important like important as and your are perspective I And COVID-XX. our when with deal continue we time just our the charge hope on it these we what's times is effects life. gain how of safe really to staying friends. you families

numbers the Now, quarter quarter team no quarter. how nationwide there in to record but the rolling revenue responded pleased I'm our backdrop of literally just results. first where our the extremely we with a InfuSystem setting had is first Against playbook. situation onto the performance, not lockdowns, in

in $XX.X home. increase the our this And accomplished ‘XX XX% adjusted of an transitioning million, team XXXX. which quarter of top to I versus while is to prouder a of be of versus on plans grew that disruptions first is first our plan couldn’t of definition conditions XX.X% and working XX% COVID-XX. from the EBITDA long-term a we've a from team, on quarter been and that, to of the by was executing and potential short InfuSystem in extreme me operations able future place, on of our contingency put

COVID-XX, to began believe will first we when certain impact potential March, early of likely most scenarios In we the assess take place.

believe patients service oncology our treatments which so be helps First, with lifesaving we impacted. would that not dramatically facilitate to

We were correct.

other month the quarter treated XX more treated of and in the any quarter than more in oncology than first patients we in ever other providing fact, any in In we service. in March patients our years

and absolutely DME our meet would and to that see did sales standpoint hospital and We knew this. increased. when logistics platform believed and we Second, to customer that increased specifically rentals demand will need likely admissions adapt demand biomedical from we pump we a execute

them. for so much I than they our has patients credit and team The Operations devices would of our ever our safest clinical team been sure possible. and more thought get have whenever wherever deserves part line deployed making the with operations front always need devices

are surge to as their resources, potential this with Unfortunately, with of to a and as able can dramatic going most we the expected started hospital elective be decline we well. about reserve Third, see correct COVID-XX any we're cases. redeploy surgeries,

pay decline steep in The quite surgeries. numbers early were a for showing strong before March management

we revenue of fact, were ahead slightly them had in numbers doubling XXXX. and again the accomplishing this pipeline In plan, that year feet after

but More are we on seeing sharp concerns have I impact. later. short-term a that no absolutely long-term

access we sales our would Fourth, impacted. severely for believe customer teams be

addition In our so to edition the internal our most everyone' with bigger therapies access Wound Cardinal hospitals Therapy Negative restrictions own integrated Health. our These safety. to visitors to non-essential impact and travel on any restricted the rightfully restrictions, Pressure platform, newest for partnership had to

meetings we product, when therapy training. impact for February. critical new selling face-to-face slower new any or in than a As is little both The and with processes announced role moving are the customer service our planned partnership of

just challenges, combination customers pace. and the Despite see that slower add the device. expect of to customers patients very these at we Cardinal's The year end a powerful of strong the is bit news we in are and the great with market currently little partnered ITS very, new demand platform for through serving our

significant therapy provide review million. current addressable $XXX would to to remains this annual with a I market of long-term it that, to And our turn financial results. CFO like for a Steele A Barry with of over potential our

Barry Steele

to Thank the Rich. everybody you, And today. thanks on call for joining

and As represented digit gross margin a EBITDA continued adjusted adjusted margin EBITDA first start like stronger quarter the to double [most] year-over-year growth mentioned, both net and and in Rich XXXX, percentages. revenue improved

the operational reduction we incur any quarter, encountered associated cost a revenue not net extra disruptions. with in crisis, really or not did health During significant the other

in for due the On and services driving increased to the segment. need COVID-XX our provide demand equipment services urgent DME contrary, services to of our [percent]

And of DME safety allowed us both for medical to preparedness accelerating expenditures purchases and disruptions supply and increasing have crisis to and responding heavily burdened respond from the capital our These case crisis. have of the request levels in stock provided disposable equipment. increased our and demand, supplies by to customers the activities included both our

by topping services increase segment this Net $XXX,XXX durable million XXXX $XX.X of XX% respectable services an $X.X increasing first medical revenues for XX% therapy a million or equipment quarter, growth, or in prior-year of the over represented Integrated in increase $X.X million X%. first or the quarter. led a

benefitted growth for a services from led mainly was the growth net therapy due pain segment equipment increase oncology but segment equipment revenue The in by market The oncology small sales. was medical integrated increased customers. increased also share to durable services management in

EBITDA above The higher higher margin EBITDA quarter high to during or to adjusted the $X million adjusted a increased XX.X% revenue grew $X.X XX.X% translated by to compared prior XX% in And which into year. the current million during quarter. the which

a both DME account mix an improvement and The a and margin. provision per margin segment driven higher cost by segment by excelling gross administrative margin tapering the partially ITS improved coverage higher [drop] offset in services decrease general was

increased accrual debt a driven collections the period of sales an mainly mix and lower in difficult The by growth margin adjustment accrual the segment margin reflected items. proportionally due included a an higher slower equipment bad but to provision customer DME services which lower reversal. year The comparison to prior which performance and was

flow the During And capital our prior impacted associated The quarter, operating represented year. $XXX,XXX. by COVID-XX first period the higher totaled current of was working $XXX,XXX cash activities. about from year a decrease utilization preparedness with

the first million The borrowings year hand the of use capital $X.X of supported than which million positive $X $X.X were $X.X net of quarter. higher of combined cash operating prior net million with million and cash expenditures on the flow

equipment expenditures year COVID-XX due in durable capital demands our and fleet This earlier. increase mentioned the an of the preparedness to current capital in market represented comprised increases timing plan primarily was acceleration in I medical and our

that Note position financial improved still slightly. our has

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

availability the at liquidity open on capital available million of in first which end consisted credit total Our million totaled line $XXX,XXX hand. quarter of expenditure and million and under a $X.X on revolving $XX.X of facility available $X.X the cash an

capital in XX, represented and million XXXX. COVID-XX expenditure of liquidity as this acceleration available capital our a With mainly December decrease due investment. $XX.X related to total The again, working the of

the decrease We normal quarter overtake slightly estimate position will and of half our year. [indiscernible] cash working levels during operating the the expenditures our our second decline capital that to starts improve during back to our during XXXX then positions as flows but capital liquidity

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

Rich DiIorio

Barry. business of revenue, not reiterate million million our flow $XX I an guidance from I $XX EBITDA early it call the COVID-XX plus financial too said impact operations. in At and net last understand in would XXXX $XX.X in and our did adjusted our to on cash of Thanks, March, was have million

I today, want our in our XXX% of confidence team As to execute in plan.

We future have the for effects in place of necessary plans contingency pandemic. this

reiterate However, at many are there for our numbers. outside too to on me of point this control unknowns still

is there know that is As oncology are grow I What patient continues to ever. here know do higher today, I some sure. than for I census said our and things

the to begin both for rentals. rescheduled, back continue are already as we see and for Our DME open coming surgeries stage management, demand services will In patients demand to and are team seeing pump getting pain sales elective online. higher-than-normal

improves, share. negative we win And pressure that as will our hospital market access

So mean? fine. what does I all think we'll this be

I to me predict also think our try should future. and be foolish times from but it'll to we I towards think original numbers these drive in able uncertain the be

can't that A certain therapies. negatively lot that we control and of questions predict could impact remain within can't growth

are surge will the as in Will We the fall with we our one we that's of will forcing in additional see flu? do huge, see COVID-XX lifted virus a of we downs, a restrictions shut the resurgence a as see questions. the state-by-state

will be everything talk again some InfuSystem strategy. even answered that on XX around we better can in and I years questions am confident clarity more been about hopeful for we and I've have going and that on full-year our us these August never passionate our of when been with financials. have with

built managing team there's do anything. top-to-bottom, growth will overcome therapies. all and a us challenge. Because Tom few certain allow been sales know will our this in for by team be our expanding Ruiz I know across withstand new his from of has functions to relentless it any to comes Why? things when I I know to that

our our team and our drive and constant it making they relentless the customers receive to improve I industry know and leading Carrie service efficiencies that will when operational are to comes sure be operations to. patients accustomed Lachance

committed members out InfuSystem platforms are side team know that are stronger know the I made that of do any sharper XXX I will that before. do and of other and we'll short-term scalable. ever sure all solid the and our make the than come be to infinitely impact of

questions. And any with that, to happy answer

Operator

comes Markets. today Capital O'Neil question. first from go Instructions] our question from [Operator Please your Street Lake ahead Brooks with And

Brooks O'Neil

admit your morning a whole good on that going I few questions remarks. been prepared distracted I some you, end. during morning This guys. my there's of things in been of a and have Thank I have lot upfront may

early if talked a just May. get oncology in. little go if I and helpful businesses So about and about, results ask it on but first I color things I would pain to hoping apologize during could you you've be of was April the

alluded you much. a think could out us color on the little right marketplace a just improvement but you're I give you more in to what now. little seeing you very there Thank

Rich DiIorio

thanks Sure, Brooks.

strong. Regarding oncology, demand remain patient

April So May had. ever quarter March first continues the we grow. and quarter no What different had. is quarter the the our to saw see we've best in senses than month we've in the first ever was best we which is

we the elective not to an in not accommodating to it's treatments not clinics something On are that’s -- oncology, go it's lifesaving can -- what something So have exactly it's patients. thought. just hospital those you and It's patient physical annual something and the surgery. are a you normal old physical, It's people not hospitals receiving that delay.

online. I as back So concerns Pain remains all. there's oncology mentioned is coming strong, no at

So we early saw, end senses April. the and of drop patient at very March

As April online. back of need end coming of for see and May, we out the started came to patients those of up we kind pumps

to as the scheduled. a are to positive where going of as in we take to and is long management involved. shape to for be has should surgeries be things while open every back want to be not year. the there as little rebound sure. and We're have They state But pain no summer for pretty all good well as pointing COVID-XX this It's

Brooks O'Neil

launch your interested little Obviously, of some April, just that related in I'm you what maybe But release more offering in to pressure in was And again to COVID. in to out that seeing a and the negative you business. color there marketplace to you're terms the us can said there in of market? response give disruption that's the try Absolutely, May particularly the great. the

Barry Steele

Yes.

a launch it's thought. we than definitely slower from going So standpoint,

just the not pressure, really through challenge non-essential to driven process people letting negative some hospitals when a the hospital. visitors visit that's And any in So patient. not they're the sales is letting and

said, has haven’t the that And restrictions the happen that when haven’t, in down slowed down That ease in has yet. those which April quite bit So seen access the launch. definitely we a we especially being some to slowed hospital big cities. of starts

So start it of able and be back to as back a is going let there pretty come waiting to that know they're open should we The again, happen. us when soon. here to news them up, to before hospitals and good for the talk lessen are happen, don’t shutdowns restrictions that'll to states us were in. we lot

they early device. service with that our So were excited the with tailwind we of or have Cardinal's offering March, February combined about

see we for So market the sure. opportunity there

negative Now, it's open we'll gaining some think -- the share I those pressure. once from and up doors hospital, start market

Brooks O'Neil

great, that's that's fantastic. Yes,

understand And elaborate I what's little an of bit on the a guys think if a bit debt in going just increase you somewhat that little you expense could bad so could quarter. too in on. we I'm curious

Rich DiIorio

what accruing our we've driven that how by actually is a noticed is quickly slower little collect. collection in It's process bit

accrual In reversal bad that to year, it quarter. significant had that we a the actually So during increase a just comp. makes slightly prior was our

Brooks O'Neil

a Okay, get bit into but not that I'm improved you of down I it then, the you guys your back it. you And year. again in come little mentioned part got least, liquidity. and kind QX curious Obviously, the last as available feel maybe about of how

and you capital Land But feel kind this of to through the you you to up on need is ahead? able period like obviously have quite Promised get the to be

Rich DiIorio

earnings definitely very kind Yes, strong. possible. see do That I we much being in of feel comfortable, liquidity very see so but the believer we I'm said, as as having a don’t

So a operations. we through good the just flow as significant we'll from the go have cash year

a stock we if Right happening, sure we're kind our we had was now -- build of and want capital there just working investment what's just to we disruption. working any make -- the supplies

inventory [indiscernible]. built And in we be particular. then accelerated So that pump

we'll capital kind start use have -- as for of we'll go able, a and to cash of pretty will and has so soon have been see working the we we'll [indiscernible] don’t that down We've now pass our slowed months. few that

it year. the I So through go strong back coming we see as

Brooks O'Neil

great Congratulations Great. keep on it year start the up. and to the

Rich DiIorio

Brooks. Thanks,

Operator

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

Douglas Weiss

Hi, a quarter. good congrats on

is end million you $X in the You $X purchases the of more that and have release in in What you're -- quarter equipment equipment. press mentioned, specifically? to an the additional medical going million at medical

Rich DiIorio

X) for hell buying products talked couple a for about of to a into but a really COVID I we've actually future haven’t facilities the go that demand been pumps mainly reasons. serving of With they're patients.

or been So, trying they our basically to that that. to DME can find segment has into anywhere serve pumps

plans. COVID not that of second that's basically little reason. the but than the just what coming expenditure will the of started lot sort on happening activity see quarter of A don’t higher a We in the we -- is earlier for hit it capital crisis. year, revenue our But into bit because year the a

Douglas Weiss

Okay. that? also And oncology, for medical of safety is then what stock you supplies mentioned

Rich DiIorio

patients. to but a supply get [indiscernible] kit. they also give services them deliver we only We of So more

times couple of course they the during get using pump. I the a their of think

brought to would make So what our did supplies supply be patients. is to in something chain sure serve we happened if in we able extra we on

was building to prepare stock safety That order basically in ourselves.

Douglas Weiss

that of a kind is thing Is ongoing? one-time that or

Barry Steele

in up a that's little of during We orders we that year. arrived go a rest put the into And then, time bit more the we it eat quarter. as quarter the showing and It's that just our the of through we'll some one-time for have stock thing. second

Douglas Weiss

already investments then, in the is later show kind for you of the or equipment in the this care up capital have And air. made room year that you

Barry Steele

Yes.

can for we automotive -- your couldn’t years. take A comparison to really to that the nice things of we that equipment of equipment the what piece a piece scale is are. that all if One needs business or put probably you won't this about company expenditures industry your capital up wouldn't we you of can buy we had the

[Indiscernible]. can you think I

for but of in the bought we to what need the serve have we initial devices So for negative the pumps stages business. only pressure

Douglas Weiss

that that you business, far your Okay. My much as guidance is in sense haven’t as true? is put really

Rich DiIorio

correct. That's

Barry Steele

revenue it to pressure There this Yes. no we launch would guidance was year. in because want when share that from negative

Douglas Weiss

have in you offer you goals anything might it Do that Okay. of too or kind early? you is any

Rich DiIorio

too it's and we early. for goals access initial share. months. we We couple bets the could had All think are it thought hospitals off I comes to what the do the next when to of

probably get market to see expected, than numbers. probably So July we those more it's We'll that could to catch say just we if June have wait I fast tough happen. to start mean till to or share

Douglas Weiss

again. and Okay. All well congrats thanks right,

Rich DiIorio

Thanks, Doug.

Operator

Erin go from Please Instructions] next your with comes question [Operator question. from Capital. Brockovich Our E.S. ahead

Erin Brockovich

morning. year, to the good excuse start me. the guys, Great to quarter Hey or

You've that DME or from some Rich call mentioned losses the side some on might the side the the last ITS of delays. of mitigate

said that think results a March. that today, your in you be bit looks you millions more it'd is perhaps now back maybe multiple you on And you little like it didn’t that’s the it in changed, me than to had but expected based

Is that led to that change? so accurate and if what's

Rich DiIorio

Yes, thanks Erin.

the till see we surgery a and and standpoint. management really in a get third actually in quarter because didn’t pain oncology drop the didn’t an week that's ITS big revenue record from elective first March of mostly So impacted and quarter

and – is on to So overcome May of all millions maybe for quarter. recover side that, money to DME surgery will be not of or much in first again will, we only May. elective going quarter had again still of the in April, of hit It's part we're of the the the really anything all it's should the second dollars. take

of the again they in quarter the out DME and they gate XXXXs. second ended or as is, the quarter strong XXXs out came strong well. first strong it came Its And or

pain recovery be second online with the DME here back could and think, if comes some the a strong senses, patient quarter on we pain a strong side. good pretty oncology quarter quick quarter So

Erin Brockovich

good. Sounds

this are think be and losses -- there must overall of surgery I the elective So part small mean, I business based then a on

Rich DiIorio

management ITS piece to segment. absolutely is oncology. the Yes, of our Obviously smallest by work pain

lose want from. be it months for to to few to don’t not for a we So we than longer we'll quarters-and-quarters. able recover But have and certainly

Erin Brockovich

the understand a All out the still mentioned fall. you're commit to uncertainty to right. in with happen certain certainly what'll uncertainty I all wanting there you even as about of numbers lot not

this I from from just at it on to I to your could a like But look as the be quarter $XX year. like pace mean, last extrapolating looks taken million, and comps mean adjusted the numbers $XX EBITDA. high million in on do me as you

something, of kind XX% is track there so second XX% that's and seen is to in being hand those that in the out that the quarter there in the DME Any increase the reason off on EBITDA. from what far that playing that you on given way quarter still for side. in some revenue anything make the of up happened are far the second adjusted fact would one like losses think you've that really that so Is increase get made the that

Barry Steele

none plan, I to there on do. Right, stays think even in lot and next I certainly the of half. pretty get even are us our know unbalance next line DME month and COVID-XX get Absolutely will think grow week a $ think are Do million going second oncology Do and back sure. can continues and million or comes I happen pain aggressive so. with not, to? $XX strong COVID? to we what's If there of to without I

Erin Brockovich

Yes, right.

Barry Steele

starts flat go about happens, we Even again. that knows. to states the the start does as but up, the there's to comes If boomerang the in concerns who if fall that's concerns There's up stays effect, open steep problem. to summer it plan, in back and back a in the current -- start cases so

would don’t oncology we Again, it second surgeries we in bring. know would know those issue another strong, would. hands we sorts We be of round think can the if stay get have on and certainly things. our postponed would don’t But elective to what

we're just know, the kind we just is numbers. and of off don’t don’t many factors know we holding so there that's So on why

Erin Brockovich

is or know terms that spread hard of side How oncology concentrated have out. hit like the is don’t were the there your a areas percentage to patients. that concentrated how already how business country, I been across couple one in being it in Is it of -- in

Rich DiIorio

Sure.

we're York, cities, The would big XX New obviously LA’s it's the the of you all So, the what at hospitals exactly most in states, world, doctors. think. Boston's, most

market country. the of well-represented much share. so have across we pretty It's So the

we've oncology hit a even concentration we New So our much have all Or those town, seen impact in we cities haven’t York not, for Boston, sure. home of all. of yes, and in in at been heavy Detroit an those haven’t

Erin Brockovich

they've the good that I And for that -- been seen then cities still not and sounds and given well disruption. Yes. the you've future hardest as mean that

that Cardinal good. me obviously that's question then for you Final So about and Health on. with leveraging is, talked sounds relationship early very still

But that. seen just anything if I'm on wondering you've

on been the here? you've on able Was that do to COVID-XX related them DME If side. anything to and

Rich DiIorio

we have of outside of and products. have [rent] so devices devices in different and That Cardinal we just we sell pressure. the and negative just types markets hospital With [indiscernible] pumps infusion Cardinal, like other

hasn’t COVID So that's case, the been always the during changed that crisis.

Erin Brockovich

guys. safe I you, appreciate and Stay good luck. Thank Okay. it.

Rich DiIorio

Erin. Thanks,

Barry Steele

too. You

Erin Brockovich

Thank you.

Operator

with gentlemen, Mr. for and call back answer closing question like end DiIorio I'd today's session. and over remarks. conference we'll that turn any ladies And the to to

Rich DiIorio

Jimmy. Thanks,

participating We the I today's to for truly XXXX second results. are when of on to again our certainly to I forward call in extraordinary report and And on team, want times. support. thank continued behalf look living you we your quarter taking appreciate

Please thank and you. safe, stay

Operator

today's gentlemen, attending. and we'll call. conference thank conclude that you with Ladies And we for Yes.

your You may now disconnect lines.

InfuSystem (INFU) 14 May 202020 Q1 Earnings call transcript